On October 8, 2020, the Department of Labor issued a new rule designed to make it much more expensive to employ an H-1B visa holder, while the Department of Homeland Security (DHS) released a new regulation to limit H-1B visas by introducing restrictive definitions of a specialty occupation and an employer-employee relationship, and limiting H-1B approvals to one year for work at customer locations. Both regulations bypassed the normal rulemaking process, raising additional legal questions.
The Department of Labor (DOL) published an interim final rule (IFR) titled Strengthening Wage Protections for the Temporary and Permanent Employment of Certain Aliens in the United States which went into immediate effect. Under the law, an employer must pay an H-1B visa holder the higher of the prevailing wage or actual wage paid to similar U.S. workers, and in the permanent residence context, the employer generally must pay at least the DOL-determined prevailing wage. DOL now determines the prevailing wage by using data from the government’s Occupational Employment Statistics (OES) wage survey and using a mathematical formula to create four levels of wages for each occupation. The rule changes how DOL's National Prevailing Wage Center (NPWC) applies its four wage-level system to generate prevailing wage determinations when Occupational Employment Statistics (OES) data is used as the wage data source. The result is dramatically higher NPWC prevailing wage determinations impacting both the temporary (e.g., H-1B) and permanent (PERM) programs.
On the same day, the Department of Homeland Security published an interim final rule at 85 FR 63918 (October 8, 2020) titled Strengthening the H-1B Nonimmigrant Visa Classification Program. This rule is effective on December 7, 2020. Changes include revised definitions of and standards for a "specialty occupation" and "employer-employee relationship," limited petition validity for third-party placements, and other changes that make use of the H-1B category more challenging.
Multiple lawsuits were filed challenging both the DOL Wage Rule and the DHS H-1B Rule:
Chamber of Commerce et al. v. DHS et al., Case No. 4:20-CV-7331 (N.D. Ca., October 19, 2020). Challenges both the DOL and DHS interim final rules. See the U.S. Chamber Litigation Center for more information, including case filings. Next hearing scheduled: November 23, 2020.
Purdue, et al. v. Scalia, Case No. 1:20-CV-03006 (D.D.C., October 19, 2020). Challenges the DOL rule only. A hearing was scheduled for November 13, 2020, but on November 10, it was cancelled. "In view of the Court's forthcoming Memorandum Opinion and Order, the Court hereby cancels the motion hearing scheduled for November 13, 2020."
ITServe Alliance Inc., et al. v. Scalia, Case No. 3:20-14604 (D.N.J., October 16, 2020). Challenges the DOL rule only.