The Department of Labor (DOL) is proposing an extended delay in the effective date of a regulation that would raise prevailing wage rates for the H-1B, H-1B1, E-3 and the PERM programs. Under the proposal, the regulation – which is currently set to take effect on May 14, 2021 – would 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.
DOL is proposing the delay to allow it 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.
The proposed postponement is expected to be published on March 22, 2021. DOL will accept comments on the proposal for 30 days. In the future, DOL plans to issue a request for public feedback on the substance of the prevailing wage regulation, which could result in further changes to the substance of the regulation, its implementation schedule, or both.
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 set to begin on July 1, 2021.
What this means for employers and foreign nationals
If the proposal is implemented, employers would 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 changes to the implementation dates and substance of 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.