Legal Alert

DOL, DHS Issue New Rules for H-1B Process and Prevailing Wage Computation

by the Labor and Employment Group

October 9, 2020

Summary

The U.S. Departments of Labor (DOL) and Homeland Security (DHS) published interim final rules yesterday that amend regulations governing prevailing wage computation and the definition of “specialty occupation” in the H-1B visa program for foreign workers.

The Upshot

The changes are consistent with President Trump’s 2017 Executive Order, Buy American, Hire American. They are designed to protect the economic interests of U.S. workers and prevent fraud and abuse within the immigration system, according to Trump administration officials.
The new DOL rule took effect yesterday; the DHS rule takes effect in 60 days, on December 7, 2020.
Promulgation of the rules appears to bypass the usual procedural requirements and most likely will be legally challenged.

The Bottom Line

The new DOL rule significantly increases prevailing wage levels, purporting to reflect the accurate wage rate of U.S. workers performing the same kinds of jobs and with similar qualifications. Correspondingly, the DHS rule narrows the definition of “specialty occupation” in the H-1B visa classification. The new rules are intended to deter employers from using foreign workers in place of U.S. workers.

FULL ALERT

These changes are consistent with President Trump’s initiatives as outlined in his 2017 Executive Order, Buy American, Hire American, aimed at protecting the economic interests of U.S. workers and preventing fraud and abuse within the immigration system. The new DOL rule is effective on October 8, 2020, and the DHS rule takes effect in 60 days, on December 7, 2020.

Promulgation of the rules appears to bypass the usual procedural requirements and most likely will be legally challenged. Meanwhile, DHS is accepting public comments for 30 days after publication, through November 9, 2020.

Existing DOL regulations require U.S. employers who employ foreign workers on H-1B, H-1B1, or E-3 visas to pay the higher of the prevailing wage or the actual wage paid to other employees with similar experience and qualifications. Additionally, employers seeking to hire immigrants on EB-2 or EB-3 classification are currently required to recruit U.S. workers for the position using a prevailing wage issued by the DOL. If no willing, available, and qualified U.S. workers are found, the employer promises to pay the DOL-issued prevailing wage to the foreign worker hired to fill the position.

The new DOL rule significantly increases the prevailing wage levels, purporting to reflect the accurate wage rate of U.S. workers performing the same kinds of jobs and with similar qualifications. The new rule is intended to deter employers from using foreign workers in place of U.S. workers. Secretary of Labor Eugene Scalia stated that the new rule DOL is “strengthening wage protections, addressing abuses in these visa programs, and ensuring American workers are not undercut by cheaper foreign labor.”

Correspondingly, the DHS rule narrows the definition of “specialty occupation” in the H-1B visa classification. As currently defined, a specialty occupation position requires a theoretical and practical application of a body of highly specialized knowledge and a bachelor’s or higher degree in the specific specialty (or its equivalent) as a minimum for entry into the occupation in the United States. Previously, specialty occupation positions could be filled by applicants with degrees in any one of several fields.

The new rule narrows the definition of “specialty occupation,” disqualifying positions that permit any college degree or one of many possible degrees. DHS will now require a direct relationship between the applicant’s degree and the position duties.

DHS stated that the H-1B rule will tighten eligibility for the visa itself, particularly targeting third-party staffing companies that place foreign employees at client worksites.

DHS Deputy Secretary Ken Cuccinelli recently stated that “immediate action is needed to guard against the risk lower-cost foreign labor can pose to the well-being of U.S. workers.”

“President Trump is putting American workers first by making sure American jobs go to American workers. The president's top priority is helping American workers get back on their feet,” Mr. Cuccinelli added.

Ballard Spahr’s Immigration Law Team within the firm’s Labor and Employment Group advises employers on all aspects of recruiting and retaining a skilled, legally compliant workforce. Please contact any team member for more information.

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