DHS and DOL Publish New Rules Which Significantly Restrict H-1B and Green Card Sponsorship for U.S. Employers

The Department of Homeland Security (DHS) and Department of Labor (DOL) are each publishing rules which will make drastic changes to the H-1B visa program and employment-based green card process through PERM labor certification. These rules will make it much more difficult for U.S. employers to sponsor employees for H-1B status as well as permanent residency in the U.S. Following is a broad overview of the two rules, which are likely to be challenged in federal court.

New DOL Rule

The DOL has published an Interim Final Rule entitled “Restructuring of H-1B/H-1B1/E-3 and PERM Wage Levels,” effective immediately, which significantly increases prevailing wage requirements for H-1B, H-1B1 (Chile/Singapore), and E-3 (Australia) visa petitions, as well as employment-based green card sponsorship through Permanent Labor Certification. DOL states that the rule is necessary to curb actual and potential abuses of the visa programs and cites the COVID-19 public health emergency as the rationale for implementing the rule without public comment first.

In the rule, DOL amends the existing wage methodology and increases the prevailing wage levels for all occupations using the Occupational Employment Statistics (OES) wage data from the Bureau of Labor Statistics (BLS). The changes will apply to all work visa petitions that require a Labor Condition Application (LCA), including H-1B, E-3 and H-1B1 petitions, as well as prevailing wage determinations (PWDs) issued in connection with the PERM labor certification process. For example, for the occupation of Software Developers, Applications (ONET 15-1132) in the King County Metropolitan Statistical Area (MSA), the Level 1 (entry-level) prevailing wage is now $139,880, compared to the prior Level 1 prevailing wage of $92,102.

The new wage levels will apply to Labor Condition Applications (LCAs) filed on and after October 8, 2020 for H-1B, H-1B1 and E-3 petitions. The rule will apply even more broadly to prevailing wage requests currently pending and yet to be filed with the DOL for the PERM labor certification process.

New DHS/USCIS Rule

The DHS/USCIS rule entitled “Strengthening the H-1B Nonimmigrant Classification Program,” (“H-1B Rule”) significantly restricts the H-1B visa program, especially for employers seeking placement at a third-party worksite for their H-1B employees. Below is a summary of the new rule:

• Specialty occupation: The rule revises the definition of “specialty occupation” for purposes of H-1B eligibility to clarify that there must be a direct relationship between the required degree field(s) and the proffered position. Employers must now show that the minimum requirement for the position is always a Bachelor’s degree in a specific specialty field. Further, the rule emphasizes that a general degree requirement (such as business administration or liberal arts), without further specialization, is not a specific specialty field that qualifies a position as a specialty occupation for purposes of H-1B eligibility.
• Offsite work: The rule changes the definitions of H-1B employment and the employer-employee relationship in order to restrict off-site (third party) placement of H-1B workers. Third-party worksite is now defined as a worksite, other than the H-1B worker’s residence, that is not owned or leased by the employer. The rule also limits the validity period for approval of H-1B petitions involving off-site employment from 3 years to 1 year, and requires employers to demonstrate “non-speculative employment” or actual work available for the H-1B employee at the time of filing.
• Site visits: DHS is adding regulations specific to the H–1B program to codify its existing authority and scope of inspections. The new regulations emphasize that inspections may include, but are not limited to, unannounced on-site visits of the employer’s facilities, interviews with its officials, review of its records related to compliance with immigration laws and regulations, and interviews with “any other individuals or review of any other records that USCIS may lawfully obtain and that it considers pertinent to verify facts related to the adjudication of the H-1B petition.” If a petitioner or a third-party fails or refuses to cooperate during a site visit, USCIS may deny a pending petition or revoke an approved petition.

Employers have a 60-day comment period before the DHS regulations are enacted.

These regulations will have a chilling effect on the hiring of foreign talent in the U.S. and will be extremely detrimental to the U.S. economy’s recovery from the COVID-19 pandemic. The immigration attorneys at Ryan Swanson will closely monitor any updates as both rules will likely be challenged in the courts.