Labor Agency Loses Remaining Suits Challenging H-1B Wage Rule

Dec. 14, 2020, 11:58 PM

A U.S. Labor Department regulation raising wages for high-skilled specialty occupation visa workers has again been struck down for shortcuts the agency took to implement the measure.

Judge Emmet G. Sullivan from the U.S. District Court for the District of Columbia on Monday found that the agency had not followed proper notice-and-comment rulemaking procedure when it overhauled the specialty occupation visa program’s pay scheme.

The ruling applies to a pair of consolidated cases brought by a group of academic institutions and companies in the health-care, immigration, and technology-related sectors that employ H-1B foreign workers across the U.S. It follows a decision out of California that similarly set aside the H-1B wage rule. That court concluded that the “good cause” exception to the Administrative Procedure Act usually evoked in the event of emergencies was undercut by the DOL’s failure to act until six months into the coronavirus pandemic.

“The DOL has failed to demonstrate that it was necessary to dispense with advance notice and comment in order to ‘prevent fiscal harm’ to U.S. workers due to recent pandemic related ‘mass lay-offs,’” Sullivan said in his decision.

Sullivan found the agency’s explanation “insufficient” for why it was necessary to release the interim final rule with an effective date two days later. “Although the DOL claims that ‘announcing a change to the [prevailing wage] levels in advance of the change taking effect’ would have caused harm to the public interest, the Executive Branch had already announced its intent to issue such a rule some months prior” to the regulation’s promulgation, Sullivan said.

The Purdue University and Stellar IT plaintiffs initially sought a preliminary injunction to block the measure from taking effect. Sullivan instead granted the cases’ plaintiffs a partial motion for summary judgment. He also directed the government to reissue any prevailing wage determinations issued on or after Oct. 8 under the wage methodology of the interim final rule.

“The order is notable in that it orders the DOL to reissue all prevailing wage determinations issued on or after October 8, 2020,” said Jesse Bless, director of federal litigation for the American Immigration Lawyers Association and an attorney for the plaintiffs. That’s “a significant and important step to remedy the chaos that the agency’s actions wrought on plaintiffs and all those who suffered from the brazen attempt to change the rules on the fly.”

A representative for the DOL didn’t immediately respond to an emailed request for comment.

Prior Wages Reinstated

The DOL rule changed the four tiers of wages that an employer must pay to high-skilled guest workers, which are determined by the job and region where the visa holder will be employed, by raising the pay for those visa holders by about 30 percent at each of the four levels.

It took effect Oct. 9 when it was published in the Federal Register.

Several lawsuits were filed in federal courts in California, New Jersey, and the District of Columbia after the rule’s release. Plaintiffs include IT staffing companies, business groups, and universities.

The agency had announced Dec. 4 that the previous wage tables for H-1B workers would be reinstated after the Dec. 1 ruling in California.

The case is Purdue University et al v. Scalia et al, D.D.C., No. 1:20-cv-03006, opinion 12/14/20.

To contact the reporter on this story: Genevieve Douglas in Washington at gdouglas@bloomberglaw.com

To contact the editors responsible for this story: Martha Mueller Neff at mmuellerneff@bloomberglaw.com; Karl Hardy at khardy@bloomberglaw.com

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