Dear Sophie: How can employers hire & comply with all this new H-1B craziness?
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Image Credits: Sophie Alcorn
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Dear Sophie:
I’ve been reading about the new H-1B rules for wage levels and defining what types of jobs qualify that came out this week. What do we as employers need to do to comply? Are any other visa types affected?
— Racking my brain in Richmond! 
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Dear Racking:
As you mentioned, the Department of Labor (DOL) and the Department of Homeland Security (DHS) each issued a new interim rule this week that affects the H-1B program. However, the DOL rule impacts other visas and green cards as well. These interim rules, one of which took effect immediately after being published, are an abuse of power.
The president continues to fear-monger in an attempt to generate votes through racism, protectionism and xenophobia. The fatal irony here is that companies were in fact already making “real offers” to “real employees” for jobs in the innovation economy, which are not fungible and are actually the source of new job creation for Americans. A 2019 report by the Economic Policy Institute found that for every 100 professional, scientific and technical services jobs created in the private sector in the U.S., 418 additional, indirect jobs are created as a result. Nearly 575 additional jobs are created for every 100 information jobs, and 206 additional jobs are created for every 100 healthcare and social assistance jobs.
The DOL rule, which went into effect on October 8, 2020, significantly raises the wages employers must pay to the employees they sponsor for H-1B, H-1B1 and E-3 specialty occupation visas, H-2B visas for temporary non-agricultural workers, EB-2 advanced degree green cards, EB-2 exceptional ability green cards and EB-3 skilled worker green cards.
The new DHS rule, which further restricts H-1B visas, will go into effect on December 7, 2020. DHS will not apply the new rule to any pending or previously approved petitions. That means your company should renew your employees’ H-1B visas — if eligible — before that date.
The American Immigration Lawyers Association (AILA) has formed a task force to review the rules and help with litigation. Although both the DOL and DHS rules will likely be challenged, they will likely remain in effect for some time before any litigation has an impact. They are actively seeking plaintiffs, including employees, employers and representatives of membership organizations who will be hurt by the new rules.
The DOL rule requires employers to pay significantly higher wages to employees they sponsor for H-1B, H-1B1 and E-3 specialty occupation visas, H-2B visas for temporary non-agricultural workers and EB-2 advanced degree and exceptional ability green cards and EB-3 skilled worker green cards. The new rule significantly raises the prevailing wage for occupations based on the location where the work will be performed, which will hit startups and small businesses particularly hard.
All four non-immigrant (temporary) visas — H-1B, H-1B1, H-2B and E-3 — require employers to file a Labor Condition Agreement (LCA). With an LCA, employers must agree to pay the actual wage paid to U.S. workers in a comparable position or the prevailing wage, whichever is higher. An approved LCA is required for an employer to sponsor an employee for one of these visas.
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EB-2 and EB-3 green cards require sponsoring employers to obtain PERM Labor Certification from DOL before a green card petition can be filed with U.S. Citizenship and Immigration Services (USCIS). The PERM process requires employers to pay the prevailing wage for the position and to conduct certain recruitment activities to try to hire a U.S. worker for the position before filing for labor certification.
Prevailing wages are broken down into four levels based on experience, with Level 1 being an entry-level position to Level 4 being the most experienced. Under the new rule, the required wage levels for workers will now have to be paid at a higher percentile wage:
| Wage Level: | Old Required Wage: | New Required Wage: |
| Level 1 | 17th percentile | 45th percentile |
| Level 2 | 34th percentile | 62nd percentile |
| Level 3 | 50th percentile | 78th percentile |
| Level 4 | 67th percentile | 95th percentile |
The latest prevailing wage data based on occupation and location in the Foreign Labor Certification Data Center system has been updated to reflect the new DOL rule. However, there may be a glitch in the system, or something wild is being required for wages: No wage levels are available for application software developers in Silicon Valley or computer and information systems managers in Silicon Valley or San Francisco. FLCDC only states the wages for these categories may be at least $208,000 a year.
Before the new rule, the prevailing wage for a software quality assurance engineer at a Level 2 wage in Silicon Valley was about $111,000. Now, the prevailing wage for that same position at the same level and location is about $140,000, a 26% increase.
The DOL rule will affect:
- Applications for prevailing wage determinations that are still pending
- New applications for prevailing wage determinations
- LCAs filed with DOL for which the employer did not obtain a prevailing wage determination prior to filing
- EB-2 (not EB-2s with National Interest Waivers) and EB-3 green card petitions that rely on prevailing wage determination applications
The DHS “specialty occupation” interim rule only impacts H-1B qualifications. It substantially restricts H-1B eligibility by requiring employers to establish that the H-1B candidate’s bachelor’s degree in a specific specialty is required for the position by showing this is always the requirement for similar positions in the industry. For example, an individual with a degree in mechanical engineering would be denied an H-1B visa for a position as a quality engineer and a software engineer couldn’t get an H-1B with an electrical engineering degree. This will limit the use of an H-1B in many computer-related professions and in relatively new fields, such as data analytics, artificial intelligence or growth product management.
The new rule also reduces from three years to just one year the period of stay for H-1B visa holders who work at third-party worksites. Their sponsoring employers — usually staffing and outsourcing firms — will now have to renew the H-1B visas for these workers every year. However, the maximum stay under an H-1B for these workers remains at six years. The DHS rule also tightens the definition of the employer-employee relationship by requiring additional evidence, which will impact sponsoring employers who have H-1B visa holders working at a third-party workplace.
DHS estimates that about one-third of H-1B applications will be rejected under its new rule. It also estimates the rule will impose nearly $25 million in new annual costs for employers and an additional time burden of 30 minutes for completing and filing H-1B petitions.
DOL is accepting public comments on the rule through November 7, 2020, even though the rule has already gone into effect. You can submit a comment on the new rule here. DHS, which oversees USCIS, is accepting comments from the public here on its rule also through November 7, 2020, before it goes into effect 30 days later. The public comments may lead to changes in the rules, so I urge you to make your voice heard by submitting a comment.
Keep me posted on how these new rules are affecting your company and let’s find ways to create a more innovative, economically beneficial and supportive immigration system together. When everyone has a chance to live their dreams, we all win.
Wishing you all the best,
Sophie
Have a question? Ask it here. We reserve the right to edit your submission for clarity and/or space. The information provided in “Dear Sophie” is general information and not legal advice. For more information on the limitations of “Dear Sophie,” please view our full disclaimer here. You can contact Sophie directly at Alcorn Immigration Law.
Sophie’s podcast, Immigration Law for Tech Startups, is available on all major podcast platforms. If you’d like to be a guest, she’s accepting applications!
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