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US
New DOL Rule Makes Significant Increases to PERM and H-1B Wage Minimums
United States
At a glance
- The regulation will restructure the prevailing wage system for the H-1B, E-3, H-1B1 and PERM programs.
- Entry-level wages for H-1B and PERM cases, for example, will increase to the 45th percentile of wages for the occupation and geographic location, from the 17th percentile – just under the current wage minimum for Level III.
- The regulation will be published on Thursday and will take effect immediately upon publication, though it is expected to be challenged in court.
The issue
A new Department of Labor (DOL) regulation will lift wages for H-1B, E-3, and H-1B1 nonimmigrant cases and the PERM labor certification program. The regulation will be published on October 8, 2020 and will take effect immediately, though DOL will accept public comments for 30 days. It is being issued as a companion to a new Department of Homeland Security regulation that will tighten H-1B eligibility standards and place new constraints on the offsite placement of H-1B workers. Both rules have been priorities in the Trump Administration.
A closer look
The Department of Labor uses Occupational Employment Statistics (OES) data from the Bureau of Labor Statistics (BLS) to determine prevailing wages in a wide array of 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 OES prevailing wage is subdivided into four tiers or wage levels, representing the range of skills from entry level to experienced.
Under the new rule, OES prevailing wage minimums will increase significantly for foreign workers at all four levels of skill and experience. For example, under current rules, the Skill Level I (entry level) wage minimum is set at the 17th percentile of the average wage for the occupation. When the new regulation takes effect, the entry-level minimum will increase to the 45th percentile – just under what is today the minimum salary for Skill Level III.
Notwithstanding these wage increases, the regulation will permit employers to continue to use alternative wage sources instead of DOL prevailing wage data for LCAs and PERM applications; these sources are not subject to the DOL wage percentiles.
Implementation of the new rule
The DOL wage regulation will take effect as follows:
- LCAs filed on or after October 8 will be subject to the new and higher wage minimums. LCAs filed and pending before October 8 will benefit from the current prevailing wage structure.
- PERM prevailing wage determinations issued on or after October 8 will be subject to the new wage structure. Determinations issued before October 8 will be based on the current prevailing wage structure. Prevailing wage determination requests pending on October 8 will be subject to the new regulation.
However, the rule is likely to be the subject of federal lawsuits. DOL took the rare step of issuing the regulation with immediate effect, no advance notice or opportunity for public comment, and without an economic impact analysis, all of which make the rule vulnerable to challenge. Plaintiffs in any litigation are likely to seek preliminary injunctions to block DOL from enforcing the rule while challenges are litigated in court.
Fragomen is closely analyzing the new regulation and monitoring its implementation. Further client alerts will be issued in the near future.
This alert is for informational purposes only. If you have any questions, please contact the immigration professional with whom you work at Fragomen.