As reported in our prior alert, the Department of Labor (DOL) has issued its final rule Strengthening Wage Protections for the Temporary and Permanent Employment of Certain Aliens in the United States. Published today in the Federal Register, the Final Rule is effective March 15, 2021. The rule increases wages employers are required to pay H-1B workers by the percentiles we previously reported for the four wage levels utilized by the DOL—35th percentile for Level 1, followed by 53rd, 72nd and 90th percentiles. The rule outlines a phased approach to implementing wage increases over the next three and a half years. On July 1, 2021, the DOL will begin applying its new wage-setting methodology on an incremental basis when releasing its annual wage data by occupation and geographic area. The introduction of an annual increase in wages on July 1 will result in the DOL reaching the percentiles (discussed below) as of July 1, 2024.
Because this rule goes into effect after January 20 and the presidential transition, the Biden administration is expected to follow precedent set by prior administrations in the treatment of “midnight regulations” issued by the outgoing administrations. That is, President-elect Biden is expected to issue an executive order postponing—probably for a period 60 days—the effective date of all “midnight regulations” (including this DOL final rule) that were issued by the prior administration and published in the Federal Register, but that have not taken effect. Such a moratorium would afford the new president’s team time to evaluate and assess new rules (as well as pending rules), and, if they wish, institute rulemaking procedures to further delay, revise, or withdraw the prior administration’s rules. It should be noted that the new administration would be required to use rulemaking procedures—typically, notice-and-comment rulemaking—to revise, withdraw, or indefinitely delay regulations that have been published in the Federal Register. The administration could not revise, withdraw, or indefinitely delay regulations merely by issuing executive orders or publishing notices in the Federal Register.