Court Strikes Down New Formulas for Prevailing Wage and Proposed Changes to H-1B Regulations

A federal judge in Northern California has set aside two rules recently issued by the Department of Homeland Security (“DHS”) and the Department of Labor (“DOL”), which sought to make significant changes to the H-1B visa program and which radically changed the way prevailing wages were calculated for the H-1B, H-1B1 and E-3 petitions, and the PERM process.  

The DHS’ proposed rule was scheduled to take effect this month, and was aimed primarily at curbing the use of H-1B visas in the Information Technology (“IT”) consulting services industry.  The DOL, in contrast, had promptly implemented its new formulas for calculating the prevailing wage levels on October 8, 2020, posting (absurd) new salary numbers on its website and issuing (unreasonable) prevailing wage determinations for the PERM.  

Both agencies had relied on “emergency grounds” to issue the rules without a public notice and comment period, citing the on-going COVID-19 pandemic and related surge in domestic unemployment numbers as a good cause exception to the notice and comment requirement.  The DOL also successfully dispensed with the normal thirty-day waiting period on good cause grounds so that it could immediately start using the new formulas.   

Will DOL Reissue Prevailing Wage Determinations?

After the judge issued his decision Tuesday afternoon (December 1), the American Association of Immigration Lawyers contacted the DOL to ask when its website would be updated with the previous wage information and whether the DOL would  affirmatively re-issue Prevailing Wage Determinations (PWDs) issued between October 8, 2020, and December 1, 2020, to reflect wage levels based on earlier data.  The DOL has not yet responded to these queries. 

The parties to the legal challenge have asked the federal judge to order DOL to reissue any PWDs issued on or after October 8, 2020, within 10 days of the court’s order.  The court has yet to rule on this proposed order.  In the meantime, filing new requests for determinations issued between October 8, 2020, and December 1, 2020, could be worthwhile. 

The situation remains fluid as we wait to hear more from the DOL.  We will continue to monitor these developments and provide updates as soon as we have more information.

This alert is for informational purposes only. Please contact me if you would like to discuss this development further.