New H1B prevailing wage rule to delay by 18 months

The Biden administered US Department of Labour has proposed an 18-month delay in the effective date to a final new prevailing wage rule for H1B and other Visa holders.

The proposed delay will provide sufficient time to the Department of Labour to thoroughly consider the legal and policy issues, issue an upcoming request for information, and gather public opinion on the sources and rules for determining prevailing wage levels, as per an official statement released after the announcement.

Based on the White House Memo, dated January 20, 2021, this proposed rule follows an initial 60-day delay.

H1B is a non-immigrant visa requiring American firms and companies to hire workers from other countries in speciality sectors that need expertise. 

The tech companies depend on these visa rules to hire several thousand employees each year from other countries, especially India and China.

The US Department of Labour, in its federal notification released, said that it is considering proposing an additional delay of the final rule’s effective date and accompanying implementation period.

The final rule published in January 2021 affects employers seeking to employ foreign employees on a permanent or temporary basis through immigrant visas or H1B, H-1B1, and E-3 non-immigrant visas.

The E-3 visa is the one for which only Australian citizens are eligible; H-1B1 visas are for Singapore and Chile residents.

The proposed delay will also give the Department time to compute and validate prevailing wage data covering specific professions and geographic areas, complete necessary system modifications, and conduct public outreach.

The rule is carried over by the Donald Trump administration, which had proposed revisions mandatory salaries after losing the court case to organizations including the Bay Area Council.

If this rule is imposed, employees working on H-1B at the lowest wage level would have to take a minimum of the 35th percentile of the prevailing wage for job type and geographic location compared to the 45th percentile of the previous version rule. Workers at the highest wage level would have to receive the 90th percentile compared to the 95th percentile.

Additionally, it would delay the potential for deadweight losses if employers pay a salary above what H-1B workers are ready to accept, results in H-1B caps not being met.

To calculate the reduction of transfer payments, the Department considered the transfer payments of the Final Rule as the baseline. It shifted them according to the proposed rule’s new transition effective dates.