Labor - Legislative Outline

Introduction

The U.S. Citizen Workforce Protection and Employment Act introduces the “U.S. Foreign Labor Levy,” a 4-Tax Pillar, 4-Tier Salary Structure Framework, to address overreliance on foreign labor, protect national security, and prioritize U.S. citizen workers in a competitive economy. Excessive use of temporary worker visas (e.g., H-1B), green card programs, and humanitarian work authorizations has displaced U.S. citizen workers in high-demand industries like tech, healthcare, and manufacturing, while posing risks like espionage and data theft in critical sectors.

Through a tiered levy structure with constant low rates for workers earning < $35K, this Act ensures fairness for low-wage sectors (e.g., agriculture, hospitality) where U.S. workers are scarce, while incentivizing U.S. citizen hiring in skilled roles. Levy proceeds fund continuous workforce training, strengthen foreign worker vetting, and support economic development. With federal and state collaboration, the Act fosters an equitable, citizen-led workforce for an enduring, prosperous future.

NEW: NAICS Proposal – Formal Classification of Foreign Labor as an Industry

As part of the broader legislative framework, a formal proposal was submitted to the U.S. Census Bureau to recognize Foreign Labor Placement and Management Services as a standalone industry under the North American Industry Classification System (NAICS):

• Proposed Code: NAICS 561399 – Foreign Labor Placement and Management Services
• Date Submitted: July 2, 2025 (via USPS Signature Confirmation, signed by "D. James")
• Placement: Subsector 561 – Administrative and Support Services, Industry Group 5613 – Employment Services
• Definition: Establishments primarily engaged in recruiting, managing, or compensating non-citizen workers under temporary visas, permanent resident status, humanitarian authorizations, or offshore arrangements—including visa processing, USCIS/DHS compliance, E-Verify reporting, and payroll management.

Economic Significance of the Proposed Industry:

• Total Covered Workforce: 16.7 million documented non-citizen workers (~10% of U.S. workforce)
• Tax Revenue Potential: ~$1.72 trillion (2025–2028)
• U.S. Citizen Job Return Potential: 6.68 million jobs recovered from displacement
• Use Case: Provides the statistical basis to inform and administer the U.S. Foreign Labor Levy and the U.S. Citizen Student Education Protection Act.

This classification will empower federal agencies (Census, BLS, BEA) with vital labor force data to better track, regulate, and model foreign labor practices across industries.

II. Definitions

For the purposes of this Act, the following terms are defined as follows:

• U.S. Citizen: A person who possesses United States citizenship by birth or naturalization, as per the Immigration and Nationality Act (8 U.S.C. § 1401 et seq.), excluding non-citizen nationals.
• Foreign Labor: Any non-citizen employee authorized to work in the U.S. and trackable through employer records, including:
  • Temporary Worker Visas: Non-immigrant visas authorizing employment, per Section 101(a)(15) of the Immigration and Nationality Act, including H-1B, H-1B1, H-2A, H-2B, H-3, L-1, O-1, O-2, P-1, P-2, P-3, E-1, E-2, E-3, TN, I, R-1, Q-1, and certain J-1 categories (e.g., au pairs, trainees), plus F-1 visas with Optional Practical Training (OPT) or STEM OPT extensions.
  • Green Card Holders: Lawful permanent residents (LPRs) employed in the U.S., including employment-based (e.g., EB-1 through EB-5), family-based (e.g., IR through F4), diversity, or humanitarian green card programs.
  • Humanitarian Categories with Work Authorization: Non-citizens with work authorization under programs like Deferred Action for Childhood Arrivals (DACA), Temporary Protected Status (TPS), asylum seekers, parolees, and other refugee or asylee categories, per employer records.
  • Exclusions: Non-citizen workers on non-work visas (e.g., B-2, F-1 without OPT) or undocumented workers not trackable.
• Green Card Employer: An employer sponsoring 100 or more non-citizen workers for employment-based lawful permanent residency (e.g., EB-1, EB-2, EB-3, EB-4) in a fiscal year, per U.S. Citizenship and Immigration Services (USCIS) Form I-140 petitions.
• Green Card Program: Lawful permanent residency programs, including employment-based and family-based categories, such as EB-1 through EB-5 and IR through F4.
• Immediate Family: Spouse or unmarried children under 21, including biological, adopted, or stepchildren, per Section 201(b) of the Immigration and Nationality Act.
• Levy: A financial charge, administered as a tax by the Internal Revenue Service (IRS), to prioritize U.S. citizen worker employment, as detailed in Section III.
• Local Median Wage: The 50th-percentile wage for an occupation in a metropolitan statistical area, per the most recent U.S. Department of Labor’s Occupational Employment Statistics (OES) survey.
• Salary Tiers: Foreign worker salary categories for levy application, based on employer payroll records and recent BLS wage data: < $35,000 (low-wage, e.g., agriculture); $35,000–$60,000 (mid-tier, e.g., manufacturing); $60,000–$100,000 (skilled, e.g., nursing); > $100,000 (high-skill, e.g., tech).
• Temporary Worker Visa: Non-immigrant visas authorizing employment, per Section 101(a)(15), including H-1B, H-1B1, H-2A, H-2B, H-3, L-1, O-1, O-2, P-1, P-2, P-3, E-1, E-2, E-3, TN, I, R-1, Q-1, and certain J-1 categories, excluding non-work visas (e.g., B-2, F-1 without OPT). F-1 OPT/STEM OPT included if authorizing employment.
• Top H-1B Employer: An employer with 1,000 or more H-1B petitions approved in a fiscal year, per USCIS.
• U.S. Citizen Worker: A U.S. citizen employed or seeking employment in the U.S.

III. Implementation of the U.S. Foreign Labor Levy: A Four-Pillar Approach

The U.S. Foreign Labor Levy comprises four levies, administered as taxes by the IRS, to make hiring foreign labor costlier than U.S. citizen workers, with no exemptions. The Work Visa and Employment Levy, Foreign Worker Payroll Levy, and Employee Remittance Levy use a 4-Tier Salary Structure (< $35K, $35K–$60K, $60K–$100K, > $100K), with constant rates for < $35K workers to ensure fairness in low-wage sectors (e.g., agriculture, hospitality) where U.S. citizens often avoid jobs. 

Levies escalate over three years to prioritize U.S. hiring, particularly in high-skill roles (e.g., tech, finance), fostering an ongoing transition to a citizen-led workforce.

1) Work Visa and Employment Levy

• Structure (per worker, tiered by salary):
  • < $35K: 3% (Years 1–3, constant). For essential roles (e.g., H-2A agriculture, 300K workers, DOL 2024).
  • $35K–$60K: 7% (Year 1), 14% (Year 2), 20% (Year 3). For mid-tier roles (e.g., manufacturing).
  • $60K–$100K: 10% (Year 1), 18% (Year 2), 28% (Year 3). For skilled roles (e.g., nursing).
  • > $100K: 15% (Year 1), 25% (Year 2), 45% (Year 3). For high-skill roles (e.g., tech, finance).
  • H-1B/L-1 Surcharge: 5% (Year 1–2), 10% (Year 3) for below-median wages (~300K workers).
• H-1B Petition Caps: Top H-1B employers limited to 50% of 2019 approvals (Year 1), 25% (Year 2), 0% (Year 3).
• Implementation: Assessed via USCIS petitions and IRS filings.
• Rationale: Constant 3% for < $35K protects low-wage sectors while progressive rates deter foreign hires in high-skill markets (2.2M STEM grads/year, BLS data).
• No Exemptions: Applies universally.

2) Foreign Worker Payroll Levy

• Structure (on wages, tiered by salary):
  • < $35K: 7% (Years 1–3, constant).
  • $35K–$60K: 12% (Year 1), 20% (Year 2), 30% (Year 3).
  • $60K–$100K: 18% (Year 1), 28% (Year 2), 40% (Year 3).
  • > $100K: 25% (Year 1), 44% (Year 2), 55% (Year 3).
  • H-1B Surcharge: 10% (Year 1–2), 15% (Year 3) for below-median wages.
• Implementation: Collected via IRS payroll taxes.
• Rationale: Constant 7% for < $35K preserves low-wage labor (e.g., healthcare aides, LeadingAge data) while escalating rates eliminate cost savings in high-skill roles.
• No Exemptions: Universal application.

3) Employee Remittance Levy

• Structure (on ~$10,400 remittances/worker):
  • < $35K: 7% (Years 1–3, constant).
  • $35K–$60K: 9% (Year 1), 14% (Year 2), 18% (Year 3).
  • $60K–$100K: 9% (Year 1), 14% (Year 2), 18% (Year 3).
  • > $100K: 9% (Year 1), 14% (Year 2), 18% (Year 3).
• Implementation: Collected by financial institutions (e.g., banks, Western Union, PayPal) at the point of each international remittance by foreign workers.
• Rationale: Constant 7% for < $35K ensures equity for low-wage workers (e.g., H-2A, H-2B), countering inequity claims, while deterring higher-wage workers.
• No Exemptions: Applies to all remittances.

4) Offshoring & Remote Labor Levy

• Structure: 15% (Year 1), 30% (Year 2), 40% (Year 3) per worker ($52K average).
• H-1B Third-Party Ban: Effective Year 1.
• Implementation: Assessed via DOL employer reports, collected by IRS.
• Rationale: Penalizes offshoring, reinforcing U.S. hiring.
• No Exemptions: Applies universally.

IV. Revenue Allocation and Use of Levy Proceeds

Levy proceeds, collected as taxes, support U.S. citizen workers and the domestic labor market through ongoing initiatives, addressing job displacement and wage suppression caused by foreign labor.

1) Government Assistance and Training Programs

• Workforce Development: Fund vocational training, apprenticeships, and certifications in high-demand industries (e.g., tech, healthcare) to equip U.S. citizen workers for roles held by foreign labor.
• Retraining for Displaced Workers: Provide continuous retraining for U.S. citizen workers displaced by foreign labor, ensuring rapid transition to new opportunities.
• Educational Grants: Allocate funds to community colleges and technical schools to sustain programs aligned with labor market needs.

2) Support for Displaced U.S. Citizen Workers

• Financial Assistance: Provide temporary aid to cover expenses during job transitions for displaced U.S. citizen workers.
• Job Placement Services: Partner with private-sector employers to place displaced U.S. citizen workers in roles aligned with their skills.

3) Incentives for Companies Hiring U.S. Citizen Workers

• Tax Incentives:
  • Hiring Credit: $7,500 per U.S. citizen worker hired for small businesses (<50 employees), $5,000 for medium businesses (50–500 employees), $3,000 for large businesses (>500 employees).
  • Retention Credit: $1,000 annually per U.S. citizen worker retained for over one year.
  • Payroll Tax Reduction: 10% payroll tax reduction for firms with 90%+ U.S. citizen worker workforces, maintained for 12 months.
• Eligibility Criteria:
  • Maintain at least 90% U.S. citizen worker workforce.
  • No layoffs of U.S. citizen workers in favor of foreign labor.
  • Compliance sustained for 12 months.
• Special Considerations: Higher hiring credits ($10,000 per U.S. citizen worker) for high-demand industries (e.g., healthcare, manufacturing) for the first 5 years.

4) Economic Development Projects

• Community Investment: Fund infrastructure and community projects to create jobs for U.S. citizen workers and stimulate local economies.
• Small Business Support: Provide grants and low-interest loans to small businesses prioritizing U.S. citizen workers, fostering job creation.

V. Transition Assistance for Affected Industries

Levy proceeds fund ongoing initiatives to support industries transitioning to U.S. citizen workers:

• Training Programs: Continuous vocational and technical training to prepare U.S. citizen workers for in-demand roles, reducing foreign labor reliance.
• Tax Credits and Grants: Financial incentives for companies adopting U.S. citizen worker workforces, minimizing economic disruption.

VI. Robust Enforcement Mechanisms

To ensure levy compliance and prioritize U.S. citizen workers:

• Compliance Audits:
  • Annual DOL and IRS audits verify levy payments, U.S. citizen worker hiring attestations, and wage compliance for all non-citizen workers.
  • Employers report all non-citizens (visas, LPRs, humanitarian) via IRS filings, cross-checked with USCIS, DHS, and E-Verify data.
  • Enforce H-1B third-party ban and petition caps.
• Penalties for Non-Compliance:
  • 100% surcharge on all levies for violations.
  • 5-year ban from federal contracts.
  • Public disclosure of violations.
• LCA Suspension:
  • Suspend DOL’s Labor Condition Application process (Year 1).
  • Require 90-day U.S. citizen worker recruitment attestation before H-1B petitions, verified by DOL audits.

VII. Addressing Concerns

To ensure the U.S. Foreign Labor Levy benefits U.S. citizen workers while minimizing disruption:

• Fairness: Constant < $35K rates (3% Work Visa, 7% Payroll, 7% Remittance) protect low-wage sectors (e.g., agriculture, 300K H-2A; hospitality, 130K H-2B, DOL data), countering inequity claims and reducing agribusiness opposition.
• Impact Studies: Continuous economic assessments evaluate wages, jobs, and inflation, ensuring benefits for U.S. citizen workers.
• Mitigation Strategies: Levy proceeds fund small business grants and training to offset costs and support transitions.

VIII. Public Awareness Campaign

To build support for the 4-Pillar, 4-Tier Framework:

• Education Initiatives: Campaign highlights H-1B abuses (e.g., 60% below local median wage, USCIS data) and levy benefits, using clustered column charts to visualize constant < $35K rates (3%, 7%, 7%) and progressive rates for fairness.
• Community Engagement: Promote U.S. citizen worker job opportunities through events and job fairs.

IX. Feedback Mechanism

To ensure the levy’s ongoing effectiveness:

• Stakeholder Input: Online portal for businesses, U.S. citizen workers, and communities to provide feedback.
• Review Periods: Biennial reviews adjust rates or H-1B caps, ensuring adaptability and fairness (e.g., constant < $35K rates).
• Legislative Codification: Advocate for Congressional legislation to codify the levy for long-term impact.

X. Collaborative Efforts

To enhance implementation:

• Interagency Coordination: DOL, IRS, DHS, USCIS, and Department of Government Efficiency (DOGE) streamline levy collection, audits, and vetting.
• State and Local Partnerships: Align state/local training and job placement programs with levy goals.

XI. Foreign Labor Vetting & National Security

To protect national security and prioritize U.S. citizen workers in critical industries:

• Enhanced Vetting: Strengthen H-1B and temporary visa vetting to safeguard infrastructure, addressing espionage and data theft risks. Levy proceeds fund vetting programs.
• Agency Roles: DOL, DHS, USCIS, DOJ, DoD, and DOGE collaborate on vetting, levy enforcement, and H-1B compliance in sensitive roles.
• Transparency: Public disclosure of H-1B hiring practices (visa status, wages, vetting compliance). Employers conduct enhanced background checks for non-citizen workers in sensitive roles, verified by DOL audits. Proceeds support training and entitlement programs.

Conclusion:

The U.S. Citizen Workforce Protection and Employment Act, now coupled with the NAICS 561399 classification proposal, transforms the U.S. labor market through a data-informed 4-Tax Pillar, 4-Tier Salary Framework. This dual approach—classification and taxation—prioritizes U.S. citizen workers, reduces foreign labor reliance, and enhances national security.

By securing a formal industry designation for foreign labor and reinforcing it with targeted levies and reinvestment strategies, the Act empowers Congress, agencies, and local stakeholders to enforce a fair and citizen-first labor economy.

In fostering ongoing training, incentives, vetting, and enforcement, the Act ensures a resilient, citizen-led workforce. Congress is urged to codify this Act to secure a competitive, secure, and equitable future for American citizen workers.