On October 8, 2020, the Department of Labor (DOL) and the Department of Homeland Security (DHS) each issued new rules attacking employment-based non-immigrant cases and the PERM labor certification program. Please note that both rules have bypassed the formal rulemaking process and are likely to be challenged and enjoined in federal court. As such, it is possible that one or both rules will be blocked by court order.
- New DOL Rule Significantly Increases PERM and H-1B Wage Minimums
The regulation was published on October 8, 2020 and took effect immediately upon publication. The DOL rule has significantly raised wage minimums for H-1B, E-3, and H-1B1 nonimmigrant cases and the PERM labor certification program. A company that employs an H-1B worker must pay the worker the required wage, defined as the higher of the actual wage or prevailing wage. This rule also applies to H-1B1, E-3, and the PERM program. The DOL uses data from the Bureau of Labor Statistics (BLS) to determine prevailing wages for various occupations. The prevailing wage rate is defined as the average wage paid to similarly employed workers in a specific occupation in the geographic area of intended employment. The wage minimums are divided into four wage levels, representing the range of skills from entry level to experienced. Under the new rule, prevailing wage minimums for foreign workers increase significantly at all four levels:
|Wage Level||Prior Percentile of the average wage for the occupation||New Percentile of the average wage for the occupation|
Impact of the new DOL rule:
- -LCAs filed on or after October 8 are subject to the new and higher wage minimums. LCAs filed and pending before October 8 will be based on the prior prevailing wage structure.
- -PERM prevailing wage determinations issued on or after October 8 are subject to the new wage structure. Determinations issued before October 8 are be based on the prior prevailing wage structure.
The new DOL rule permits employers to continue to use private surveys instead of DOL prevailing wage data for LCAs and PERM applications. These alternative sources are not subject to the DOL wage percentiles.
- New DHS Rule is Aimed at Restricting H-1B Eligibility Standards
The DHS rule, which is currently set to go into effect on December 7, 2020, tightens restrictions on companies hiring skilled foreign workers in specialty occupations. The new rule attacks the H-1B Definition of Specialty Occupation and H-1B Definition of Employer-Employee Relationship. Please note that many of these changes, although not reflected in the rules until now, have in fact been embedded in the large numbers of Requests for Evidence (RFE) issued by the USCIS over the last 3 years of the Trump administration.
- New H-1B Specialty Occupation Definition
The new version of the definition narrows the scope of which positions qualify as specialty occupations. The rule imposes language requiring a direct relationship between the specialized degree and the occupation. Specifically, a detailed overview of how degree courses associated with the required degree and the duties of the H1B position are connected. The rule also eliminates the terms “normally,” “common,” and “usually” requiring H-1B employers to demonstrate that the degree fields set as minimum requirements in an H-1B role are in fact the minimum requirements provided by the DOL for entry into the occupation.
The proposed rule is an attempt to alter the language of the regulation in a way that seems to add a second level of burden on the H1B petitioners. Under current rules, it has only been necessary to satisfy one of the four prongs provided to demonstrate that the H-1B role is a “specialty occupation.” Under the new rule, satisfying one of the four prongs of the specialty occupation is no longer sufficient, as USCIS appears to still have the right to deny the application. At the same time, the new rule does not clarify how many prongs must be satisfied.
- New H-1B Employer-Employee Relationship Definition
The new proposed rule also attempts to significantly alter H-1B petitions for workers placed at third party worksite. These proposed changes include:
- -An H-1B petitioner must have non-speculative employment for the beneficiary at the time of filing and must establish that a bona fide job offer exists and that actual work will be available as of the requested start date.
- -The rule also brings back requirements asking for contracts, work orders, etc. to prove an employer-employee relationship with the H-1B visa applicant. The petitioning employer must essentially control and evaluate the work of the H-1B employee.
- -The delivered work product has to be related to the H1B employer’s usual line of work.
- -Reducing of the H-1B visa validity period from the current three years to just one year when the H-1B worker will work at a third-party worksite.
- -Additional evidence to prove employer-employee relationship including: Statement of Work, Supplier Agreements, Master Service Agreement and related work orders, Technical documents related to Specialty work, for example, market research, reports, brochures, or milestone tables, or any other legally binding agreements.
- -Provides USCIS more discretion in interpreting whether an employer-employee relationship exists. The revised “employer-employee” definition lists non-exhaustive factors to be considered in the totality of the circumstances by USCIS officers.
Under the new rule, the DHS can elect to do inspections physically on-site, electronically, or over the phone. These verifications and site visits can be done before the H-1B visa is approved or thereafter. The rules also include on-site visits to the H-1B employer’s facilities to interview officials and other employees and review the employer’s records. The DHS will be allowed to visit any site, including headquarters or the location the H-1B petitioner is working at.
- But Don’t Panic! What to Expect Moving Forward
Both rules are not retroactive and do not apply to any H-1B cases that have already been filed or are in process with an LCA filed before October 8, 2020. Similarly, the new DOL rule only applies to the PERM cases where the prevailing wage determination was issued on or after October 8, 2020.
Moreover, both rules have bypassed the formal rulemaking process and are likely to be challenged and enjoined in federal court. The American Immigration Lawyers Association (AILA) is looking for employers interested in being plaintiffs in an action challenging the new rules if they will be adversely affected by either of these rules. Clients and interested employers are encouraged to contact an attorney at Minsky, McCormick & Hallagan, P.C. or the AILA to be considered for the class action. As such, it is possible that one or both rules will be blocked by court order.
If you have any additional questions regarding new rules, please contact an attorney at Minsky, McCormick & Hallagan, P.C.