3.06.2014

Third Circuit Affirms Department of Labor’s Ability to Set Foreign Worker Wages

The Third Circuit Court of Appeals in Louisiana Forestry Association Inc., et al v. Oates, et al affirmed the Department of Labor’s ability to set wages for foreign guest workers. The ruling allows the Department of Labor (“DOL”) to regulate the minimum wage a U.S. employer can offer a foreign worker as part of the H-2B visa program. This program allows U.S. employers to recruit and employ non-skilled, non-agricultural foreign workers to fill positions that cannot be filled by American workers.

Under the current setup, an employer must receive a temporary labor certification from the DOL, which verifies that that no qualified American workers will take the job in question and that American workers will not be adversely affected by the employment of foreign workers. As part of this determination, the DOL will calculate a prevailing wage for the area of intended employment. Once this certification is issued, the employer must then file an application for an H-2B visa with the Department of Homeland Security (“DHS”), who has the ultimate authority to either deny or grant the visa petition. The rule governing the prevailing wage calculation, the 2011 Wage Rule, was at the heart of this litigation.

The 2011 Wage Rule was challenged by a group of associations representing employers who recruited workers under the H-2B visa program. The group’s arguments rested primarily on the contention that the DHS unlawfully sub-delegated its authority to the DOL as it related to the H-2B program. The group challenged the DOL’s authority to issue a rule regulating the calculation of minimum wage, as well as the rule’s compliance with both the Administrative Procedure Act and the Immigration and Nationality Act. Their arguments were rejected by the District Court for the Eastern District of Pennsylvania, and they subsequently appealed.

The Third Circuit held that, because the DHS conditioned its own granting of an H-2B visa on the DOL’s grant of a temporary labor certification, the wage rule in question was therefore issued pursuant to this “conditioning.” Essentially, the DOL has the power to issue rules as they relate to the grant of the temporary labor certification, even though the ultimate determination of an H-2B visa still rests with the DHS. Therefore, there was no unlawful sub-delegation, and the court declined to address any further authority issues.

Employers who hire H-2B employees will have to continue complying with the wage requirements established by the DOL during the H-2B process, and that could mean future increases in wages for the guest workers. The ruling ensures that U.S. workers have equal opportunity to apply for these jobs, that employers who do not hire H-2B guest workers but rely on U.S. workforce will not be under-bid, and that H-2B guest workers who come to the United States to work in what are often very physically demanding jobs, are not exploited.



Contact: Marcus Pringle
216.696.7077
mpringle@ralaw.com

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