On October 8, 2020, the Department of Labor (DOL) published an interim final rule (IFR) titled Strengthening Wage Protections for the Temporary and Permanent Employment of Certain Aliens in the United States. The rule changes how DOL computes Level I through Level IV wage rates when it uses Occupational Employment Statistics (OES) wage data to make a National Prevailing Wage Center (NPWC) prevailing wage determination or to certify an LCA that relies on OES wage data. This will result in higher NPWC prevailing wage determinations in each OES-based wage level. As an interim final rule, the public can comment for 30 days even though the rule is already in effect.
- Read the IFR at 85 FR 63872 (October 8, 2020).
- Read Frequently Asked Questions on the rule, prepared by DOL
- The rule is effective on the date of publication, October 8, 2020, but as an interim final rule the public is able to comment for 30 days even though the rule is already in effect. Comments are due on or before November 9, 2020.
- The American Immigration Lawyers Association (AILA) is searching for plaintiffs for a possible lawsuit to challenge the rule. "AILA is seeking plaintiffs in an action challenging the new interim final rule on prevailing wages for H-1B, H-1B1, E-3 and PERM filings. This form seeks to identify employers, employees, and membership organizations that may be interested in serving as named plaintiffs in litigation to be filed on a very expedited basis." Interested organizations and individuals should complete the linked data collection form to express their interest.
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The rule changes how DOL's National Prevailing Wage Center (NPWC) applies its four wage-level system to generate prevailing wage determinations when Occupational Employment Statistics (OES) data is used as the wage data source. This will result in higher NPWC prevailing wage determinations in each OES-based wage level. The rule will impact prevailing wage determinations in both the temporary (e.g., H-1B) and permanent (PERM) programs. The table below illustrates how the interim final rule impacts OES-based prevailing wage determinations done by the NPWC and LCAs filed with DOL on or after October 8, 2020 "where the OES survey data is the prevailing wage source, and where the employer did not obtain the PWD from the NPWC prior to the effective date of the regulation."
|Wage Level||Percentile Starting 10/08/20||Prior Percentile|
|Level I||45th percentile||was 17th percentile|
|Level II||62nd percentile||was 34th percentile|
|Level III||78th percentile||was 50th percentile)|
|Level IV||95th percentile||was 67th percentile)|
Regarding the abandonment of the percentile calculations that have been in place for over 20 years, DOL states in the rule preamble:
"The Department acknowledges that the existing wage levels – set at approximately the 17th, 34th, 50th, and 67th percentiles – have been in place for over 20 years, and that many employers likely have longstanding practices of paying their foreign workers at the rates produced by the current levels. Adjusting the levels to the 45th, 62nd, 78th, and 95th percentiles represents a significant change, and may result in some employers modifying their use of the H- 1B and PERM programs. It will also likely result in higher personnel costs for some employers, as detailed below. However, to the extent employers have reliance interests in the existing levels, the Department has determined that setting the wage levels in a manner that is consistent with the text of the INA and that advances the statute’s purpose of protecting U.S. workers outweighs such interests and justifies such increased costs."
DOL also cites President Trump's 2017 Buy American Hire American executive order as justification for the policy change.
In the rule preamble, DOL states that the rule will only apply to currently pending and future OES-based applications, including:
- "applications for prevailing wage determination pending with the NPWC as of the effective date of the regulation;"
- "applications for prevailing wage determinations filed with the NPWC on or after the effective date of the regulation; and"
- "LCAs filed with the Department on or after the effective date of the regulation where the OES survey data is the prevailing wage source, and where the employer did not obtain the PWD from the NPWC prior to the effective date of the regulation."
DOL goes on to say that the rule will not affect previously-approved NPWC prevailing wage determinations:
- "The Department will not apply the new regulations to any previously-approved prevailing wage determinations, permanent labor certification applications, or LCAs, either through reopening or through issuing supplemental prevailing wage determinations or through notices of suspension, invalidation, or revocation."
In an announcement on the DOL web site, the agency states:
"Effect of the Interim Final Rule:
The IFR will only apply to the following:
- An Application for Prevailing Wage Determination, Form ETA-9141, pending with OFLC's National Prevailing Wage Center (NPWC) as of the effective date of the regulation;
- An Application for Prevailing Wage Determination, Form ETA-9141, filed with the NPWC on or after the effective date of the regulation; and
- A Labor Condition Application for Nonimmigrant Workers (LCA), Form ETA-9035/9035E, filed with OFLC on or after the effective date of the regulation where the OES survey data is the prevailing wage source, and where the employer did not obtain the prevailing wage determination from the NPWC prior to the effective date of the regulation.
- On October 8, 2020, employers and their authorized attorneys or agents will be able to:
- Access revised OES prevailing wage data for each SOC and area of intended employment at https://www.flcdatacenter.com/;
- Use the Foreign Labor Application Gateway (FLAG) system to submit LCAs at https://flag.dol.gov/; and
- Continue to submit requests for prevailing wage determinations using the FLAG system.
- On October 13, 2020, the NPWC will begin issuing prevailing wage determinations using the revised OES prevailing wage data computed for the Interim Final Rule. This brief delay in issuing wage determinations is necessary to complete the required technical changes to the FLAG system's internal prevailing wage determination module and reduce the risk of unintended system problems or errors that may impact customers and OFLC staff.
- OFLC will continue to issue non-OES based prevailing wages (e.g. employer-provided surveys or collective bargaining agreements) without delay."
Alternatives and what hasn't changed
The DOL interim final rule focuses on the way the NPWC uses data from the Bureau of Labor Statistics (BLS) Occupational Employment Statistics (OES) system. It does not change the underlying laws, regulations, or policy relating to non-OES wage data. Employers continue to be able to choose other wage sources that comply with DOL regulations. For example, employers can request that the NPWC issue a prevailing wage determination based on a collective bargaining agreement (CBA), or on the basis of employer-provided wage surveys under 20 CFR 565.40(g) (PERM) or 20 CFR 655.731 (H-1B). See NAFSA Adviser's Manual 360 section 8.A.3., Employer-provided surveys, for a review. NAFSA has temporarily opened that section to non licenses holders.