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H1B visa wage calculation Joe Biden administration proposes 18 month delay

The Biden Administration has recommended delaying the implementation of a final rule on determining the prevailing salaries of certain immigrants and non-immigrant workers

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Biden admin proposes 18-month delay in calculating prevailing wages of H-1B, other visas

The Biden Administration has recommended delaying the implementation of a final rule on determining the prevailing salaries of certain immigrants and non-immigrant workers, including those on the popular H-1B visas, for an additional 18 months. According to an official release issued after the announcement on Monday, the proposed delay will give the Department of Labour enough time to carefully consider the rule’s legal and policy issues, issue an upcoming Request for Information, and collect public comments on the sources and procedures for determining prevailing wage levels.

This proposed rule comes after a 60-day moratorium was announced earlier this month.

According to the media release, the department took that action based on a White House memo dated January 20, 2021.

The H-1B visa is a non-immigrant visa that permits businesses in the United States to hire foreign employees in specialty professions that require theoretical or technical knowledge.

Technology firms rely on it to recruit tens of thousands of workers from countries such as India and China each year.

The Department of Labor indicated in a federal notification released earlier this month that it is considering whether to recommend a further delay of the final rule’s effective date and implementation periods.

The suggested delay is in accordance with a Presidential directive expressed in a memorandum from the Assistant to the President and Chief of Staff titled “Regulatory Freeze Pending Review” dated January 20, 2021.

The public was given 15 days to submit written comments on the proposed delay in the effective date. By February 16, 2021, all comments had to be submitted.

The final rule, which takes effect in January 2021, includes employers looking to hire foreign workers on a permanent or temporary basis through certain immigrant visas or non-immigrant visas such as H-1B, H-1B1, and E-3, according to the Department of Labor.

The E3 visa is only available to Australian citizens, while the H-1B1 visa is only available to Singaporeans and Chileans.

The proposed delay would also provide enough time for agency officials to calculate and verify prevailing wage data for particular occupations and geographic areas, complete system changes, and conduct public outreach.

The rule is a holdover from the Trump administration, which proposed mandatory salary revisions after losing a court battle over an earlier version to groups like the Bay Area Council.

If enacted, H-1B workers at the lowest wage level would be required to earn at least the 35th percentile of the prevailing wage for their job type and location, as opposed to the 45th percentile in the original version. In comparison to the 95th percentile, workers at the highest wage level will have to earn the 90th percentile.

According to the Department of Labor, the proposed rule’s later effective date would result in a reduction in transfer payments from employers to H-1B workers in the form of higher wages.

Furthermore, the proposed rule would postpone the possibility of deadweight losses if employers are required to pay a wage higher than what H-1B workers are willing to accept, resulting in H-1B caps not being met, according to the proposal.

From fiscal 2014 to fiscal 2020, the annual H-1B cap was achieved within the first five business days of each year, according to the Department.

“While the Department expects that the increase in wages may incentivise some employers to substitute domestic workers for H-1B employees, provided that domestic workers are available for the jobs, it is likely that the same number of H-1B visas will be allotted within the annual caps in the future,” it said.

The Department used the transfer payments from the Final Rule as a baseline and moved them to the proposed rule’s new transition effective dates to determine the reduction in transfer payments, it said.

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