After months of speculation, the Department of Labor’s (DOL’s) “Strengthening Wage Protections for the Temporary and Permanent Employment of Certain Aliens in the United States” rule was finally released to the public.  It will be published in the Federal Register on October 8, 2020 and will go into effect immediately upon publication.  The rule’s wage hikes, put forward with little notice, could upend the hiring and retention practices of companies that use and rely on highly skilled foreign employees.

The Restructuring rule will significantly raise the wages required for H-1B, H-1B1, E-3 and PERM eligibility.  There are currently four DOL wage levels based upon the duties and requirements of the job.

  • Level I = Beginning level employees who need close supervision
  • Level II = Fully competent employees who can use independent judgment and independent evaluation when performing job duties
  • Level III = Experienced employees with a sound understanding of the occupation
  • Level IV = Fully qualified employees who have enough experience to use independent judgment and independent evaluation to plan, modify and approve standard procedures and techniques

The minimum wages for each level are based on DOL’s calculation of the local median salary for the specific position.

  • Level I is currently set at the 17th Percentile
  • Level II is currently set at the 34th Percentile
  • Level III is currently set at the 50th Percentile
  • Level IV is currently set at the 67th Percentile

On October 8th, the Restructuring rule will change these percentages dramatically – by 20% or more.

  • Level I will move to the 45th Percentile
  • Level II will move to the 62nd Percentile
  • Level III will move to the 78th Percentile
  • Level IV will move to the 95% Percentile

This dramatic change will make it nearly impossible for companies to hire Level I or Level II employees unless they are paid at the level of experienced employees.  DOL has apparently concluded that this restructuring will eliminate what it believes to be the downward distortion of wages due to the existence of workers in their wage surveys who lack the requisite “specialty occupation” credentials but who may nonetheless be capable of doing the job.  This rule appears to be yet another regulation issued by the Trump Administration designed to make it increasingly difficult for U.S. employers to bring highly skilled foreign nationals into the U.S. workforce.

The new rule applies to:

  • Labor Condition Applications (Form ETA-9035/9035E) filed on or after October 8, 2020 (the effective date of the regulation) where the prevailing wage source is Occupational Employment Statistics (OES) survey data and where the employer did not obtain the prevailing wage determination from the OFLC National Prevailing Wage Center (NPWC) prior to October 8, 2020
  • Applications for Prevailing Wage Determinations (Form ETA-9141) pending with the OFLC NPWC as of October 8, 2020
  • Applications for Prevailing Wage Determinations (Form ETA-9141) filed with the OFLC NPWC on or after October 8, 2020

The revised OES prevailing wage data for each SOC Code and area of intended employment will be available on October 8, 2020.  The agency expects that there will be a brief delay in issuing prevailing wage determinations (Form ETA-9141) due to required technical changes to the FLAG system.

Employers, employers’ associations, and foreign nationals may well sue the government to stop the rule from going into effect.  Jackson Lewis attorneys are available to advise you on the implications of the Restructuring rule.