On December 1, 2020, the October 8, 2020 DOL interim final rule was set aside by a U.S. District Court, and is no longer in effect.


Related recent updates

  • On January 14, 2021, DOL published a final rule titled Strengthening Wage Protections for the Temporary and Permanent Employment of Certain Aliens in the United States, at 86 FR 3608, which was the Trump administration's response to federal courts having set aside the below-described October 8, 2020 interim final rule of the same title.
  • Consult NAFSA's page on the January 14, 2021 final rule for updates.

On December 1, 2020, the October 8, 2020 DOL interim final rule was set aside by a U.S. District Court, and is no longer in effect.

Four groups of plaintiffs separately challenged the DOL interim final rule. These groups of plaintiffs, which included academic institutions, businesses, and trade associations, claimed the Department lacked good cause to issue the interim final rule without undergoing notice and comment procedures under the APA and that the interim final rule was arbitrary and capricious and in violation of the INA. In three of the four cases, the district court approved the parties' stipulation to convert plaintiffs' preliminary injunction motion to a motion for partial summary judgment on the notice and comment claim.

  • On December 14, 2020, the U.S. District Court for the District of Columbia granted the plaintiffs' motions for partial summary judgement and ordered the Department of Labor "to reissue any prevailing wage determinations issued on or after October 8, 2020 under the wage methodology of the IFR" and that the parties "meet-and-confer to discuss a mutually agreeable schedule to reissue the relevant prevailing wage determinations." Read the court's Order and Memorandum Opinion. The case is Purdue University et al. v. Scalia (Stellar IT was consolidated into this case), Case No. 1:20-CV-03006 (D.D.C., October 19, 2020). This blocked the DOL rule from being enforced or implemented.
  • On December 3, 2020, the U.S. Court for the District of New Jersey granted the plaintiffs' motion for a preliminary injunction, enjoining DOL from enforcing its October 8, 2020 interim final rule pending the outcome of litigation. Read the Court's Opinion and Order. The case is ITServe Alliance Inc., et al. v. Scalia, Case No. 3:20-14604 (D.N.J., October 16, 2020).
  • On December 1, 2020, the U.S. District Court for the Northern District of California granted the plaintiffs' motion for partial summary judgement, and set aside both the Department of Labor and Department of Homeland Security interim final rules. This blocked both rules from being enforced or implemented. Read the court's order and judgement, which found that the agencies did not have just cause to promulgate the rules without notice and comment. The case is Chamber of Commerce et al. v. DHS et al., Case No. 4:20-CV-7331 (N.D. Ca., October 19, 2020). On December 3, 2020, the Office of Foreign Labor Certification (OFLC) announced detailed plans for implementing the court's order and associated procedures, including replacing the 10/8/2020-6/30/2021 wage source year data that was implemented under the interim final rule with the OES prevailing wage data that was in effect on October 7, 2020.

The discussion below regards the blocked interim final rule. This content is being kept for research and reference purposes.

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 was able to comment for 30 days even though the rule went into effect on the day of publication.

  • Read the IFR at 85 FR 63872 (October 8, 2020).
  • Comments. The rule was effective on the date of publication, October 8, 2020, but as an interim final rule the public was able to comment for 30 days even though the rule was already in effect. Comments were due on or before November 9, 2020. NAFSA signed on to two joint comment letters, one led by the Compete America Coalition and one led by the College and University Professional Association for Human Resources (CUPA-HR).
  • On October 27, 2020, NAFSA hosted "Government Connection: The Use of Alternative Wage Surveys in Prevailing Wage Determinations," where NAFSA member experts discussed the higher NPWC prevailing wage determinations resulting from the rule in each OES-based wage level, and the use of alternative wage surveys to obtain a reasonable prevailing wage for H-1B and PERM processes. The recording and slides are available for download by NAFSA members.

Litigation - 3 lawsuits

  • Chamber of Commerce et al. v. DHS et al., Case No. 4:20-CV-7331 (N.D. Ca., October 19, 2020). Challenges both the DOL and DHS interim final rules. See the U.S. Chamber Litigation Center for more information, including case filings. On December 1, 2020, the U.S. District Court for the Northern District of California granted the plaintiffs' motion for partial summary judgement, and set aside both the Department of Labor and Department of Homeland Security interim final rules. This blocks both rules from being enforced or implemented. Read the court's order and judgement, which found that the agencies did not have just cause to promulgate the rules without notice and comment.
  • Purdue, et al. v. Scalia, Case No. 1:20-CV-03006 (D.D.C., October 19, 2020). Challenges the DOL rule only. On December 14, 2020, the court granted the plaintiffs' motions for partial summary judgement and ordered the Department of Labor "to reissue any prevailing wage determinations" issued under DOL the interim final rule. Read the court's Order and Memorandum Opinion.
  • ITServe Alliance Inc., et al. v. Scalia, Case No. 3:20-14604 (D.N.J., October 16, 2020). Challenges the DOL rule only. On December 3, 2020, the U.S. Court for the District of New Jersey granted the plantiffs' motion for a preliminary injunction, enjoining DOl from enforcing its October 8, 2020 interim final rule pending the outcome of litigation. Read the Court's Opinion and Order.

All three plaintiff groups have also filed motions for preliminary injunctions asking the courts to halt implementation while litigation proceeds.

  • NAFSA co-signed two amicus briefs filed by the American Council on Education (ACE) that support the motions for preliminary injunctions in the California and District of Columbia cases. Read the amicus briefs: filed in the District of Columbia and Northern District of California district courts.

Summary

The rule sought to change 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 stated 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 cited President Trump's 2017 Buy American Hire American executive order as justification for the policy change.

Implementation

In the rule preamble, DOL stated that the rule would 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 went on to say that the rule would 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 stated:

"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.

Alternatives and what hasn't changed

The DOL interim final rule focused on the way the NPWC uses data from the Bureau of Labor Statistics (BLS) Occupational Employment Statistics (OES) system. It did 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.