On March 12, 2021, The Department of Labor (DOL) proposed an extended delay in the effective date which for the first start date was scheduled for March 15, 2021, of a regulation that would raise prevailing wage rates for the H-1B, H-1B1, E-3, and the PERM programs. The prevailing wage rule went into effect in January 2021 as one of the last regulatory actions of the Trump Administration in the furtherance of “protecting US workers’ jobs” related to the Buy and Hire America campaign. The rule seeks to restructure the prevailing wage system for the H-1B, E-3, H-1B1, and PERM programs by raising wage minimums for those programs (a 4 tier wage system) based on a worker’s education and experience. The reason for the DOL’s delay is multifold including the lack of proper notice and comment period for the public to comment on provisions in the Final Rule, the Department’s failure to make available technical studies and data it employed in reaching decisions in that rule, and that Interim Final Rule (IFR) did not adequately consider and respond to issues raised by public comments to the IFR. Specifically, the final rule has been fraught with litigation where plaintiffs have raised claims in the pending litigation that the changes of the IFR relied on undisclosed data and analyses that DOL failed to make available on the public rulemaking docket.

Under the current DOL proposal, the delay the effective date of the rule will be delayed by 18 months, or until November 14, 2022. The proposal would also delay the start of the transition period for adjustments to prevailing wage levels until January 1, 2023, from July 1, 2021, and extend the transition period from 18 months to three years. The proposed final rule included raising Level I entry-level wages for H-1B and PERM cases to the 35th percentile of wages for each occupation and geographic area, from the 17th percentile. Level II would increase to the 53rd percentile, from the 34thpercentile. Level III wages would increase to the 72nd percentile, from the 50th percentile, and Level IV wages would increase to the 90th percentile, from the 67th percentile. The wage increases were to be phased in over an 18-month period that was set to begin on July 1, 2021.

The typical DOL’s prevailing wage data is set for a regular annual increase on July 1, 2021, which will affect labor condition applications and prevailing wage determinations certified or filed on or after that date.

We, at Emandi Law Firm, will keep you posted with further updates.

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