Athira Sethu
Kochi, 9 September 2025
The United States is going to make it more difficult for businesses to employ labor from other nations. There has been a new law proposed that might prevent businesses from outsourcing jobs in order to save money. This new law is named the HIRE Act, which stands for Halting International Relocation of Employment Act.
Ohio Senator Bernie Moreno sponsored the bill. He states too many US companies are outsourcing jobs abroad just so they can pay less. He thinks that it hurts American workers, particularly those who have recently graduated from college and are having a tough time finding work.
What is the HIRE Act?
The HIRE Act will introduce a new 25% tax on any payment by an American company to a foreign employee if the employment is to the benefit of individuals in the U.S. This means, if an American company employs an individual abroad to do work for customers in America, they will have to pay additional tax.
This tax will begin from December 31, 2025.
The concept behind this bill is to prevent firms from outsourcing jobs and to save American workers. Senator Moreno noted firms should not pursue “cheap labor” abroad just to earn extra revenue. He aims to make it costly for firms to forego hiring American workers.
Where will the tax money go?
The funds raised from this tax will go into a new initiative known as the Domestic Workforce Fund. This fund will assist American workers by funding job training, apprenticeships, and other career development programs.
In addition, businesses cannot write off these outsourcing fees from taxes. This makes the penalty all the more severe for those who persist in sending jobs overseas.
What about foreign students?
The new law also proposes modifications for foreign students who work in the U.S. under the OPT (Optional Practical Training) program. Currently, these students are exempt from paying FICA taxes (paid into the Social Security and Medicare funds). But with the new law, they will be required to pay FICA taxes, just like the rest of the population.
Why does this matter?
The HIRE Act is a very clear message from the U.S. government. It indicates that the nation prefers to retain jobs within America and provide its own people with greater job opportunities. If the bill is passed, it will become more difficult for corporations to recruit employees outside of the U.S. simply to cut costs.