[Federal Register Volume 63, Number 54 (Friday, March 20, 1998)]
[Rules and Regulations]
[Pages 13756-13767]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-7339]
[[Page 13755]]
_______________________________________________________________________
Part VI
Department of Labor
_______________________________________________________________________
Employment and Training Administration
_______________________________________________________________________
20 CFR Part 656
Labor Certification Process for the Permanent Employment of Aliens;
Researchers Employed by Colleges and Universities, College and
University Operated Federally Funded Research and Development Centers,
and Certain Federal Agencies; Final Rule
Federal Register / Vol. 63, No. 54 / Friday, March 20 1998 / Rules
and Regulations
[[Page 13756]]
DEPARTMENT OF LABOR
Employment and Training Administration
20 CFR Part 656
RIN 1205-AB11
Labor Certification Process for the Permanent Employment of
Aliens; Researchers Employed by Colleges and Universities, College and
University Operated Federally Funded Research and Development Centers,
and Certain Federal Agencies
AGENCY: Employment and Training Administration, Department of Labor.
ACTION: Final rule.
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SUMMARY: The Employment and Training Administration (ETA) of the
Department of Labor (Department or DOL) is publishing a final rule
relating to labor certification for permanent employment of immigrant
aliens in the United States. The amendments change the way prevailing
wage determinations are made for researchers employed by colleges and
universities, Federally Funded Research and Development Centers
(FFRDC's) operated by colleges and universities, and Federal research
agencies. The final rule also changes the way prevailing wages are
determined for colleges and universities, FFRDC's operated by colleges
and universities, and Federal research agencies filing H-1B labor
condition applications on behalf of researchers, since the regulations
governing prevailing wage determinations for the permanent program are
followed by State Employment Security Agencies (SESA's or State
agencies) in determining prevailing wages for the H-1B program.
EFFECTIVE DATE: May 4, 1998.
FOR FURTHER INFORMATION: Contact Denis M. Gruskin, Senior Specialist,
Division of Foreign Labor Certifications, Employment and Training
Administration, Room N-4456, 200 Constitution Avenue NW., Washington,
DC 20210. Telephone: (202) 219-5263 (this is not a toll-free number).
SUPPLEMENTARY INFORMATION:
I. Introduction
On April 22, 1996, ETA published in the Federal Register a Notice
of Proposed Rulemaking (NPRM) proposing to amend ETA's regulations at
20 CFR part 656 to permit prevailing wage determinations for
researchers employed by colleges and universities to be based solely on
the wages paid by such institutions. 61 FR 17610. In addition to
inviting comments on that proposal, commenters were invited to submit
comments about extending the proposed rule to researchers in other
employment, such as Federal nonprofit research agencies and their
affiliated nonprofit research institutions. Comments were invited from
interested persons through May 22, 1996. This document adopts final
regulations based upon the April 22, 1996, NPRM and the comments
received.
II. Permanent Alien Employment Certification Process
Before the Department of State (DOS) and the Immigration and
Naturalization Service (INS) may issue visas and admit certain
immigrant aliens to work permanently in the United States, the
Secretary of Labor (Secretary) first must certify to the Secretary of
State and to the Attorney General that:
(a) There are not sufficient United States workers who are able,
willing, qualified, and available at the time of the application for a
visa and admission into the United States and at the place where the
alien is to perform the work; and
(b) The employment of such aliens will not adversely affect the
wages and working conditions of similarly employed United States
workers. 8 U.S.C. 1182(a)(5)(A).
If the Secretary, through ETA, determines that there are no able,
willing, qualified, and available U.S. workers, and that the employment
of the alien will not adversely affect the wages and working conditions
of similarly employed U.S. workers, DOL so certifies to the INS and to
the DOS by issuing a permanent alien labor certification.
If DOL cannot make either of the above findings, the application
for permanent alien employment certification is denied. DOL may be
unable to make either of the two required findings for one or more
reasons, including, but not limited to:
(a) The employer has not adequately recruited U.S. workers for the
job offered to the alien, or has not followed the proper procedural
steps prescribed in 20 CFR part 656.
These recruitment requirements and procedural steps are designed to
test the labor market for available U.S. workers. They include
providing notice of the job opportunity to the bargaining
representative (if any) or posting of the job opportunity on the
employer's premises, placing an advertisement in an appropriate
publication, and placing a job order for 30 days with the appropriate
local public employment service office.
(b) The employer has not met its burden of proof under section 291
of the Immigration and Nationality Act (INA) (8 U.S.C. 1361), that is,
the employer has not submitted sufficient evidence of attempts to
obtain qualified, willing, able, and available U.S. workers and/or the
employer has not submitted sufficient evidence that the wages and
working conditions which the employer is offering will not adversely
affect the wages and working conditions of similarly employed U.S.
workers. With respect to the burden of proof, section 291 of the INA
states, in pertinent part, that:
Whenever any person makes application for a visa or any other
document required for entry, or makes application for admission, or
otherwise attempts to enter the United States, the burden of proof
shall be upon such person to establish that he is eligible for such
visa or such document, or is not subject to exclusion under any
provision of (the INA) * * * .
III. Department of Labor Regulations
The Department has promulgated regulations, at 20 CFR part 656,
governing the labor certification process described above for the
permanent employment of immigrant aliens in the United States. Part 656
was promulgated pursuant to section 212(a)(14) of the INA (now at
section 212(a)(5)(A)). 8 U.S.C. 1182(a)(5)(A).
These regulations set forth the factfinding process designed to
develop information sufficient to support the granting or denial of a
permanent labor certification. They describe the potential of the
nationwide system of public employment service offices to assist
employers in finding available U.S. workers and how the factfinding
process is utilized by DOL as the primary basis of developing
information for the certification determinations. See also 20 CFR parts
651-658; and the Wagner-Peyser Act (29 U.S.C. Chapter 4B).
Part 656 sets forth the responsibilities of employers who desire to
employ immigrant aliens permanently in the United States. Such
employers are required to demonstrate that they have attempted to
recruit U.S. workers through advertising, through the Federal-State
Employment Service System, and by other specified means. The purpose is
to assure an adequate test of the availability of qualified, willing,
and able U.S. workers to perform the work, and to ensure that aliens
are not employed under conditions that would adversely affect the wages
and working conditions of similarly employed U.S. workers.
IV. Prevailing Wages and Researchers
Employers seeking a permanent labor certification must recruit for
U.S. workers at prevailing wages. The
[[Page 13757]]
SESA's survey prevailing wage rates on behalf of DOL. The permanent
labor certification regulations at Sec. 656.40 specify how State
agencies are to calculate prevailing wages. The prevailing wage
methodology set forth is used not only in determining prevailing wages
for the permanent labor certification program, but is also followed in
determining prevailing wages for the H-2B temporary nonagricultural
certification program, the H-1B labor condition application (LCA)
program, and the (expired) F-1 student off-campus employment program.
See 20 CFR part 655, subparts A, H, and J, respectively. In each of
these programs, the applicable legislative and/or regulatory history
requires that prevailing wages be determined in accordance with the
requirements of the permanent labor certification regulations at 20 CFR
656.40.
Section 656.40 of the permanent labor certification regulations
requires that in the absence of a wage determination issued under the
Davis-Bacon Act, the Service Contract Act, or a collective bargaining
agreement, the prevailing wage shall be the weighted average rate of
wages paid to workers similarly employed in the area of intended
employment, i.e., ``the rate of wages [is] to be determined, to the
extent feasible, by adding the wage paid to workers similarly employed
in the area of intended employment and dividing the total by the number
of such workers.'' Section 656.40(b) further provides that ``similarly
employed'' is defined as having substantially comparable jobs in the
occupational category in the area of intended employment.
The INA requires that the wages paid to an H-1B professional worker
be the higher of the actual wage paid to workers in the occupation by
the employer or the prevailing wage for the occupational classification
in the area of employment. The H-1B regulations incorporate the
language of 20 CFR 656.40 (as suggested by H.R. Conference Report, No.
101-955, October 26, 1990, page 122) and provide employers filing
applications the option of obtaining a prevailing wage determination
from the SESA, using an independent authoritative source or other
legitimate source, as provided by Sec. 655.731(a)(2)(iii)(B) and (C) of
the H-1B regulations. Thus, this final rule applies to the H-1B program
as well.
V. Effects of Hathaway Children's Services on Prevailing Wages
In accordance with the en banc decision of the Board of Alien Labor
Certification Appeals (BALCA or Board) in Hathaway Children's Services
(91-INA-388, February 4, 1994), prevailing wages are calculated by
using wage data obtained by surveying employers across industries in
the occupation in the area of intended employment. In Hathaway, the
BALCA overruled its decision in Tuskegee University (87-INA-561, Feb.
23, 1988, en banc), which had interpreted Sec. 656.40 to permit an
examination of the nature of the employer's business in ascertaining
the appropriate prevailing wage. 87-INA-561 at 4. In Tuskegee, the
Board had said, in relevant part:
Thus to be ``similarly employed'' for purposes of a prevailing
wage determination, it is not enough that the jobs being compared
are in the same occupational category; they must also be
``substantially comparable.'' Accordingly, it is wrong to focus only
on the job title or duties; the totality of the job opportunity must
be examined * * *.
It is clear that it is not only the job titles, but the nature
of the business or institution where the jobs are located--for
example, public or private, secular or religious, profit or non-
profit (sic), multinational corporation or individual
proprietorship--which must be evaluated in determining whether the
jobs are ``substantially comparable.''
In Hathaway, the Board declined to make an exception for
maintenance repairers employed by nonprofit institutions, analogous to
the exception it had made in Tuskegee. The employer in Hathaway, a
nonprofit United Way affiliate, urged that the Board's decision in
Tuskegee should be dispositive. The employer argued that the rationale
in Tuskegee necessarily extends to nonprofit employers, thereby
differentiating them from for-profit employers.
The Board stated in Hathaway that its holding in Tuskegee was ill-
advised and explicitly overruled it. The Board went on to say that:
The underlying purpose of establishing a prevailing wage rate is
to establish a minimum level of wages for workers employed in jobs
requiring similar skills and knowledge levels in a particular
locality. It follows that the term ``similarly employed'' does not
refer to the nature of the Employer's business as such; on the
contrary, it must be determined on the basis of similarity of the
skills and knowledge required for performance of the job offered * *
*.
In accordance with the holding in Hathaway, SESA's were instructed
to survey all employers, without regard to the nature of the employer,
in the area of intended employment in determining prevailing wages for
an occupation.
It was subsequently asserted that implementation of this policy
resulted in considerably higher prevailing wage determinations for
research positions in colleges and universities. The higher education
community maintained that this policy jeopardized its ability to
recruit foreign researchers with talents and skills not readily
available in the U.S. Further, following the decision in Hathaway, the
Department received comments and inquiries from Congress and other
Federal agencies and organizations, such as the Council of Economic
Advisors (CEA); National Science Foundation (NSF); Department of
Defense, Defense Research and Engineering (DRE); Office of Science and
Technology Policy (OSTP); National Institutes of Health (NIH); National
Aeronautics and Space Administration (NASA); United States Department
of Agriculture (USDA); United States Geological Survey (USGS),
Department of Energy (DOE), and Department of Transportation (DOT),
expressing concern about the Department's change of policy in
determining prevailing wages for researchers employed by universities.
VI. Bases for Proposed Rule
The Department believed there were substantial policy reasons to
propose an exception to the current rule.
Among the bases of the proposed rule were:
The nonproprietary nature of academic research as
articulated by the American Association of Universities. The Department
specifically requested comments on whether there are attributes of
academic research that distinguish it from research conducted by
private, for-profit employers. This was a factor in determining that
such workers are not similarly employed.
Other Federal agencies. Other Federal agencies and
organizations with an interest in the research talent, knowledge,
skills and abilities available to the U.S. academic community expressed
concerns that the Hathaway decision could interfere with the ability of
institutions of higher education to obtain the services of talented
foreign scholars and researchers.
The belief of the academic community and others that
intangible, non-pecuniary factors that are incentives for working in an
academic environment should be considered in determining prevailing
wages for researchers employed by institutions of higher education. The
Department stated that it was interested in comments specifying the
nature of these intangible benefits and how they are unique to higher
education.
The Department also invited comments with respect to extending the
concept discussed in the proposed rule to prevailing wages in other
employment, such as instances in which
[[Page 13758]]
researchers are employed by Federal research agencies and their
affiliated nonprofit research institutions engaged in research, in
which postdoctoral fellows and visiting scientists may be employed in a
manner similar in certain respects to colleges and universities.
In sum, the proposal reflected a determination that consideration
of all of the above factors supported a conclusion that researchers
employed by colleges and universities may not be similarly employed to
researchers employed by private, for-profit employers.
One also should note that in the context of college and university
employment there is precedent, albeit statutory, for treating workers
attached to the academic process differently than those outside the
academic community. As stated in section 212(a)(5)(A) of the INA,
certification of employment of aliens shall be denied on the basis of
availability of ``qualified'' U.S. workers who are able and willing,
that is, those who possess the minimum qualifications necessary to
perform the job, even if they are less qualified than the alien
beneficiary. By contrast, the statute states in the same subparagraph
that for job opportunities as college and university teachers,
certification of employment of aliens generally may be denied on the
basis of availability of ``equally qualified'' (emphasis added) U.S.
workers who are able and willing, that is, only those equally or more
qualified than the alien beneficiary.
While differentiation of treatment of college and universities in
this statutory provision certainly is not dispositive of issues
discussed in this rulemaking, it does supplement the concept that it is
legitimate to examine the differences between college and university
employment and the broader employment market.
VII. Comments on Proposed Rule and Analysis of Comments
Seventy-five comments were received on the April 22, 1996, proposed
rule. The largest number of comments were received from independent
research institutes. Thirty-four comments were received from research
institutes such as the Howard Hughes Medical Institute, the Scripps
Research Institute, and the National Biomedical Foundation of
Georgetown University.
The next largest group of comments was received from colleges and
universities. Twenty-one comments were received from colleges and
universities. Colleges and universities represented by these comments
included such institutions as Princeton, University of Chicago, Yale,
Harvard, Massachusetts Institute of Technology, Johns Hopkins, and
Stanford.
Seven comments were received from Federal agencies. The agencies
submitting comments were OSTP, NIH, NSF, DRE, the Smithsonian
Institution, and the USDA which submitted comments from two different
subcomponents.
Seven comments were also received from various associations. These
associations included the Association of American Universities (AAU),
American Immigration Lawyers Association (AILA), Council of Graduate
Schools, and NAFSA Association of International Educators.
Two comments were received from State Employment Security Agencies.
The SESA's submitting comments were the Arizona Department of Economic
Security and the Wyoming Department of Employment.
One comment was received from each of the following: Congressman
Lamar Smith, Massachusetts General Hospital, one international human
rights group, and a senior economist employed by an association of
universities.
Seventy-two of the comments were in favor of the proposed rule and
the majority were in favor of extending the rule to include nonprofit
research institutes. Only three commenters opposed the rule. The
commenters opposed to the rule were the two SESA's and the senior
economist employed by Oak Ridge Associated Universities.
A. Comments About the Proposal to Adopt the Rule as Proposed for
Colleges and Universities
All of the 21 comments received from colleges and universities
supported the proposed rule. The NPRM was also supported by the
Association of American Universities (AAU), Council of Graduate
Schools, NAFSA Association of International Educators (NAFSA), several
Federal agencies, AILA, and nonprofit research institutes.
In addition to supporting DOL's finding that such employees are not
``similarly employed'' to commercial researchers, the colleges and
universities and some other commenters advanced public policy arguments
to the effect that the NPRM would eliminate perceived anomalies and
economic hardship caused by the post-Hathaway policy of determining
prevailing wages by surveying across industries. Perceived problems
caused by the post-Hathaway policy that would be eliminated by the
proposed rule, noted by one or more of the colleges or universities in
their comments, included the following:
Much higher prevailing wage determinations as a result of
the post-Hathaway policy.
Higher wages have precluded many universities from using
the permanent labor certification program and the H-1B labor condition
application program and have disrupted important university-based
research programs.
Need to increase the wage of the H-1B employee or
terminate employment of the researcher.
Some granting agencies, such as the National Institutes of
Health, specify the amount to be paid to each researcher; even without
such restrictions, it is often not possible to find the additional
money needed to increase the salary of a researcher needed to meet the
prevailing wage.
Alien researchers may be paid more than U.S. citizens for
performing similar duties and responsibilities.
Requiring higher salaries to be paid to foreign
researchers and foreign scholars who are in lower positions than, for
example, Assistant Professors.
Permanent labor certification applications and H-1B labor
condition applications have been withdrawn because of the higher
prevailing wages required by the post-Hathaway policy.
1. Department's Analysis of Comments
After consideration of all comments, the Department has concluded
that the proposed rule should be adopted for colleges and universities
and expanded as set forth below. The comments and the Department's
analysis are discussed below in greater depth.
a. Academic Researchers are not Similarly Employed to Commercial
Researchers. In the preamble to the NPRM, the Department specifically
requested comments as to whether there are attributes of academic
research that distinguish it from research conducted by private, for-
profit employers (see 61 FR at 17613). About half of the comments from
colleges and universities asserted that there were substantial
differences between academic researchers and researchers working in a
for-profit environment. A few commenters attached the AAU position on
this issue previously submitted to the Department,1 and
[[Page 13759]]
others addressed this issue directly. Having considered these comments,
the Department has determined that different treatment of researchers
employed by colleges and universities is justified, in part, by the
close relationship of research to teaching in the academic environment.
Research positions at colleges and universities are often related to
teaching (faculty) positions and often involve teaching duties, albeit
not in a classroom setting. See footnote 1.
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\1\ In the preamble to the NPRM, the AAU's comment was quoted,
in part, as follows:
Teaching is a primary mission of universities and occurs in all
university settings. Teaching and research are inextricably
intermingled in universities, with research extending into
undergraduate education, and teaching extending into postdoctoral
education. Academic research scientists are expected to operate as
teachers as well as researchers. University teaching includes a wide
range of activities beyond the traditional classroom lecture, such
as seminars, advising and other forms of mentoring. Some of the most
effective teaching about research is carried out by doing research,
and university research personnel often operate as student and
teacher at the same time in the same setting: a postdoctoral fellow
is instructed by the faculty researchers with whom he or she is
working at the same time he or she serves as a teacher for graduate
and undergraduate students working in the same lab. (Emphasis in
original.)
61 FR at 17613.
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With one exception, all of the comments that addressed this issue
agreed with the view of the AAU. The one commenter that disagreed with
this position pointed out that according to the 1993 National Science
Foundation survey of doctorate recipients, of those postdoctorates
reporting that their primary work activity was research, only 5.3
percent indicated that teaching was their secondary activity. The
commenter went on to state that ``all highly educated workers play a
teaching role by helping to show new employees the ropes in their work
environment, but in this regard doctorates in universities who do not
teach courses are not substantially different from doctorates in
industry or in government.''
The preamble to the proposed rule made clear that AAU was not
speaking with respect to teaching in a classroom setting conducted by
faculty members. In the Department's view, the relationship described
by AAU and quoted above, as well as in the NPRM's preamble, goes
substantially beyond showing new employees the ``ropes in their new
environment.''
Based on the comments received, the Department is persuaded that
teaching, as described by the AAU, is an important function often
performed by college and university researchers. This is not as true
for non-academic researchers.
Other commenters, such as independent nonprofit research institutes
and Federal agencies, were also in agreement that there were
significant differences between research conducted by academic
institutions and research conducted by private, for-profit employers.
These comments provide further amplification and support for the AAU
position summarized in the preamble to the NPRM, 61 FR at 17613, that
research in academic institutions is nonproprietary as opposed to
research conducted in a private, for-profit research organizations. The
research product delivered by researchers in private, for-profit
organizations is proprietary in nature and can be appropriated by the
employing institution for commercial purposes. 61 FR at 17613. Examples
of the points made by the colleges and universities include the
following:
Academic research is for the public good and advancement
of knowledge, as opposed to having a profit motive.
Researchers in academia, unlike researchers in for-profit
organizations, are expected to publish promptly and widely in peer-
reviewed journals; commercial scientists apply research results to
product development within the company, often withholding the
publication of research.
Academic research is independently initiated and sustained
with the intention of transmitting bodies of knowledge to succeeding
generations of researchers, public and private; commercial research
priorities are set by company goals for developing marketable products.
Two of the three commenters opposing the rule asserted that the
same skills are required on the part of researchers who are employed in
a university setting as are required of those employed in a private,
for-profit research organization. One of these two commenters
acknowledged that university research tends to focus on issues of basic
research while private sector research tends to focus on the applied
end of the spectrum. However, this commenter indicated that the degree
to which an academic institution is engaged in applied and basic
research across a variety of disciplines is a function of the extent to
which the institution's research is leveraged by private sector or
Federal agency contracts.
The third commenter opposing the rule indicated that the dichotomy
between university and industry research cited by the AAU is
exaggerated. Industry funding of academic research has been growing
rapidly, and many universities have been applying for patents of their
own in promising new fields such as biotechnology, human genome
research, and exotic materials.
These comments in opposition to the rule presently are
unpersuasive, for the following reasons.
(1) Skill Requirements
Differences in the skills and knowledge required of researchers to
work in an academic environment compared to the skills and knowledge in
a private, for-profit organization was not one of the policy reasons
for issuing the NPRM. The differences articulated in the proposed rule
discussed such factors as the wide dissemination of research results in
peer-reviewed scientific journals, the expected application of research
results to producing marketable products within commercial
organizations, the expansion of the frontiers of knowledge by academic
researchers conducting fundamental research programs, and the
nonproprietary nature of research performed in an academic setting as
opposed to that performed in a private, for-profit setting. 61 FR at
17613.
(2) Differences Between Academic and Commercial Researchers
The Department has carefully considered the issues raised
concerning the differences between academic and commercial research and
has found that, at present, sufficient distinctions exist between the
two to support separate treatment of researchers in the two venues.
Despite trends regarding sources and uses of research funds in
colleges and universities, the overwhelming majority of R&D the $21.6
billion spent for R&D at U.S. academic institutions in 1995 appears to
be nonproprietary in nature. This conclusion is supported by the
following:
Funds from the commercial sector during the past two
decades grew faster than funds from any other source. Funding from the
commercial sector, however, constituted a relatively small proportion
(6.9 percent) of academic R&D funding in 1995. Science & Engineering
Indicators 1996, National Science Board Subcommittee, National Science
Foundation, at 5-8 and 5-9.
Although patents awarded to universities have grown
rapidly over the past two decades and universities are increasingly
negotiating royalty and licensing arrangements based on their patents,
income from these licensing arrangements are modest when compared with
total R&D expenditures. In 1993, gross revenues received by U.S.
universities from licensing arrangements amounted to $242 million.
Ibid. at 5-42 and 5-43.
The nonproprietary nature of academic research and the
fact that academic researchers are expected to publish widely in peer-
reviewed journals is also supported by the fact
[[Page 13760]]
that in 1993, as in previous years, the United States contributed the
largest fraction--34 percent--of 414,000 articles published in refereed
journals worldwide. About 70 percent of the U.S. articles had academic
authors. Further, in virtually all nations' journals, U.S. articles are
cited more heavily than articles appearing in domestic publications.
Ibid. at 5-4, 5-30, 5-31, and 5-40.
In view of the trends regarding sources and uses of academic R&D
funds, the Department plans to monitor such trends in promulgating a
rule establishing an exception to the results of the Hathaway decision
that would permit prevailing wage determinations for researchers in
colleges and universities to be based solely on the wages paid by such
institutions. If the current trends relative to the performance of
research by colleges and universities were to continue long enough, one
or more of the bases for concluding that researchers employed by
colleges and universities are not similarly employed to nonacademic
researchers may no longer be valid.
b. Non-pecuniary Factors. In the preamble to the proposed rule, the
Department asked for comments that specify the nature of the
intangible, non-pecuniary incentives to working in an academic
environment and how they are unique to higher education. Several of the
colleges and universities addressed this issue. These comments provide
further amplification of and support for the nature of the intangible,
non-pecuniary incentives to working in an academic environment advanced
by the Council of Economic Advisors and cited in the NPRM (see 61 FR
17614). Other commenters, such as independent nonprofit research
institutes and Federal agencies, were also in agreement that there were
significant non-pecuniary incentives to working in an academic
environment. Examples of these comments included the following:
Intellectual freedom to determine one's own research
direction is relatively unhindered by direction from management or by a
profit motivation.
The opportunity exists to interact with a large number of
people with similar goals and interests.
Academic research, unlike commercial research, is
characterized by a great diversity of research interests and
activities.
One commenter maintained that although ``tenured professors
appreciate the autonomy they have in research universities and that
this permits the universities to compete in the labor market without
paying wages and benefits equal to those in industry,'' it is not clear
that this applies to non-tenure track, temporary research appointments.
The commenter observed that employees on temporary research
appointments do not enjoy the autonomy experienced by tenure and
tenure-tack faculty who are principal investigators on research
projects. In particular, postdoctoral appointees and research
associates do not have faculty status and enjoy few if any of the non-
pecuniary incentives alluded to by the CEA.
Nonetheless, autonomy in choice of research projects is not the
only intangible benefit associated with working in an academic
environment. The Department believes, based on the comments, that
postdoctorates are also significantly motivated by other non-pecuniary
factors, such as working with leaders in their chosen field and
generally working with colleagues and other scholars. The Department
also believes that working on nonproprietary research issues adds an
important qualitative dimension to the non-pecuniary incentives that is
not readily duplicated in other work environments.
2. Additional Issues Raised by Commenters Opposing Rule; DOL Analysis
Additionally, the three commenters opposing the rule raised issues
that were not addressed in the preamble to the NPRM. Those comments and
the Department's analysis of them are provided below.
a. Wage Differentials. One commenter took issue with the claim that
there is a great wage differential between researchers in private
industry and in colleges and universities. According to this commenter,
the wage differentials cited in the preamble to the proposed rule
between industry and colleges and universities for researches are
grossly exaggerated. According to the commenter, a ``true national
average which included industry wages would almost certainly be less
than 20 percent higher than a national average which included only
colleges and universities.'' According to the commenter, such a
differential was 23 percent in 1989. The commenter also maintained that
implementation of the rule would reduce costs on research projects by
an average of much less than 10 percent compared to the prevailing wage
methodology required by the current regulation.
Economic hardship to employers due to wage differentials, by
itself, would not be a basis for promulgating an exception to the
decision in Hathaway. However, the Department is convinced that the
wage differentials are significant and, in combination with the other
factors--differences between academic and commercial research and the
value of non-pecuniary benefits and incentives--constitute sufficient
reason to conclude that researchers employed by colleges and
universities and researchers employed by for-profit commercial
employers are not ``similarly employed''.
Most employers would find wage differentials of 23 percent, as
cited by the commenter, to be significant. Further comments received
prior to the issuance and subsequent to the issuance of the NPRM
suggest that the national wage differential could be greater than 23
percent. On a localized level, some commenters report differentials
much greater than 23 percent. The Department is convinced that enough
of a national differential exists, in combination with the other bases
for the rule, discussed above, to justify the conclusion that DOL's
regulations should recognize that researchers employed by colleges and
universities and researchers employed by for-profit commercial
employers are not similarly employed.
b. General Labor Market Conditions. Two commenters expressed
concern about the general labor market impact of the proposed rule.
These comments, in large measure, misconstrue the nature of the
rulemaking. The Department's mandate under the permanent labor
certification program is to prevent the entry of foreign immigrant
workers from adversely affecting the wages or working conditions of
similarly employed U.S. workers. The wage protection component of this
requirement is effectuated by regulations which require that the
employers seeking labor certification must offer at least the
prevailing wage paid to similarly employed U.S. workers in the area of
intended employment. The proposed rule was not intended to alter this
basic structure and it does not do so. The rule addresses only the
narrow issue of how the phrase ``similarly employed'' should be
defined. Whether the use of foreign researchers, in and of itself, has
some negative impact on the domestic labor market is simply beyond the
scope of this rulemaking. The determination as to whether academic
researchers and researchers in the for-profit sector are or are not
similarly employed is not impacted by considerations of potential
adverse effect on labor market conditions among researchers. If, as the
Department has now concluded, academic researchers are not similarly
employed to their colleagues outside academe, the adverse effect is
addressed by requiring the payment of the prevailing wage among
similarly
[[Page 13761]]
employed academic researchers. To the extent there are economic factors
limiting the employment potential of researchers, they are outside the
scope of this rulemaking.
Nevertheless, the Department is concerned about the possible
adverse effect on U.S. researchers as a result of this rulemaking and
has considered the comments submitted in this regard. As a result of
the comments indicating that adverse effect may arise from this rule
and trends regarding sources and uses of academic R&D funds discussed
above, the Department plans to study the effects of this rulemaking
over the next 5 years.
One SESA's comments were, on balance, against the proposed rule
because of perceived adverse effects on U.S. researchers. The Arizona
SESA pointed out that one published survey it used until recently to
make prevailing wage determinations for researchers showed, based on a
universe of employers that did not include colleges and universities, a
wage level that was more than 30 percent higher than the universities'
salary schedules. According to the SESA, many U.S. workers majoring or
obtaining degrees in the Sciences, quickly go on to employment
opportunities in private industry because of the higher wage scale. The
SESA was of the opinion that many foreign workers are willing to work
for universities at low wages because the opportunity to stay in the
United States, either permanently or temporarily, is a big enticement.
According to the SESA, many foreign workers know that if they can get
permanent employment with a college or university, the opportunity to
adjust to permanent residence status increases because of the INA's
``equally qualified'' provision which provides the basis for the
special handling procedures for college and university teachers in the
permanent labor certification regulations. See 8 U.S.C.
1182(a)(5)(A)(I)(I) and (a)(5)(A)(ii); 20 CFR 656.21a; and 61 FR at
17612. The SESA, in addition, expressed the view that grant funding
restrictions and other established practices do not justify basing
prevailing wage determinations for researchers employed by colleges and
universities solely on the wages paid by such institutions if it
discourages U.S. workers from applying for such positions.
This SESA in its comments indicated, however, that it may be
appropriate to consider academic researchers as not similarly employed
to researchers employed in the private sector and to base prevailing
wage determinations solely on the wages paid by colleges and
universities. Specifically, the SESA stated in the course of its
comments that:
The research positions at the universities and in the private
sector are not totally comparable, since researchers are not
``similarly employed'' as the current regulation determines. The
researcher at the university may also be teaching, writing articles
for scientific journals, working on basic, fundamental or
theoretical research. If they are performing other duties then they
should be given a different job title and code (presumably from
private sector researchers).
The Department has concluded that, currently, there are ample bases
to conclude that researchers employed by colleges and universities and
researchers employed by for-profit commercial employers are not
similarly employed. The observations of the Arizona SESA concerning the
general labor market effects of foreign doctorates in the labor force
are discussed below along with those of another commenter who submitted
comments expressing concern about the effect of foreign doctorates on
the general labor market for doctorate recipients employed as
researchers.
The senior economist employed by an association of universities
offered a number of reasons for not promulgating a final rule that
would allow prevailing wage determinations for researchers employed by
colleges and universities to be based solely on the wages paid by such
institutions. The reasons advanced by this commenter concerned general
labor market factors affecting the supply and demand for researchers
and the policy bases articulated for issuing the NPRM.
The comments concerning general labor market conditions are
summarized and discussed below.
(1) Unemployment Rate
A commenter asserted that unemployment and underemployment, as
measured by the NSF, are higher now for doctorate scientists and
engineers than they have been in many years. Such concerns, however,
are not relevant to this rulemaking, which is implementing the
statutory protection against adverse effect on wages and working
conditions of similarly employed U.S. workers, due to the importation
of foreign workers. Further, in the permanent alien labor certification
program, high levels of unemployment should have a self-correcting
effect, since more U.S. workers will be available for the jobs for
which certification is sought. In the H-1B program, to which this rule
also will be applied, Congress has determined that no labor market test
is necessary.
Nevertheless, available information indicates that, generally, job
prospects for recent Ph.D. recipients remain strong. According to the
NSF, in April 1993, the overall unemployment rate for recent science
and engineering (S&E) doctorate recipients stood at 1.7 percent, while
the NSF states that the unemployment rate for the entire U.S. labor
force for the comparable period--1993--was 6.8 percent.2
Ibid. at 3-5.
---------------------------------------------------------------------------
\2\ The Bureau of Labor Statistics, in its ``Labor Force
Statistics from the Current Population Survey'' reports that for
September 1996, the seasonally adjusted civilian unemployment rate
was 5.2 percent.
---------------------------------------------------------------------------
According to the NSF, concerns expressed about labor market
prospects by recent S&E doctorate recipients have less to do with their
ability to find a job than with their ability to get full-time jobs
that use their training. In 1993, the ``involuntary out-of-field''
(IOF) rate for all recent S&E doctorate recipients was 3.6 percent.
Individuals were considered involuntarily out of their Ph.D. field if
they stated in an NSF survey that they were either working part-time
solely because a full-time job was not available or that one reason
they were working outside of their Ph.D. field was because a job in
their field was not available. Unfortunately, it is not possible to
compare the IOF rate for 1993 with previous years because of the lack
of comparable data. Ibid. at 3-6. However, another measure reported by
the NSF indicates that foreign doctorate recipients have not had a
significant impact on the overall labor market for recent doctorate
recipients. Self-assessment by recent S&E doctorate recipients as to
whether their primary jobs in 1993 are closely related to their Ph.D.
fields shows very similar patterns to the information pertaining to
then-recent doctorate recipients in 1988. Ibid. at 3-8 and 3-9.
(2) Effect on Recent Doctorate Recipients in Universities
Two commenters maintained that the wage levels of recent U.S.
doctorate recipients employed in colleges and universities have been
held in check by the hiring of foreign researchers. One commenter
maintained that the rule as proposed, in conjunction with the hiring of
foreign researchers, increased immigration levels, and the elimination
of the growth in research and development funding will have unfavorable
consequences for U.S. researchers.
It does not appear that the number of foreign doctoral recipients
who remain in the United States after graduating are numerous enough to
have any appreciable affect on general wage
[[Page 13762]]
levels. About 30 percent of the 8,000 foreign students earning S&E
doctoral degrees received firm offers to stay in the United States in
1993. (This overall percentage has been stable over the past several
years.) The firm offers were from three primary sources:
About 400, or 5 percent, received firm offers for academic
employment.
Almost 500, or 6 percent, received firm offers for
commercial employment.
A larger group, almost 1,500, or 18 percent, obtained a
postdoctoral research position for 1 year.
Ibid. at 2-28 and 2-29.
Not all foreign students who receive a firm offer to stay in the
United States do so. A number of factors influence foreign doctoral
recipients' decisions to return home. Further, as emerging countries
expand their capacity to educate at the doctoral level, the NSF expects
that fewer foreign students will come to the United States to be
educated. Ibid. at 2-29. The number of foreign students studying S&E
fields in the United States seems to have peaked in 1992. Ibid. at 2-
33.
With respect to the comment concerning flattened growth in R&D
funding, a look at overall R&D spending presents a rather complex
picture. Overall R&D spending in the 1990's generally has not kept pace
with inflation. The decline, in real terms (largely related to the
Defense downsizing), has been modest--2 percent. In nominal terms, R&D
funding reached an all time high of $171 billion in 1995. It is
important to note, however, that of the three major R&D performing
sectors--industry, the Federal Government, and academia--academic is
the only one to have registered a real increase in R&D performance
since 1990. Ibid. at 4-2. A more detailed examination of the trends
reveals that the annual rate of increase in academic R&D performance
has been falling fairly steadily since the late 1980's. On the other
hand, the Federal Government, which supplies about three-fifths of all
funds used to perform R&D on campus, has been increasing its support of
academic research continuously since 1982. Ibid. at 4-2. This suggests
that job opportunities involving research in academia have been growing
rather than declining, albeit at a slow rate over the last several
years.
If foreign doctorate recipients have an adverse effect on any part
of the labor market segment, it is most likely to be on the market for
postdoctoral appointments. However, the wage data included in the
comments of the individual opposing the rule do not indicate that
foreign doctorate recipients have had an adverse effect on the market
for postdoctoral appointments. This commenter asserted that the wage
gap between academe and industry for recent doctorate recipients with
less than 6 years of work experience has been steadily declining.
According to information furnished by the commenter, the percentage gap
between non-academic and academic salaries of doctorates with less than
6 years of experience declined from 32 percent in 1981 to 23 percent,
as indicated above, in 1989. And this trend, according to the
commenter, continued through 1993--the year of last available data.
DOL is not convinced, for the reasons cited above, that the
admission of foreign academic researchers, at current levels, is at
such an extent as to diminish or stagnate the wage levels of doctoral
recipients doing academic research nationwide. While foreign worker
penetration of the job market for postdoctoral positions is greater,
DOL has reached the same conclusion for those job opportunities. The
Department, however, plans to study over the next 5 years whether
pervasive hiring of foreign workers has taken place and whether adverse
effect has occurred on a scale broader than individual job
opportunities or individual localities.
(3) Discourages U.S. Workers From Obtaining Doctorates
One commenter expressed the belief that declining labor market
conditions for young researchers will discourage talented young
Americans from choosing to make investments in S&E graduate education
in the near future, and that the United States will suffer as a result.
These concerns appear to be overstated in light of the supply and
demand projections for S&E personnel discussed in Science & Engineering
Indicators 1996.
According to the NSF-reported ``mid-growth scenario'' of the demand
for S&E workers, overall demand for S&E will slightly exceed supply by
the year 2005 by a small amount--4 percent. Most of this excess demand
occurs in the last 3 years of the forecast; until 2002, the S&E labor
market appears to be in balance. This should not be a problem, since
the NSF indicates that even if the ``high-growth scenario'' were to
materialize there would be sufficient time for the labor market to
respond to the new higher demands. Ibid. at 3-21. In any event, these
models suggest that concerns that foreign researchers are shutting U.S.
researchers out of the labor market are not a problem over the long
term.
The Department, based on the above, is not convinced at this time
that foreign recipients of doctoral degrees have had an appreciable
impact on the general market for recent doctorate recipients or on the
market for postdoctoral recipients. However, the impact of foreign
labor on the ability of recent U.S. recipients of doctorates to obtain
employment generally and to obtain postdoctoral appointments in
particular has not been definitively determined. Therefore, the
Department cannot dismiss those related issues raised by the commenters
in view of its statutory responsibility to protect wages and working
conditions of similarly employed U.S. workers under section
212(a)(5)(A) of the INA. The Department, therefore, plans to study the
impact of the final rule over the next 5 years.
3. Conclusion
The Department is convinced that a set of unique factors lead to
the conclusion that, at this time, researchers in academe and
researchers employed by for-profit commercial employers are not
similarly employed and that the proposed rule should be adopted for
colleges and universities. The Department, however, plans to study the
impact of the final rule over the next 5 years, and determine whether
the bases for promulgating the rule continue to hold.
B. Other Issues Relating to Colleges and Universities
Commenters submitting comments on the NPRM also raised other issues
relating to colleges and universities that are discussed below.
1. Definition of ``College and University''
Nine commenters, including six universities, two academic
associations and one Congressman recommended that the term
``institutions of higher education as defined in section 1201(a) of the
Higher Education Act of 1965'' be used instead of the term ``colleges
and universities'' in any final rule promulgated by the Department. The
Department has reviewed the definition of institutions of higher
education in section 1201(a) of the Higher Education Act and has
determined that it is not appropriate for the labor certification
program. The definition proposed by commenters is not consistent with
the definition of ``college or university'' that has been used for many
years in administering the special handling provisions in the
regulations established for college and university teachers. Unlike the
definition of ``colleges and
[[Page 13763]]
universities'' used in administering the permanent labor certification
program, section 1201(a) of the Higher Education Act includes business
and vocational schools and is limited to public or other nonprofit
institutions. A directive dated January 13, 1984, from Bryan T. Keilty,
then ETA's Acting Administrator for Regional Management, to all
regional administrators, in relevant part, defined ``college or
university'' as follows:
``College or university'' means an educational institution: (A)
which admits as regular students only individuals having a
certificate or diploma of graduation from high school, or the
recognized equivalent of such a certificate or diploma; (B) which is
legally authorized by the Federal and/or State Government(s) to
provide a program of education beyond high school; and (C) which
provides an educational program for which it awards a baccalaureate
(bachelor's) or higher degree, or provides a program which is
acceptable for such a degree. This would include those junior or
community colleges which award associate degrees, but which teach
courses which can be credited toward a baccalaureate degree at
another college or university.
The Department has concluded it cannot change the definition of
``college or university'' used for the past 14 years in administering
the permanent labor certification program without complying with the
notice and comment requirements of the Administrative Procedure Act.
2. Extension of Proposed Amendment to H-1B Labor Condition Application
(LCA) Program
Many commenters, including several colleges and universities,
independent nonprofit research institutes, various associations, the
American Immigration Lawyers Association, Federal agencies and one
member of Congress, indicated that the H-1B regulations dealing with
prevailing wages, at 20 CFR 655.731(a)(2)(iv), should be modified to
clarify that the proposed changes would also apply to the H-1B program.
Amendment of the H-1B regulations at 20 CFR 655.731(a)(2)(iv) would
require the initiation of a separate NPRM to modify that regulation,
but such a rulemaking is unnecessary for the reasons discussed below.
There are sufficient bases to apply the methodology required by
this final rule to the H-1B program. The Department clearly expressed
in the preamble to the proposed rule that the change proposed for
Sec. 656.40(b) would be followed in determining prevailing wage for the
H-1B LCA program, as well as the permanent labor certification program.
The preamble stated that the ``proposed rule would also change the way
prevailing wages are determined for colleges and universities filing H-
1B labor condition applications on behalf of researchers, since the
regulations governing prevailing wage determinations for the permanent
program are followed by State Employment Security Agencies in
determining prevailing wages for the H-1B program.'' The preamble also
noted that the H-1B regulations incorporate the language of 20 CFR
656.40 (as suggested by H.R. Conf. Rep. No. 101-955 (October 26, 1990),
page 122). Specifically, the conference report at page 122 stated that
the prevailing wage to which an H-1B visa petitioner ``must attest is
expected to be interpreted by the Department of Labor in a like manner
as regulations currently guiding section 212(a)(14)'' (now section
212(a)(5)(A) of the Immigration and Nationality Act).
It should also be noted that the H-1B regulations at
Sec. 655.731(a)(2)(iv) define ``similarly employed'' as it is defined
in the current permanent labor certification rule. Section
655.731(a)(2)(iii)(A) provides, in relevant part, that ``(w)here the
prevailing wage is not immediately available, the SESA will conduct a
prevailing wage survey using the methods outlined at 20 CFR 656.40 and
other administrative guidelines or regulations issued by ETA.'' On May
18, 1995, ETA issued General Administrative Letter (GAL) No. 4-95 to
All State Employment Security Agencies, Subject: Interim Prevailing
Wage Policy for Nonagricultural Immigration Programs. That GAL
provided, in relevant part, that ``(i)n determining prevailing wages
for the permanent and temporary labor certification programs, the H-1B
program, and the F-1 student attestation program, the regulatory scheme
at 20 CFR 656.40 must be strictly followed.'' 3
---------------------------------------------------------------------------
\3\ General Administrative Letter 2-98, issued on October 31,
1997, which superseded GAL 4-95, provides that the regulatory scheme
at 20 CFR 656.40 must be followed in determining prevailing wages
for the permanent and temporary H-2B labor certification programs
and the H-1B program.
---------------------------------------------------------------------------
3. Extension of the Proposed Amendment to Research Institutes
Affiliated with Colleges and Universities
Some commenters expressed the view that institutions ``affiliated''
with colleges and universities should be included in the exception to
the Department's general prevailing wage methodology crafted for
colleges and universities. The Department is not including institutions
affiliated with colleges and universities because it requires
additional information as to whether researchers employed by such
affiliated institutions are sufficiently similar to college and
university researchers to warrant similar treatment, and if so, how to
define affiliated research institutes and what institutions should be
included in wage surveys to determine prevailing wages for such
institutions.
4. Including an Express Provision to Permit Consideration of Wage
Differences by Discipline
The AILA recommended that the rule should explicitly provide for
consideration of wage differentials among researchers working in
different disciplines. The Department does not believe such an express
provision is necessary. According to the Dictionary of Occupational
Titles (DOT), researchers are classified according to field of
specialization. Consequently, the Department currently makes prevailing
wage determinations for researchers by discipline.
C. Extension of Rule to Nonprofit Research Institutes
As indicated above, commenters also were invited in the preamble to
the NPRM to submit comments with respect to extending the proposed rule
change to researchers in other employment. All of the comments
submitted by apparently nonprofit, independent research institutes were
in favor of extending the scope of the proposed rule to cover
independent research institutes. The overwhelming majority of the
comments received from independent research institutes included the
reasons discussed below for extending the rule to cover such research
institutes.
1. Competitive Factors
The commenters maintained that researchers at independent research
institutes across the Nation compete for Federal grants and publish
research results in the same manner as universities. According to the
commenters, the only difference between institutes and universities is
that most institutes are not degree-granting institutions.
The Department did not receive sufficient information to evaluate
to what extent the independent research institutes compete for Federal
grants and publish research results in the same manner as universities.
However, an issue more important to this rulemaking would be the extent
to which researchers at independent research institutes are or are not
``similarly employed'' to researchers in private industry. The extent
to which the
[[Page 13764]]
nonprofit research institutes perform nonproprietary research as
opposed to proprietary research and development would, for example, be
an important factor in making this determination. The commenters did
not submit sufficient information with respect to competitive factors
and the ``similarly employed'' issue to determine that such concerns
could be used as a basis for making an exception in the prevailing wage
methodology for researchers employed by nonprofit research institutes.
2. Prevailing Wage Methodology for Researchers
The research institutes asserted that prior to Hathaway,
researchers in independent research institutes were included with
researchers at colleges and universities in determining prevailing
wages. The commenters stated that inclusion of independent research
institutes would not be an extension of the proposed rule--it would be
a restoration of the pre-Hathaway practice. It was stated in the
preamble to the NPRM that prior to Hathaway, SESA's, in conducting
prevailing wage surveys for researchers employed by colleges and
universities, consistently limited prevailing wage surveys to colleges
and universities, and DOL was not aware of any other situation in which
a similar practice was followed in determining prevailing wages for an
occupation found in a variety of industries.
Further investigation of sampling practices by SESA's subsequent to
the receipt of comments on the NPRM, however, indicates that there was
greater variation in sampling practices for colleges and universities
than indicated in the NPRM. Not all SESA's limited surveys only to
researchers employed by colleges and universities. Some surveyed a
variety of industries in making such determinations. Some SESA's
included nonprofit research institutes in the sample used in
determining prevailing wages for colleges and universities. Some
sampled nonprofit research institutions separately in the course of
making prevailing wage determinations for researchers employed by such
institutions. Some SESA's pointed out that they would not have known
prior to the Hathaway decision whether the employer was profit or
nonprofit, and included profit and nonprofit institutes in the same
sample when responding to prevailing wage requests. Because SESA's were
inconsistent in their sampling practices, their practices in this
regard cannot be considered as a basis for the NPRM or the final rule.
3. Pending Legislation to Change Prevailing Wage Methodology for
Researchers
Many commenters stated that Congress has acknowledged the
similarities between researchers in academic settings and those at
nonprofit, independent research institutes by providing legislative
language in immigration bills that would require prevailing wage
determinations for employees employed by colleges and universities and
research institutes to be based solely on the wages paid by such
institutions. Unenacted legislation is, however, outside the scope of
this rulemaking and to consider it in the rulemaking would be
speculative.
4. Additional Reasons Advanced for Extending the Proposed Rule to
Nonprofit Research Institutes
One or more commenters offered additional reasons for extending the
proposed rule to nonprofit, independent research institutes. Their
comments and the Department's response to them are provided below.
a. Anomalies of Staff Doing the Same Work Being Paid at Dissimilar
Rates. Some commenters pointed out that there are many situations where
staff from the university and nonprofit research institutes work side-
by-side. One commenter expressed the opinion that it would make little
sense for institute employees on H-1B visas to be subject to a
different wage structure than everyone else on the university campus.
Such anomalies are not prohibited under the H-1B program, as a
result of amendments made to the INA by the Miscellaneous and Technical
Immigration Amendments of 1991 (MTINA), Pub. L. 102-232, 105 Stat. 1733
(December 12, 1991). The anomalies are not a function of DOL prevailing
wage methodologies and policies. The INA, as amended by the Immigration
Act of 1990 (IMMACT), Pub. L. 101-649, 104 Stat. 4978, provided that
employers did not have to pay similarly employed U.S. workers the same
wage as must be paid to H-1B workers. Under IMMACT prior to MTINA, the
employer was required to pay the higher of the actual or prevailing
wage for an occupation to both H-1B nonimmigrant and ``to other
individuals employed in the occupational classification and in the area
of employment. . . .'' MTINA amended the INA/IMMACT wage requirements,
in relevant part, so that the obligation that the employer pay the
prevailing wage applied only to its H-1B nonimmigrant workers and not
to the ``other individuals employed in the occupational classification.
. . .'' Thus, subsequent to MTINA, not all workers in the U.S. labor
market receive prevailing wage protections, even when they have foreign
co-workers. It is, therefore, not illegal under this program to have
workers working side-by-side being paid disparate wages. This possible
disparity in wages between U.S. workers and H-1B nonimmigrant workers
is not unique to colleges and universities, Federal research agencies,
nonprofit research institutes, or even for-profit entities.
In the Department's view, disparities in wages paid to researchers
with similar duties working side-by-side does not justify establishing
an exception to the prevailing wage determination methodology currently
followed in situations involving employers other than colleges and
universities. More fundamentally, wage disparity among workers is not
germane to the question of whether the workers are similarly employed.
b. Source of Funding Should be Considered. One commenter pointed
out that research projects are funded by many different government
agencies, and it is a waste of taxpayers' money to require payment of
artificially high salaries to temporary foreign and immigrant
employees.
The Department has consistently taken the view that sources of
funding are not factors to be taken into consideration in prevailing
wage determinations. Had source of funding been a determinant, the
broad protection against adverse effect in the INA would have made an
exception for government-funded employment--but it does not do so.
Further, in the Department's view, such a position furthers its
statutory mission to protect the wages and working conditions of U.S.
worker, rather than constituting a waste.
However, the Department recognizes that source of funding may be a
factor for determining similarity of employment, to the extent it
supports nonproprietary research, as opposed to proprietary research
and development. Since nonproprietary research currently dominates
academic research performance in large measure, it is one determinant
that distinguishes academic research from commercial research. The
rulemaking record does not establish to the satisfaction of the
Department that nonprofit research institutes perform nonproprietary
research in relative or absolute terms to the same extent as colleges
and universities.
[[Page 13765]]
c. Non-pecuniary Motivations. Some commenters asserted that non-
pecuniary motivations of researchers working in nonprofit research
institutes are similar to those working in academia. This may be true,
but unlike academe, research in nonprofit institutions does not appear
to be ``inextricably intermingled'' with teaching in an academic
setting as it is in colleges and universities. Nor is there any firm
information as to the relative significance of performing research with
the attributes that distinguish that research from research in a for-
profit setting, to the total research and development effort. The
Department believes that the amount of nonproprietary research
performed by an institution is not only important in terms of the
attributes that distinguish it from commercial research, but that it
adds an important dimension to the non-pecuniary incentives to working
in a research environment.
d. Worker Displacement. At least one commenter maintained that
foreign researchers do not displace immigrant or citizen researchers,
but rather complement their efforts. As previously indicated, available
information does not indicate that displacement of domestic doctorate
recipients by foreign labor is significant. In any event, as indicated
above, this rule addresses only the narrow issue of how the phrase
``similarly employed'' should be defined.
5. Overly Broad Implementation of Hathaway
The AILA was strongly in favor of the NPRM, but was of the opinion
that DOL's implementation of Hathaway was overly broad and incorrect,
and did not require conducting wage surveys across industries to
determine prevailing wages for researchers employed by colleges and
universities. The Department does not believe these comments are
germane to the rulemaking. Assuming that the recognition of a separate
wage system for college and university researchers was achievable under
the existing regulations, a proposition that the Department does not
accept, that conclusion would not preclude the Department from
addressing the matter through a regulatory change. Given the interest
expressed and the need to assure consistent treatment of the issue, the
Department concluded that rulemaking was the appropriate course.
Whether the Hathaway precedent is being applied improperly in
occupations other than academic researchers is both beyond the scope of
this rulemaking and is a matter that can and should be addressed to the
BALCA in an appropriate case.
D. Other Requests to Extend the Rule
In response to the proposed rule, comments also were received from
Federally Funded Research and Development Centers (FFRDC's) and Federal
agencies urging that they be included within the scope of the rule. The
comments received from the FFRDC's and the Federal agencies are
discussed below.
1. Federal Research Centers
The Department has concluded that it is appropriate to include
FFRDC's administered by academic institutions within the scope of the
final rule. The Department believes that research conducted by FFRDC's
administered by academic institutions are an extension of the research
environment existing in the colleges and universities and the research
performed in such FFRDC's has the same attributes as research performed
by colleges and universities; i.e., nonproprietary in nature,
inextricably intermingled with teaching, and offers significant
intangible, nonpecuniary incentives.
Comments to support this conclusion were received from the National
Laboratory Immigration Forum (NLIF) which represents the 10 most well
known of the FFRDC's often referred to as the national laboratories.
The comments of the NLIF relevant to the scope of this rule were
similar to those made by the colleges and universities and the
independent research institutes. The main points made by the NLIF were:
National laboratories are involved in far-ranging
collaborative efforts with the academic community and many researchers
have joint appointments with both a laboratory and a university, which
involve teaching as well as research.
Most funding for the operation of the national laboratory
complex comes through the Federal Government and is subject to many of
the same salary limitations that universities are subject to under non-
DOE Federal research grants.
Research conducted by the national laboratories is largely
nonproprietary in nature. Research results are expected to be
disseminated through publication in peer-reviewed scientific journals.
Non-pecuniary factors are a substantial motivator for
researchers seeking employment in the national laboratories.
Some areas of research are well beyond the scope of normal
domestic research and may call for expertise in disciplines that are
not readily available in the United States.
The above comments are consistent with the comments of the colleges
and universities urging that the national laboratories be included
within the scope of the proposed rule.
The Department believes the above factors apply in large measure to
all of the FFRDC's administered by colleges and universities, and has
therefore, concluded that FFRDC's administered by academic institutions
should be included within the final rule. The Department, however, does
not believe the FFRDC's managed by non-academic institutions should be
included in the final rule establishing an exception to the way
prevailing wage determinations are made for researchers employed by
colleges and universities. The Department is not convinced that the
attributes of academic research which distinguish it from commercial
research are as pronounced in those FFRDC's managed by nonacademic
institutions as they are in the FFRDC's administered by colleges and
universities. Further, the Department is concerned that researchers
from other countries coming to work for the FFRDC's managed by
nonacademic entities may be used to a greater extent to perform
research of a proprietary nature in those FFRDC's that are not managed
by academic institutions. Therefore, the Department is extending the
final rule to include only those FFRDC's managed by colleges and
universities.
2. Federal Agencies
All Federal agencies that submitted comments were in favor of the
thrust of the proposed rule, but generally indicated that it was too
narrow and should be extended to Federal agencies and laboratories;
federally-affiliated, nonprofit institutions; and other nonprofit
institutions affiliated with universities and colleges. Reasons offered
for supporting the rule were similar to those advanced by many of the
other commenters. The major points made by one or more of the agencies
with respect to extending the proposed rule to cover Federal agencies
were:
Post-Hathaway policies impact negatively on the ability to
recruit foreign scientists and result in such anomalies as foreign
staff being paid more than U.S. workers.
The proposed rule is too narrow. It should be extended to
Federal agencies and laboratories, federally-affiliated nonprofit
institutions, and other nonprofit institutions affiliated with
universities and colleges.
Research by Federal agencies is nonproprietary in nature.
[[Page 13766]]
Non-pecuniary factors similar to those in colleges and
universities motivate individuals to work for Federal research agencies
and federally affiliated nonprofit institutions.
The Federal pay scale should be accepted by DOL as a
``legitimate source'' of prevailing wage data for federally sponsored
employment. Alternatively, a rule should be promulgated recognizing
that postdoctoral fellows, visiting scientists and other scholars
employed by Federal agencies in H-1B status will necessarily be paid
according to the pay practices of the research entity, and this fact
satisfies prevailing wage concerns.
Although the comments advocating inclusion of the Federal research
agencies did not provide sufficient information to draft a final rule
excluding all Federal research agencies as a class from the effects of
Hathaway Children's Services on the Department's prevailing wage
methodology, the Department is convinced that some Federal agencies may
be able to satisfy the necessary criteria in order to be provided such
an exception. These criteria are: (1) A close relationship between
research and teaching; (2) a primary engagement in nonproprietary
research; and (3) significant, intangible nonpecuniary factors that
motivate researchers to work for the Federal research agency. Federal
research agencies, by virtue of the fact that they are Government
institutions, can presumptively satisfy the criterion of being
primarily performers of nonproprietary research. Therefore, the final
rule provides that Federal research agencies may petition the Director,
U.S. Employment Service, to submit evidence that shows they meet the
other two criteria necessary to obtain an exception to the prevailing
wage methodology required by the issuance of Hathaway Children's
Services. The rule also provides that if a petition is denied, a
request for review of the denial may be made to the Board of Alien
Labor Certification Appeals.
The procedures that will have to be followed and the documentation
that will have to be supplied by the Federal research agencies to
obtain an exception from the general prevailing wage methodology that
requires prevailing wages to be determined by surveying employers
across industries in the occupation in the area of intended employment
will be developed and issued by ETA within 45 days of publication of
the final rule. Prevailing wages for the research agencies that are
granted an exception from the general prevailing wage methodology will
be determined by considering only the wages paid to researchers by
Federal research agencies, colleges and universities, and FFRDC's
administered by colleges and universities.
ETA believes that to meet the criteria contemplated by this rule
requires a relatively large organization. The research agency must be
rather large before it can have researchers significantly and
substantially involved in teaching as well as research and offer
significant, intangible nonpecuniary incentives similar to those
offered by colleges and universities. Therefore, a Federal research
agency is defined for the purpose of this rule as:
[A] major organizational component of a Federal cabinet level
agency or other agency operating with appropriated funds that has as
its primary purpose the performance of scientific research. Federal
research agencies are presumed to be doing nonproprietary research.
To be considered a major organizational component of a cabinet level
agency or other agency operating with appropriated funds for the
purpose of this part, the organizational component or other agency
must be administered by a person who is no lower than Level V (or
the equivalent) of the Executive Schedule (see 5 U.S.C. 5316).
ETA is not establishing a similar petitioning process for other
members of the research community, such as nonprofit research
institutes. Since such entities are private organizations, it cannot be
presumed that the research they perform is of a nonproprietary nature.
Since they are private entities, they can engage in either proprietary
or nonproprietary research. Although the entity may be accorded a
nonprofit status under the Internal Revenue Code, they can contract to
perform research that has a commercial application for private, for-
profit entities. The ETA cannot be expected to sort out in this
rulemaking process the extent to which non-profit research
organizations are or are not performing research that has commercial
applications for a for-profit entity.
Executive Order 12866
The Department has determined that this proposed rule is not an
``economically significant regulatory action'' within the meaning of
Executive Order 12866, in that it will not have an economic effect on
the economy of $100 million or more or adversely affect in a material
way the economy, a sector of the economy, productivity, competition,
jobs, the environment, public health or safety, or State, local, or
tribal governments or communities.
While it is not economically significant, the Office of Management
and Budget reviewed the final rule because of the novel legal and
policy issues raised by the rulemaking.
Regulatory Flexibility Act
When the proposed rule was published, the Department of Labor
notified the Chief Counsel for Advocacy, Small Business Administration,
and made the certification pursuant to the Regulatory Flexibility Act
at 5 U.S.C. 605(b), that the rule does not have a significant impact on
a substantial number of small entities. The Chief Counsel did not
submit a comment.
Small Business Regulatory Enforcement Fairness Act
The Department has determined that this final rule is not a ``major
rule'' pursuant to the Small Business Enforcement Regulatory Fairness
Act of 1996 (5 U.S.C. 801 et seq.), because it is not likely to result
in (1) an annual effect on the economy of $100 million or more; (2) a
major increase in costs or prices for consumers, individual industries,
Federal, State or local government agencies, or geographic regions; or
(3) significant adverse effects on competition, employment, investment,
productivity, innovation, or on the ability of United States-based
enterprises to compete with foreign-based enterprises in domestic and
export markets.
Paperwork Reduction Act
This final rule will create no collection of information
requirements. The petitioning process for Federal agencies requests
information from current Federal employees acting in their official
capacity.
Catalogue of Federal Domestic Assistance Number
This program is listed in the Catalogue of Federal Domestic
Assistance at Number 17.203. ``Certification for Immigrant Workers.''
List of Subjects in 20 CFR Part 656
Administrative practice and procedure, Aliens, Employment,
Employment and training, Enforcement, Fraud, Guam, Immigration, Labor,
Longshore work, Unemployment, Wages, and Working conditions.
Final Rule
Accordingly, part 656 of Chapter V of title 20, Code of Federal
Regulations, is amended as follows:
PART 656--[AMENDED]
1. The authority citation for part 656 continues to read as
follows:
[[Page 13767]]
Authority: 8 U.S.C. 1182(a)(5)(A); 29 U.S.C. 49 et seq.; section
122, Pub. L. 101-649, 109 Stat. 4978.
2. Section 656.3 is amended as follows:
a. A definition of ``Federal research agency'' is added in
alphabetical order as follows:
Sec. 656.3 Definitions for the purpose of this part, of terms used in
this part.
* * * * *
Federal research agency means a major organizational component of a
Federal cabinet level agency or other agency operating with
appropriated funds that has as its primary purpose the performance of
scientific research. Federal research agencies are presumed to be doing
nonproprietary research. To be considered a major organizational
component of a cabinet level agency or other agency operating with
appropriated funds for the purpose of this part the organizational
component or other agency must be administered by a person who is no
lower than Level V (or the equivalent) of the Executive Schedule (see 5
U.S.C. 5316).
* * * * *
3. Section 656.40 is amended as follows:
a. In the introductory language in paragraph (b), the phrase
``except as provided in paragraph (c) of this section,'' is added
immediately after the phrase ``For purposes of this section,''.
b. Paragraph (c) is redesignated as paragraph (d), and a new
paragraph (c) is added to read as follows:
Sec. 656.40 Determination of prevailing wage for labor certification
purposes.
* * * * *
(c) For purposes of this section, similarly employed in the case of
researchers employed by colleges and universities, Federally Funded
Research and Development Centers (FFRDC's) administered by colleges and
universities or Federal research agencies, means researchers employed
by colleges and universities, FFRDC's administered by colleges and
universities, and Federal research agencies in the area of intended
employment.'' If no researchers are employed by colleges and
universities, FFRDC's administered by colleges and universities, and
Federal research agencies other than the employer applicant,
researchers employed by colleges and universities, FFRDC's administered
by colleges and universities, and Federal research agencies outside the
area of intended employment shall be considered ``similarly employed.''
* * * * *
4. Subpart E is added to read as follows:
Subpart E--Petitioning Process for Federal Research Agencies
Sec. 656.50 Petitioning Process.
(a) Federal research agencies seeking to have prevailing wages
determined in accordance with Sec. 656.40(c)(2) shall file a petition
with the Director, U.S. Employment Service.
(b) The procedures and information to be included in the petition
shall be in accordance with administrative directives issued by ETA
that will specify the procedures to be followed and information that
shall be filed in support of the petition by the requesting agency.
(c) The Director shall make a determination either to grant or deny
the petition on the basis of whether the petitioning agency is a
Federal research agency, whether most researchers at the petitioning
agency have a close relationship with teaching as well as research, and
whether the employment environment for researchers at the petitioning
agency provides significant intangible and nonpecuniary incentives of
the nature found at colleges and universities.
(d) Denials of agency petitions may be appealed to the Board of
Alien Labor Certification Appeals.
(1) The request for review shall be in writing and shall be mailed
by certified mail to the Director, U.S. Employment Service, within 35
calendar days of the date of the determination, that is by the date
specified in the Director's determination; shall set forth the
particular grounds for the request; and shall include all the documents
which accompanied the Director's determination.
(2) Failure to file a request for review in a timely manner shall
constitute a failure to exhaust available administrative remedies.
(e) Upon a request for review, the Director shall immediately
assemble an indexed Appeal File.
(1) The Appeal File shall be in chronological order, shall have the
index on top followed by the most recent document. The Appeal File
shall contain the request for review, the complete petition file, and
copies of all the written material upon which the denial was based.
(2) The Director shall send the Appeal File to the Board of Alien
Labor Certification Appeals.
(f) In considering requests for review of denied petitions, the
Board of Alien Labor Certification Appeals shall be guided by
Sec. 656.27.
Signed at Washington, DC, this 17th day of March, 1998.
Alexis M. Herman,
Secretary of Labor.
[FR Doc. 98-7339 Filed 3-19-98; 8:45 am]
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