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DOL Re-issues Rule Changing Calculation of Prevailing Wage Levels for H-1B, H-1B1, E-3 and PERM applications

23:11 12 January in News Updates
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Today the U.S. Department of Labor published an advance copy of a Prevailing Wage Rule titled, “Strengthening Wage Protections for the Temporary and Permanent Employment of Certain Aliens in the United States.”   The rule again proposes amending regulations governing prevailing wage calculations for permanent labor certifications (for the green card process) and Labor Condition Applications (applicable to H-1B, H-1B1 and E-3 nonimmigrant worker petitions).   

When will it be effective, if at all?

The rule is expected to be republished as a final rule on Thursday, January 14, 2021 and take effect 60 days from the date of publication.   However, the effective date will likely be further extended as the Biden Administration has indicated it will issue a memo on January 20 delaying implementation of “midnight regulations,” which are those issued since the election but have not taken effect for 60 days.

We also expect that groups that previously challenged this regulation will again litigate the revised final rule, which is again vulnerable to injunction.

The rule was initially published and effective on October 8, 2020.   It was enjoined on December 1, 2020 by three federal courts as a result of litigation citing violations of the Administrative Procedures Act, faulty calculations, and the objection of numerous industry, business and university advocates citing anticipated damage to the economy contrary to the intent of the rule.

While the new rule corrects some significant calculation errors from the earlier version, practitioners note problems remain with the DOL’s methodology of calculating the new tiers, especially at the higher wage levels.  Further, the basic concerns that the rule ignores existing law and economic reality, hurting small business and start-ups at a time it can least be afforded, lead many to expect the rule will again be struck down, for the same reasons as was the interim final rule.

If the rule does take effect, unlike the October rule which was implemented immediately, the new rule would be phased in.  Wages would start increasing in July 2021, and take full effect for some employees one year later.   For individuals requiring H-1B extensions due to immigrant visa quota backlogs, the rule would not take full effect until July 2024.

Comparison with current OES wage calculations

The new final rule would raise the entry-level prevailing wage calculations such that they will be based on the following percentiles:

Level 1:              current structure 17th percentile to new rule 35th percentile

Level 2:              34th percentile to 53rd percentile

Level 3:              50th percentile to 72nd percentile

Level 4:              67th percentile to 90th percentile

The above wage tiers, while higher than the current structure, are lower than the interim final rule issued in October which set Level 1 salaries at the 45th percentile, followed by tiers at the 62nd, 78th and 95th percentiles.

Additional Info

Advance Copy of Final Rule: Strengthening Wage Protections for the Temporary and Permanent Employment of Certain Aliens in the United States (dol.gov)

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This update was prepared by Fausta M. Albi, Partner, Larrabee Albi Coker LLP.

Legal Disclaimer:   This e-blast is provided for informational purposes only and does not substitute for legal advice based on the circumstances of a specific matter.  Immigration laws and policies change frequently, often without notice.  It is therefore important to seek direct legal counsel based upon individual circumstances.

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