On October 8, 2020, the U.S. Department of Labor (DOL)
published an interim final rule with an immediate effective date
that significantly increases the prevailing wages for temporary
foreign worker programs, which most notably includes the H-1B visa
program. H-1B is the most common classification available to
foreign professionals working in the United States, and it is also
the most regulated, as it requires the employer to comply with
several ongoing obligations unique to this category. Among these
obligations is payment of a minimum salary meeting or exceeding a
"prevailing wage" set by DOL based on the occupational
classification and geographic area of employment. DOL asserts its
historical wage methodology has potential to undermine wages of
U.S. workers and has led to abuse of visa programs. Therefore,
under the new rule, prevailing wage levels are now an average of
approximately 40% higher for all occupations, which DOL claims will
provide wage protections and strengthen H-1B and other foreign
worker programs.
Employers sponsoring H-1B workers are now subject to these new wage obligations for new filings and may be required to significantly and unexpectedly increase employee salaries in order to comply with the prevailing wage requirements. However, a lawsuit was filed on October 16, 2020 in the U.S. District Court for the District of New Jersey that challenges the new rule and seeks a preliminary and permanent injunction. While the rule remains in effect pending a decision by the court, additional legal challenges are also expected, so the long-term viability of the rule is unknown.
Employers sponsoring H-1B workers are now subject to these new wage obligations for new filings and may be required to significantly and unexpectedly increase employee salaries in order to comply with the prevailing wage requirements. However, a lawsuit was filed on October 16, 2020 in the U.S. District Court for the District of New Jersey that challenges the new rule and seeks a preliminary and permanent injunction. While the rule remains in effect pending a decision by the court, additional legal challenges are also expected, so the long-term viability of the rule is unknown.
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