[Federal Register Volume 85, Number 50 (Friday, March 13, 2020)]
[Notices]
[Pages 14706-14711]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-05205]


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DEPARTMENT OF LABOR


Withdrawal of Notice of Intent To Issue a Declaratory Order

AGENCY: Office of the Secretary.

ACTION: Notice of withdrawal.

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SUMMARY: For legal, programmatic, and prudential reasons, the 
Department of Labor, through the Office of the Secretary of Labor, is 
withdrawing its December 17, 2014 Notice of Intent to Issue a 
Declaratory Order.

DATES: This Withdrawal Notice is effective March 9, 2020.

SUPPLEMENTARY INFORMATION:

I. Introduction

    The Department of Labor (the Department or DOL), through the Office 
of the Secretary of Labor and pursuant to 5 U.S.C. 554(e), is 
withdrawing its December 17, 2014 Notice of Intent to Issue a 
Declaratory Order, 79 FR 75,179 (Dec. 17, 2014) (Notice of Intent). The 
Notice of Intent proposed to overrule the Board of Alien Labor 
Certification Appeals' (BALCA) decision in Island Holdings, 2013-PWD-
00002 (BALCA Dec. 3, 2013) (en banc), through an adjudicatory 
proceeding that would result in a declaratory order issued under 5 
U.S.C. 554(e). Island Holdings is among the roughly 1,050 
administrative appeals that have been pending before DOL's National 
Prevailing Wage Center (NPWC) since 2013, and that challenge DOL's 
issuance of supplemental prevailing wage determinations (SPWDs) to 
certain H-2B employers (the 2013 SPWDs).
    Although the Notice of Intent was published over five years ago, 
and concerned the wages of temporary workers from more than a year 
before that, the Department never issued the proposed declaratory 
order. The Notice of Intent has left interested parties under a cloud 
of uncertainty, and the passage of time has reduced the feasibility of 
compliance with and enforcement of the 2013 SPWDs. The Department is 
now withdrawing the Notice of Intent to provide certainty and finality, 
and to implement the resolution that best accords with the regulatory 
framework and relevant policy and programmatic considerations.
    The Department's decision follows careful consideration of the 
applicable law and the impact of the various options on both U.S. and 
H-2B workers, employers, and administration of the H-2B labor 
certification program itself. The Department concludes that (1) 
issuance of the proposed Section 554(e) declaratory order would not be 
appropriate under the circumstances and the relevant regulations; (2) 
on the merits, Island Holdings is well-reasoned and reflects the better 
view of the law; and (3) prudential and programmatic considerations 
weigh in favor of withdrawing the Notice of Intent and accepting the en 
banc Island Holdings ruling.

II. Regulatory And Procedural Background 1
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    \1\ The relevant background has been summarized on multiple 
occasions. See, e.g., Notice of Intent, 79 FR at 75,180-83; Island 
Holdings at 2-7; Comit[eacute] de Apoyo a los Trabajadores 
Agr[iacute]colas (CATA) v. Perez, 46 F. Supp. 3d 550, 556-59 (E.D. 
Pa. 2014) (CATA III); CATA v. Solis, 933 F. Supp. 2d 700, 703-09 
(E.D. Pa. 2013) (CATA II); La. Forestry Ass'n, Inc. v. Sec'y of 
Labor, 889 F. Supp. 2d 711, 715-19 (E.D. Pa. 2012).
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A. Regulatory Background 2
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    \2\ This section summarizes and cites the statutory and 
regulatory provisions as they existed at the time relevant to the 
SPWD administrative appeals. This is not intended to serve as a 
summary of the current law or its interpretation.
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    A prospective H-2B employer must obtain a temporary labor 
certification (TLC) from the Employment and Training Administration's 
(ETA) Office of Foreign Labor Certification (OFLC). 8 CFR 
214.2(h)(6)(iii)(A). Through the TLC, DOL advises the Department of 
Homeland Security (DHS) that U.S. workers capable of performing the 
temporary services or labor sought by the employer are not available 
and that H-2B workers' employment will not adversely affect the wages 
and working conditions of similarly employed U.S. workers. Id.; see 
also 8 U.S.C. 1182(a)(5)(A)(i)(I)-(II). To that end, a TLC may issue 
only if U.S. workers are not available to fill the given position at 
what OFLC determines to be the ``prevailing wage.'' See 20 CFR 655.10 
(2012).\3\
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    \3\ Citations to Title 20 of the 2012 edition of the Code of 
Federal Regulations are to those provisions in effect when that 
edition was published, and such citations reference provisions 
promulgated in 2008, see 73 FR 78,020 (Dec. 19, 2008). The 2012 
edition separately included, for convenience, provisions associated 
with a rulemaking that had not yet gone into effect and, as 
discussed infra, never did.
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    Prevailing wages are designed to ensure that jobs are advertised 
and offered to U.S. workers at a wage reflective of the local economy 
and to prevent employers from undercutting U.S. workers' wages. A 
would-be H-2B employer initiates the process by requesting and 
obtaining a prevailing wage determination (PWD) from OFLC. Id. Sec.  
655.10(a).\4\ The employer must then recruit U.S. workers for the job 
opportunity by advertising and offering the position at that prevailing 
wage or higher. Id. Sec. Sec.  655.10(a)(3), 655.15. The wage used in 
this recruitment is known as the ``offered wage.''
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    \4\ OFLC sets a validity period for each PWD, which is at 
minimum three months and at maximum twelve months. Id. Sec.  
655.10(d). The validity period dictates when an employer may begin 
the recruitment process or file its TLC application, id. Sec.  
655.10(a)(2), but does not govern the time period in which the 
employer is required to offer and pay the prevailing wage.
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    If, after these domestic recruitment efforts, an employer still has 
unmet labor needs, it applies for a TLC. Id. Sec. Sec.  655.15(a), 
655.20(a). The employer agrees to abide by certain conditions, 
including to pay workers the offered wage, which cannot be lower than 
the PWD rate, ``during the entire period of the approved H-2B labor 
certification.'' Id. Sec.  655.22(e); see also id. Sec.  655.10(d) (the 
PWD applies ``for the duration of'' a given certified H-2B employment). 
The employer also attests that it will not offer H-2B workers more 
favorable wages than those it offered to U.S. workers. Id. Sec.  
655.22(a). After obtaining a TLC, an employer petitions DHS to

[[Page 14707]]

employ H-2B workers for the duration and conditions specified in the 
TLC. 8 CFR 214.2(h)(6)(iii)(A). DOL's Wage and Hour Division (WHD), as 
necessary, investigates and brings enforcement actions for violations 
of the employer's obligations.
    An employer who disputes a PWD may seek review by NPWC. 20 CFR 
655.10(g) (2012). If still dissatisfied, the employer may seek review 
by the NPWC Center Director. Id.; see also id. Sec.  655.11(a)-(d). As 
a final avenue of administrative review, the employer may appeal the 
Center Director's decision to BALCA, and the resulting decision 
represents ``the final administrative decision of the Secretary.'' \5\ 
Id. Sec.  655.11(e); 29 CFR 18.58 (2012).\6\ If an employer declines to 
pursue review at any of these stages, it is deemed to have acquiesced 
to the PWD or to the most recent administrative decision.
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    \5\ The BALCA consists of administrative law judges (ALJs) 
within DOL assigned to review certain decisions pertaining to DOL's 
foreign labor certification programs. See, e.g., 52 FR 11,217, 
11,218 (Apr. 8, 1987).
    \6\ This provision has since been slightly modified to provide 
that BALCA's decision in this context constitutes the ``Secretary's 
final administrative decision.'' 29 CFR 18.95 (2019).
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B. Procedural Background

1. CATA I And The 2011 Rule
    In 2008, DOL set forth a methodology via rulemaking for calculating 
prevailing wages in the H-2B program (the 2008 Methodology) that became 
the subject of a multi-year litigation. In a 2010 court decision in 
that case, the 2008 Methodology was invalidated on procedural grounds. 
CATA v. Solis, Civ. No. 09-240, 2010 WL 3431761, at *19 (E.D. Pa. Aug. 
30, 2010) (CATA I). Citing the disruption that would result if DOL 
could not use the methodology, the court allowed it 120 days to 
``promulgate new, valid regulations for determining the prevailing wage 
rate.'' Id. DOL lawfully continued to use the invalidated 2008 
Methodology as it worked to issue a new rule.
    Plaintiffs next sought to prohibit DOL from issuing any TLC unless 
the employer agreed to comply with an SPWD resulting from any changes 
in the methodology in the forthcoming rule. CATA v. Solis, Civ. No. 09-
240, 2010 WL 4823236, at *1 (E.D. Pa. Nov. 24, 2010). The Department 
responded that such relief would force it to violate its own 
regulations, under which the PWD was in effect ``for the duration of 
employment.'' Id. at *1-2 (quoting 20 CFR 655.10(d)). The court held 
that it lacked the authority to grant plaintiffs' request. It explained 
that ``[u]nder plaintiffs' proposed relief, every H-2B employer who 
received a conditional labor certification would have to obtain [an 
SPWD] after DOL issued revised wage regulations'' and that the court's 
equitable authority did not extend to requiring DOL to undergo such 
``extensive administration and management.'' Id. at *3. Nevertheless, 
the court stated in dicta that DOL's interpretation of the regulations 
was erroneous and that nothing precluded DOL from issuing such 
conditional labor certifications as an ``interim measure[ ].'' Id. at 
*1-2.
    On January 19, 2011, DOL promulgated a rule containing a new 
prevailing wage methodology (the 2011 Rule). 76 FR 3,452 (Jan. 19, 
2011). In conjunction with this new rule and in anticipation of it 
going into effect, DOL conditioned TLCs on an employer's agreement to 
later receive and comply with an SPWD calculated under the 2011 Rule's 
methodology. 76 FR 21,036 (Apr. 14, 2011). To implement this change, 
DOL amended ETA's Form 9142 to contain an attestation in which the 
employer agreed to pay at least the prevailing wage rate that ``is or 
will be issued by'' DOL. Id.; Form 9142, Appendix B.1 Sec.  B(5).
    The 2011 Rule never went into effect due to litigation and to 
congressional appropriations riders blocking the use of funds for its 
implementation, administration, or enforcement. See 78 FR 24,047, 
24,052 (Apr. 24, 2013). Despite its connection to the blocked 2011 
Rule, the 2011 attestation remained on the Form 9142.
2. CATA II, The Interim Final Rule, And The 2013 SPWDs
    Since the 2011 Rule never went into effect, DOL continued to use 
the 2008 Methodology. The CATA plaintiffs again sought invalidation of 
the methodology and a permanent injunction barring its use. CATA II, 
933 F. Supp. 2d at 709. On March 21, 2013, the court held that not only 
did the procedures by which the 2008 Methodology was adopted violate 
the APA, as ruled in CATA I, but also that the substance of the 
Methodology conflicted with the APA's requirement of reasoned decision-
making. Id. at 710-13. Specifically, the court said that the 2008 
Methodology resulted in TLCs that did not comply with the statutory and 
regulatory mandate that DOL ensure H-2B workers' employment will not 
adversely affect similarly employed U.S. workers' wages. Id. at 711-13. 
In reaching this conclusion, the court relied on DOL's statement in the 
preamble to the 2011 Rule (a rule that never took effect) that the 2008 
Methodology set artificially low wage rates that harmed U.S. workers. 
Id. The court vacated the 2008 Methodology and allowed the Department 
thirty days to ``come into compliance.'' Id. at 716.
    After CATA II, OFLC immediately ceased issuing PWDs in the H-2B 
program based on the 2008 Methodology. 78 FR 19,098, 19,099 (Mar. 29, 
2013). On April 24, 2013, DHS and DOL issued an interim final rule 
(IFR) revising the methodology. 78 FR 24,047 (Apr. 24, 2013). The IFR's 
methodology generally resulted in higher prevailing wages than under 
the 2008 Methodology, id. at 24,058 (estimating as much as a $2.12 
increase in the weighted average hourly rate), and was effective 
immediately, id. at 24,055. OFLC resumed processing pending H-2B 
requests for PWDs using the new methodology.
    The IFR's preamble also suggested something more: it stated that H-
2B employers who had already received PWDs would be issued SPWDs, 
calculated under the new methodology--including employers who had 
already received TLCs and were currently employing H-2B workers. Id. at 
24,055-56. The preamble explained that the employers' obligation to pay 
wages consistent with these SPWDs derived from CATA II and the Form 
9142 attestation to offer and pay the most recent prevailing wage 
issued by DOL. Id. at 24,055. The IFR itself, however, modified only 
the regulatory text setting forth the prevailing wage methodology. It 
did not alter the text under which PWDs and offered wages apply 
throughout the certified employment.
    On April 25, 2013, DOL clarified in a ``frequently asked 
questions'' document that employers would be ``required to offer and 
pay'' at a minimum the SPWD wage rate ``for any work performed on and 
after the date the employer receives the supplemental determination'' 
(SPWD Notice).\7\ Thus, the SPWD rates would apply to the remaining 
work performed in conjunction with the employers' TLCs for the 2013 
season. Notably, the SPWD Notices did not require employers to reopen 
or conduct additional recruitment of U.S. workers at the SPWD rate.
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    \7\ Frequently Asked Questions, Interim Final Rule, Wage 
Methodology for the Temporary Non-Agricultural Employment H-2B 
Program, Part 2, at 2 (ETA, OFLC Apr. 25, 2013), https://www.foreignlaborcert.doleta.gov/pdf/faq_final_rule_april_2013.pdf.
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    DOL completed issuance of SPWD Notices on August 12, 2013.\8\ See 
79 FR

[[Page 14708]]

at 75,181. In each Notice, DOL informed the employer that it could seek 
redetermination of the SPWD.
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    \8\ This included issuance of SPWDs to employers, who (i) had 
already received a TLC and were currently employing H-2B workers; 
(ii) had received a TLC and had an H-2B petition pending at DHS; and 
(iii) had completed recruitment of U.S. workers and had a TLC 
application pending at OFLC. See Defs.' Mem. ISO Mot. for a 
Protective Order at 5, CATA v. Perez, Civ. No. 09-240 (E.D. Pa.), 
ECF No. 189-1 (Protective Order Mot.) (detailing the categories). 
Because of the manner in which H-2B case files are maintained by 
DOL, it would be exceptionally difficult and time-consuming--and 
potentially impossible--to determine, seven years after the fact, 
which employers fell into each of these three groups and the scope 
of worker positions impacted.
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    Employers filed more than 1,400 requests for NPWC redetermination. 
See Protective Order Mot. at 5. Because an SPWD is not a final agency 
action until the employer has exhausted all administrative review and 
appeal processes, an appealing employer does not have an obligation to 
comply with the SPWD unless or until the SPWD is affirmed at the 
conclusion of this review and appeal.
3. The Island Holdings Administrative Appeal and CATA III
    Before CATA II and publication of the IFR, OFLC had granted Island 
Holdings, LLC (Island Holdings) three TLCs for the 2013 season. Island 
Holdings at 6. The TLCs were premised on PWDs calculated under the 2008 
Methodology and certified employment dates going into November 2013. 
Id.; 79 FR at 75,181. On May 6, 2013, Island Holdings received SPWD 
Notices for each of its TLCs setting forth prevailing wages higher than 
those in its PWDs. Island Holdings at 6-7. On May 23, 2013, Island 
Holdings filed an administrative appeal to BALCA arguing, inter alia, 
that DOL lacked authority to issue SPWDs in the manner contemplated in 
the IFR's preamble. See 79 FR at 75,181.
    At this time, the number of requests for NPWC and Center Director 
review of the 2013 SPWDs was rapidly rising and had resulted in an 
extraordinarily high case volume. It was apparent that a global 
resolution of the legal issues presented by these administrative 
appeals would be instrumental to the appeals' fair and expeditious 
resolution. Thus, on June 6, 2013, DOL requested that BALCA hear Island 
Holdings' three combined appeals en banc, explaining that the argument 
that DOL lacked authority to issue the 2013 SPWDs presented ``a matter 
of exceptional importance which could impact a significant number of 
additional cases . . . .'' Certifying Officer's Request for En Banc 
Consideration, at 1-2, Island Holdings, 2013-PED-00002. BALCA's en banc 
review was expected and intended to (i) address the question of DOL's 
authority to issue the SPWDs and (ii) serve as a bellwether decision 
that would impact DOL's adjudication of the other SPWD administrative 
appeals presenting this question. After a brief remand to the NPWC, 
which relied on the IFR's preamble to affirm the SPWDs, the case became 
ripe for BALCA's consideration. 79 FR at 75,181.
    On December 3, 2013, the en banc BALCA unanimously ruled to vacate 
Island Holdings' SPWDs. Island Holdings at 15. BALCA held that DOL 
lacked the authority to issue SPWDs where it had already approved and 
issued a TLC based on the 2008 Methodology. BALCA concluded that 
nothing in DOL's regulations contemplated the issuance of the 2013 
SPWDs, id. at 11-12, and it rejected DOL's argument that CATA II 
required DOL to issue them, id. at 14. Moreover, BALCA held that the 
relevant attestation on the Form 9142 could not serve as the authority 
to issue the 2013 SPWDs, since it lacked a foundation in the regulatory 
text. Id. at 12-14. Pursuant to DOL's regulations, this decision 
constituted ``the final administrative decision of the Secretary.'' 29 
CFR 18.58 (2012).\9\
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    \9\ Despite BALCA's remand to the NPWC with instructions to 
vacate the SPWDs issued to Island Holdings, NPWC has yet to do so. 
See CATA III, 46 F. Supp. 3d at 562.
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    On December 20, 2013, after the CATA plaintiffs filed a new 
lawsuit, OFLC stayed further action on all pending SPWD administrative 
appeals. See CATA III, 46 F. Supp. 3d at 557. Plaintiffs asked the 
district court to set Island Holdings aside, arguing that BALCA, which 
is composed of ALJs, exceeded its authority by overruling the Secretary 
on issues of law and policy. Id. at 555. In tension with its prior 
representation when requesting en banc BALCA review, DOL stated that 
Island Holdings merely ``represents a resolution of that individual 
case''; ``BALCA's decision does not represent the legal position of the 
Secretary of Labor,'' DOL said. Id. (citation omitted). On July 23, 
2014, the court dismissed plaintiffs' complaint on standing and 
ripeness grounds. Id. at 560-64. Despite this holding, OFLC continued 
to stay the SPWD administrative appeals.
4. Notice of Intent To Issue a Declaratory Order
    Nearly a year after OFLC stayed the SPWD administrative appeals, on 
December 17, 2014, the Office of the Secretary published the Notice of 
Intent proposing to overrule Island Holdings through a declaratory 
order issued under 5 U.S.C. 554(e), which would ``reaffirm the 
Secretary's interpretation of the regulations, as stated in the 
preamble to the IFR.'' 79 FR at 75,183. Section 554(e) of the APA 
provides that an ``agency, with like effect as in the case of other 
orders, and in its sound discretion, may issue a declaratory order to 
terminate a controversy or remove uncertainty.'' 5 U.S.C. 554(e). While 
Section 554(e) declaratory orders have issued infrequently in the APA's 
history, agencies have used them in the past to, for example, interpret 
the agency's governing statute or its own regulations, define terms of 
art, clarify whether a matter falls within federal regulatory 
authority, or address questions of preemption.\10\ The Department of 
Labor does not appear to have ever issued a Section 554(e) order, nor 
to have used such an order to reverse an agency action that--under 
Departmental regulations--constituted ``the final . . . decision of the 
Secretary,'' 29 CFR 18.58 (2012).
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    \10\ Emily S. Bremer, The Agency Declaratory Judgment, 78 Ohio 
St. L.J. 1169, 1203-04 (2017).
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    During his more than two remaining years in office, Secretary 
Thomas E. Perez never issued the declaratory order he had proposed. The 
roughly 1,050 remaining requests for NPWC review or Center Director 
review (collectively the SPWD administrative appeals) have remained 
stayed.\11\ On June 24, 2019, five former H-2B workers filed a 
complaint alleging that DOL's failure to give effect to the 2013 SPWDs 
or resolve their former employers' SPWD administrative appeals 
constitutes an unreasonable delay and is arbitrary and capricious under 
the APA. Calixto v. Scalia, Civ. No. 19-1853 (D.D.C.).
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    \11\ Employers filed over 1,400 SPWD administrative appeals. Of 
these, roughly 1,050 were still pending when Island Holdings issued 
and were stayed by OFLC. The other approximately 350 appeals were 
either rejected for late submission or had already been resolved at 
the NPWC review level and the employers had acquiesced by declining 
to seek Center Director review.
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    Roughly five years after the issuance of the Notice of Intent, six 
years after the appeals were stayed, and almost seven years since the 
year of temporary employment at issue, it is time for the Department to 
bring a resolution to this matter.

III. The Department Will Not Issue a Declaratory Order

    The Department has determined not to engage in an APA Section 
554(e) adjudication or to issue the proposed declaratory order. 
Existing DOL regulations, unlike the regulations of some agencies, do 
not contemplate such orders or provide procedures for their

[[Page 14709]]

issuance. Indeed, DOL's regulations provide no mechanism at all for a 
Department official to review BALCA decisions regarding H-2B prevailing 
wage determinations, stating instead that the ``decision of [BALCA] 
shall become the final administrative decision of the Secretary.'' 29 
CFR 18.58 (2012); see also 29 CFR 18.95 (2019). There appears to be no 
precedent, at any federal agency, for using a Section 554(e) order in 
circumstances like these.
    This is not to say that it is appropriate for BALCA to have the 
unreviewable final say on questions of law and policy presented to the 
Department. Indeed, in order to establish a defined procedural 
mechanism for review of decisions of ALJs, the Department recently 
proposed changes to its regulations to provide for discretionary 
Secretarial review of BALCA decisions in the H-2A, CW-1, and PERM 
programs. See 85 FR 13,024 (Mar. 6, 2020). DOL and DHS also intend to 
jointly issue a separate proposed rule regarding the Secretary's review 
authority over BALCA decisions in the H-2B program.\12\ See id. at 
13,026.
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    \12\ The Department would not attempt to exercise this new 
discretionary review authority to reverse BALCA decisions applying 
Island Holdings to the 2013 SPWDs, in light of the passage of time 
and the factors addressed below, among other considerations.
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IV. For Legal, Prudential, and Programmatic Reasons, the Department 
Will Accept the Decision in Island Holdings

    Even if there were an appropriate procedural mechanism to do so, 
the Department will not overrule Island Holdings. BALCA's decision--and 
not the Notice of Intent--sets forth the better view of law as to the 
2013 SPWDs. Permitting Island Holdings to remain ``the final 
administrative decision of the Secretary,'' 29 CFR 18.58 (2012), is 
also more consistent with programmatic, policy, and prudential 
considerations.

A. Island Holdings Represents the Better View of the Law

1. The 2013 SPWDs Were Inconsistent With DOL's Regulations
    DOL's regulations did not contain any express provisions regarding 
calculating, issuing, or complying with SPWDs. To the contrary, the 
regulations provided that the original PWD ``shall apply and shall be 
paid . . . at a minimum, for the duration of employment,'' 20 CFR 
655.10(d) (2012), id. Sec.  655.20(f), and that employers agree to pay 
the wage offered to U.S. workers in recruitment (which could not be 
lower than the prevailing wage) ``during the entire period of the 
approved H-2B labor certification,'' id. Sec.  655.22(e); Island 
Holdings at 8-10. As BALCA noted, the requirement to continue paying 
the offered wage throughout the employment is part of an employer's 
obligation to offer to U.S. workers wages ``not less favorable than 
those offered to the H-2B workers.'' Island Holdings at 11 (citing 20 
CFR 655.22(a)). An employer could not agree to, or comply with, this 
obligation if DOL could raise PWDs during the certified employment.\13\
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    \13\ This does not mean that DOL could have never issued an SPWD 
under the regulations as they existed at the time. There may have 
been instances where doing so would have been appropriate, such as 
to correct an inadvertent error in a PWD, rather than for purposes 
of programmatic administration of the H-2B program.
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    This is consistent with DOL's longstanding interpretation of the 
regulations and with its historical practice.\14\ Before 2013, DOL had 
never imposed new prevailing wage rates on employers during the course 
of the employment. DOL only departed from this interpretation to issue 
and justify the 2013 SPWDs, relying on dicta from the CATA court.\15\ 
See, e.g., Notice of Intent, 79 FR at 75,182. DOL now returns to the 
best reading of its own regulations.
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    \14\ See, e.g., Defs.' Response in Opp. to Mot. for Additional 
Relief, CATA v. Solis, Civ. No. 09-240, 2010 WL 4823236 (Nov. 24, 
2010) (E.D. Pa.), ECF No. 89.
    \15\ See CATA v. Solis, Civ. No. 09-240, 2010 WL 4823236, at *2-
3 (E.D. Pa. Nov. 24, 2010). The CATA plaintiffs had not challenged 
these portions of the regulations. They were only at issue because, 
as DOL interpreted them, they precluded the additional relief the 
plaintiffs requested--relief the court held it was powerless to 
grant. Id. at *3.
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    Under these circumstances, neither the IFR's preamble nor the Form 
9142 attestation could have served as authority to issue the 2013 
SPWDs. Island Holdings at 11-14. The IFR's preamble described DOL's 
intent to issue the SPWDs, but a preamble cannot impose legal 
obligations that contradict the regulatory text. Id. at 12 (citing 
Nat'l Wildlife Fed'n v. EPA, 286 F.3d 554, 569-70 (DC Cir. 2002)). 
Likewise, the regulations do not support adjusting the prevailing wage 
rate on the basis of an employer's attestation that it will pay the 
prevailing wage rate that ``is or will'' be issued.\16\ Doing so is 
also inconsistent with principles requiring proper notice to regulated 
parties of their legal obligations. Finally, the weight to be given to 
the attestation's language in this context is diminished further by the 
fact that the language was adopted in conjunction with the 2011 Rule, 
which was barred from taking effect.
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    \16\ This analysis is distinguished from instances in which (i) 
a preamble merely explains or clarifies language in the existing 
regulations in a manner consistent with--as opposed to in 
contradiction with--the regulatory text or (ii) an employer's 
attestation forms the basis of an enforcement action where the 
underlying attestation is supported--not contradicted--by the 
regulatory text.
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2. The 2013 SPWDs Were Inconsistent With the H-2B Labor Certification 
Program's Structure and Primary Purposes
    The H-2B program balances the need for temporary, seasonal foreign 
workers in certain industries against the need to protect U.S. workers' 
jobs, wages, and working conditions. As evidenced by their role in the 
labor certification process, H-2B prevailing wages are primarily 
intended to bolster the protection side of the equation. The 2013 SPWDs 
must be assessed in light of this structure and purpose.
    Ordinarily, PWDs safeguard U.S. workers in at least two important 
ways. First, they serve to require employers to recruit U.S. workers at 
a wage rate that is not artificially depressed by the importation of 
temporary foreign labor. The 2013 SPWDs never fulfilled this purpose 
because H-2B employers were not required to conduct additional 
recruitment of U.S. workers at the SPWD rate. Ordering employers to pay 
foreign H-2B workers a higher wage than they offered to U.S. workers in 
recruitment is inconsistent with the central purpose of the mandatory 
recruitment process. See Island Holdings at 14.
    Second, the employer's obligation to pay, at minimum, the PWD wage 
rate for the duration of the H-2B employment protects all similarly 
employed U.S. workers from wage depression. The delay resulting from 
the stay of more than 1,050 administrative appeals means that the SPWDs 
at issue in those actions will never have this impact on the wages of 
similarly employed workers. Had those SPWD wages been paid at the time 
the work was performed, these H-2B employers' competitors might have 
been pressured to raise wages in order to attract and retain workers. 
But now, seven years after their issuance, these SPWDs cannot serve 
this purpose.\17\
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    \17\ Ordinarily, the protective purpose of PWDs is also 
furthered by WHD's investigations and enforcement actions, including 
for back wages for both U.S. and H-2B workers. Such investigations 
and actions ensure H-2B employers comply with their obligations, 
including those obligations designed to protect U.S. workers. 
However, for the reasons set forth infra, enforcement of the 2013 
SPWDs would be neither feasible nor prudent.
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    By and large, then, U.S workers whose wages may have been depressed 
in 2013 would not benefit from now

[[Page 14710]]

affirming the 2013 SPWDs. By definition, H-2B employers' efforts to 
recruit U.S. workers were at best only partially successful, meaning 
that executing the Notice of Intent's plan would result in ordering 
back wages predominantly to H-2B workers.\18\ Creating an obligation to 
pay such back wages arguably protects those H-2B workers from 
substandard wages, but that is not the primary purpose of prevailing 
wages. The large disparity between the back wages that would be owed to 
H-2B and U.S. workers places the 2013 SPWDs in tension with the 
temporary labor certification program's predominant concerns of 
protecting the domestic workforce from wage depression and from 
preferential treatment of H-2B workers.
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    \18\ If employers did recruit any U.S. workers in conjunction 
with their H-2B applications, the SPWD Notices required them to pay 
those U.S. workers as well as the H-2B workers at least the SPWD 
wage rate for the remainder of the certified employment.
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3. CATA II Did Not Compel DOL To Issue the 2013 SPWDs
    Despite earlier suggestions by the Department to the contrary, CATA 
II did not require issuance of the 2013 SPWDs. Island Holdings at 14; 
see, e.g., 79 FR at 75,182 (speculating that ``the CATA court 
expected'' DOL to issue the SPWDs while acknowledging that CATA II 
might not have ``required'' it to do so). Far from ordering adjustment 
of PWDs already issued under the 2008 Methodology, the court spoke only 
to the likelihood of its order disrupting determinations to be made in 
the future. CATA II, 933 F. Supp. 2d at 715. Nor may such a directive 
in CATA II properly be inferred.\19\ CATA II did not revisit the 
court's previous rulings that (i) the court lacked power to order DOL 
to issue SPWDs and (ii) use of the 2008 Methodology had been 
permissible following CATA I.
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    \19\ DOL was not required to give CATA II retroactive effect by 
issuing the 2013 SPWDs. The applicable case law does not set a 
default requirement that agencies nullify actions undertaken 
pursuant to a rule before that rule is vacated. Council Tree 
Communc'ns, Inc. v. FCC, 619 F.3d 235, 257 (3d Cir. 2010) (declining 
to nullify certain auction results). Further, CATA II did not 
reinstate the status quo ante and instead necessitated promulgation 
of a new rule. Using a new rule to adjust actions taken before the 
rule issued is arguably in tension with the prohibition against 
retroactive rulemaking absent congressional authorization. See Bowen 
v. Georgetown Univ. Hosp., 488 U.S. 204, 208 (1988).
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B. Prudential and Programmatic Considerations Favor Accepting Island 
Holdings

    DOL has considered the effect that withdrawing the Notice of 
Intent, and allowing Island Holdings to remain the ``the final 
administrative decision of the Secretary,'' 29 CFR 18.58 (2012), will 
have on workers, both H-2B and U.S. DOL has also considered reliance 
interests and the impact that individually adjudicating the stayed SPWD 
administrative appeals would have on time-sensitive programs, likely 
for little practical benefit. These prudential and programmatic 
concerns weigh in favor of withdrawing the Notice of Intent.
1. Individually Adjudicating the Employer Appeals Would Disrupt 
Administration of Labor Certification Programs for Little Practical 
Benefit
    Overruling Island Holdings and leaving OFLC to individually 
adjudicate each of the roughly 1,050 pending SPWD administrative 
appeals relating to the 2013 employment season would drain significant 
DOL resources.\20\ This would substantially detract from the pursuit of 
other priorities and, in the end, would likely prove futile given that 
the passage of time has diminished employers' ability to comply with 
the 2013 SPWDs and WHD's preparedness to enforce them.
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    \20\ Even if the Secretary issued a declaratory order overruling 
Island Holdings and setting the policy for OFLC to apply to various 
arguments raised by employers challenging the 2013 SPWDs, OFLC would 
have to review each case file to determine which arguments a given 
employer raised and then draft an individualized opinion 
accordingly. Moreover, OFLC would have to address any arguments 
that, even if the 2013 SPWDs were valid, particular SPWDs were 
improperly calculated under the IFR's methodology. Application of 
Island Holdings avoids such individualized review and adjudication 
because its conclusion that the 2013 SPWDs were invalid may be 
uniformly applied to all the remaining requests for review of 2013 
SPWDs.
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    ETA estimates that notifying the employers, reviewing the case 
files, issuing Center Director opinions, processing BALCA requests, and 
taking BALCA-directed action could collectively take over two-and-a-
half years to complete.\21\ This work would impact OFLC's usual case-
processing tasks, including in time-sensitive programs. ETA's normal 
business lines would see an increase in processing times and backlogs, 
including during high-filing periods. For example, it currently takes 
on average 110 days to process prevailing wage determinations in the 
CW-1 and PERM programs, but that could increase to approximately 150 
days if, without acquiring new resources, ETA were tasked with 
individually adjudicating the SPWD administrative appeals.\22\
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    \21\ Specifically, ETA estimates that this work could occupy 706 
workdays and would require the use of four senior analysts, roughly 
half-time each. Such analysts have experience in, and are typically 
tasked with, making prevailing wage determinations for the H-2B, CW-
1, PERM, and H-1B programs.
    \22\ Processing times for H-2B prevailing wage requests, which 
are currently 30 days on average, would not be impacted due to 
regulatory requirements.
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    Even if the Department were to expend these considerable resources 
on the 2013 case files, there would likely be little practical benefit 
to doing so, given the significant obstacles that now exist to 
compliance and enforcement. There would be several hurdles to an 
employer's ability to now comply with the 2013 SPWDs by issuing back 
wages: The passage of time since the work at issue was performed; the 
fact that the regulations in place in 2013 had no requirement that 
employers retain the relevant employment records and therefore records 
are likely to have been lost or destroyed; and the difficulty of 
locating the relevant workers--most of whom, by definition, reside 
outside the United States and came here to work here temporarily. Were 
DOL, at this late date, to finalize the SPWDs at issue in the stayed 
administrative appeals, these and other factors would also present 
substantial barriers to enforcement. To be actionable, H-2B violations 
must be willful. 8 U.S.C. 1184(c)(14)(D) (prohibiting a ``willful 
failure to comply with the requirements of [the H-2B provisions] that 
constitutes a significant deviation from the terms and conditions of a 
petition''). It is questionable whether an employer's decision to 
adhere to an initial PWD, rather than to an SPWD judged unlawful in a 
``final'' decision of the Department, could properly be deemed 
``willful.'' Regardless, the practical obstacles to compliance 
described above would also pose serious challenges to proving the 
willfulness of any subsequent non-compliance. Indeed, the challenges 
presented by lost records, faded memories, and hard-to-locate workers 
are precisely the type of staleness concerns that underlie WHD's 
general policy of limiting its investigations to violations alleged to 
have taken place within the last two years. WHD Field Operations 
Handbook 76c03(a).
    In short, the Department has strong programmatic reasons to accept 
the ``final'' decision in Island Holdings, rather than expending 
thousands of work hours, in derogation of other responsibilities, to 
issue decisions that would be difficult ever to obey or enforce.

[[Page 14711]]

2. Prudential Considerations Do Not Warrant Issuing the Proposed 
Declaratory Order or Continuing To Contest Island Holdings
    The H-2B workers and U.S. workers recruited in connection with the 
appealing employers' H-2B applications understood their work would be 
temporary, and they accepted and performed the work at the offered 
wage. Although the 2013 SPWDs may have given them an initial expectancy 
of increased wages or back pay, those SPWDs subject to administrative 
appeals were properly challenged and never became final because the 
stay of the appeals prevented completion of administrative review. 
Island Holdings--a ``final decision'' of the Secretary--held the SPWDs 
were ultra vires, and no court has ever invalidated that holding. The 
Notice of Intent proposed overruling Island Holdings, but the Notice 
never progressed beyond a mere proposal. Five years have passed, and 
DOL never issued a final declaratory order overturning Island Holdings. 
In these circumstances, reliance on those SPWDs would not have been 
reasonable.
    On the other hand, many parties relied on the original PWDs before 
recruitment and hiring. Prior to 2013, DOL had never issued SPWDs, at 
least not on a large scale to all H-2B employers with then-extant TLCs. 
Nor did the text of DOL's regulations provide notice of the potential 
for SPWDs, much less specify the potential increase to wages. Further, 
the 2013 SPWDs were issued not only to employers who had yet to hire H-
2B workers, but also to employers already employing H-2B workers. Such 
employers had already paid the costs of recruiting workers, and would 
have had limited options for responding to the SPWDs' increased costs: 
H-2B workers, once employed, must be employed full-time; the employer 
must pay return transportation for H-2B workers dismissed earlier than 
scheduled; and the employer cannot lay off similarly employed U.S. 
workers. 20 CFR 655.22(h), (i), (m) (2012). And, while employers might 
have inferred from their Form 9142s that it was possible DOL would 
issue SPWDs, there was no notice that this would in fact occur, let 
alone notice of the amount or timing of the SPWD, or the methodology 
that DOL would use.

V. Conclusion

    For all the foregoing reasons, the Notice of Intent is withdrawn.

    Signed: at Washington, DC this 9th of March 2020.
Eugene Scalia,
Secretary of Labor.
[FR Doc. 2020-05205 Filed 3-12-20; 8:45 am]
 BILLING CODE 4510-HL-P