Interim Final Rule Released Reforming Foreign Worker Program Wages

On October 6^th, 2020, the U.S. Department of Labor (DOL) issued an Interim Final Rule (IFR) amending prevailing wage regulations. Specifically, the final rule helps protect wages and job opportunities by reforming the methodology used in several foreign worker programs.

 Overview of the Interim Final Rule

The IFR is the result of an extensive review of the DOL’s Permanent Employment Certification, H-1B, H-1B1, and E-3 Visa programs. After the review, the DOL determined that the existing prevailing wage methodology under the programs could lead to potential abuses. In some cases, these abuses could undermine the wages and job opportunities of U.S. workers. Put simply, many employers could hire foreign workers at a far lesser rate than domestic workers. The agency was also concerned that the effects of COVID-19 on the U.S. labor market would increase these events. According to the DOL, the IFR improves the accuracy of prevailing wages paid to foreign workers by doing the following:

• Brings the prevailing wages paid to foreign workers more in line with wages paid to similarly employed U.S. workers; and
• Removes economic incentives currently in place to hire foreign workers on a permanent or temporary basis over American workers.

Requirements Under the Interim Final Rule

Under the IFR, there are some rules that employers must follow. When hiring a worker under an H-1B, H-1B1, or E-3 visa, employers must attest that they will:

• pay nonimmigrant workers the higher of the prevailing wage; or
• pay the actual wage currently paid to other employees with similar experience and qualifications.

If an employer seeks to hire an immigrant under an EB-2 or EB-3 classification, they must follow additional specific rules. Firstly, employers would need to try and recruit U.S. workers for the position using the DOL prevailing wage.  Secondly, if there are no willing, available, and qualified workers, employers must pay any hired foreign workers the same prevailing wage. The rule went into effect on October 8^th, 2020. Enforcement falls under the DOL’s Employment and Training Administration. This IFR comes after other guidance was recently released by the DOL on various subject matters. Those topics include new OSHA workplace guidance on COVID-19 and revisions to Family and Medical Leave Act notices and forms.

 Employer Takeaways

When hiring foreign workers, employers need to follow the prevailing wages dictated by the DOL for specific positions. Those who employ foreign workers should consult with appropriate legal counsel to determine if the company’s hiring policy complies with the rule. Failure to comply with the new IFR could lead to possible hefty fines and lawsuits as dictated by the DOL.