H1B: Rules requiring high pay move forward
The Trump administration forged ahead with a rule to increase the minimum pay for foreign workers on highskill H1B visas Tuesday in a move that could sideline many of them from the U. S. labor market.
The Department of Labor announced the final rule after federal lawsuits in San Francisco and elsewhere stopped a previous version from taking immediate effect late last year.
“The final rule we are releasing today represents an important step to improve some of America’s largest foreign labor programs and ensure they function in a way that benefits all Americans,” said U. S. Secretary of Labor Eugene Scalia in a press briefing on Tuesday. The new wage standards will “ensure companies cannot use foreign labor as a lowcost alternative to American workers.”
Immigration advocates, including many in Silicon Valley who rely on the visas, had assailed interim rules issued in October, saying they set unrealistic and unattainable salary floors, amounting to $ 208,000 a year in many cases. Labor officials said they had received more than 2,000 public comments to those initial rules. “Many thought wages were inflated, and would have a significant negative effect on the economy,” said John Pallasch, assistant secretary for employment and training. Commentators “urged phased implementation to allow employers, workers and the department ( time) to adjust to the new methodology.”
Critics of highskill visa programs, including in the Trump administration, have long characterized H1Bs and other workbased visas as vehicles for undercutting U. S. workers with cheaper foreign labor.
Supporters of the program say the changes are designed to subvert immigration laws and unfairly disadvantage foreigners
who might work for U. S. companies, hurting innovation.
“By artificially increasing the wage level, you’ll drive more people out of the U. S. labor market,” said Stuart Anderson, executive director for the National Foundation for American Policy. Companies may choose to place skilled workers in other countries, like Canada, with less restrictive rules, he said.
The move comes as the Department of Homeland Security rolled out a final rule last week seeking to
base the lottery that picks H1B recipients on wages instead of education level. That rule will only affect new applicants whereas the Labor Department rule includes extensions, renewals and those seeking permanent residency via green cards.
“These two new rules taken together ( are) another attempt to discourage legal immigration for high skilled workers,” said Hiba Anver, the managing director with Erickson Immigration Group and an immigration attorney.
Labor officials said they have adjusted the wage floors downward and created phases, especially for overseas workers already in the United States. They said they felt confident that these changes would circumvent the legal challenges the rules have already faced that resulted in a court injunction against them.
Court challenges in San Francisco and elsewhere succeeded in stopping the Labor Department from getting around the normal public notice and comment period required by federal law, but have not answered the question of whether the moves violate immigration laws.
If lawsuits over the rule continue or new ones are brought, the Department of Justice under the Biden administration will have to decide if it will continue defending the Trumpera rule, said Eleanor Pelta, a lawyer and immigration expert at Morgan, Lewis & Bockius.
The wage floors take effect July 1 and vary across four wage and experience levels depending on location, ranging from entrylevel to executive roles.
Entrylevel visa holders will eventually be required to make more than 35% of people in the same occupation and area, up from 17%. Level two workers will see an increase to 53%, while level three will jump to 72% and the highest level will increase to 90%.
For new overseas workers, they initially will be set at 90% of the new wages, rising to the full amount after one year.
Immigrant workers who are in the process of obtaining a green card or who have H1B visas that are eligible for extension will be subject to wage minimums that are 85% of the final amount on the July 1 starting date. After one year that will rise to 90%, then 95% after two years. Beginning July 1, 2024, they will be subject to the full new rate.
The rules come from a government department run by the Trump administration, which is openly hostile to immigration, unlike the incoming Biden administration.
The Biden administration has said it plans to halt socalled “midnight regulations” pushed through by Trump in the waning days of his administration.
The incoming administration could then issue its own rule, go through Congress to rescind the wage changes, or go through the courts if it chose to head off the new rules, according to Maka Hutson, an attorney at Akin Gump Strauss Hauer & Feld.