October 8, 2020

U.S.: Minimum Wage Increases for Labor Condition Applications and PERM Labor Certifications

The U.S. Department of Labor (DOL) has issued an Interim Final Rule that significantly increases existing wage levels for certain permit categories. The regulation is effective October 8, but is likely to be challenged in court.

What has changed?

The DOL is implementing a new regulation to increase the prevailing wage levels for H-1B, E-3, H-1B1 and PERM labor certification programs. They will continue to use a four-tier system identifying the wage levels for specific job types and have based their increases on a survey of salaries in various job categories and geographic regions.

U.S. companies must compensate foreign workers at required base-level salaries and cannot include supplementary benefits or bonuses in these calculations. The new regulation is going to significantly impact U.S. employers hiring foreign workers in H-1B or E-3 status categories – particularly those with salaries that are close to the current wage levels and will now require increased adjustments.

The current skill level wage changes are as follows:

    • Level 1 will increase from the 17th percentile to the 45th percentile
    • Level 2 will increase from the 34th percentile to the 62nd percentile
    • Level 3 will increase from the 50th percentile to the 78th percentile
    • Level 4 will increase from the 67th percentile to the 95th percentile

The DOL stated that the increase has been implemented in response to President Trump’s "Buy American, Hire American" executive order, and in an attempt to address the recent high levels of unemployment and the impact of employment-based immigration on U.S. workers.

Who is affected?

The new levels will not be applied to cases that are currently pending, or to previously issued wage determinations or Labor Condition Applications (LCAs). It will, however, impact LCAs submitted on or after October 8. Pending and future PERM wage submissions are subject to the new levels as of the effective date.

As the DOL issued the regulation without advance notice or a public comment period, and without an analysis of the economic impact, court challenges are expected.

What you need to do

For further information on minimum wage levels for immigration applications to the U.S., please contact the Sterling Lexicon immigration team at immigration@sterlinglexicon.com.

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