Prevailing wage concept

Federal judge strikes down new prevailing wage and H-1B visa interim final rules: Details and information

A federal judge has struck down a pair of interim final rules that would have significantly altered the H-1B visa program and the computation of prevailing wages in connection with the H-1B, H-1B1, E-3 and PERM programs.

U.S. District Judge Jeffrey White, of the United States District Court for the Northern District of California, ruled earlier this week that the COVID-19 pandemic was not sufficient “cause” for the U.S. Department of Homeland Security (DHS) and Department of Labor (DOL) to skip standard regulatory procedures when issuing the interim final rules.

“The statistics presented regarding pandemic related unemployment still indicate that unemployment is concentrated in service occupations and that a large number of job vacancies remain in the areas most affected by Rules: computer operations which require high-skilled workers,” White wrote in his decision.

He continued: “Without any consultation with interested parties about the impact on American employers, DHS and DOL made changes to policies on which Plaintiffs and their members have relied for years and which are creating uncertainty in their planning and budgeting.”

White also found that the DOL had not “met their burden to show that providing advance notice would have had consequences so dire that notice and comment would not have served the public interest.”

The interim final rule issued by the DOL considerably raised the “required wage” for H-1B visas, which is equal to or higher than the “prevailing” wage for the specialty occupation in the local labor market or the “actual” wage paid by the employer to other workers with similar responsibilities and qualifications.

That rule also impacted wages connected to H-1B1 and E-3 applications as well as employment-based immigrant petitions requiring labor certifications.

Meanwhile, the interim final rule from the DHS was set to tighten the definition of a “specialty occupation” by requiring a bachelor’s degree in a field that has a “direct relationship” to the position being filled by the H-1B visa holder.

Additionally, the rule would have altered specific “employer-employee” requirements and increased scrutiny of employers who place H-1B employees at third-party worksites.

The ruling from White can be appealed by the Trump administration.

What is the H-1B visa program?

The H-1B nonimmigrant visa category is available for U.S. companies to fill a “specialty occupation” with a qualified foreign national. A specialty occupation is one that generally requires a bachelor’s degree or higher, or its equivalent, as a minimum, entry-level credential.

In most situations, an H-1B petition can be approved for a maximum initial period of three years and may be extended for an additional three years longer under certain circumstances.

There is a statutory cap that limits approval of new H-1B petitions in a fiscal year that is currently set at 85,000, with 20,000 reserved for foreign nationals who have obtained an advanced degree or higher from a U.S. college or university.

The H-1B1 and E-3 nonimmigrant visa programs are governed by many of the same rules which apply to the H-1B visa program. The H-1B1 program is limited to nationals of Chile and Singapore, while the E-3 visa program is limited to nationals of Australia.

What is the prevailing wage?

Certain visa types, including the H-1B visa, are subject to provisions established by the Immigration and Nationality Act requiring employers to pay H-1B workers the same rates as similarly employed U.S. workers, to guard against wage suppression and the replacement of U.S. workers by lower-cost foreign labor. This provision has been established in law for more than 50 years.

In connection with the H-1B visa program, the Department of Labor uses Occupational Employment Statistics (OES) data from the Bureau of Labor Statistics (BLS) to determine prevailing wages for a wide range of occupations. The prevailing wage rate is defined as the average wage paid to similarly employed workers in a specific occupation in the geographic area of intended employment.

The OES prevailing wage is subdivided into four tiers or wage levels, representing a range of skills from entry level to experienced. The rules blocked by White’s decision would have substantially changed the wage thresholds.

The DOL uses the same OES prevailing wage levels for the H-1B1, E-3 and PERM programs.

As always, please do not hesitate to contact Garfinkel Immigration Law Firm at 704-442-8000 or via email with any questions.

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