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Dept Of Labor Raises H-1B Wage Requirements

 

The Department of Labor (DOL) has issued a new rule designed to make it much more expensive to employ certain categories of foreign workers, and harder for U.S. companies to sponsor workers for the PERM-based green card process. Starting October 8, 2020, the rule will increase H-1B, E-3, H-1B1 and PERM wage requirements. 

The DOL uses data from the Bureau of Labor Statistics (BLS) to determine prevailing wages for a wide range of jobs in each U.S county, organized by occupations and experience levels (Level I to Level IV). To qualify for a H-1B, E-3, H-1B1, and PERM, the employer must offer a salary that is at least the prevailing wage for that specific occupation and experience level. As a consequence, this rule to increase prevailing wage requirements for all occupations and wage levels will make it harder for U.S. companies to sponsor H-1B, E-3, H-1B1 workers and PERMs.

The increases to wage requirements are significant. The chart below outlines the drastic increase. For example, entry level employees (Level I) must now make a salary at the 45th percentile of the average wage for their occupation, compared to the previous standard of the 17th percentile.

DOL Prevailing Wage Levels: Current & New
Skill Level Current Percentile New Percentile
Level I 17% 45%
Level II 34% 62%
Level III 50% 78%
Level IV 67% 95%
  • For H-1B, E-3, H-1B1: LCAs filed October 8th or after will be subject to the new and higher wage minimums.
  • PERM prevailing wage determinations issued October 8th or after will be subject to the higher wage minimums.

In addition, the U.S. Department of Homeland Security (DHS) will publish a rule to add more restrictions to the H-1B program. The rule will take effect on December 7, 2020 (60 days after publication in October). It will apply to all H-1B petitions, including extensions and amendments, filed December 7 or later. The rule will:

  1. Tighten the definition of “specialty occupation” by requiring the applicant’s Bachelor’s degree be directly related to the position.
  2. Clarify the employer-employee relationship for work at third-party worksites.
  3. Increase requirements and documentation for work at third party sites like contract and itinerary requirements.
  4. Limit third-party placement H-1B validity to one-year increments.
  5. Codify USCIS’ H-1B site visit authority.

Litigation on both of these rules are expected. Legalpad is closely monitoring developments.

Important note: These restrictions may make the EB-1 and EB-2 NIW more attractive options for many people seeking permanent residency in the U.S., as these immigrant petitions do not require PERMs and do not have minimum salary requirements. The same is true for the O-1 visa which, while more demanding in its qualifications, may become a more attractive option for some candidates looking for work authorization in the U.S., because the O-1 does not have a minimum salary requirement, unlike the H-1B, H-1B1, and E-3 .

To learn more about these petitions and their requirements, see our resources:

The EB-1A, EB-1B, and EB-1C

The EB-2 National Interest Waiver Explained

The O-1 Visa: Requirements & How To Qualify

If you have additional questions regarding these petitions, sign up for one of our weekly webinars here.