Dive Brief:

• The U.S. Department of Labor proposed March 22 a rule delaying for 18 months the effective date of a Trump-era rule that would have adjusted the wage levels employers must maintain for certain employment-based immigration visa programs, including the H-1B visa program.
• The rule, first delayed from March to May 14, 2021, raised minimum pay for participants in the H-1B visa program and the Permanent Labor Certification, or PERM, program over two separate phase-in periods. The first period would have begun July 1, 2021 and ended July 1, 2022. A second period running from July 1, 2021, to July 1, 2024, applies to job opportunities that an employer would fill with a foreign worker eligible for extension of their H-1B status or on track to achieve permanent resident status.
• DOL's most recent move aims to delay the effective date of the Trump-era rule to November 14, 2022, and it would delay the July 1, 2021, phase-in period start date to January 1, 2023. Each of the rule's remaining transition dates would receive corresponding one-year delays under the final rule.

Dive Insight:

The Biden administration continues to reverse or delay much of the previous administration's labor and employment policy work. In February, DOL delayed to regulatory actions including changes to the agency's interpretation of the Fair Labor Standards Act's independent contractor rule and tip pool options.

The Trump administration first published the wage-level rule as an interim final rule in October 2020 before issuing a second version in January 2021 with adjustments after receiving comments from employers.

The second version contained adjustments to the agency's originally proposed revisions. For example, it set the entry-level wage for H-1B visa and PERM program workers at the 35th percentile of a given job's wage distribution. That is lower than the 45th percentile DOL would have adopted in its first attempt at publishing a wage-level adjustment rule last year, but higher than the existing level, set at the 17th percentile.

The delay could give employers the opportunity to factor in potential increased labor costs under the rule, Jorge Lopez, shareholder at Littler Mendelson and chair of the firm's global mobility and immigration practice group, told HR Dive in an email. Wage-rate increases would have a negative impact on the competitiveness of U.S. companies in global and U.S. markets, Lopez said, particularly given the shortage of STEM talent in the U.S. that companies may address through the H-1B program.

"I'm optimistic that the Biden administration will factor in the effect on the U.S. economy that arbitrary increases would effectuate," Lopez said, adding that U.S. employers have "expressed a desire" for the country's schools to produce more STEM talent. "[Employers] would want to streamline their recruitment to manage better immigration complications if they had a choice."

The Biden administration has already delayed the implementation of a separate final rule that would replace the program's existing lottery system for selecting cap-subject H-1B petitions with a ranking system that would prioritize foreign workers who receive the highest wage offers from employers.

While employers and business groups have generally supported raising the maximum number of H-1B petitions accepted by the U.S. Department of Homeland Security each year, the Biden administration may "sidestep" this, according to a February Bloomberg report, due to pressure from labor groups.