One senior administration official described "abuse" of the program as any company that "brings in a worker not because you need their skill or talent, but for the objective of undercutting the American worker" by seeking out cheap foreign labor.
He said replacing the H-1B lottery with a more merit-based system could advance the program's goals of attracting people with advanced science and technology skills.
The senior official said that under the current system foreign workers are often brought in at less pay to replace American workers, "violating the principle of the program". On the contrary, technology companies argue that the United States has a shortage of skilled technology workers.
"This order also breaks additional new ground by taking a very hard look at how waivers of Buy American in our free trade agreements may be a poster child of unfair and non-reciprocal trade in the $4.4 trillion global procurement market", the senior administration official said.
The executive order from President Trump will shift the H-1B visa program away from a lottery system weighted toward lowest-wage workers to a system that prioritizes higher-skilled, higher-paid workers. He was critical of the H-1B program during his election.
The tech industry has argued that the H-1B program is needed because it encourages students to stay in the US after getting degrees in high-tech specialties - and they can't always find enough American workers with the skills they need.
According to the executive order, the Departments of Commerce, Labor, Homeland Security and State are required to more strictly police the visa program.
The US Citizenship and Immigration Services on Monday said that that employers who sought visas for 2018 submitted only 199,000 applications this year, compared last year's 236,000 applications.
Other visa programs, like the H-2B seasonal worker visa that Trump himself uses to staff his Mar-a-Lago resort in Palm Beach, Fla., will be largely unaffected. The H-2B visa program allows American companies to hire low-wage foreign nonagricultural workers.
The government issues 85,000 H-1B visas annually. Chuck Grassley, would require companies seeking H-1B visas to first make a good-faith effort to hire Americans, a requirement many companies can dodge under the current system; give the Labor Department more power to investigate and sanction H-1B abuses; and give "the best and brightest" foreign students studying in the USA priority in getting H-1B visas.
"This is what America wants", said a second official.
The order calls on the Department of Labor, the Department of Justice, the Department of Homeland Security and the State Department to "take prompt action to crack down on fraud and abuse" within the USA immigration system to "protect workers". Under the existing rules, 65,000 visas are available, although the number of applicants is usually two-three times this.
Through its "more targeted approach", USCIS has also chose to make random and unannounced "targeted site visits" to companies recruiting H-1B employees, in a bid to "focus resources where fraud and abuse of the H-1B program may be more likely to occur".
Companies say they use the visas to recruit top talent. You know, are companies like Tata (TCS), Infosys, Cognizant. "Like putting extra tickets in the lottery raffle, if you will", the official said. "But you could be looking at things on the administration side like increasing fees for H-1B visas". It grants 65,000 visas every year while another 20,000 are set aside for those with United States advanced degrees. An administration official claimed that the "lion's share" of the visas are presently used for "entry-level positions".