New DHS and DOL Rules Will Impact H-1B Petitions and Increase Prevailing Wages

October 7, 2020

The DHS and DOL have issued interim final rules regarding H-1B visas and prevailing wage determinations for Labor Condition Applications (LCAs) and PERM labor certifications. Our firm is reviewing the lengthy regulations and their potential impact on employers and will continue to provide updates here.

The DHS Interim Final Rule will be published in the Federal Register on October 8, 2020, and will be effective 60 days after publication.

The DOL Interim Final Rule to change prevailing wage levels will be published in the Federal Register on October 8, 2020, and will take effect immediately.

President Trump had previously directed government agencies to promulgate regulations or take other actions relating to H-1B visas and PERM labor certifications.

To summarize, the new DHS rule (which will take effect in approximately 60 days, barring an injunction):

• Tightens the definition of “specialty occupation” for H-1Bs to require a direct relationship between the specific degree field and the position duties. When an employer lists multiple degree fields as acceptable for a position, the employer must establish how each identified degree provides highly specialized knowledge directly related to the job duties. Positions which can be filled by someone with a general bachelor’s degree, such as business administration or liberal arts, are not considered “specialty occupations.”
• Lists factors to consider whether an “employer-employee relationship” exists and indicates that DHS will consider the totality of circumstances. New factors, likely geared toward petitioners who place beneficiaries at third-party work sites, include whether the petitioner evaluates the work product of the beneficiary, whether the beneficiary uses proprietary information of the petitioner in order to perform duties, whether the beneficiary produces an end-product that is directly linked to the petitioner’s line of business, and whether the petitioner has the ability to control the manner and means in which the work product of the beneficiary is accomplished.
• Provides that where the beneficiary will be working at a third-party worksite, the petition can only be approved for one year, requires contracts and itineraries, and site visits of the third-party location are permitted.
• When it takes effect, will apply to all H-1B petitions, including extensions of stay, amendments and changes of employer.

The new DOL rule (effective October 8, barring an injunction) calls for:

• Altering the percentile the DOL uses to determine prevailing wage. This will significantly increase the prevailing wage for each of the four Skill Levels set by the DOL.
  • Level I wages will increase from the 17^th percentile to 45^th percentile
  • Level II wages will increase from the 34^th percentile to 62^nd percentile
  • Level III wages will increase from the 50^th percentile to the 78^th percentile
  • Level IV wages will increase from the 67tth percentile to the 95^th percentile
• LCAs filed before October 8 may rely on the current method for determining prevailing wage. LCAs filed on or after October 8 must use the new method for determining prevailing wage.
• PERM prevailing wage determinations issued before October 8 will use the current method. Any pending requests for PERM prevailing wage as of October 8 will use the new method. DOL will use the new method for any PERM prevailing wage determinations issued or requested after October 8.

If employers subscribe to a wage survey (e.g., Radford), it appears they may still use this data to establish prevailing wage for LCAs and PERMs.

Weaver Schlenger anticipates that lawsuits to enjoin the implementation of both sets of regulations will be filed. For more insights into these rules, we recommend this article.