Federal Court set aside the DOL wage hike rule and the DHS rule revising the specialty occupation and the employer-employee definitions

December 1, 2020
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The U.S District Court, Northern District of California, in the matter of Chamber of Commerce v. DHS, has set aside the interim rule by the Department of Labor increasing the H-1B wages.   The court also set aside the DHS regulations that were set to take effect on December 8, 2020, wherein the DHS is revising the regulatory definition of and standards for a “specialty occupation” and revising the definition of “United States employer”; and limiting the validity period for third-party placement petitions to a maximum of 1 year.   October 8, 2020, the U.S. Department of Labor (DOL) published an interim final rule, entitled “Strengthening Wage Protections for the Temporary and Permanent Employment of Certain Aliens in the United States,” that changes how prevailing wages are calculated. This applies to foreign national workers in H1B, H1B1, and E-3 status. It also applies to prevailing wage determinations issued by the DOL for PERM labor certifications. The rule went into effect immediately without the Notice and Comment requirement under the Federal Regulations.  However, many organizations challenged the legality of the interim rule, and the U.S District Court, Northern District of California has found that the DOL failed to show that there was a good cause to dispense with the rational and thoughtful discourse that is provided by the APA’s notice and comment requirement. The court mentioned that the good cause exception to notice and comment is “narrowly construed” and “reluctantly countenanced.” Defendants must “overcome a high bar” to show good cause exists for dispensing with notice and comment. “Good cause” usually is invoked in the event of emergencies, where “delay would do real harm to life, property, or public safety.” “Good cause cannot arise as a result of the agency’s own delay.”  Plaintiff argued that although both agencies cited to “skyrocketing” and “widespread” unemployment rates as a basis to find “immediate” action was necessary, they did not do so for over six months.   The DOL will take a couple of days to make changes to the OFLC database to reflect the wages prior to the implementation of the wage hike rule.  At this point, it is not sure if the DOL/DHS will appeal the summary judgment.  The judgment applies universally and not just to the parties to the litigation.
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