On August 30, 2010, the US District Court for the Eastern District of Pennsylvania, in Comitè de Apoyo los Trabajadores Agricolas (CATA) v. Solis, et al., Civil No. 2:09-cv-240, invalidated the Department of Labor's use of skill levels and Occupational Employment Statistics data in establishing prevailing wages in lieu of Davis Bacon Act and Service Contract Act rates.  The court ordered the Department to complete a new rulemaking governing the calculation of prevailing wages for H-2B cases within 120 days.

The Department then worked with the Small Business Administration to promulgate a final rule published on January 19, 2011.  That final rule would have made the changes to how DOL calculates prevailing wages in H-2B cases effective Janaury 1, 2012.  The District Court Judge did not find any "logical outgrowth" from the proposed rule for the long delay in the effective date.  The court then issued a second order DOL to issue a new Notice of Proposed Rulemaking within 45 days of the court's order June 15, 2011 order.

DOL is now attempting to issue H-2B wage redeterminations for approximately 4,000 cases no later than October 1, 2011.  During this time, it is certain that many thousands of H-1B and PERM labor certification prevailing wage requests will pile up in queue since there are no wage analysts working on any prevailing wage determinations other than the H-2B program redeterminations.  It is likely that the prevailing wage backlog will not be meaningfully repaired until early 2012.

The new H-2B regulations will likely mandate much higher wages for H-2B workers, which will probably be a good thing for US workers.  The new rule ends the four tier OES "skill-based" wage survey for H-2B cases and instead counsels use of the highest wage of the the following methods:

• Wages established under an agreed-upon collective bargaining agreement
• A wage rate established under the Davis-Bacon Act or the Service Contract Act for that occupation in the area of intended employment
• The arithmetic mean wage rate established by the Occupational Employment Statistics (OES) wage survey for that occupation in the area of intended employment

Jane Oates, Assistant Secretary of Labor for Emloyment and Training said,

On August 30, 2010, the US District Court... issued a ruling in the CATA litigation that required the Department to re-examine the way prevailing wages were promulgated in the H-2B program. It subsequently issued an NPRM... culminating in a Final Rule that published on January 19, 2011. On June 15, 2011, the court invalidated the January 1, 2012 effective date of the H-2B Wage Rule... [ordering] the Department to announce a new effective date for the rule within 45 days...

The basis for the district court's June 15, 2011 ruling was: (1) that the almost one-year delay in the effective date was not a “logical outgrowth” of the proposed rule, and therefore violated the Administrative Procedure Act; and (2) that the Department violated the Immigration and Nationality Act in considering hardship to employers when deciding to delay the effective date.  The Department is attempting to comply with the Court’s order by issuing a Notice of Proposed Rulemaking (NPRM) to provide for a new effective date. The Department published the NPRM on June 28, 2011 in the Federal Register, and the public comment period closed on July 8, 2011.

Assistant Secretary Oates addressed questions while participating in a web chat with stakeholders on July 15, 2011.

Read the DOL stakeholder's chat with Assistant Secretary Oates addressing the H-2B wage redetermination debacle here