Things to Know About the DOL Regulation Hiking Prevailing Wages: H1B Visa Lawyer

Posted by Berd & Klauss, PLLC on December 7th, 2020

Early in October this year, the US Dept of Labor or DOL set forth a rule that aims to “strengthen” wage protections for H1B visa holders, as well as other aliens including those with H1B1 and E3 status. The rule also applies to PERM labor certifications. Several organizations—most notably the Small Business Administration—have already challenged it.  If your business is affected, it’s best to consult anH1B visa lawyer in NYC.

The new regulations essentially hike prevailing wages for these workers.  Since 2005, wage level one has been set approximately at the 17^th percentile of wage distribution for the occupation and the region where the visa holder will be working. Wage level two was set at the 34th percentile, wage level three at the 50^th percentile, and wage level four at the 67^th percentile.

The new regulations from the DOL shift these numbers dramatically.  Level one will be set at the 45^th percentile, level two at the 62^nd percentile, level three at the 78^th percentile, and level four at the 95^th percentile.  This all sounds like welcome news for H1B workers on the surface, but many parties are saying that the goal of the regulation is not to really raise salaries for these workers—it’s to discourage employers from hiring workers in H1B status.  The new regulations also seem to be aimed at employers looking to fill entry-level jobs, with the assumption that most employers will not pay a salary in the 45^th percentile for positions that require no relevant work experience.

Not surprisingly, the Small Business Administration or SBA has been very vocal about urging the government to delay this wage hike.  Members are saying that it will cost small employers more than 8 billion over a period of 10 years.  The new regulations will also have a disproportionately negative impact on small businesses that are already struggling to keep doors open because of the economic impact of the pandemic.

Small businesses will be hit the hardest because they will be unable to afford the new wages and therefore find it very hard if not impossible to hire skilled guest workers.  The new rule essentially forces small business owners to increase salaries by as much as 50%, effectively increasing the burden on already-struggling companies.  The fact that it has become much more expensive to hire foreign talent will also have lasting negative effects on the startup ecosystem.

If the new rules affect you or your business, talk to an H1B visa lawyer in NYC. A NY H1B lawyer can look at the circumstances surrounding your issue and give you the best legal advice going forward.  Many small businesses routinely hire an H1B attorney in New York to get expert guidance on matters of hiring guest workers.  Talk to an H1B lawyer in New York today.

About the Author:

This content is written by Patrick Klauss, Esq, who is an immigration lawyer and a partner at Berd & Klauss, PLLC. The firm specializes in immigration & immigration-related issues and handles everything from immigrant visas to deportation and waivers.