[Federal Register Volume 79, Number 50 (Friday, March 14, 2014)]
[Proposed Rules]
[Pages 14450-14453]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-05589]


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DEPARTMENT OF LABOR

Employment and Training Administration

20 CFR Part 655

RIN 1205-ZA00


Wage Methodology for the Temporary Non-Agricultural Employment H-
2B Program

AGENCY: Employment and Training Administration, Labor.

ACTION: Notification of Status of the 2011 H-2B Wage Rule.

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SUMMARY: The Department of Labor (DOL) is providing notice to the 
regulated community of the status of Wage Methodology for the Temporary 
Non-agricultural Employment H-2B Program, published January 19, 2011 in 
the Federal Register. DOL intends to publish a notice of proposed 
rulemaking on the proper wage methodology for the H-2B program, working 
off of the 2011 Wage Rule as a starting point.

DATES: March 14, 2014.

FOR FURTHER INFORMATION CONTACT: For further information, contact 
William L. Carlson, Ph.D., Administrator, Office of Foreign Labor 
Certification, ETA, U.S. Department of Labor, 200 Constitution Avenue 
NW., Room C-4312, Washington, DC 20210; Telephone (202) 693-3010 (this 
is not a toll-free number). Individuals with hearing or

[[Page 14451]]

speech impairments may access the telephone number above via TTY by 
calling the toll-free Federal Information Relay Service at 1-800-877-
8339.

SUPPLEMENTARY INFORMATION: As discussed below, DOL intends to publish a 
notice of proposed rulemaking on the proper wage methodology for the H-
2B program, working off of as a starting point Wage Methodology for the 
Temporary Non-agricultural Employment H-2B Program, 76 FR 3452 (2011 
Wage Rule). Until such time as DOL finalizes a new wage methodology, 
the current wage methodology contained in 20 CFR 655.10(b), as set by 
Wage Methodology for the Temporary Non-Agricultural Employment H-2B 
Program, Part 2, 78 FR 24047 (Apr. 24, 2013) (2013 IFR), will remain 
unchanged and continue in effect. We will consolidate our current 
review of comments on the 2013 IFR with review of comments received on 
the new notice of proposed rulemaking, and will issue a final rule 
accordingly.
    The Immigration and Nationality Act (INA) establishes the H-2B visa 
classification for a non-agricultural temporary worker ``having a 
residence in a foreign country which he has no intention of abandoning 
who is coming temporarily to the United States to perform . . . 
temporary [non-agricultural] service or labor if unemployed persons 
capable of performing such service or labor cannot be found in this 
country[.]'' 8 U.S.C. 1101(a)(15)(H)(ii)(b). Section 214(c)(1) of the 
INA, 8 U.S.C. 1184(c)(1), requires an importing employer (H-2B 
employer) to petition the Department of Homeland Security (DHS) for 
classification of the prospective temporary worker as an H-2B 
nonimmigrant. This petition shall be made and approved before the 
beneficiary can be considered eligible for an H-2B visa or H-2B status. 
The INA requires DHS to consult with ``appropriate agencies of the 
Government'' before adjudicating an H-2B petition. Id.
    DHS has determined that in order to administer the INA's H-2B visa 
program it must consult with the Department of Labor (DOL) to determine 
whether U.S. workers capable of performing the temporary services or 
labor are available and that the foreign worker's employment will not 
adversely affect the wages or working conditions of similarly employed 
U.S. workers. 8 CFR 214.2(h)(6)(iii)(A).\1\ DHS's regulation requires 
employers to obtain certification from DOL that these conditions are 
met prior to submitting a petition to DHS. Id. In addition, as part of 
DOL's certification, DHS requires DOL to determine the prevailing wage 
applicable to an application for temporary labor certification. 8 CFR 
214.2(h)(6)(iii)(D).
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    \1\ The regulation establishes a different procedure for the 
Territory of Guam, under which a petitioning employer must apply for 
a temporary labor certification with the Governor of Guam. 8 CFR 
214.2(h)(6)(iii)(A).
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    DOL has established procedures to certify whether a qualified U.S. 
worker is available to fill the petitioning H-2B employer's job 
opportunity and whether foreign worker's employment in the job 
opportunity will adversely affect the wages or working conditions of 
similarly employed U.S. workers. See 20 CFR part 655, subpart A. As 
part of DOL's labor certification process and, pursuant to the DHS 
regulations, 8 CFR 214.2(h)(6)(iii)(D), DOL sets the wage that 
employers must offer and pay foreign workers entering the country on an 
H-2B visa. See 20 CFR 655.10.
    In 2008, DOL issued regulations governing DOL's role in the H-2B 
temporary worker program, and the regulation established, among other 
things, a methodology for determining the wage that a prospective H-2B 
employer must pay. Labor Certification Process and Enforcement for 
Temporary Employment in Occupations Other Than Agriculture or 
Registered Nursing in the United States (H-2B Workers), and Other 
Technical Changes, 73 FR 78020 (Dec. 19, 2008) (the 2008 rule).\2\ The 
2008 rule provided that the prevailing wage would be the collective 
bargaining agreement (CBA) wage rate, if the job opportunity was 
covered by an agreement negotiated at arms' length between a union and 
the employer; the Occupational Employment Statistics (OES) four-tier 
wage rate if there was no CBA; a survey if an employer elected to 
provide an acceptable survey; or a wage rate under the Davis-Bacon Act 
(DBA), 40 U.S.C. 276a et seq., or the McNamara-O'Hara Service Contract 
Act (SCA), 41 U.S.C. 351 et seq., if one was available for the 
occupation in the area of intended employment. See 20 CFR 655.10(b)(2) 
(2009). In the absence of the CBA wage, the employer could elect to use 
the applicable SCA or the DBA wage in lieu of the OES wage. See 20 CFR 
655.10(b) (2009). The 2008 rule required that when the prevailing wage 
determinations were based on the OES wage survey, which is compiled by 
the Bureau of Labor Statistics (BLS), the wage must be structured to 
contain four tiers to reflect skill and experience.\3\ Most provisions 
of the 2008 rule were subject to the Administrative Procedure Act's 
(APA) procedural requirements, but because DOL had already been 
implementing the four-tiered wages in the H-2B program pursuant to sub-
regulatory guidance,\4\ DOL did not seek public comments on the use of 
the four-tiered wage methodology for determining prevailing wages when 
promulgating the 2008 rule. 73 FR at 78031.
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    \2\ Before 2008, DOL set the prevailing wage in the H-2B program 
through sub-regulatory guidance. See, e.g., General Administration 
Letter (GAL) 10-84, ``Procedures for Temporary Labor Certifications 
in Non Agricultural Occupations'' (April 23, 1984); GAL 4-95, 
``Interim Prevailing Wage Policy for Nonagricultural Immigration 
Programs'' (May 18, 1995), Attachment I,; GAL 2-98, ``Prevailing 
Wage Policy for Nonagricultural Immigration Programs'' (November 30, 
1998).
    \3\ Because the OES survey captures no information about actual 
skills or responsibilities of the workers whose wages are being 
reported, the four-tiered wage structure, adapted from the 
statutorily required four tiers applicable to the H-1B visa program 
under sec. 212(p)(4) of the INA, was derived by mathematical formula 
as follows to reflect ``entry level,'' ``qualified,'' 
``experienced,'' and ``fully competent'' workers: Level 1 is the 
mean of the lowest-paid 1/3, or approximately the 17th percentile; 
Level 2 is approximately the 34th percentile; Level 3 is 
approximately the 50th percentile; and Level 4 is the mean of the 
highest-paid 2/3, or approximately the 67th percentile.
    \4\ See supra n.1.
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    In 2009, shortly after the promulgation of the 2008 H-2B 
regulation, worker advocacy groups filed suit under the APA challenging 
several aspects of the 2008 rule. Comite de Apoya a los Trabajadores 
Agricolas v. Solis, Civ. No. 2:09-cv-240-LP, 2010 WL 3431761 (E.D. Pa.) 
(CATA I). Among the issues raised in this litigation was the use of the 
four-tiered wage structure in the H-2B program. In the August 30, 2010 
decision, the Court ruled that DOL had violated the APA by failing to 
adequately explain its reasoning for adopting skill and experience 
levels as part of the H-2B prevailing wage determination process. Id. 
at *19. The court ordered promulgation of ``new rules concerning the 
calculation of the prevailing wage rate in the H-2B program that are in 
compliance with the [APA].'' Id. at *27.
    In response to the CATA I order, DOL published a final rule, Wage 
Methodology for the Temporary Non-agricultural Employment H-2B Program, 
on January 19, 2011, 76 FR 3452 (the 2011 Wage Rule). In that rule, DOL 
determined that ``there are no significant skill-based wage differences 
in the occupations that predominate in the H-2B program, and to the 
extent such differences might exist, those differences are not captured 
by the existing four-tier wage structure.'' 76 FR at 3460. Therefore, 
the 2011 Wage Rule revised the wage methodology by eliminating the 2008 
rule's four-tier wage structure on the ground that it

[[Page 14452]]

violated the obligation to set H-2B wages at a rate that did not 
adversely affect U.S. workers' wages.\5\ Id. at 3458-3461. The new 
methodology set the prevailing wage as the highest of the OES 
arithmetic mean wage for each occupational category in the area of 
intended employment; the applicable SCA/DBA wage rate; or the CBA wage. 
The rule also eliminated the use of employer-provided surveys as 
alternative wage sources, except in limited circumstances.\6\ The 
effective date of the 2011 Wage Rule was originally set for January 1, 
2012. However, as a result of litigation challenging the effective date 
and following notice-and-comment rulemaking, DOL issued a final rule, 
76 FR 45667 (Aug. 1, 2011), revising the effective date of the 2011 
Wage Rule to September 30, 2011, and a second final rule, 76 FR 59896 
(Sept. 28, 2011), further revising the effective date of the 2011 Wage 
Rule to November 30, 2011.
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    \5\ DOL found that in 2010, almost 75 percent of H-2B jobs were 
certified at a Level 1 wage (the mean of the lowest one-third of all 
reported wages), and over a several year period, approximately 96 
percent of the prevailing wages issued were lower than the mean of 
the OES wage rates for the same occupation. 76 FR at 3463. DOL 
determined that in the low-skilled occupations in the H-2B program, 
the mean ``represents the wage that the average employer is willing 
to pay for unskilled workers to perform that job.'' Id. Therefore, 
DOL concluded that the use of skill levels adversely affected U.S. 
workers because it ``artificially lowers [wages] to a point that 
[they] no longer represent[] a market-based wage for that 
occupation.'' Id. The application of the four levels set a wage 
``below what the average similarly employed worker is paid.'' Id. 
DOL concluded that ``the net result is an adverse effect on the 
[U.S.] worker's income.'' 76 FR at 3463.
    \6\ These circumstances include very specific situations in 
which there are no data to determine an OES wage (for instance, 
certain geographic locations, such as the Commonwealth of the 
Northern Mariana Islands, are not included in BLS's data collection) 
and there are no applicable CBA, DBA or SCA wages; or where an 
employer may not be party to a CBA, and cannot use a DBA wage, an 
SCA wage, or an OES wage because the job opportunity is not 
accurately represented within the job classification used in those 
surveys. 76 FR at 3466-3467.
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    Shortly before the 2011 Wage Rule was to become effective, Congress 
effectively barred its implementation. The Consolidated and Further 
Continuing Appropriations Act, 2012, enacted on November 18, 2011, 
provided that ``[n]one of the funds made available by this or any other 
Act for fiscal year 2012 may be used to implement, administer, or 
enforce, prior to January 1, 2012 the [2011 Wage Rule].'' Public Law 
112-55, 125 Stat. 552, Div. B, Title V, sec. 546 (Nov. 18, 2011) (the 
November 2011 Appropriations Act). In response to the Congressional 
prohibition on implementation, DOL delayed the effective date of the 
2011 Wage Rule until January 1, 2012. 76 FR 73508 (Nov. 29, 2011). The 
delayed effective date was necessary because, although the November 
2011 Appropriations Act prevented the expenditure of funds to 
implement, administer, or enforce the 2011 Wage Rule, it did not 
prevent the 2011 Wage Rule from going into effect. 76 FR at 73509. Had 
the 2011 Wage Rule gone into effect, it would have superseded and 
nullified the prevailing wage provisions from the 2008 rule. 
Implementing the 2011 Wage rule would have left DOL with new wage 
provisions which DOL lacked appropriated funds to implement and 
enforce, in effect leaving DOL without a methodology to make prevailing 
wage determinations. Id. Because the issuance of a prevailing wage 
determination is a condition precedent to approving an employer's 
request for an H-2B labor certification, 20 CFR 655.10, DOL's H-2B 
labor certification program would be inoperable without the ability to 
issue a prevailing wage pursuant to regulatory standards. Accordingly, 
we determined that it was necessary, in light of the Consolidated and 
Further Continuing Appropriations Act, 2012, to delay the effective 
date of the 2011 Wage Rule to allow DOL to continue to make prevailing 
wage determinations. Therefore failing to delay the effective date (in 
conjunction with the rider prohibiting enforcement or implementation) 
would have meant the H-2B program would have ceased to function.
    Subsequent appropriations legislation \7\ contained the same 
restriction prohibiting DOL's use of appropriated funds to implement, 
administer, or enforce the 2011 Wage Rule. This legislation 
necessitated subsequent extensions of the effective date of that rule. 
See 76 FR 82115 (Dec. 30, 2011) (extending the effective date to Oct. 
1, 2012); 77 FR 60040 (Oct. 2, 2012) (extending the effective date to 
Mar. 27, 2013); 78 FR 19098 (Mar. 29, 2013) (extending the effective 
date to Oct. 1, 2013). While the 2011 Wage Rule implementation was 
suspended, DOL remained unable to implement the wage methodology that, 
among other things, eliminated the four-tier wage structure, and 
instead relied on the prevailing wage provisions of the 2008 rule, 
including the use of the four-tiered wage structure, when issuing a 
prevailing wage based on the OES.
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    \7\ These include the Consolidated Appropriations Act of 2012, 
Public Law 112-74, 125 Stat. 786 (Dec. 23, 2011); Continuing 
Appropriations Resolution, 2013, Public Law 112-175, 126 Stat. 1313 
(Sept. 28, 2012); Consolidated and Further Continuing Appropriations 
Act, 2013, Public Law 113-6, 127 Stat. 198 (Mar. 26, 2013); 
Continuing Appropriations Act, 2014, Public Law 113-46, 127 Stat. 
558 (Oct. 17, 2013); and Joint Resolution Making further Continuing 
Appropriations for Fiscal Year 2014, Public Law 113-73, 128 Stat. 3 
(Jan. 15, 2014).
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    Based on DOL's ongoing use of the 2008 rule's four wage tiers, the 
CATA I plaintiffs returned to court seeking immediate vacatur of the 
four-tiered wage structure from the 2008 rule. On March 21, 2013, the 
district court agreed with plaintiffs that its prior holding that the 
four-tiered wage structure was promulgated in violation of the APA 
remained unremedied. Therefore, the court vacated 20 CFR 655.10(b)(2), 
which was the basis for the four-tiered wage structure, and remanded 
the matter to DOL, ordering Defendants to comply within 30 days. Comite 
de Apoyo a los Trabajadores Agricolas v. Solis, 933 F. Supp. 2d 700 
(E.D. Pa. 2013) (CATA II).
    In response to the vacatur and 30-day compliance order in CATA II, 
DOL, together with DHS (the Departments),\8\ promulgated an interim 
final rule, Wage Methodology for the Temporary Non-Agricultural 
Employment H-2B Program, Part 2, 78 FR 24047 (Apr. 24, 2013) (2013 
IFR), establishing a new wage methodology. In the 2013 IFR, the 
Departments struck the phrase, ``at the skill level,'' from 20 CFR 
655.10(b)(2). As a result of the deletion of this phrase, the 
Departments now require that

[[Page 14453]]

prevailing wage determinations issued using the OES survey to be based 
on the mean wage for the occupation in the area of intended employment 
without tiers or skill levels. 78 FR at 24053. That revision became 
effective on April 24, 2013, the date of publication, because of the 
need to comply within the 30-day period ordered by the CATA II Court. 
The rule was published pursuant to 5 U.S.C. 553(b)(B), which authorizes 
agencies to make a rule effective immediately upon a showing of ``good 
cause.'' Significantly, however, the 2013 IFR only implemented the 
court-ordered change to the wage methodology but left intact all other 
provisions of the wage methodology contained in the 2008 rule, 
including allowing the use of employer-submitted surveys, and 
permitting voluntary use of the SCA or DBA wage if one was available 
for the occupation in the area of intended employment. Despite 
immediate implementation of the provisions of the 2013 IFR, the 
Departments requested comments on all aspects of the prevailing wage 
provisions of 20 CFR 655.10(b), including, among other things, whether 
the OES mean is the appropriate basis for determining the prevailing 
wage; whether wages based on the DBA or SCA should be used to determine 
the prevailing wage, and if so, to what extent; and whether the 
continued use of employer-submitted surveys should be permitted and if 
so, how to strengthen their methodology. The comment period closed on 
June 10, 2013, and the Departments received over 300 comments on all 
aspects of the H-2B wage methodology from interested parties.
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    \8\ The Departments issued the 2013 IFR jointly to dispel 
questions that arose contemporaneously with its promulgation 
regarding the respective roles of the two agencies and the validity 
of DOL's regulations as an appropriate way to implement the 
interagency consultation specified in section 214(c)(1) of the INA, 
8 U.S.C. 1184(c)(1). See Bayou Lawn & Landscape Servs. v. Sec'y of 
Labor, 713 F.3d 1080 (11th Cir. 2013) (concluding that plaintiffs 
are likely to prevail on their allegation that the Department of 
Labor lacks independent rulemaking authority under the INA to issue 
legislative regulations implementing its role in the H-2B program). 
However, the Bayou ruling involved only a decision on whether the 
district court's entry of a preliminary injunction against 
implementation of DOL's H-2B rule based on an assessment of 
plaintiffs' likelihood of success on the merits was without error, 
and was not a final judgment on the merits of plaintiffs' claim that 
DOL is without authority to promulgate legislative rules in the H-2B 
program. The latter issue is currently before the district court 
awaiting decision on pending motions for summary judgment. In sharp 
contrast to the Bayou case, in an APA challenge to the 2011 Wage 
Rule, which also tested DOL's authority to issue legislative rules 
in the H-2B program, the U.S. Court of Appeals for the Third Circuit 
held recently that ``DOL has authority to promulgate rules 
concerning the temporary labor certification process in the context 
of the H-2B program, and that the 2011 Wage Rule was validly 
promulgated pursuant to that authority.'' La. Forestry Ass'n v. 
Perez, -- F.3d ---, 2014 WL 444157, at *11 (3d Cir. Feb. 5, 2014); 
see also G.H. Daniels & Assocs., Inc. v. Solis, 2013 WL 5216453, *4-
5 (D. Colo. Sept. 17, 2013) (DOL has authority to issue H-2B 
legislative rules), appeal pending, No. 13-1479 (10th Cir.).
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    On July 23, 2013, DOL proposed the indefinite delay of the 
effective date of the 2011 Wage Rule, and accepted comments from the 
public on the proposed indefinite delay through August 9, 2013. 78 FR 
44054. The reasons for this delay were two-fold: First, at that time, 
implementation of the 2011 Wage Rule was still effectively made 
impossible by Congress's continued refusal to appropriate funding for 
this purpose, with no indication that the prohibition on the use of 
appropriated funds would be lifted in the future. Second, at that time, 
the Departments were reviewing and analyzing the comments received on 
the 2013 IFR to determine whether changes to 20 CFR 655.10(b) were 
warranted in light of the public comments. For these two reasons, on 
August 30, 2013 DOL published a final rule indefinitely delaying the 
effective date of the 2011 Wage Rule. 78 FR 53643, 53645 (indefinite 
delay rule). In the final indefinite delay rule, DOL stated that when 
``Congress no longer prohibits implementation of the 2011 Wage Rule, 
the Department [of Labor] will publish a document in the Federal 
Register within 45 days of that event apprising the public of the 
status of 20 CFR 655.10 and the effective date of the 2011 Wage Rule.'' 
Id. DOL also stated that, ``if Congress lifts the prohibition against 
implementation of the 2011 Wage Rule, the Department [of Labor] would 
need time to assess the current regulatory framework, to consider any 
changed circumstances, novel concerns or new information received, and 
to minimize disruptions.'' 78 FR at 53645.
    On January 17, 2014, the Consolidated Appropriations Act, 2014, 
Public Law 113-76, 128 Stat. 5, was enacted. For the first time in over 
two years, DOL's appropriations did not prohibit the implementation or 
enforcement of the 2011 Wage Rule. Moreover, on February 5, 2014, the 
Third Circuit Court of Appeals held that ``DOL has authority to 
promulgate rules concerning the temporary labor certification process 
in the context of the H-2B program, and that the 2011 Wage Rule was 
validly promulgated pursuant to that authority.'' La. Forestry Ass'n v. 
Perez, -- F.3d --,2014 WL 444157, at *11 (3d Cir. 2014). The Third 
Circuit further found that DOL did not act in contravention of the 
procedural requirements of the APA in issuing the 2011 Wage Rule, and 
that the INA's requirement of the four wage tiers in the H-1B program, 
8 U.S.C. 1182(p)(4), applies only to that program and is not mandated 
in the H-2B program. Id. at *17-20.
    DOL is now ``free to take any steps deemed necessary to implement, 
administer and enforce the regulations.'' See Am. Fed'n of Gov. 
Employees v. OPM, 821 F.2d 761, 764 (D.C. Cir. 1987). Accordingly, as 
described below, DOL intends to engage in further notice and comment 
rulemaking in order to move toward implementing, subject to 
modifications based on the notice and comment, the 2011 Wage Rule.
    With the appropriations rider pertaining to the 2011 Wage Rule 
having been lifted, the Department has begun the process of determining 
how to implement that rule, keeping in mind the overlap between that 
rule and the comments submitted in connection with the 2013 IFR. DOL 
has determined that recent developments in the H-2B program require 
consideration of the comments submitted in connection with the 2013 
IFR, and that further notice and comment is appropriate. As stated in 
the preamble to the 2011 Wage Rule (76 FR 3458-61), and the preamble to 
the 2013 IFR (79 FR 24053-54), DOL will continue to implement the H-2B 
wage methodology using the OES mean wage rate as the proper baseline 
for setting prevailing wage rates. DOL continues to evaluate other 
policy choices, including the possible use of SCA and DBA wage rates 
and private surveys, in light of additional public input and program 
experience. After receiving and reviewing this information, DOL intends 
to exercise its rulemaking authority to implement a regulation 
governing the wage methodology in the H-2B program, modified as 
necessary to accommodate these developments and considerations.
    Therefore in light of the current regulatory landscape and in 
response to Congress's recent actions, as well as judicial decisions, 
DOL intends to publish a notice of proposed rulemaking on the proper 
wage methodology for the H-2B program, working off of the 2011 Wage 
Rule as a starting point. Until such time as DOL finalizes a new wage 
methodology, the current wage methodology contained in 20 CFR 
655.10(b), as set by the 2013 IFR, will remain unchanged and continue 
in effect. We will consolidate our current review of comments on the 
2013 IFR with review of comments received on the new notice of proposed 
rulemaking, and will issue a final rule accordingly.

    Signed: at Washington, DC, this 10th of March, 2014.
Eric M. Seleznow,
Acting Assistant Secretary for Employment and Training.
[FR Doc. 2014-05589 Filed 3-12-14; 11:15 am]
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