Today, the U.S. Department of Labor (DOL) posted an advance copy of a new regulation that will dramatically increase prevailing wage levels. They will continue to use the four-tier leveling system, but the prevailing wages will increase as follows:
Level 1 will increase from the 17th percentile to the 45th percentile.
Level 2 will increase from the 34th percentile to the 62nd percentile.
Level 3 will increase from the 50th percentile to the 78th percentile.
Level 4 will increase from the 67th percentile to the 95th percentile.
These percentiles are based on the DOL’s survey of salaries in specified job categories and geographic regions.
The interim final regulation will go into effect immediately upon publication on 10/8/2020 after it is posted in the Federal Register. It is being pushed through without public comment, which could result in litigation. The DOL has said that it can bypass the public comment requirement because doing so would result in delays that would hurt the public interest. Citing Trump’s “Buy American and Hire American” executive order, as well as the recent high level of unemployment, along with the directive in a recent executive order to review the impact of employment-based immigration on U.S. workers.
The new prevailing wage calculation will not impact cases that are currently pending. It will affect LCAs submitted after the final rule goes into effect. It will also impact PERM prevailing wage submissions that are pending at the time the rule goes into effect. It will NOT impact previously issued wage determinations or LCAs.
This rule will significantly impact U.S. companies that hire foreign workers in H-1B or E-3 status and pay salaries at or near current prevailing wage levels. To meet prevailing wage levels, companies must pay base salaries at the required levels, which does not allow for the addition of bonus structures or the value of other employee benefits in the calculation. Companies may need to review compensation structures to meet the demands of these increased prevailing wage levels.
Please contact your Graham Adair attorney with any questions.