Proposed Changes to H-1B Regulations and New Formulas for Prevailing Wage
Earlier this month, the Department of Homeland Security (DHS) released a proposed rule, amending certain regulations governing the H-1B nonimmigrant visa program. This proposed rule will take effect on December 7, 2020. Written comments regarding the proposed rule must be received on or before that date.
What Changes Will be Made to the H-1B Visa Program?
DHS has proposed the following changes to the H-1B regulations:
The position must require a degree in a directly related field. Where the relation is not obvious, an employer will need to explain how the field of study matches the job. An example the government gave and which we see in our practice is how a degree in Physics would fit with a Software Engineer role.
The degree requirement is always a minimum industry standard. The new regulations eliminate the terms “normally,” “common,” and “usually” from the criteria for showing the degree requirement.
For H-1B petitions that involve work at a client or third party location that is not the H-1B worker’s home office, the following changes have been proposed:
Granting approvals for only 12 months instead of three years where the work will be done at a third-party work-site.
Eliminating the itinerary requirement.
Requiring proof of work to be done at the client or third-party worksite.
Giving DHS authority to conduct site-visits at a third party site.
Enumerating specific elements to show an employer-employee relationship exists while the H-1B worker is off-site.
What’s Driving These Changes?
The changes proposed by this rule are aimed primarily at the Information Technology (“IT”) consulting services industry, which, according to DHS, is one of the largest users of the H-1B program. Companies that provide IT consulting services routinely have employees work at a client or third-party work-site where the employer-employee relationship becomes unclear. DHS also is concerned by the project-based nature of the work available in this industry, which means there are gaps in pay (referred to as “benching”) and which adversely impacts US workers who may not be willing to work under such conditions.
DHS justifies these changes based on reports of fraud in the H-1B program. It also cites to the disproportionate rise in H-1B petitions for computer-related occupations versus the growth of IT positions in the U.S. economy, and the stagnation of IT wages.
Related Changes to Prevailing Wage Determinations for H-1B and PERM Processing
In order to address the wage issues of foreign national workers, the Department of Labor’s Office of Foreign Labor Certification (OFLC) uploaded new prevailing wage data on October 7, 2020, for the period starting the next day on October 8, 2020, to June 30, 2021. The Department of Labor has revised the way it will calculate the four levels of a Prevailing Wage for purposes of both the Labor Condition Application, which is submitted with H-1B, H-1B1 and E-3 petitions, and the PERM process.
These sudden and dramatic changes to how DOL can calculate prevailing wages have prompted a lawsuit by the American Immigration Lawyers Association (“AILA”), which seeks to stop the government from relying on these new formulas without first giving the public a chance to comment on these changes.
As you can see, the changes are happening quickly and suddenly. We will continue to monitor these developments and provide updates as soon as possible.
This alert is for informational purposes only. If you would like to discuss this development further, please do not hesitate to contact us.