Home » US Immigration - Visas » H1B Visa » H1B Wage Levels Changes – Final Rule by DOL

H1B Wage Levels Changes – Final Rule by DOL

US Department of Labor(DOL) published H1B, PERM Wage Levels Changes regulation as interim final rule on October 8th, 2020 and later it was cancelled by courts as they did not follow proper notice and comment period. DOL had to revert back the FLCDataCenter published wage levels and do many other things to comply with court order.

On Jan 12th, 2020, DOL published the final rule on the same regulation that was cancelled by Court by making changes as per public comments.  They have revised many things from the interim final rule. In this article, we will review the overall background on high level, what was changed from the interim final rule, when it will start, its potential for lawsuits, and other common FAQs.  

Background – Interim Final Rule, Court Cases, Final Rule, Public Comments

  • Interim Final Rule : US Dept of Labor(DOL) originally published the interim final rule on H1B, PERM Wage Levels Changes on October 8th, 2020. DOL said that it published the same to protect American workers wages & jobs as per guidance from Trump Administration like Buy American Hire American Executive Order and Trump Travel Ban for H1B, L1, Others. The Interim final rule was effective immediately from October 8th, 2020 and many employers scrambled to comply with the changes. 
  • Lawsuits in Court : There were  lawsuits filed in various Courts by few on the changes to H1B, PERM wage levels rule and all of them ruled in favor of plaintiffs. In first week of December 2020, the Courts asked DOL to cancel the interim final rule and follow proper process. The Courts did not look at the merits of the actual issue on changes to H1B, PERM wage levels, rather issued judgement to cancel the regulation based on procedural grounds stating there was no proper reason for DOL to skip the notice and comments period.
  • Final Rule Publication Jan 2021: DOL has published the final rule in federal register on Jan 12th, 2021 stating that they gave option for public to give comments for 30 days from Oct 8, 2020 to Nov 9, 2020 after they published interim final rule. They have made some revisions to the interim final rule that was cancelled by courts based on the public comments submitted during the 30 days comment period.
  • Public Comments: DOL says that about 2,340 Comments were submitted by public during the 30 days comment period that closed on Nov 9, 2020.  They say that most of the comments submitted were not relevant or not substantive. Only 148 comments were relevant and substantive. The have addressed these 148 comments responses in final rule and done changes to Interim final rule accordingly.

For more information on why DOL wanted to change the wage levels, their analysis, read H1B, PERM Wage Levels Changes – Interim Final Rule. You may read What are H1B Wage Levels, How to find, if you are new to this and how it all works.

Now that you have the background and current status, let’s look at the changes done in the interim final rule by DOL.

Changes to Interim Final rule on H1B, PERM Wage Levels after Public Comments  

The final rule on H1B, PERM Wage Levels changes that is published by US Dept of Labor (DOL) is 207 pages long in Federal register.  It is about a lot longer than the interim final rule. Below are the changes done in the final rule after DOL reviewed the public comments.

Wage Levels Changed in Final Rule

The interim final rule had 45th percentile for Level I, now it is changed to 35th percentile. Also, the Level IV wage was 95th percentile before, now it is changed to 90th percentile. As the Level II and Level III wage levels are derived based on Level I and Level IV, they are now adjusted to 53rd and 72nd percentile. Below table summarizes the wage levels that are in final rule in comparison with what was in Interim Final Rule (IFR) and where they stand today.

Prevailing Wage LevelH1B LCA, PERM Wage Levels  Today   H1B LCA, PERM Wage levels  from October 2020 Interim Final rule  Revised H1B,  PERM Wage Levels in Final Rule published on Jan 12, 2021
Wage Level I17th percentile45th percentile35th percentile
Wage Level II34th  percentile62nd  percentile53rd percentile
Wage Level III50th  percentile78th  percentile72nd percentile
Wage Level IV67th  percentile95th percentile  90th percentile
H1B, PERM Wage Levels Changes

Phased approach to roll out of New Wage Levels applicant category.

DOL says that based on feedback, they want to give enough time for existing employers to transition and also time for applicants with approve PERM and I-140 to transition without changes to their wages significantly.  They categorize applications into two categories and give phased approach for roll out of new wage levels.

  • New Filings of LCAs, PERM : This would be the major category of the applications filed with DOL and include all new filings of LCAs for H1B, H1B1, E3 and new PERM filings. For this category, the new wage levels will be implemented in two steps over a year and half period.  Below is how new wage levels will be rolled out by time period.
Time PeriodH1B Wage Levels for New Petitions
  Jan 1st, 2021 to June 30th, 2021No changes in Wage Levels. Current wage levels will be used
Level I  – 17th percentile
Level II – 34th percentile
Level III – 50th percentile
Level IV – 67th percentile
  July 1st, 2021 to June 30th, 2022Prevailing wage would be 90% of the final rule wage levels. Level I – 90% Wage of 35th Percentile
Level II – 90% Wage of 53rd Percentile
Level III – 90% Wage of 72nd Percentile
Level IV – 90% Wage of 90th Percentile
From July 1st, 2022 onwardsPrevailing wage would be wage levels as described in final rule.
Level I – 35th Percentile
Level II – 53rd Percentile
Level III – 72nd Percentile
Level IV – 90th Percentile
H1B, PERM Wage Levels Changes Phased roll out by time period for new filings
  • Applicants with Approved PERM / I-140 : This would be the category of applicants filing LCAs for H1B Extensions under AC21 provision with approved PERM or I-140. The condition is that such applicants need to have  approved PERM and/or I-140, or submitted Prevailing Wage Determinations (PWD) as of October 8th, 2020. If they fall under this criteria, the new wage levels will be implemented in four steps over a three and half year period. Below is how new wage levels will be rolled out by time period.
Time PeriodH1B Wage Levels for New Petitions
  Jan 1st, 2021 to June 30th, 2021No changes in Wage Levels. Current wage levels will be used
Level I  – 17th percentile
Level II – 34th percentile
Level III – 50th percentile
Level IV – 67th percentile
  July 1st, 2021 to June 30th, 2022Prevailing wage would be 85% of the final rule wage levels. Level I – 85% Wage of 35th Percentile
Level II – 85% Wage of 53rd Percentile
Level III – 85% Wage of 72nd Percentile
Level IV – 85% Wage of 90th Percentile
  July 1st, 2022 to June 30th, 2023Prevailing wage would be 90% of the final rule wage levels. Level I – 90% Wage of 35th Percentile
Level II – 90% Wage of 53rd Percentile
Level III – 90% Wage of 72nd Percentile
Level IV – 90% Wage of 90th Percentile
  July 1st, 2023 to June 30th, 2024Prevailing wage would be 95% of the final rule wage levels. Level I – 95% Wage of 35th Percentile
Level II – 95% Wage of 53rd Percentile
Level III – 95% Wage of 72nd Percentile
Level IV – 95% Wage of 90th Percentile
From July 1st, 2024 onwardsPrevailing wage would be wage levels as described in final rule.
Level I – 35th Percentile
Level II – 53rd Percentile
Level III – 72nd Percentile
Level IV – 90th Percentile
H1B, PERM Wage Levels Changes Phased roll out by time period for applicants in Green Card path

Elimination of Default Wage of $208,000 per year for all Wage Levels

In the interim final rule, there was a default wage of $208,000 per year for all four wage levels, where the BLS Wage Level data was not available for a job title/SOC Code in a location.  DOL clarified that this issue of this only comes when Bureau of Labor Statistics (BLS) is not able to report a Level IV wage and then reports a default wage of $100 an hour or $208,000. 

DOL says that, they will not have the default $100 an hour or $208,000 for all the cases. In cases, where there is no level IV wage, they would retain the other wage levels as they stand and give those wage levels. They will not inflate the wage levels of Level I, II or Level III. They will give a foot note indicating the non-availability for Level IV wages and give guidance on how to use. They say there will be some cases, but most of the current issues with inflated wage levels will not be there.

Usage of Private Wage Surveys, Snapshot of Filings in FY 2020  

Employers are free to use private wage surveys and the regulation does not stop them from using the same.  Employers can use private wage surveys, where the data is not available. The private wage surveys have to meet the typical standards similar to OES Wage Survey. They mentioned out of the total 19,509 LCAs filed for FY 2020, about 14,153 LCAs were filed using independent authoritative sources of wages across 152 occupations.  

DOL Framework Used for choosing the Entry Level Worker Wage Level

DOL says that they looked at the H1B definition as per INA and wage data of H1B, PERM workers’. After careful analysis, they choose entry level wage for H1B, PERM to be equal to a US Workers’ wages who has master’s degree with limited work experience.

Though many commenters asked this framework is not correct, DOL says this is the appropriate logic for selecting the wage levels. The wages for such US workers with master’s and limited work experience is between 32nd and 49th percentile. Based on public comments and data provided, this is revised to be set at 35th percentile.

How were the wages levels percentile Computed

 They picked the Level I wage as 35th percentile, Level IV wage as 90th percentile.

  • Formula for other two wage levels is “Divide the difference between Leve I and Level IV by three and adding the quotient to the Level I to get Level II, and Level III is obtained by subtracting the quotient from the Level IV wage “. This formula is per Immigration and Nationality Act (INA)
  • Using the formula, they took the difference between two 90 – 35 = 55 and divided it by three( 55/3 = 18.33). They just added that to the lowest 35+18.33 = 53rd  to get the Level II and for Level III, we compute by subtracting 90 – 18.33 = 72nd percentile.

DOL Responses on some key Issues raised

  • Why change Wage levels, Keep old ones: DOL says that the old wage levels defined many years ago were not set based on any economic analysis, so it does not make sense to keep them. They say that commentors did not provide data justifying why we should keep the old one. They say the current wage levels are based on analysis and a proper framework.
  • Occupation Specific Wage Levels not desirable: The reason is it there are over 800 different occupations in SOC classification and it is costly to manage and get the wage data and keep them updated. Also, BLS to produce hundreds of different wage levels by various occupations is not sustainable.  
  • Medical Professionals, Wages impact : DOL says that many of the comments did not provide any data or economic justifications that tells old wages are correct. Based on DOL analysis, they are lower and hence need change. They do not really address the healthcare workers situation and say, it is DOL discretion and talk about NSF surveys. They say that the elimination of the default $100 per hour for non-data availability will address the concerns of medical professionals.

Final Rule Publish Date, Effective Date, Official Copy

The final rule is effective 60 days from the date of publication. It is set to be published in Federal Register on Jan 14th, 2021. It will be effective from March 15th, 2021.  The effective date is of little importance as the wage levels will change only from July 1st, 2021. You can check Official Copy of the PDF version of the final rule.

Lawsuits ?  Biden Administration actions ?

It is too early to say, but there would very likely be lawsuits filed by some agencies. Below are the some of the few areas that could be used for the lawsuit

  • OMB review was not done and waived, though it is a economically significant rule. In general, it is important for OMB review for anything that has an annual effect of $100 million or more on economy.
  • Medical professionals’ impact is not very well addressed and subject to some litigation.
  • The studies used in the regulation are contradictory and DOL picked studies based on their discretion and authority.
  • There could be other procedural claims that maybe raised like APA clauses as well.

As the rule would not be effective on the day Biden takes office, they can technically not make it effective. They have not really mentioned anything on the wages in their agenda, so we do not know, if they would take any action.   Also, if this issue is taken to court, Biden administration may choose not to fight it in court, thus Court would cancel. So, these are all various options. We need to wait and see.

Common FAQs

Does it impact H1B Transfers, Amendments, Extensions? COS to H1B ?

Yes, any H1B filing that is done and requires a new LCA will be impacted by this rule. The wage levels will be applicable as per the phased approached described in above article.

Does this impact existing H1B LCAs, PERM Labor Certs already approved ?

No, it does not impact existing already approved H1B LCAs or PERM Labor Certifications. There is no need to file a new LCA or PERM Labor Cert, unless they are expiring.

Is new H1B Wage Levels Data released by US Dept of Labor ?

No, the new Wage Levels Data is not yet released by Department of Labor.  It will published on FLCDatacenter at some point. They have not given a specific date.  

If I change Employers after I-140 approval, will this new wage levels apply ?

Yes, the new wage levels will apply. As you would need to start the PERM process again, you will be impacted. You would retain the priority date, but new wage levels would be applicable.

I have H1B Visa Stamping scheduled, will I have to get new LCA as per new wage levels ?

No, you do not have to do anything. As long as the H1B job related LCA is approved, you are fine. It does not apply to already approved LCAs.

What do you think of the final Wage Levels Rule ?

Screenshots on Wage Level Changes from the official regulation document

H1B Wage Levels Changes - Jan 2021
H1B Wage Levels Changes Revised – Jan 2021

References :

   


Other Articles

29 Comments

  1. Hi Kumar…thank you for posting updates. My employer cannot file my H1 extension until end of March and my visa expiring end of April. If they file after march 15th, should the LCA have new wages? or existing wages will get approved?

    Reply
  2. Hi ,
    My PWD is approved before 8th Oct, when will changes apply to me?
    Can you please share progress on lawsuits on this matter?

    Reply
  3. Hi,

    My Employer will file my PWD in Feb 2021.

    So will the new wage levels be applicable to me since PWD is filed before July 2021 and my PERM application will mostly be filed after July 2021?

    Thanks

    Reply
    • Mahesh,
      So far the rule is not withdrawn yet. It is better to wait for few more weeks until this Wage thing is sorted out. There are lawsuits planned as well by some attorney…

      Reply
      • So basically it makes sense to wait as my PERM application cant be filed if PWD is issued on new wage levels and PWD will have to be done all over again if new wages are cancelled.

        This is a huge impact. i am assuming this will be applicable to everyone then who are planning to start the PWD or have recently initiated PWD.

        Thanks for the advice Kumar. Will wait a few more weeks.

        Reply
          • Thanks Kumar. I am guessing that the new wage levels will be canceled either by the administration or planned lawsuits within the next 60 days before the lottery happens.

  4. Hi Kumar,
    Thank you for the update. Will this affect level 1 and 2 h1b extensions if we meet wage level….do we have to change our wage level to level 3 or 4? Because from what it looks like its going to be almost impossible to get first time if you are in level 1 or 2.

    Reply
  5. Hi Kumar,

    I think there has been a increase in the 17,34,50 and 67th percentile from Jan-2021 itself as I noticed a little change in all the wage levels for a few of the job codes that I checked on DOL website. Please correct me if I am wrong here? In this post it is mentioned that from Jan2021 to June30th 2021 there will be no change in wage levels, which I think may not be the case.

    Thank you very much for your time!

    Reply
  6. Hi Kumar,

    Thanks for this article.

    My employer requested my prevailing wage from the DOL for my PERM early December 2020. The wage determination would likely be issued before June 30th.

    My question is, how would this affect me going forward since the PERM might be filed after June 30? Will my wage be affected at all by this?

    Kindly,
    Steve.

    Reply
    • Steven,
      You would be subject to the rule as your PERM related PWD was not submitted before October 8th. Yes, you will be assessed based on the phases as described in above article.

      Reply
  7. I am in the process of changing employer. I got hired by new employer in Sept 2020, right after offer they started with my H1 transfer, they got the LCA approved before Oct 8th when new LCA rule cam in to picture, so before filing for H1B transfer case they applied to get new LCA as per new rule by the time they get approved LCA then again there was some change with respect to LCA prevailing wages during December and employer decided to apply again for new LCA as per new rule. finally they submitted my H1 case last week. LCA was approved during December last week.
    Now my question is – is my current H1b transfer will face any issues because of all the change in rules?

    Reply
  8. how is the percentile calculated for different wage levels ?
    let’s say for example a person’s LCA is filed and approved in 2020 with level 2 wage as mentioned below

    Area Title:Southeast Oklahoma nonmetropolitan area
    OES/SOC Code:15-1132
    OES/SOC Title:Software Developers, Applications

    Level 2 Wage:$29.69 hour – $61,755 year

    does this meet the new percentile requirement ?

    Reply
    • abhishek,
      Percentile is not computed, it is rather picked up after sorting all the wages collected for that job title in that location. It is hard to say anything as the data can be very different at different percentile. If someone says, they computed it, they are wrong. We need to wait for the data from DOL.

      Reply
      • Hi …thank you for posting the updates. My employer is preparing to file for my extension. If it will be filed before march 15th do I need to get lca with new wages?or lca with existing wages will get approved?

        Reply
  9. HI Kumar,

    My H1 is valid up to 9/10/2021, so i can start extension process from March 10th.
    So if we apply for extension on March 10th, will this wage level increase effect me?
    Can LCA be filed with current wages now? Please help, will wait for your response.

    Reply
  10. This is still a fist to the guts for most of the h1 dependent employers here and foreign workers!
    Will this also eventually be challenged in court or there’s no stranding against this rule now ?

    Reply

Leave a Comment