Lawsuits Over New Prevailing Wage Rates

By: Dayna Lally[i]

History of New DOL Prevailing Wage Rule

On October 8, 2020, the Department of Labor (“DOL”) published an interim final rule (“IFR”) titled, “Strengthening Wage Protections for the Temporary and Permanent Employment of Certain Aliens in the United States.”[ii]

The IFR updated the computation of prevailing wage levels for certain labor certification programs “to better reflect the actual wages earned by U.S. workers similarly employed to foreign workers.”[iii]

The prevailing wage percentiles, as adjusted by the interim final rule, are summarized below:

By way of example, the IFR increased the prevailing wage rates for Software Developer occupations (15-1132) in the New York-Newark-Jersey City metropolitan statistical area as follows:

The IFR took effect the day it was published without providing prior notice and without prior notice and opportunity for public comment as required under 5 U.S.C. § 553(b).[iv]

Lawsuits Challenging New DOL Prevailing Wage Rule

ITServe Alliance, Inc. et al v. Scalia et al., No. 20-cv-14604

1. Issues: (1) Whether the IFR violated the notice and comment procedures required under the Administrative Procedure Act (“APA”); (2) Whether the DOL’s new wage rates, as amended, violate the Immigration and Nationality Act (“INA”); and (3) Whether DOL’s actions are “arbitrary and capricious”.
2. Holdings: (1) DOL lacks the necessary factual and legal justification to invoke the good cause exception for avoiding the required notice and comment procedures[v]; (2) DOL used a standard contrary to the statutory criteria for determining the minimum requirements for entry into the H-1B program[vi]; and (3) DOL’s new wage rule is arbitrary and capricious because the agency relied on outdated, incorrect, or limited empirical data, failed to consider readily available, relevant data and empirical studies, and engaged in reasoning that conflicts with basic economic theory.[vii]

Chamber of Commerce, et al., v. DHS, et al.,  20-cv-7331

1. Issue: Whether the U.S. Dept. of Homeland Security demonstrated that the impact of the COVID-19 pandemic on domestic unemployment justified dispensing with the “due deliberation” that normally accompanies rulemaking to make changes to the H-1B visa program that even Defendants acknowledge are significant.[viii]
2. Holding: DHS failed to show there was good cause to dispense with the rational and thoughtful discourse that is provided by the APA’s notice and comment requirements.[ix]

Purdue University, et al., v. Scalia et al., No. 20-cv-3006 (D.D.C. Dec. 14, 2020) (EGS)

1. Issues: (1) Whether the DOL sufficiently justified its decision, as detailed in the IFR, that advance notice-and-comment procedures would have been “impracticable”[x]; and (2) Whether the DOL sufficiently justified its decision, as described in the IFR, that advance notice-and-comment procedures would have been contrary to the public interest[xi].
2. Holdings: (1) DOL did not appropriately invoke the good cause exception based upon its stated rationale in the IFR[xii]; and (2) DOL failed to provide any evidence in the record that supports its contention that a “massive rush” to evade the IFR would have occurred if the DOL had provided advance notice and comment[xiii].

Current Status of New DOL Prevailing Wage Rule

On Monday, December 14, 2020, D.C. District Court Judge Sullivan ordered DOL “to reissue any prevailing wage determinations issued on or after October 8, 2020 under the wage methodology”.[xiv]

According to the DOL website:

The Department is taking necessary steps to comply with the courts’ orders, including making required technical changes to the Foreign Labor Application Gateway (FLAG) system, in a manner that minimizes service disruptions for customers and OFLC staff.  Specifically, the Department must make changes to the FLAG system modules to replace the 10/8/2020-6/30/2021 wage source year data that was implemented under the IFR with the OES prevailing wage data that was in effect on October 7, 2020.[xv] 

Opportunity to Request NPWC Review of a PWD Issued Under the IFR

According to the DOL website:

Any employer desiring review of a PWD issued using the 10/8/2020-6/30/2021 wage source year data that was implemented under the IFR may make a request for review by the NPWC Director under 20 CFR 656.41 on or before January 4, 2021, and the Director will consider such request timely under 20 CFR 656.41(a).[xvi]

Lally Immigration Services, LLC is closely monitoring the situation regarding the DOL prevailing wage rule and will provide updates as they become available.

If you would like to file an H-1B petition and/or initiate a Permanent Labor Certification Application (“PERM”), contact Lally Immigration Services, LLC at (617) 870-1000 or email H-1B lawyer, Dayna Lally, at [email protected].

[i] Dayna Lally is an immigration lawyer and the owner of Lally Immigration Services, LLC. ​ Dayna has exclusively practiced immigration law since 2015. Dayna passed the Massachusetts Bar Exam in 2013 and the State Bar of Michigan in 2014. ​Dayna is the spouse of a naturalized U.S. citizen and the mother of a young daughter who holds dual citizenship in the U.S. and Ireland.

[ii] See 85 Fed. Reg. at 63872.

[iii] Id.

[iv] https://static1.squarespace.com/static/5e1f282f4170ac611f481d17/t/5f8a1cd6ce7cf718b1d0b90d/1602886871825/01+-+ITServe+DOL+IFR+Complaint+FILED.pdf

[v] ITServe Alliance, Inc. et al v. Scalia et al., No. 20-cv-14604,

https://static1.squarespace.com/static/5e1f282f4170ac611f481d17/t/5f8a1cd6ce7cf718b1d0b90d/1602886871825/01+-+ITServe+DOL+IFR+Complaint+FILED.pdf (12/17/2020).

[vi] Id. at 32.

[vii] Id. at 3.

[viii] Chamber of Commerce, et al., v. DHS, et al., No. 20-cv-7331

[ix] Id. at 22-23.

[x] Pursue University, et al., v. Scalia et al., No. 20-cv-3006 (D.D.C. Dec. 14, 2020) (EGS)

[xi] Id. at 29.

[xii] Id. at 20.

[xiii] Id. at 36.

[xiv] Purdue Mot., ECF No. 6 at 11.

[xv] See https://www.dol.gov/agencies/eta/foreign-labor/news.

[xvi] See https://www.dol.gov/agencies/eta/foreign-labor/news.