Could Trump’s 2020 H-1B Wage Rule Make a Comeback?

If Donald Trump returns to the White House after the upcoming election, his previous administration’s controversial 2020 rule concerning H-1B visas could provide insights into potential future immigration policies.

Although this rule was eventually blocked, its implications continue to resonate with businesses and foreign professionals alike.

Background on the 2020 H-1B Wage Rule

In October 2020, the U.S. Department of Labor (DOL) introduced a rule that significantly increased the minimum wages employers must pay H-1B visa holders and employment-based immigrants.

This rule was seen by many as a move to price foreign professionals out of the U.S. labour market, as it required employers to offer salaries far above what was previously mandated.

Before this rule, employers were required to pay H-1B professionals either the prevailing wage in the job market or the actual wage paid to similar U.S. workers, whichever was higher.

The Trump administration’s regulation, however, led to a steep increase in these wages, particularly affecting foreign-born scientists and engineers.

Altering the Wage Formula

Immigration attorneys argued that the Trump administration manipulated a revised mathematical formula in its wage rule to artificially inflate required salaries. This change was starkly evident when comparing the DOL’s new wage determinations to private sector salary surveys, revealing significant discrepancies.

According to the DOL, the prevailing wage should reflect the average salary paid to workers in a specific occupation within a given area. However, critics of the rule, argued that the new regulation pushed wages far beyond what the actual data indicated.

Also Read: US Eases H-1B Visa Process for College Graduates with Job Offers

Impact on Employment and Litigation

The 2020 H-1B wage rule had significant consequences for employers and foreign workers. Here are the key impacts:

1. Increased Salaries: According to the National Foundation for American Policy, entry-level salaries for certain positions, like petroleum engineers, could jump by 100%. In some cases, minimum required salaries for common occupations rose by 200% or more.

2. Hiring Challenges: These steep salary increases made it harder for employers to hire foreign professionals under the H-1B program or sponsor them for permanent residency.

3. Legal Vulnerability: The rule was introduced as an “interim final” regulation, which left it vulnerable to legal challenges.

4. Court Ruling: On December 1, 2020, U.S. District Judge Jeffrey S. White vacated the rule. The judge cited the Trump administration’s failure to follow proper procedures, including bypassing the required public comment period under the Administrative Procedure Act (APA).

Also Read: H-1B Visa Reforms Proposed to Help Students Stay in the US After Studies

Attempts to Reinstate the Wage Rule

Despite the initial setback, the Trump administration made another attempt to enforce the DOL regulation by issuing a final rule in January 2021. The aim remained the same: to make the U.S. labor market less accessible to foreign-born professionals by raising wage requirements.

However, this move faced strong opposition. In March 2021, the U.S. Chamber of Commerce and other organizations filed an amended complaint, arguing that the rule would make H-1B visas accessible only to those with skills equivalent to a master’s degree, thereby raising the eligibility bar for foreign workers.

Current Status and Future Prospects

The Biden administration, which took office shortly after the final rule was issued, decided not to defend the regulation. In April 2021, the Department of Labor sought public input on how to calculate prevailing wages, signaling a potential shift away from the Trump-era policy.

In June 2023, the DOL moved its proposal to raise prevailing wage rates for the H-1B visa and PERM programs to its long-term agenda, suggesting the rule may be shelved permanently. The DOL has taken no further action on the rule, leaving its future uncertain.

Also Read: US Tech Layoffs: A Guide for H-1B Visa Holders Facing Termination

Conclusion

The 2020 H-1B wage rule serves as a reminder of the significant impact U.S. immigration policies can have on both employers and foreign professionals. As the next election approaches, businesses and foreign workers will closely watch for signs that a second Trump administration might revive similar policies.