[UPDATE: Currently on hold by the federal courts.]
Interim Final Rule: Strengthening Wage Protections for the Temporary and Permanent Employment of Certain Aliens in the United States
The Department of Labor (DOL) announced that upon publication in the Federal Register on Thursday, October 8, 2020, the Interim Final Rule (IFR) increasing prevailing wage levels will go into effect immediately. Comments will still be accepted for 30 days after publication.
The IFR will apply to permanent labor certifications and labor condition applications (LCAs). The rule changes how prevailing wage levels are calculated, resulting in immediately higher prevailing wages for all occupations.
- Level I Wage: 45th percentile (previously 17th percentile)
- Level II Wage: 62nd percentile (previously 34th percentile)
- Level III Wage: 78th percentile (previously 50th percentile)
- Level IV Wage: 95th percentile (previously 67th percentile)
This rule will apply to:
- Applications for Prevailing Wage Determination (PWD) pending with the National Prevailing Wage Center (NPWC) on or after the effective date of the regulation;
- Applications for Prevailing Wage Determinations filed with the NPWC on or after the effective date of the regulation; and
- Labor Condition Application for Nonimmigrant Workers (LCAs) filed with DOL on or after the effective date of the regulation where the Occupational Employment Statistics (OES) survey data is the prevailing wage source, and where the employer did not obtain the PWD from the NPWC prior to the effective date of the regulation.
Employers and attorneys can access new prevailing wage data for each SOC and area of intended employment starting October 8, 2020. The Foreign Labor Application Gateway (FLAG) system can be used to submit LCAs and prevailing wage determinations. New PWDs will be issued starting October 13 to allow technical changs to the FLAG system. Non-OES prevailing wages, such as employer-provided surveys or collective bargaining agreements, will continue to be issued during this period.
What does this mean for employers?
Employers using LCAs or PWDs as part of the employment sponsorship process will see an immediate increase to the wages associated with each wage level, effectively increasing the “required wage” since it is defined as the higher of the actual and prevailing wages. Employment-based immigrant visa petitions relying on OES-based PWD applications will also see higher wages associated.
H-1B & PERM Updates
Employers are required to pay H-1B workers the greater of “the actual wage level paid by the employer to all other individuals with similar experience and qualifications for the specific employment in question,” or the “prevailing wage level for the occupational classification in the area of employment. The wage levels are to ensure that H-1B workers are paid at the same levels as U.S. workers to protect against the replacement of U.S. workers by lower-cost foreign labor.
The prevailing wage levels used in the H-1B (and H-1B1 and E-3) specialty occupation programs are the same used in PERM programs.
DHS has also posted an interim final rule to amend H-1B regulations. The DHS rule will become effective 60 days from publication.
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