Worldwide ERC® Joins Stakeholders in Support of Challenging Restrictive DOL and DHS Immigration Rules

New rules released by the Department of Labor (DOL) and the Department of Homeland Security (DHS) that restrict the ability for U.S. employers to hire foreign skilled talent are being challenged by Worldwide ERC® and other stakeholders.

A new rule released on 8 October by the Department of Labor (DOL) that restricts the ability of workforce mobility employers to access high skilled foreign talent is being challenged. Worldwide ERC® filed comment on the new rule this week and joined a Compete America stakeholder comment alongside dozens of other organizations. Additionally, Worldwide ERC® joined an amicus brief to support litigation against both the DOL rule and the new Department of Homeland Security (DHS) rule that also restricts employers’ ability to hire high-skilled foreign talent.

What are the new rules released by DOL and DHS?

The Department of Labor’s interim final rule (IFR) would require employers to increase what they pay H-1B and employment-based green card beneficiaries. Administration officials have specifically argued that the H-1B visa program has been taken advantage of to the detriment of U.S.-born workers. These wage increases are meant to course correct that argument by inflating market wages. The rule was effective immediately, requiring employers to 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.

• Level I (entry-level workers) will move from the 17th percentile to the 45th percentile.
• Level II (qualified employees) will move from the 34th percentile to the 62nd percentile.
• Level III (experienced employees) will move from the 50th percentile to the 78th percentile.
• Level IV (fully qualified employees) will move from the 67th percentile to the 95th percentile.

The new prevailing wage levels will be significantly higher than current prevailing wage levels due to changes in the formula under the rule, increasing wages on average 41%-50% for level 1 wages, 61%-70% for level 2 wages, and a haphazard 30-100% for level 3 and 4 wage rates. This will only make it very difficult for employers to hire high-skilled foreign nationals that provide innovations to our industry and to fill critical roles in the U.S. often where skills gaps exist.

Members of the undersigned organizations have found that level 1 wages for jobs offered to their H-1B employees (representing about 14% of all LCAs) increased overnight by an average of 41%-50%, level 2 wages increased on average between 61%-70% (representing 49% of all LCAs), with level 3 and 4 wage rates increasingly haphazardly (between 30%-100%). In addition, thousands of employers report that the new level 1, 2, 3, 4 percentiles of surveyed OES wages codified in DOL’s IFR (identified in the IFR to be at the 45th, 62nd , 78th, and 95th percentiles) are not being implemented as written in new 20 CFR 656.40(b)(2)(i)(A)-(D) and that often the new level 2 prevailing wage (62nd percentile) exceeds the old level 4 prevailing wage (67th percentile), among other anomalies

The Department of Homeland Security’s interim final rule (IFR) 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 third party worksites, to hire high-skilled foreign nationals.

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 the key function of an IFR is to expedite the time it takes to implement such rules.

What steps are being taken in response to these rules?

Worldwide ERC® filed comment to the DOL rule, and requests that the Department withdraw the rule and instead re-publish it as a “Notice of Proposed Rulemaking” with a sixty-day period to collect comments from the regulated community. We ask the DOL to provide a reasonable implementation period for businesses to adjust if and when the regulation is re-issued as an interim final or final rule. Just as importantly Worldwide ERC®’s comment states that while we support the DOL’s mission of protecting the U.S. workforce, particularly in light of the COVID-19 pandemic, the hiring of foreign skilled talent to the U.S. does not run contrary to that mission. The new wage rule will impede the competitiveness of U.S. employers and global companies with U.S. operations, while the dramatic nature of the rule would upend employers’ ability to retain current workers and hire new talent.

Worldwide ERC® is also engaged with the broader stakeholder community regarding the DOL’s new wage rule. In addition to our comment, we joined a number of multi-sector associations, and employers who are a part of the Compete America coalition in filing comment against the rule. Signatories, including Worldwide ERC®, help to ensure that the U.S. immigration process promotes the ability of high-skilled foreign talent to be employed in the U.S., believing that such talent is key to the U.S.’s ability to obtain and retain necessary talent that support the economy. By outlining the key shortcomings of the rule, the signatories urged for the rescission of the rule.

Finally, both the DOL and DHS rules were challenged by the U.S. Chamber of Commerce in the Northern District of California. This litigation reiterated the importance of the U.S.’s ability to hire high-skilled foreign talent, and that the new rules would “significantly reduce the economic benefits provided by the H-1B program, stunt the U.S. economy’s recovery from the pandemic, and leads to greater reliance by U.S. companies on operations outside of the United States—inflicting long-term damage to our Nation’s economic growth.” Worldwide ERC® signed onto an amicus brief as part of the Chamber’s challenge to the rules.