The Solution: NAICS 561399 (Phase 1) → U.S. Foreign Labor Levy (Phase 2)
This Act establishes a two-phase structural solution to address the scale, opacity, and economic impact of foreign labor operating within the United States.
Phase 1 — NAICS 561399: Industry Classification (First Priority)
Phase 1 formally classifies foreign labor as a distinct U.S. industry through the adoption of NAICS 561399 — Foreign Labor Placement and Management Services.
This classification is the foundational prerequisite for all subsequent action. It enables consistent measurement, standardized reporting, and cross-agency visibility of non-citizen labor across visa programs, staffing firms, offshore subsidiaries, and university-related employment pathways.
By recognizing foreign labor as a measurable and auditable industry, Phase 1 establishes the structural basis required for taxation, enforcement, and long-term policy accountability.
Phase 2 — U.S. Foreign Labor Levy (Enabled by Phase 1)
Once foreign labor is formally classified under NAICS 561399, Phase 2 implements the U.S. Foreign Labor Levy, a 4-Pillar, 4-Tier salary-based framework designed to realign hiring incentives and prioritize qualified U.S. citizens.
Together, Phases 1 and 2 ensure:
- Taxation and Data Parity
Foreign labor is measured, reported, and treated consistently with all other U.S. industries.
- Incentives for Citizen Hiring
Employers are economically incentivized to prioritize American workers over non-citizen labor.
- Oversight and Accountability
Enables consolidated monitoring of staffing firms, offshore labor arrangements, and university visa programs.
Phase 2 Framework: 4-Pillar, 4-Tier Structure
- Work Visa and Employment Levy
A per-worker tax, scaled by salary tier, discouraging unnecessary foreign hiring and penalizing underpayment of non-citizen workers.
- Foreign Worker Payroll Levy
An employer payroll tax based on wage level and visa type, ensuring compliance with NAICS 561399 labor management and payroll tracking standards.
- Employee Remittance Levy
A tax on outbound remittances by foreign workers, addressing economic leakage and reinforcing citizen-first labor policies.
- Offshoring & Remote Labor Levy
A tax on remote foreign workers serving U.S. employers, curbing unregulated offshore labor and boosting demand for U.S.-based talent.
Economic Impact
- Total Impacted Workforce: ~32 million documented non-citizen workers (USCIS, DHS 2025)
- Corporate Profit Advantage: $180.2 billion annually from foreign labor arbitrage (BLS-adjusted)
- Potential Levy Revenue (2025–2028): $3.314 trillion
- Job Recovery Potential: ~12.8 million displaced American workers reintegrated
Why NAICS 561399 Matters (Phase 1 Foundation)
The proposed NAICS 561399 classification ensures:
- Data Alignment: Integration of DHS, IRS, USCIS, DOL, and Census data for consistent tracking
- Statistical Insight: Tracking of foreign worker recruitment, offshore employment, and student labor (F-1, OPT/CPT)
- Revenue Modeling: Structural support for levy collection and enforcement
- Future Legislation: Enables the Student Education Protection Act and expanded citizen training programs
This classification is non-regulatory, but critical for enabling taxation, enforcement, and economic analysis.
National Security Benefits
NAICS 561399 data and levy proceeds support:
- Real-time vetting of foreign workers in sensitive roles
- Employer transparency through H-1B usage disclosures and audits
- Monitoring of offshore labor via standardized NAICS-based tracking
Call to Action
Phase 1 must come first.
President Trump must issue an Executive Order directing interagency action to classify Foreign Labor as a distinct U.S. industry through the adoption of NAICS 561399. This step requires no congressional approval and can be implemented through coordination among OMB, the Census Bureau, the Department of Labor, DHS, USCIS, and the IRS.
Once Phase 1 classification and data transparency are established, Phase 2—the U.S. Foreign Labor Levy—can be implemented through legislative action to enforce taxation, compliance, and long-term accountability.
Supporting Documents
- NAICS 561399 Proposal (June 2025)
- USCIS Visa Data; DHS EAD Reports (2024–2025)
- BLS Wage and Employment Displacement Statistics (2025)
- Economic Impact Summary (available upon request)