The U.S. Department of Labor (DOL) wage rule was published and took immediate effect on October 8. The DOL wage rule has drastically altered the system used to determine accurate wages for H-1B, H-1B1, and E-3 nonimmigrant petitions and Permanent Labor Certification (PERM) applications.
Under the DOL wage rule, required wages have increased by approximately 25% for all levels and occupational categories. However, the DOL wage rule does not restrict the use of alternate wage surveys in order to circumvent the DOL’s new and inflated wages. Although alternate wage surveys will be an additional expense for employers, and they must meet regulatory requirements to be viable, they offer a route for employers to use realistic wage levels for their immigration processes moving forward.
The U.S. Department of Homeland Security (DHS) rule was also published on October 8, but will not take effect until December 7. The DHS rule will narrow the definition of H-1B specialty occupation and place additional restrictions on third-party placement that is often used by H-1B employers, and IT companies in particular. Under the DHS rule:
- The definition of H-1B specialty occupation will be altered. Employers must prove that the H-1B beneficiary possesses a bachelor’s degree (or higher) in a directly-related specific specialty and that the specific degree is always required for the H-1B position. Under the prior regulation, employers had more opportunity to prove that H-1B beneficiaries were qualified if they had earned a general or a related degree.
- The definition of employer will be altered for third-party placement. Employers must prove “actual control” of the H-1B beneficiary. Under the prior regulation, employers had only to prove the “right to control” the H-1B beneficiary.
- The duration of status granted for H-1B petitions will be truncated if the beneficiary will work pursuant to a third-party placement. Approvals will be granted for a maximum of one year per H-1B petition filed. Under the prior regulation, H-1B petitions filed for third-party placement positions were eligible for a duration of status of up to three years.
- Corroborating evidence required for H-1B petitions filed for third-party placement positions will increase. Employers must provide a Master Service Agreement (MSA) and a Statement of Work (SOW) which list all the H-1B specialty occupation’s requirements. Under the prior regulation, employers were not required to provide contractual documentation if other credible and substantive evidence was provided to address the relationship between the H-1B employer and the end-client.
The heightened standards and increased scrutiny that the DOL and DHS rules will inflict are intended to dissuade employers from the use of foreign workers, limit the types of workers and positions that are eligible for H-1B status, and restrict the ability of employers to place H-1B workers at third-party worksites. Litigation is expected in response to both rules.
Our law office will continue to monitor the situation and alert our clients of important news.
This update is brought to you courtesy of the Law Office of Sandra C. Lee. For additional information, please contact us at dlaughlin@sandralee.law.