On October 8, 2020, the U.S. Department of Labor (DOL) published in the Federal Register a new, interim final rule with an immediate effective date, which imposed drastically higher wage requirements for H-1B, H-1B1, and E-3 workers and “green card” applicants whose applications are based on labor certification. 
 
The new regulation changed, without notice or the opportunity for public comment, the formula for establishing the four wage levels to be assigned to jobs based on the level of education and experience required by the employer.  The result was more than a twofold increase in the required wage for many mid-career, experienced positions.  The new regulation applies to H-1B extensions as well as new petitions, essentially forcing employers in some cases to double the offered salary simply to retain an H-1B employee in the same job.  In many cases affected employees have been in the United States for years waiting in the long lines under the annual immigrant quota system for applicants born in India and China.  Without notice, the new regulation imposed drastically higher costs on employers who, if unable to pay, may lose the significant investments they have already made in the petitioning process for the H-1B worker under both the H-1B and PERM labor certification programs.
 
For these and other reasons, two groups of plaintiffs have filed suit against the DOL seeking to enjoin enforcement of the regulation and return the prevailing wages to those amounts that were issued by the DOL on July 1.  On October 16, a group of IT companies and ITServe Alliance filed suit in the United States District Court for the District of New Jersey, and on October 19, the American Immigration Lawyers Association (AILA) filed suit in the United States District Court for the District of Columbia.  Both actions seek to preliminarily and permanently enjoin enforcement of the regulation in its entirety.  The AILA lawsuit also seeks an order requiring DOL to reissue Prevailing Wage Determinations that were issued since the new rule went into effect.

While the outcome of litigation is never certain, there are sound legal grounds for award of an injunction halting implementation and enforcement of the rule, both on a preliminary basis while litigation is ongoing and on a permanent basis as a final outcome of litigation.  Should the upcoming presidential election result in an administration change, the regulation might also be defeated by the new Administration’s rescission of the regulation or refusal to defend it in court.
 
Foster will continue to monitor changes litigation impacting on the regulations governing the H-1B and PERM labor certification programs and will make future updates available as appropriate via our firm’s website at www.fosterglobal.com.