The Trump Administration has announced that it will publish two Interim Final Rules on Thursday, October 8, 2020 that will substantially alter the H-1B visa program for temporary professionals working in a specialty occupation and significantly increase wage obligations for employers that file H-1B, H-1B1, and E-3 petitions, and PERM labor certification applications. The rules will have an immediate, direct and adverse impact on businesses seeking to employ these workers.
- The U.S. Department of Labor (DOL) rule imposes a higher wage requirement on businesses that employ H-1B, H-1B1 and E-3 workers, and businesses that sponsor PERM labor certifications for foreign workers. The DOL rule is effective October 8, 2020.
- The U.S. Department of Homeland Security (DHS) rule drastically restricts who will qualify for an H-1B visa by narrowly redefining what qualifies as a specialty occupation. Additionally, the rule imposes restrictions on petitioners who place H-1B workers at third-party worksites. The restrictions will also impact the end-clients that contract for services provided by these workers. The DHS rule will take effect 60 days from the date of publication.
Employers who sponsor H-1B, H-1B1 and E-3 nonimmigrant (temporary worker) petitions must first obtain a Labor Condition Application (LCA) from DOL prior to submitting a petition to U.S. Citizenship and Immigration Services (USCIS). In connection with the LCA, the employer must make certain attestations about the wages and working conditions for foreign workers. The employer must pay foreign workers at least the prevailing wage for the occupation in the area of intended employment, commensurate with the level of experience required for the position. Similarly, prior to filing a PERM labor certification application for permanent residence sponsorship on behalf of a foreign worker, the sponsoring employer must obtain a Prevailing Wage Determination (PWD) from DOL, and the employer must offer a wage that is at least the DOL-determined prevailing wage level for the occupation in the area of intended employment.
The DOL rule revises the calculus used to determine prevailing wage levels, significantly increasing the wage requirement for LCAs and PWDs.
The revised prevailing wage requirement will apply to:
- applications for PWDs pending with the National Prevailing Wage Center (NPWC) as of October 8, 2020;
- applications for PWDs filed with the NPWC on or after October 8, 2020; and,
- LCAs filed with DOL on or after October 8, 2020 where the DOL’s wage survey data is the prevailing wage source, and where the employer did not obtain the PWD from the NPWC prior to the effective date of the regulation.
DOL will not apply the new regulations to any previously-approved prevailing wage determinations, permanent labor certification applications, or LCAs.
The DHS rule does the following:
- Narrows the definition of and standards for a specialty occupation to limit who will qualify for the visa.
- Imposes restrictions aimed at employers that place H-1B workers at end-client sites (third-party placement petitions), including revising how an “employer” and “worksite” are defined, and detailing how USCIS will determine whether there is an employer-employee relationship between the petitioning company and the employed foreign national.
- Limits validity of third-party placement petitions to 1 year (instead of the prior maximum of 3 years).
- Codifies USCIS H-1B site visit authority, including the authority to visit end-client sites and interview employees, and the authority to revoke petitions for perceived failure to cooperate.
The rule will apply to petitions filed on or after the effective date of the regulation (60 days from publication). The rule will not apply to previously approved petitions. However when an extension or amended petition is filed for a foreign worker after the rule takes effect, the rule will apply to the extension/amendment filing. It is projected that the new rule will eliminate eligibility for one-third of sponsored petitions. If implemented, this will cause significant workforce disruptions and business continuity issues for impacted employers.
Legal challenges are expected. The Administration has advanced both rules on a fast track, proceeding with implementation prior to consideration of public comments. The emergency rationale offered for doing so is dubious. Collectively, the rules aim to effectuate the Administration’s 2017 Buy American Hire American Executive Order, bypassing Congress to rewrite the law. The DHS rule may be particularly vulnerable, in that within the past few weeks, different federal courts have found that the DHS acting secretary was likely appointed illegally and thus lacks the authority to impose new rules. Similar challenges are expected here.