ETA Publishes Proposed Rule on Wage Methodology for H-2B Temporary Non-Agricultural Employment

November 13th, 2010 by Brian D. Zuccaro

The Department of Labor’s Employment and Training Administration has proposed to amend its regulations governing certification of the employment of nonimmigrant workers in temporary or seasonal non-agricultural employment and related enforcement. The proposed rule, published on October 5, 2010, would revise the methodology by which the Department calculates the H-2B prevailing wage.

The proposed rule would establish that the prevailing wage will be the highest of: (1) wages established under an agreed-upon collective bargaining agreement (CBA); (2) a wage rate established under the Davis-Bacon Act (DBA) or McNamara-O’Hara Service Contract Act (SCA) for that occupation in the area of intended employment; and (3) the arithmetic mean wage rate established by Occupational Employment Statistics (OES) for that occupation in the area of intended employment. The employer would be required to pay its workers at least the highest of the prevailing wage as determined by the National Processing Center (NPC) (currently the National Prevailing Wage Center), the federal minimum wage, the state minimum wage, or the local minimum wage.

The proposed rule also would eliminate the use of the current four-tiered wage structure that differentiates wage tiers by level of experience, education, and supervision required to perform the job duties. The Department proposes instead a single OES wage level for H-2B job opportunities based on the arithmetic mean of the OES wage data for the job opportunities in the area of intended employment.

On August 30, 2010, the U.S. District Court for the Eastern District of Pennsylvania in Comitè de Apoyo a los Trabajadores Agricolas (CATA) v. Solis, et al., invalidated the Department’s use of skill levels in establishing prevailing wages and the Department’s reliance on OES data in lieu of DBA and SCA rates. The court order required the Department to complete a new rulemaking regarding the calculation of prevailing wage rates in the H-2B program within 120 days.

The Department noted that the types of jobs found in the H-2B program involve few if any skill differentials necessitating tiered wage levels. The Department said that multiple wage rates, particularly in a program in which most job opportunities have few or no skill requirements, “stratify wages and inappropriately allow employers to force much of the wage-earning workforce into a lower wage.” H-2B workers, most of whom fill jobs with low skill levels, are more likely to be classified at the low end of the wage tiers, ultimately adversely affecting the wages of U.S. workers in those same jobs, the Department noted, citing H-2B disclosure data from the last 10 years demonstrating that many jobs for which employers seek H-2B workers (e.g., housekeepers, landscape workers) “clearly require minimal skill to perform, have few special skill or experience requirements, and do not generally have career ladders.”

These jobs typically have resulted in a Level 1 (the lowest wage level) determination for the H-2B employer because the jobs themselves do not require the employer to seek workers with higher skill levels, the Department pointed out. The result is a wage determination lower than the average wage paid for many jobs under the same classification as those filled under the H-2B program. “By allowing jobs to be filled by H-2B workers at these lower wages, a tiered wage system can have a depressive effect on wages of similar domestic workers, ultimately adversely affecting the wages of U.S. workers in those same jobs.” The Department said it “cannot continue to allow such wage depression where its mandate is to ensure that the wages of U.S. workers suffer no adverse impact.”

Finally, the H-2B regulations currently allow the use of an employer-provided survey to determine the prevailing wage when that survey meets certain methodological requirements, even if the survey produces a lower wage than the OES wage. The proposed rule would eliminate the use of private wage surveys in the H-2B program. The Department said it has concluded that “the review of such surveys is an inefficient and unnecessary expenditure of government resources. While private surveys can provide useful information, the cost of reviewing the surveys outweighs their utility.”

The Department anticipates further rulemaking that will address other aspects of the H-2B temporary worker program. (The proposed rule notes that temporary labor certification is currently not required for H-2B employment on Guam, for which certification from the governor of Guam is required.)

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