There will be no Improvement in H-1B Wage Levels for the Next Two Years

Employers who sponsor H-1B jobs will be subject to the same pay laws and standards for the next almost two years. A staggered transition to the new wage levels (yet to be determined) will begin on January 1, 2023.

The US Department of Labor (DOL) has announced that it would prolong the delay of a regulation that would lift the prevailing wage rates for H-1B and green card holders – this law was scheduled to go into effect on May 14, 2021. (which itself was an extended date).

“According to the latest announcement, this deadline has been pushed back by 18 months, to November 14, 2022. Only in January 2023 will the transition period for adjusting to current wage levels begin in a staggered manner, “Mitchell Wexler, partner at Fragomen, a global immigration law firm, explains.

In its final days, the Trump administration released a regulation that raised salaries for H-1B jobs and green card holders across all four ability levels. However, a multi-year transition phase has been planned. The wage increase was not as drastic as that found in the previous interim final rule issued in October, which US district courts rejected because the public notice and comment conditions were not met.

According to the current regulation (which has been postponed), entry-level salaries for H-1B and PERM cases will rise to the 35th percentile of wages for the profession and geographic area, up from the 17th percentile. This is slightly higher than the current skill level 2 wage minimum.

This rule is hurting bridging ability gaps, especially in critical sectors such as technology, medicine, and science. It is also seen as discouraging international students because recruiting foreign staff at entry-level positions would be difficult.

Critics of the H-1B cap visa scheme, on the other hand, claim that some supporting employers misuse the system and recruit ‘cheap’ foreign labour.

Until now, US government agencies have used the Bureau of Labor Statistics’ Occupational Employment Statistics Report data to assess the required wage rate based on the work and area where the H-1B visa holder will be working. As previously stated by TOI, the DOL has also requested public input to update the calculation of the prevailing wage rate.

According to the DOL, the rule’s enforcement is being delayed to allow more time to thoroughly analyse the legal and policy problems posed by the government and more time to compute and verify prevailing wage data for particular occupations and geographic areas.