Newly released rules from the U.S. Department of Labor and the U.S. Department of Homeland Security aim to make changes to the H-1B program that will make hiring these foreign national workers more difficult for companies.
Effective today, 8 October, a newly released Department of Labor (DOL) interim final rule (IFR) would require employers to increase what they pay H-1B beneficiaries. Administration officials have argued that the H-1B visa program has been taken advantage of to the detriment of U.S.-born workers. These wage increases will make it difficult for companies to hire high-skilled foreign nationals that fill critical roles in the U.S.
Under the DOL H-1B wage rule, that is effective immediately, employers must pay H-1B recipients the higher of the prevailing wage as determined by a formula set forth in the IFR, or the actual wage the employer pays its non-H-1B holders who hold a similar position. The new prevailing wage levels will be significantly higher than current prevailing wage levels due to changes in the formula under the rule. The specific increases in new prevailing wages depend on several factors including the profession and where in the U.S. the position is located. The IFR does outline four wage levels in which the percentiles of the surveyed wages, as determined by the Bureau of Labor Statistics, used to determine prevailing wages has increased from the 17, 34, 50 and 67th percentiles to the 45, 62, 78 and 95th percentiles of average wages. The prevailing wage has therefore been significantly increased for each wage level.
Additionally today, the Department of Homeland Security (DHS) announced an interim final rule (IFR, that aims to strengthen the H-1B nonimmigrant visa program to guarantee that only qualified H-1B petitions are approved. However, these restrictions will also make it more difficult for employers, in particular those providing services, to hire high-skilled foreign nationals.
According to the DHS, “The H-1B program was intended to allow employers to fill gaps in their workforce and remain competitive in the global economy, however it has now expanded far beyond that, often to the detriment of U.S. workers.” Thus, the rule aims to avoid an influx of low-cost H-1B workers that, according to the DHS, leads to the stagnation of wages in certain industries.
According to the DHS press release, the rule will narrow the definition of “specialty occupation,” require companies to close hiring loopholes and only make “real” offers to “real employees,” and strengthen the DHS’s compliance enforcement abilities through worksite inspections conducted through the entire H-1B petition process. The DHS rules are slated to go into effect in 60 days, however an IFR functions to expedite the time it takes to instate such rules.