On Tuesday, October 6, both the Department of Labor (DOL) and the Department of Homeland Security (DHS) announced regulations that will significantly impact the H-1B visa program. These actions are part of the Trump Administration’s attack on Legal Immigration. Worse things will happen if Trump is reelected.
DOL Regulation on Prevailing Wages
The Department of Labor issued an Interim Final Rule that has immediate effect. The Rule itself was issued in direct violation of existing standards under the Administrative Procedures Act and we feel certain that a legal challenge will effectively shut down this new regulation.
Kuck Baxter Immigration, along with our colleagues at Joseph & Hall and Siskind Susser, along with the litigation team at AILA (the American Immigration Lawyers Association), will be filing a suit early next week seeking a preliminary injunction against this rule to stop its devastating effect on American Businesses. If you would like to participate in this litigation as a Plaintiff (no cost), then please email Mr. Kuck at ckuck@immigration.net
This new rule will dramatically increase the DOL’s prevailing wages, which are used for H-1B, H-1B1 and E-3 visas, as well as PERM Labor Certifications, making them, effectively, unusable. The rule is intended to make sponsoring an foreign national for work in the United States impossible for a normal employer.
DOL last updated its prevailing wage structure in 2004 when it created a four-tiered wage system. The current system classifies the four tiers with corresponding skill levels and the percentile of wage data that sets each wage level, and the new system radically modifies those levels:
While the DOL has never published its underlying data or methodology for creating the wage level amounts, in most circumstances the existing DOL wage data created a reasonable wage system that employers could rely on in determining the appropriate prevailing wage for an H-1B, H-1B1 or E-3 worker. In most cases the DOL wage data generally aligned with market wages.
The Interim Final Rule goes through a lengthy and tortured analysis of PERM application data to try to justify the use of a much higher percentile to set each of the four wage levels. The Rule also references the President’s Executive Order 13788, known as “Buy American and Hire American.” That Executive Order stated an “urgent need for strengthening wage protections in these programs to support economic recovery.” In short, the new rule will result in prevailing wages that are expected to be far higher than industry standards, in an attempt to discourage U.S. employers from hiring foreign workers.
The Level I and Level IV wages promise to be alarmingly high and will likely far exceed competitive wages currently paid by U.S. employers. Entry level positions (commonly requiring a bachelor’s degree and fewer than two years of experience) will be set nearly at the mid-point of all wage data. Level IV wages (for positions commonly requiring a bachelor’s degree and five or more years of experience) will be at the 95th percentile, which is not reflective of a typical “Fully Competent” professional.
Here is a wage calculator for you use to determine how crazy these new wages will be:https://immigration.app.law/
The Interim Final Rule also confirmed that the revised wage data (and it has been suspiciously revised upward) will be used to make wage determinations on prevailing wage requests that are currently pending with the DOL. This will cause harm to U.S. employers who are seeking to file for permanent residence on behalf of foreign national employees, as well as to those that relied on existing wage data in making the decision to a nonimmigrant visa.
Any prevailing wage determinations that have already been issued by the DOL will continue to be valid through their expiration date.
The one area of the prevailing wage regulations that remains unchanged is the ability to use certain private wage surveys that meet DOL criteria for wage methodology. The new regulations do not change DOL’s standards for determining if a private wage survey is acceptable. Employers who find the new OES wage data unusable can still seek a private wage survey. This may be the “out” that most employers will have to use to still sponsor employees.
A first glance of the new OES wage data shows a shocking increase in many common occupations in populous locations. In some instances, wages increased by an average of $40,000 – $50,000 across each wage level.
Incredibly, DOL’s new wage data indicates that “due to limits in OES data,” they cannot provide wage data for the occupation of “Software Developer” in the San Francisco Bay Area-Silicon Valley Metropolitan Statistical Area (MSA). The result is a default wage for all Software Developers in this MSA at the national prevailing wage rate of $208,000. This is true for some other common occupations in large cities as well.
It is difficult to understand why there is insufficient data to set a prevailing wage for Software Developers in Silicon Valley. Clearly, the new prevailing wage rule and data may have been driven by political motivations and not by economic analysis.
The “New” H-1B Regulations from USCIS
The DHS/USCIS Interim Final Rule was published on Thursday, October 8, 2020. It is effective 60 days from the publication date, on December 7, 2020. The rule dramatically narrows the standard for qualification for H-1B status and creates onerous burdens on employers that place H-1B workers at another company’s location. Again, there will be litigation on this rule as well, as it far exceeds the authority of the USCIS, especially as it relates to the evisceration of congressional intent.
The DHS rule restricts the definition of “specialty occupation,” which is the legal standard to determine whether a position qualifies for H-1B status.
Currently, to qualify for H-1B status, a position must be “professional” in the sense that an occupation must require a four-year bachelor’s degree in a specific specialty as a minimum qualification for the role. The foreign national beneficiary must have a four-year degree or equivalent in a “specific specialty” that is related to the occupation.
The current regulations require a showing that the degree requirement is “normal,” “common,” or “usual” to the occupation. The current regulations list four different standards to demonstrate that a degree is a common requirement; an employer must provide evidence to meet one of the four criteria for the position to qualify. The use of the terms “normal,” “common,” and “usual” allowed for an H-1B to be approved with a showing that a degree is a common requirement, but not a universal requirement in every instance.
Over the past few years, U.S. Citizenship and Immigration Services (USCIS) adjudication practice has attempted through internal policy manipulation to revise the definition and indicate that a degree “must” be a requirement. Many H-1B petitions were denied on this unsupportable ground. Thanks to federal court litigation, this standard was rejected by many courts, and H-1B denials were overturned.
Unsurprisingly, the new rule contains the more restrictive standard USCIS had been trying to implement through adjudication. The new regulation no longer allows a showing that the degree requirement is “normal”, “common,” or “usual” among employers or within the industry. Instead, the rule requires a showing that the degree is “always” a requirement for the occupation.
Similarly, USCIS has been attempting to unlawfully restrict the type of degrees that would qualify an individual to work in the particular occupation listed in the H-1B. USCIS had denied many cases based on the unsupportable standard that an occupation can only require a degree in one particular degree field in order to qualify for H-1B status. These decisions were not aligned with the regulation, which required that the degree must be in a “specific specialty.” For example, the regulations allow a Software Engineer to qualify with a degree in the specialty of Software Engineering, which could include Computer Science, Information Systems, Information Technology, and Electrical Engineering, among others.
The new rule contains a much narrower standard. The rule requires a bachelor’s degree in a “directly related specific specialty.” USCIS is certain to use this definition to deny H-1B petitions where they deem the beneficiary’s degree not to be “directly related.”
In addition, in common situations where an employer will accept more than one degree to qualify for a position, the regulation instructs,
“the petitioner would have to establish how each field of study is in a specific specialty providing “a body of highly specialized knowledge” directly related to the duties and responsibilities of the particular position to meet the requirements of [the position]”
USCIS has commonly relied on the Department of Labor’s Occupational Outlook Handbook (OOH) to challenge the approvability of H-1B petitions and to deny many H-1B petitions. This exclusive reliance of the OOH is done despite a disclaimer from the DOL that states, “The OOH . . . should never be used for any legal purpose.”
USCIS has long used language in the OOH that states, for example, that “many employers require a bachelor’s degree” to argue that the degree requirement is not “common” or “normal” to the industry and, therefore, deny an H-1B petition.
Despite the instruction that the DOL’s OOH is not to be used for any legal purpose, the new DHS rule states, “DHS would continue its practice of consulting the DOL’s Occupational Outlook Handbook and other reliable and informative sources.” This will make it extremely difficult to succeed with an H-1B petition on the criteria that a degree in specific field is a minimum requirement for that occupation. This language is NOT an accident. It was inserted specifically to destroy the legal immigration system.
USCIS has long sought to limit the ability of employers to place H-1B workers on other company worksites, even though professional contract employment has become more common in many industries. The new rule will restrict the ability for employers to hire and maintain status for H-1B workers who will work at third-party worksites.
The validity period of any H-1B petition that includes work at a third-party worksite will be limited to one year. In addition, the rule allows USCIS to limit the validity period of an H-1B approval to a duration shorter than what was requested on Form I-129 and include a “brief explanation” in the approval notice. Again, this is in response to litigation that it frequently lost in federal court.
Further, employers must document that there is available work for the H-1B worker, through the submission of “work order(s), statement(s) of work, or other similar legally binding agreements.” This was a long-standing issue, where USCIS sought documentation that the H-1B worker would have available work for the duration of the petition. USCIS often reduced the validity of the H-1B based on that documentation, and notoriously approved cases for only a few months, and in at least one instance for a single day. This practice was deemed to be invalid in a federal district court decision in March 2020.
The DHS rule formalizes this requirement, and for any petition that notes offsite employment, employers will be required to document that work is available through MSAs, SOWs or similar documentation. Based on past USCIS practice, these petitions will likely face intense scrutiny and higher rates of denial.
The rule will formally adopt the criteria that were enumerated in a 2010 USCIS memo that defined “employer-employee relationship” based on common law doctrine and listed a number of criteria that could be documented to evidence the employer’s control of the employee’s work. This standard was deemed to be invalid in the same federal district court decision noted above.
While the rule indicates that this provision is focused on offsite employment, based on past USCIS practice, it is likely that USCIS will focus on the employer-employee relationship in all H-1B petitions, even for in-house employment. This reversion to the prior USCIS standard will likely add additional burdens to all employers that file H-1B petitions and require additional documentation for a petition to be approvable.
The DHS rule adopts the DOL’s regulatory definition of “worksite” to determine if an H-1B worker is “placed” at a third-party worksite for purposes of triggering increased scrutiny and documentation requirements.
DOL regulations provide both a definition of a worksite, as well as definitions and examples of “non-worksites” and worksite exemptions. There are a number of instances and examples where placement of H-1B workers at third-party company locations does not meet the definition of a “worksite” and therefore does not trigger this scrutiny. In some instances, employers may be able to modify their business practices to fit within these exemptions and reduce the additional burdens in H-1B processing.
KBI immigration attorneys and paralegals are available to discuss any questions on worksite exemptions.
We will keep our clients updated on the ongoing litigation, and, of course, please call you KBI attorney or paralegal to get information on your specific case, and these regulations’ effect on you or your company.