News

19 Mar 2021

United States

U.S. Department of Labor Proposes 18 Month Delay to Rule Increasing Prevailing Wage Levels

The Employment and Training Administration at the U.S. Department of Labor (DOL) has released a notice that will be published in the Federal Register on Monday, March 22, 2021. DOL proposes to delay—by 18 months—the changes to prevailing wage levels that are set to be implemented on July 1, 2021. Prevailing wages are relevant to employers who sponsor foreign workers on a temporary basis through H–1B, H–1B1, or E–3 nonimmigrant visas as well as on a permanent basis through the PERM-based immigrant worker classifications. 

Background and Previous Regulatory Activity 

  • On October 8, 2020, DOL published an interim final rule (IFR) that immediately changed the computation of prevailing wage levels under the DOL’s four-tiered structure that had been in place for more than 20 years.  
  • In December 2020, three federal district courts issued orders setting aside the IFR or prohibiting DOL from enforcing it, because it was improperly issued without advance notice and public comment. 
  • On January 14, 2021, DOL published a Final Rule that adopted, with changes, the substance of the IFR. The increases to the prevailing wage levels, while still significant, would not be quite as drastic as in the IFR, and the Final Rule had an effective date of March 15, 2021, but an implementation date of July 1, 2021. It also announced two sets of transitions periods to gradually phase-in the higher prevailing wage levels.  
  • After President Biden took office, DOL proposed to delay the Final Rule’s effective date by 60 days to allow review by the new administration. On March 12, 2021, DOL published notice adopting this proposal and delaying the effective date to May 14, 2021. The implementation date remained set at July 1, 2021. 

DOL’s latest regulatory action indicates that the agency has serious concerns about substantive aspects of the Final Rule as well as the rulemaking record. DOL also announced its intention to solicit further input from the public and interested stakeholders on sources of data and methodologies relevant to computation of prevailing wages. However, the strongest rationale for the delay was the technical requirements necessary to ensure orderly implementation of the Final Rule. Additional time is required to compute and validate data, modify and test the electronic application system, train staff, publish guidance, and conduct public outreach.  

The March 22, 2021 publication includes a 30-day period for comment on whether the proposed 18-month delay is appropriate and any specific impact that the decision to delay could have on the regulated community or other stakeholders. After considering the public feedback received, DOL is expected to publish its final determination on delaying the implementation of changes to the prevailing wage levels. 

© 2021 Tafapolsky & Smith LLP. All rights reserved. 
The content above is provided for informational purposes only. It should not be construed as legal advice on any subject matter. Use of this information does not create an attorney-client relationship.   

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Alan Tafapolsky

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Robin Paulino

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J. Anthony Smith

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John Lemacks

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