How Trump's Work Visa Suspension Will Affect Israeli High-tech Companies

Move blocking entry of some foreign workers may affect multinational companies who want to bring Israeli engineers and managers to the U.S.

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President Donald Trump speaks with reporters before departing on Marine One on the South Lawn of the White House, June 23, 2020, in Washington.
President Donald Trump speaks with reporters before departing on Marine One on the South Lawn of the White House, June 23, 2020, in Washington. Credit: AP Photo/Alex Brandon

U.S. President Donald Trump suspended the entry into the United States of several types of work visas for foreign nationals on Monday, including visas popular among high-tech companies and used by Israelis relocating for tech jobs.

As far as Israel is concerned, the main impact may be felt by multinational companies with offices in Israel that want to bring Israeli engineers or managers to the United States, said immigration law expert Tsvi Kan-Tor.

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Israel has some 320 multinational research and development centers.

The White House said the move would help the coronavirus-battered economy by opening up jobs for U.S. workers. But high-tech companies have opposed the idea, saying they face a shortage of workers, and it also encountered criticism from the U.S. Chamber of Commerce.

Trump issued a presidential proclamation that temporarily blocks foreign workers entering on H-1B visas for skilled employees, and L visas, for managers and specialized workers being transferred within a company. He also blocked those entering on H-2B seasonal worker visas, used by landscapers and other industries.

Kan-Tor, a founding partner at the Ramat Gan-based Kan-Tor & Acco office specializing in immigration law, said that while the move was a drastic change of approach toward foreigners, the main thing hurting relocations was the inevitable fallout from the coronavirus pandemic and its impact on the U.S. economy, not Trump’s visa suspension.

The move will not affect Israeli workers who have already relocated to the United States, as it does not affect visa renewals, but rather only blocks the arrival of new workers.

Israel’s Economy and Industry Ministry estimates that about 1,200 Israeli tech companies, most of them startups, have some kind of presence in the United States.

Visas being used by Israeli startups with a presence in the United States, like E and O-1, have not been impacted, said Kan-Tor. However, Israelis seeking E visas have been left waiting for months due to the suspension in service at the U.S. embassy caused by the pandemic.

The main impact will be felt by big high-tech companies, which typically use H-1B visas, and current employees of international companies seeking to relocate to the United States under L visas.

The restrictions will wreak havoc on major technology companies, including Fortune 200 companies, which make widespread use of visas to bring in engineers who work for relatively low salaries, primarily from India, according to Kan-Tor.

The H-1B restriction will have much less of an impact on Israel, he said, since Israeli citizens don’t make widespread use of these visas.

“The quota for [H-1B] visas would be filled up in a single day over the past decade,” he noted. “It demanded a lot of advance preparation, which doesn’t suit Israelis. Occasionally they’d transfer a few Israeli workers to the United States under this visa because it didn’t mandate prior employment at the company, and indeed this option is now not available.”

However, major technology companies like Apple and Facebook have been more likely to import Israeli managers and engineers under L-1 visas for professionals with specialized knowledge. The restriction on these visas “is a major hit to multinational companies with operations in Israel,” he said.

Israeli startups tend to use L-1, O-1 and E-2 visas, he noted. The United States has made E-2 visas available to Israelis over the past two years under a special agreement with a limited list of countries, on the basis of reciprocity for U.S. workers relocating abroad. Applications for E-2 visas are frozen because the U.S. embassy in Israel is not handling applications due to the virus, he said.

Critics of the measure say Trump is using the pandemic to achieve his long-standing goal to limit immigration. The proclamation’s immediate effects are likely to be limited, as U.S. consulates around the world remain closed for most routine visa processing.

Trump’s “buy American and hire American” philosophy has already been impacting U.S. tech companies with ties to Israel. A 2019 study by the National Foundation for American policy found that the rejection rate for H-1B visas rose to 33% that year, and that visa extension rejections rose to 14%.