Shaping Smarter Regulations

DOL Should Withdraw Its H-2B Wage Methodology Rule

After imposition of a new prevailing wage methodology was barred by Congress in appropriations riders for FY12 and FY13, the Department of Labor did an end-run around congressional intent and promulgated a new joint rule with the Department of Homeland Security that, technically, was not barred by the riders. The new prevailing wage methodology under 20 CFR Part 655 was unworkable for most employers, who were able to utilize the H-2B system in FY14 principally by relying on independent private wage surveys. In December 2014, DOL barred the use of independent private wage surveys, which ultimately will challenge the viability of the H 2B visa category for U.S. employers.

 

The Department of Labor concedes that the new wage methodology governing the H-2B visa category will raise controlling wages an average of $4.50 per hour, but makes no corresponding claim that the new wage levels are more accurate. The Department now refuses to allow employers to use independent private wage surveys, despite the fact that they often provide the best data across many occupations where H-2B workers are hired. Moreover, the linchpin of the new wage methodology is the imposition of Davis Bacon Act (DBA) and Service Contract Act (SCA) wage levels even for employers who are not subject to DBA or SCA, which is unworkable for employers and seems to have no defensible basis except to create wage inflation. Despite the fact that the Department of Labor recognizes that a large number of small businesses utilize the H-2B visa category to secure temporary and seasonal workers, the DOL ignored the comments by the SBA Office of Advocacy concerning changes to the prevailing wage methodology.

 

The current wage methodology regulation and policy should be rescinded, and replaced with a policy that recognizes tiered wage levels along with independent private wage surveys that employ a legitimate methodology and also removes any imposition of Davis-Bacon Act or Service Contract Act except for those employers subject to those Acts.

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Idea No. 59