District Court Invalidates New DOL Wage Regulations for a Third Time in December 2020

On December 14, 2020, the U.S. District Court for the District of Columbia granted a motion for partial summary judgment in favor of the plaintiffs to invalidate recent regulations from the U.S. Department of Labor (DOL), which dramatically increased the prevailing wage methodology that is commonly used for various types of immigration applications. This ruling is the third such loss for the agency in December 2020. On December 1, 2020, a separate district court invalidated both the DOL rule and a new set of U.S. Department of Homeland Security (DHS) regulations that were set to take effect on December 7, 2020.

The DOL rule, published as an interim final rule (IFR), changed the methodology used to calculate the department’s Occupational Employment Statistics (OES) prevailing wage determinations. By issuing the change as an interim final rule, the DOL bypassed the traditional, and lengthier, notice and comment rulemaking process under the Administrative Procedure Act (APA). As justification for the expedited rulemaking, the agency invoked the good cause exception, citing to emergent circumstances created by the COVID-19 pandemic. In its order, the district court found insufficient cause for the agency to forego the traditional notice and comment period prior to implementation of the new regulations. This ruling is in line with the prior two court decisions from other district courts regarding the same regulations. In addition (and going farther than prior decisions invaliding the rule), the court ordered the DOL to reissue any OES-based prevailing wage determinations that were issued using the new methodology.

In its decision on the consolidated lawsuits, the district court held that “given the DOL’s more than six month delay in implementing changes to the prevailing wage calculation, the Court declines to countenance the agency’s avoidance of notice-and-comment procedures. Under D.C. Circuit precedent, ‘[n]otice and comment can only be avoided in truly exceptional emergency situations, which notably, cannot arise as a result of the agency’s own delay.’”

The DOL rule, which went into effect on October 8, 2020—only two days after its publication—dramatically changed the way that OES wage levels were calculated for use with H-1B, H-1B1, and E-3 visa petitions, as well as PERM labor certification cases. During the brief effective period of the rule, many employers faced challenges in moving these cases forward due to the significantly increased OES wage levels.

Since December 1, 2020, when the rule was first invalidated, the DOL has taken steps to revert to the prior wage data methodology. The DOL previously announced that, for prevailing wage determinations issued using the IFR wage data, employers could specifically request a redetermination prior to January 4, 2021. However, in light of this new ruling, the DOL has been ordered to reissue any such determinations automatically, without employers having to request them. The DOL has not made an announcement yet regarding when employers can expect these redeterminations to be issued.

Ogletree Deakins’ Immigration Practice Group will continue to monitor developments and will post updates on the Immigration blog as additional information becomes available. Important information for employers is also available via the firm’s webinar and podcast programs.