Federal District Court Strikes Down DOL Wage Regulation, Orders Reissuance of Prevailing Wage Determinations

The issue

A federal district court in the District of Columbia today set aside a fast-track Department of Labor regulation that significantly restructured the prevailing wage system for the H-1B, E-3 and H-1B1 nonimmigrant programs and PERM labor certification. The district court is the third to rule against the regulation in recent weeks.

The decision comes in a pair of consolidated lawsuits filed by universities and business groups challenging the Department of Labor’s October 8, 2020 release of an interim final regulation (IFR) that resulted in significantly higher government prevailing wage minimums for foreign professional workers.  As an IFR, the rule took effect before public comments were considered. DOL justified expedited review and implementation of the rules on the grounds that expedited implementation was necessary to support U.S. workers amid the economic impact of the COVID-19 emergency. The court rejected DOL’s rationale, finding that it did not have good cause to bypass public notice and comment, thus violating the Administrative Procedures Act. The cases are Purdue University v. Scalia and Stellar IT, Inc. v. Scalia.

Reissuance of DOL wage determinations

In addition to striking down the regulation, the district court ordered DOL to reissue any prevailing wage determination (PWD) issued after October 8, 2020 under the now-invalidated rule. The parties to the lawsuit are expected to propose a timeline for reissuance for the court’s approval in the coming weeks. Once that occurs, DOL is expected to issue a procedural update for affected employers.

What’s next for the prevailing wage regulation

Despite several legal setbacks, the Trump Administration is continuing to pursue the finalization of a set of regulations that would significantly affect the H-1B and other employment-based immigration programs, including a revised prevailing wage rule. The Administration plans to have these regulations in place before the Biden inauguration, though it is not yet clear whether it will be able to do so. The new administration could seek to postpone the implementation of any such last-minute regulations.

Fragomen is closely monitoring the Trump Administration’s regulatory activity and related litigation, and will provide updates as developments occur.

This alert is for informational purposes only. If you have any questions, please contact the immigration professional with whom you work at Fragomen.