On Tuesday, December 1, 2020, the U.S. District Court for the Northern District of California issued a decision setting aside the recently promulgated U.S. Department of Labor (DOL) prevailing wage rule that went into effect on October 8 without notice and the U.S. Department of Homeland Security (DHS) rule redefining “specialty occupation” for purposes of qualifying under the U.S. Citizenship and Immigration Services (USCIS) H-1B visa program.  

The court found that the rules were promulgated in violation of the Administrative Procedures Act, which requires public notice and a comment period before issuance of a final rule absent a showing of good cause.  The court held the government had not shown good cause for forgoing the notice and comment period.  Similarly, the court also held there was no showing of good cause for making the DOL wage rule immediately effective or the DHS rule related to H-1Bs effective on December 7. Accordingly, the DOL wages that went into effect on July 1, 2020 have been reinstated. The H-1B interim final regulation that was set to go into effect on December 7 will not go into effect on that date as the APA first requires a comment period.    

Notably, the court did not rule on whether DOL and DHS had the authority to promulgate rules with the same substantive comment.  The ruling was limited to the issue of whether they might do so based on good cause exceptions to the notice and comment requirement.  Accordingly, DOL and DHS could elect to republish essentially the same rules as proposed rules subject to notice and comment rather than as final rules.  Given the upcoming change in administrations, it is unclear whether DOL and DHS will continue to prioritize these rulemaking efforts. 

DOL has not yet  removed the now defunct October 8 wage data available through the Foreign Labor Certification Data Center Online Wage Library, which is the most common source used for determining prevailing wages for purposes of the H-1B and permanent labor certification programs.  The July 1 wages remain on the DOL’s Foreign Labor Certification Data Center Online Wage Library.  We have received reports that since this court decision, the DOL has issued prevailing wage determinations using the July 1 wages. 

The DHS rule change to the USCIS H-1B visa program regarding the definitions of “specialty occupation”, and the employer-employee relationship and reducing the H-1B validity period for H-1B workers employed at third-party job sites from three years to one year will not go into effect on December 7, 2020.  Because of the decision setting aside the rule, USCIS no longer has authority to enforce the rule  on December 7. Accordingly, USCIS should continue to apply the current regulatory criteria in all H-1B adjudications. 

For more information on how the court’s decision impacts a particular case, contact your Foster attorney.  Foster will continue to monitor regulatory and litigation updates and will make additional information available via the Foster website at www.fosterglobal.com.