At the end of March, the United States District Court for the Eastern District of Pennsylvania issued a ruling that will have an immediate impact on those clubs that utilize the H-2B Visa Program. Judge Legrome Davis ruled that the current process by which the Department of Labor (DOL) issues labor certifications is invalid. He has vacated (thrown out) the current prevailing wage regulation and he has required DOL to come into compliance with an older order within 30 days. The effect of this ruling has been for DOL to suspend issuing any further labor certifications. In response, the Department of Homeland Security (DHS) has ceased processing H-2B visa applications.
Those clubs that are in the midst of having their H-2B workers approved for the summer season will now have a delay of at least 30 days while DOL acts. It is our expectation that the delay will be longer because of additional legal matters that impact this ruling. NCA and our allies on the H-2B Workforce Coalition have begun discussions with supporters on the Hill to persuade DOL to start the program up again. We are also looking at what action we can take in the Pa. federal court to apprise the judge of the impact of his decision on seasonal employers.
The problem stems from DOL’s 2005 guidance on how to determine a job’s appropriate prevailing wage. If DOL cannot determine a prevailing wage, it is unable to determine whether a labor certification may be granted. The chronology of the case is as follows:
- In 2005, a process was developed by DOL that established a four-tier system to determine the prevailing wage for seasonal jobs. Unfortunately, this prevailing wage determination process was issued by DOL as “guidance.” At no time did DOL give proper notice to affected individuals about this determination process, and there was no opportunity for comments to be submitted to DOL from the affected stakeholders.
- In 2008, DOL simply adopted this “guidance” as a part of its formal prevailing wage rule—again without a notice and comment period.
- In 2009, workers filed a lawsuit claiming the wage rule was issued without following the appropriate procedures.
- In late 2010, the judge in that case ruled that the 2008 Prevailing Wage Rule was invalid and ordered DOL to accurately promulgate a replacement rule within 120 days.
- Before that order was issued, President Obama’s new Secretary of Labor had determined that a new Wage Rule should be issued. Thus, DOL decided to strike the 2008 Prevailing Wage Rule completely and to issue a new one that would resolve the judge’s concerns.
- In 2011, DOL issued the new Wage Rule. This is the new rule that would have increased H-2B wages by an average of $4.50 per hour for private clubs. NCA and our coalition allies initiated litigation against this new Wage Rule, and the court granted us a preliminary injunction stopping the implementation of the new Wage Rule until the case is resolved (which could be soon). Additionally, Congress has prohibited funding for this new Wage Rule three different times. On the last occasion, funding for the new Wage Rule was removed until the end of this fiscal year.
- A few days ago, in response to a motion from the workers, a federal judge in Pennsylvania stated that a delay from DOL of more than 30 months to comply with the 2010 order was unacceptable. Thus, he vacated the 2008 Prevailing Wage Rule. In addition, he ordered DOL to comply with the original order within 30 days.
Unfortunately, there are some significant problems arising from the Pa. judge’s final ruling. By removing the existing 2008 Prevailing Wage Rule, DOL now claims it has no way to determine the prevailing wage for seasonal jobs—especially when the new Wage Rule is tied up in a different court case and when Congress has not allocated any funds for it for the rest of FY 2013. Making matters even more difficult is the fact that the Pa. case involves workers (whom the Administration supports) and the Administration’s own Department of Labor (when the case began, it was the Bush Administration’s DOL). As such, this DOL is not likely to appeal (or even complain about) the ruling. Furthermore, the H-2B employer community was never a party to the case and it will take some doing to intervene.
In addition, there has just been a ruling issued by the U.S. Court of Appeals for the Eleventh Circuit that states DOL does not have the right or authority to issue any H-2B Visa Program regulations—only DHS may do so. Therefore, even if DOL wanted to comply with the Pa. judge’s 30-day order, a U.S. Circuit Court has indicated that it cannot. As such, DOL and DHS will need to fashion a response to the Pa. judge that addresses this problem of agency authority over rule-making.
As of now, it is our belief that DOL and DHS will take as long as they can to resolve the matter. With the Administration’s preferred Wage Rule lacking federal funding and tied up in litigation, DOL is unlikely to act quickly. Indeed, in response to our numerous queries regarding their suspension of the program they have said that they are simply complying with the Pa. judge’s order. Of course, nowhere in the order does it say that the entire program should be shut down; however, that is exactly what has happened.
We will continue to work with our allies on the Hill to exert pressure on DOL to get the H-2B Visa Program rolling again ASAP. Unfortunately, DOL’s intransigence will likely mean this will take time and that may impact your ability to get H-2B workers. As of now, know that the key players on the Hill who can move DOL understand how crucial it is for the H-2B Visa Program to be restarted.
Please stay tuned for additional Alerts coming from NCA about this issue and for how you can be of assistance. And, as always, should you have any questions please feel free to contact NCA's Vice President of Government Relations and General Counsel, Brad D. Steele, at email@example.com.
Thank you for being a part of NCA.