The Employment and Training Administration (ETA) at the U.S. Department of Labor (DOL) published a notice in the Federal Register on May 13, 2021, confirming an 18-month delay of the effective date of the Final Rule on computation of prevailing wage levels that was published on January 14, 2021.
For background information and previous regulatory activity, please see our March 19, 2021 News Alert. DOL proposed this 18-month delay—after already delaying the rule for 60 days—because of concerns about substantive aspects of the Final Rule and the rulemaking record, as well as the technical challenges associated with implementing the Final Rule. In response to its proposal, DOL received more than 600 public comments, with the overwhelming majority supporting the delay.
The new effective date of the Final Rule—which will change the way DOL calculates prevailing wages for foreign workers in the PERM, H-1B, H-1B1, and E-3 programs—is November 14, 2022. Under the Final Rule, the four levels used by ETA to set prevailing wages—which are currently set at approximately the 17th, 34th, 50th, and 67th percentiles, respectively, of what all workers in a particular occupation and geographic region are paid—will be increased incrementally over a three-year period until they reach the 35th, 53rd, 72nd, and 90th percentiles, respectively. The delayed dates for the four-step transition are January 1, 2023; January 1, 2024; January 1, 2025; and January 1, 2026.
DOL is still evaluating the Final Rule and assessing whether to take further action. On April 2, 2021, DOL published a Request for Information (RFI) to provide the public with an opportunity to share information on the alternate sources of data and methodologies that should be considered when determining prevailing wage levels, as well as strategies for aligning prevailing wage levels with the wages of U.S. workers similarly employed. The RFI has a 60-day comment period that closes on June 1, 2021. DOL indicated that it will use the information and public input received from the RFI in its evaluation of the Final Rule, which may result in a future notice of proposed rulemaking to modify or revise the DOL’s methods for computing prevailing wage levels.