Interim Final Rules Related to the H-1B Program

On October 8, 2020, the Department of Homeland Security (“DHS”) issued an Interim Final Rule (“DHS IFR”) revising the definition of "Specialty Occupation".  That same date, the Department of Labor (“DOL”) issued another Interim Final Rule (“DOL IFR”), amending the regulations governing permanent Labor Certifications and Labor Condition Applications to incorporate changes to the computation of prevailing wage levels.  According to the American Immigration Lawyers Association (AILA), these rules together will upend decades of requirements for the H-1B program.  Both IFRs were published in the Federal Register on October 8, 2020. 

 

More about the DOL Interim Final Rule: 

 

The DOL IFR will update how the existing “four-tiered wage structure based on the Occupational Employment Statistics (OES) wage survey” is calculated for purposes of determining prevailing wages.  These changes will result in significant wage increases to the wage levels for all four levels of the OES survey, across all occupations.  As of October 8, 2020, the OES wage survey had already been updated to reflect the increased wages for most metropolitan areas and occupations.  While this may sound nice to the potential foreign employees, many employers will be unable to pay these higher prevailing wages.  This means that less employers will be able and willing to hire high level, specialized foreign workers.  The wage adjustments will affect the processing of H-1B, H-1B1, and E-3 temporary work visas, as well as permanent labor certification program (PERM) applications. 

 

Background: 

 

The DOL explained that it “has long relied on OES data to establish prevailing wage levels” in both the LCA and PERM contexts. The OES program collects wage data nationwide and produces prevailing wage estimates annually for approximately 800 occupations.  The OES survey’s four-tiered wage structure is intended to ensure that wages paid to foreign high-skilled workers meet a given industry standards and do not depress wages of comparable U.S. workers.

 

The resulting change in distribution is illustrated in the table below: 

OES wage level

Percentile of the OES wage distribution before October 8, 2020

Percentile of the OES wage distribution effective October 8, 2020

Level 1

17th percentile

45th percentile

Level 2

34th percentile

62nd percentile

Level 3

50th percentile

78th percentile

Level 4

67th percentile

95th percentile

 

 

The DOL published a list of frequently asked questions in connection with the IFR addressing how it will implement these changes to cases currently in progress. Please click here to view those questions. 

 

Implementation Date: 

 

The DOL IFR has no notice period.  Generally, the DOL would be subject to the standard notice and comment rulemaking procedures under the Administrative Procedure Act, which requires a period of public commentary on a proposed rule before its finalization. The DOL justified its ability to bypass notice and comment rulemaking by arguing that (1) such procedures would defeat the purpose of the rule, which is to provide immediate protection of U.S. workers amid the coronavirus pandemic that has resulted in a “shock to the labor market”;  and that (2) such procedures would provide employers an opportunity to “secure wages at the current low levels” by filing large volumes of labor condition applications and prevailing wage requests before the comment period was complete.

 

Although the rule is immediately effective, comments can still be submitted up until November 9, 2020. 

 

Please click here to view the DOL Interim Final Rule. 

 

More about the DHS Interim Final Rule

 

The DHS IFR revises regulations regarding the H-1B nonimmigrant visa program. Its changes  restrict eligibility for the program in several ways, including the following: 

 

  1. It revises the definition of H-1B specialty occupation to include the requirement of a specific relationship between the required degree field(s) and the duties of the offered position.  
  2. It restores the requirement that employers provide contracts, work orders, itineraries or similar evidence to prove employer-employee relationships when sending H-1B workers to third party worksites.  This requirement had previously been defeated in federal court, and earlier this year DHS had retracted its policy memo enforcing this requirement for third party placements.  The rule restores this requirement. 
  3. It reduces the current three-year maximum validity period to one year for third party placement.  This only applies to H-1B holders that are employed by third party companies. 
  4. It increases DHS’ power to determine compliance with worksite inspections and to oversee compliance before, during, and after an H-1B petition is approved. Inspections may be conducted at an employer’s headquarters, satellite locations, and work sites, including third-party worksites.  USCIS will have the authority to deny or revoke H-1B petitions if it determines the employer or third party fails or refuses to cooperate with site visits.

 

The DHS IFR, unlike the DOL IFR, only applies to the H-1B program.  This IFR will become effective 60 days after its publication in the Federal Register.  USCIS is forgoing the regular notice and comment period with the ‘argument’ that there is an urgent need to ensure that employing H-1B workers will not worsen the economic crisis caused by COVID-19 and adversely affect wages and working conditions of similarly employed U.S. workers.

 

The DHS IFR will become effective on December 7, 2020. Comments can be submitted in the meantime up until November 9, 2020.  

 

Please click here to view the DHS Interim Final Rule. 

 

Please Remember the Following: 

Because the rules propose such sweeping changes that could cause irreparable harm to many, it is likely that lawsuits will be filed and that preliminary injunctions may be ordered by district court judges. 

 

Please call Blaszkow Legal, PLLC at 703-879-5910 for further updates on this matter