On December 1, 2020, the U.S. District Court in the Northern District of California struck down two Trump administration rules designed to restrict the H-1B Visa: Department of Homeland Security’s (DHS) “H-1B Specialty Occupation” rule and the Department of Labor’s (DOL) “Prevailing Wage” rule.

The District Court found that bypassing the standard rulemaking procedure – specifically of a public notice and comments period – was unlawful, and that the agencies failed to substantiate their claims that the rules were an emergency response to the pandemic.

What does this mean?

1. Neither the DOL rule, which took effect on October 8, 2020, nor the DHS rule, which was scheduled to take effect on December 7, 2020, will be in effect.
2. Employers may continue to rely on the previous prevailing wage system and the existing adjudication standards for H-1B. However, as of December 2, 2020, DOL system has not yet been updated to reflect this ruling.

What are key points for Employers to keep in mind?

1. While it is possible that the agencies appeal this decision and/or promulgate new rules, they are not likely to pursue either option. Even if agencies decide to publish revised rules, there may not be sufficient time for implementation before Biden is inaugurated. 
2. This ruling is welcome news for employers and allows continued sponsorship of foreign national workers under the longstanding adjudication standards.

How is MT responding?

1. MT is working diligently to identify cases that may benefit from this ruling and will reach out to clients that require additional actions. We are also monitoring the development closely, as we anticipate guidance from DHS and DOL. 

Background

In October 2020, DHS and DOL published new rules, asserting that these rules were necessary to protect U.S. workers during the COVID-19 pandemic. Both agencies bypassed the standard procedure of a public notice and comment period. The DOL rule went into effect immediately upon announcement, while the DHS rule was scheduled to take effect on December 7, 2020.

DOL Rule
This rule restructured the prevailing wage system for H-1B, E-3, H-1B1, and PERM programs, affecting the immigration processes that require a prevailing wage. In effect, this rule rendered DOL’s wage survey impractical and forced many employers to hunt for alternative private wage survey(s), thereby introducing additional hurdles to visa sponsorship. In some cases, it made visa sponsorship prohibitively expensive if employers could not locate a suitable alternative wage survey.

DHS Rule
This rule would have restricted the definitions of, and standards for, “specialty occupation” and “employer-employee relationship.” Specifically, it sought to clarify that there must be a direct relationship between the required degree field(s) and the duties of the proposed position. It would have curtailed H-1B visas for many technical and professional positions including software engineers and data analysts, because employers would have been required to defend each major field listed as a job requirement.