The White House has announced issuance of two new rules, both of which will take effect immediately upon publication in the Federal Register:
- The Department of Homeland Security’s H-1B rule, “Strengthening the H-1B Non-immigrant Visa Classification Program,” which has been on the DHS regulatory agenda for many years, including its first appearance in Fall 2017 under the current administration. It has since appeared in every other regulatory agenda since then, including Spring 2018, Fall 2018, Spring 2019, Fall 2019, and Spring 2020, as summarized on Reginfo.gov. The DHS announcement about the upcoming rule is included here.
- The Department of Labor’s rule increasing prevailing wage requirements for US employers, which apply to the Labor Condition Application filings that accompany H-1B, H-1B1, and E-3 petitions (including amendments and extensions), and apply to PERM labor certifications. Wage Level 1 will increase from the 17th percentile to the 45th percentile. Wage Levels 2, 3, and 4 all are increasing substantially above the current 50th percentile for Wage Level 3. Wage Wage Level 2 will increase to the 62nd percentile; Wage Level 3 to the 78th percentile; and Wage Level 4 to the 90th percentile. Percentiles are calculated for the specific occupational classification and vary by location (typically the Metropolitan Statistical Area or “normal commuting distance” from the job location).
Both rules will be Interim Final Rules, which makes them vulnerable to litigation based on the agencies’ bypassing of notice and comment, particularly as the delays in passing the rules are not explicable. The overall injury and disruption to employers and divergence of the wage levels from actual market wages are likely to form part of the challenges and requests for injunctive relief. The Northern District of California’s recent grant of an injunction enjoining the White House’s suspension of H-1B, L-1, and J-1 visas was premised on this type of injury, as reported in our COVID-19 blog post.
The DOL rule, which DOL indicates is required “to adjust the existing wage levels to ensure the levels reflect the wages paid to U.S. workers with levels of experience, education, and responsibility comparable to those possessed by similarly employed foreign workers,” repudiate the use of the government survey data (the OES Survey) which DOL has used since 1990, and it substitutes a new construct for calculating the wage that relies in part on statistics that some employers pay H-1B workers wages that are higher than the legacy prevailing wages. DOL also takes the posture that it will continue to use the OES data but recalculate the wage levels to exclude the lower-paid workers included in any category, alleging that lower-paid workers have lower skills or lesser academic credentials and so should not be included in the wage analysis.
As a result, DOL has created its own construct to dramatically shift the percentile allocations for wages, premised on what appears to be a largely conceptual approach and no documented objective source for the wage percentile deviations. Nor does the DOL rule reconcile why a sudden departure from the legacy wages on which employers have relied should be authorized, without notice and comment.