Background on the H-2B Temporary Worker Program

The H-2B program provides visas for temporary, non-agricultural positions to foreign nationals in the United States. Traditionally, employers have used the H-2B program to fill positions whose temporariness can be demonstrated either because the employer has an “intermittent,” “seasonal,” “one-time occurrence,” or “peakload” need. Many industries with temporary needs, including construction, gardening, coaching, and tourism are heavily dependent upon H-2B workers. 

The H-2B program is subject to an annual quota of 66,000 visas. Congress has divided this quota into two halves, with the first half of the quota (33,000 visas) available for positions with a start date during the first half of the USCIS fiscal year (Oct. 1 to March 31). The remaining visa numbers are only available for positions involving employment start dates during the second half of the fiscal year (April 1 to  September 31). 

The H-2B application process is complex and has traditionally involved several steps, including: 

• The Department. of Labor’s (DOL) issuance of a prevailing wage, which represents a threshold minimum wage that must be paid to the H-2B worker for the offered position. The employer must offer the higher of the actual wage rate paid to U.S. workers or the prevailing wage to the H-2B worker and use this wage rate during recruitment, as described below.
• Requiring employers to complete certain mandatory recruitment steps to elicit applications from able, qualified, and willing U.S. workers who can fill the position;
• Certification by the DOL that the position is temporary (“temporary labor certification”); and
• The submission of an H-2B worker application to USCIS.

If the H-2B worker is abroad, the Department of State must also issue a visa to the worker. 

By regulation, these steps must be completed within very specific timeframes in advance of the employer’s date of need, and the DOL’s certification of an H-2B application (the Form ETA 9142B) can often become a hyper-technical process. 

Recent H-2B Developments Have Introduced Uncertainty Into the Program

The H-2B program has been the subject of frequent litigation, specifically over DOL regulations governing prevailing wages (which do not involve private employer surveys), and the temporary labor certification process. Since 2008, separate lawsuits in Florida and Pennsylvania have found their way to the U.S. Court of Appeals for the Eleventh Circuit and Third Circuit, respectively, resulting in multiple injunctions and suspensions of the H-2B program. The most recent and significant lawsuit in Florida (Perez v. Perez) resulted in a federal court enjoining the DOL’s 2008 prevailing wage issuance rules after the court found that the DOL had not been delegated authority by Congress to issue such rules, leaving the DOL unable to discharge its responsibility of issuing prevailing wages for this vital program as of March 4, 2015. After a temporary stay of this ruling resulted in a temporary resumption of the program, the DOL and USCIS then issued an Interim Final Rule (IFR) on April 29, 2015, which is, at least right now, in effect. 

Impact on H-2B Employers

The H-2B program remains active, although further legal challenges to H-2B program rules remain on the horizon. Due to the uncertainty in this program over the past six months in particular, the DOL has also announced emergency transition procedures for positions with start dates prior to October 1, 2015, to allow employers to complete recruitment and related steps on an expedited basis. Employers should be aware that the IFR announcement made on April 29, 2015, makes certain changes to the program, the most relevant of which are: 

• The maximum yearly period of need is now nine, rather than 10, months (the only exception to this rule is for one-time occurrences, which can be longer than one year);
• The definition of full-time employment (FTE) is now 35, rather than 30, hours per week.
• Changing the timeframes for recruitment and the filing of the temporary labor certification request. 

In the meantime, the quota for the second half of the FY2015 fiscal year has been exhausted. Thus, only the following applications are not subject to the quota and can request a start date prior to October 1, 2015. 

• H-2B workers in the United States or abroad who have been previously counted towards the cap in the same fiscal year;
• Current H-2B workers seeking an extension of stay;
• Current H-2B workers seeking a change of employer or terms of employment;
• Fish roe processors, fish roe technicians, and/or supervisors of fish roe processing; and
• H-2B workers performing labor or services in the Commonwealth of the Northern Mariana Islands and/or Guam until December 31, 2019. 

Applicability of FLSA Guidelines or Wage Deduction Rules

The IFR does not change the applicability of FLSA guidelines or wage deduction rules within this program. The employment of H-2B workers must remain consistent with the Fair Labor Standards Act (FLSA), and employers must carefully document hours worked and ensure that employees receive proper overtime compensation. 

The H-2B program retains very specific limitations on acceptable deductions from the H-2B employee’s wages. The employer should make deductions mandated by state and federal law (FICA contributions, for example), and may in certain circumstances deduct the reasonable costs of transportation and lodging at the worksite. The employer can never deduct the costs associated with H-2B program sponsorship, including attorney fees, recruitment costs, and other similarly related expenses. The H-2B employee must receive at least the prevailing wage, or the wage rate listed in the recruitment materials for U.S. workers, “free and clear”. Additionally, this wage rate must not be contingent upon any bonuses or commissions and should be a guaranteed wage. 

The H-2B program remains an important source of workers for employers with temporary needs and plays a critical role in our economy. Nevertheless, given the flux and uncertainty within the H-2B program and the impact of the new IFR on recruitment timelines, employers with temporary worker needs during 2015 and the first half of 2016 are well-advised to begin planning now.