Earlier this month the Department of Homeland Security (DHS) and Department of Labor (DOL) published two interim final rules that make key changes to the H-1B visa program and permanent labor condition and labor condition application process. The rules, “Strengthening the H-1B Nonimmigrant Visa Classification Program” and “Strengthening Wage Protections for the Temporary and Permanent Employment of Certain Aliens in the United States”, were both published on October 8, 2020.

DHS Rule

The DHS claimed that their rule, which comes only months after the presidential proclamation (PP 10052) that suspended issuance of H-1B visas for those outside the US, “strengthens the H-1B nonimmigrant visa program to protect U.S. workers, restores integrity to the H-1B program and better guarantees that H-1B petitions are approved only for qualified beneficiaries and petitioner.” Claiming that data shows more than a half million H-1B nonimmigrants in the US have been used to displace US workers, the DHS said this rule will “combat the use of H-1B workers to serve as a low-cost replacement for otherwise qualified American workers.” DHS also cited the effect of the coronavirus pandemic on the US economy as justification for forgoing the regular notice and comment period. The DHS rule, effective December 7, 2020, makes some critical changes to the H-1B program. The rule will:

Narrow the definition of “specialty occupation” by closing what DHS calls an “overbroad definition that allowed companies to game the system;”
Require companies to make so-called “real” offers to “real employees,” by “closing loopholes and preventing the displacement of the American worker;” and
Enhance compliance enforcement through worksite inspections and monitor compliance before, during, and after an H1-B petition is approved;

Acting DHS Deputy Secretary Ken Cuccinelli estimated that about one-third of H-1B applicants would be denied under the new rules. Under the current law, there is an annual limit of 65,000 new H-1Bs, and there are an additional 20,000 visas available for current or prospective employees who possess an advanced degree earned at a US accredited educational institution. Moreover, these numbers are separate from the large number of non-cap subject petitions filed when an H-1B employee moves to a new employer or an employer files an extension of stay—these types of petitions would also be affected by the new rules.

DOL Rule

The DOL rule, effective October 8, 2020, is meant to “protect the wages and job opportunities of American workers by reforming the prevailing wage methodology used by the Department in several foreign worker programs.” The rule amends existing regulations governing permanent labor certifications and labor condition applications (LCA) and changes the way that DOL calculates prevailing wage levels, resulting in higher prevailing wages. Specifically, the rule changes the prevailing wage levels 1-4 from the 17th, 34th, 50th, and 67th percentiles to 45th, 62th, 78th and 95th percentiles of surveyed wages from Bureau of Labor Statistics (BLS) for H-1B, H-1B1, E-3 and I-140s.

The American Immigration Lawyers Association (AILA) criticized both of the rules, noting they “upend decades of requirements for the H-1B program without so much as giving the businesses, employees, and stakeholder community impacted by the rules adequate opportunity to voice their concerns before they take effect.”

Lawsuits

As expected, there have been several lawsuits filed challenging the DHS and DOL interim final rules. On October 16, 2020, the Wasden Banias law firm on behalf of ITServe Alliance, Dots Technologies, Iflowsoft Solutions, Kolla Soft, NAM Info, Precision Technologies, Smart Works and Zenith Services filed a complaint in the US District Court for the District of New Jersey that challenged the rule on the basis of DOL’s “decision to set dramatically higher wage rates without following the notice and comment rulemaking procedures required under the Administrative Procedure Act.”

On October 19, 2020, the US Chamber of Commerce, along with the National Association of Manufacturers, the Presidents’ Alliance on Higher Education and Immigration, and other organizations and universities, with Paul Hughes of McDermott Will & Emery as lead counsel, filed a complaint in the US District Court for the Northern District of California against both the DHS rule and the DOL rule. The complaint noted: “These rules are extraordinary: If left unchecked, they would sever the employment relationship of hundreds of thousands of existing employees in the United States, and they would virtually foreclose the hiring of new individuals via the H-1B program. They would also gut EB-2 and EB-3 immigrant visas, which provide for employment-based permanent residence in the United States.”

Additionally, on October 19, 2020, seventeen individual and organizational plaintiffs, including institutions of higher education, nonprofit organizations, and businesses, represented by AILA and Greg Siskind of Siskind Susser PC, among others, sued in the US District Court for the District of Columbia to enjoin, in its entirety, the DOL interim final rule. Jesse Bless, AILA’s Director of Federal Litigation, stated in a press release: “Standing alone, the failure of the government to provide the proper notice and opportunity for comment before making such dramatic changes, requires an immediate relief for plaintiffs. But the arguments against this rule stretch far beyond its unlawful implementation.…The regulation has caused immediate and unnecessary harm in every corner of our economy, including academic institutions, nonprofits, hospitals, start-ups, and small businesses.”

UPDATE MAY 26, 2021: This month the Department of Homeland Security (DHS) formally rescinded the Trump administration rule that had attempted to tighten H-1B program criteria. On May 19, 2021, DHS issued a final rule that removes from the Code of Federal Regulations (CFR) the Trump-era interim final rule (IFR) issued in October 2020. This final rule published May 19, 2021 “removes the regulatory text that DHS published in the vacated October 2020 IFR and restores the regulatory text to appear as it did before the October 2020 IFR was issued.”