Trump administration sued over H-1B wage hike

ITServe alleges rule change “dramatically altered” how H-1B, green card salaries are calculated.

A group of technology consulting firms has filed the first lawsuit challenging the Trump administration’s rule raising minimum salary requirements for foreign professionals on H-1B high-skilled work visas, largely used by Indian techies.

Dallas based ITServe alliance filed the lawsuit in New Jersey federal court Friday just eight days after the wage rule took effect claiming the government used faulty data when setting the new figures, Law360 reported.

The suit alleges that the US Department of Labor, without notice, “dramatically altered” the way it calculates minimum salaries for the H-1B visas and certain employment-based green cards.

The wage requirements are set to prevent employers from underpaying foreign workers and thus depressing wages for US workers.

READ: ‘New H-1B rules would hurt American firms’ (October 7, 2020)

ITServe, an alliance of tech consulting firms, along with other similar firms claimed that the rule, if left in place, will upend their businesses and force some to lay off workers and move operations abroad, Law360 said.

“ITServe’s members are unable to absorb, without material disruption to their operations, the cost increase imposed on them,” the suit says.

The lawsuit attacks the Labor Department’s decision to sidestep procedural requirements when issuing the rule, as well as the underlying economic justifications behind the policy change, which raises minimum salaries by as high as 50% in some industries.

Under the rule, entry-level computer programmers on H-1B visas in Newark, for instance, would need to be paid $116K annually, up from the previous entry-level rate of $79K for that job.

According to the companies, the department rule fails to point to compelling evidence that H-1B workers are in fact paid less than their US counterparts.

The Labor Department “relied on outdated, incorrect or limited empirical data, failed to consider readily available, relevant data and empirical studies, and engaged in reasoning that conflicts with basic economic theory,” the companies said in the lawsuit.

And while the Trump administration had justified fast-tracking the rule by pointing to widespread unemployment in the US as a result of the coronavirus pandemic, unemployment in technology and computer professions — which typically take advantage of the H-1B visa program — has remained low, the suit says.

RELATED: Joe Biden vows to lift Trump’s H-1B ban if elected (July 1, 2020)

The suit is the first to challenge the Labor Department’s rule, issued earlier this month, that revised the four wage tiers used to evaluate salaries in various foreign worker programs, including the H-1B visa and certain employment-based green cards.

The department previously required employers to pay entry-level foreign workers a salary that was at least at the 17th percentile for their industry and location. But under the new rule, that minimum level jumped to the 45th percentile, taking the other higher three levels for more experienced workers with it.

The rule took effect just two days after it was first announced, immediately upon publication.

On the same day the DOL’s rule was announced, the US Department of Homeland Security also issued its long-anticipated rule narrowing the eligibility criteria for H-1B visas.

Jonathan Wasden of Wasden Banias LLC, an attorney for the IT consulting companies, told Law360 said that his firm will be challenging that rule, which won’t take effect until December, in the next few weeks.

More litigation from the business and higher education community challenging the visa restrictions is expected, Law360 said.

ITServe is the same organization who had won a court case against USCIS’s strict rules for short H1B third party approvals and the itinerary requirements earlier this year.

The proposed change included heightening the standard for staffing companies to show the requisite “employer-employee” relationship.

DHS abandoned that change earlier this year as part of a settlement after a federal judge in Georgia concluded that the restrictions were illegal.

But DHS revived the stricter standard for third-party staffing companies to establish an employer-employee relationship in its new rule.

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