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Department of Labor to Raise Prevailing Wage Rates for H-1Bs

On Tuesday, Jan. 12, 2021, the U.S. Department of Labor (DOL) finalized a rule that will raise the minimum wage that employers are required to pay skilled H-1B workers. The rule is scheduled to be published on Thursday, Jan. 14, 2021. Unless it is stopped by a federal court or by the Biden administration, these higher wage levels will be phased in over the 18-month period beginning July 1, 2021.

The new policy began as an interim final rule that took effect on October 8, 2020 and was halted by a federal court on December 1, 2020. This new rule is similar (but not identical) to the previous interim final rule.

The rule increases the minimum required pay for H-1B workers, but not by as much as the first attempt would have. It requires workers at each of the four wage levels to receive at least a certain percentile of the prevailing wage for that job type and location:

  • Workers at Level 1 (the lowest skill level) must receive at least the 35th percentile of the prevailing wage, up from current requirement of the 17th percentile.
  • Workers at Level 2 must receive at least the 53rd percentile of the prevailing wage, up from current requirement of the 34th percentile.
  • Workers at Level 3 must receive at least the 72nd percentile of the prevailing wage, up from current requirement of the 50th percentile.
  • Workers at Level 4 (the highest skill level) must receive at least the 90th percentile of the prevailing wage, up from the current requirement of the 67th percentile.

Again, these minimum salaries dictated in the final rule are not as high as those initially requested in October. The rule’s supporters claim that it protects American workers from being displaced by cheaper labor from abroad. They also claim that it is meant to prevent abuses in visa programs. Critics, however, see this new rule as yet another attempt by the Trump administration to undermine the H-1B visa program as whole.

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