H-1B and Prevailing Wage Ruling

On October 8, 2020, the Trump Administration announced two new sets of rules regarding the H-1B visa program and the prevailing wage system, which is used to determine how much an employer must pay a foreign worker in both temporary visa and employment-based permanent residency cases. These new rules made it more difficult for U.S. employers to hire foreign professionals in specialty occupations, and substantially raised the salary thresholds for such workers. The changes went into effect immediately. Typically, the Administrative Procedures Act requires that before regulatory changes such as these can go into effect, the public must be given advance notice of the proposed rules and a chance to submit comments. The agency must consider and respond to all public comments, and can revise the proposed rules based on public feedback before they go into effect. The “notice and comment” period typically lasts at least 30 days. However, in this instance, the Trump Administration claimed that the new rules needed to be effective immediately without any notice and comment period, because of the economic upheaval created by the COVID-19 pandemic.

Many U.S. employers – particularly in the tech industry – claimed that the new rules would cripple their businesses, and would actually cause further damage to the economy. A class action lawsuit challenging these rules was spearheaded by the Chamber of Commerce of the United States of America and filed in the U.S. District Court for the Northern District of California. On December 1, the Court issued an order setting aside both the H-1B interim final rule and the restructuring of the prevailing wage levels. This was not a temporary injunction order, halting implementation of the rules for a limited period of time; it was a summary judgment dismissal throwing out the new rules completely. The Court found that the Trump Administration did not sufficiently demonstrate emergency circumstances that would have justified their skipping the required public notice and comment procedures before implementing these new regulations. This is a “win” for the employers who found these rules to be overly burdensome. It is likely this decision will be appealed by the Trump Administration, but for now, both USCIS and the Department of Labor are taking steps to undue the new rules.

If you are a U.S. employer or a foreign worker with questions about how the recent court order could impact you, contact Best Law Offices today for a consultation!