On December 1, 2020, the U.S. District Court for the Northern District of California issued an order in Chamber of Commerce, et al. v. DHS, et al., No. 4:20-CV-7331 (N.D. Ca., October 19, 2020), finding that the U.S. Department of Labor (the Department) failed to show it had good cause to forgo advance notice and comment under the Administrative Procedure Act for the Interim Final Rule (IFR),Strengthening Wage Protections for the Temporary and Permanent Employment of Certain Aliens in the United States, 85 FR 63872 (Oct. 8, 2020). The court’s order sets aside the IFR, which took effect on October 8, 2020 and implemented reforms to the prevailing wage methodology for the Permanent Employment Certification, H-1B, H-1B1, and E-3 visa programs. Similarly, on December 3, 2020, the U.S. District Court for the District of New Jersey issued a preliminary injunction in ITServe Alliance, Inc., et al. v. Scalia, et al., No. 3:20-14604 (D.N.J., October 16, 2020), which applying to the plaintiffs in that case.
The ruling in Chamber of Commerce also sets aside the IFR issued by Department of Homeland Security to revise the definition of the term “specialty occupation” and makes other changes to the H-1B regulations. This decision blocks both rules from being enforced or implemented.
On December 3, 2020, the Office of Foreign Labor Certification (OFLC) announced detailed plans for implementing the court’s order and associated procedures, including replacing the 10/8/2020-6/30/2021 wage source year data that was implemented under the interim final rule with the OES prevailing wage data that was in effect on October 7, 2020.
Takeaways for Filing Labor Condition Applications (LCAs)
As a result of the court order, the following apply:
- On December 4, 2020 at 12:00 p.m. EST, DOL will begin updating data sources to reflect the correct prevailing wage data for each Standard Occupational Classification (SOC) and area of intended employment through June 30, 2021.
- All Form ETA-9035/9035Es (LCA applications) submitted using the Foreign Labor Application Gateway (FLAG) system through 5:59 AM EST on December 4, 2020, where the Occupational Employment Statistics (OES) survey data is the prevailing wage source, will continue to be processed and issued a final determination without delay.
- Starting at 6:00 AM EST on December 4, 2020, the FLAG system will be temporarily unavailable and the OES prevailing wage calculator disabled in order to make the necessary code changes.
- At 8:30 AM EST on December 9, 2020, employers and authorized attorneys or agents will be able to submit new LCAs, Form ETA-9035/9035E, using the OES survey data that was in effect on October 7, 2020.
- Note: Employers or authorized representatives will still be able to submit new LCAs for processing where an independent survey (not the OES survey) is the prevailing wage source.
Pause on Processing of Prevailing Wage Determinations (PWDs)
The court order also affects PWD as follows:
- The Office of Foreign Labor Certification (OFLC)’s National Prevailing Wage Center (NPWC) has paused processing pending Form ETA-9141s for use in filing LCA and Permanent Labor Certification (PERM) applications.
- At 8:30 AM EST on December 15, 2020, OFLC’s NPWC will resume processing all pending and new Form ETA-9141s for use in filing LCA and PERM applications and will use the OES survey data that was in effect on October 7, 2020, for prevailing wage determinations.
Review of Prior PWDs Issued Under the IFR
Because the rule went into effect immediately on October 8, 2020, employers that filed PWDs pursuant to the previously in-effect survey data would likely have received significantly higher wage determinations for proposed employee roles. They will be able to request a review of the determinations by the NPWC Director by January 4, 2021. Employers that would like to request a review of a prevailing wage determination issued using the 10/8/2020-6/30/2021 wage source year data that was implemented under the IFR (and overturned) will be able to make a request for review by the NPWC Director on or before January 4, 2021, via email.
Because of these system changes, employers should expect a minor lag in processing for their LCAs and PERMs during the closures. We will monitor any updates and potential need to request a review of PWDs filed between October 8, 2020, and December 4, 2020, in order to utilize lower corrected wage rates where possible. Employers should consult counsel for additional guidance and advice on specific cases or requests for review of wage rates.