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US DOL Rule Changes How Prevailing Wages Are Determined for Immigration Purposes

October 09, 2020

Effective October 8, 2020, the US Department of Labor will determine the prevailing wage for permanent labor certifications and labor condition applications based on a new formula for computing prevailing wage levels, resulting in higher prevailing wage levels for all occupations in the Occupation Employment Statistics wage database.

The following table illustrates the upward shift in wage levels for all occupations in the US Department of Labor’s (DOL’s) Occupation Employment Statistics (OES) wage database:

OES Wage Level

Previous Percentile

New Percentile

Level I

17th percentile

45th percentile

Level II

34th percentile

62nd percentile

Level III

50th percentile

78th percentile

Level IV

67th percentile

95th percentile


Accordingly, the 45th percentile is now the entry-level wage under the four-tier wage structure. For a typical professional-level position (O*Net Job Zone 4), entry level is for positions that require no more than a bachelor’s degree plus two years of experience. DOL’s existing formula for computing the appropriate wage level for a professional position increases the wage level one step for each additional year of experience that an employer requires beyond two years. Thus, a professional position that requires a bachelor’s degree plus five years of experience (a midlevel professional role for many employers) will now require a salary at no less than the 95th percentile.

The wage changes will impact the H-1B visa, the H-1B1 visa for professionals from Chile and Singapore, and the E-3 visa for professionals from Australia, all of which require a certified labor condition application (LCA). Permanent labor certification application (PERM) prevailing wage determinations will also conform to the new formula.

What Applications Are Affected By This Rule?

  • Applications for prevailing wage determinations (PWDs) pending with the DOL National Prevailing Wage Center (NPWC) as of October 8
  • Applications for PWDs filed with the NPWC on or after October 8
  • LCAs filed with DOL 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 will not apply the new regulations to any previously approved PWDs, PERMs, or LCAs, either through reopening, through issuing supplemental PWDs, or through notices of suspension, invalidation, or revocation.

The regulation does not change existing regulations regarding the use of employer-provided alternative wage surveys. Nonetheless, it remains to be seen whether DOL will continue to accept alternative wage surveys that comport with existing regulations in the same fashion that it accepted them prior to this new rule.

Looking Forward

In light of the fast-tracked publication of the regulation, we anticipate that this rule, as well as the Interim Final Rule published by the US Department of Homeland Security (DHS) on October 8, 2020, titled “Strengthening the H-1B Nonimmigrant Visa Classification Program” (see our alert on the H-1B rule), will be challenged quickly in federal court. Both DHS and DOL referred to these rules as major changes. Normally, a rule with major impact requires a period of public notice and comment prior to the rule’s implementation. The DHS rule has a shortened “notice and comment” period prior to implementation, and the DOL rule is effective upon publication.

Not only were the policies published without first obtaining and considering public feedback, but the Office of Information and Regulatory Affairs, which typically would review agency regulations, waived its right to review the rules prior to publication. In their haste to publish the rules, it may be that DOL and DHS rendered the new regulations unlawful.

Contacts

If you have any questions or would like more information on the issues discussed in this alert, please contact any of the following Morgan Lewis lawyers:

Washington, DC
Shannon A. Donnelly
Eleanor Pelta
Eric S. Bord

Miami
Laura C. Garvin

San Francisco
A. James Vázquez-Azpiri
Christina M. Gonzaga