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New Regulation to Increase Prevailing Wages for PERM, H-1B, H-1B1 and E-3

Posted October 7, 2020Articles, Green Card, H-1B

The regulation to increase the prevailing wages for PERM, H-1B, H-1B1 and E-3 petitions will be published in the Federal Register on October 8 and will take effect immediately. The regulation has been issued as an interim final rule using the current global pandemic’s impact on the economy as the reason for fast-tracking the rule-making process.  We do anticipate that there will litigation challenging the regulations.

It is important to note that these new regulations will only affect applications filed after the effective date. 

New Calculations for Prevailing Wages

The Department of Labor (DOL) calculates the average wage paid to similarly employed workers in occupations within a geographic area of employment from data gathered by the Bureau of Labor Statistics.  This data is divided into 4 wage levels:

  • Level 1 – entry level
  • Level 2 – qualified
  • Level 3 – experienced
  • Level 4 – fully competent

The new rule will increase the prevailing wage minimums for each of the wage levels. Currently, Level 1 is calculated at 17th percentile and Level 4 at the 67th percentile.  These will increase to the 45th percentile for Level 1 and the 95th percentile for Level 4.

Who is Affected

  • Labor Condition Applications (LCAs) filed with the DOL on or after October 8, 2020 will use the new wage structure. LCAs filed prior to October 8, 2020 will use the previous wage structure.
  • Prevailing Wage Determinations (PWDs), typically used for PERM green cards, issued on or after October 8, 2020 will be subject to the new wage structure. Prevailing wage requests submitted prior to October 8, but are still pending, will be subject to the new wage structure. PWDs that have already been issued will remain valid under the previous wage structure.

Next Steps

  • Employers may want to consider accessing alternative wage surveys which may result in wages that are more in line with industry standards. These surveys do typically require additional fees for access.
  • We will closely look at filed prevailing wage requests in light of the new wages once they are released, to see whether any action is required.
  • We have historically recommended filing H-1B petitions with Level 2 wages or above to pre-empt requests for evidence from USCIS whether the position qualifies as entry level or whether entry level positions qualify as specialty occupations. These new wage guidelines will require employers to file petitions at Level 1 wages. We are preparing strategies to confront such requests for evidence in the future.
  • We expect that these new rules will prompt more RFEs going forward.

Meltzer Hellrung will be monitoring this matter and will provide updates as they occur.  Please reach out to your designated Meltzer Hellrung attorney or with any questions.