US Dept of Labor New Rule for Wage Levels H1B

Changes to H1B, PERM Wage Levels – Rule Withdrawn [Oct 2020]

In H1B Visa by KumarUpdated : 6 Comments

US Department of Labor submitted a new regulation that is aimed at changing the H1B and PERM Wage Levels. It was submitted on, September 16th to OMB for review. Ultimately, it was withdrawn on Sep 30th. Below article covers all the details of the same in this article.

Latest Update : Rule Withdrawn by US Dept of Labor

October 7th, 2020 : There are new updates on this rule, we have the new draft of the rule document, below is the key message that the wage levels are going to be changing. We will post a detail article on this soon. Stay tuned for our blog updates.

Summary of rule

October 1st, 2020 : There are some rumors floating around telling that DOL withdraw it to speed it up further. Greg Siskind one of the prominent attorneys shares the rumor. We do not know yet…if they try to do something that is not through proper regulation, it will invite lawsuits. So, until we see something out, cannot really be sure. Check below tweet that is the rumor, take it with a pinch of salt.

September 30th, 2020 : US Department of Labor has withdrawn the planned rule on H1B, PERM wage levels that was set in Interim Final Stage. There is no reason given. Its status was updated yesterday. You cannot see this Regulatory Item anymore in Regulatory Review Dashboard as well. See below screenshots.

As we analysed before in below article, it was a very tricky call for the current administration to push something like this without public comments & review. Now, they have realised with OIRA review that this may lead to more litigations and hence probably dropped their plans.

US Federal Register - Wage Levels H1B rule Withdrawn
US Federal Register – Wage Levels H1B rule Withdrawn
US Federal Register - Wage Levels Rule Withdrawn Status
US Federal Register – Wage Levels Rule Withdrawn Status

Background – What are H1B, PERM Wage Levels?

 All the H1B LCAs have salary information related to the position that is offered by the employer. The range of salary paid to an H1B, H1B1 or E3 employees, including PERM depend on the prevailing wage levels for that position in that area. US Department of Labor defines prevailing wage levels based on the wage data collected under Occupational Employment Statistics (OES) Program.

Depending on the job and experience of the worker, there are primarily 4 wage level, broadly said as Level 1, Level 2, Level 3 and Level 4. The salary of Level 4 wage would be highest, and Level 1 would be lowest as it is for entry level position. Below is a screenshot of wage level from an LCA copy taken from H1B LCA Search offered by H1BGrader.com  for Microsoft H1B LCA for Software Engineer

H1B Wage Levels Prevailing Wage
H1B Wage Levels Prevailing Wage

You can check article H1B Wage Levels, Minimum Wage, How to find it for complete info on the same.

You can watch below YouTube video, if you prefer video over reading.

What is the New H1B Rule for H1B & PERM Wage Levels ?

If we review the Federal Regulatory Dashboard , we can find a new rule submitted by US Department of Labor(DOL). It says “Restructuring of H-1B/H-1B1/E-3 and PERM Wage Levels”. See below screenshot from regulatory dashboard.

H-1B and PERM Wage Levels Regulation by DOL
H-1B and PERM Wage Levels Regulation by DOL

This wage changes rule by US DOL was not part of the Spring 2020 Regulatory Agenda under H1B category. This is a totally new rule that was submitted by US DOL to address the Trump’s initiatives to protect American jobs.

Current Details on H1B & PERM Wage Levels Rule

As of today, we do not have any public preview of the rule. There is no basic description of the rule too…  All we know is the title and it is economically significant. Below is the screenshot of the same with all the available details for public at Reginfo.gov

H1B Wage Changes Rule Status - Pending EO 12866 Review
H1B Wage Changes Rule Status – Pending EO 12866 Review

Some of the speculated details are from June, where White House officials wanted to change the wages for foreign workers. Bloomberg Law reports that in that press conference, they said that “H1B prevailing wage floor should be set to 50th percentile, which equals to ‘Level 3’ minimum wage”. The primary goal to change this is to make sure H1B workers are in the upper half of the salary range for any given job position in an area.   This basically is in line with previous Trump’s Merit Based Immigration Plan for H1B remarks to have “best and brightest”…which potentially means they would have to be paid highest salaries for a position.

Again, we do NOT have additional official details on the rule yet. We will keep this article updated as we have more information.

The worrying part is that it is economically significant rule and it does not have option for public review and comments beforehand, let’s review what that means.

Current Status of New H1B Rule, Impact ?

Similar to recent Strengthen H1B Program Rule, this rule was also submitted to OMB for review with Interim Final Stage.  In general, the federal rule making process is long and has to go through 9 Steps of Federal Rule Making.   Depending on the situation and impact of the rule, some regulations can skip few of the stages to avoid unnecessary burden, public interest or not practical.  

As the current rule is set to stage “Interim Final rule”, it will become effective as soon as it is published. It means that public does not get a chance to review the H1B and PERM wage changes rule and give comments on the same, before it becomes effective.  After publication, the US Dept of Labor can take public comments as needed and then move it to final rule.

The biggest issue is, as the rule is economically significant, it usually should go through public comments period. Unless US Dept of Labor can justify the reason for this, it can face legal challenges.  All these recent H1B rules are offshoot of executive order of Trump’s H1B Travel Ban to protect US Labor market. Also, we can assume, these are all part of the US election campaign strategy to lure voters by Trump.

What do you think of this new rule by US Department of Labor ? Share your thoughts in comments.

   

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Comments ( 6 )

  1. Confused

    New wage levels:
    L1: 45th percentile / 17th earlier
    L2: 62nd percentile / 34th earlier
    L3: 78th percentile / 50th earlier
    L4: 95th percentile / 67th earlier

    What does this mean? If L3 wage for a particular country was say 90k then what happens in this new ruling?

  2. Martha

    Kumar, would this affect approved petitions please? Or just new ones?

    I have an approved H1B petition, but waiting for my stamp.

    Thanks!

    1. administrator
      Kumar

      WWW,
      Probably not. They cannot enforce backwards…It will be very hard. They will give some guidance to comply, if they really need to enforce such thing…

      1. Martha

        Kumar, would this affect approved petitions please? Or just new ones?

        I have an approved H1B petition, but waiting for my stamp.

        Thanks!

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