The Department of Labor (DOL) has confirmed that it will extend the delay of a regulation that would raise prevailing wage rates for the H-1B, H-1B1, E-3 and the PERM programs. The rule – which was set to take effect on May 14, 2021 – will be delayed by 18 months, or until November 14, 2022. The start of the transition period for adjustments to prevailing wage levels will also be delayed until January 1, 2023, from July 1, 2021, and the transition period will extend from 18 months to three years.
DOL is delaying implementation to allow more time to fully analyze the legal and policy issues raised by the rule, as well as additional time to compute and validate prevailing wage data for specific occupations and geographic areas. Separately, the agency is currently accepting comments in response to its request for information on available sources of data and methodologies used in computing different wage levels based on DOL Occupational Employment Statistics (OES) wage survey data.
The delay will be published in the Federal Register on May 13, 2021.
Employers will remain subject to DOL’s current prevailing wage rules, levels, and rates for most of the next two years. A transition period to the new wage levels would begin on January 1, 2023, with a phase-in of further increases on January 1, 2024, January 1, 2025, and January 1, 2026. However, it is possible that DOL could make additional changes to the substance of the regulation in response to public feedback and its own further analysis of the rule and prevailing wage data.
Separate from the regulation, 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.
Background on the prevailing wage rule
The prevailing wage rule was promulgated in January as one of the last regulatory actions of the Trump Administration. The rule seeks to restructure the prevailing wage system for the H-1B, E-3, H-1B1 and PERM programs and lift wage minimums for those programs. As the regulation is currently written, Level I (entry-level) wages for H-1B and PERM cases would increase 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 34th percentile. 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 initially set to begin on July 1, 2021. Today’s rule delays this implementation and leaves open the possibility of further changes to the methodology.