Department of Labor Changes to Computation of Prevailing Wage Effective October 8, 2020

Department of Labor’s interim final rule (IFR) submitted to the Office of the Federal Register for publication amends existing regulations governing permanent labor certifications and labor condition applications (LCA). Specifically, the IFR will change the computation of prevailing wage levels, resulting in higher prevailing wages for all occupations for each OES-based wage level.

  • Level I Wage: 45th percentile (from 17th percentile)
  • Level II Wage: 62nd percentile (from 34th percentile)
  • Level III Wage: 78th percentile (from 50th percentile)
  • Level IV Wage: 95th percentile (from 67th percentile)

This IFR takes effect on October 8, 2020. In order to take advantage of the current leveling system, LCAs must be filed by the end of day October 7, 2020.

This IFR will be published on October 8, 2020 and takes effect immediately upon publication. This rule will only apply to applications for prevailing wage determination (PWD) pending with the National Prevailing Wage Center (NPWC) as of the effective date of the regulation; applications for prevailing wage determinations filed with the NPWC on or after the effective date of the regulation; and LCAs filed with DOL on or after the effective date of the regulation where the OES survey data is the prevailing wage source, and where the employer did not obtain the PWD from the NPWC prior to the effective date of the regulation.

DOL will not apply the new regulations to any previously approved PWDs, permanent labor certification applications, or LCAs, either through reopening or through issuing supplemental prevailing wage determinations or through notices of suspension, invalidation, or revocation.

Employers that rely on LCAs or PWDs will see an immediate increase to the wages associates with each wage level. This will effectively increase the “required wage” associated with H-1B, H-1B1, and E-3 benefit requests, as the “required” wage is defined as the higher of the actual wage and the prevailing wage. The IFR will result in higher wages associated with employment-based immigrant visa petitions that rely on OES-based PWD applications.

Department of Homeland Security (DHS) has also posted an interim final rule for public inspection amending its H-1B regulations. The DHS H-1B Strengthening Rule will also publish on October 8, 2020; but will take effect on December 7, 2020. The IFR will revise the definition of specialty occupation, change the “employer-employee” requirements, and increase vetting of H-1B users.

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