On October 7, 2020 The U.S. Department of Homeland Security (DHS) has announced an Interim Final Rule (IFR) designed to tighten the H-1B and correspondingly the E-3 visa program in order to make it more difficult for employers to displace U.S. workers. The IFR, which will have a 60-day delayed effect and a 30-day comment period, will:

• Narrow the definition of “specialty occupation” to include only those occupations that require a specialized degree or equivalent experience
  • What this means for Australians: When in effect, it might be harder to get E-3s issued because the position will definitively need a degree in a specific field.
• Impose tighter hiring requirements to prevent the displacement of the U.S. workers especially for third party worksite placements
  • What this means for Australians: It will be more difficult to do work for third parties and at clients sites.
• Enhance DHS’s ability to enforce compliance through worksite inspections and monitor compliance before, during, and after an H1-B petition is approved.
  • What this means for Australians: ICE will do more compliance reviews requiring employers to maintain better compliance files.

Also on October 7, 2020, the U.S. Department of Labor (DOL) announced an IFR designed to reform the prevailing wage methodology used by the DOL in several foreign worker programs, including the H-1B, H-1B1, and E-3. This rule will become effective on October 8, 2020. 

Under current law, employers who seek to temporarily employ foreign nationals in the H-1B, H-1B1, and E-3 nonimmigrant classifications, must certify by means of a Labor Condition Application (LCA) that intended foreign workers will be paid no less than the “prevailing wage” for the occupational classification in the area of intended employment.  The “prevailing wage” is defined as the average wage paid to similarly employed workers in a specific occupation in the geographic area of intended employment. The DOL applies a four-tiered wage level structure, representing the range.  To arrive at a specific prevailing wage for each level the DOL applies a formula where each of the four levels represents a particular percentile of the average wage for a given occupation. Under current rules, the Level I (entry level) prevailing wage is set at the 17th percentile of the average wage for the occupation. Under the new regulation, the entry-level minimum will increase to the 45th percentile – just under what is today the minimum salary for a Level III occupation. Level IV prevailing wages increase from the 67th to the 95th percentile.  

LCAs filed on or after October 8 will be subject to the new and higher wage minimums. LCAs filed and pending before October 8 will be reviewed under the current prevailing wage structure.

What this means for Australians: get your LCAs lodged before the rule becomes effective and consider using alternative wage surveys thereafter.

Unlike the DHS rule, the DOL rule has no comment period, but rather goes into effect immediately on October 8.  It is expected that the rule will be challenged and could be enjoined in a Federal Court filing because the standard rule making protocol was not followed and an urgent justification for the change was not established (the government has suggested COVID-19 as the basis).