[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