New Trump admin rule will raise wage cost for employing H-1B workers

The move is part of the Trump administration's efforts to protect American workers from being undercut by cheaper labour from abroad

The Trump administration has announced a final rule that will significantly raise the minimum wages the employers in the US must pay to foreign workers on visa programmes like the H-1B as part of the efforts to protect American workers from being undercut by cheaper labour from abroad.

Days before the exit of the administration of President Donald Trump, the US Department of Labor said that the final rule would help protect the wages and job opportunities of American workers by reforming the wage methodology it uses to set prevailing wage rates to prevent potential abuses of its Permanent Employment Certification, H-1B, H-1B1 and E-3 Visa foreign worker programmes.

The H-1B visa is a non-immigrant visa that allows US companies to employ foreign workers in speciality occupations that require theoretical or technical expertise.

The technology companies depend on it to hire tens of thousands of employees each year from countries like India and China.

The final rule will improve the accuracy of prevailing wages paid to foreign workers by bringing them in line with the wages paid to similarly employed US workers, the Department of Labor said in a news release on Tuesday.

The final rule will ensure the Department more effectively protects the job opportunities and wages of American workers by removing the economic incentive to hire foreign workers on a permanent or temporary basis in the US over American workers, it said.

Restricting immigration has been a focus of the Trump administration since its first days when it issued the travel ban on seven Muslim-majority countries, and it has continued into Trump's final year in office as the White House uses the coronavirus pandemic as cover.

The Trump administration recently extended the freeze on H-1B visas along with other types of work visas and green cards until March 31.

Last week it modified the selection process for H-1B visa, giving priority to salary and skills instead of the current lottery procedures.

Democratic leader Joe Biden, who will be sworn in as the 46th US President on January 20, has promised to lift the suspension on H-1B visas, saying Trump's immigration policies are cruel.

The Labor department's Employment and Training Administration administers the foreign labour programmes covered by the Department's wage methodology.

On Oct 8, 2020, the Department published an interim final rule and invited public comment.

After an extensive review of the comments received, the Department said it has determined that the existing wage methodology undermines the wages and job opportunities of US workers and that it is in tension with the governing statute.

The US Department of Labor is taking these steps to strengthen wage protections, address abuses in visa programmes, and protect American workers from being undercut by cheaper foreign labour, said US Secretary of Labor Eugene Scalia.

These changes help ensure that these important foreign worker programmes function as Congress intended while securing American workers' opportunities for stable, good-paying jobs.

"In response to the comments we received, the Department has adjusted the wages levels used in the Interim Final Rule to better reflect market wages and included provisions to smooth the transition to the new wage levels," Scalia said,

When seeking H-1B, H-1B1 or E-3 visas for workers, US employers must attest that they will pay nonimmigrant workers, during the period of authorised employment, the higher of the prevailing wage or the actual wage paid to other employees with similar experience and qualifications.

The H-1B1 visa is a variant of the H-1B visa in the United States for nationals of Singapore and Chile. The E-3 visa is a US visa for which only citizens of Australia are eligible.

Similarly, when an employer seeks to hire an immigrant under an EB-2 or EB-3 classification, the employer must recruit US workers for the position using a prevailing wage issued by the Department.

They must also attest that they will pay foreign workers the prevailing wage.

The prevailing wage rate is defined as the average wage paid to similarly employed workers in a specific occupation in the area of intended employment.

The prevailing wage rates in these programmes serve to protect US workers from unfair competition posed by the entry of lower-cost foreign labour into the US.

Using the Department's methodology in calculating the prevailing wage rates to reflect accurately the wages that US workers who perform the same kinds of jobs and possess similar qualifications, ensures that the use of these programmes will not adversely affect the wages and job opportunities of American workers.

The mission of the Department of Labor is to foster, promote and develop the welfare of the wage earners, job seekers and retirees of the United States; improve working conditions; advance opportunities for profitable employment; and assure work-related benefits and rights.