DOL Issues Implementation Guidance after Federal Courts Block Prevailing Wage Interim Final Rule

The Department of Labor has issued guidance on how the agency will comply with the two federal court orders issued this week, which block implementation of its October 8, 2020 prevailing wage rule. The fast-tracked rule had significantly and immediately increased government prevailing wages in the H-1B, E-3, H-1B1 and PERM labor certification programs on October 8.  The cases are U.S. Chamber of Commerce et al. v. DHS and ITServe Alliance Inc. et al. v Scalia.

Overview of DOL guidance

To comply with the court orders, DOL will revert to the government’s Occupational Employment Statistics (OES) wage data in use prior to October 8.  This will require DOL to make technical changes to the Foreign Labor Application Gateway (FLAG) system, which processes Labor Condition Applications (LCAs) and Prevailing Wage Determinations (PWDs).   The agency states that these technical changes will cause some delays in FLAG functionality.

DOL provided the following timelines with regard to FLAG processing and the review of PWDs issued while the October 8 rule was in effect:

• Labor Condition Applications: The FLAG system will not accept nonimmigrant LCAs using pre-October 8 OES prevailing wage data until approximately 8:30 am Eastern on Wednesday, December 9.  Until then, the system will only accept LCAs relying on wage data generated from an already issued PWD or from an independent authoritative source. 
• Prevailing Wage Determinations: Though prevailing wage requests may continue to be filed in the FLAG system, PWD processing is temporarily paused and will resume at approximately 8:30 am Eastern on December 15 using pre-October 8 OES wage data. 
• Issued PWD requests for review: Employer may ask DOL to review and reissue PWDs that were issued using the higher wage data from the October 8 rule. 
  • Requests for review must be received on or before January 4, 2021.
  • It is not known how long this type of review might be pending with DOL or when a new determination might be issued.

Background

DOL’s actions were prompted by orders issued in two federal court cases.  On December 1, the judge in the U.S. Chamber of Commerce case set aside the October 8 DOL rule on a summary judgment motion, which means the rule is barred nationwide until and unless a higher court stays or reverses the order.

Two days later on December 3, the judge in the ITServe Alliance case issued a temporary preliminary injunction against the rule, but applied that order only to the Plaintiffs in the case.  Along with the ITServe Alliance trade group, a set of IT service companies are joined in the suit as Plaintiffs.

The DOL is likely to appeal both court orders to a higher court. Regardless of the outcome of any appeal, the agency could also take administrative steps to reissue the prevailing wage regulation in the remaining weeks of the Trump Administration. In the meantime, however, DOL is barred from enforcing the rule nationwide.

What the DOL guidance means for employers and foreign nationals

Starting December, 9, employers and foreign nationals should be able to submit H-1B, H-1B1 and E-3 LCAs using the pre-October 8 OES wage data.  On December 15, DOL will resume issuance of PWDs with the pre-October 8 OES wage data. 

Employers who were issued PWDs under the now blocked rule will have through January 4, 2021 to ask DOL to review and reissue a determination using the pre-October 8 wage data. Timeframes for DOL review and reissuance of a new PWD under this process are unknown and the agency is likely to receive many requests between now and January 4.