By Mica Rosenberg, Stephen Nellis and Emily Stephenson
NEW YORK/SAN FRANCISCO (Reuters) - President-elect Donald Trump's transition team has been actively considering ways to revamp a temporary visa program used to bring foreign workers to the United States to fill high-skilled jobs, according to sources familiar with the discussions.
Possibilities for reforming the distribution of H-1B visas, which are used largely by the tech industry, were discussed at a meeting last month with chief executives of tech companies at Trump Tower, said two sources, who asked not to be named because they were not authorized to talk about the closed-door talks.
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Trump senior policy adviser Stephen Miller proposed scrapping the existing lottery system used to award the visas. A possible replacement system would favor visa petitions for jobs that pay the highest salaries, according to the sources.
H-1B visas are intended for foreign nationals in "specialty" occupations that generally require higher education, which according to U.S. Citizenship and Immigration Services (USCIS) includes, but is not limited to, scientists, engineers or computer programmers. The government awards 65,000 every year.
Companies say they use them to recruit top talent. But a majority of the visas are awarded to outsourcing firms, sparking criticism by skeptics that say those firms use the visas to fill lower-level information technology jobs. Critics also say the lottery system benefits outsourcing firms that flood the system with mass applications.
The H-1B visa program tends to be more critical to outsourcing firms than U.S. tech firms. For instance, more than 60 percent of the U.S. employees of Indian outsourcing firm Infosys <INFY.NS> are H-1B holders, and the company in its annual report has cited an increase in visa costs as among factors that could hurt its profitability.
The top 10 recipients of H-1B visas in 2015 were all outsourcing firms, according to government data compiled by the IEEE-USA, a professional organization representing U.S. engineers.
Sixty-five percent of H-1B petitions approved in the 2014 fiscal year went to tech workers, mostly from India, according to USCIS.
In several high-profile cases, American workers were asked to train H-1B holders to do their jobs before being laid off themselves.
The idea advanced by Miller in the tech meeting has also been pushed by the IEEE-USA.
Miller previously served as a staffer for Senator Jeff Sessions, Trump's pick for attorney general, who has been an outspoken critic of abuses of the H-1B program.
Trump, who has applied for H-1B visas to bring in foreign workers to his own businesses sent mixed messages about the program on the campaign trail. He assailed it for taking jobs from U.S. workers, but during a Republican debate last March said he was "softening" his position "because we have to have talented people in this country."
He later issued a statement on his website saying he would "end forever the use of the H-1B as a cheap labor program."
Trump businesses, like Trump National Golf Club and Trump Model Management, have received permission to bring in more than two dozen foreign employees on H-1B visas since 2011, according to Department of Labor data.
TRUMP TOWER MEETING
During the meeting last month in New York, Trump seemed to be searching for middle ground, and members of his transition team raised specific proposals, the two sources said. A third source familiar with the talks said the Trump team has also discussed the plan to change the lottery system internally.
There were more than a dozen top tech executives from some of the country's largest tech companies, including Google <GOOGL.O>, Facebook <FB.O> and Apple <AAPL.O>, present at the meeting.
Microsoft <MSFT.O> CEO Satya Nadella said technology companies need to be able to recruit talent from abroad when necessary.
Trump seemed open to modifying the H-1B program, the sources said. He said he wanted to stop "bad people" from immigrating to the United States, not "great people," according to one account of the meeting.
Among proposals the group discussed was raising the cost of applications from large companies as a way to discourage bulk filing for the visas. Asked by Trump if they would object to that, none of the tech CEOs said they would.
"In our view, the president-elect is not hostile to H-1B visas," said one of the sources familiar with discussions at the meeting.
While Trump could initiate some changes to the visa program with executive action, significant shifts would likely need to go through a lengthy formal rulemaking process, said Stephen Yale-Loehr, an immigration expert at Cornell Law School. Major changes would likely be subject to court challenges, he said.
Other reforms, like changing the visa cap or offering more green cards to high-tech workers, could require Congressional action, Yale-Loehr said.
A wide variety of companies, including Thomson Reuters <TRI.TO>, use the H-1B visa program to bring in employees from abroad.
(Reporting by Mica Rosenberg in New York, Emily Stephenson in Washington and Stephen Nellis in San Fransico; Editing by Leslie Adler; Additional reporting by Julia Edwards in Washington; editing by Sue Horton)