United States – Court Invalidates DHS and DOL H-1B Program Rules

US – Court Invalidates DHS, DOL H-1B Program Rules

A federal district court has set aside new Department of Homeland Security (DHS) and Department of Labor (DOL) interim final rules affecting H-1B, H-1B1 and E-3 workers. The interim DOL and DHS rules were the subject of multiple court challenges and would have significantly impacted the ability of U.S. employers to employ and sponsor foreign talent in the H-1B, H-1B1, and E-3 visa categories.

1000
Chelsea Hseih

Partner, US Immigration, KPMG Law LLP

KPMG in Canada

Email
flash-alert-2020-481

A federal district court has set aside recent, controversial  Department of Homeland Security (DHS) and Department of Labor (DOL) interim final rules affecting H-1B, H-1B1 and E-3 workers. (For prior coverage on the interim rules and related court challenges see GMS Flash Alert 2020-424, 7 October 2020 and GMS Flash Alert 2020-438, 22 October 2020.)

On December 1, 2020, the U.S. District Court for the Northern District of California in Chamber of Commerce v. DHS found that the DHS’ interim final rule,  “Strengthening the H-1B Nonimmigrant Visa Classification Program,” and DOL interim final rule titled “Strengthening Wage Protections for the Temporary and Permanent Employment of Certain Aliens in the United States” were enacted in violation of standard federal rulemaking procedures.1

WHY THIS MATTERS

The interim DOL and DHS rules would have significantly impacted the ability of U.S. employers to employ and sponsor foreign talent in the H-1B, H-1B1, and E-3 visa categories. The DOL rule changed the method in which the agency computes prevailing wage levels, exponentially raising the minimum wages that must be paid to foreign workers with H-1B, H-1B1, and E-3 non-immigrant visa petitions. The DHS rule sought to tighten H-1B eligibility criteria by narrowing the definition of “specialty occupation,” decreasing the pool of occupations eligible for H-1B visa sponsorship. The DHS rule also sought to codify several new obligations on businesses who employ H-1B workers at secondary client locations.

Based on the court’s decision, which takes effect immediately, implementation and enforcement of the DOL and DHS rules have been halted. The DOL’s computation of prevailing wage levels is to return to pre-October 2020 methodology, and the DHS’ new policies affecting the H-1B program will most likely not take effect as scheduled on December 7, 2020.   

Court’s Decision

The court sided with the plaintiffs who argued that the DOL and DHS did not follow appropriate federal procedure when the agencies published the regulations without adequate notice or an opportunity for the public to provide feedback. While the government argued expedited implementation of the rules was necessary to alleviate the economic impacts of the COVID-19 pandemic, the court ultimately found that the DOL and DHS failed to adequately demonstrate good cause to exempt them from the standard rulemaking requirements of the Administrative Procedures Act. 

KPMG LAW LLP NOTE

The DOL and DHS are expected to appeal the court’s decision. KPMG Law LLP in Canada will continue to carefully follow the progress of the DOL and DHS rules, and will endeavor to keep GMS Flash Alert readers informed as developments occur.

FOOTNOTE

1  See Chamber of Commerce et al. v. DHS et al., Case No. 20-cv-07331-JSW (N.D. Cal, December 1, 2020).  https://www.courtlistener.com/docket/18552033/74/chamber-of-commerce-of-the-united-state-of-america-v-united-states/

*Please note that KPMG LLP (U.S.) does not provide any immigration services. However, KPMG Law LLP in Canada can assist clients with U.S. immigration matters.

 

The information contained in this newsletter was submitted by the KPMG International member firm in Canada.

SUBSCRIBE

To subscribe to GMS Flash Alert, fill out the subscription form.

© 2024 KPMG LLP, a Canada limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss entity. All rights reserved.

KPMG International Cooperative (“KPMG International”) is a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.

GMS Flash Alert is a Global Mobility Services publication of the KPMG LLP Washington National Tax practice. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

Connect with us

Stay up to date with what matters to you

Gain access to personalized content based on your interests by signing up today