DOL and DHS Issue New H-2B Prevailing Wage Rule
On March 21, the United States District Court for the Eastern District of Pennsylvania vacated the way the Department of Labor (DOL) determines prevailing wages for H-2B workers. In the order, the judge required DOL to come up with a new process within 30 days. The effect of that ruling has been for DOL to suspend issuing any further labor certifications. In addition, the Department of Homeland Security (DHS) has ceased processing H-2B visa applications altogether.
In response, NCA and our partners in the H-2B Workforce Coalition spent the last month pushing DOL’s lawyers to file their new regulation ASAP. On April 19, they finally submitted the new prevailing wage determination rule to the court.
Currently, DOL establishes the prevailing wage by using the Bureau of Labor Statistics’ Occupational Employment Statistics (OES) wage survey as its guide. For each job, there are four levels of wages that a worker can be given – each level accounts for things like experience and skill of the worker. The prevailing wage is calculated by averaging the wages in a particular tier that fits the employee’s background.
Unfortunately, the new rule removes this four-tier wage system and streamlines it to one. As such, the new prevailing wage will no longer be the average wage in a particular tier, but will instead be the overall average of all wages in the occupation in question.
The new rule also allows the prevailing wage to be determined by using a club’s union collective bargaining agreement, if one is present, or by using the Davis-Bacon Act or the Service Contract Act requirements, if the club so chooses, or by using a private wage survey. Though these other options are available, they are rarely used because they traditionally provide an inflated wage for most clubs. Instead, the OES wage survey is the most commonly used way to determine the prevailing wage for H-2B workers.
With the removal of the four-tier system, it is our belief that the prevailing wage for H-2B workers will be higher than they have been in the past. Indeed, this proposed rule is almost identical to DOL’s 2011 H-2B Wage Rule. As you recall, that rule would have increased wages by an average of $4.50 per hour for club H-2B workers.
NCA and our allies fought that rule in court and we pushed Congress to remove funding for it over the last two years. Unfortunately, it seems the Pennsylvania court’s ruling has now given DOL a new avenue to implement its preferred H-2B Wage Rule.
As of now, DOL has submitted this new regulation to the court as an interim final rule, which allows it to go into effect immediately. It is our expectation that the court will approve it and DOL and DHS will resume their consideration of H-2B visa applications once the court signs off on the measure.
Those clubs that are in the midst of their H-2B application process should expect notification from DOL regarding this new prevailing wage soon. Most importantly, clubs will be required to pay this new prevailing wage to all of their H-2B workers for any work done on or after April 24, 2013.
While this wage rule is not at all acceptable to us, the only solace we can take is that DOL and DHS no longer have an excuse for shutting down the program. Thus, the H-2B program should be up and running again very soon. Should there be a viable way for NCA and our partners to object to this new process without delaying the restart of the program, we will do so. Until then, clubs should prepare to pay higher wages to their H-2B workers.
As always, should you have any questions about this matter 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.