11TH HOUR TRUMP ADMINISTRATION H-1B MEASURES
Over the past several days, the Trump Administration has issued or re-issued three H-1B rules changes which would dramatically impact the H-1B sponsorship process for employers. None of these measures have taken effect yet, and they may be challenged in court or removed by the incoming Biden Administration.
New H-1B Cap Registration Rule
The first rule change, issued by the U.S. Department of Homeland Security (DHS) concerns the filing of H-1B petitions that are subject to the H-1B cap and the virtually-certain lottery triggered by the number of H-1B cap entries submitted by employers each year. Instead of employing the lottery system from March 2020 as was done for last year’s H-1B cap, the new regulation would authorize U.S. Citizenship and Immigration Services (USCIS) to select H-1B cap registrations listing the highest salary level based on the U.S. Department of Labor’s (DOL) Occupational Employment Statistics wage level system. The final rule states: “USCIS will rank and select the petitions received on the basis of the highest Occupational Employment Statistics (OES) wage level that the proffered wage equals or exceeds for the relevant Standard Occupational Classification code in the area of intended employment, beginning with OES wage level IV and proceeding in descending order with OES wage levels III, II, and I.” There is strong risk that registrations listing wages no higher than Level I or II may not be selected. In fact, DHS predicts that no Level I registrants would be selected and that only about 25% of Level II registrants would be chosen under the new system. This new rule will go into effect on March 8, 2021 (which would likely be in the “middle” of the cap registration period), but litigation is expected challenging the legality of the rule. At this point, it is not clear whether the Biden Administration opposes the new rule, although in a statement regarding its immigration plan, Biden has indicated that his Administration will review prevailing wages for temporary visa holders. Employers may continue to use private wage surveys acceptable under DOL regulations to establish that they will pay the H-1B worker the appropriate salary. However, for H-1B cap registration purposes, USCIS will instead assign DOL’s OES wage levels and rank accordingly for the selection process.
Since Employers may be impacted by the implementation of the rule for upcoming H-1B cap registrations, they should remain in close contact with Maggio Kattar regarding any developments which may impact their registrations.
H-1B and PERM Labor Certification Prevailing Wage Rule Redux
Last week, the DOL published a final rule regarding H-1B and PERM labor certification prevailing wages. This rule, which reformulates the manner in which prevailing wages are calculated and significantly increases prevailing wages, is basically a re-issue of the DOL rule which was defeated in several court filings last Fall. The rule’s effective date is March 15, 2021, unless litigation is again successful or the Biden Administration suspends it. Although litigation is almost certain, it is unclear whether the Biden Administration will allow the rule to be implemented. Employers should therefore plan for significantly higher prevailing wages in the event that the rule is not suspended or defeated in court. We would therefore encourage our readers to consider securing Labor Condition Applications now for H-1B filings that are needed in coming months. Any prevailing wage determinations sought in connection with PERM labor certifications that are not secured by March 15, 2021 will be issued under the new system. Unfortunately, the DOL is currently taking about five to six months to issue prevailing wage determinations for PERM labor certifications, so it is practically too late to try to secure determinations for PERM cases under the current system.
H-1B Rule Re-Issued and Narrowed for Employment at Client Sites
Over the past four years, the Trump Administration issued adjudication policies which dramatically increased denial rates for H-1B workers employed at client sites. These policies were an amplified continuation of adjudication policies begun in preceding Administrations with respect to these H-1B workers and their employers. In 2020, a lawsuit challenging these adjudication trends caused USCIS to reverse its policies, but late last week DHS re-issued the same rule but narrowed its focus to the employer-employee relationship, which is a central facet of the H-1B regulations. At the same time, the DOL issued a policy memo (instead of new regulations) echoing the DHS’s new requirements. The narrowed focus is an apparent attempt to avoid another defeat in the courts, but many of the issues raised in prior litigation remain present in the new rule and memo. The new requirements would again change the definition of “employer” and would in effect force companies who host H-1B workers, but do not consider them as employees, to be liable for H-1B regulatory requirements such as prevailing wages. Companies hosting H-1B professionals would be required to file Labor Condition Applications and H-1B petitions as though they were the employers of these individuals. Maggio Kattar believes that the new DHS rule, as well as the DOL policy memo, which go into effect on July 14, 2021, are vulnerable to legal challenges.
As we expect new developments to occur with respect to each of the above issues, we will issue updated guidance as events unfold. Please reach out to your Maggio Kattar contact with any questions.