DOL Reverts to Lower Wage Requirements After Courts Block H-1B Rule Changes

Courts again have thwarted the Trump Administration's efforts to change H-1B rules and to increase the required wages that U.S. employers must pay to foreign workers. On December 1 and 3, 2020, a federal court order in California and preliminary injunction in New Jersey stalled abrupt rule changes that would have dramatically altered the H-1B program and imposed sharp wage hikes on employers who hire foreign workers.

Beginning on December 4, 2020, the U.S. Department of Labor (DOL) will reinstate the prior, lower wages, available on the government website. Any employer who received a DOL prevailing wage determination (PWD) or Labor Condition Application (LCA) at the increased wage rates may request a redetermination or refile.

The U.S. Chamber of Commerce and other plaintiffs sued in California under the Administrative Procedure Act (APA) to strike down both rules. A technology consortium, IT Serve Alliance, was the key plaintiff in New Jersey to strike down the DOL rule.

Both courts decided that there was no good cause to justify the rule changes. The court in the Chamber of Commerce case specified that there was no basis to "dispense with the rational and thoughtful discourse that is provided by the APA's notice and comment requirements." An appeal is unlikely.

To view the rule changes, please see our prior advisory.

What Are DOL Wage Requirements for Foreign Workers?

Before filing a petition for a temporary foreign worker in the categories H-1B, H-1B1 (for citizens of Chile and Singapore), or E-3 (for citizens of Australia), the employer must file an LCA with the DOL to certify that the wage offered to the foreign worker meets or exceeds the "prevailing wage" in the area of intended employment. The U.S. Bureau of Labor Statistics maintains an Online Wage Library which contains government Occupational Employment Statistics (OES) prevailing wage determinations for various occupations in each area of the country.

The Online Wage Library contains four levels of wages based on the job duties, education and experience requirements from Level 1 for entry level, to Level 4 for fully qualified or expert personnel. Alternatively, the employer may use a private wage survey with wage data that meets DOL requirements. The DOL also refers to the same four-level wage data to establish the required wages for the PERM application program for employers seeking to obtain permanent residence and green cards for foreign workers.

Will DOL Be Reissuing LCAs or PWDs for the Determinations Issued Between October 8 and December 2, 2020?

The DOL will not take the initiative to reissue LCAs or Prevailing Wage Determinations (PWDs) issued between October 8, 2020, and December 2, 2020. Employers with LCAs issued at the increased rates should submit new LCAs. The processing time is seven days.

What Should Employers Do?

• First, check the wages available on the government OES website for data to match the employee wage against the government OES data, with an effective date of July 1, 2020.
• On December 9, 2020, employers will be able to submit new LCAs using the OES survey data that was in effect on October 7, 2020, with the July 1, 2020, effective date.
• The DOL is temporarily suspending processing of pending Prevailing Wage Requests for use in PERM (green card) applications. However, employers can continue to file new requests for a prevailing wage determination at any time.
• Employers with PWDs at the increased rates should submit redetermination requests or new Prevailing Wage Requests, but bear in mind that current processing time might be around four months. For PWDs already issued with the interim increased wage, an employer may make a request for review on or before January 4, 2021. These requests can be made online, by email, or by mail.
• On December 15, 2020, the DOL will resume processing of Prevailing Wage Requests and will use the data that was in effect on October 7, 2020, for PWDs where the OES survey data is the prevailing wage source.
• Employers still may consider using a private wage survey where government wage information appears to be inflated.