3608 Federal Register / Vol. 86, No. 9 / Thursday, January 14, 2021 / Rules and Regulations 

1There are two general categories of U.S. visas: 

Immigrant and nonimmigrant. Immigrant visas are 

issued to foreign nationals who intend to live 

permanently in the U.S. Nonimmigrant visas are for 

foreign nationals who enter the U.S. on a temporary 

basis—for tourism, medical treatment, business, 

temporary work, study, or other reasons. 

2 8 U.S.C. 1101(a)(15)(E)(iii), (H)(i)(b), (H)(i)(b1). 

3 8 U.S.C. 1182(a)(5)(A). Although this provision 

references the Attorney General, the authority to 

adjudicate immigrant visa petitions was transferred 

to the Director of the Bureau of Citizenship and 

Immigration Services (an agency within the 

Department of Homeland Security) by the 

Homeland Security Act of 2002, Public Law 107– 

296, 451(b) (codified at 6 U.S.C. 271(b)). Under 6 

U.S.C. 557, references in federal law to any agency 

or officer whose functions have been transferred to 

the Department of Homeland Security shall be 

deemed to refer to the Secretary of Homeland 

Security or other official or component to which the 

functions were transferred. 

4See 8 U.S.C. 1153(b)(2), (3), 1182(a)(5)(D). 

Section 1153(b)(2) governs the EB–2 classification 

of immigrant work visas granted to foreign workers 

who are either professionals holding advanced 

degrees (master’s degree or above) or foreign 

equivalents of such degrees, or persons of 

‘‘exceptional ability’’ in the sciences, arts, or 

business. To gain entry in this category, the foreign 

worker must have prearranged employment with a 

U.S. employer that meets the requirements of labor 

certification, unless the work he or she is seeking 

admission to perform is in the ‘‘national interest,’’ 

such as to qualify for a waiver of the job offer (and 

hence, the labor certification) requirement under 8 

U.S.C. 1153(b)(2)(B). Section 1153(b)(3), governs the 

EB–3 classification of immigrant work visas granted 

to foreign workers who are either ‘‘skilled workers,’’ 

‘‘professionals,’’ or ‘‘other’’ (unskilled) workers, as 

defined by the statute. To gain entry in this 

category, the foreign worker must have prearranged 

employment with a U.S. employer that meets the 

requirements of labor certification, without 

exception. 

5 8 U.S.C. 1154(a)(1)(F), 1182(a)(5)(A) and (D). 

6 8 U.S.C. 1153(b)(2), (b)(3)(C), 1201(g). 

7 8 U.S.C. 1153(b)(2)(A). 

8 8 CFR 204.5(k)(2). 

DEPARTMENT OF LABOR 

Employment and Training 

Administration 

20 CFR Parts 655 and 656 

[DOL Docket No. ETA–2020–0006] 

RIN 1205–AC00 

Strengthening Wage Protections for 

the Temporary and Permanent 

Employment of Certain Aliens in the 

United States 

ACTION: Final rule. 

SUMMARY: In this final rule, the 

Department of Labor (the Department or 

DOL) adopts with changes an Interim 

Final Rule (IFR) that amended 

Employment and Training 

Administration (ETA) regulations 

governing the prevailing wages for 

employment opportunities that United 

States (U.S.) employers seek to fill with 

foreign workers on a permanent or 

temporary basis through certain 

employment-based immigrant visas or 

through H–1B, H–1B1, or E–3 

nonimmigrant visas. Specifically, the 

IFR amended the Department’s 

regulations governing permanent 

(PERM) labor certifications and Labor 

Condition Applications (LCAs) to 

incorporate changes to the computation 

of wage levels under the Department’s 

four-tiered wage structure based on the 

Occupational Employment Statistics 

(OES) wage survey administered by the 

Bureau of Labor Statistics (BLS). The 

primary purpose of these changes is to 

update the computation of prevailing 

wage levels under the existing four-tier 

wage structure to better reflect the 

actual wages earned by U.S. workers 

similarly employed to foreign workers. 

This final rule will allow the 

Department to more effectively ensure 

the employment of immigrant and 

nonimmigrant workers admitted or 

otherwise provided status through the 

above-referenced programs does not 

adversely affect the wages and job 

opportunities of U.S. workers. 

DATES: This final rule is effective March 

15, 2021. 

FOR FURTHER INFORMATION CONTACT: For 

further information, contact Brian D. 

Pasternak, Administrator, Office of 

Foreign Labor Certification, 

Employment and Training 

Administration, Department of Labor, 

200 Constitution Avenue NW, Room N– 

5311, Washington, DC 20210, telephone: 

(202) 693–8200 (this is not a toll-free 

number). Individuals with hearing or 

speech impairments may access the 

telephone numbers above via TTY/TDD 

by calling the toll-free Federal 

Information Relay Service at 1 (877) 

889–5627. 

SUPPLEMENTARY INFORMATION: 

I. Background 

The Immigration and Nationality Act 

(INA or Act), as amended, assigns 

responsibilities to the Secretary of Labor 

(Secretary) relating to the entry and 

employment of certain categories of 

immigrants and nonimmigrants.1 This 

final rule concerns the calculation of the 

prevailing wage for job opportunities in 

the PERM, H–1B, H–1B1, and E–3 

programs for which employers seek 

labor certification from the Secretary.2

A. Permanent Labor Certifications 

The INA prohibits the admission of 

certain employment-based immigrants 

unless the Secretary of Labor has 

determined and certified to the 

Secretary of State and the Attorney 

General that (1) there are not sufficient 

workers who are able, willing, qualified 

and available at the time of application 

for a visa and admission to the United 

States and at the place where the alien 

is to perform such skilled or unskilled 

labor, and (2) the employment of such 

alien will not adversely affect the wages 

and working conditions of workers in 

the United States similarly employed.3

This ‘‘labor certification’’ requirement 

does not apply to all employment-based 

immigrants. The INA provides for five 

‘‘preference’’ categories or immigrant 

visa classes, only two of which—the 

second and third preference 

employment categories (commonly 

called the EB–2 and EB–3 immigrant 

visa classifications)—require a labor 

certification.4 An employer seeking to 

sponsor a foreign worker for an 

immigrant visa under the EB–2 or 

EB–3 immigrant visa classifications 

generally must file a visa petition with 

the Department of Homeland Security 

(DHS) on the worker’s behalf, which 

must include a labor certification from 

the Secretary of Labor.5 Further, the 

Department of State (DOS) may not 

issue a visa unless the Secretary of 

Labor has issued a labor certification in 

conformity with the relevant provisions 

of the INA.6 If the Secretary determines 

both that there are not sufficient able, 

willing, qualified, and available U.S. 

workers and that employment of the 

foreign worker will not adversely affect 

the wages and working conditions of 

similarly employed U.S. workers, the 

Secretary so certifies to DHS and DOS 

by issuing a permanent labor 

certification. If the Secretary cannot 

make one or both of the above findings, 

the application for permanent 

employment certification is denied. 

Under the INA, the EB–2 

classification applies to individuals who 

are ‘‘members of the professions holding 

advanced degrees or their equivalent or 

who because of their exceptional ability 

in the sciences, arts, or business, will 

substantially benefit prospectively the 

national economy, cultural or 

educational interests, or welfare of the 

United States.’’ 7 United States 

Citizenship and Immigration Services 

(USCIS) regulations, in turn, define an 

‘‘advanced degree’’ as any United States 

academic or professional degree or a 

foreign equivalent degree above that of 

baccalaureate. A United States 

baccalaureate degree or a foreign 

equivalent degree followed by at least 

five years of progressive experience in 

the specialty shall be considered the 

equivalent of a master’s degree. If a 

doctoral degree customarily is required 

by the specialty, the alien must have a 

United States doctorate or a foreign 

equivalent degree.8 The regulation goes 

on to define ‘‘exceptional ability’’ as ‘‘a 


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Federal Register / Vol. 86, No. 9 / Thursday, January 14, 2021 / Rules and Regulations 3609 

9 Id. 

10 8 U.S.C. 1153(b)(3); 8 CFR 204.5(l). 

11 8 U.S.C. 1101(a)(15)(E)(iii), (H)(i)(b), (H)(i)(b1); 

8 CFR 214.2(h)(2)(i)(E). 

12See generally 8 U.S.C. 1182(n), (t); 20 CFR part 

655, subpart H. 

13 8 U.S.C. 1182(n)(1)(A). 

14See 8 U.S.C. 1101(a)(15)(H)(i)(b), 1184(i). 

15 8 U.S.C. 1101(a)(15)(H)(i)(b1). 16 8 U.S.C. 1101(a)(15)(E)(iii). 

17The current regulations were issued through a 

final rule implementing the streamlined permanent 

labor certification program through revisions to 20 

CFR part 656. The final rule was published on 

December 27, 2004, and took effect on March 28, 

2005. See Labor Certification for the Permanent 

Employment of Aliens in the United States; 

Implementation of New System, 69 FR 77326 (Dec. 

27, 2004). The Department published a final rule on 

May 17, 2007, to enhance program integrity and 

reduce the incentives and opportunities for fraud 

and abuse related to permanent labor certification, 

commonly known as ‘‘the fraud rule.’’ Labor 

Certification for the Permanent Employment of 

Aliens in the United States; Reducing the Incentives 

and Opportunities for Fraud and Abuse and 

Enhancing Program Integrity, 72 FR 27904 (May 17, 

2007). 

18 8 U.S.C. 1182(a)(5)(A)(i). 

19 20 CFR 656.10(c)(1). 

20 20 CFR 656.15(b)(1), 656.40(a). 

21See 20 CFR 656.40(b)(1). 

22See 20 CFR 656.40(b), (g). 

23See 20 CFR 656.40(b)(2). 

24 20 CFR 656.40(c). 

25Applications for Schedule A occupations are 

eligible to receive pre-certification and bypass the 

standard applications review process. In those 

cases, employers file the appropriate 

documentation directly with DHS. See 20 CFR 

656.5, 656.15. 

degree of expertise significantly above 

that ordinarily encountered in the 

sciences, arts, or business.’’ 9

The EB–3 program consists of three 

discrete classifications: ‘‘skilled 

workers,’’ defined as aliens who are 

‘‘capable . . . of performing skilled 

labor (requiring at least two years 

training or experience), not of a 

temporary or seasonal nature, for which 

qualified workers are not available in 

the United States;’’ ‘‘professionals,’’ 

defined as aliens ‘‘who hold 

baccalaureate degrees and who are 

members of the professions;’’ and ‘‘other 

workers,’’ defined as aliens who are 

‘‘capable . . . of performing unskilled 

labor, not of a temporary or seasonal 

nature, for which qualified workers are 

not available in the United States.’’ 10

B. Labor Condition Applications 

The Secretary must certify an LCA 

filed by an U.S. employer before the 

employer may file a petition with DHS 

on behalf of a foreign worker for H–1B, 

H–1B1, or E–3 nonimmigrant 

classification.11 The LCA contains 

various attestations from the employer 

about the wages and working conditions 

that it will provide for the foreign 

worker.12 Most importantly, for the 

purposes of this final rule, the INA 

requires employers to pay H–1B workers 

the greater of ‘‘the actual wage level 

paid by the employer to all other 

individuals with similar experience and 

qualifications for the specific 

employment in question,’’ or the ‘‘the 

prevailing wage level for the 

occupational classification in the area of 

employment.’’ 13

The H–1B program allows U.S. 

employers to employ foreign workers 

temporarily in specialty occupations. 

‘‘Specialty occupation’’ is defined as an 

occupation that requires the theoretical 

and practical application of a body of 

‘‘highly specialized knowledge,’’ and a 

bachelor’s or higher degree in the 

specific specialty, or its equivalent, as a 

minimum for entry into the occupation 

in the U.S.14 Similar to the H–1B visa 

classification, the H–1B1 and E–3 

nonimmigrant visa classifications also 

allow U.S. employers to temporarily 

employ foreign workers in specialty 

occupations, except that these 

classifications specifically apply to the 

nationals of certain countries: The H– 

1B1 visa classification applies to foreign 

workers in specialty occupations from 

Chile and Singapore,15 and the E–3 visa 

classification applies to foreign workers 

in specialty occupations from 

Australia.16

C. The Permanent Labor Certification 

Process 

The Department’s regulations at 20 

CFR part 656 govern the labor 

certification process and set forth the 

responsibilities of employers who desire 

to employ, on a permanent basis, foreign 

nationals covered by the INA’s labor 

certification requirement.17 The 

Department processes labor certification 

applications for employers seeking to 

sponsor foreign workers for permanent 

employment under the EB–2 and EB–3 

immigrant visa preference categories. 

Aliens seeking admission or adjustment 

of status under the EB–2 or EB–3 

preference categories are inadmissible 

‘‘unless the Secretary of Labor has 

determined and certified . . . that—(I) 

there are not sufficient workers who are 

able, willing, qualified . . . and 

available at the time of application for 

a visa and admission to the United 

States and at the place where the alien 

is to perform such skilled or unskilled 

labor, and (II) the employment of such 

alien will not adversely affect the wages 

and working conditions of workers in 

the United States similarly 

employed.’’ 18

The Secretary makes this 

determination in the PERM programs 

by, among other things, requiring the 

foreign worker’s sponsoring employer to 

recruit U.S. workers by offering a wage 

that equals or exceeds the prevailing 

wage and to assure that the employer 

will pay the foreign worker a wage equal 

to or exceeding the prevailing wage.19

Prior to filing a labor certification 

application, the employer must obtain a 

Prevailing Wage Determination (PWD) 

for its job opportunity from the Office of 

Foreign Labor Certification’s (OFLC) 

National Prevailing Wage Center 

(NPWC).20 The standards and 

procedures governing the PWD process 

in connection with the permanent labor 

certification program are set forth in the 

Department’s regulations at 20 CFR 

656.40 and 656.41. If the job 

opportunity is covered by a collective 

bargaining agreement (CBA) that was 

negotiated at arms-length between a 

union and the employer, the wage rate 

set forth in the CBA agreement is 

considered the prevailing wage for labor 

certification purposes.21 In the absence 

of a prevailing wage rate derived from 

an applicable CBA, the employer may 

elect to use an applicable wage 

determination under the Davis-Bacon 

Act (DBA) or McNamara-O’Hara Service 

Contract Act (SCA), or provide a wage 

survey that complies with the 

Department’s standards governing 

employer-provided wage data.22 In the 

absence of any of the above sources, the 

NPWC will use the BLS OES survey to 

determine the prevailing wage for the 

employer’s job opportunity.23 After 

reviewing the employer’s application, 

the NPWC will determine the prevailing 

wage and specify the validity period, 

which may be no less than 90 days and 

no more than one year from the 

determination date. Employers must 

either file the labor certification 

application or begin the recruitment 

process, required by the regulation, 

within the validity period of the PWD 

issued by the NPWC.24

Once the U.S. employer has received 

a PWD, the process for obtaining a 

permanent labor certification generally 

begins with the U.S. employer filing an 

Application for Permanent Employment 

Certification, Form ETA–9089, with 

OFLC.25 As part of the standard 

application process, the employer must 

describe, among other things, the labor 

or services it needs performed; the wage 

it is offering to pay for such labor or 

services and the actual minimum 

requirements of the job opportunity; the 

geographic location(s) where the work is 

expected to be performed; and the 

efforts it made to recruit qualified and 

available U.S. workers. Additionally, 

the employer must attest to the 

conditions listed in its labor 

certification application, including that 


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3610 Federal Register / Vol. 86, No. 9 / Thursday, January 14, 2021 / Rules and Regulations 

26 20 CFR 656.10(c)(1). 

27 20 CFR 656.30(b)(1). 

28 8 U.S.C. 1182(n)(1)(A)–(C), (t)(1)(A)–(C); 20 

CFR 655.705(c)(1), 655.730(d). 

29 20 CFR 655.731(a)(2). 

30 Id. 

31 Id. 

32 20 CFR 655.731(a)(2)(ii)(A) through (C). 

33 8 U.S.C. 1182(n)(1), (t)(2)(C); 20 CFR 

655.740(a)(1). 

34For aliens seeking H–1B1 or E–3 classification, 

the alien may apply directly to the State 

Department for a visa once the LCA has been 

certified. 

35Wage Methodology for the Temporary Nonagricultural Employment H–2B Program, 76 FR 

3452, 3463 (Jan. 19, 2011). 

36Prevailing Wage Policy for Nonagricultural 

Immigration Programs, General Administration 

Letter No. 2–98 (GAL 2–98) (Oct. 31, 1997), 

available at https://wdr.doleta.gov/directives/corr_

doc.cfm?DOCN=942. 

37 GAL 2–98 at 5. 

38By way of clarification, the Department notes 

that, because the old wage methodology took the 

mean of a portion of the OES wage distribution, the 

precise wage it produced will not always fall at 

‘‘[t]he offered wage equals or exceeds 

the prevailing wage determined 

pursuant to [20 CFR 656.40 and 656.41] 

and the wage the employer will pay to 

the alien to begin work will equal or 

exceed the prevailing wage that is 

applicable at the time the alien begins 

work or from the time the alien is 

admitted to take up the certified 

employment.’’ 26

Through the requisite test of the labor 

market, the employer also attests, at the 

time of filing the Form ETA–9089, that 

the job opportunity has been and is 

clearly open to any U.S. worker and that 

all U.S. workers who applied for the job 

opportunity were rejected for lawful, 

job-related reasons. OFLC performs a 

review of the Form ETA–9089 and may 

either grant or deny a permanent labor 

certification. Where OFLC grants a 

permanent labor certification, the 

employer must submit the certified 

Form ETA–9089 along with an 

Immigrant Petition for Alien Worker 

(Form I–140 petition) to DHS. A 

permanent labor certification is valid 

only for the job opportunity, employer, 

foreign worker, and area of intended 

employment named on the Form ETA– 

9089 and must be filed in support of a 

Form I–140 petition within 180 calendar 

days of the date on which OFLC granted 

the certification.27

D. The Temporary Labor Condition 

Application Process 

The Department’s regulations at 20 

CFR part 655, subpart H, govern the 

process for obtaining a certified LCA 

and set forth the responsibilities of 

employers who desire to temporarily 

employ foreign nationals in H–1B, H– 

1B1, and E–3 nonimmigrant 

classifications. 

A prospective employer must attest 

on the LCA that (1) it is offering to and 

will pay the nonimmigrant, during the 

period of authorized employment, 

wages that are at least the actual wage 

level paid by the employer to all other 

employees with similar experience and 

qualifications for the specific 

employment in question, or the 

prevailing wage level for the 

occupational classification in the area of 

intended employment, whichever is 

greater (based on the best information 

available at the time of filing the 

attestation); (2) it will provide working 

conditions for the nonimmigrant worker 

that will not adversely affect working 

conditions for similarly employed U.S. 

workers; (3) there is no strike or lockout 

in the course of a labor dispute in the 

occupational classification at the 

worksite; and (4) it has provided notice 

of its filing of an LCA to its employee’s 

bargaining representative for the 

occupational classification affected or, if 

there is no bargaining representative, it 

has provided notice to its employees in 

the affected occupational classification 

by posting the notice in a conspicuous 

location at the worksite or through other 

means such as electronic notification.28

As relevant here, the prevailing wage 

must be determined as of the time of the 

filing of the LCA.29 In contrast to the 

permanent labor certification process, 

an employer is not required to obtain a 

PWD from the NPWC.30 However, like 

the permanent labor certification 

process, if there is an applicable CBA 

that was negotiated at arms-length 

between a union and the employer that 

contains a wage rate applicable to the 

occupation, the CBA must be used to 

determine the prevailing wage.31 In the 

absence of an applicable CBA, an 

employer may base the prevailing wage 

on one of several sources: A PWD from 

the NPWC; an independent 

authoritative source that satisfies the 

requirements in 20 CFR 

655.731(b)(3)(iii)(B); or another 

legitimate source of wage data that 

satisfies the requirements in 20 CFR 

655.731(b)(3)(iii)(C).32

An employer may not file an LCA 

more than six months prior to the 

beginning date of the period of intended 

employment. 20 CFR 655.730. Unless 

the LCA is incomplete or obviously 

inaccurate, the Secretary must certify it 

within seven working days of its 

filing.33 Once an employer receives a 

certified LCA, it must file the Petition 

for Nonimmigrant Worker, Form I–129 

(‘‘Form I–129 Petition’’) with DHS if 

seeking classification of the alien as an 

H–1B worker.34 Upon petition, DHS 

then determines, among other things, 

whether the employer’s position 

qualifies as a specialty occupation and, 

if so, whether the nonimmigrant worker 

is qualified for the position. 

II. Prevailing Wage Background 

A. The Department’s Prevailing Wage 

Determination Methodology 

The Department has long relied on 

BLS OES data to establish prevailing 

wage levels. The OES is a 

comprehensive, statistically valid 

survey that, in many respects, is the best 

source of wage data available for 

satisfying the Department’s purposes in 

setting wages in most immigrant and 

nonimmigrant programs. The OES wage 

survey is among the largest continuous 

statistical survey programs of the 

Federal Government. BLS produces the 

survey materials and selects the 

nonfarm establishments to be surveyed 

using the list of establishments 

maintained by State Workforce Agencies 

(SWAs) for unemployment insurance 

purposes. The OES collects data from 

over one million establishments. Salary 

levels based on geographic areas are 

available at the national and State levels 

and for certain territories in which 

statistical validity can be ascertained, 

including the District of Columbia, 

Guam, Puerto Rico, and the U.S. Virgin 

Islands. Salary information is also made 

available at the metropolitan and 

nonmetropolitan area levels within a 

State. Wages for the OES survey are 

straight-time, gross pay, exclusive of 

premium pay. Base rate, cost-of-living 

allowances, guaranteed pay, hazardous 

duty pay, incentive pay including 

commissions and production bonuses, 

tips, and on-call pay are included. 

These features are unique to the OES 

survey, which make it a valuable source 

for use in many of the Department’s 

foreign labor programs.35

The Department incorporated the 

wage component of the OES survey into 

its prevailing wage guidance in 1997.36

At the time, the Department divided 

OES wage data into two skill levels: A 

Level I wage for ‘‘beginning level 

employees’’ and a Level II wage for 

‘‘fully competent employees.’’ Because 

the OES survey does not provide data 

about skill differentials within Standard 

Occupational Classification (SOC) 

codes, the Department established the 

entry and experienced skill levels 

mathematically.37 Specifically, under an 

Memorandum of Understanding (MOU), 

BLS computed a Level I wage calculated 

as the mean of the lowest paid one-third 

of workers in a given occupation 

(approximately the 17th percentile of 

the OES wage distribution) 38 and a 


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17th percentile. Rather, the 17th percentile is the 

midpoint or median of the distribution for which 

a mean was produced, and is therefore only an 

approximation for what the actual wage rates would 

be. The same is true of the old wage methodology 

for calculating the Level IV wage, which used the 

mean of the upper two thirds of the OES 

distribution, the midpoint of which is the 67th 

percentile. 

39 Intra-Agency Memorandum of Understanding 

executed by Mr. John R. Beverly, III, Director, U.S. 

Employment Service, ETA, and Ms. Katharine 

Newman, Chief, Division of Financial Planning and 

Management, Office of Administration, BLS (Sept. 

30, 1998). 

40 GAL 2–98, available at https://oui.doleta.gov/ 

dmstree/gal/gal98/gal_02-98.htm. See also Wage 

Methodology for the Temporary Non-agricultural 

Employment H–2B Program, 76FR 3452, 3453 (Jan. 

19, 2011); Wage Methodology for the Temporary 

Non-Agricultural Employment H–2B Program, Part 

2, 78 FR 24047, 24051 (Apr. 24, 2013). 

41ETA Prevailing Wage Determination Policy 

Guidance, Nonagricultural Immigration Programs 7 

(May 2005), available at https://

www.foreignlaborcert.doleta.gov/pdf/policy_nonag_

progs.pdf; See also 85 FR at 63874—63876 for a 

discussion of the development of the prevailing 

wage determination process. 

42 Id. at 1. 

43See Labor Certification Process and 

Enforcement for Temporary Employment in 

Occupations Other Than Agriculture or Registered 

Nursing in the United States (H–2B Workers), and 

Other Technical Changes, 73 FR 78020 (Dec. 19, 

2008); Prevailing Wage Determinations for Use in 

the H–1B, H–1B1 (Chile/Singapore), H–1C, H–2B, E– 

3 (Australia), and Permanent Labor Certification 

Programs; Prevailing Wage Determinations for Use 

in the Commonwealth of the Northern Mariana 

Islands, 74 FR 63796 (Dec. 4, 2009). 44Employment and Training Administration; 

Prevailing Wage Determination Policy Guidance, 

Nonagricultural Immigration Programs (Revised 

Nov. 2009) (hereinafter 2009 Guidance), available 

at https://www.dol.gov/sites/dolgov/files/ETA/oflc/ 

pdfs/NPWHC_Guidance_Revised_11_2009.pdf. 

45 Id. at 1. 

46 Id. at 1–7; see also Occupational Information 

Network, available at http://online.onetcenter.org. 

O*Net provides information on skills, abilities, 

knowledge, tasks, work activities, and specific 

vocational preparation levels associated with 

occupations and stratifies occupations based on 

shared skill, education, and training indicators. 

47 2009 Guidance at 6. 48See 8 U.S.C. 1182(p)(4). 

Level IV wage calculated as the mean 

wage of the highest paid upper twothirds of workers (approximately the 

67th percentile).39 This two-tier wage 

structure was based on the assumption 

that the mean wage of the lowest paid 

one-third of the workers surveyed in 

each occupation could provide a 

surrogate for the entry-level wage, but 

the Department did not previously 

conduct any meaningful economic 

analysis to test its validity, or otherwise 

explain how these levels were 

consistent with the INA’s wage 

provisions.40

In order to implement the INA’s fourtier prevailing wage provision, the 

Department published comprehensive 

Prevailing Wage Determination Policy 

Guidance for Nonagricultural 

Immigration Programs (2005 Guidance), 

which expanded the two-tier OES wage 

level system to provide four ‘‘skill 

levels’’: Level I ‘‘entry level,’’ Level II 

‘‘qualified,’’ Level III ‘‘experienced,’’ 

and Level IV ‘‘fully competent.’’ 41 The 

Department applied the formula in the 

INA to its two existing wage levels to set 

Levels I through IV, respectively, at 

approximately the 17th percentile, the 

34th percentile, the 50th percentile, and 

the 67th percentile.42 In 2010, the 

Department centralized the prevailing 

wage determination process for 

nonagricultural labor certification 

programs within OFLC’s NPWC.43 In 

preparation for this transition, the 

Department issued new Prevailing Wage 

Determination Policy Guidance for 

Nonagricultural Immigration Programs 

(2009 Guidance).44 This guidance 

currently governs OFLC’s PWD process 

for the PERM, H–1B, H–1B1, and E–3 

visa programs and will continue to 

govern OFLC’s PWD process for these 

programs. No rulemaking to codify the 

old wage levels was ever undertaken, 

nor the public given an opportunity to 

comment on them. 

When assigning a prevailing wage 

using OES data, the NPWC examines the 

nature of the job offer, the area of 

intended employment, and job duties 

for workers that are similarly 

employed.45 In particular, the NPWC 

uses the SOC taxonomy to classify the 

employer’s job opportunity into an 

occupation by comparing the 

employer’s job description, title, and 

requirements to occupational 

information provided in sources like the 

Department’s Occupational Information 

Network (O*Net).46 Once the NPWC 

identifies the applicable SOC code, it 

determines the appropriate wage level 

for the job opportunity by comparing 

the employer’s job description, title, and 

requirements to those normally required 

for the occupation, as reported in 

sources like O*Net. This determination 

involves a step-by-step process in which 

each job opportunity begins at Level I 

(entry level) and may progress to Level 

II (experienced), Level III (qualified), or 

Level IV (fully competent) based on the 

NPWC’s comparison of the job 

opportunity to occupational 

requirements, including the education, 

training, experience, skills, knowledge, 

and tasks required in the occupation.47

After determining the prevailing wage 

level, the NPWC issues a PWD to the 

employer using the OES wage for that 

level in the occupation and area of 

intended employment. 

B. The Interim Final Rule 

On October 8, 2020, the Department 

published an Interim Final Rule (IFR) in 

the Federal Register, 85 FR 63872, 

revising the methodology the 

Department uses to determine 

prevailing wage levels for the H–1B, H– 

1B1, E–3, and PERM programs. As 

explained in the IFR, the Department 

concluded the existing wage levels were 

not consistent with the relevant 

statutory requirement that a government 

survey employed to determine the 

prevailing wage provide four wage 

levels commensurate with experience, 

education, and level of supervision.48

The Department also determined that 

the existing wage levels were artificially 

low and provided an opportunity for 

employers to hire and retain foreign 

workers at wages well below what their 

U.S. counterparts earn, creating an 

incentive to prefer foreign workers to 

U.S. workers, an incentive that is at 

odds with the statutory scheme and 

causes downward pressure on the wages 

of the domestic workforce. Therefore, 

the Department revised wage provisions 

at 20 CFR 655.731 and 656.40 to adjust 

the existing wage levels to ensure the 

wage levels reflect the wages paid to 

U.S. workers with similar experience, 

education, and responsibility to those 

possessed by similarly employed foreign 

workers. 

In particular, the IFR amended 

paragraphs (a), (b)(2), and (b)(3) of 20 

CFR 656.40, codifying the four-tier wage 

practice and revising the wage level 

computation methodology. A new 

§ 656.40(b)(2)(i) specified the four new 

levels (Levels I through IV) to be 

applied. Paragraph (b)(2)(i)(A) explained 

the Level I wage would be calculated as 

the mean of the fifth decile of the wage 

distribution for the most specific 

occupation and geographic area 

available, rather than calculated as the 

mean of the bottom third of the OES 

wage distribution, as was the case prior 

to the IFR. Paragraph (b)(2)(i)(D) 

provided that the Level IV wage would 

be calculated as the mean of the upper 

decile of the wage distribution for the 

most specific occupation and 

geographic area available, rather than 

using the mean of the upper two-thirds 

of the distribution. As a result of these 

changes, the wage levels were increased, 

respectively, from approximately the 

17th, 34th, 50th, and 67th percentiles to 

approximately the 45th, 62nd, 78th, and 

95th percentiles. The IFR also made 

minor technical and clarifying 

amendments to sections 656.40 and 

655.731, which the Department has 

adopted in this final rule with only a 

minor change to the location of one of 

the amended provisions, as explained 

further in section IV below. 


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49 5 U.S.C. 553(b)(B). 50 Jifry v. FAA, 370 F.3d 1174, 1179 (D.C. Cir. 

2004). 

51See 85 FR 63872, 63898–63902 (Oct. 8, 2020). 

52Order Granting Plaintiffs’ Motion for Partial 

Summary Judgment and Denying Defendants’ 

Cross-Motion, Chamber of Commerce, et al. v. DHS, 

et al., 20–cv–07331 (N.D. Cal. Dec. 1, 2020). The 

plaintiffs in this case also challenged an interim 

final rule issued by DHS, Strengthening the H–1B 

Nonimmigrant Visa Classification Program, 85 FR 

63, 918 (Oct. 8, 2020), that published on October 

8, 2020. 

53Memorandum Opinion, Purdue University, et 

al. v. Scalia, et al., 20–cv–03006 (D.D.C. Dec. 14, 

2020); Memorandum Opinion, Stellar IT, et al. v. 

Scalia, et al., 20–cv–03175 (D.D.C.). 

54Opinion, ITServe Alliance, et al. v. Scalia, et 

al., 20–cv–14604 (D.N.J. Dec. 3, 2020). 

55 Id. at 8–20. 

56 Little Sisters of the Poor Saints Peter and Paul 

Home v. Pennsylvania, 140 S.Ct. 2367, 2385–86 

(2020). 

57 5 U.S.C. 553(b). 

58 5 U.S.C. 553(c). 

59 Id. 

60 5 U.S.C. 553(d). 

The Administrative Procedure Act 

(APA), 5 U.S.C. 551 et seq., authorizes 

an agency to issue a rule without prior 

notice and opportunity to comment 

when the agency for good cause finds 

that those procedures are 

‘‘impracticable, unnecessary, or contrary 

to the public interest.’’ 49 The good 

cause exception for forgoing notice and 

comment rulemaking ‘‘excuses notice 

and comment in emergency situations, 

or where delay could result in serious 

harm.’’ 50 The Department published the 

IFR with an immediate effective date, 

bypassing notice and comment due to 

exigent circumstances created by the 

coronavirus public health emergency 

that threatened immediate harm to the 

wages and job prospects of U.S. 

workers, as well as the need to avoid 

evasion by employers of the new wage 

rates.51 However, the Department 

requested public input on all aspects of 

the IFR during a post-promulgation 30- 

day public comment period and 

explained it would review and consider 

these comments before issuing a final 

rule. The public comment period ended 

on November 9, 2020, and resulted in 

receipt of more than two thousand 

comments. Most of the comments were 

not relevant and/or not substantive, but 

148 relevant and substantive comments 

were received and are discussed further 

below. 

C. Litigation 

Four groups of plaintiffs separately 

challenged the Department’s IFR. These 

groups of plaintiffs, which included 

academic institutions, businesses, and 

trade associations, claimed the 

Department lacked good cause to issue 

the IFR without undergoing notice and 

comment procedures under the APA 

and that the IFR was arbitrary and 

capricious and in violation of the INA. 

These plaintiffs further requested that 

the IFR be enjoined and the Department 

prevented from implementing it. In 

three of the four cases, the district court 

approved the parties’ stipulation to 

convert plaintiffs’ preliminary 

injunction motion to a motion for partial 

summary judgment on the notice and 

comment claim. In Chamber of 

Commerce, the district court issued a 

decision on December 1, 2020, granting 

plaintiffs’ motion for partial summary 

judgment on their notice and comment 

claim and setting aside the Department’s 

IFR.52 In Purdue University and Stellar 

IT (which were consolidated), the 

district court issued a decision on 

December 14, 2020, granting partial 

summary judgment to the plaintiffs on 

the basis that the Department lacked 

good cause to issue the IFR, and ordered 

the Department to re-issue prevailing 

wage determinations issued under the 

IFR on a mutually agreeable schedule.53

In the fourth case, ITServe Alliance, the 

district court issued a preliminary 

injunction on December 3, 2020, 

prohibiting the Department from 

enforcing the IFR against the plaintiffs 

in that case.54 In discussing plaintiffs’ 

likelihood of success on the merits in 

that case, the court limited its analysis 

to plaintiffs’ claim that the Department 

lacked good cause to forgo advance 

notice and comment.55 Following the 

district court’s decisions in Chamber of 

Commerce and ITServe Alliance, OFLC 

took immediate action to comply with 

the courts’ directives, including issuing 

a public announcement on its website 

on December 3, 2020, outlining the 

steps it was taking in response to the 

courts’ orders. 

Notwithstanding the district courts’ 

orders to set aside the IFR on procedural 

grounds, the U.S. Supreme Court has 

acknowledged and affirmed the 

proposition that a procedurally flawed 

IFR does not taint a final rule relying 

upon an IFR as a proposed rule.56 The 

Department is satisfied that it meets the 

APA’s objective requirements necessary 

for the promulgation of a final rule in 

this case. Specifically, the Department’s 

IFR provided sufficient notice to the 

public by allowing for a 30 day 

comment period; 57 ‘‘gave interested 

persons an opportunity to participate in 

the rule making through submission of 

written data, views or arguments’’; 58 the 

rule contained a ‘‘concise general 

statement of their basis and purpose’’; 59

and the rule will be published more 

than 30 days before it becomes 

effective.60 Accordingly, the Department 

maintains the legal authority to pursue 

this final rule based upon its 

compliance with the APA’s procedural 

requirements satisfied in the IFR. 

III. Discussion of Final Rule, 

Comments, and Responses 

A. Overview 

The IFR provided for the submission 

of public comments during a prescribed 

30-day public comment period that 

closed on November 9, 2020. During 

this time, the Department received 2,340 

comments. The Department received 

input from a broad range of 

commenters, including labor unions; 

employers; law firms; academic and 

research institutions; healthcare 

providers; public policy organizations; 

professional and trade associations; a 

federal agency; foreign workers, 

students, attorneys, and other 

individuals; and a significant number of 

anonymous commenters. Some 

commenters supported the new wage 

level computation methodology in the 

IFR generally or in concept as a 

necessary change to prevent abuse of the 

H–1B program, particularly its four-tier 

wage level system, by employers 

seeking to hire foreign workers at below 

market wages. However, the 

overwhelming majority of commenters 

opposed the new wage level 

computation methodology. Notably, 

however, commenters generally did not 

offer justifications or data to support the 

continued use of the old wage 

methodology. 

Commenters opposed to the 

substantive changes in the IFR generally 

asserted that the revised wage levels do 

not correspond with wages paid to U.S. 

workers with similar qualifications or 

those employed in job opportunities 

with similar requirements, that the IFR 

wages do not reflect market wages as 

evidenced by comparisons to private 

wage surveys and wage data on various 

websites, and that the wage increases 

are arbitrary and unsustainable for most 

employers, especially given the 

immediate effective date of the IFR. 

Commenters expressed concern that the 

IFR would negatively impact the 

economy broadly by reducing labor 

demand, reducing American 

competitiveness in innovative 

industries, and encouraging 

outsourcing. A number of commenters 

asserted the IFR would 

disproportionately impact small 

businesses and start-ups; nonprofits; 

and academic, research, and healthcare 

institutions. Many commenters claimed 

that there is no need to raise wages to 

protect U.S. workers, asserting that 

foreign workers are not underpaid and 

employment of foreign workers creates, 


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61Sure-Tan, Inc. v. N.L.R.B., 467 U.S. 883, 893 

(1984). 

62H.R. Rep. No. 1365, 82d Cong., 2d Sess., 50– 

51 (1952) (discussing the INA’s ‘‘safeguards for 

American labor’’). 

63Washington All. of Tech. Workers v. U.S. Dep’t 

of Homeland Sec., 156 F. Supp. 3d 123, 142 (D.D.C. 

2015), judgment vacated, appeal dismissed sub 

nom. Washington All. of Tech. Workers v. U.S. 

Dep’t of Homeland Sec., 650 F. App’x 13 (D.C. Cir. 

2016). 

64Cyberworld Enter. Techs., Inc. v. Napolitano, 

602 F.3d 189, 199 (3d Cir. 2010). 

65Caremax Inc v. Holder, 40 F. Supp. 3d 1182, 

1187 (N.D. Cal. 2014). 

66See, e.g., Public Law 105–277 § § 412–13, 112 

Stat. 2681, 2981–642 to –650 (1998). See also H.R. 

Rep. No. 101–723(I), 101st Cong., 2d Sess. 44, 66– 

67 (1990) (‘‘[IMMACT 90] recognizes that certain 

entry-level workers with highly specialized 

knowledge are needed in the United States and that 

sufficient U.S. workers are sometimes not available. 

At the same time, heavy use and abuse of the H– 

1 category has produced undue reliance on alien 

workers.’’); 144 Cong. Rec. S12741, S12749 (daily 

ed. October 21, 1998) (statement of Sen. Abraham) 

(describing the purpose of the H–1B provisions of 

the American Competiveness and Workforce 

Improvement Act as being to ensure ‘‘that 

companies will not replace American workers with 

foreign born professionals, including increased 

penalties and oversight, as well as measures 

eliminating any economic incentive to hire a 

foreign born worker if there is an American 

available with the skills needed to fill the job.’’). 

67See Labor Condition Applications and 

Requirements for Employers Using Nonimmigrants 

on H–1B Visas in Specialty Occupations and as 

Fashion Models, 59 FR 65646, 65655 (December 20, 

1994) (describing the ‘‘Congressional purposes of 

protecting the wages of U.S. workers’’ in the H–1B 

program); H.R. REP. 106–692, 12 (quoting Office of 

Inspector General, U.S. Department of Labor, Final 

Report: The Department of Labor’s Foreign Labor 

Certification Programs: The System is Broken and 

Needs to Be Fixed 21 (May 22, 1996) (‘‘The 

employer’s attestation to . . . pay the prevailing 

wage is the only safeguard against the erosion of 

U.S. worker’s [sic.] wages.’’). 

68 8 U.S.C. 1182(n)(1)(A). 

69See Labor Condition Applications and 

Requirements for Employers Using Nonimmigrants 

on H–1B Visas in Specialty Occupations and as 

Fashion Models; Labor Certification Process for 

Permanent Employment of Aliens in the United 

States, 65 FR 80110, 80110 (Dec. 20, 2000) (‘‘The 

[INA], among other things, requires that an 

employer pay an H–1B worker the higher of the 

actual wage or the prevailing wage, to protect U.S. 

workers’ wages and eliminate any economic 

incentive or advantage in hiring temporary foreign 

workers.’’); Panwar v. Access Therapies, Inc., 975 

F. Supp. 2d 948, 952 (S.D. Ind. 2013) (‘‘The wage 

requirements are designed to prevent . . . the 

influx of inexpensive foreign labor for professional 

services.’’). 

rather than reduces, employment 

opportunities for U.S. workers and 

benefits the economy broadly. Many 

commenters also expressed concern the 

IFR would harm currently employed 

foreign workers and their families, 

especially foreign workers with 

significant ties to the U.S. and for whom 

immigrant visa petitions have been filed 

but for whom visas are unavailable due 

to per country visa caps. 

After careful and thorough 

consideration of the comments, the 

Department has adopted a number of 

modifications in this final rule to the 

wage methodology established by the 

IFR. In particular, the Department has 

adjusted the Level I wage and the Level 

IV wage downward to the 35th 

percentile and 90th percentile, 

respectively. The Department is also 

implementing in this rule a number of 

changes to how it uses data from BLS 

in the H–1B and PERM programs that 

will further reduce the incidence of 

inappropriately inflated wages 

identified by commenters. Finally, the 

Department is adopting a phase-in 

approach to how the new wage levels 

will be applied to give employers and 

workers time to adapt to the change. In 

combination, the Department believes 

these measures appropriately address 

commenters’ concerns and will ensure 

that, going forward, the prevailing wage 

rates provided by the Department fully 

protect the wages and job opportunities 

of U.S. workers. 

As the Department explained in the 

IFR, a primary purpose of the 

restrictions on immigration created by 

the INA, both numerical and otherwise, 

is ‘‘to preserve jobs for American 

workers.’’ 61 Safeguards for American 

labor, and the Department’s role in 

administering them, have been a 

foundational element of the statutory 

scheme since the INA was enacted in 

1952.62 For the reasons set forth below, 

the Department has determined that the 

way it previously regulated the wages of 

certain immigrant and nonimmigrant 

workers in the H–1B, H–1B1, E–3, and 

PERM programs is inconsistent with the 

text of the INA. A substantial body of 

evidence examined by the Department, 

and discussed at length in the IFR, also 

suggests that the existing prevailing 

wage rates used by the Department in 

these foreign labor programs are causing 

adverse effects on the wages and job 

opportunities of U.S. workers and are 

therefore at odds with the purpose of 

the INA’s labor safeguards. The current 

wage levels were also promulgated 

through guidance, without providing 

the public with any notice or an 

opportunity to comment, and without 

any meaningful economic justification. 

Accordingly, the Department is acting to 

adjust the wage levels to ensure they are 

codified and consistent with the factors 

the INA dictates must govern the 

calculation of foreign workers’ wages. In 

so doing, the Department expects to 

reduce the dangers posed by the existing 

levels to U.S. workers’ wages and job 

opportunities and thereby advance a 

primary purpose of the statute. While 

some commenters disagreed with the 

Department’s conclusions about the 

effects of the old wage levels on U.S. 

workers, the Department continues to 

believe that the reasoning put forward 

in the IFR on this point is sound. 

The modern H–1B program was 

created by the enactment of the 

Immigration Act of 1990 (IMMACT 90). 

Among other reforms, IMMACT 90 

established ‘‘various labor protections 

for domestic workers’’ in the program.63

These protections were primarily 

designed ‘‘to prevent displacement of 

the American workforce’’ by foreign 

labor.64 In general, the purpose of the 

H–1B program is to ‘‘allow[ ] an 

employer to reach outside of the U.S. to 

fill a temporary position because of a 

special need, presumably one that 

cannot be easily fulfilled within the 

U.S.’’ 65 Using a foreign worker as a 

substitute for a U.S. worker who is 

already working in or could work in a 

given job is therefore inconsistent with 

the broad aims of the program. Congress 

has recognized that repeatedly, both in 

enacting IMMACT 90 and in making 

subsequent changes to the H–1B 

program.66

Wage requirements are central to the 

H–1B program’s protections for U.S. 

workers.67 Under the INA, employers 

must pay H–1B workers the greater of 

‘‘the actual wage level paid by the 

employer to all other individuals with 

similar experience and qualifications for 

the specific employment in question’’ or 

the ‘‘the prevailing wage level for the 

occupational classification in the area of 

employment.’’ 68 By ensuring that H–1B 

workers are offered and paid wages that 

are no less than what U.S. workers 

similarly employed in the occupation 

are being paid, the wage requirements 

are meant to guard against both wage 

suppression and the replacement of U.S. 

workers by lower-cost foreign labor.69

The OES prevailing wage levels that 

the Department uses in the H–1B 

program—as well as the related H–1B1 

and E–3 ‘‘specialty occupation’’ 

programs for foreign workers from 

Chile, Singapore, and Australia—are the 

same as those it uses in its PERM 

program. Through the PERM program, 

the Department processes labor 

certification applications for employers 

seeking to sponsor foreign workers for 

permanent employment under the EB– 

2 and EB–3 immigrant visa preference 

categories. Aliens seeking admission or 

adjustment of status under the EB–2 or 

EB–3 preference categories are 

inadmissible ‘‘unless the Secretary of 

Labor has determined and certified . . . 

that—(I) there are not sufficient workers 

who are able, willing, qualified . . . and 

available at the time of application for 


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70 8 U.S.C. 1182(a)(5)(A)(i). 

71 20 CFR 656.10(c)(1). 

72Pai v. U.S. Citizenship & Immigration Servs., 

810 F. Supp. 2d 102, 110 (D.D.C. 2011) (‘‘The plain 

language of [8 U.S.C. 1182(a)(5)(A) and 1153(b)(3)] 

reflects a concern to protect the interests of workers 

in the United States.’’); Fed’n for Am. Immigration 

Reform, Inc. v. Reno, 93 F.3d 897, 903 (D.C. Cir. 

1996) (explaining that the INA’s various limits on 

immigration, such as in the allocation of visas in 

the EB–2 and EB–3 preference categories, ‘‘reflect 

a clear concern about protecting the job 

opportunities of United States citizens.’’). See 

generally Texas v. United States, 809 F.3d 134, 181 

(5th Cir. 2015) (quoting I.N.S. v. Nat’l Ctr. for 

Immigrants’ Rights, Inc., 502 U.S. 183, 194 (1991) 

(‘‘The INA’s careful employment-authorization 

scheme ‘protect[s] against the displacement of 

workers in the United States,’ and a ‘primary 

purpose in restricting immigration is to preserve 

jobs for American workers.’ ’’). 

73See, e.g., Durable Mfg. Co. v. U.S. Dep’t of 

Labor, 578 F.3d 497, 502 (7th Cir. 2009) (‘‘The point 

remains that the new § 656.30(b) advances, to some 

degree, the congressional purpose of protecting 

American workers.’’); Rizvi v. Dep’t of Homeland 

Sec. ex rel. Johnson, 627 F. App’x 292, 294–95 (5th 

Cir. 2015) (unpublished) (‘‘Viewed in the proper 

context, the challenged regulation serves purposes 

in accord with the statutory duty to grant immigrant 

status only where the interests of American workers 

will not be harmed; showing the employer’s 

ongoing ability to pay the prevailing wage is one 

reasonable way to fulfill this goal.’’). 

74See Wage Methodology for the Temporary NonAgricultural Employment H–2B Program, Part 2, 78 

FR 24047, 24051 (Apr. 24, 2013) (‘‘Since the OES 

survey captures no information about actual skills 

or responsibilities of the workers whose wages are 

being reported, the two-tier wage structure 

introduced in 1998 was based on the assumption 

that the mean wage of the lowest paid one-third of 

the workers surveyed in each occupation could 

provide a reasonable proxy for the entry-level wage. 

DOL did not conduct any meaningful economic 

analysis to test the validity of that assumption 

. . .’’). 

75 8 U.S.C. 1182(p)(4). 

a visa and admission to the United 

States and at the place where the alien 

is to perform such skilled or unskilled 

labor, and (II) the employment of such 

alien will not adversely affect the wages 

and working conditions of workers in 

the United States similarly 

employed.’’ 70

The Secretary makes this 

determination in the PERM program by, 

among other things, requiring the 

foreign worker’s sponsoring employer to 

recruit U.S. workers by offering a wage 

that equals or exceeds the prevailing 

wage and to assure that the employer 

will pay the foreign worker a wage equal 

to or exceeding the prevailing wage.71 In 

this way, similar to its role in the H–1B 

program, the prevailing wage 

requirement in the PERM program 

furthers the statute’s purpose of 

protecting the interests of, and 

preserving job opportunities for, 

American workers.72 Effectuating this 

purpose is the principle objective of the 

Department’s regulatory scheme in the 

PERM program.73

While the prevailing wage levels the 

Department sets in the H–1B, H–1B1, E– 

3, and PERM programs are meant to 

protect against the adverse effects the 

entry of immigrant and nonimmigrant 

workers can have on U.S. workers, they 

do not accomplish that goal—and have 

not for some time. For starters, the 

Department has never offered any 

explanation or economic justification 

for the way it currently calculates the 

prevailing wage levels it uses in these 

foreign labor programs.74 The INA 

requires that a government survey 

employed to determine the prevailing 

wage provide wage levels 

commensurate with experience, 

education, and level of supervision.75

However, it is clear that the 

Department’s current wage levels are 

not sufficiently set in accordance with 

the relevant statutory factors. In setting 

the wage levels, the Department did not 

engage in an effort to tether them to the 

statutory factors, identify sources of 

wage data that would inform an analysis 

of how the levels should be calibrated 

so as to protect U.S. workers’ wages and 

job opportunities, or otherwise 

articulate an analytical framework to 

guide and explain how the levels were 

established. It also set the levels outside 

the rulemaking process, instead 

promulgating them solely through a 

memorandum of understanding between 

departmental components. 

Further, the Department’s analysis of 

the likely effects of H–1B and PERM 

workers on U.S. workers’ wages and job 

opportunities shows that the existing 

wage levels are not advancing the 

purposes of the INA’s wage provisions. 

As explained below, under the existing 

wage levels, artificially low prevailing 

wages provide an opportunity for 

employers to hire and retain foreign 

workers at wages well below what their 

U.S. counterparts—meaning U.S. 

workers in the same labor market, 

performing similar jobs, and possessing 

similar levels of education, experience, 

and responsibility—make, creating an 

incentive—entirely at odds with the 

statutory scheme—to prefer foreign 

workers to U.S. workers, and causing 

downward pressure on the wages of the 

domestic workforce. The Department is 

therefore acting to adjust the existing 

wage levels to ensure the levels reflect 

the wages paid to U.S. workers with 

levels of experience, education, and 

responsibility comparable to those 

possessed by similarly employed foreign 

workers. 

To accomplish this, the Department 

articulated an analytical framework in 

the IFR to govern how it adjusted the 

prevailing wage levels. In doing so, the 

Department considered, among other 

things, the statutory context in which 

the INA’s prevailing wage provisions are 

found. In particular, because the 

prevailing wage levels are used 

primarily for high-skilled workers, most 

of whom are H–1B workers, the 

Department took into account the INA’s 

definition of ‘‘specialty occupation,’’ 

which establishes the baseline 

minimum qualification requirements 

that foreign workers must possess to 

obtain an H–1B visa, and also looked to 

the qualification requirements for 

obtaining an EB–2 visa. From its review 

of these qualification requirements, the 

Department drew a number of 

conclusions about the least-skilled, or 

entry-level workers employed in the 

PERM and H–1B programs. Specifically, 

the Department determined that such 

workers often possess greater skills than 

many of the least qualified workers in 

the most common occupational 

classifications in which H–1B and 

PERM workers are found. For that 

reason, the Department concluded that 

the lower end of the wage distribution 

reported by the OES survey for those 

classifications should be discounted in 

setting an entry-level wage. Because 

wages for H–1B and PERM workers are, 

under the INA, to be based on the wages 

paid to U.S. workers with comparable 

education, experience, and 

responsibility, looking to the wage data 

of workers at the lowest points of the 

wage distributions for these occupations 

who likely would not be considered as 

working in a ‘‘specialty occupation’’ 

would therefore be inconsistent with the 

statute. Because the old wage 

methodology made such wage data a 

central element of the prevailing wage 

calculation, it did not, in the 

Department’s judgment, comport with 

the INA. 

The Department’s review of the INA’s 

qualification requirements for H–1B and 

EB–2 workers, in combination with an 

analysis of the demographic 

characteristics of workers in the H–1B 

program, led the Department to 

determine that, for purposes of 

identifying an entry-level wage, it 

should look to the wages paid to U.S. 

workers who possess a master’s degree 

and limited work experience. Using 

such workers as wage comparators for 

entry-level H–1B and PERM workers, in 

the Department’s judgment, is an 

appropriate way of determining what 

U.S. workers similarly employed and 

with comparable education and 

experience to such H–1B and PERM 

workers are paid. In analyzing wage 

data on such workers, the Department 

also determined that it was appropriate 


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to focus its analysis on those 

occupations that account for one 

percent or more of all H–1B workers. As 

the Department acknowledged in the 

IFR, using a single wage structure across 

multiple programs, hundreds of 

different occupations, and for hundreds 

of thousands of different workers 

necessarily means that prevailing wage 

rates will not be perfectly tailored to 

every single job opportunity. While still 

giving due weight to other occupations 

in its analysis, the Department has 

determined that paying special attention 

to those occupations where foreign 

workers are most heavily concentrated, 

and where the risk to U.S. workers’ 

wages and job opportunities from the 

employment of foreign labor is therefore 

most acute, is the optimal way of 

advancing the purpose of the INA’s 

wage protections while accounting for 

the breadth of the programs and 

occupations covered by the four-tier 

structure. As discussed further below, 

while several commenters disagreed 

with various aspects of this analytical 

framework and the Department’s 

interpretation of the INA, the 

Department, after considering those 

comments, continues to believe that its 

approach is appropriate. 

Having determined how it would 

analyze the question of how to set 

prevailing wage levels, the Department 

proceeded to review data from various, 

credible government sources, 

specifically the surveys from the 

National Science Foundation (NSF) and 

the Current Population Survey (CPS), 

about the wages paid to master’s degree 

holders with limited work experience 

employed in occupations that account 

for the vast majority of workers covered 

by the prevailing wage levels. Based on 

its analysis of this data, the Department 

concluded in the IFR that the range 

within the OES distribution where 

workers similarly employed and with 

levels of education and experience 

comparable to entry-level H–1B and 

PERM workers fall is between the 32nd 

and 49th percentiles of the distribution. 

The Department continues to believe 

that this conclusion is largely accurate, 

and that it is highly relevant to how it 

will set the entry-level wage in this final 

rule. 

In the IFR, the Department relied on 

a number of qualitative considerations, 

including the relative strengths and 

weaknesses of the data it relied on to 

identify the entry-level wage range as 

well as the purpose of the INA’s wage 

protections, to conclude that the entrylevel wage should be placed higher up 

within the identified range at 

approximately the 45th percentile. 

Based on private wage data and other 

considerations provided by 

commenters, which are addressed 

below, the Department has reassessed 

this conclusion, and has now 

determined that the entry-level wage for 

the H–1B and PERM programs is more 

appropriate at the 35th percentile. In 

particular, data provided by 

commenters indicate that the lower end 

of the range may in fact provide a more 

accurate representation of what U.S. 

workers similarly employed to entrylevel H–1B and PERM workers are paid. 

Concerns from commenters about how a 

potentially inflated entry-level wage 

would affect employers’ ability to access 

the program, and how the IFR’s 

reasoning was weighted too heavily to 

certain occupations and geographic 

areas, are also compelling reasons, in 

the Department’s judgment, to favor a 

lower point in the range. Importantly, 

the Department believes that by staying 

within the range identified in the IFR, 

the entry-level wage it has selected will 

provide robust protection for U.S. 

workers. 

The Department acknowledges 

commenters’ reliance interests on the 

current wage methodology and 

understands that immediate changes to 

wage rates could cause some economic 

uncertainty for both employers and 

foreign workers. Thus, the Department 

is also adopting a series of transition 

provisions in this final rule to make it 

easier for employers and workers to 

adapt to the changed wage levels, thus 

avoiding disruption and striking a 

proper balance between stakeholders’ 

reliance interests and the Department’s 

obligation to comply with the INA and 

pursue a policy that is protective of U.S. 

workers. For many job opportunities, 

the new wage rates will phase in 

through two steps over a year and a half 

period. For job opportunities that will 

be filled by workers on track to become 

lawful permanent residents, and who 

therefore have greater reliance interests 

in the old wage methodology, the new 

wage rates will phase in through four 

steps over a three and a half year period. 

The Department also reduced the Level 

IV wage from approximately the 95th 

percentile to the 90th percentile, and 

made a number of other technical 

modifications to how it uses BLS data 

to produce prevailing wage rates. These 

changes, too, address commenters’ 

concerns that wages under the IFR were 

inappropriately high. 

B. Discussion 

1. The Need for Rulemaking 

Summary of Comments 

The Department received a number of 

comments in support of the IFR, 

including one commenter that believed 

the IFR ‘‘makes important strides to 

bring wage requirements for the H–1B 

program closer to real prevailing wages 

in relevant industries.’’ These 

commenters agreed with the Department 

that the prior wage levels resulted in 

adverse effects on U.S. workers’ wages 

and job opportunities. Some of these 

commenters noted that the Level I and 

II wages under the prior wage level 

methodology (approximately the 17th 

and 34th percentiles) were well below 

the median for the occupation and that 

60 percent of H–1B positions were 

certified at one of these wage levels. 

One of these commenters expressed 

concern that the prior wage level 

methodology permitted H–1B employers 

to ‘‘engage in de facto wage arbitrage 

schemes.’’ A public policy organization 

noted that many employers ‘‘pay H–1B 

workers the lowest wages legally 

allowed, and outsource their H–1B 

employees to third-party firms.’’ The 

commenter asserted that employers 

opposed to the revised wage level 

methodology and increased wages claim 

‘‘that employers will only hire H–1B 

workers if they are underpaid relative to 

similarly-situated U.S. workers,’’ which 

creates a wage ‘‘race to the bottom.’’ The 

commenter further stated that ‘‘other 

reliable sources of wage data’’ 

demonstrate that the wage results 

generated by the Department in the IFR 

are in fact too low. The commenter cited 

data from both the Department and NSF 

to draw the comparison and substantiate 

this claim, and it requested that the 

Department conduct a ‘‘systematic 

review’’ of major H–1B occupations to 

ensure that updates to the wage 

structure are in line with credible 

sources of salary data, such as the NSF’s 

survey of recent college graduates. 

Another commenter believed the IFR 

would ‘‘prevent employers that seek 

specialized workers from being crowded 

out of the H–1B program by employers 

using the program to pay below market 

wages.’’ Some of these commenters 

believed the Level I wage should be set 

closer to the median for the occupation 

and one of the commenters stated that 

the Level I wage was the only wage level 

that mattered because the Department 

‘‘has no adjudicative power over 

employer skill level claims.’’ 

By contrast, the majority of comments 

received on the IFR expressed strong 

opposition to the rule and a number of 

commenters questioned whether 

adjustments to the prevailing wage level 

methodology are necessary. Many 

commenters believed there was no need 

to raise wages to protect U.S. workers, 

citing the Department’s statement that 


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76See New American Economy, ‘‘About,’’ https:// 

www.newamericaneconomy.org/about. 

many frequent H–1B program users pay 

wages above the required prevailing 

wage rates, as well as other external 

sources finding that foreign workers are 

paid as much or more than similarly 

employed U.S. workers and that foreign 

workers create jobs for U.S. workers or 

otherwise benefit U.S. workers and the 

economy broadly. Many commenters 

pointed to unemployment statistics and 

forecasted job growth in certain fields as 

evidence that the IFR changes are not 

necessary to protect U.S. workers. Three 

commenters stated that it is more 

expensive to hire foreign workers due to 

costs related to the visa process and that 

employers prefer to hire U.S. workers 

due to concern about the ‘‘instability of 

H–1B lottery systems.’’ Some 

commenters believed the regulatory 

requirement that H–1B employers must 

pay the highest of the actual or 

prevailing wage provides sufficient 

protection to U.S. workers because the 

employer must pay the actual wage in 

cases where the Department’s PWD rate 

is lower. One commenter asserted the 

annual visa caps provide sufficient 

protection for U.S. workers and a 

second commenter asserted the 

recruitment requirements in the 

permanent labor certification 

regulations offer sufficient protection. 

Several commenters claimed it was 

improper for the Department to cite 

higher actual wages paid by large H–1B 

employers as an indication that the 

prevailing wage levels were insufficient 

to protect U.S. workers. For example, an 

university commenter noted the 

Department’s acknowledgment that 

many large ‘‘program users pay well in 

excess of the prevailing wage’’ and the 

commenter asserted this was an 

acknowledgment ‘‘that the issue it is 

trying to resolve . . . is non-existent.’’ 

This commenter stated that employers 

paying more than the prevailing wage 

might simply indicate these employers 

pay a higher actual wage ‘‘due to 

legitimate business factors.’’ Similarly, a 

public policy organization and a 

professional association stated that the 

fact that a group of H–1B employers 

pays more than the prevailing wage 

indicates only that some employers 

voluntarily increase wages for 

competitive reasons. Another 

commenter stated that pay differences 

are reflective of the ‘‘free market at 

work’’ and that ‘‘high profile tech 

companies . . . are in heavy 

competition . . . and have large enough 

profit margins’’ to pay higher wages. A 

group of associations stated that 

payment of higher wages by these 

employers may be due to geography and 

‘‘intensity of the work’’ such that these 

employers must ‘‘pay a premium to 

attract both domestic talent and foreignborn talent . . .’’ By intensity of the 

work, the commenters referred to areas 

in which at least one percent of workers 

are employed in a particular occupation. 

The commenters stated that the OES 

‘‘identifies for each SOC . . . [areas 

where] the number of employed 

individuals per each 1,000 employed 

persons in that particular occupation 

. . .’’ and that the Department should 

look to this as ‘‘a useful proxy for the 

intensity of activity in that particular 

occupation in a particular geography,’’ 

in addition to analyzing available LCA 

data to determine how often wages in 

excess of prevailing wages ‘‘are 

primarily for such high intensity jobs 

and locations.’’ 

Many commenters asserted the 

Department failed to consider or 

‘‘insufficiently weighted’’ a wide range 

of relevant and readily available studies 

and reports that indicate a revision to 

the wage level methodology is 

unnecessary. These commenters stated 

that the Department ignored ample 

evidence that H–1B workers are paid at 

least as much as their U.S. counterparts 

and that employment of H–1B workers 

may increase the wages earned by U.S. 

workers. A few commenters cited a 

GAO report finding H–1B workers earn 

the same or more than similar U.S. 

workers and an analysis by the website 

Glassdoor finding that across ‘‘10 cities 

and roughly 100 jobs’’ it examined, 

salaries for H–1B workers were ‘‘about 

2.8 percent higher than comparable U.S. 

salaries . . . .’’ Similarly, several 

commenters cited a report published by 

the Partnership for a New American 

Economy, a research and advocacy 

organization dedicated to ‘‘mak[ing] the 

economic case for immigration,’’ 76

finding that denials of H–1B petitions 

from 2007 to 2008 slowed job and wage 

growth for U.S. workers and that every 

one-percentage-point increase in the 

‘‘foreign STEM share of a city’s total 

employment . . . made possible by the 

H–1B visa program’’ increased wage 

growth by three to seven percentage 

points for U.S. workers. Other cited 

sources included: 

• A Cato Institute report indicating 

roughly 80 percent of H–1B employers 

pay H–1B workers ‘‘above average 

market wages’’; 

• A working paper from the National 

Bureau of Economic Research finding 

that ‘‘complete elimination’’ of the H– 

1B program would have virtually no 

effect on the wages of ‘‘high-skilled 

Americans in year one and a slight 

reduction . . . by year three’’; 

• A National Foundation for 

American Policy (NFAP) report finding 

‘‘on average, H–1B workers reduce 

overall unemployment and increase 

earnings growth within the fields they 

are employed by increasing firm 

productivity’’; 

• An NFAP report finding that each 1 

percent increase in H–1B workers in 

science, engineering, technology, and 

mathematics (STEM) occupations 

‘‘increased local wages of college 

educated Americans by 7–8 percent and 

non-college educated Americans by 3–4 

percent’’; 

• A journal article concluding that 

‘‘after controlling for human capital 

attributes, foreign I.T. professionals’’ 

earn more than their U.S. counterparts; 

and 

• A National Survey of College 

Graduates comparative analysis finding 

that ‘‘controlling for socioeconomic and 

demographic characteristics, workers 

who hold a temporary work visa earn 

about thirty percent more than 

comparable’’ U.S. workers. 

Commenters also cited a variety of 

studies and reports that conclude that 

the employment of foreign workers has 

little or no effect on employment rates 

for similarly employed U.S. workers. 

For example, a group comment cited a 

2016 Journal of Economic Perspectives 

study on ‘‘Global Talent Flows’’ that the 

commenter said indicated ‘‘very little 

displacement of U.S.-born innovators 

and high-skilled professionals by highskilled immigrants.’’ Another 

commenter stated ‘‘key fields such as 

software development and data science 

. . . are facing undeniable workforce 

supply shortages’’ and asserted this 

‘‘undermin[ed] the argument that an 

influx in cheaper labor supply will 

result in lower possible earnings’’ for 

U.S. workers. In support, the commenter 

cited a Wall Street Journal article noting 

‘‘tech job postings in the U.S. rose 32%’’ 

in the first half of 2019 and a 2018 BLS 

report projecting higher than average 

employment growth in high-tech 

services. 

Some commenters also expressed 

concerns about the sources the 

Department did cite in the IFR in 

support of the need to revise wage 

levels. Citing an analysis of the IFR by 

labor economist and professor Dr. 

Madeline Zavodny, a trade association 

asserted the Department relied on 

‘‘outdated, incorrect, or limited 

empirical data’’ and relied on sources 

that did not ‘‘include an analysis of the 

wages of H–1B workers in direct 

comparison with other workers having 

the same level of education, experience, 


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77See https://www.grassley.senate.gov/news/ 

news-releases/bipartisan-group-lawmakers-proposereforms-skilled-non-immigrant-visa-programs. 

78Wage Methodology for the Temporary NonAgricultural Employment H–2B Program, Part 2, 78 

FR 24047, 24051 (Apr. 24, 2013). 

79See Bureau of Labor Statistics, Learn more, earn 

more: Education leads to higher wages, lower 

unemployment, available at https://www.bls.gov/ 

careeroutlook/2020/data-on-display/educationpays.htm. 

80For example, the occupation of Software 

Developers, which accounts for a large number of 

H–1B workers, does not require the same degree of 

specialized knowledge as a baseline entry 

requirement as does the INA’s definition of 

‘‘specialty occupation.’’ Yet approximately 10 

Continued 

or responsibility.’’ The commenter 

stated that the Associated Press analysis 

cited at footnote 122 provides ‘‘an 

incomplete picture’’ because it is not 

based on ‘‘actual workers in the U.S. 

who hold an H–1B visa’’ but instead is 

based on LCA data, which includes 

‘‘applications that are denied (often 

because the wage is too low).’’ The 

commenter also stated that the analysis 

‘‘does not control for any differences 

between applicants for an H–1B visa 

and U.S. workers, such as differences in 

age and education.’’ An anonymous 

commenter stated that the Associated 

Press article indicated that 58 percent of 

H–1B workers are paid more than their 

U.S. counterparts and asserted the 

article can only be used to support 

statements regarding wages paid to 

workers in computer occupations. 

The trade association stated that the 

citations at footnote 121 in the IFR that 

the Department relied on to support its 

statement that H–1B IT workers earn 

roughly 25–33 percent less than U.S. 

workers failed to provide ‘‘a clear 

analysis of the wages of workers who 

hold an H–1B visa compared with other 

workers;’’ failed to include H–1B 

workers in the analysis; and failed to 

provide sufficient details of the wage 

analysis to determine the reason for the 

wage differentials. The anonymous 

commenter stated that the CRISIL 

Research citation in this footnote failed 

to cite evidence or provide data to 

support the statement that H–1B 

workers earn 25 percent less than U.S. 

workers and failed to provide a source 

for the claim that ‘‘local hires . . . cost 

25–30% more.’’ The anonymous 

commenter stated that the third citation 

in this footnote is outdated, analyzing 

‘‘only immigrant trends in the 1990s’’ 

and does not ‘‘specifically reference 

computer occupations.’’ The commenter 

also noted that the report recognizes 

that ‘‘the lower earnings of recent 

immigrants may reflect unobserved 

differences in the quality and type of 

education among immigrant cohorts’’ 

and the report ‘‘offers alternative factors 

that weigh into the wage trends of H– 

1B workers that [DOL] has not 

accounted for in this rule.’’ 

An immigration law firm stated that 

the IFR misconstrued the CRISIL report, 

which the commenter asserted ‘‘actually 

shows that as a result of recent H–1B 

policy changes, it is harder to obtain H– 

1Bs for employees that are contracted to 

work at third-party worksites forcing 

U.S. employers to instead hire full-time 

employees to fill these roles’’ and ‘‘the 

increase in costs is attributed to the 

costs of full time employees’’ compared 

to the cost of ‘‘contract employees.’’ The 

commenter also asserted that the 

Department misconstrued Economic 

Policy Institute research when it 

claimed the research showed that only 

one of every two STEM graduates get a 

job in the field. The commenter stated 

that the researchers ‘‘found that half of 

students that do not enter the STEM 

industry found jobs in other industries.’’ 

The anonymous commenter also 

asserted that the congressional 

testimony cited in this footnote provides 

no evidence to ‘‘establish the median 

wage as the appropriate compensation 

for any specific [H–1B] positions’’ and 

fails to consider that ‘‘that a Level 1 

wage does not necessarily represent a 

position that requires less skill, but 

rather may have fewer experience 

requirements or supervisory duties.’’ 

The commenter also asserted that the 

journal article cited in this footnote is 

‘‘outdated in its data’’ and ‘‘refers to 

computer occupations’’ so it ‘‘cannot be 

applied to any other occupational 

codes.’’ 

Finally, a trade association noted that 

the Department cited findings by George 

Borjas regarding the impact of foreign 

workers on the wages of low-skill 

workers but failed to acknowledge 

Borjas’s contribution to a 2016 National 

Academies of Sciences, Engineering, 

and Medicine (NASEM) literature 

review in which he stated ‘‘wage 

impacts from immigrants on U.S.-born 

college-educated workforce is minor (an 

increase for U.S. professionals of onehalf of one percent in wage rates as a 

result of high-skilled immigration).’’ 

The commenter added that the NASEM 

review found that there is a ‘‘broad 

consensus with respect to high-skilled 

immigration that any impacts on U.S. 

wages by high-skilled, college-educated 

foreign-born professionals are close to 

negligible.’’ 

Response to Comments 

First, as the Department explained in 

the IFR, a primary and independently 

sufficient reason for reforming the 

manner in which it sets prevailing wage 

levels in the H–1B and PERM programs 

is that the old wage levels were never 

justified through an economic analysis, 

nor codified in rulemaking through 

notice and comment, and, on closer 

inspection, are in substantial tension 

with the statutory framework. Notably, 

commenters have also not provided data 

or analysis demonstrating that the wage 

rates under the old wage methodology 

produces wage rates commensurate with 

the wages paid to U.S. workers similarly 

employed and with comparable 

education, experience, and 

responsibility to H–1B and PERM 

workers, as required by statute. While 

some commenters urged the Department 

to preserve the old wage methodology, 

they provided no evidence for why that 

would be appropriate or consistent with 

the INA. Moreover, the Department 

notes that criticism of the way in which 

the wage levels are currently set is 

longstanding and exists across the 

political spectrum.77 Put simply, the old 

wage methodology is an outmoded 

method for calculating prevailing wage 

rates that is neither supported economic 

analysis, nor defended by commenters, 

and has never tied to the relevant 

statutory factors. 

The Level I wage under the old 

methodology is set by calculating the 

mean of the bottom third of the OES 

wage distribution. That means the 

wages for many H–1B workers are set 

based on a calculation that takes into 

account wages paid to workers who, as 

explained in the IFR and below, almost 

certainly would not qualify to work in 

a ‘‘specialty occupation,’’ as defined by 

the INA. The Department has noted 

previously that ‘‘workers in occupations 

that require sophisticated skills and 

training receive higher wages based on 

those skills.’’ 78 As a worker’s education 

and skills increase, his wages are 

expected to increase as well.79 For that 

reason, it is likely that workers at the 

lowest end of an occupation’s wage 

distribution generally have the lowest 

levels of education, experience, and 

responsibility in the occupation. In 

consequence, if the occupation by 

definition includes workers who do not 

have the level of specialized knowledge 

required of H–1B workers, as is the case 

with some of the most common 

occupations in which H–1B workers are 

employed, the very bottom of the wage 

distribution should be discounted in 

determining the appropriate point in the 

OES wage distribution at which to 

establish the entry-level wage under the 

four-tiered wage structure because 

workers at the bottom end are not 

similarly employed to H–1B workers. 

Yet the old wage structure made such 

workers a central component of that 

calculation.80 Similarly, the current 


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3618 Federal Register / Vol. 86, No. 9 / Thursday, January 14, 2021 / Rules and Regulations 

percent of all LCAs filed with the Department for 

software developer positions classify those 

positions as entry-level, meaning that under the 

current wage levels the wages paid to such specialty 

occupation workers are calculated based, at least in 

part, on the wages paid to some workers who do 

not have comparable specialized knowledge and 

expertise. This outcome contravenes the INA’s 

requirement that H–1B workers be paid wages 

based on the wages paid to U.S. workers with 

similar levels of education, experience, and 

responsibility. 

81See Long Island Care at Home, Ltd. v. Coke, 

551 U.S. 158, 175 (2007) (‘‘Neither can we find any 

significant legal problem with the Department’s 

explanation for the change. The agency said that it 

had ‘concluded that these exemptions can be 

available to such third party employers’ because 

that interpretation is ‘more consistent’ with 

statutory language that refers to ‘any employee’ 

engaged ‘in’ the ‘enumerated services’ and with 

‘prior practices concerning other similarly worded 

exemptions.’ There is no indication that anyone 

objected to this explanation at the time. And more 

than 30 years later it remains a reasonable, albeit 

brief, explanation.’’). 

82Atlantic Council, Reforming US’ High-Skilled 

Guestworker Program, (2019), available at https://

www.atlanticcouncil.org/in-depth-research-reports/ 

report/reforming-us-high-skilled-immigrationprogram/; The Impact of High-Skilled Immigration 

on U.S. Workers: Hearing before the Senate 

Committee on the Judiciary (February 25, 2016) 

(testimony of John Miano, representing Washington 

Alliance of Technology Workers, Local 37083 of the 

Communications Workers of America, the AFL– 

CIO); Norman Matloff, On the Need for Reform of 

the H–1B Non-Immigrant Work Visa in ComputerRelated Occupations, 36 U. Mich. J.L. Reform 815 

(2003). 

83U.S. Citizenship and Immigration Services, 

Characteristics of H–1B Specialty Occupation 

Workers Fiscal Year 2019 Annual Report to 

Congress October 1, 2018–September 30, 2019, 

(2020), available at https://www.uscis.gov/sites/ 

default/files/document/reports/Characteristics_of_

Specialty_Occupation_Workers_H-1B_Fiscal_Year_

2019.pdf, (showing 66 percent of H–1B petitions 

approved in FY2019 were for computer-related 

occupations); Sean McLain & Dhanya Ann Thoppil, 

Bulging Staff Cost, Shrinking Margins, CRISIL 

Research, (2019), available at https://

www.crisil.com/en/home/our-analysis/reports/ 

2019/05/bulging-staff-cost-shrinking-margins.html; 

Sean McLain & Dhanya Ann Thoppil, U.S. Visa Bill 

‘Very Tough’ for Indian IT, The Wall Street Journal, 

April 18, 2013, available at https://blogs.wsj.com/ 

indiarealtime/2013/04/18/u-s-visa-bill-very-toughfor-indian-it/?mod=wsj_streaming_latest-headlines; 

The State of Asian Pacific America,’’ Paul Ong (ed.), 

LEAP Asian Pacific American Public Policy 

Institute and UCLA Asian American Studies Center, 

1994, pp. 179–180; Carnegie Endowment for 

International Peace, Balancing Interests: Rethinking 

U.S. Selection of Skilled Immigrants, (1996); 

Youyou Zhou, Most H–1B workers are paid less, but 

it depends on the job, Associated Press, April 18, 

2017, available at https://apnews.com/ 

afs:Content:873580003/Most-H-1B-workers-arepaid-less,-but-it-depends-on-the-type-of-job. 84 George Borjas, The Labor Demand Curve Is 

Downward Sloping: Reexamining the Impact of 

Immigration on the Labor Market, The Quarterly 

Journal of Economics Vol. 118, No. 4 (Nov., 2003), 

pp. 1335–1374, available at https://www.jstor.org/ 

stable/25053941?seq=1. 

85 John Bound et al., Understanding the Economic 

Impact of the H–1B Program on the U.S., NBER 

Working Paper No. 23153 (2017), available at 

https://www.nber.org/papers/w23153.pdf. The 

Border Security, Economic Opportunity, and 

Immigration Modernization Act, S. 744: Hearing 

before the Senate Committee on the Judiciary (April 

22, 2013) (testimony of Neeraj Gupta, CEO of 

Systems in Motion, to the Senate Judiciary 

Committee), available at https://

www.judiciary.senate.gov/imo/media/doc/04-22- 

13GuptaTestimony.pdf. Daniel Costa and Ronil 

Hira, H–1B Visas and Prevailing Wage Levels, 

Economic Policy Institute, (2020), available at 

https://www.epi.org/publication/h-1b-visas-andprevailing-wage-levels/. 

86 85 FR at 63,882. 

87 Id. 

Level IV wage is set by calculating the 

mean of the upper two-thirds of the 

wage distribution. That means that the 

wage level provided for the most 

experienced and highly educated H–1B 

workers is determined, in part, by taking 

into account a sizeable number of 

workers who do not even make more 

than the median wage of the occupation. 

Given the correlation between wages 

and skills, this calculation also would 

appear inconsistent with the statutory 

and regulatory framework. Common 

sense dictates that workers making less 

than the median wage of the occupation 

cannot be regarded as being similarly 

qualified to the most competent and 

experienced members of that 

occupation. That puts the old 

methodology in substantial tension with 

the governing statute and is in and of 

itself a sufficient reason for reassessing 

and revising the prior methodology in 

order to bring it more closely in line 

with the INA’s wage provisions.81

The Department also based its 

conclusion in the IFR that regulatory 

reform of H–1B and PERM prevailing 

wages was needed, in part, on a review 

of the academic literature on the subject, 

congressional testimony and media 

accounts of the practical consequences 

of the prior prevailing wage levels, and 

data on the actual wages that major 

users of the H–1B and PERM programs 

pay their foreign workers. As discussed 

at length in the preamble to the IFR, the 

Department considered numerous 

studies finding that H–1B workers are 

paid less than their U.S. counterparts.82

Other studies found this disparity to be 

especially true of H–1B employees 

working in computer science and 

information technology, fields in which 

two thirds of H–1B workers are 

employed.83 The Department’s 

justification also took into account the 

fact that economic literature suggests 

that the introduction of low-cost foreign 

labor into a labor market suppresses 

wages in proportion to the number of 

foreign workers present in that labor 

market.84 Studies involving computer 

science workers confirm this general 

finding.85 Its review of this information 

led the Department to conclude that the 

old wage methodology resulted in 

adverse effects on both U.S. workers’ 

wages as well as their job opportunities. 

After reviewing comments and the 

studies and information they provided, 

the Department continues to believe 

that, at least in some cases, the old 

prevailing wage methodology resulted 

in harm to U.S. workers and therefore 

should be revised. 

The Department recognized, as did 

some commenters, the limitations of 

some of the wage studies it relied on in 

the IFR, noting that many of them 

compare H–1B and U.S. workers in the 

same occupation but do not directly 

compare workers in those occupations 

with the same levels of education, 

experience, and responsibility.86

However, in the IFR, the Department 

explained why these studies 

nonetheless allow for an instructive 

wage comparison: ‘‘[B]ecause H–1B 

workers are required to possess 

specialized knowledge and expertise 

that often exceeds the level of education 

and experience necessary to enter a 

given occupation generally, and greater 

skills are associated with higher 

earnings, the median H–1B workers 

should earn a wage that is at least the 

same, if not more, than the median wage 

paid to U.S. workers in the occupation. 

But a variety of studies show that the 

opposite is occurring.’’ 87 Put another 

way, while the Department 

acknowledges that there is an inherent 

limitation in comparing median 

earnings of groups of workers, since 

doing so does not account for different 

levels of experience and education, the 

distortion in the data that results from 

such a limitation would be expected to 

show higher earnings for H–1B workers 

at the median given that a result of the 

INA’s specialty occupation requirement 

for H–1B workers is that H–1B workers 

must possess more advanced education 

and experience than what is typically 

required to enter some of the most 

common occupations in which H–1B 

workers are employed. Yet the median 

earning of H–1B workers, according to 

these studies, are in fact skewed lower 

than the median U.S. worker in these 

occupations. Accordingly, the 

Department continues to believe this is 

a compelling data point demonstrating 

that H–1B workers in many cases make 

wages below those of similarly 

employed U.S. workers. 

Further, the Department disagrees 

with commenters that other aspects of 

the methodology and reasoning relied 

on in the various studies that support 

the Department’s position are flawed. 

These are, in many cases, studies from 

credible sources that are commonly 

cited in reporting and literature about 

the effects of the H–1B program on U.S. 

workers. Moreover, to the extent these 


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88The Impact of High-Skilled Immigration on 

U.S. Workers: Hearing before the Senate Committee 

on the Judiciary (Feb. 25, 2016) (testimony of John 

Miano, representing Washington Alliance of 

Technology Workers, Local 37083 of the 

Communications Workers of America, the AFL– 

CIO); Immigration Reforms Needed to Protect 

Skilled American Workers: Hearing before the 

Senate Committee on the Judiciary (Mar. 17, 2015) 

(testimony of Ronil Hira, Associate Professor of 

Public Policy Rochester Institute of Technology, 

Rochester, NY), available at https://

www.judiciary.senate.gov/imo/media/doc/ 

HiraTestimony.pdf; The Border Security, Economic 

Opportunity, and Immigration Modernization Act, 

S. 744: Hearing before the Senate Committee on the 

Judiciary (Apr. 22, 2013) (testimony of Neeraj 

Gupta, CEO of Systems in Motion, to the Senate 

Judiciary Committee), available at https://

www.judiciary.senate.gov/imo/media/doc/04-22- 

13GuptaTestimony.pdf. 

89 ‘‘Visa Abuses Harm American Workers,’’ The 

New York Times, June 16, 2016, available at http:// 

www.nytimes.com/interactive/opinion/ 

editorialboard.html; Julia Preston, Pink Slips at 

Disney. But First, Training Foreign Replacements, 

The New York Times, June 3, 2015, available at 

https://www.nytimes.com/2015/06/04/us/last-taskafter-layoff-at-disney-train-foreignreplacements.html; Julia Preston, Toys ‘R’ Us Brings 

Temporary Foreign Workers to U.S. to Move Jobs 

Overseas, The New York Times, Sept. 29, 2015, 

available at https://www.nytimes.com/2015/09/30/ 

us/toys-r-us-brings-temporary-foreign-workers-tous-to-move-jobs-overseas.html; Michael Hiltzik, A 

loophole in immigration law is costing thousands 

of American jobs, Los Angeles Times, February 20, 

2015, available at https://www.latimes.com/ 

business/hiltzik/la-fi-hiltzik-20150222- 

column.html; Daisuke Wakabayashi & Nelson 

Schwarts, Not Everyone in Tech Cheers Visa 

Program for Foreign Workers, The New York Times, 

Feb. 5, 2017, available at https://www.nytimes.com/ 

2017/02/05/business/h-1b-visa-tech-cheers-forforeign-workers.html. 

90 85 FR at 63,882, 63,884. 91An agency is not required to respond to every 

study, or consider every conceivable piece of 

evidence in drawing a conclusion. Tex. Office of 

Pub. Util. Counsel v. F.C.C., 265 F.3d 313, 328 n.7 

(5th Cir. 2001). 

92See Or. Envtl. Council v. Kunzman, 817 F.2d 

484, 496 (9th Cir. 1987); see also New York v. U.S. 

Nuclear Regulatory Comm’n, 589 F.3d 551, 555 (2d 

Cir. 2009) (‘‘These are technical and scientific 

studies. Courts should be particularly reluctant to 

second-guess agency choices involving scientific 

disputes that are in the agency’s province of 

expertise. Deference is desirable.’’ (quoted source 

omitted)); see generally Universal Camera Corp. v. 

NLRB, 340 U.S. 474, 488 (1951) (‘‘The substantiality 

of evidence [in APA review] must take into account 

whatever in the record fairly detracts from its 

weight,’’ but this ‘‘does not furnish a calculus of 

value by which a reviewing court can assess the 

evidence,’’ nor does it negate agency expertise that 

the court ‘‘must respect,’’ nor permit a court to 

displace the agency’s ‘‘choice between two fairly 

conflicting views.’’); cf. Fed. Power Comm’n v. Fla. 

Power & Light Co., 404 U.S. 453, 463, (1972) 

(‘‘Particularly when we consider a purely factual 

question within the area of competence of an 

administrative agency created by Congress, and 

when resolution of that question depends on 

‘engineering and scientific’ considerations, we 

recognize the relevant agency’s technical expertise 

and experience, and defer to its analysis unless it 

is without substantial basis in fact.’’). 

93 Marsh v. Or. Nat. Res. Council, 490 U.S. 360, 

378 (1989). 

94 85 FR at 63,882. 

studies focus on computer science and 

IT occupations, the Department believes 

that focus is appropriate. As explained 

at greater length below, the 

Department’s analytic framework gives 

special attention to these occupations 

because they are where the largest 

concentration of H–1B and PERM 

workers are found, and therefore the 

places where the risks to U.S. workers 

that the Department is trying to guard 

against are most acute. 

In addition, the Department 

considered testimony before the Senate 

Judiciary Committee 88 as well as news 

reports about the displacement of U.S. 

workers by H–1B workers.89 As noted, 

some commenters criticized these 

sources as anecdotal and insufficient. 

But they were not the only sources on 

which the Department relied. The 

information from those sources 

supplemented the information the 

Department derived from studies and 

academic articles. Standing alone such 

information may (or may not) be 

insufficient to demonstrate systematic, 

adverse effects on U.S. workers, but, 

viewed in combination with other 

available evidence, it provides vital 

insight into the Department’s 

understanding of the effects of the old 

wage methodology. The Department 

also views evidence about the realworld consequences of its wage 

methodology on U.S. workers, as shown 

in news reports, as important 

information that should not be ignored. 

As detailed above, some commenters 

also claimed that the Department 

ignored or unfairly discounted studies 

showing that some H–1B workers earn 

more than U.S. workers. Far from 

ignoring or discounting such studies, 

the Department acknowledged their 

findings and addressed them in the 

IFR.90 While the Department did not 

discuss in the IFR every study of that 

kind that the commenters cite, it has 

reviewed the studies provided by 

commenters and notes that it did 

consider many sources with similar 

information, analysis, and conclusions 

to these studies.91 In addition, while 

some studies cited by commenters 

which were not directly addressed in 

the IFR offer additional analysis, they 

do not overwhelm the conclusions of 

other studies originally cited in the IFR. 

For example, reports that find that H– 

1B workers’ wages exceed market wages 

often ignore that the prevailing wage 

level is fixed for the H–1B worker for 

three years, meaning that even if the H– 

1B worker is paid in excess of the 

market wage for an entry-level worker in 

year 1, this may not be the case in year 

3 because the H–1B workers’ wages 

should no longer be compared to entrylevel workers. Other reports cited by 

critical commenters acknowledged that 

the research on employment of 

American workers in the presence of H– 

1B workers remains inconclusive or that 

the existing studies present mixed 

results on whether H–1B workers crowd 

out American workers. Some of these 

studies then focused on one segment of 

the American worker and H–1B market 

(e.g., recent college graduates) to obtain 

specific results which in many cases 

cannot be extrapolated to other workers 

cohorts. Others of these studies relied 

on data gathered only during recent 

economic recessions, which make it 

difficult to draw proper conclusions 

about the effect of H–1B workers on 

compensation and employment for 

competing workers under other (and 

more typical) economic conditions. The 

Department examined these studies 

concluding that some H–1B workers in 

some circumstances are better paid than 

U.S. workers, weighed them against 

other studies reaching the opposite 

conclusion, and, in its expert judgment, 

determined that there was reason to 

conclude that, at least in some 

instances, prevailing wage levels are set 

too low. An agency’s choice of studies 

on which to rely is entitled to 

substantial deference.92 The Supreme 

Court has held that ‘‘[w]hen specialists 

express conflicting views, an agency 

must have discretion to rely on the 

reasonable opinions of its own qualified 

experts even if, as an original matter, a 

court might find contrary views more 

persuasive.’’ 93 The studies cited by 

commenters rest on the same kinds of 

analyses and reach similar conclusions 

to those studies reviewed by the 

Department in development of the IFR. 

The Department has reviewed these 

studies and has concluded that they do 

not discredit, or even necessarily 

contradict, other sources of information 

that demonstrate that H–1B workers do, 

in some instances, adversely affect U.S. 

workers’ wages and job opportunities, 

even if that is not true in all cases, as 

explained throughout. Accordingly, 

based on its review of these studies the 

Department continues to believe that 

some modification to the wage levels is 

necessary. 

Contrary to the commenters’ 

assertions, the Department considered 

studies showing that H–1B workers 

benefit U.S. workers. In the IFR, the 

Department acknowledged that in some 

instances the employment of H–1B 

workers fuels economic growth and job 

creation,94 as well as the fact that paying 

foreign workers at wages lower than 

U.S. workers may increase firms’ 


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95 Id. at 63,883. 

96 Id. at FR at 63,882. 

97 Id. at 63,884. 

98The Border Security, Economic Opportunity, 

and Immigration Modernization Act, S. 744: 

Hearing before the Senate Committee on the 

Judiciary (Apr. 22, 2013), available at https://

www.judiciary.senate.gov/imo/media/doc/04-22-13

BradSmithTestimony.pdf. 

99 85 FR at 63,855. 

100 John Bound et al., Understanding the 

Economic Impact of the H–1B Program on the U.S., 

NBER Working Paper No. 23153 (2017), available at 

https://www.nber.org/papers/w23153.pdf. 

101 85 FR at 63,884. 

102 8 U.S.C. 1182(a)(5)(A)(i)(II). 

103 8 U.S.C. 1182(n)(1)(A)(i). 

104Hussion v. Madigan, 950 F.2d 1546, 1554 

(11th Cir. 1992). 

profitability.95 Indeed, in the IFR the 

Department discussed studies that 

suggest the employment of H–1B 

workers has positive effects on the 

wages and job opportunities of U.S. 

workers and expressed a qualified 

agreement with them, specifically 

noting that ‘‘[w]hile the Department 

agrees that this is true in some 

instances, it is also clear that the current 

prevailing wage levels often result in 

adverse effects, and that adjustments to 

the wage levels are needed to ensure 

that the positive effects of the program 

will be enjoyed more widely.’’ 96 In 

other words, the Department anticipates 

that bringing the wages of foreign 

workers in line with what similarly 

employed U.S. workers actually make 

will enhance the benefits resulting from 

the employment of such workers, which 

studies considered in the IFR as well 

offered by commenters show exist in 

some cases. The Department did not 

dispute in the IFR ‘‘that allowing firms 

to access skilled foreign workers can 

lead to overall increases in innovation 

and economic activity, which can, in 

turn, benefit U.S. workers,’’ but did 

conclude ‘‘H–1B workers’ earnings data 

and other research indicate that, in 

many cases, the existing wage levels do 

not lead to these outcomes.’’ 97 At no 

point in the IFR did the Department 

suggest that H–1B workers either always 

harm U.S. workers or always benefits 

U.S. workers and the firms that employ 

them. Rather, the Department 

concluded, and continues to conclude, 

that the positive benefits of the program, 

while real, are not as widespread as they 

might otherwise be, and that this is 

likely due to the fact that H–1B workers 

in some instances are paid wages below 

that paid to their U.S. counterparts. 

One argument along these lines that 

the Department addressed in the IFR 

was made by the general counsel of a 

major user of the H–1B program in 

testimony before the Senate Judiciary 

Committee. In his testimony, he 

contended that H–1B workers raise the 

income of U.S. workers because they 

alleviate labor shortages, particularly in 

STEM and computer science. Importing 

workers to fill needs that would 

otherwise go unmet, he argued, allows 

companies to innovate and grow, 

creating more employment 

opportunities and higher-paying jobs for 

U.S. workers.98 The Department rejects 

the premise of the general counsel’s 

argument that STEM jobs are going 

unfilled because there are no qualified 

American workers willing to take them, 

and therefore U.S. gross domestic 

product (GDP) would be smaller 

without importing foreign STEM 

workers. The Department notes that for 

every two students who graduate from 

a U.S. university with a STEM degree, 

only one obtains a STEM job.99 In the 

case of computer science occupations, 

another study cited by the Department 

challenges the notion that H–1B workers 

are filling needs unmet by U.S. workers. 

The study contains findings that foreign 

computer science workers have 

suppressed wages for U.S. computer 

science workers along with findings that 

‘‘imply that for every 100 foreign 

[computer science] workers that enter 

the US, between 33 to 61 native 

[computer science] workers are crowded 

out from computer science to other 

college graduate occupations.’’ 100

Further, while some commenters argued 

that the Department misconstrued the 

study showing that only half of U.S. 

STEM graduates go on to work in STEM 

fields on the grounds that many of these 

students find employment in other 

industries, the Department disagrees 

that the study is not relevant here. In 

fields where a graduate’s degree signals 

certain skills to potential employers, 

such as computer science or many 

STEM fields, it is reasonable to assume 

that students who major in a particular 

field typically intend to find 

employment in that field. The fact that 

many of these particular students are 

able to find employment in other 

industries does not undercut the 

conclusion—indeed, it bolsters it—that 

at least some of their job opportunities 

in the fields for which they trained are 

limited by the presence of lower-paid 

foreign workers in some instances. 

The Department also acknowledges 

commenters’ point that in some 

circumstances H–1B workers contribute 

to innovation. Those contributions 

notwithstanding, ‘‘such outcomes are 

not the immediate objectives of the of 

the INA’s wage protections.’’ 101 Further, 

this rulemaking does not alter the 

number of H–1B workers permitted to 

work and it is unclear how the current 

wage levels promote greater innovation 

than the wages which will exist under 

this rule. The PERM program permits 

employers to hire aliens to work at 

permanent jobs where the Secretary of 

Labor has certified to the Secretary of 

State and the Secretary of Homeland 

Security that the employment of an 

alien seeking to enter the United States 

to perform skilled or unskilled labor 

‘‘will not adversely affect the wages and 

working conditions of workers in the 

United States similarly employed.’’ 102

In the case of H–1B workers, employers 

must file LCAs stating that the employer 

will offer wages that are, at a minimum, 

‘‘the actual wage level paid by the 

employer to all other individuals with 

similar experience and qualifications for 

the specific employment in question,’’ 

or ‘‘the prevailing wage level for the 

occupational classification in the area of 

employment, whichever is greater.’’ 103

In rulemaking, an agency is not required 

‘‘to accord greater weight to aspects of 

a policy question than the agency’s 

enabling statute itself assigns to those 

considerations.’’ 104 In consequence, to 

the extent some comments and the 

studies cited therein criticized the 

Department’s conclusion that the 

prevailing wage levels are set too low on 

the grounds that H–1B workers fuel 

innovation and economic growth, the 

Department affords them less weight. 

Such considerations are secondary to 

the Department’s more immediate 

concern of fulfilling its statutory 

mandate to ensure that the presence of 

foreign workers does not adversely 

affect U.S. workers. 

The Department also reemphasizes 

that while commenters preferred some 

studies and sources over others cited by 

the Department, they and their studies 

offered no affirmative argument in 

support of the old wage levels, nor did 

they explain how the prior wage levels 

reflect actual market wages. Rather, 

these commenters presented studies 

which the Department has already 

reviewed and which the Department 

does not believe align with the weight 

of the evidence which the Department 

continues to rely upon. The evidence 

amassed in the IFR provides a 

reasonable basis for increasing the wage 

rates, the Department stands by its 

determination that the old methodology 

did not adequately protect U.S. workers. 

The Department also notes that a 

number of commenters agreed with its 

conclusion that current wage levels 

often do not reflect prevailing wages 

and are set too low. For example, one 

commenter noted that, in some cases 

where H–1B workers are used to replace 


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105See 63872 FR 63885–87. 

106The Department also notes that the need for 

this rulemaking is undiminished by the possibility, 

recently proposed by DHS, that the limited visas 

available under the H–1B cap may be allocated 

based on how high the wage level is at which an 

employer plans to compensate its foreign workers. 

See Modification of Registration Requirement for 

Petitioners Seeking To File Cap-Subject H–1B 

Petitions, 85 FR 69236 (November 2, 2020). The 

Department’s wage structure applies to programs 

other than the H–1B program, meaning that even if 

there are other means of preventing adverse wage 

effects in the H–1B program, the benefits of 

updating the Department’s prevailing wage 

methodology extend more broadly. Relatedly, even 

within the H–1B program, not all visas are subject 

to the annual cap, and would thus not be affected 

by a new method of allocating capped visas. Even 

more critically, the INA directs the Department to 

set wage levels that will ensure foreign workers will 

be compensated at rates comparable to U.S. workers 

similarly employed with similar levels of 

education, experience, and responsibility. As 

explained throughout, the Department has 

determined that adjustments are needed for all four 

wage levels to ensure they protect similarly 

employed U.S. workers from wage suppression and 

dangers to their job opportunities. Thus, even under 

a visas allocation system that prioritizes workers 

placed at higher wage levels, the Department’s wage 

methodology must still protect workers similarly 

employed to workers at those wage levels from 

adverse employment effects. Put another way, the 

purpose of the INA’s wage provisions is to protect 

individual U.S. workers from having to compete 

Continued 

U.S. workers, ‘‘the H–1B workers have 

been hired with annual wages of around 

$30,000 to $40,000 less than the workers 

they have replaced.’’ These comments 

corroborate the Department’s position 

that it weighted the conflicting evidence 

in a reasonable way and reached an 

appropriate conclusion that H–1B 

workers can and in many cases are used 

as low-cost alternatives to U.S. workers, 

and thereby undercut U.S. workers’ 

wages and job opportunities. 

The Department also acknowledges 

the comments it received (and studies 

cited therein) that argue that pointing to 

the higher actual wages that some 

employers pay H–1B and PERM workers 

to show that prevailing wage rates were 

too low is flawed reasoning because 

there may be other business factors 

beyond a worker’s qualifications that 

explain why some employers pay a 

premium on the prevailing wage. The 

Department agrees that there may, in 

some instances, be legitimate business 

factors that explain why actual wages 

paid to H–1B workers would be higher 

than the prevailing wage rate. For 

example, a firm that faces a sudden 

increase in demand for its product 

relative to its competitors might be 

willing to pay premiums to both 

domestic and H–1B workers relative to 

its competitors. However, factors such 

as these are typically specific to a 

particular firm, employee, or geographic 

area, as some commenters 

acknowledged in their discussion of 

high-intensity occupation areas, and do 

not reflect the wages paid by the typical 

employer in a given labor market. In 

consequence, while the actual wages 

paid to H–1B workers might very well 

exceed the prevailing wage rate for 

legitimate reasons in some cases, such 

incidents should not be the norm across 

all employers, occupations, and locales. 

If the actual wage is consistently higher 

across the board than the prevailing 

wage rate, this suggests that the 

prevailing wage is not actually reflective 

of the market wage rate on offer in the 

labor market. As the data presented in 

the IFR shows, actual wages paid to H– 

1B workers not only exceed the 

prevailing wage rate, but do so 

consistently and substantially, on 

average, across many different 

employers. This suggests that legitimate 

business factors alone do not account 

for the extreme differences between the 

actual wages paid to H–1B workers and 

prevailing wage rates. Rather, it suggests 

that the prevailing wage rate is out of 

line with the market wage. 

For similar reasons, the Department 

also rejects some commenters’ 

contention (including as purportedly 

supported by the studies cited) that the 

fact that actual wages often exceeds the 

prevailing wage rate shows that there is 

no wage problem in the H–1B and 

PERM programs. One shortcoming such 

studies failed to acknowledge is that 

because the prevailing wage is in place 

for 3 years for H–1B workers, even if 

they are paid more than the prevailing 

wage in their first year, there is a 

distinct possibility that the prevailing 

wage will be low compared to the 

market for more experienced workers in 

the subsequent years. As the 

Department explained in the IFR, the 

INA takes a belt-and-suspenders 

approach to protecting U.S. workers’ 

wages. Employers must pay the higher 

of the actual wage they pay to similarly 

employed workers or the prevailing 

wage rate set by the Department. Both 

rates generally should approximate the 

market wage for workers with similar 

qualifications and performing the same 

types of job duties in a given labor 

market as H–1B workers. It is therefore 

a reasonable assumption that, if both of 

the INA’s wage safeguards were working 

properly, the wage rates they produce 

would, at least in many cases, be 

similar. Where the Department’s 

otherwise applicable wage rate is 

significantly below the rates actually 

being paid by employers in a given labor 

market, it gives rise to an inference that 

the Department’s current wage rates, 

based on statistical data and 

assumptions about the skill levels of 

U.S. workers, are not reflective of the 

types of wages that workers similarly 

employed to H–1B workers can and 

likely do command in the actual labor 

market. There is a mismatch between 

what the Department’s prevailing wage 

structure says the relevant cohort of U.S. 

workers are or should be making and 

what employers are likely actually 

paying such workers, as demonstrated 

by the actual wage they are paying H– 

1B workers. Put another way, when 

many of the heaviest users of the H–1B 

program consistently pay wages well 

above the prevailing wage, it suggests 

that the prevailing wages are too low, 

and thus can be abused by other firms 

to replace U.S. workers with lower-wage 

foreign workers in cases where those 

firms do not have similarly employed 

workers on their jobsites whose actual 

wages would be used to set the wage for 

H–1B workers.105

The Department also believes that 

looking to the pay practices of some of 

the most frequent users of the H–1B 

program is appropriate in determining 

whether the prevailing wage rates are 

set too low. Because the risk of harm to 

U.S. workers is most acute by employers 

in labor markets with heavy 

concentrations of H–1B workers, data on 

the actual wage rates at those employers 

and in those areas are entitled to special 

weight in the Department’s analysis. 

Further, to the extent some commenters 

argue that looking at such firms unduly 

minimizes the Department’s 

consideration of wage effects in rural 

areas or at smaller employers, the 

Department notes that, like its use of 

anecdotal evidence, the wage data it 

looked to from the heaviest users of the 

program is just one piece of various 

types of evidence on which it bases its 

conclusions about the effects of the old 

wage levels—no single piece of which is 

given dispositive weight. Rather, when 

considered in combination, this 

evidence provides a sound basis, in the 

Department’s judgment, for concluding 

that the old wage methodology resulted 

in inappropriately low wages in a 

variety of circumstances. 

The Department also disagrees that 

other safeguards in the INA are 

sufficient to protect U.S. workers and 

that updates to the prevailing wage 

levels are therefore unnecessary. 

Congress chose to enact multiple forms 

of protection for U.S. workers in these 

foreign labor programs. The Department 

must operationalize those protections 

entrusted to its administration as it sees 

best for the discharge of its legal 

responsibilities under the INA and its 

policy of more fully ensuring the 

protection of U.S. workers, including by 

updating the prevailing wage levels.106


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with low-cost foreign labor, something that can only 

be accomplished by setting appropriate wage levels 

even if all H–1B workers granted work 

authorization are at the highest skill level since 

such workers will necessarily be competing with 

U.S. workers with comparable qualifications. 

107dePape v. Trinity Health Sys., Inc., 242 F. 

Supp. 2d 585, 593 (N.D. Iowa 2003). 

108See Sadikshya Nepal, The Convoluted 

Pathway from H–1B to Permanent Residency: A 

Primer, Bipartisan Policy Center (2020); 

Congressional Research Service, The EmploymentBased Immigration Backlog (2020) (‘‘A primary 

pathway to acquire an employment-based green 

card is by working in the United States on an H– 

1B visa for specialty occupation workers, getting 

sponsored for a green card by a U.S. employer, and 

then adjusting status when a green card becomes 

available.’’). 

109U.S. Citizenship and Immigration Services, H– 

1B Authorized-to-Work Population Estimate (2020). 

110See Department of Homeland Security, 2017 

Yearbook of Immigration Statistics, Table 7. Persons 

Obtaining Lawful Permanent Resident Status by 

Type and Detailed Class of Admission: Fiscal Year 

2017, available at https://www.dhs.gov/ 

immigration-statistics/yearbook/2017/table7. 

111Office of Foreign Labor Certification, 

Permanent Labor Certification Program—Selected 

Statistics, FY 19, available at https://www.dol.gov/ 

sites/dolgov/files/ETA/oflc/pdfs/PERM_Selected_

Statistics_FY2019_Q4.pdf. 

112See Public Law 107–273, § 11030A(a), 116 

Stat. 1836 (2002). 

113See 144 Cong. Rec. S12741, S12756 

(explaining that 8 U.S.C. 1182(p) ‘‘spells out how 

[the prevailing] wage is to be calculated in the 

context of both the H–1B program and the 

permanent employment program in two 

circumstances.’’). 

114See Congressional Research Service, The 

Employment-Based Immigration Backlog (2020). 

115See 8 U.S.C. 1152(a)(2); U.S. Department of 

State, Visa Bulletin For September 2020, https://

travel.state.gov/content/travel/en/legal/visa-law0/ 

visa-bulletin/2020/visa-bulletin-for-september2020.html. 

116U.S. Citizenship and Immigration Services, 

Characteristics of H–1B Specialty Occupation 

Workers Fiscal Year 2019 Annual Report to 

Congress October 1, 2018–September 30, 2019, 

(2020), available at https://www.uscis.gov/sites/ 

default/files/document/reports/Characteristics_of_

Specialty_Occupation_Workers_H-1B_Fiscal_Year_

2019.pdf (showing 66 percent of H–1B petitions 

approved in FY2019 were for computer-related 

occupations). 

117Congressional Research Service, The 

Employment-Based Immigration Backlog (2020). 

As explained in the IFR, the 

Department has determined that the 

conclusions it reached about adverse 

wage effects with respect to the H–1B 

program can also be extrapolated to the 

PERM program, about which the 

economic literature is far scanter. 

Critically, the PERM programs and the 

H–1B program are closely linked in both 

how they are regulated and used by 

employers. Unlike most nonimmigrant 

visas, H–1B visas are unusual in that 

they are ‘‘dual intent’’ visas, meaning 

under the INA, H–1B workers can enter 

the U.S. on a temporary status while 

also seeking to adjust status to that of 

lawful permanent residents.107 One of 

the most common pathways by which 

H–1B visa holders obtain lawful 

permanent resident status is through 

employment-based green cards, and in 

particular EB–2 and EB–3 visas.108

USCIS has estimated that over 80 

percent of all H–1B visa holders who 

adjust to lawful permanent resident 

status do so through an employmentbased green card.109 This is reflected in 

data on the PERM programs. In recent 

years, more than 80 percent of all 

individuals granted lawful permanent 

residence in the EB–2 and EB–3 

classifications have been aliens 

adjusting status, meaning they were 

already present in the U.S. on some 

kind of nonimmigrant status.110 Given 

that the H–1B program is the largest 

temporary visa program in the U.S. and 

is one of the few that allows for dual 

intent, it is a reasonable assumption that 

the vast majority of the EB–2 and EB– 

3 adjustment-of-status cases are for H– 

1B workers. This is corroborated by the 

Department’s own data, which shows 

that, in recent years, approximately 70 

percent of all PERM labor certification 

applications filed with the Department 

have been for H–1B nonimmigrants.111

Because of how many H–1B visa 

holders apply for EB–2 and EB–3 

classifications, Congress has repeatedly 

amended the INA to account for the 

close connection between the programs. 

For example, while H–1B 

nonimmigrants are generally required to 

depart the U.S. after a maximum of six 

years of temporary employment, 

Congress has exempted from that 

requirement H–1B nonimmigrants who 

are beneficiaries of PERM labor 

certification applications with the 

Department, or who are beneficiaries of 

petitions for an employment-based 

immigrant visa with DHS that have been 

pending for longer than a year, if certain 

other requirements are met.112

Similarly, as noted above, Congress 

established the INA’s prevailing wage 

requirements in section 212(p) with 

specific reference to the fact that they 

would apply in both the H–1B and 

PERM programs.113

The various features of the statutory 

framework governing the programs, 

working in combination, have further 

tightened the relationship between 

them. In particular, because H–1B 

workers can have dual intent and, if 

they have a pending petition for an 

employment-based green card, can 

remain in the U.S. beyond the 6-year 

period of authorized stay limitation, 

many workers for whom an employer 

has filed a PERM labor certification 

application are already working for that 

same employer on an H–1B status.114

And because the method by which 

employment-based green cards are 

allocated can result in significant delays 

between when an alien is approved for 

a green card and when the green card 

is actually issued, the period during 

which a worker can, in some sense, 

have one foot in each program, is often 

protracted.115

This system results in significant 

overlap in the principal uses of the H– 

1B and PERM programs. H–1B petitions 

approved in FY 2019,116 and the vast 

majority of individuals waiting for 

adjudication of EB–2- and EB–3-based 

adjustment of status applications, are 

concentrated in the same countries of 

origin.117 Relatedly, LCAs and 

applications for PERM labor 

certifications often are for job 

opportunities in the same occupations. 

Data from the Department’s OFLC 

shows that of the ten most common 

occupations in which H–1B workers are 

employed, seven are also among the ten 

most common occupations in which 

PERM workers are employed. And 

PERM workers’ wages are set based on 

the same methodology used for H–1B 

workers. 

Given the evidence that these two 

programs are used similarly by 

employers, and employ in many 

instances the same or at least similarly 

situated foreign workers, the 

Department believes that it should treat 

the H–1B and PERM programs similarly. 

The upshot is that the H–1B and PERM 

programs are, in a variety of ways, 

inextricably conjoined. The rules 

governing the programs and how 

employers use them mean that, in many 

instances, workers in the PERM 

programs and workers in the H–1B 

program are often the exact same 

workers doing the same jobs in the same 

occupations for the same employers. 

And given the evidence of similarity, 

the Department can reasonably infer 

that the current wage levels under the 

four-tier structure—which result in 

inappropriately low wage rates in some 

instances for H–1B workers—also result 

in inappropriately low wage rates in 

some instances for the PERM programs. 

This is also borne out by the fact that, 

as noted in the IFR, the significant 

disparities between actual wages paid 

by heavy users of the programs and 

prevailing wage rates discussed above in 

connection with the H–1B program are 

also found in the PERM program. 

2. Wage Level Methodology and 

Analytical Framework 

Summary of Comments 

Many commenters disagreed with the 

methodology and analytical framework 

the Department used to determine the 


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appropriate prevailing wage rate, often 

asserting that the Department 

inappropriately relied on wage data 

from a limited pool of employers in the 

H–1B program and a pool of workers 

based on educational attainment limited 

to workers in information technology 

jobs, rather than basing the prevailing 

wage on market wages paid to workers 

in the applicable occupational 

classification based on the requirements 

of the occupation or employer’s job 

opportunity. Several commenters also 

expressed concern about the chosen 

percentiles, asserting that an entry-level 

wage near the median for the 

occupation does not reflect real pay 

structures. 

Some commenters asserted the 

Department inappropriately conflated 

the ‘‘actual’’ with the ‘‘prevailing’’ wage 

provisions in the INA and the 

Department’s regulations at 20 CFR 

655.731(a)(1) and (a)(2). A professional 

association stated it was improper to 

base prevailing wages on the 

‘‘accomplishments, education or 

training of the employee’’ because that 

is the focus of the actual wage 

provision, whereas the prevailing wage 

is, ‘‘by regulation, based on the 

requirements for the position.’’ A 

university commenter noted that the 

prevailing wage is the wage paid to 

similarly employed workers, defined as 

‘‘positions that have substantially 

comparable duties’’ in the occupation 

and area of employment and thus in 

prevailing wage determinations ‘‘the 

requirements of the position matters, 

not the skills that the individual worker 

brings to the table.’’ The commenter also 

asserted the IFR incorrectly states that 

the new methodology does not change 

the current wage determination process 

because the Department’s 2009 PWD 

guidance indicates PWDs begin at entry 

level and ‘‘progress . . . only after 

considering the experience, education, 

and skill requirements of an employer’s 

job description (opportunity).’’ 

Related to these comments, many 

commenters believed it was improper 

for the Department to rely solely on 

wages paid to workers that possess a 

master’s degree. A university 

commenter stated that the fact many H– 

1B workers possess a master’s degree or 

higher is ‘‘attributed to the fact that 

USCIS favors beneficiaries with more 

advanced degrees.’’ Some commenters 

asserted that determining prevailing 

wage levels based only on wages paid to 

master’s degree holders violates the INA 

because Congress did not include a 

master’s degree requirement as a 

prerequisite for the employment-based 

visa programs. An association noted the 

statute defines ‘‘specialty occupation’’ 

as ‘‘an occupation requiring a bachelor’s 

degree as the minimum qualification for 

entry.’’ Similarly, an immigration law 

firm believed that exclusion of wage 

data from workers possessing less than 

a master’s degree is ‘‘baseless’’ because 

‘‘attainment of a U.S. Bachelor’s degree, 

or its equivalent, is sufficient for H–1B 

eligibility provided the petitioner can 

show a sufficient nexus between the 

degree earned and the offered position’’ 

and ‘‘the nexus of the degree specialty 

is a separate inquiry from prevailing 

wage requirements.’’ Noting that DHS 

regulations at 8 CFR 204.5(k)(2) 

‘‘equate[ ] a master’s degree to a 

bachelor’s degree plus 5 years of 

progressively responsible work 

experience,’’ the commenter asked how 

the same Level I wage can represent 

both a position requiring a master’s 

degree for entry and ‘‘entry level H–1B 

occupations that require a bachelor’s 

degree in a specific specialty.’’ 

Some commenters noted that a large 

number of occupations require at least 

a master’s degree for entry and that it is 

improper for the Department to exclude 

the bottom third of wage data when 

determining the Level I prevailing wage 

in these occupations. For example, a 

university commenter stated that even if 

one accepts the prevailing wage was set 

too low for IT occupations ‘‘it is 

arbitrary to extrapolate from that very 

limited data set that the prevailing wage 

data set for other occupations is also 

lacking, especially for occupations 

where the normal educational 

requirement is an advanced degree.’’ 

Similarly, a professional association 

noted that at least 99 occupations 

require an advanced degree for entry 

according to DOL sources, including 

many that require a Ph.D., and that the 

bottom third of wages in these 

occupations ‘‘capture qualified and 

eligible H–1B individuals.’’ The 

commenter asserted the Department 

improperly excluded from consideration 

‘‘one-third of the wages of individuals 

who are ‘similarly employed’ ’’ and 

‘‘essentially sets a minimum education 

level for entry as those with at least a 

master’s degree in most professions.’’ 

One commenter from academia stated 

that many H–1B occupations that 

require a bachelor’s degree are 

nonetheless specialized and thus the 

Department should consider all wage 

data for the occupation. 

Several commenters also asserted that 

reliance on only wages paid to workers 

possessing a master’s degree is 

particularly inappropriate for 

determining prevailing wages in the 

permanent labor certification context 

because many job opportunities in that 

program are in occupations that require 

no more than a bachelor’s degree for 

entry. A group of associations asserted 

the Department ignored the fact that 

‘‘about an equal number of individuals 

in H–1B status with advanced degrees 

and Bachelor’s degrees are sponsored 

for green card status.’’ An immigration 

law firm stated the Department’s 

reasoning focused centrally on wages 

paid to H–1B workers and asked the 

Department to explain how the ‘‘prior 

wage levels as applied in the PERM 

program negatively impact the wages of 

U.S. workers.’’ The commenter noted 

the PERM program differs from H–1B in 

relevant respects, including the labor 

market test requirement and the fact that 

employers file PERM petitions to fill ‘‘a 

future permanent position’’ that is ‘‘not 

necessarily the current position of the 

H–1B employee.’’ Noting the 

Department’s acknowledgment that ‘‘not 

all SOC [occupations] qualify as a 

‘specialty occupation,’ ’’ this commenter 

asserted the IFR methodology ‘‘would 

arbitrarily raise salary requirements for 

occupations that are not used in the H– 

1B program but are used in the PERM 

program.’’ This commenter also noted 

that the Department acknowledged the 

new wage level methodology would 

create a ‘‘premium’’ on the wages of EB– 

3 workers and the commenter asserted 

the Department failed to cite authority 

to ‘‘require EB–3 petitioners to pay an 

additional fee, above what would be 

required to ensure the wages of U.S. 

workers are not negatively affected.’’ 

Some commenters asserted that 

reliance on education alone when 

considering relevant wage data was 

inappropriate because many other 

factors can determine a worker’s wage 

level. One commenter stated the 

Department provided no evidence that 

workers with a bachelor’s degree 

‘‘necessarily . . . make up a lower paid 

cohort of employees’’ and noted the 

Department’s acknowledgment that ‘‘H– 

1B workers with master’s degrees tend 

to be younger and less highly 

compensated than H–1B workers with 

bachelor’s degrees.’’ The commenter 

noted that employers will accept 

equivalent credentials like experience 

and training and may base worker 

compensation on factors like 

‘‘experience, special skills, history with 

the company or industry . . . [and] 

highly specialized knowledge.’’ Another 

commenter noted that someone with a 

bachelor’s degree and 10 years of 

experience might be paid more for the 

same job opportunity than someone 

with a master’s degree and 2 years of 

experience, whereas a bachelor’s degree 

holder with 2 years of experience may 

be paid less. The prevailing wage in this 


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118 8 U.S.C. 1182(n)(1)(A). 

119 8 U.S.C. 1182(p)(4). 

120 Id. 

121 Labor Condition Applications and 

Requirements for Employers Using Nonimmigrants 

on H–1B Visas in Specialty Occupations and as 

Fashion Models; Labor Certification Process for 

Permanent Employment of Aliens in the United 

States, 65 FR 80110, 80110 (Dec. 20, 2000). 

case would be based on the 

requirements for the position, whereas 

the actual wage would be the wage paid 

to the worker employed in the position 

and may depend on the worker’s 

education and experience. 

A number of commenters asserted it 

was improper for the Department to rely 

only on wage data from workers in a 

limited set of information technology 

occupations as the relevant benchmark 

for determining the appropriate wage 

level. An anonymous commenter 

asserted that the Department’s reasoning 

focused solely on ‘‘computer 

occupations’’ and the prevailing wage 

methodology based on that reasoning 

‘‘can therefore only be applied to 

computer occupations.’’ A university 

commenter noted that many common 

occupations in the H–1B and PERM 

programs fall outside of this occupation 

set, including many occupations in the 

education sector, such as postsecondary teachers, several of which 

may require a Ph.D. for entry. The 

commenter added that even if one 

assumes wages are too low in the IT 

sector, ‘‘it is arbitrary to extrapolate 

from that very limited data set that the 

prevailing wage’’ is too low in other 

sectors. 

Based on these concerns, some 

commenters urged the Department to 

reconsider its decision in the IFR to use 

a uniform wage structure across all 

occupations and programs. For example, 

a university commenter suggested the 

Department should apply the pre-IFR 

wage level methodology to occupations 

that normally require an advanced 

degree for entry, according to O*Net, 

rather than discounting the first onethird of occupational wage data for 

these occupations. One commenter 

suggested the Department should apply 

the revised wage level methodology to 

large IT employers and H–1B dependent 

employers, while applying the ‘‘PWD 

data from 07/01/2020–10/06/2020’’ to 

occupations in ‘‘medicine and health 

[070–079] and education [090–099].’’ 

Similarly, some commenters urged the 

Department to exempt specific positions 

in the medical field from revised wage 

methodology or exempt all ACWIAeligible employers. 

Many commenters also took issue 

with the reasoning behind setting the 

Level I wage for entry-level workers at 

approximately the 45th percentile. A 

public policy organization stated that 

placing entry level workers close to the 

median wage in the occupation ‘‘departs 

from the English language definition of 

median’’ and stated that, by definition, 

‘‘[e]ntry level workers cannot be both at 

the bottom quarter of the wage scale and 

at almost the median of the wage scale.’’ 

A trade association stated that no 

employer sets compensation above the 

occupational median wage for all entrylevel workers ‘‘completing graduate or 

professional degrees with little 

professional experience.’’ The 

commenter asserted the Department 

provided no evidence indicating a nearmedian wage is ‘‘the most reasonable 

and closest proxy’’ for the market wage 

paid to entry-level workers. A human 

resources professional association stated 

that it is ‘‘particularly important to 

reflect the lower and higher range’’ of an 

occupational wage distribution when 

using the SOC system because the SOC 

occupations are ‘‘hopelessly broad’’ and 

the commenter stated that SOC 11–9033 

encompasses 126 distinct jobs in higher 

education. 

Response to Comments 

As noted, some commenters asserted 

that the Department misinterpreted the 

INA in the IFR, specifically disagreeing 

with the notion that the prevailing wage 

rate and the actual wage provided for by 

the INA should approximate one 

another, and similarly contending that 

the Department should not consider the 

accomplishments, education, or training 

of the employee as those are 

considerations associated with the 

actual wage requirement; rather, the 

Department should focus on the 

requirements for the position. This 

argument, however, misreads the 

statute, and also fails to understand a 

fundamental premise of the IFR. The 

Department is not ignoring its 

regulations or guidance on how 

prevailing wages rates are assigned; 

rather, the Department in this 

rulemaking is doing something 

different. It is making an assessment of 

how the four wage levels required by 8 

U.S.C. 1182(p)(4) are to be established. 

To begin with, as the IFR discussed in 

detail, the INA requires employers to 

pay H–1B workers the greater ‘‘of the 

actual wage level paid by the employer 

to all other individuals with similar 

experience and qualifications for the 

specific employment in question,’’ or 

the ‘‘prevailing wage level for the 

occupational classification in the area of 

employment.’’ 118 The statute further 

provides that, when a government 

survey is used to establish the wage 

levels, ‘‘such survey shall provide at 

least 4 levels of wages commensurate 

with experience, education, and the 

level of supervision.’’ 119 If an existing 

government survey produces only two 

levels, the statute provides a formula to 

calculate two intermediate levels.120

Thus, like the statute’s actual wage 

clause, the prevailing wage requirement, 

when calculated based on a government 

survey, makes the qualifications 

possessed by workers, namely 

education, experience, and 

responsibility, an important part of the 

wage calculation. 

Put slightly different, both clauses 

yield wage calculations that in similar 

fashions are designed to approximate 

the rate at which workers in the U.S. are 

being compensated, taking into account 

the area in which they work, the types 

of work they perform, and the 

qualifications they possess. The statute 

requires employers to pay the rate of 

whichever calculation yields the higher 

wage. In this way, the statutory scheme 

is meant to ‘‘protect U.S. workers’ wages 

and eliminate any economic incentive 

or advantage in hiring temporary foreign 

workers.’’ 121 If employers are required 

to pay H–1B workers approximately the 

same wage paid to U.S. workers doing 

the same type of work in the same 

geographic area and with similar levels 

of education, experience, and 

responsibility as the H–1B workers, 

employers will have significantly 

diminished incentives to prefer H–1B 

workers over U.S. workers, and U.S. 

workers’ wages will not be suppressed 

by the presence of foreign workers in 

the relevant labor market. 

The Department therefore disagrees 

with commenters’ contention that the 

INA’s actual wage clause and prevailing 

wage clause are not to be understood 

and operationalized in similar fashions. 

Moreover, the Department notes that, 

while commenters are correct that 

Department guidance and regulations 

discuss the ‘‘prevailing wage’’ as 

something that is assigned based on the 

requirements of a job opportunity, 

rather than the qualifications of the 

specific worker who will fill the 

position, the manner in which the 

‘‘prevailing wage’’ for a specific job is 

assigned is different from the manner in 

which the Department establishes the 

four ‘‘prevailing wage levels’’ required 

by § 1182(p)(4). For one thing, a 

prevailing wage for a specific job 

opportunity is often assigned before the 

identity and actual qualifications of the 

worker who will fill the position are 

known. As a practical matter, it is 

therefore unavoidable that this would be 

done by reference to job requirements as 


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122For example, both the NSF and CPS surveys 

the Department used in the IFR survey individual 

workers about the wages they make and the skills 

they possess, not the qualification requirements of 

the jobs they fill. 

123Contrary to some commenters’ contentions, 

the Department did not look exclusively at 

educational attainment in assessing where the 

entry-level wage should be placed. It also took into 

account work experience. While commenters are 

correct that in some cases factors other than 

education and work experience may influence 

wages, these are the factors the INA requires the 

Department to consider. Further, as explained in 

the IFR, education and experience are often key 

determinants of levels of compensation, and 

therefore allow for a reasonable differentiation 

among workers. 

124Age is a common proxy for potential work 

experience. See, e.g., Rebecca Chenevert & Danial 

Litwok, Acquiring Work Experience with age, 

United States Census Bureau, (2013) available at 

https://www.census.gov/newsroom/blogs/randomsamplings/2013/02/acquiring-work-experiencewith-age.html. 125This analysis is based on data from U.S. 

Citizenship and Immigration Services about the 

demographic characteristics of H–1B workers. 

126Elka Torpey, Same occupation, different pay: 

How wages vary, Bureau of Labor Statistics (2015), 

available at https://www.bls.gov/careeroutlook/ 

2015/article/wage-differences.htm. 

127U.S. Citizenship and Immigration Services, 

Characteristics of H–1B Specialty Occupation 

Workers Fiscal Year 2019 Annual Report to 

Congress October 1, 2018–September 30, 2019, 

(2020), available at https://www.uscis.gov/sites/ 

default/files/document/reports/Characteristics_of_

Specialty_Occupation_Workers_H-1B_Fiscal_Year_

2019.pdf. 

opposed to the qualifications of an 

unknown worker. By contrast, the 

Department sets the four wage levels 

that are used to calculate specific 

prevailing wage rates by reviewing 

statistical data. The review of statistical 

data necessarily occurs at a more 

general level given that the four wage 

levels apply to broad swaths of workers 

and occupations and therefore relies on 

information from surveys, which often 

collect information about the skills 

possessed by particular workers rather 

than the job requirements of specific 

jobs.122 It is thus reasonable for the 

Department to consider the 

qualifications possessed by actual 

workers in operationalizing section 

1182(p)(4). 

In addition, the Department notes that 

it is a reasonable inference that, in many 

cases, the skills possessed by an actual 

worker will likely align with the 

qualification requirements of the job 

opportunity such worker fills. Looking 

to the skills possessed by actual workers 

thus should serve as a reasonable proxy 

in many cases for the requirements of 

the job opportunities in which they 

work. Moreover, to the extent the 

qualifications possessed by workers are 

different from the requirements of the 

jobs they fill, the Department believes 

that taking workers’ actual skills and 

qualifications into account furthers the 

purpose of the statute. As explained 

throughout, the INA’s wage provisions 

are designed to protect U.S. workers. In 

the labor market, workers compete with 

other workers based on the skills and 

qualifications those workers bring to the 

job—not based on what qualifications 

an employer lists in a job opening. 

Giving some weight to the actual 

characteristics of entry-level workers in 

the foreign labor programs thus takes 

into account important factors that 

determine how workers compete against 

one another over wages and job 

opportunities. Ignoring workers’ actual 

qualifications in setting the wage levels 

would thus potentially weaken 

protections for U.S. workers insofar as it 

would mean the Department was 

leaving out of its analysis an important 

factor that influences employment 

outcomes. 

Further, because, as noted, the actual 

wage clause and the prevailing wage 

clause of the INA are designed to 

achieve similar outcomes, serving as a 

form of belt-and-suspenders protection 

for U.S. workers, and given that the 

actual wage clause does take into 

account the specific qualifications 

possessed by actual workers, the 

Department believes it is reasonable to 

similarly take into account the actual 

qualifications of the workers when 

assessing survey data to set prevailing 

wage levels. 

Finally, the Department also notes 

that, to the extent commenters suggest 

that the method by which the 

Department is setting the four wage 

levels pursuant to section 1182(p)(4) 

contradicts the previous method by 

which the Department set the wage 

levels, they are also mistaken. As noted, 

the Department has never previously set 

the wage levels through regulation. or 

has it ever explained its analysis or 

provided an economic justification for 

why the wage levels are set as they are. 

Rather, the old wage levels were set 

through a memorandum of 

understanding between DOL 

components, which offered no 

explanation for why the specific levels 

used were selected or how they 

comported with the statute. This 

rulemaking is therefore the first time the 

Department has undertaken to justify, 

and tether to the relevant statutory 

factors the manner in which the wage 

levels are established. There is no prior 

analytical framework to contradict 

because none was ever used. Again, the 

distinction between assigning a 

prevailing wage rate and setting 

prevailing wage levels pursuant to 

section 1182(p)(4) is key. While the 

Department has longstanding 

regulations on the former, this 

rulemaking is its first attempt to do the 

latter in a meaningful way. 

Based, in part, on similar reasoning 

related to the actual demographics of 

workers in the H–1B program, the 

Department also concluded in the IFR, 

and continues to believe, that using 

master’s degree holders with limited 

work experience as a proxy for entrylevel workers in analyzing survey data 

to determine the entry-level wage for its 

H–1B and PERM programs is 

appropriate.123 In particular, in the IFR 

the Department examined the 

demographic characteristics of H–1B 

workers and concluded that many entrylevel workers in the program are 

master’s degree holders with limited 

work experience. In particular, a review 

of data from USCIS about the 

characteristics of individuals granted H– 

1B visas in fiscal years 2017, 2018, and 

2019 indicates that H–1B workers with 

master’s degrees tend to be younger and 

less highly compensated than H–1B 

workers with bachelor’s degrees. On 

average, individuals with master’s 

degrees in the program are 

approximately 30 years old, whereas 

bachelor’s degree holders are, on 

average, 32 years old. This suggests that, 

while possessing a more advanced 

degree, master’s degree holders in the 

program are likely to have less relevant 

work experience than their bachelor’s 

degree counterparts.124 Relatedly, H–1B 

master’s degree holders make, based on 

a simple average, $86,927, whereas 

bachelor’s degree holders make on 

average $88,565.125 Given that 

differences in skills and experience 

often explain differences in wages, this 

gap in average earnings and age suggests 

that, while possessing a more advanced 

degree, master’s degree holders in the 

H–1B program tend to be less skilled 

and experienced—and are therefore 

more likely to enter the program as 

entry-level workers—than are bachelor’s 

degree holders.126

This conclusion is further bolstered 

by the fact that master’s degree holders 

have, in recent years, been the largest 

educational cohort within the program. 

In FY2019, for instance, 54 percent of 

the beneficiaries of approved H–1B 

petitions had a master’s degree— 

whereas only 36 percent of beneficiaries 

had only a bachelor’s degree.127 These 

facts, in combination with the age and 

earnings profiles of master’s degree 

holders in the program, strongly suggest 

that a significant number of entry-level 

H–1B workers are individuals with a 

master’s degree and very limited work 

experience. Because, as explained 

above, the Department has determined 


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128See 8 U.S.C. 1153(b)(2)(A) (‘‘Visas shall be 

made available . . . to qualified immigrants who 

are members of the professions holding advanced 

degrees or their equivalent . . .’’). 

129 8 U.S.C. 1184(i). 

130See Chung Song Ja Corp. v. U.S. Citizenship 

& Immigration Servs., 96 F. Supp. 3d 1191, 1197– 

98 (W.D. Wash. 2015). 

131 8 U.S.C. 1184(i). 

that the qualifications of actual workers 

are highly relevant to establishing 

prevailing wage levels pursuant to 

section 1182(p)(4), this analysis of the 

demographic characteristics of H–1B 

workers adds critical weight to the 

Department’s conclusion to use master’s 

degree holders as an analytical proxy for 

entry-level workers. 

To further address commenters’ 

concerns that master’s degree holders 

with limited work experience are an 

inappropriate proxy for entry-level H– 

1B workers, the Department notes that, 

contrary to some commenters’ 

contentions, this approach is consistent 

with the baseline qualification 

requirements in the INA for the H–1B 

program, as well as for EB–2 visas. For 

one thing, the statutory criteria for who 

can qualify as an EB–2 worker provide 

a clear, analytically useable definition of 

the minimum qualifications workers 

within that classification must possess. 

Even the least experienced individuals 

within the EB–2 classification are likely 

to have at least a master’s degree or its 

equivalent.128 Possession of an 

advanced degree is thus a meaningful 

baseline with which to describe entrylevel workers in the EB–2 classification. 

As noted in the IFR, the baseline 

qualifications needed to obtain entry as 

an H–1B worker are different. An 

individual with a bachelor’s degree in a 

specific specialty, or its equivalent, may 

qualify for an H–1B visa; a master’s 

degree is not a prerequisite.129 However, 

the bachelor’s degree or equivalent must 

be in a specific specialty. A generalized 

bachelor’s degree is insufficient to 

satisfy the requirement that H–1B 

workers possess highly specialized 

knowledge.130 Further, the statute 

requires that the individual be working 

in a job that requires the application of 

‘‘highly specialized knowledge.’’ 131

Again, this means, contrary to some 

commenters’ assertions, that for the H– 

1B program the possession of any kind 

of bachelor’s degree is not the baseline 

qualification criterion for admission. 

Something more is needed. The ultimate 

inquiry rests also on whether the 

individual can and will be performing 

work requiring highly specialized 

knowledge. 

As with aliens in the EB–2 

classification, looking to the earnings of 

individuals with a master’s degree 

provides an appropriate and analytically 

useable proxy for purposes of analyzing 

the wages of typical, entry-level workers 

within the H–1B program. For one 

thing, master’s degree programs are, 

generally speaking, more specialized 

courses of study than bachelor’s degree 

programs. Thus, while the fact that an 

individual possesses a bachelor’s degree 

does not necessarily suggest one way or 

another whether the individual 

possesses the kind of specialized 

knowledge required of H–1B workers, 

the possession of a master’s degree is 

significantly more likely to indicate 

some form of specialization. Although a 

master’s degree alone does not 

automatically mean an individual will 

qualify for an H–1B visa, possession of 

a master’s degree—something that is 

surveyed for in a variety of wage 

surveys—is thus a better proxy for 

specialized knowledge than is 

possession of a bachelor’s degree for 

purposes of the Department’s analysis. 

While possession of a bachelor’s degree 

is also commonly surveyed for, mere 

possession of a bachelor’s degree is not 

nearly as reliable an indicator that the 

degree holder possesses specialized 

knowledge. 

Importantly, the Department is not 

claiming that all entry-level workers in 

the H–1B program possess a master’s 

degree, or that possession of a bachelor’s 

degree in a specific specialty such as 

would demonstrate specialized 

knowledge is in all cases the equivalent 

of having a master’s degree. To reiterate, 

the Department is using master’s degree 

holders with limited work experience as 

a proxy for entry-level workers purely 

for analytical purposes. As more fully 

explained below, because the OES 

survey does not capture data on 

workers’ education and experience—the 

factors that the INA requires the 

Department to take into account in 

establishing wage levels—the 

Department sought in the IFR to identify 

where within the OES wage distribution 

the entry-level wage should fall by 

consulting other survey sources that do 

gather information on education and 

experience. Doing so necessarily 

requires the Department to identify an 

appropriate wage comparator or group 

of comparators for entry-level H–1B and 

PERM workers within those survey 

sources to ensure that the wage level for 

entry-level workers set based on that 

data reflects what workers with similar 

qualifications to entry-level H–1B and 

PERM workers are paid. For the reasons 

given above the Department, in its 

discretion, has determined that using 

master’s degree holders as an analytical 

proxy for entry-level workers in these 

high-skilled programs is a reasonable 

method of assessing wage data for 

purposes of establishing the entry-level 

wage. 

As noted, commenters also criticized 

the conclusion the Department reached 

about where to place the entry-level 

wage in the IFR based on its analysis of 

wage data about master’s degree 

holders, arguing that placing the entrylevel wage at approximately the 45th 

percentile is axiomatically in error given 

that entry-level workers do not, by 

definition, start out making more than 

almost half of all workers in an 

occupation. Although for the reasons 

given below the Department has 

decided to adjust the entry-level wage 

downward to the 35th percentile, the 

Department disagrees with commenters 

that setting the entry-level wage closer 

to the median of the OES distribution is 

inappropriate. As explained in the IFR, 

the interplay between the statutory 

framework governing the prevailing 

wage and the OES survey data 

demonstrate that, for the top H–1B and 

PERM occupations, workers at the lower 

end of the OES distribution in the most 

common H–1B occupations likely 

would not qualify as working in a 

‘‘specialty occupation,’’ as that term is 

defined in the INA, and thus do not 

have education and experience 

comparable to even the least qualified 

H–1B worker—a contention generally 

not disputed by commenters—meaning 

their wage data must be discounted in 

setting wages for entry-level H–1B 

workers. In consequence, while a wage 

close to the median does not represent 

what all entry-level workers in a given 

occupation generally make, it is entirely 

reasonable that the wage for the vast run 

of entry-level workers covered by the 

four-tier wage structure, many of whom 

are required to possess more specialized 

skills, would fall closer to the median. 

As explained above, the Department 

interprets the INA’s wage provisions to 

require it to take into account the 

education, experience, and 

responsibility of workers in setting wage 

levels for the H–1B program. It is 

therefore necessary to identify what 

types of U.S. workers in a given 

occupation have comparable levels of 

education, experience, and 

responsibility to H–1B workers. The 

Department did so by looking to wage 

data about master’s degree holders with 

limited work experience in occupations 

in which H–1B workers are commonly 

employed. While the INA makes clear 

that the prevailing wage levels must be 

set commensurate with education, 

experience, and level of supervision, it 

leaves assessment of those factors to the 

Department’s discretion. How the 


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132See Consolidated Appropriations Act, 2005, 

Public Law 108–447, div. J, tit. IV, § 423; 118 Stat. 

2809 (Dec. 8, 2004). 133 8 U.S.C. 1101(a)(15)(H)(i)(b). 134 8 U.S.C. 1184(i)(1). 

135 8 U.S.C. 1184(i)(2). 

136 8 CFR 214.2(h)(4)(iii) (A) and C). 

137See 20 CFR. § 655.715. 

138See Chung Song Ja Corp. v. U.S. Citizenship 

& Immigration Servs., 96 F. Supp. 3d 1191, 1197– 

98 (W.D. Wash. 2015) (‘‘Permitting an occupation 

to qualify simply by requiring a generalized 

bachelor degree would run contrary to 

congressional intent to provide a visa program for 

specialized, as opposed to merely educated, 

workers.’’); Caremax Inc v. Holder, 40 F. Supp. 3d 

1182, 1187–88 (N.D. Cal. 2014) (‘‘A position that 

requires applicants to have any bachelor’s degree, 

or a bachelor’s degree in a large subset of fields, can 

hardly be considered specialized.’’). 

139U.S. Bureau of Labor Statistics, Standard 

Occupational Classification, https://www.bls.gov/ 

soc/. 

140Office of Foreign Labor Certification, H–1B 

Temporary Specialty Occupations Labor Condition 

Program—Selected Statistics, FY 2019, available at 

https://www.foreignlaborcert.doleta.gov/pdf/ 

PerformanceData/2019/H-1B_Selected_Statistics_

FY2019_Q4.pdf. 

141Bureau of Labor Statistics, Occupational 

Outlook Handbook, Computer Programmers, 

available at https://www.bls.gov/ooh/computerand-information-technology/computerprogrammers.htm.. 

142 Id. 

143See Innova Sols., Inc. v. Baran, 399 F. Supp. 

3d 1004, 1015 (N.D. Cal. 2019). 

144As noted throughout, under the INA a 

bachelor’s degree is not an absolute prerequisite for 

obtaining an H–1B visa. Work experience imparting 

comparable levels of expertise will also suffice. 

Indeed, as the President has noted in other contexts, 

focusing on possession of a degree to the exclusion 

of work experience ignores important 

considerations about how merit and qualifications 

should be assessed. See Exec. Order No. 13932, 85 

FR 39457 (2020). The Department’s focus on the 

OOH’s description of degree requirements here is 

not meant to suggest otherwise, but rather simply 

accounts for the fact that, within the H–1B program, 

nearly all nonimmigrants hold a degree. See U.S. 

Citizenship and Immigration Services, 

Characteristics of H–1B Specialty Occupation 

Workers Fiscal Year 2019 Annual Report to 

Congress October 1, 2018–September 30, 2019, 

(2020), available at https://www.uscis.gov/sites/ 

default/files/document/reports/Characteristics_of_

Specialty_Occupation_Workers_H-1B_Fiscal_Year_

2019.pdf. Further, under the INA, EB–2 and EB–3 

immigrants are, in many cases, required to possess 

a degree. And, in any event, the Department’s 

assessment of the OOH’s descriptions of education 

requirements and how they demonstrate that, for 

the most common H–1B occupations, there is some 

portion of workers who would not qualify as 

working in a specialty occupation holds true for the 

OOH’s description of various occupations’ 

experience requirements. The mere fact that OOH 

describes many workers in an occupation as having 

several years of experience in or skills relevant to 

their respective fields does not necessarily mean 

Continued 

Department exercises that discretion is 

informed by the legislative context in 

which the four-tier wage structure was 

enacted, which indicates that the wage 

levels are primarily designed for use in 

the Department’s high-skilled and 

PERM foreign labor programs.132 Other 

provisions in the INA relating to the 

education and experience requirements 

of those programs—and in particular the 

statutory definition of ‘‘specialty 

occupation’’—therefore serve as critical 

guides for how wage levels based on 

experience, education, and level of 

supervision should be formulated. 

Under the INA, H–1B visas can, in 

most cases, only be granted to aliens 

entering the U.S. to perform services ‘‘in 

a specialty occupation.’’ 133 The statute 

defines ‘‘specialty occupation’’ as an 

occupation that requires theoretical and 

practical application of a body of 

‘‘highly specialized knowledge’’ and the 

‘‘attainment of a bachelor’s or higher 

degree in the specific specialty (or its 

equivalent) as a minimum for entry into 

the occupation in the United States.’’ 134

An alien may be classified as an H–1B 

specialty occupation worker if the alien 

possesses ‘‘full state licensure to 

practice in the occupation, if such 

licensure is required to practice in the 

occupation,’’ ‘‘completion of [a 

bachelor’s or higher degree in the 

specific specialty (or its equivalent)],’’ 

or ‘‘(i) experience in the specialty 

equivalent to the completion of such 

degree, and (ii) recognition of expertise 

in the specialty through progressively 

responsible positions relating to the 

specialty.’’ 135 DHS regulations further 

clarify the requirements for establishing 

that the position is a specialty 

occupation and that the beneficiary of 

an H–1B petition must be qualified for 

a specialty occupation.136 The 

Department’s regulations restate the 

statute’s definition of specialty 

occupation essentially verbatim.137

A few features of the definition bear 

emphasizing. First, the statute sets the 

attainment of a bachelor’s degree in a 

specific specialty, or experience that 

would give an individual expertise 

equivalent to that associated with a 

bachelor’s degree in the specific 

specialty, as the baseline, minimum 

requirement for an alien to qualify for 

the classification. Of even greater 

importance, having any bachelor’s 

degree as a job requirement is not 

sufficient to qualify a job as a specialty 

occupation position—the bachelor’s 

degree or equivalent experience 

required to perform the job must be ‘‘in 

the specific specialty.’’ In other words, 

the bachelor’s degree required, or 

equivalent experience, must be 

specialized to the particular needs of the 

job, and impart a level of expertise 

greater than that associated with a 

general bachelor’s degree, meaning a 

bachelor’s degree not in some way 

tailored to a given field.138 These 

aspects of the definition play an 

important role in how the Department 

uses data from the BLS OES survey to 

set appropriate prevailing wage levels. 

The OES survey categorizes workers 

into occupational groups defined by the 

SOC system, a federal statistical 

standard used by federal agencies to 

classify workers into occupational 

categories for the purpose of collecting, 

calculating, or disseminating data.139

An informative source on the duties and 

educational requirements of a wide 

variety of occupations, including those 

in the SOC system, is the Department’s 

Occupational Outlook Handbook 

(OOH), which, among other things, 

details for various occupations the 

baseline qualifications needed to work 

in each occupation. A review of the 

OOH shows that only a portion of the 

workers covered by many of the 

occupational classifications used in the 

OES survey likely have levels of 

education and experience similar to 

those of H–1B workers in the same 

occupation. Some share of workers in 

these classifications likely do not have 

the education or experience 

qualifications necessary to be 

considered similarly employed to 

specialty occupation workers. Because 

the INA requires the prevailing wage 

levels for H–1B workers to be set based 

on the wages of U.S. workers with levels 

of experience and education similar to 

those of H–1B workers, the Department 

must take this into account when using 

OES data to determine prevailing wages. 

For example, a common occupational 

classification in which H–1B 

nonimmigrants work is Computer 

Programmers.140 In some cases, the 

work of a computer programmer may 

involve writing basic computer code 

and testing it.141 The OOH’s entry for 

Computer Programmers describes the 

educational requirements for the 

occupation as follows: ‘‘Most computer 

programmers have a bachelor’s degree; 

however, some employers hire workers 

with an associate’s degree.’’ 142 In other 

words, while common, a bachelor’s 

degree-level education, or its equivalent, 

is not a prerequisite for working in the 

occupation. USCIS and at least one 

court have reasoned from this that the 

mere fact that an individual is working 

as a Computer Programmer does not 

establish that the individual is working 

in a ‘‘specialty occupation.’’ 143 Because 

a person without a specialized 

bachelor’s degree can still be classified 

as a Computer Programmer, some 

portion of Computer Programmers 

captured by the OES survey are not 

similarly employed to H–1B workers 

because the baseline qualifications to 

enter the occupation do not match the 

statutory requirements.144


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that they possess ‘‘highly specialized knowledge,’’ 

or that all workers in the occupation have such 

experience. See Royal Siam Corp. v. Chertoff, 484 

F.3d 139, 147 (1st Cir. 2007). See also Bureau of 

Labor Statistics, Occupational Outlook Handbook, 

Computer Systems Analysts, available at https://

www.bls.gov/ooh/computer-and-informationtechnology/computer-systems-analysts.htm; Bureau 

of Labor Statistics, Occupational Outlook 

Handbook, Food Service Managers, available at 

https://www.bls.gov/ooh/management/food-servicemanagers.htm. Whether discussing education or 

experience requirements, the fact remains that 

OOH’s description of the occupational 

classifications used in the BLS OES are, in most 

cases, not limited to workers who would qualify as 

working in a specialty occupation. 

145See Ajit Healthcare Inc. v. U.S. Dep’t of 

Homeland Sec., 2014 WL 11412671, at 4 (C.D. Cal. 

Feb. 7, 2014); see also Bureau of Labor Statistics, 

Occupational Outlook Handbook, Medical and 

Health Services Managers, available at https://

www.bls.gov/ooh/computer-and-informationtechnology/computer-programmers.htm. The 

Department notes that some courts and USCIS have 

concluded that the fact that an occupation does not 

in all cases require a bachelor’s degree as a 

minimum qualification does not necessarily 

preclude the occupational classification from 

serving as evidence that a particular job qualifies as 

a ‘‘specialty occupation.’’ See, e.g., Taylor Made 

Software, Inc. v. Cuccinelli, 2020 WL 1536306, at 

6 (D.D.C. Mar. 31, 2020); see also 8 CFR 

214.2(h)(4)(iii). That said the INA ultimately does 

not admit of any exceptions to the rule that a job 

must require a bachelor’s degree in a specific 

specialty, or its equivalent, to qualify as a specialty 

occupation, meaning, whatever its relevance to 

determining whether a particular job is in a 

‘‘specialty occupation,’’ the fact that many SOC 

classifications contain workers that would not meet 

the statutory definition is highly relevant to how 

OES data for an entire occupational classification is 

used in setting prevailing wage levels. Put another 

way, as the court in Taylor Made acknowledged, the 

fact that a bachelor’s degree is not required in all 

cases for a given occupation means that some 

number of workers within the occupation are not 

performing work in a specialty occupation. Id. 

Because such workers are almost certainly captured 

within OES data, and the Department calculates 

prevailing wages by taking into account the actual 

wages reported for broad swaths of workers in the 

OES data, the presence of these workers in the 

survey data directly relates to how prevailing wage 

levels are set, even if it does not have a great deal 

of significance for how a single, specific job in an 

occupation is determined to be or not to be in a 

‘‘specialty occupation.’’ 

146See Ajit Healthcare, 2014 WL 11412671, at 4. 

147Temporary Alien Workers Seeking 

Classification Under the Immigration and 

Nationality Act, 56 FR 61,111, 61,113 (Dec. 2, 1991) 

(emphasis added). 

148 8 U.S.C. 1184(i); see Royal Siam Corp. v. 

Chertoff, 484 F.3d 139, 147 (1st Cir. 2007). 

149Office of Foreign Labor Certification, H–1B 

Temporary Specialty Occupations Labor Condition 

Program—Selected Statistics, FY 2019, available at 

https://www.foreignlaborcert.doleta.gov/pdf/ 

PerformanceData/2019/H-1B_Selected_Statistics_

FY2019_Q4.pdf 

150Bureau of Labor Statistics, Occupational 

Outlook Handbook, Software Developers, available 

at https://www.bls.gov/ooh/computer-andinformation-technology/software-developers.htm. 

151Office of Foreign Labor Certification, H–1B 

Temporary Specialty Occupations Labor Condition 

Program—Selected Statistics, FY 2019, available at 

https://www.foreignlaborcert.doleta.gov/pdf/ 

PerformanceData/2019/H-1B_Selected_Statistics_

FY2019_Q4.pdf 

152Bureau of Labor Statistics, Occupational 

Outlook Handbook, Computer Systems Analysts, 

available at https://www.bls.gov/ooh/computerand-information-technology/computer-systemsanalysts.htm 

153See Office of Foreign Labor Certification, H– 

1B Temporary Specialty Occupations Labor 

Condition Program—Selected Statistics, FY 2019, 

available at https://

www.foreignlaborcert.doleta.gov/pdf/ 

PerformanceData/2019/H-1B_Selected_Statistics_

FY2019_Q4.pdf; O*NET Online, https://

www.onetonline.org/. 

The same is true for other 

occupational classifications in which 

H–1B workers are often employed. For 

example, the Medical and Health 

Services Manager occupation, as 

described by the OOH, does not in all 

cases require a bachelor’s degree as a 

minimum requirement for entry.145

USCIS has therefore concluded that the 

fact that an individual works in that 

occupational classification does not 

necessarily mean that the individual is 

working in a ‘‘specialty occupation.’’ 146

USCIS and its predecessor agency, the 

Immigration and Naturalization Service, 

have long emphasized that the term 

‘‘specialty occupation’’ does not 

‘‘include those occupations which [do] 

not require a bachelor’s degree in the 

specific specialty.’’ 147 In other words, if 

not all jobs in an occupational 

classification require a specialized 

bachelor’s degree or equivalent 

experience, under the INA other 

evidence is needed to show that a 

worker will be performing duties in a 

specialty occupation beyond whether 

the job opportunity falls within a 

particular SOC classification.148

A review of the OOH entries for the 

occupations in which H–1B 

nonimmigrants most commonly work 

demonstrates that most H–1B workers 

fall within SOC classifications that 

include some number of workers who 

would not qualify for employment in a 

specialty occupation. For instance, the 

OOH entries for Software Developers— 

an occupation accounting for over 40 

percent of all certified LCAs 149— 

provides that such workers ‘‘usually 

have a bachelor’s degree in computer 

science and strong computer 

programming skills.’’ 150 For Computer 

Systems Analysts, which make up 

approximately 8.8 percent of all 

certified LCAs,151 ‘‘a bachelor’s degree 

in a computer or information science 

field is common, although not always a 

requirement. Some firms hire analysts 

with business or liberal arts degrees 

who have skills in information 

technology or computer 

programming.’’ 152 Similarly, the O*Net 

database, which surveys employers on 

the types of qualifications they seek in 

workers for various occupations, shows 

that, on average, over 13 percent of all 

jobs in the occupations that H–1B 

workers are most likely to work in do 

not require workers to have even a 

bachelor’s degree.153 Moreover, the 

O*Net does not differentiate between 

jobs that require bachelor’s degrees in 

specific specialties and job for which a 

general bachelor’s degree will suffice. It 

is therefore a reasonable inference that 

the percentage of jobs in these 

occupations that would not qualify as 

specialty occupation positions for 

purposes of the INA is almost certainly 

even higher. 

Simply put, the universe of workers 

surveyed by the OES for some of the 

most common occupational 

classifications in which H–1B workers 

are employed is larger than the pool of 

workers who can be said to have levels 

of education and experience comparable 

to those of even the least skilled H–1B 

workers performing work in a specialty 

occupation. Because the statutory 

scheme requires the Department to set 

the prevailing wage levels based on 

what workers similarly employed to 

foreign workers make, taking into 

account workers’ qualifications and, as 

noted, the large majority of foreign 

workers are H–1B workers, it would be 

inappropriate to consider the wages of 

the least educated and experienced 

workers in these occupational 

classifications in setting the prevailing 

wage levels. To conclude otherwise 

would place the Department at odds 

with one of the purposes of the INA’s 

wage protections: to ensure that foreign 

workers earn wages comparable to the 

wages of their U.S. counterparts. 

As a result, it is entirely reasonable 

that the entry-level wage for H–1B 

workers would fall closer to the median 

of the OES distribution. The OES survey 

is not specifically designed to serve the 

Department’s foreign labor programs. It 

does not survey for education and 

experience—the factors the INA requires 

the Department to consider in setting 

prevailing wage levels—which is why 

the Department looks to other survey 

sources, like the NSF and CPS, to make 

assessments about where within the 

OES distribution workers with 

particular education and experience 

levels are likely to fall. So too, as 

demonstrated by the above analysis of 

the OOH, its occupational 

classifications are not delineated so as 

to exclude workers who could not be 

regarded as working in a specialty 

occupation, meaning only a portion of 

the OES distribution for many 

occupations is actually relevant to how 

the Department sets wages for the H–1B 

program. As a result, the median of the 

OES distribution is not necessarily the 


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154See Department of Homeland Security, 2017 

Yearbook of Immigration Statistics, Table 7. Persons 

Obtaining Lawful Permanent Resident Status by 

Type and Detailed Class of Admission: Fiscal Year 

2017, available at https://www.dhs.gov/ 

immigration-statistics/yearbook/2017/table7; 

United States Citizenship and Immigration 

Services, Characteristics of H–1B Specialty 

Occupation Workers: Fiscal Year 2017 Annual 

Report to Congress October 1, 2016—September 30, 

2017, (2020), available at https://www.uscis.gov/ 

sites/default/files/document/foia/Characteristics_

of_H-1B_Specialty_Occupation_Workers_FY17.pdf. 

155Cf. Wage Methodology for the Temporary Nonagricultural Employment H–2B Program, 76 FR 

3452, 3461 (Jan. 19, 2011) (justifying wage 

methodology designed for lower-skilled workers 

that was adopted in the H–2B program on grounds 

that the program ‘‘is overwhelmingly used for work 

requiring lesser skilled workers,’’ while also 

acknowledging that ‘‘not all positions requested 

through the H–2B program are for low-skilled 

labor.’’). 

156 In FY2019, 68.2 percent of all PERM labor 

certification applications filed were for H–1B 

workers already working in the United States. 

Office of Foreign Labor Certification, Permanent 

Labor Certification Program—Selected Statistics, FY 

19, available at https://www.dol.gov/sites/dolgov/ 

files/ETA/oflc/pdfs/PERM_Selected_Statistics_

FY2019_Q4.pdf. 

157Under the O*Net system a job zone is a group 

of occupations that are similar in the amount of 

education, experience, and on the job training that 

is required for a worker to fill a position in the 

occupation. Job Zone 4 includes occupations that 

require considerable preparation; Job Zone 5 

includes occupations that require extensive 

preparation. See https://www.onetonline.org/help/ 

online/zones. 

158This information is based on data collected by 

the Department’s Office of Foreign Labor 

Certification on LCAs filed between March 1, 2020, 

and August 14, 2020. 

159See Sadikshya Nepal, The Convoluted 

Pathway from H–1B to Permanent Residency: A 

Primer, Bipartisan Policy Center (2020). 

160Office of Foreign Labor Certification, 

Permanent Labor Certification Program—Selected 

Statistics, FY 19, available at https://www.dol.gov/ 

sites/dolgov/files/ETA/oflc/pdfs/PERM_Selected_

Statistics_FY2019_Q4.pdf. 

median of the distribution of workers 

who have qualifications comparable to 

H–1B workers. The median of that 

distribution will likely in many cases 

fall above the median of the overall OES 

distribution since lower skilled, and 

therefore less highly compensated 

workers will be excluded. 

On this last point, commenters also 

argued that the IFR’s analysis 

improperly focused on only certain 

occupations, and that, for other 

occupations, most particularly those 

requiring an advanced degree, the above 

reasoning about how SOC classifications 

should be assessed in light of the 

statutory framework is inapposite. 

Relatedly, a number of commenters 

faulted the Department for focusing 

much of its analysis on the H–1B 

program, claiming the Department did 

not take adequate account of the array 

of occupations for which labor 

certification is sought in the PERM 

program. Despite these comments, for 

the reasons discussed above, the 

Department continues to believe that 

focusing its analysis on those programs 

and occupations that account for the 

largest share of workers covered by the 

four-tier wage structure is appropriate 

and consistent with the approach the 

Department has taken in setting wages 

in other foreign labor programs. Doing 

so is, in the Department’s judgment, the 

most appropriate way to ensure U.S. 

workers are protected to the greatest 

extent possible in light of the fact that 

the Department’s wage structure applies 

to a large and varied class of workers 

and occupations. Further, the 

Department acknowledges that PERM 

workers and advanced degree 

occupations are entitled to some weight 

in the Department’s decision over how 

to set wage levels. As discussed at 

greater length below, taking into 

account these aspects of the issue 

addressed by this rule played an 

important part in the Department’s 

decision to reduce the entry-level wage 

from the 45th percentile to the 35th 

percentile. 

To explain its focus on H–1B workers, 

the Department notes that the H–1B 

program accounts, by order of 

magnitude, for the largest share of 

foreign workers covered by the 

Department’s four-tier wage structure. 

Upwards of 80 percent of all workers 

admitted or otherwise authorized to 

work under the programs covered by the 

wage structure are H–1B workers.154

This, in combination with the fact that, 

as explained in an earlier section, the 

risk of adverse effects to U.S. workers 

posed by the presence of foreign 

workers is most acute where there are 

high concentrations of such workers, 

supports the Department’s 

determination to pay special attention to 

the H–1B program in how it sets wages. 

Because the wage structure governs 

wages for hundreds of thousands of 

workers across five different foreign 

labor programs and hundreds of 

different occupations, no wage 

methodology will be perfectly tailored 

to the unique circumstances of every job 

opportunity.155 Advancing the INA’s 

purpose of guarding against 

displacement and adverse wage effects 

against this statutory backdrop therefore 

means, in the Department’s judgment, 

that particular weight should be given 

in the Department’s analysis to those 

aspects of the problem this rule 

addresses where there is the greatest 

danger to U.S. workers’ wages—hence 

the added focus on the H–1B program. 

Relatedly, the Department notes that 

the H–1B program is linked closely to 

the PERM programs that are also 

covered by the Department’s wage 

structure. For one thing, there is 

significant overlap in the types of 

occupations in which H–1B and PERM 

workers are employed.156 For example, 

the top ten most common H–1B 

occupations include seven of the ten 

most common PERM occupations. 

Through the third quarter of FY 2020, 

80 percent of PERM cases were for jobs 

in Job Zones 4 and 5 157—the most 

highly skilled job categories, which also 

account for 94 percent of all H–1B 

cases.158 Moreover, it is also clear that 

H–1B status often serves as a pathway 

to employment-based green card status 

for many foreign workers and that a very 

substantial majority of workers covered 

by PERM labor certification applications 

are already working in the U.S. as H–1B 

nonimmigrants.159 In FY 2019, 68.2 

percent of all PERM applications were 

for aliens that at the time the 

applications were filed were already 

working in the U.S. on H–1B visas.160

For these reasons, giving particular 

attention to the H–1B program in 

determining how to adjust the wage 

levels is entirely consistent with also 

ensuring that how the wage levels are 

applied in the PERM programs is 

properly accounted for in the 

Department’s analysis. 

Similarly, the Department has 

concluded, in its discretion, that the 

Level I wage should be established 

based on the wages paid to workers in 

those occupations that make up a 

substantial majority of the applications 

filed in the H–1B, H–1B1, E–3, and 

PERM programs. This also ensures that 

the Department appropriately takes into 

account the size and breadth of the 

programs covered by the four-tier wage 

structure by giving special attention to 

those areas where the risk to U.S. 

workers’ wages and job opportunities is 

most severe by virtue of having high 

concentrations of H–1B and PERM 

workers. Commenters are incorrect that 

the Department’s decision to take this 

focus means it only looked at computer 

occupations. Rather, the Department 

looked at all occupations that account 

for one percent or more of the total H– 

1B population. While many of these 

occupations are computer-related, some 

are not. Further, while commenters are 

correct that there are as many as 99 

occupations that require advanced 

degrees, the Department notes that this 

is out of a total of over 550 occupations 

covered by the OOH. Further, those 99 

occupations account for an even smaller 

share of the actual workers who are 

employed under the Department’s fourtier wage structure. While this does not 


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161See Musunuru v. Lynch, 831 F.3d 880, 885 

(7th Cir. 2016) (describing a person applying for 

both EB–2 and EB–3 status). 

162See Comite’ De Apoyo A Los Trabajadores 

Agricolas v. Perez, 774 F.3d 173, 185 (3d Cir. 2014) 

(noting loopholes that can be created if employers 

are able to use different methodologies to calculate 

wages for the same types of workers). 

mean that due attention should not be 

given to how the wage levels affect 

workers in advanced degree 

occupations, it does guide the relative 

weight these occupations are given in 

the Department’s analysis. 

Despite their disagreement with the 

methodology employed by the 

Department, commenters generally did 

not offer alternative ways to balance 

using a single wage structure across all 

five programs and hundreds of different 

occupations with varying skill 

requirements against the need to protect 

U.S. workers as fully as possible. Some 

commenters suggested as an alternative 

that different occupations or groups of 

occupations should be subject to a 

separate analysis and different wage 

structure. The Department has 

considered this option and believes that 

the utility of preserving a uniform wage 

structure across all programs and 

occupations outweighs any benefits that 

might be achieved by promulgating 

multiple, occupation or programspecific wage structures. The 

Department continues to believe that its 

method of doing so is the best available 

option as it is consistent with the 

approach the Department has taken in 

other foreign labor programs and 

focuses the Department’s analysis on 

those areas where the risk to U.S. 

workers is greatest. 

As for treating the PERM programs 

differently than the H–1B program, the 

Department notes that its analysis of 

highly skilled workers with advanced 

degrees and/or specialized knowledge— 

namely the EB–2 immigrant 

classification and the H–1B, E–3, and 

H–1B1 nonimmigrant programs— 

already takes into full account a large 

portion of the PERM program. With 

respect to the EB–3 classification, it is 

also noteworthy that many H–1B 

workers adjust status to that of lawful 

permanent residents through EB–3 

classification, and the manner in which 

the programs operate means that, in 

many cases, foreign workers can, in 

some sense, have one foot in each 

program simultaneously for extended 

periods of time. Using different wage 

methodologies in the programs would 

therefore result in the incongruous 

possibility of a worker doing the same 

job for the same employer suddenly 

receiving a different wage upon 

adjusting status. Similarly, while having 

somewhat different eligibility criteria, 

the EB–2 and EB–3 classifications are 

not mutually exclusive: many workers 

that satisfy the eligibility criteria for one 

would also do so for the other.161

Applying the same wage methodology 

in both classifications is therefore 

important to ensure consistent treatment 

of similarly situated workers and 

prevent the creation of incentives for 

employers to prefer one classification 

over the other because different wage 

methodologies yield different wages.162

Thus, it is key in the Department’s 

judgment that the EB–3 classification be 

treated the same as the EB–2 

classification and H–1B program. More 

generally, continuing to employ the 

same wage structure across both the H– 

1B and PERM programs advances the 

Department’s interest in administrative 

consistency and efficiency. Because 

there is significant overlap between the 

H–1B and PERM programs, they have 

long been regulated in connection with 

one another. Moreover, to the extent 

commenters assert that the IFR’s wage 

levels resulted in inappropriately high 

wages for certain workers in advanced 

degree occupations, the Department 

notes that its decision to reduce the 

entry-level wage should, to some degree, 

ameliorate this concern. 

For several reasons, the Department 

has also determined that occupationspecific wage structures are undesirable. 

For starters, calculating multiple 

different wage structures based on 

occupation would be a substantial and 

costly administrative undertaking for 

multiple components within the 

Department. There are over 800 

different occupations in the SOC 

classification system used in the OES 

survey. The analysis needed to tailor 

different wage structures to each 

occupation would be an enormous 

undertaking, even assuming it were 

possible to conduct a meaningful, 

occupation-by-occupation analysis. 

Further, the burden on BLS to produce 

hundreds of different wage levels every 

year across various occupations would 

simply be unsustainable. 

In addition, treating different 

occupations differently would create an 

opportunity and incentive, in some 

cases, for employers to misclassify 

workers in order to take advantage of 

lower wage rates. This is something that 

the Department already encounters by 

virtue of having different wage 

methodologies for different 

nonimmigrant programs that cover 

different types of jobs. Introducing the 

possibility of securing a different wage 

methodology within the H–1B and 

PERM programs would similarly allow 

employers ability to seek lower wages 

even if such wages are not the right 

wage for the job opportunity in question 

and result in adverse effects on U.S. 

workers. Again, this also means that, 

barring a compelling reason to introduce 

this kind of disuniformity into the H–1B 

and PERM programs, a single wage 

structure should be preserved. And the 

Department does not believe that there 

is such a compelling reason to 

disaggregate the wage methodology by 

occupation. While certain advanced 

degree occupations present somewhat 

different considerations in terms of how 

wage rates should be provided as 

compared to the top H–1B and PERM 

occupations the Department focused on 

in its analysis in the IFR, the 

Department reiterates that, as explained 

more fully below, the effects of the new 

wage methodology on advanced degree 

occupations have been given significant 

weight in the Department’s analysis of 

where to set the entry-level wage. The 

Department therefore believes that 

adjusting the IFR’s entry-level wage 

down to the 35th percentile—together 

with other features of the system, 

discussed below—adequately accounts 

for the interests of workers and 

employers in advanced degree 

occupations and will more consistently 

supply wage rates that are appropriate 

across a broader range of occupations. 

Moreover, other changes made in this 

final rule, including eliminating the use 

of the default wage of $208,000 per year 

for all four wage levels in cases where 

BLS cannot supply a Level IV wage (an 

issue that was of particular concern for 

commenters that discussed how the IFR 

affected employers of workers in 

advanced degree occupations), will also 

reduce the incidence of job 

opportunities requiring an advanced 

degree being assigned inflated wage 

rates. 

Moreover, the Department notes that 

the use of a single wage structure has 

been its practice ever since it began 

using leveled wages in the H–1B and 

PERM programs. Twenty years of 

experience shows that using a single 

wage structure across all occupations is 

not unmanageable for employers. 

Indeed, given that the previous wage 

levels were selected with no analysis or 

explanation, the Department anticipates 

that its revised levels will in fact 

produce more appropriate outcomes in 

a larger number of cases across different 

occupations. For the first time the 

Department has undertaken a 

meaningful analysis of what wage levels 


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163 8 U.S.C. 1182(n)(1)(A)(i)(II). 

164 20 CFR 655.731(a)(2)(ii)(B) and (C). 

165 20 CFR 655.715. 

166 20 CFR 655.731(b)(3)(iii)(B)(1)–(4). 

167Employment and Training Administration; 

Prevailing Wage Determination Policy Guidance, 

Nonagricultural Immigration Programs (Revised 

Nov. 2009), available at https://www.dol.gov/sites/ 

dolgov/files/ETA/oflc/pdfs/NPWHC_Guidance_

Revised_11_2009.pdf. 

168 20 CFR 655.731(b)(3)(iii)(C). 

169 20 CFR 655.731 (b)(3)(iii)(C)(4). 

will yield prevailing wage rates in the 

largest number of cases possible that are 

consistent with the wages paid to U.S. 

workers similarly employed and with 

comparable levels of education, 

experience, and responsibility to H–1B 

and PERM workers. In consequence, 

preserving a single wage structure 

should, if anything, be even more 

feasible and reasonable now than it was 

when the old wage levels were 

operative. 

Further, the INA allows an employer 

to use the best available information at 

the time of filing an LCA in setting the 

wages in the H–1B program.163 If an 

employer does not believe the OES wage 

provided by the Department is the best 

available information at the time of 

filing, the employer may utilize an 

alternative prevailing wage survey 

provided by an independent 

authoritative source or another 

legitimate source of wage 

information.164 Such alternative sources 

of wage information are, in the 

Department’s experience, widely 

available, and provide a backstop for 

employers, thereby reducing any need 

to create multiple, precisely tailored 

wage structures for different 

occupations. 

The Department defines a prevailing 

wage survey published by independent 

authoritative source as ‘‘a prevailing 

wage survey for the occupation in the 

area of intended employment published 

. . . in a book, newspaper, periodical, 

loose-leaf service, newsletter, or other 

similar medium, within the 24–month 

period immediately preceding the filing 

of the employer’s application.’’ 165 The 

independent authoritative source 

should: (1) Reflect the average wage 

paid to workers similarly employed in 

the area of intended employment; (2) 

Reflect the median wage of workers 

similarly employed in the area of 

intended employment if the survey 

provides such a median and does not 

provide a weighted average wage of 

workers similarly employed in the area 

of intended employment; (3) be based 

upon recently collected data; and (4) 

represent the latest published prevailing 

wage finding by the authoritative source 

for the occupation in the area of 

intended employment.166

In utilizing an independent 

authoritative source, the Department 

requires employers to follow the 

Department guidance, which explains 

the standards contained in the 

Department’s regulations.167 Employers 

following the 2009 Guidance should 

ensure wage data collected is for 

similarly employed workers, meaning 

having substantially similar levels of 

skills. The survey should contain a 

representative sample of wages within 

the occupation that comports with 

recognized statistical standards and 

principals in producing prevailing 

wages. It is important to note that the 

nature of the employer, such as whether 

the employer is public or private, for 

profit or nonprofit, large or small, 

charitable, a religious institution, a job 

contractor, or a struggling or prosperous 

firm, do not bear in a significant way on 

the skills and knowledge levels required 

and should not limit the universe of 

employers surveyed. The relevant 

factors are the job, the geographic 

locality of the job, and the level of skill 

required to perform independently on 

the job. The Department provides a set 

of minimum survey standards in 

Appendix E of the 2009 Guidance, and 

encourages employers to reference these 

standards when seeking to use an 

independent authoritative source as the 

prevailing wage. Written documentation 

on the methodology used to conduct the 

survey and the validity of the 

methodology used in computing the 

occupational wage data covering the 

area of intended employment must be 

kept in the employer’s data file and 

made available in the event of an 

investigation. 

In addition, the Department allows 

employers to rely upon other legitimate 

sources of wage information if they do 

not have access to a published 

independent authoritative source.168

The only difference between a 

published independent authoritative 

source and another legitimate source of 

wage information is that the other 

legitimate source of wage information 

simply has to be ‘‘reasonable and 

consistent with recognized standards 

and principals in producing a prevailing 

wage’’ and does not need to be 

published.169 As with independent 

authoritative sources, the Department 

encourages employers to ensure the 

other legitimate source of wage 

information follows the Department’s 

2009 Guidance to ensure it is reasonable 

and consistent with recognized 

standards and principals in producing a 

prevailing wage. 

The Department notes that since the 

IFR, employers have availed themselves 

of the ability to use independent 

authoritative sources and other 

legitimate sources of wage information 

at rates 274 percent greater than the 

same timeframe in 2019. In fact, since 

publication of the IFR, the Department 

has received 14,153 LCAs supported by 

an independent authoritative source or 

other legitimate source of wage 

information for 153 unique occupations, 

compared to 19,509 representing 216 

unique occupations for the entirety of 

FY 2020. This increased use of private 

surveys is consistent with the 

Department’s experience that alternative 

wage surveys are readily available 

across many different regions and 

industries. 

This widespread use and availability 

of alternative age sources extends to 

advanced degree occupations. Since the 

IFR publication, employers filing 523 

LCAs representing 950 positions for 

occupations requiring advanced degrees 

used an independent authoritative 

source or other legitimate source of 

wage information. Since the IFR, there 

have been 4,973 PWDs requested for 

occupations requiring an advanced 

degree using a survey as the wage 

source; this is 1,780 more PWDs relying 

on a survey as the wage source than for 

similar PWDs in FY 2020. 

For the PERM program, too, 

employers are required to obtain a PWD 

from the Department; they have the 

option of providing an alternate wage 

source to the OES survey in this process 

as well. There are well-established 

standards of acceptance of alternative 

wage sources. In the weeks since the 

publication of the IFR, the Department 

has received more than 6,900 prevailing 

wage requests supported by private 

wage surveys in the PERM program, 

which is a 335% increase over the same 

timeframe in 2019. Again, this increase 

confirms that such sources of wage data 

are readily available for use in seeking 

a PWD not based on the OES survey if 

employers believe in anomalous cases 

that the OES survey does not produce 

an accurate wage. This obviates any 

need, in the Department’s view, to 

create a complicated, administratively 

burdensome scheme of occupationspecific wage structures. 

3. The IFR Wages and Market Wage 

Rates 

Summary of Comments 

The most common concern raised by 

commenters on this subject was that 

prevailing wages under the IFR’s 


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methodology do not reflect actual 

market rates and in many cases are 

unrealistically high such that they will 

require employers to lay off currently 

employed foreign workers, will make it 

‘‘difficult if not impossible, to hire for 

highly specialized and hard-to-recruit 

for positions,’’ and will ‘‘frustrate equal 

pay principles for U.S. workers, and 

create an endless upward spiral of wage 

obligations that bear no relation to 

market dynamics.’’ A professional 

association asserted that the wage level 

methodology in the IFR produced 

‘‘artificially high’’ prevailing wages and 

circumvented congressional intent by 

making it ‘‘virtually impossible for 

employers to use the H–1B visa 

program.’’ The commenter asserted the 

Department violated section 212(n) of 

the INA by ‘‘incorrectly setting the way 

data is leveled’’ and ‘‘prevent[ing] 

employers from obtaining’’ from the 

Department’s Online Wage Library ‘‘a 

wage that is in fact the prevailing wage 

for the’’ occupation and Area of 

Intended Employment or a wage that 

represents ‘‘the best information 

available as of the time of filing the 

application.’’ An employer asserted the 

IFR would create spiraling wages 

because ‘‘the next collection of BLS data 

will be distorted by these new wage 

requirements, yielding new and even 

higher prevailing wage requirements, in 

a pattern that will repeat and multiply’’ 

over time. A public policy organization 

said the IFR would lead to inflated 

wages because employers must post at 

the worksite the H–1B worker’s salary, 

which will compel employers to pay the 

increased IFR wage to similarly 

employed U.S. workers. 

Commenters cited numerous general 

and specific examples of substantial 

wage increases for combinations of 

occupations and areas of employment 

that do not reflect, according to 

commenters, market wages. Several 

commenters cited an NFAP analysis that 

compared wages under the IFR to 

private survey wages and pre-IFR OES 

wages and found that for all occupations 

and geographic locations the new wages 

are ‘‘on average, 39% higher for Level 1 

positions, 41% higher for Level 2, 43% 

higher for Level 3 and 45% higher for 

Level 4.’’ Examples included a 99.5 

percent increase for Level I petroleum 

engineers and for electrical engineers, 

computer network architects, computer 

systems analysts, mechanical engineers, 

and database administrators at all wage 

levels. The most dramatic examples 

included a Level I wage increase of 

more than 206 percent for a computer 

and information systems manager in 

East Stroudsburg, Pennsylvania, and 

more than 177 percent for a pediatrician 

in Wichita, Kansas. Referencing an 

American Action Forum report, a trade 

association cited average IFR wage 

increases for several occupations, 

including ‘‘an 83 percent increase for 

Level 1 Computer and Information 

Systems Managers’’ and ‘‘a 44 percent 

increase for Level 2 Software 

Developers.’’ Several commenters 

asserted the required prevailing wages 

for some information technology 

occupations would exceed the salary 

cap implemented by some big tech 

employers, such as Level II and Level IV 

wages in Silicon Valley and Seattle that 

exceed a $160,000 salary maximum at 

Amazon. 

Many commenters stated the wages 

produced under the IFR did not reflect 

data on prevailing wages found on 

websites like Payscale, Glassdoor, 

Indeed, or Levels.fyi. Examples cited 

include Level I software developer 

wages in Santa Clara and Level I 

engineer wages in Seattle that are lower 

than the 45th percentile, according to 

Levels.fyi, and a median salary for 

software developers in Cincinnati that is 

$20,000 per year lower than the entry 

level wage under the IFR, based on 

Payscale data. One commenter also 

stated that the Level IV IFR wage for 

electrical engineers in Seattle exceeded 

$168,820, the highest wage listed for the 

occupation in O*Net. 

A few commenters expressed concern 

that the IFR wages are not consistent 

with prevailing wage determinations 

produced by private wage surveys. A 

public policy organization compared 

wages under the IFR to surveys 

conducted by Willis Towers Watson and 

found a divergence in wage 

determinations between the two, 

including IFR wages 63 percent higher 

for Level IV programmers in Chicago, 

three times higher for all levels of 

financial analysts in New York City, and 

62 percent higher for Level I software 

developers in Los Angeles. This 

commenter noted that many private 

surveys use ‘‘precise methodologies and 

a wide range of data gathering to ensure 

that the surveys’’ are accurate and they 

are ‘‘used by employers for companywide salary benchmarking.’’ Similarly, a 

trade association stated that private 

wage surveys ‘‘commonly collect 

compensation information reflecting 

education, experience, and 

responsibility,’’ and a professional 

association stated these surveys often 

‘‘gather real market data for what 

companies are paying employees at 

different levels,’’ in contrast to the OES, 

which gathers ‘‘general data without 

regard to experience levels.’’ 

In addition to arguing that the IFR’s 

wage rates were too high, a number of 

commenters highlighted what can be 

described as second and third order 

consequences of prevailing wage rates 

being out-of-step with market wages. 

For instance, comments primarily from 

academic and research institutions and 

related organizations and individuals 

expressed concern that if wages are 

untethered from market rates, 

particularly for post-doctoral research 

positions, clinical faculty, 

administrative positions, and teaching 

assistants, and the prevailing wage 

requirement would be untenable for 

institutions reliant on grant funding, 

especially those reliant on government 

funding. As a result, commenters 

believed the IFR would produce a 

shortage of qualified faculty and 

diminish the quality of education 

students receive; reduce already 

declining foreign student enrollment 

and tuition revenue; and derail critical 

research projects in science, healthcare, 

and technology. 

Most of these commenters asserted 

wages under the IFR often are 

significantly higher than prevailing 

wages in the higher education or 

research sectors, and several 

commenters cited specific examples, 

like a Level I wage increase for postdoctoral researchers that would raise the 

wage higher than the salary of many 

experienced tenure track faculty. 

Several commenters asserted the 

increased wages would be especially 

burdensome for employers reliant on 

grant funding that may be subject to 

statutory or other limits on the funding 

amounts and the ways the employer can 

expend the funds. For example, a 

university stated that federal research 

organizations lack adequate funding to 

pay the IFR wages for work on research 

projects funded by federal awards and 

will need to reduce the size of those 

project groups or attempt to avoid 

employing H–1B workers on any of 

those projects. Other commenters noted 

more specifically that grants like those 

awarded by the National Institute of 

Health (NIH) are subject to rules 

limiting the amount that can be used for 

‘‘administrative costs, including 

salaries,’’ and one commenter stated 

that the IFR prevailing wage for 

biological scientists would exceed the 

NIH salary cap by as much as 79 percent 

in some areas. 

Commenters expressed concern the 

wage increases would diminish the 

quality of education universities 

provide by making it difficult or 

impossible to retain or hire qualified 

faculty, researchers, and workers in 

other jobs like administrative positions. 


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A leading teaching and medical research 

hospital stated that the inability to 

retain researchers at the IFR wage levels 

would jeopardize critical research 

projects and the jobs in which U.S. 

workers are employed in ‘‘assistant, tech 

and coordinator roles.’’ Commenters 

also believed the wage increases would 

reduce post-graduation career 

opportunities significantly for 

international students and would 

reduce already declining foreign student 

enrollment, which in turn would 

contribute to a shortage of skilled labor 

in higher education and research and in 

the United States broadly. For example, 

some commenters asserted the IFR 

would reduce the number of available 

and qualified graduate teaching 

assistants, tutors, post-doctoral 

researchers, and similar workers 

because international students 

constitute a substantial portion of this 

labor force. An employer expressed 

concern about the impact of the IFR on 

the STEM and engineering labor force, 

noting that foreign graduates account for 

more than 70 percent of workers 

possessing a master’s degree or Ph.D. in 

electronics engineering or related fields, 

according to a referenced 2018 National 

Center for Education Statistics 

Integrated Postsecondary Education 

Data System survey. Several of the 

commenters also stated the enrollment 

decline would reduce not only tuition 

revenue but also tax revenue and 

consumer spending. 

Citing budget constraints and the 

importance of its work, a research 

organization reliant on NIH grant 

funding urged the Department to 

provide an exemption from the wage 

rule for ACWIA-eligible employers, 

which would encompass institutions of 

higher education and related or 

affiliated nonprofit entities, as well as 

nonprofit and governmental research 

organizations. The commenter added 

that the Department should continue to 

work to ‘‘update the ACWIA wage 

library.’’ 

Comments primarily from healthcare 

providers and academic institutions 

expressed concerns similar to concerns 

of higher education commenters. The 

commenters asserted the new wage rates 

would exceed market rates, particularly 

for physicians subject to a $208,000 

wage in many areas and for resident 

physicians. Two commenters asserted 

university clinical programs and 

medical research programs did not have 

adequate funds to pay the increased 

wages and asserted this would set back 

important ‘‘biomedical research during 

a pandemic’’ and curtail their ability ‘‘to 

care for and treat those afflicted.’’ A 

professional association stated that 

resident physicians are physicians in 

training and asserted that use of the OES 

to determine the prevailing wage for 

these job opportunities would produce 

wages higher than the actual prevailing 

wage for residents. 

Most of these commenters asserted 

the increased wages would lead to a 

shortage of healthcare workers, 

including bilingual workers and mental 

health professionals and would reduce 

the quality of and access to healthcare 

and the quality of care available. Several 

commenters expressed concern this 

would have a particularly significant 

impact on providers in rural areas that 

have difficulty recruiting, cannot afford 

to pay the same wages as employers in 

larger areas, and often rely on foreign 

workers allocated to underserved areas 

through the Conrad-30 waiver program. 

One commenter also asserted the 

increased wages under the IFR ‘‘may 

cause elimination of the Conrad-30 

waiver program’’ altogether. 

Several commenters expressed 

concern the IFR would adversely impact 

small employers, start-ups, and 

nonprofits in particular because many 

these employers cannot afford 

competitive base wages due to limited 

resources and instead compete based on 

intangibles or use incentives like stock 

options. One commenter asserted that 

‘‘incremental compliance costs’’ for 

small employers would be as much as 

three percent of revenue in 2020–21 and 

that these employers would effectively 

‘‘be shut out of the H–1B visa program 

for new workers.’’ Some commenters 

asserted these employers are more likely 

to rely on DOL issued wages than 

private wage surveys, either due to 

inability to afford the survey or because 

they operate in small or 

nonmetropolitan areas and ‘‘private 

wage surveys are based on metropolitan 

area wages and do not cover many small 

market areas or less commonly utilized 

occupations because of data 

limitations.’’ 

Many commenters expressed concern 

that the IFR would require employers to 

pay foreign workers more than the wage 

paid to U.S. workers or foreign workers 

hired prior to the IFR effective date and 

this would require employers to 

increase wages across the board due to 

the potential for worker resentment or 

decreased morale or because federal and 

state laws prohibiting discrimination 

require equal pay. For example, a 

professional association expressed 

concern that the IFR would require 

employers to pay the IFR wage to 

similarly employed workers to avoid 

potential pay equity claims under 

federal and state laws prohibiting 

discrimination, including Title VII of 

the Civil Rights Act of 1964 and a New 

York state law requiring equal pay for 

‘‘equal or substantially similar work.’’ 

Similarly, some higher education 

commenters were concerned that they 

would need to pay the IFR wage to a 

broad range of U.S. workers due to ‘‘pay 

equity demands’’ or an ‘‘actual wage 

analysis’’ requiring payment of the 

higher wage to ‘‘all comparable 

workers.’’ Several commenters 

expressed general concern that the IFR 

would produce entry-level wages higher 

than wages paid to mid-career 

professionals or even the managers or 

supervisors of those workers. 

By contrast, a number of commenters 

suggested that IFR’s entry-level wage 

was set too low, that the entry-level 

wage should be placed no lower than 

the median of the OES distribution, and 

that some place even higher up within 

the distribution may be appropriate. A 

public policy organization asserted that 

wages ‘‘close to and above the median 

. . . will ensure H–1B workers are not 

being sought out simply because 

employers can save on labor costs.’’ A 

second public policy organization 

expressed concern that the pre-IFR wage 

level methodology that set rates below 

the median in the occupation ‘‘failed to 

require that firms pay market wages to 

H–1B workers.’’ A third public policy 

organization supported the increased 

wages under the IFR but expressed 

concern that setting the Level I wage 

‘‘just below the local median wage’’ 

would ‘‘permit employers to pay H–1B 

workers at below market wage rates.’’ 

Similarly, a labor union and a 

commenter from academia supported 

the Department’s decision to increase 

the Level I wage closer to the median, 

which the labor union asserted ‘‘is 

reflective of the minimum market rate 

that should be paid to an H–1B worker 

in order to safeguard U.S. wage 

standards and ensure that migrant 

workers in H–1B status are compensated 

fairly.’’ Another public policy 

organization and an academic 

commenter suggested the Department 

should increase the Level I wage to the 

75th percentile and require that all H– 

1B job opportunities be certified ‘‘at a 

wage that is no lower than the national 

median wage for the occupation.’’ 

Other suggestions about how to set 

the wage levels included one from an 

anonymous commenter, who urged the 

Department to set the prevailing wage at 

the highest prevailing wage in the 

country for the occupation, such as 

requiring all employers to pay the 

prevailing wage for physicians in New 

York City if that is the highest wage 

among all areas in the country. The 

commenter believed this would 


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3634 Federal Register / Vol. 86, No. 9 / Thursday, January 14, 2021 / Rules and Regulations 

170The CPS, sponsored jointly by the U.S. Census 

Bureau and BLS, is the primary source of labor 

force statistics for the population of the U.S. See 

United States Census Bureau, Current Population 

Survey, available at https://www.census.gov/ 

programs-surveys/cps.html. 

171For the CPS data, the Department looked at the 

wages of workers in all occupations that account for 

1 percent or more of the total H–1B population. 

These occupations also account for the majority of 

PERM workers. For the NSF data the Department 

examined the wages of workers in 11 of the most 

common (in the top 17) occupational codes for H– 

‘‘equalize the cost to [all] employers’’ 

and would incentivize employers to 

recruit in other regions of the United 

States before hiring foreign workers. 

Another anonymous commenter 

suggested the Department should set the 

wage levels at the average of the IFR and 

pre-IFR levels, stating this would result 

in wage levels at the 31st, 48th or 50th, 

64th or 66th, and 81st or 83rd 

percentiles for Levels I through IV, 

respectively. 

Response to Comments 

At the outset, the Department notes 

that commenters generally did not offer 

data or economic justifications 

purporting to show that the old wage 

level methodology produced wages 

across many different occupations and 

geographic areas that reflect the wages 

paid to U.S. workers similarly employed 

to H–1B and PERM workers. Further, as 

explained above, the Department has 

reasonably concluded that the old wage 

methodology, in many instances, is a 

source of harm to U.S. workers’ wages 

and job opportunities. This fact, on its 

own, in the Department’s view, gives 

rise to a clear inference that the old 

wage levels were not set in a manner 

that yielded prevailing wage rates on 

par with market wages. Whatever merits 

some commenters might see in the old 

methodology, it is clear it did not 

advance the purpose of the INA’s wage 

provisions to protect U.S. workers. Of 

equal importance, and a reason 

independently sufficient for concluding 

that adjustments to the old wage 

methodology are needed, is the fact that 

the old methodology, as noted 

previously, is in tension with the 

governing statute. 

The need for this rulemaking clear, 

the question then turns to how the wage 

levels should be adjusted. Notably, a 

number of commenters agreed with the 

foundational premise of the IFR that the 

Department should set prevailing wage 

levels based on an assessment of what 

workers with similar levels of education 

and experience to the foreign workers 

covered by the four-tier wage structure 

are paid. As one commenter said, ‘‘DOL 

reasonably claims that a wellfunctioning system for prevailing wages 

determinations would find that the 

wages that need to be paid for foreign 

national workers subject to these 

requirements ‘generally should 

approximate the going wage for workers 

with similar qualifications and 

performing the same types of job duties 

in a given labor market.’ ’’ This 

commenter, and others, therefore did 

not disagree with the aim of the IFR, but 

rather simply claimed that the 

Department had overshot the mark and 

adjusted the wage levels so high that 

they do not reflect actual market wages. 

The Department agrees with these 

commenters, and the reasoning in the 

IFR, that prevailing wage rates produced 

by the four-tier wage structure should 

approximate actual market wages to the 

greatest extent possible. The Department 

also takes seriously commenters’ 

concerns that the IFR’s wage levels may 

yield prevailing wage rates that do not 

meet that goal. It has therefore taken 

into account data and analysis provided 

by commenters to supplement and 

inform the analysis used in the IFR. 

Based on this reassessment of the 

conclusions it reached in the IFR, the 

Department has determined that it is 

appropriate to reduce the entry-level 

wage from the mean of the fifth decile, 

or the 45th percentile, to the 35th 

percentile. Doing so will, in the 

Department’s expert judgment, and 

based on a review of the relevant data 

sources, including those provided by 

commenters, result in entry-level 

prevailing wage rates that approximate 

the wages paid to U.S. workers similarly 

employed to H–1B and PERM workers. 

While the Department believes that 

data and analysis provided by 

commenters warrants a reassessment of 

the IFR’s wage levels, the Department, 

as discussed in detail above, has 

determined that the analytical 

framework relied on in the IFR remains 

the appropriate lens through which to 

understand how the levels should be 

set. 

While the INA provides the relevant 

factors and general framework by which 

the wage levels are to be set, it leaves 

the precise manner in which this is 

accomplished, including the types of 

data and evidence to be used and how 

such data and evidence are weighed, to 

the Department’s discretion and expert 

judgment. In exercising that discretion, 

the Department’s decision on how to 

adjust the wage levels is informed by 

the statute’s purpose of protecting the 

wages and job opportunities of U.S. 

workers. This means the Department 

has focused its analysis on those areas 

where the risk to U.S. workers is most 

acute, taken into account how the 

foreign labor programs are actually used 

by employers, and, where appropriate, 

resolved doubts in favor of refining the 

wage calculations so as to eliminate to 

the greatest extent reasonably possible 

adverse effects on U.S. workers caused 

by the employment of foreign workers, 

while also ensuring that the program is 

still accessible to employers. 

As explained in the IFR, to determine 

the wages typically made by individuals 

having comparable levels of education, 

experience, and responsibility to the 

prototypical entry-level H–1B and EB–2 

workers and working in the most 

common H–1B and PERM occupations, 

the Department consulted a variety of 

data sources, most importantly wage 

data on individuals with master’s 

degrees or higher and limited years of 

work experience—the type of worker 

the Department determined to be an 

appropriate wage comparator for entrylevel H–1B and EB–2 workers—from the 

2016, 2017, and 2018 CPS 170 conducted 

by the U.S. Census Bureau, and data on 

the salaries of recent graduates of 

master’s degree programs in STEM 

occupations garnered from surveys 

conducted by the NSF in 2015 and 

2017. Both of these surveys represent 

the highest standards of data collection 

and analysis performed by the federal 

government. Both surveys have large 

sample sizes that have been 

methodically collected and are 

consistently used not just across the 

federal government for purposes of 

analysis and policymaking but by 

academia and the broader public as 

well. 

In the case of the CPS survey, the 

Department used a wage prediction 

model to identify the wages an 

individual with a master’s degree or 

higher and little-to-no work experience 

(based on age) would be expected to 

make and matched the predicted wage 

with the corresponding point on the 

OES wage distribution. Using the NSF 

surveys, the Department calculated the 

average wage of individuals who 

recently graduated from STEM master’s 

degree programs and matched the 

average wage against the corresponding 

point on the OES distribution. 

These analyses located three points 

within the OES wage distribution at 

which the wages of U.S. workers with 

similar levels of education and 

experience to the prototypical entrylevel workers in specialty occupations 

and the EB–2 program are likely to fall. 

In particular, the 2015 NSF survey data 

indicate that workers in some of the 

most common H–1B and PERM 

occupations with a master’s degree and 

little-to-no relevant work experience are 

likely to make wages at or near the 49th 

percentile of the OES distribution.171


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1B workers that were convertible to the 

occupational code convention of the NSF, which 

account for approximately 63 percent of all H–1B 

workers, according to data from USCIS. 

172The Department notes again by way of 

clarification that it is not suggesting that possession 

of a master’s degree is required to work in a 

specialty occupation. Rather, as explained above, 

possession of a master’s degree by someone with 

little-to-no relevant work experience is being 

employed as a useable proxy, for analytical 

purposes, of the level of education and experience 

that approximates the baseline level of specialized 

knowledge needed to work in the H–1B and EB–2 

programs and that many entry-level workers in 

those programs actually possess. Again, the 

Department notes that master’s degree holders have, 

in recent years, been the largest educational cohort 

within the H–1B program, accounting in FY2019 for 

over fifty percent of new H–1B workers. See U.S. 

Citizenship and Immigration Services, 

Characteristics of H–1B Specialty Occupation 

Workers Fiscal Year 2019 Annual Report to 

Congress October 1, 2018—September 30, 2019, 

(2020), available at https://www.uscis.gov/sites/ 

default/files/document/reports/Characteristics_of_

Specialty_Occupation_Workers_H-1B_Fiscal_Year_

2019.pdf. 

173See 8 U.S.C. 1182(a)(5)(A) (requiring the 

Secretary to certify that the employment of 

immigrants seeking EB–2 classification ‘‘will not 

adversely affect the wages and working conditions 

of workers in the United States similarly employed) 

(emphasis added); 8 U.S.C. 1182(n)(1)(A)(i) 

(requiring prospective H–1B employers to offer and 

pay at least the actual wage level or ‘‘the prevailing 

wage level for the occupational classification in the 

area of employment’’). 

174For example, under this metric, a 30 year old 

individual with 18 years’ worth of education would 

be counted as having six years of work experience. 

The 2017 NSF survey suggests that these 

workers are likely to make wages at or 

near the 46th percentile of the OES 

distribution. On the low end, the CPS 

data suggest that such individuals make 

wages at or near the 32nd percentile. 

The Department thus identified a 

range within the OES data wherein fall 

the wages of workers who, while being 

relatively junior within their 

occupations, clearly possess the kinds of 

specialized education and/or experience 

that the vast majority of foreign workers 

covered by the Department’s wage 

structure are, at a minimum, required to 

have.172 Put another way, through an 

assessment of the experience and 

education generally possessed by some 

of the least skilled and least experienced 

H–1B and EB–2 workers—workers who 

are likely entry-level workers within 

their respective programs—the 

Department determined what U.S. 

workers with similar levels of education 

and experience are likely paid. 

Accordingly, it is appropriate for the 

wages paid to such U.S. workers to 

govern the entry-level prevailing wage 

paid under the Department’s wage 

structure.173

In the IFR, the Department explained 

that translating the identified range into 

an entry-level wage for the Department’s 

use in the H–1B and PERM programs 

could be accomplished in a number of 

ways. One option would be to simply 

calculate the average wage of all 

workers that fall within the range, 

meaning those workers whose reported 

wage falls between the 32nd and 49th 

percentiles, which would place the 

entry-level wage at approximately just 

above the 40th percentile. An 

alternative would be to identify a subset 

of wages within the range—either on the 

lower end or the higher end of the 

range—and calculate the average wage 

paid to workers within such subset. 

Because of the greater suitability of the 

NSF data for the Department’s purposes, 

likely distortions in the wage data of 

both surveys caused by the presence of 

lower-paid foreign workers in the 

relevant labor markets, and the purposes 

of the INA’s wage protections, the 

Department determined in the IFR that 

the most appropriate course was to set 

the entry-level wage by calculating the 

average of a subset of the data located 

at the higher end of the identified wage 

range. This resulted in the entry-level 

wage being placed at approximately the 

45th percentile. Notably, commenters 

did not dispute these three qualitative 

considerations the Department offered 

for why it favored the higher end of the 

range. 

The Department therefore continues 

to believe that the reasoning that led it 

to set the entry-level wage at the higher 

end of the identified range remains 

relevant to its decision in this rule. For 

one thing, as between the two data 

sources and the manner in which they 

were analyzed, the NSF data are better 

tailored to the Department’s purposes in 

identifying an entry-level wage for the 

H–1B program. The NSF surveys 

provide data on the wages of 

individuals with degrees directly 

relevant to the specialized occupations 

in which they are working, namely 

degrees in STEM fields. By contrast, the 

CPS data only show whether a person 

does or does not have a master’s degree 

and does not identify what field the 

master’s degree or the individual’s 

undergraduate course of study was in. It 

is therefore likely that some of the wage 

data relied on in generating the CPS 

estimate were based on the earnings of 

individuals who possess degrees not 

directly related to the occupation in 

which they work. Given that the CPS 

data used only accounted for persons 

with little-to-no experience, such 

individuals would therefore be unlikely 

to have the qualifications needed to 

work in a ‘‘specialty occupation,’’ as 

that term is defined in the INA. Having 

neither a specialized degree nor 

experience, and therefore lacking in 

specialized skills or expertise, at least 

with respect to the occupations in 

which they work, such individuals 

would not qualify as similarly employed 

to even the least skilled H–1B workers 

and are thus not appropriate 

comparators for identifying an entrylevel wage in the H–1B program. 

Because of these workers’ relative lack 

of skill and expertise, they are likely to 

command lower wages, and thus 

decrease the predicted wage below what 

would be an appropriate entry-level 

wage for the Department’s foreign labor 

programs. 

Relatedly, the Department’s method 

for approximating experience in the CPS 

data is also not as closely tailored to the 

goal of determining what U.S. workers 

similarly employed to the prototypical 

entry-level H–1B and EB–2 workers are 

paid as is the NSF data. The CPS 

analysis relied on potential experience 

as a proxy for actual experience, which 

was calculated using a standard formula 

of subtracting from individuals’ ages 

their years of education and six, based 

on the common assumption that most 

individuals start their education at the 

age of six.174 While a standard measure 

for potential experience, this method of 

approximation is imprecise because it 

shows each individual of the same age 

and education level as having the same 

level of work experience. In reality, 

such individuals may vary significantly 

in their levels of experience. 

For starters, the approximation does 

not take into account the possibility of 

a worker temporarily exiting the 

workforce, and would count the time 

spent outside the workforce as work 

experience. It also does not account for 

gaps between when a person received 

his or her bachelor’s degree and when 

he or she enrolled in a master’s degree 

program. In such cases, the work 

experience captured by the proxy of 

potential experience may thus not be 

directly relevant to the work a person 

performs after he or she graduates from 

a master’s degree program since in some 

cases the work experience in question 

was likely acquired before the 

individual enrolled in a master’s degree 

program. In consequence, the sample 

used in the CPS analysis almost 

certainly includes some individuals 

who have no relevant experience in the 

specialized occupations in which they 

are working, which likely decreases the 

wage estimate calculated using the CPS 

data and makes it a less precise and 

reliable estimation of the wages of U.S. 

workers with similar levels of education 

and experience to the prototypical, 

entry-level H–1B and EB–2 workers. In 

other words, the CPS data allows for 


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175The Department estimated the share of H–1B 

workers in the IT sector by tallying the total number 

of computer occupation workers in the U.S., 

subtracting those workers that fill positions for 

which H–1B workers are generally ineligible, and 

dividing the total by the total number of H–1B 

workers likely working in computer occupations, 

based on data and reports issued by USCIS. See 

Bureau of Labor Statistics, Employment by Detailed 

Occupation, https://www.bls.gov/emp/tables/empby-detailed-occupation.htm; United States 

Citizenship and Immigration Services, H–1B 

Authorized-to-Work Population Estimate, (2020), 

available at https://www.uscis.gov/sites/default/ 

files/document/reports/USCIS%20H1B%20Authorized%20to%20Work%20Report.pdf; 

United States Citizenship and Immigration 

Services, Characteristics of H–1B Specialty 

Occupation Workers: Fiscal Year 2019 Annual 

Report to Congress October 1, 2018–September 30, 

2019, (2020), available at https://www.uscis.gov/ 

sites/default/files/document/reports/ 

Characteristics_of_Specialty_Occupation_Workers_

H-1B_Fiscal_Year_2019.pdf. 

176These findings come from data provided by 

USCIS and the 2017 Occupational Employment 

Statistics survey from the Bureau of Labor Statistics. 

They are based the total number of H–1B workers 

according the FY19 USCIS tracker data within a 

SOC code divided by the 2017 OES estimate of total 

workers in a SOC code. 

177Wage Methodology for the Temporary Nonagricultural Employment H–2B Program, 76 FR 

3452, 3453 (Jan. 19, 2011) (acknowledging the 

Department did not conduct ‘‘meaningful economic 

analysis to test [the] validity’’ of its ‘‘assumption 

that the mean wage of the lowest paid one-third of 

the workers surveyed in each occupation could 

provide a surrogate for the entry-level wage’’); see 

also Wage Methodology for the Temporary NonAgricultural Employment H–2B Program, Part 2, 78 

FR 24,047, 24,051 (Apr. 24, 2013). 

178 Labor Condition Applications and 

Requirements for Employers Using Nonimmigrants 

on H–1B Visas in Specialty Occupations and as 

Fashion Models; Labor Certification Process for 

Permanent Employment of Aliens in the United 

States, 65 FR 80,110 (Dec. 20, 2000). 

only a rough approximation of 

experience—a key factor the Department 

must take into account in adjusting the 

prevailing wage levels. This, in 

combination with the fact that some 

workers contained within the CPS 

dataset likely also lack specialized 

education relevant to the occupations in 

which they work, means that CPS data 

is, in some degree, distorted by wage 

earners who should be discounted in 

identifying the appropriate entry-level 

wage because they likely possess neither 

the type of specialized experience nor 

the education in their field that is 

comparable to that possessed by entrylevel H–1B and EB–2 workers. 

The NSF survey data, by contrast, are 

uniquely suited to the Department’s 

purposes. The NSF surveys in 2015 and 

2017 capture wage data about exactly 

the sort of workers the Department has 

determined serve as the appropriate 

comparators for entry-level H–1B and 

EB–2 workers. They surveyed 

individuals with master’s degrees in 

STEM fields who are working in STEM 

occupations, including some of the most 

common H–1B and PERM occupations, 

and who are approximately three years 

or less out of their master’s degree 

programs. In other words, the NSF 

surveys report wage data for individuals 

with specialized knowledge and 

expertise working in the occupations in 

which H–1B and PERM workers are 

most often employed and who are 

relatively junior within their respective 

occupations. The NSF data therefore 

provide a more accurate wage profile of 

workers similarly employed to entrylevel H–1B and EB–2 workers. While 

both data sources are useful in helping 

determine a wage range for entry-level 

H–1B and PERM workers, of the two, 

the NSF surveys provide information 

more relevant to the Department’s 

assessment of what is the appropriate 

entry-level wage. Therefore, the 

Department’s analysis relies more on the 

NSF surveys. This weighs in favor of 

placing the entry-level wage higher up 

in the identified wage range given that 

is where the NSF survey results fall. 

Beyond the relative weight of each 

data source, the Department also takes 

into account in identifying the 

appropriate entry-level wage the fact 

that both sources are likely distorted to 

some degree by the presence, in both the 

surveyed population and the labor 

market as a whole, of the very foreign 

workers the Department has determined 

are, in some instances, paid wages 

below the market rate. As noted above, 

various studies and data demonstrate 

that some H–1B workers are paid wages 

substantially below the wages paid to 

their U.S. counterparts, and that this has 

a suppressive effect on the wages of U.S. 

workers. Further, these adverse effects 

are most likely to occur and be severe 

in occupations with higher 

concentrations of foreign workers. It is 

therefore relevant to how the 

Department weighs the data that many 

of the occupations examined in the 

analyses of the NSF and CPS datasets 

have very high concentrations of H–1B 

workers. H–1B nonimmigrants make up 

about 10 percent of the total IT labor 

force in the U.S.175 In certain fields, 

including software developers, 

applications (22 percent); statisticians 

(22 percent); computer occupations, all 

other (18 percent); and computer 

systems analysts (12 percent), H–1B 

workers likely make up an even higher 

percentage of the overall workforce.176

From this, the Department draws two 

conclusions. First, the respondents 

reporting wages in the CPS and NSF 

surveys are likely in some cases H–1B 

or PERM workers, given that both 

surveys contain responses from both 

U.S. citizens and noncitizens and the 

surveyed occupations have high 

concentrations of such foreign workers. 

The reported wages are thus in some 

instances likely not the market wage 

paid to U.S. workers similarly employed 

to H–1B and PERM workers, but rather 

the wages of the foreign workers 

themselves, which, as discussed 

previously, will be likely lower than the 

wages of U.S. workers in some cases. 

Second, even the reported wages of 

respondents who are not H–1B and 

PERM workers are likely not perfectly 

accurate reflections of what the market 

rate would be absent wage suppression 

given that high concentrations of lowerpaid foreign workers likely decrease the 

overall average wage paid in the 

relevant labor market, as detailed above. 

The need to account for these 

distortions also weighs in favor of 

setting the entry-level wage at the higher 

end of the identified wage range. To 

discount this consideration would mean 

that, far from ensuring that the adjusted 

wage levels guard against adverse effects 

on U.S. workers caused by the presence 

and availability of lower-cost foreign 

labor, the Department would, to some 

degree, be basing its regulations on a 

preexisting distortion caused by the old, 

flawed wage methodology.177

Finally, the purpose of the relevant 

INA authorities, particularly the 

prevailing wage requirement, also 

weighs in favor of adjusting the entrylevel wage higher up within the 

identified wage range. As emphasized 

throughout, the guiding purpose of the 

INA’s prevailing wage requirements is 

to ‘‘protect U.S. workers’ wages and 

eliminate any economic incentive or 

advantage in hiring temporary foreign 

workers.’’ 178 Giving due weight to the 

purpose of the statutory scheme 

suggests, in the Department’s judgment, 

that uncertainties should, to some 

extent, be resolved so as to eliminate the 

risk of adverse effects on U.S. workers’ 

wages and job opportunities. That also 

countenances in favor of placing the 

entry-level wage at the higher end of the 

wage range. 

However, in response to the IFR 

commenters provided the Department 

with additional data and considerations, 

which have led the Department to 

modify the wage levels established in 

the IFR. As noted, the principal concern 

commenters expressed about the IFR 

was that the wages it produces are 

significantly higher than the actual 

market wages employers pay their 

workers. To substantiate this criticism, 

various commenters offered wage 

figures from private and public wage 

surveys, and, in some instances, 

reported what specific employers pay 

their workers. The wage data from 

commenters analyzed by the 


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Department generally dealt with wages 

paid to what commenters represented to 

be starting or entry-level positions. 

To allow for a meaningful comparison 

with the wage figures used in the IFR, 

the Department selected a cross section 

of the wage data provided by 

commenters and used the same mode of 

analysis it used in the IFR to match 

those figures with percentiles in the 

OES. In particular, it compared annual 

wage data offered for specific jobs in 

specific metropolitan areas with OES 

data for the occupation in which the job 

falls in the same metropolitan area. OES 

data provides annual wage data for the 

10th, 25th, 50th, 75th, and 90th 

percentiles for occupations at national, 

state, and metropolitan area levels. 

Using these data, the Department 

interpolated annual wages data 

provided by commenters at each of the 

missing percentiles between the 10th 

and the 25th, the 25th and the 50th, the 

50th and the 75th, and the 75th and the 

90th percentiles. This allowed the 

Department to approximate the specific 

percentile at which the wages offered by 

employers fall. 

In general, the Department found that 

the annual wage data for specific jobs in 

specific metropolitan areas offered by 

commenters were clustered around 

percentiles in the 30s. Some annual 

wage data offered by commenters fell in 

lower percentiles, and a few fell higher 

in the distribution. 

A number of commenters cited annual 

wage data based on salary offers for L3 

software developers with no relevant 

work experience from major employers 

that are significant users of H–1B 

workers in the Seattle-Tacoma-Bellevue, 

WA Metropolitan Statistical Area (MSA) 

and San Jose-Sunnyvale-Santa Clara, 

CA. These offers ranged between the 

25th percentile and 42nd percentile of 

the OES distribution. Excluding the 

lowest offer and the highest offer, most 

offers were clustered between the 32nd 

percentile and 41st percentile. 

One commenter cited annual wage 

data from Glassdoor for entry-level tax 

managers at public accounting firms in 

the New York-Newark-Jersey City, NYNJ-PA MSA. The Department found that 

the annual wage was between 33rd 

percentile and the 34th percentile. 

Another commenter offered Indeed and 

Payscale annual wage data for 

accountants in the Dallas-Fort WorthArlington, TX MSA. Using the higher 

annual wages from the two surveys, 

annual wages were between the 19th 

percentile and the 20th percentile. 

One comment cited Glassdoor, 

Payscale, and ZipRecruiter data for 

minimum and maximum annual wages 

for statisticians in the New YorkNewark-Jersey City, NY-NJ-PA MSA. 

Review of this data showed the 

minimum annual wages were less than 

the 10th percentile. Another comment 

cited Glassdoor average annual wage 

data for financial analysts with no 

experience in in the Dallas-Fort WorthArlington, TX MSA, which showed that 

the average annual wages were between 

the 31st percentile and 32nd percentile. 

A commenter cited annual wages 

offered by a major university in the 

Bloomington, IN MSA. Because of data 

limitations in the OES, the Department 

could only compare the annual wages 

for the computer system analyst 

position provided by the commenter. 

The Department found that the annual 

wages for this position were between 

the 68th percentile and 69th percentile. 

A commenter cited the annual wages 

of an assistant professor of clinical 

pediatrics/physician surgeon at a major 

university in the Chicago-NapervilleElgin, IL-IN-WI MSA. The Department 

found the annual wages were between 

the 44th percentile and the 45th 

percentile. 

One commenter cited the annual 

wages of four employees of a major 

university in the Salt Lake City, UT 

MSA: (1) A computer and information 

research scientist, (2) a database 

architect, (3) a foreign language 

instructor, and (4) a pediatric 

endocrinologist. The Department found 

that these annual wages were (1) 

between the 36th percentile and the 

37th percentile, (2) between the 32 

percentile and the 33rd percentile, (3) 

between the 12th percentile and 13th 

percentile, and (4) between the 34th 

percentile and the 35th percentile, 

respectively. 

Another commenter cited Glassdoor 

annual wage data for a structural 

engineer with four to six years of 

experience in the Boston-CambridgeNashua, MA-NH MSA. The Department 

found that the annual wages were 

between the 24th percentile and the 

25th percentile. 

One commenter cited Willis Tower 

Watson private wage survey data for 

eight jobs in different metropolitan area 

that compare with Level 1 and Level 4 

OES. The Department focused on the 

Level 1 data and found the following: 

Job OES 

code Metro Percentile below 

Percentile 

above 

Electrical Engineer .......................................... 17–2017 San Jose-Sunnyvale-Santa Clara, CA ........... Less than 10 ........................

Computer Programmer ................................... 15–1251 Chicago-Naperville-Elgin, IL-IN-WI MSA ....... 32 33 

Financial Analyst ............................................. 13–2098 New York-Newark-Jersey City, NY-NJ-PA 

MSA.

10 11 

Software Developer ........................................ 15–1256 New York-Newark-Jersey City, NY-NJ-PA 

MSA.

14 15 

Information Security Analyst ........................... 15–1212 Chicago-Naperville-Elgin, IL-IN-WI MSA ....... 16 17 

Software Developer ........................................ 15–1256 Los Angeles-Long Beach-Anaheim, CA ........ 11 12 

Electrical Engineer .......................................... 17–2071 Los Angeles-Long Beach-Anaheim, CA ........ 21 22 

In sum, most of the wage data offered 

by commenters was for salaries paid by 

employers to entry-level workers in 

positions typically filled by H–1B 

workers. While there are outliers, most 

of these wage observations fell between 

the 30th and 40th percentiles of the OES 

distribution. Importantly, wage data 

about entry-level software developers 

employed by some of the largest users 

of the H–1B program fell between the 

32nd and 41st percentiles. This is 

noteworthy given that such data may 

allow for the closest comparison to the 

IFR’s data of all the private wage data 

submitted by commenters. This is 

because, as noted above, the IFR’s 

analysis also focused on software 

developers and other occupations in the 

IT sector to account for the fact that 

such occupations comprise the largest 

share of the relevant programs. 

It is also notable, in the Department’s 

judgment, that, while the wage data 

submitted by commenters tends to be 

lower on the OES distribution than the 

IFR’s 45th percentile entry-level wage, it 

still generally falls within the wage 

range between the 32nd and 49th 

percentiles identified by the IFR as the 

portion of the OES distribution where 

U.S. workers similarly employed to 

entry-level H–1B workers are likely to 


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3638 Federal Register / Vol. 86, No. 9 / Thursday, January 14, 2021 / Rules and Regulations 

179See 20 CFR 655.731(b)(3)(iii)(B) and (C); 

§ 656.40(g). 

180Bureau of Labor Statistics, Occupational 

Outlook Handbook, Computer Programmers, 

available at https://www.bls.gov/ooh/computerand-information-technology/computerprogrammers.htm. 

be found. From this, the Department 

draws two conclusions. First, the IFR’s 

determination that wages paid to 

workers similarly employed to entrylevel H–1B and PERM workers likely 

fall in this range seems to be largely 

accurate. While there are outliers in the 

wage data provided by commenters that 

fall both well above and well below the 

range, the data from commenters does 

not give the Department reason to 

abandon its conclusion in the IFR that 

some point within that range will serve 

as the appropriate entry-level wage. 

Second, while consistent with the 

IFR’s wage range, the commenters’ data 

suggests, contrary to the IFR’s reasoning, 

that the lower half, as opposed to the 

upper half of the range, would be a more 

appropriate place to set the entry-level 

wage. While the IFR offered a variety of 

reasons for why the NSF data, which 

falls at the higher end of the range, were 

likely better suited as compared to the 

CPS data for informing the Department’s 

decision about where to set the entrylevel wage, and the Department still 

views those considerations as relevant, 

the commenters’ data suggests 

otherwise. As noted, the CPS data 

suggest that a point closer to the 32nd 

percentile would be the appropriate 

place to set the entry-level wage, which 

many data from commenters would 

seem to confirm. 

As was the case in the IFR, the 

Department does not evaluate the data 

from either the government sources it 

analyzed or the private wage data 

submitted by commenters in a vacuum. 

Various qualitative considerations, 

including key points raised by 

commenters, shape the Department’s 

assessment of what conclusions to 

derive from this data. 

First, DOL regulations and guidance 

establish quality standards for the use of 

private wage sources in setting 

prevailing wage rates.179 Some of the 

private wage sources provided by 

commenters—particularly the 

comments that offer a single example of 

a wage paid by one employer in one 

geographic area—would almost 

certainly not satisfy these standards if 

an employer sought to use them to 

establish a wage rate for its H–1B 

workers. These data are therefore 

arguably entitled to less weight than the 

data relied on in the IFR. Similarly, 

even as to the private wage survey 

sources offered by commenters that may 

satisfy DOL’s standards, the NSF and 

CPS data are, in the Department’s 

judgment, of higher quality. These are 

highly credible government surveys 

administered by agencies with extensive 

experience in gathering wage data. This 

too suggests that the data provided by 

commenters is entitled to less weight in 

the Department’s analysis than the data 

used in the IFR. 

Similarly, as explained above, the 

analysis used in the IFR controlled for 

characteristics relevant to setting a wage 

rate under the INA’s framework. 

Because the Department is seeking to set 

an appropriate wage primarily for 

workers in specialty occupations—not 

for workers generally—the IFR took, 

among other things, the INA’s minimum 

qualification requirements for working 

in a specialty occupation into account 

in deciding what data to use. It is at best 

unclear whether some of the surveys 

offered by commenters are also limited 

to workers who could be described as 

working in a specialty occupation, and 

therefore similarly employed to H–1B 

workers. For example, while data from 

one commenter suggest that an entrylevel computer programmer working in 

the Chicago area makes wages that fall 

between the 32nd and 33rd percentiles 

of the OES distribution, computer 

programmers will likely not in all cases 

be properly regarded as working in a 

specialty occupation. For example, in 

some cases, the job of a computer 

programmer may involve writing basic 

computer code and testing it.180 As 

explained previously, because a person 

without a specialized bachelor’s degree 

can still be classified as a Computer 

Programmer, some portion of Computer 

Programmers captured by the OES 

survey are not similarly employed to H– 

1B workers because the baseline 

qualifications to enter the occupation do 

not match the statutory requirements. It 

is therefore possible that the computer 

programmer described as an entry-level 

worker by the commenter may not in 

fact have the same level of qualifications 

as an entry-level H–1B computer 

programmer. In such cases, the wage 

data provided by commenters, being 

based on the wages paid to workers who 

lack the specialized knowledge required 

of H–1B workers, is likely below the 

level that would be an appropriate 

entry-level wage for the Department’s 

foreign labor programs. This, in turn, 

suggests that the data provided by 

commenters are entitled to less weight 

than the IFR’s analysis, which 

controlled for the INA’s specialty 

occupation requirement, and may also 

explain some of the extreme outliers at 

the lower end of the OES distribution 

found among commenters’ data. 

Relatedly, some of the commenters’ 

private wage surveys report the bare 

minimum wage paid to workers in the 

occupation as the entry-level wage. 

Given that entry-level workers typically 

fall within a range of the wage data, as 

opposed to falling only at the very low 

end of the distribution, some of the 

private wage data arguably does not 

represent what would count as a 

reasonable entry-level wage, even if 

some portion of entry-level workers do 

in fact make wages at the bottom end of 

the distribution. Indeed, as the 

Department explained above, the 

purpose of the INA’s wage provisions to 

protect U.S. workers suggests that 

uncertainty over how to read available 

wage data should be resolved in favor of 

placing the entry-level wage higher up 

within the distribution to eliminate as 

much as possible risks to U.S. workers 

from the employment of foreign labor. 

Yet these private wage sources do just 

the opposite, offering what is the 

absolute bare minimum wage that an 

entry-level worker might be expected to 

make. This too likely accounts for some 

of the outliers in the commenters’ data 

that fall below the IFR’s identified wage 

range, and suggests a wage higher up 

within the range should be selected. 

On the other side of the equation, and 

in addition to the data they provided, 

commenters have provided the 

Department with various considerations 

that pull in the direction of favoring the 

lower end of the IFR’s wage range. As 

explained previously, commenters 

detailed various second and third order 

consequences that would result if 

prevailing wage rates do not 

approximate actual market wages. These 

consequences include limiting 

healthcare providers’, universities’, and 

small businesses’ ability to use the H– 

1B program, which would, in turn, 

disrupt research and impede access to 

healthcare, particularly in rural areas. 

Commenters also expressed concerns 

about the effect overly inflated 

prevailing wages would have on their 

ability to comply with pay equity laws. 

The Department takes these concerns 

seriously, and has determined that they 

weigh in favor of placing the entry-level 

wage at the lower end of the range 

identified by the IFR. 

To begin with, the Department notes 

that many if not all of these problems 

are eliminated if prevailing wages rates 

are set in line with actual market wages. 

Each of these issues arises principally 

because, according to commenters, the 

IFR’s wages do not approximate market 

wages. Setting an appropriate entrylevel wage based on available data and 


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181See 144 Cong. Rec. S12741–04, 144 Cong. Rec. 

S12741–04, S12749, 1998 WL 734046. 

other relevant considerations is thus the 

appropriate way to address these 

concerns. 

As explained previously, the 

Department continues to believe that the 

range identified by the IFR accurately 

reflects the portion of the OES 

distribution where workers with levels 

of education, experience, and 

responsibility similar to the vast run of 

entry-level H–1B and PERM workers 

likely fall—something that commenters’ 

wage data largely confirms. However, as 

the Department has also acknowledged, 

there is some level of indeterminacy 

about the exact point in that range at 

which placing the entry-level wage will 

yield optimal outcomes in the largest 

number of cases given that different data 

sources point toward somewhat 

different conclusions. In the IFR, the 

Department reasoned that the purpose 

of the INA’s wage provisions to protect 

U.S. workers warranted resolving such 

indeterminacy in favor of placing the 

wage higher up within the range. 

However, the Department also 

recognizes that a purpose of the H–1B 

program more generally is to ensure that 

employers can access needed highskilled labor to supplement their 

workforces.181 Given that prevailing 

wage rates that are substantially above 

actual market wages can impede 

employers’ access to the program, and 

cause various problematic, secondary 

consequences, the importance of 

avoiding such outcomes weighs in favor 

of resolving indeterminacy in favor of 

the lower end of the identified range. 

While the INA’s wage provisions must 

be implemented in a way that fully 

protects U.S. workers’ wages, raising 

wages to such a degree that the program 

becomes unusable for many employers 

defeats the entire reason Congress 

created the program. Placing the entrylevel wage at a lower point within the 

range is one way to ensure that does not 

occur. 

Relatedly, because the four-tier wage 

structure covers hundreds of thousands 

of workers employed across hundreds of 

different occupations by a wide variety 

of different employers, there is some 

level of variability as between different 

workers and what would constitute an 

appropriate entry-level wage for each of 

them. As explained above, in 

establishing the identified range, the 

Department focused its analysis on 

those occupations that account for the 

largest number of workers covered by 

the four-tier wage structure. The 

Department continues to believe this is 

appropriate given that occupations with 

large numbers of foreign workers are 

where U.S. workers are most at risk of 

experiencing adverse wage effects due 

to competition from foreign labor. 

However, the Department also 

acknowledges that some occupations, 

such as physicians, that account for a 

smaller share of H–1B and PERM 

workers and are therefore given less 

weight in how the Department 

identified the entry-level wage range, 

may have entry-level market wages that 

are somewhat lower within the OES 

distribution than the top H–1B 

occupations. This is because, as 

commenters explained, occupations like 

physicians typically require all workers 

in them to possess an advanced degree, 

meaning that, while in the top H–1B 

occupations the INA’s specialty 

occupation requirement will generally 

mean that wages paid to H–1B workers 

should be placed higher up within the 

OES distribution, that is less true of 

advanced degree occupations. Workers 

in such occupations with qualifications 

similar to the least skilled H–1B worker 

might be found closer to the lower end 

of the OES distribution. 

In consequence, while the analysis 

used to identify the entry-level wage 

range largely focused on top H–1B 

occupations, the decision of where 

within that range the entry-level wage 

should be set should give additional 

weight to occupations that account for 

a smaller number of workers within the 

program, particularly the advanced 

degree occupations about which 

commenters raised concerns. This 

suggests that the lower end of the entrylevel range would be a more appropriate 

point to place the first wage level. 

Indeed, the Department notes that data 

from at least one commenter about the 

starting salary of a pediatric 

endocrinologist—which falls between 

the 34th and the 35th percentiles of the 

OES distribution—suggest that the 

lower end of the range may yield an 

appropriate entry-level wage for some 

positions in advanced degree 

occupations. Further, as discussed 

previously, some commenters suggested 

that the bottom third of the distribution 

for advanced degree occupations 

consists of entry-level workers similarly 

employed to H–1B workers. If 

commenters are correct, that means that 

the lowest points within the entry-level 

range identified by the Department does 

in fact cover the highest paid entry-level 

workers in such occupations. 

Accounting for small businesses and 

rural employers that use the H–1B and 

PERM programs in selecting a point 

within the entry-level range identified 

by the Department also weighs in favor 

of the lower part of the range. As 

commenters note, large employers are 

able in some cases pay higher wages 

than small businesses. Further, wages in 

metropolitan areas may be higher to the 

extent that these are high-intensity 

occupational areas. The Department 

notes that some of these differences are 

already accounted for by other aspects 

of the regulatory framework governing 

prevailing wage rates. In particular, the 

Department issues wages based not only 

on the occupation a worker is in, but 

also on the geographic area in which the 

worker is employed. Thus, for example, 

while the wage data described above 

from large tech companies fall between 

the 32nd and 41st percentiles of the 

wage data gathered for the metropolitan 

areas in which those firms operate, such 

data fall well above the 60th percentile 

of the national OES wage distribution. 

By taking geographic area into account 

in analyzing what the appropriate entrylevel wage is, the Department has thus, 

to some degree, already accounted for 

the differences between employers 

about which some commenters 

expressed concern. However, the 

Department also recognizes that higher 

wages may still be less manageable for 

small businesses and rural employers, 

which suggests that the lower part of the 

entry-level range would be appropriate. 

Moreover, the Department 

acknowledges that placing the entrylevel wage at any place within the 

identified range—even the lowest 

point—will result in significant wage 

increases for employers that may, in 

some cases, be difficult to adapt to given 

how long the old wage methodology has 

been in place. As detailed at greater 

length below, the Department is 

addressing this concern by phasing in 

the new wage rates over a period of 

time. However, the Department also 

believes that, even with a phased-in 

approach, the ability of employers to 

adapt to a significant change is relevant 

to the decision of where to set the entrylevel wage. Insofar as a smaller 

increase—albeit one that is still 

substantial—will be more manageable 

for employers, the Department considers 

that also to be a reason to favor the 

lower end of the range. 

On balance, the Department has 

determined that the factors pointing to 

the lower end of the identified range 

carry greater weight than the reasoning 

relied on in the IFR to select the higher 

end of the range. Accounting for 

advanced degree occupations, 

employers’ ability to access the program 

and adapt to the change effected by this 

rule, and private wage data are all 

compelling considerations put forward 

by commenters that, in the Department’s 

judgment, warrant a reassessment of its 


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3640 Federal Register / Vol. 86, No. 9 / Thursday, January 14, 2021 / Rules and Regulations 

decision in the IFR. Thus, while in the 

IFR the Department chose to set the 

entry-level wage at approximately the 

45th percentile, which fell at 

approximately the midpoint of the 

upper half of the entry-level range, the 

Department is now adjusting the level 

downward to approximately the 

midpoint of the lower half of the range, 

which is the 35th percentile. 

Importantly, setting the wage at the 

35th percentile will, in the Department’s 

view, still provide the full protection to 

U.S. workers contemplated by the INA. 

The 35th percentile falls within the 

range identified in the IFR as the 

portion of the OES distribution where 

workers with qualifications comparable 

to entry-level H–1B and PERM workers 

are likely to fall. The manner in which 

the Department identified that range, as 

recounted above, relied on a variety of 

considerations, including the INA’s 

specialty occupation requirement and 

how that interplays with the OES data, 

to ensure that the interests of U.S. 

workers are fully and properly 

accounted for in how the wage levels 

are set. As a result, while lower than the 

level set in the IFR, the 35th percentile 

will still achieve the purpose of the 

INA’s wage provisions. While a point 

higher up within the range may also be 

reasonable, and the Department may 

reassess how to set the entry-level wage 

as it gains experience administering the 

entry-level at the 35th percentile, the 

Department believes that the 35th 

percentile strikes the right balance 

between fully protecting workers’ wages 

and job opportunities while also 

preserving employers’ ability to access 

the program. 

By favoring the lower end of the 

range, the Department is confident the 

second and third order consequences 

identified by commenters as a product 

of prevailing wage rates that are inflated 

above actual market wages will be 

reduced if not eliminated by the 

downward adjustment in the entry-level 

wage. The Department notes that the 

downward adjustment is substantial. To 

compare the effects of the final rule on 

prevailing wages with the effects on 

prevailing wages produced by the IFR, 

the Department calculated the 

prevailing wages for two common 

occupations for H–1B workers (web 

develops and electrical engineers) in 

five metropolitan area (Atlanta-Sandy 

Springs-Roswell, GA; Austin-Round 

Rock, TX; Chicago-Naperville-Elgin, ILIN-WI; San Jose-Sunnyvale-Santa Clara, 

CA; and Seattle-Tacoma-Bellevue, WA) 

under the IFR and the final rule. The 

Department then analyzed the 

differences. Comparing the prevailing 

wages under the final rule and interim 

final rule, the Department found that the 

prevailing wages are significantly lower 

under the final rule for both occupations 

in all five metropolitan areas at all four 

levels expect for the prevailing wage for 

level 4 web developers in Seattle, which 

is $7,322 or 3.8% higher (see table 

below). 

MSA Occupation Level 1 Level 2 Level 3 Level 4 

Atlanta-Sandy Springs-Roswell, GA ................... Web Developer ............ ¥$11,648 ¥13.1% ¥$12,370 ¥11.6% ¥$13,114 ¥10.6% ¥$13,836 ¥9.8% 

Atlanta-Sandy Springs-Roswell, GA ................... Electrical Engineer ....... ¥11,635 ¥12.6% ¥13,743 ¥11.6% ¥15,851 ¥11.0% ¥17,960 ¥10.6% 

Austin-Round Rock, TX ...................................... Web Developer ............ ¥4,235 ¥5.9% ¥7,805 ¥8.2% ¥11,355 ¥9.5% ¥14,926 ¥10.5% 

Austin-Round Rock, TX ...................................... Electrical Engineer ....... ¥2,732 ¥3.0% ¥9,165 ¥7.6% ¥15,576 ¥10.5% ¥22,009 ¥12.4% 

Chicago-Naperville-Elgin, IL-IN-WI ..................... Web Developer ............ ¥27,280 ¥29.6% ¥29,138 ¥25.6% ¥30,974 ¥22.9% ¥32,831 ¥20.9% 

Chicago-Naperville-Elgin, IL-IN-WI ..................... Electrical Engineer ....... ¥9,720 ¥10.5% ¥15,301 ¥13.2% ¥20,881 ¥15.1% ¥26,462 ¥16.4% 

San Jose-Sunnyvale-Santa Clara, CA ............... Web Developer ............ ¥9,157 ¥10.2% ¥11,963 ¥10.0% ¥14,769 ¥9.9% ¥17,576 ¥9.9% 

San Jose-Sunnyvale-Santa Clara, CA ............... Electrical Engineer ....... ¥5,420 ¥4.5% ¥18,039 ¥11.1% ¥30,680 ¥15.0% ¥43,299 ¥17.6% 

Seattle-Tacoma-Bellevue, WA ............................ Web Developer ............ ¥20,876 ¥14.6% ¥11,477 ¥7.2% ¥2,078 ¥1.2% 7,322 3.8% 

Seattle-Tacoma-Bellevue, WA ............................ Electrical Engineer ....... ¥16,485 ¥14.1% ¥21,561 ¥14.8% ¥26,617 ¥15.2% ¥31,693 ¥15.4% 

Further, the Department notes that 

many of commenters’ concerns are also 

addressed by other measures the 

Department is taking in this final rule. 

For example, commenters’ complaints 

about overly inflated wages for 

physicians, particularly in rural areas, 

focused in many cases on the fact that 

the IFR resulted in a default wage of 

$208,000 a year for all four levels in a 

number of different locations. As 

detailed more fully below, the 

Department is eliminating the influence 

of outliers on the upper level wage, 

reducing the upper level wage, and 

providing a default rule for cases where 

BLS is unable to calculate the upper 

level wage to ensure that the 

Department provides leveled wages 

wherever possible. These measures will 

further alleviate complications 

healthcare providers and other 

employers in rural areas encountered 

under the IFR. 

The Department disagrees with 

comments that suggested that the 

median of the OES distribution should 

be the absolute minimum for the entrylevel wage, and that some point even 

higher up in the distribution might be 

appropriate. The purpose of having a 

four-tier wage structure is to provide 

gradually increasing wages as workers 

skill levels increase. The entry-level 

wage should therefore be set not based 

on what the median wage is of all 

workers, but rather based on an 

assessment of what other entry-level 

workers with qualifications comparable 

to H–1B and PERM workers possess. As 

detailed at length above, the 

Department’s review of the relevant data 

and other considerations indicates that 

a point below the median is the right 

place to set the entry-level wage. 

The Department also rejects other 

alternatives suggested by commenters. 

For example, the recommendation that 

the Department set wages by averaging 

the IFR’s wage levels with the old wage 

levels is flawed because, as noted, the 

old wage levels were selected 

arbitrarily, and therefore should not be 

a significant factor in how the 

Department determines the new wage 

levels, except insofar as the Department 

takes into account employers’ and 

workers’ reliance interests in the prior 

methodology. The Department also 

disagrees with the commenter that 

suggested that the prevailing wage 

should be the highest prevailing wage in 

the nation for any given occupation. 

Doing so would ignore the importance 

variations in labor markets by 

geographic area have long played in 

how prevailing wage rates are provided, 

as well as the statutory requirement that 

prevailing wage rates be based in part 

on geographic area. 

4. Reliance Interests 

Summary of Comments 

Many commenters expressed concern 

about the IFR’s negative impact on 

current H–1B visa holders in the United 

States, especially those with families 

and strong ties in the United States and 

those with pending or approved I–140 

Immigrant Petitions for Alien Workers 

or pending I–485 Applications to 

Register Permanent Residence or Adjust 

Status (‘‘green cards’’). Several 

commenters discussed the impact on 

foreign workers who had expected to 

continue working in the United States 

and for some, obtain lawful permanent 

status through their employer. 

Commenters expressed concern that 

employers would terminate H–1B visa 

holders and ‘‘potential green-card 

recipients’’ would have to leave the 

country. An individual commenter 


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asserted that the IFR would inhibit job 

opportunities for international graduates 

of U.S. universities, regardless of their 

capabilities, and contended that the new 

wage levels would disincentivize legal 

immigration. Similarly, another 

individual commenter described the 

rule as ‘‘eliminating legal immigration 

paths’’ and warned that it will cause 

foreign workers who have contributed 

greatly to the U.S. tax base to go out of 

status. 

Commenters stated that since some 

employers will not be able to afford the 

wage increases and will terminate 

foreign workers, the IFR would have 

devastating effects on the lives of 

foreign workers with families, property, 

and ties to a community. One lobbying 

organization stated the IFR would mean 

that ‘‘many talented foreign nationals 

[would be] forced to leave the U.S. 

because these new wage requirements 

make it impractical to continue 

employing them in our country.’’ Based 

on polls of their membership conducted 

by some of the signatories, a group of 

professional associations and advocacy 

organizations asserted that as many as 

70 percent of H–1B workers who are 

making progress toward obtaining a 

green card, and in many cases have 

‘‘developed permanent ties to the 

United States’’ through home ownership 

or U.S.-born children, may have to 

abandon the process. The commenter 

also stated that the IFR ‘‘understates or 

ignores altogether the reliance interests’’ 

of the nearly 600,000 H–1B workers 

currently employed in the United 

States. This professional association 

warned that H–1B workers whose status 

is threatened by the IFR will need to 

leave the country abruptly, impacting 

not only the workers, but also their 

spouses and children, and it expressed 

concern about COVID–19 complicating 

further their ability to relocate. The 

commenter maintained that suddenly 

changing the longstanding rules that 

have before now allowed workers to buy 

homes, raise children, and otherwise 

create ties to the United States over time 

is unfair and unreasonable. Meanwhile, 

an attorney claimed that the IFR’s 

economic and social impacts will be 

acute for Indian nationals in particular 

because they often face long delays 

while waiting for green cards, which the 

commenter said results in many 

purchasing houses and having children 

here. One public policy organization 

that supported the IFR opposed 

immediate implementation, asserting 

the abrupt wage increase would put 

currently employed workers in a 

‘‘precarious position’’ and ‘‘may cause 

churn if employers [are] unwilling to 

pay real market wages [and] decline to 

renew their workers’ H–1B visas or 

initiate petitions for permanence.’’ 

One commenter also expressed 

concern that an employer may violate 

DOL regulations at § 655.731(a) if it pays 

the IFR wage to workers hired after the 

IFR effective date, but continues to pay 

a current H–1B worker the lower wage 

issued prior to the IFR, because the 

employer will be paying less than the 

actual wage to the first employee. The 

commenter suggested that this would 

result in additional disruption to 

employers’ operations as the new wage 

levels would result in increases in the 

wages owed to new H–1B workers, but 

would result in immediate changes to 

the wages owed to workers already 

employed. 

Many commenters expressed concern 

that immediate implementation of the 

IFR dramatically increased prevailing 

wages too abruptly, jeopardizing 

operations by disrupting long-term 

budget and other planning, interfering 

with contractual obligations, and 

preventing employers from adapting to 

the wage increases by adjusting 

operations and hiring and training new 

workers. 

A professional association expressed 

concern that the immediate 

implementation of the IFR would 

increase costs for ‘‘human resources and 

compensation staff to bring their 

companies into compliance with the 

rule’’ and asserted the Department failed 

to consider staffing changes that may be 

necessary for employers that cannot 

‘‘support’’ wages at levels produced by 

the IFR methodology. A trade 

association expressed concern that the 

IFR may cause ‘‘material disruption’’ to 

employers’ ‘‘operations or delivery 

models . . . because of long-term 

contractual commitments . . .’’ and that 

these employers may be ‘‘forced to 

operate at a loss’’ because they are 

unable to re-negotiate contracts entered 

into prior to the IFR effective date. 

Another trade association stated that the 

IFR forced employers to put ‘‘talent 

acquisition and workforce development 

decisions on hold’’ and required them to 

‘‘reconsider work schedules, cost 

increases, and performance metrics that 

impact their entire workforce.’’ The 

commenter expressed concern that 

immediate implementation of the IFR 

created operational disruptions because 

employers relied on the published July 

2020 OES wages ‘‘to create plans, 

develop strategies and hiring, and 

consider talent retention and 

immigration programs.’’ A third trade 

association asserted the IFR may cause 

long-term damage to employers and 

disrupt U.S. worker hiring processes 

because employers ‘‘plan and budget 

their hiring months and often years in 

advance.’’ 

A higher education policy 

organization noted that colleges and 

universities have planned budgets and 

salaries and signed employment 

contracts in reliance on wages produced 

by the Department’s wage surveys and 

expressed concern the IFR would 

require these employers to ‘‘re-visit all 

of those plans, in the midst of a 

pandemic and in the middle of an 

academic year.’’ The commenter also 

stated the Department’s wage rules are 

complex and that universities have 

‘‘spent years developing the 

methodology according to DOL 

requirements’’ and ‘‘invested significant 

resources over the years to train 

international offices on DOL prevailing 

wage methodology.’’ A higher education 

professional association noted hiring 

cycles at academic institutions ‘‘often 

run over a year’’ and that employers 

have already made offers to foreign 

workers ‘‘based on the ability to sponsor 

H–1B status and/or green cards.’’ A 

university submitted a similar comment 

and expressed concern that immediate 

implementation of the IFR would 

require the employer to renegotiate 

employment offers ‘‘in some cases . . . 

just days before the expiration of the 

beneficiary’s current status.’’ 

Several commenters, including some 

that expressed support for the IFR, 

urged the Department to provide for a 

transition period or to phase in the 

wages over time to permit employers to 

adjust to the wage increases. A 

commenter from academia suggested the 

Department should phase in the new 

wage levels over no more than a twoyear period, which the commenter 

believed would be sufficient time for 

employers to adjust to the new wage 

levels while also preventing employer 

‘‘exploitation of artificially low wage 

rules.’’ A public policy organization that 

supported a phase-in period also 

suggested the Department should work 

with DHS to ‘‘create positive incentives 

for employers who match the new wage 

requirements for their existing 

workforce.’’ A public policy 

organization also suggested the 

Department should apply the revised 

wage level methodology only to ‘‘new 

workers in . . . temporary work visa 

programs with [LCAs] submitted after 

the IFR took effect’’ to avoid 

‘‘discourag[ing] renewals and petitions 

for lawful permanent residence by 

employers unwilling to pay market 

wage rates.’’ The commenter stated this 

would protect workers who were 

‘‘contracted under one set of rules and 

expectations’’ by avoiding an 


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3642 Federal Register / Vol. 86, No. 9 / Thursday, January 14, 2021 / Rules and Regulations 

182 F.C.C. v. Fox Television Stations, Inc., 556 

U.S. 502, 515 (2009). 

183 85 FR 63,893. 

184 85 FR 63,894. 

185 Id. 

186See Labor Condition Applications and 

Requirements for Employers Using Nonimmigrants 

on H–1B Visas in Specialty Occupations and as 

Fashion Models, 59 FR 65,646, 65,655 (Dec. 20, 

1994) (describing the ‘‘Congressional purposes of 

protecting the wages of U.S. workers’’ in the H–1B 

program); H.R. Rep. 106–692, 12 (quoting Office of 

Inspector General, U.S. Department of Labor, Final 

Report: The Department of Labor’s Foreign Labor 

Certification Programs: The System is Broken and 

Needs to Be Fixed 21 (May 22, 1996) (‘‘The 

employer’s attestation to . . . pay the prevailing 

wage is the only safeguard against the erosion of 

U.S. worker’s [sic.] wages.’’). 

unreasonable change to those terms and 

conditions of employment. 

Response to Comments 

While the Department believes that 

adjusting the wage levels in the IFR to 

a level that more closely approximates 

the actual wage typically paid to U.S. 

workers similarly employed to H–1B 

workers will address many if not most 

of the concerns raised by commenters 

about the impact of the new wage 

methodology, it also recognizes that 

implementing such an immediate and 

significant change may cause disruption 

to employers’ and foreign workers’ 

reliance interests in the old 

methodology. While such reliance 

interests are difficult to quantify, the 

Department has sought to account for 

these interests and ensure that the new 

wage levels are implemented in a way 

that appropriately balances the need to 

protect U.S. workers with the 

Department’s obligation to consider 

reliance interests engendered by its 

prior methodology, the Department has 

decided to adopt a series of measures to 

ease the transition to the new wage 

structure. 

In particular, the Department is 

including in the final rule a delayed 

implementation period under which 

adjustments to the new wage levels will 

not begin until July 1, 2021. Further, 

once adjustments begin, they will be 

made in a phased approach, with most 

job opportunities not becoming subject 

to the full increase to the new levels 

until July 1, 2022. For workers who are 

on track to receive lawful permanent 

resident (LPR) status, as indicated by 

their being the beneficiaries of approved 

employment-based green card petitions, 

or otherwise eligible to extend their H– 

1B status beyond the six-year limit, the 

Department has determined that a more 

gradual phase-in occurring in four steps 

that results in job opportunities filled by 

such workers being placed at the new 

wage levels beginning on July 1, 2024, 

is appropriate. Finally, to the extent that 

employers’ actual wage obligations 

under the INA may result in more 

immediate changes to the wages they 

must pay workers who have already 

received work authorization on a 

previously approved LCA, the 

Department will take this into account 

in exercising the discretion afforded it 

by the INA when enforcing such 

obligations. 

In effecting an adjustment to the wage 

levels previously used to set the 

prevailing wage in the H–1B and PERM 

programs, the Department is obligated to 

consider whether ‘‘its prior policy has 

engendered serious reliance 

interests.’’ 182 In the IFR, the Department 

recognized that the old wage levels 

‘‘have been in place for over 20 years, 

and that many employers likely have 

longstanding practices of paying their 

foreign workers at the rates produced by 

the current levels.’’ 183 The Department 

further acknowledged that making 

significant adjustments to the wage 

levels ‘‘may result in some employers 

modifying their use of the H–1B and 

PERM programs,’’ and ‘‘will also likely 

result in higher personnel costs for some 

employers.’’ 184 Despite these 

considerations, the Department 

concluded that ‘‘to the extent employers 

have reliance interests in the existing 

levels . . . setting the wage levels in a 

manner that is consistent with the text 

of the INA and that advances the 

statute’s purpose of protecting U.S. 

workers outweighs such interests and 

justifies such increased costs.’’ 185

As explained above, the Department 

continues to believe that the old wage 

levels are the source, in many cases, of 

serious, adverse effects on U.S. workers’ 

wages and job opportunities. Adjusting 

the levels to bring them in line with the 

wages paid to U.S. workers with levels 

of education, experience, and 

responsibility comparable to H–1B 

workers—and thereby reducing the 

danger posed to U.S. workers by the 

employment of foreign workers— 

remains the principal aim of this 

rulemaking. Ensuring that the 

Department’s wage structure is set in 

accordance with the relevant statutory 

factors is also necessarily a controlling 

objective in the Department’s 

assessment of how best to reform the 

prevailing wage levels. The old levels 

have never been justified by economic 

analysis, and, as detailed above, are in 

tension with the statutory scheme 

insofar as they are based, in many 

instances, on data about the earnings of 

workers who cannot be regarded as 

similarly employed to workers in 

specialty occupations. Effecting a 

significant adjustment to the wage 

levels, and doing so as expeditiously as 

is reasonably possible, is therefore of 

paramount importance in the 

Department’s judgment. 

That said, concerns raised by 

commenters about disruptions to 

business operations, fairness to foreign 

workers, and the feasibility of adapting 

to significant changes to the wage levels 

in a short period of time are also 

entitled to weight in how the 

Department implements adjustments to 

the levels. The old levels were set far 

too low, which means that the 

adjustment necessary to bring them in 

line with what similarly employed U.S. 

workers make, and therefore be 

consistent with the statutory scheme, is 

substantial. The Department notes that 

shifting the entry-level wage from 

approximately the 45th percentile 

provided for by the IFR to the 35th 

percentile means the adjustment 

employers will have to make to 

accommodate themselves to the new 

levels is less dramatic. But it is still 

significant. Indeed, approximately 60 

percent of all LCAs in recent years have 

been for job opportunities at the first 

and second wage levels, which are at 

roughly the 17th and 34th percentiles of 

the OES distribution. Setting the lowest 

wage level at the 35th percentile thus 

means that the prevailing wage for all 

H–1B workers going forward will likely 

be higher—and in many cases 

substantially so—than the prevailing 

wage for as much as 60 percent of the 

current H–1B population. The Level III 

and Level IV wages will also now be, in 

many cases, higher than the highest 

wage required under the old Level IV 

wage. Considerations brought to the 

Department’s attention by commenters 

about the effects of an adjustment of this 

magnitude have provided the 

Department with greater insight into 

how to implement such a substantial 

change. 

For that reason, the Department has 

reassessed how it balanced in the IFR 

reliance interests in the old wage levels 

with the need to adjust the wage levels. 

To begin with, the Department reiterates 

that setting wages so as to protect U.S. 

workers is the central purpose of the 

INA’s wage requirements.186 To the 

extent commenters suggest that business 

practices have evolved around and been 

shaped by the old wage levels, and that 

the old levels, or something close to 

them, should therefore be maintained 

indefinitely or for extended periods of 

time to prevent disruption to employers’ 

operations, the Department disagrees. 

The fact that some employers have long 

benefited from inappropriately low 


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187See 144 Cong. Rec. S12741–04, 144 Cong. Rec. 

S12741–04, S12749, 1998 WL 734046. 188See Mexichem Fluor, Inc. v. Envtl. Prot. 

Agency, 866 F.3d 451, 464 (D.C. Cir. 2017). 189 Dep’t of Homeland Sec. v. Regents of the Univ. 

of California, 140 S. Ct. 1891, 1914 (2020). 

190Select Specialty Hosp.-Akron, LLC v. Sebelius, 

820 F. Supp. 2d 13, 24 (D.D.C. 2011). 

191https://www.dol.gov/agencies/whd/minimumwage/history. 

192 Id. 

193https://www.dol.gov/agencies/whd/minimumwage/state. 

194See 20 CFR 655.211(d). 

195 84 FR 51,230, 51,234. 

196 81 FR 32,391 (May 23, 2016). 

197 69 FR 22,121. 

198 Id. at 22,126. 

wage rates cannot justify the continued 

perpetuation of the harms to U.S. 

workers that result from foreign workers 

earning wages that do not reflect what 

similarly employed U.S. workers are 

paid. 

However, in light of the comments it 

received, the Department has 

determined that a wage increase that is 

both dramatic and immediate is also 

undesirable, and indeed may be 

counterproductive to the aims of this 

rule. For one thing, as some commenters 

noted, immediate disruptions to 

business operations, such as might lead 

to the termination of contracts or the 

shuttering of offices, may in fact 

threaten U.S. workers with job losses or 

reductions in work. Adopting a rule that 

eliminates workers’ jobs in order to 

protect their wages advances neither the 

interests of workers nor the purposes of 

the INA. 

Similarly, the Department 

acknowledges that, while the aim of the 

INA’s wage requirements is to protect 

U.S. workers, one purpose of the H–1B 

program more generally is to ensure that 

employers can access needed highskilled labor to supplement their 

workforces.187 Although permitting 

employers to access temporary foreign 

labor must be accomplished in a way 

that works no harm on the wages and 

job opportunities of U.S. workers, it is 

also important to ensure that reforms to 

the prevailing wage do not 

unnecessarily limit employers’ use of 

the program. Helping employers bring 

the wages they pay their H–1B workers 

in line with the requirements of the INA 

while avoiding the kind of abrupt 

change that might make it unreasonably 

difficult for employers to adapt is 

therefore consistent with the broader 

goals of the H–1B program. 

For those reasons, the Department has 

determined that a gradual transition to 

the new wage levels is needed to 

account for employers’ reliance interests 

on the prior system while still ensuring 

that U.S. workers’ wages and job 

opportunities are fully protected. Such 

an approach is a reasonable method of 

effecting a regulatory change that results 

in increased costs on regulated 

entities.188 Modifying the existing 

system over a period of time, even 

where the prior system is inconsistent 

with the governing statute, can assist 

affected parties in ‘‘reorder[ing] their 

affairs.’’ 189 The Department’s decision 

to implement the new wage rates 

through a transition rather than through 

an immediate adjustment is also 

consistent with the notice the IFR gave 

to the public of the intended policy 

change.190

Modifying the prevailing wage levels 

through a delayed or graduated 

transition matches how Congress and 

other agencies have instituted similar 

changes to employers’ wage obligations 

in other contexts. For example, all 

increases in the Federal minimum wage 

that Congress enacted over the last 60 

years were phased in over two or more 

years.191 Only two of the ten minimum 

wage adjustments since the enactment 

of the Fair Labor Standards Act have 

been made fully effective immediately. 

The three most recent amendments to 

the Federal minimum wage were 

implemented over two or three year 

periods.192 In so doing, Congress has 

sought to minimize any loss of jobs or 

other economic disruptions that an 

immediate, one-step increase in the 

Federal minimum wage might cause to 

labor markets. Changes to minimum 

wage laws at the state level are also 

often made through incremental 

adjustments.193 Similarly, the 

Department has employed comparable 

transition provisions when 

implementing wage changes in other 

foreign labor programs.194

Similarly, the Wage and Hour 

Division has typically implemented 

changes to employers’ obligations to 

provide overtime pay through delayed 

effective periods. The most recent 

change to overtime rules was made 

effective more than 90 days after the 

final rule was published—more time 

than is required by either the 

Administrative Procedure Act or the 

Congressional Review Act.195 The 2016 

overtime rule (later enjoined) was made 

effective more than five months after 

publication.196 The 2004 overtime rule 

was made effective 120 days after 

publication.197 In both cases, the 

Department determined that a delayed 

effective date would ‘‘provide 

employers ample time to make any 

changes necessary to ensure compliance 

with the final regulations.’’ 198

The Department notes that changes to 

the minimum wage or overtime 

obligations are different in important 

respects from the adjustments the 

Department is making to the prevailing 

wage levels. For one thing, changes to 

the minimum wage and overtime 

requirements are often made in light of 

gradual changes in economic conditions 

that make it necessary to reassess a prior 

policy determination. By contrast, in 

undertaking a change to the prevailing 

wage levels, the Department is giving 

meaningful consideration to what 

employers’ wage obligations should be 

based on available economic data for the 

first time since the Department began 

using a multi-level wage structure in its 

foreign labor programs. Similarly, while 

Congress’s decision to adjust the 

minimum wage is driven entirely by 

competing policy considerations, the 

Department’s discretion to adjust the 

wage levels is to some degree confined 

by the INA. As explained above, the 

Department is adjusting the manner in 

which it sets prevailing wage rates not 

only because the existing wage levels 

are the source, in some cases, of harm 

to U.S. workers’ wages and job 

opportunities, but also because they are 

inconsistent with the governing statute. 

In consequence, the reform the 

Department is undertaking in this 

rulemaking is long overdue and of 

greater significance than similar kinds 

of changes to employers’ wage 

obligations in other contexts. Finally, as 

explained further below, the 

adjustments to the prevailing wage 

levels will not have the same kind of 

immediate impact on employers’ wage 

obligations with respect to all workers 

currently on their payroll as changes to 

the minimum wage do. Employers will 

be able to pay H–1B workers currently 

employed in many cases at the current 

wage levels for the duration of the 

validity period of their current LCAs. 

Increases in the wage levels will 

generally have an immediate impact 

only on new workers or where the 

employer seeks to renew a current 

worker for a new period of employment. 

In consequence, immediate changes to 

the wage levels are likely to be less 

disruptive than immediate increases in 

the minimum wage. In combination, 

these considerations weigh in favor of 

keeping the transition period to the new 

wage levels of short duration, even if 

that means employers will still be 

required to adapt quickly to a significant 

increase in the wage levels. 

The Department has therefore decided 

to implement the adjustments to the 

prevailing wage levels through a 

combination of a delayed effective 

period and multi-step adjustments 

occurring over approximately a year and 


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3644 Federal Register / Vol. 86, No. 9 / Thursday, January 14, 2021 / Rules and Regulations 

199 It should be noted that this is a finite issue 

that exists only until current workers’ visas expire. 

200See 20 CFR 655.731(a)(2)(viii) (‘‘Where new 

nonimmigrants are employed pursuant to a new 

LCA, that new LCA prescribes the employer’s 

obligations as to those new nonimmigrants. The 

prevailing wage determination on the later/ 

subsequent LCA does not ‘‘relate back’’ to operate 

as an ‘‘update’’ of the prevailing wage for the 

previously-filed LCA for the same occupational 

classification in the same area of employment. 

201See 8 U.S.C. 1182(n)(1). 

202 20 CFR 655.731(a)(2)(viii); see also Labor 

Condition Applications and Requirements for 

Employers Using Nonimmigrants on H–1B Visas in 

Specialty Occupations and as Fashion Models; 

Labor Certification Process for Permanent 

Employment of Aliens in the United States, 65 FR 

80,110–01 (‘‘The Department’s interpretation of an 

employer’s actual wage obligation as an ongoing, 

dynamic obligation has been the Department’s 

position since the inception of the H–1B 

program.’’). 

half period. The first adjustment to 

employers’ prevailing wage obligation 

will not occur until July 1, 2021. This 

delay from publication of this rule until 

the first wage increase will give 

employers time to plan for the 

adjustment. Adjusting the wage levels 

on July 1st is also consistent with 

historical practice at the Department, 

which has typically published the new 

annual wage rates for the H–1B and 

PERM programs each year at the 

beginning of July. Employers are thus 

accustomed to modifications being 

made at that time of the year. 

On July 1st, the entry-level wage will 

increase from roughly the 17th 

percentile to 90 percent of the 35th 

percentile wage, as provided by BLS— 

a point approximately halfway between 

the current Level I wage and the 35th 

percentile, which, as explained above, is 

the point in the OES distribution that 

the Department has determined is 

appropriate for setting entry-level wage 

rates. Similarly, at the same time the 

Level IV wage will increase from 

roughly the 67th percentile to 90 

percent of the 90th percentile wage. The 

following year, on July 1, 2022, the wage 

levels will again increase, and be placed 

at the 35th percentile for the entry-level 

wage and the 90th percentile for the 

uppermost level, at which point the 

transition to the new wage structure will 

be complete. 

The Department determined the 

appropriate step up in wages by 

analyzing national wage data for the top 

ten occupations in which H–1B workers 

are employed. In particular, the 

Department averaged the wages 

estimated to fall at various percentile in 

the OES distribution using linear 

interpolation, and weighted that average 

by the share of H–1B workers in each 

occupation relative to the total number 

of H–1B workers in the top ten 

occupations. In so doing, the 

Department relied on the same basic 

methodology it used to determine the 

appropriate entry-level wage. As 

explained elsewhere, the Department’s 

interest in maintaining a single, uniform 

wage methodology for the H–1B and 

PERM programs means that the wage 

provided will not be perfectly tailored 

to every job opportunity or geographic 

location. Providing wages that are 

closely tailored to the unique 

circumstances of as many job 

opportunities as possible while still 

using a single wage structure necessarily 

means that the Department must focus 

on nationwide data and those 

occupations that account for the largest 

share of the affected programs. 

An analysis of national data for the 

top ten H–1B occupations indicates that 

90 percent of the average wage at the 

35th percentile falls approximately at 

the midpoint between wages at the 17th 

percentile—a rough proxy for the wages 

yielded by the old wage methodology— 

and wages at the 35th percentile. 

Similarly, 90 percent of the average 

wage at the 90th percentile is 

approximately the midpoint between 

wages at the 67th percentile—a rough 

proxy for the Level IV wages yielded by 

the old methodology—and the 90th 

percentile. Requiring employers to pay 

wages that are 90 percent of the 35th 

percentile for entry-level workers and 

90 percent for Level IV workers in the 

first stage of the two-step implantation 

of this rule will thus ensure an even and 

gradual adjustment over the period of 

time the Department has determined is 

appropriate to allow employers to adapt 

to the new wage rates. 

The Department recognizes that, even 

under this incremental approach, wage 

rates will still increase significantly in 

a relatively short period. An analysis of 

wage rates based on current OES data 

suggests that an increase in the entrylevel wage from roughly the 17th 

percentile to 90 percent of the 35th 

percentile may equate in many cases to 

a real dollar increase of approximately 

14 percent in the annual wages 

employers will be required to pay their 

foreign workers. However, for the 

reasons given above, the Department 

believes that a transition consisting of 

both a delayed effective period and a 

gradual increase to the new wage levels 

occurring over a year and a half period 

is the appropriate way to balance the 

need to ensure U.S. workers are not 

harmed by the presence of foreign 

workers in the labor market while giving 

employers time to adapt to the new 

wage system. Further delay in adjusting 

to the new levels would, absent some 

other compelling consideration, entail 

too great a risk to U.S. workers’ wages 

and job opportunities, in the 

Department’s judgment. 

Beyond employers’ general reliance 

on the old wage levels, the Department 

notes that some employers also have 

reliance interests in a specific worker or 

group of workers currently working who 

were hired on the understanding that 

they would be employed at wages based 

on the prior prevailing wage 

methodology. Immediate changes to the 

wages employers are required to pay 

could change the expectations 

employers had about the cost of 

employing such workers when they 

invested in sponsoring them for a visa. 

Such concern would only pertain to visa 

workers who have already been 

approved and who are already working. 

It is unlikely that this kind of immediate 

change to employers’ wage obligations 

to current workers will occur, however, 

to the extent it does the Department 

possesses some enforcement discretion 

to mitigate against any such potential 

impact on visa workers hired under the 

prior prevailing wage methodology.199

As some commenters noted, there is 

a possibility that employers’ wage 

obligations as to current workers will be 

immediately affected by significant 

adjustments to the prevailing wage 

levels, even though the Department has 

already approved LCAs for these 

workers, which contain prevailing wage 

rates that will remain valid for the 

duration of the LCA’s validity period.200

This may occur through operation of 

employers’ actual wage obligation under 

the INA and the Department’s 

regulations, which is to say their 

obligation to pay the higher of the actual 

wage or the prevailing wage to their H– 

1B workers.201 As the Department’s 

regulations note, ‘‘employers are 

cautioned that the actual wage 

component to the required wage may, as 

a practical matter, eliminate any wagepayment differentiation among H–1B 

employees based on different prevailing 

wage rates stated in applicable 

LCAs.’’ 202 While new prevailing wage 

rates based on this rule’s revised 

methodology will not immediately 

change the prevailing wage for H–1B 

workers with already-approved LCAs, 

the arrival of new H–1B workers at the 

same worksite that is subject to a higher 

prevailing wage under the new 

methodology could potentially modify 

employers’ actual wage obligations with 

respect to current H–1B workers and 

result in the employer having to pay a 

higher wage. 

While acknowledging this issue, the 

Department believes, as a practical 

matter, it is unlikely that the 

introduction of new H–1B workers at a 

worksite will result in immediate and 


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203See 20 CFR 655.731(a)(1); 20 CFR 655.715. 

204 65 FR 80193 (Dec. 20, 2000). 

205 20 CFR 655.731(a)(1). 

206 65 FR 80193. 

207See 8 U.S.C. 1182(n)(2)(G)(ii); Heckler v. 

Chaney, 470 U.S. 821, 835 (1985). 

208See 8 U.S.C. 1182(n)(2)(C); Butz v. Glover 

Livestock Comm’n Co., 411 U.S. 182, 185–86 (1973); 

20 CFR 655.810(c). 

209Cf. LeClerc v. Webb, 419 F.3d 405, 417–18 (5th 

Cir. 2005). 

210See Labor Condition Applications and 

Requirements for Employers Using Nonimmigrants 

on H–1B Visas in Specialty Occupations and as 

Fashion Models, 59 FR 65646, 65654–55. 

significant increases in the wages an 

employer is required to pay current H– 

1B workers who have already been 

approved to work at prevailing wage 

rates based on the prior wage 

methodology. First, the Department’s 

Wage and Hour Division has never 

brought a case in which an employer 

was deemed to have violated its actual 

wage obligations as a result of a 

different H–1B worker being paid a 

higher prevailing wage rate. This is so 

for a few reasons. For instance, for the 

wage paid to a new H–1B worker to be 

relevant to the employer’s actual wage 

obligation to a current worker, the new 

worker would not only have to be 

stationed at the same specific worksite, 

but also possessed of similar 

qualifications and experience as the 

current worker and be performing the 

same set of duties and 

responsibilities.203 Thus, the wages paid 

to many new H–1B workers will likely 

simply not be relevant to employers’ 

actual wage obligations to current 

workers. 

Second, the actual wage ‘‘reflects the 

application of an employer’s actual pay 

system.’’ 204 Employers are therefore 

permitted to establish the actual wage 

they pay H–1B workers by taking into 

account ‘‘Experience, qualifications, 

education, job responsibility and 

function, specialized knowledge, and 

other legitimate business factors.’’ 205 In 

consequence, even as between H–1B 

workers with similar qualifications and 

experience performing the same duties 

and responsibilities, an employer may 

have other legitimate reasons for paying 

these workers different wages. The fact 

that one worker has a significantly 

higher prevailing wage rate will, in 

many cases, be only one of many 

relevant factors governing the 

employers’ actual wage obligation. 

In those instances where the employer 

has not documented and cannot 

reconstruct its actual wage system, the 

Department may base the actual wage 

on averaging the wages paid to all 

similarly employed workers.206 In those 

instances, the introduction of a new H– 

1B worker at the worksite will not 

necessarily cause the actual wage owed 

to current H–1B workers to immediately 

increase to whatever the new workers’ 

prevailing wage rate is. Rather, a more 

modest increase may be required based 

on an average of what the new worker 

is being paid as compared to what 

similarly employed current workers are 

making. 

Finally, although the Department does 

not believe that employers’ actual wage 

obligations to current H–1B workers are 

likely to change immediately as a result 

of adjustments to the prevailing wage 

levels, the Wage and Hour Division will, 

where appropriate, take the above 

factors into consideration in 

enforcement actions. In some cases, the 

Department has discretion over whether 

to launch an investigation into potential 

violations of the INA’s wage 

requirements.207 Similarly, even in 

those cases where the Department is 

obligated by statute to initiate an 

investigation and make a determination 

as to whether a violation has occurred, 

the assessment of civil money penalties, 

where such penalties are applicable at 

all, is sufficiently flexible to take all of 

the facts and circumstances into 

account.208

In the unlikely event that violations of 

this kind arise the Department will 

evaluate them on a case-by-case basis, 

and, in choosing whether to bring an 

enforcement action or impose civil 

monetary penalties, the cause of the 

violation will be taken into account. 

Once a currently employed worker’s 

LCA expires, the employer will, except 

as explained below, be required to pay 

the worker a prevailing wage rate based 

on the new methodology if the employer 

seeks a new labor certification. As noted 

above, some commenters suggested that 

this will result in certain employers 

being unable to renew their workers for 

a new period of employment as it will 

be too costly to do so, and that this will 

be disruptive to business operations. 

While this may be the case in some 

instances, the Department emphasizes 

that H–1B visas provide only temporary 

work authorization. Neither employers 

nor guest workers on H–1B visas can 

claim a permanent interest in a 

temporary employment relationship.209

Further, requiring employers to file new 

LCAs periodically to continue 

employing H–1B workers gives teeth to 

the INA’s wage protections by ensuring 

that the prevailing wage an employer 

must pay is not based on out-of-date 

information.210 Allowing all current H– 

1B workers to continue working at the 

prevailing wage rates below the level 

the Department has determined is 

appropriate after the LCAs associated 

with their positions have expired and 

their employers have filed new LCAs 

would undermine the Department’s 

determination that significant 

adjustments are needed to the wage 

levels to adequately protect U.S. 

workers. 

In consequence, when an employer 

files a new LCA as part of the process 

of renewing an H–1B worker for a new 

period of employment, the Department 

has concluded that it is appropriate that 

the new prevailing wage rates should, 

except as noted below, apply. To the 

extent employers may have had 

expectations that current workers could 

be renewed at rates based on the old 

wage levels, such expectations are 

naturally circumscribed by the fact that 

H–1B visas are inherently temporary in 

nature and there is no legal guarantee 

that work authorizations will be 

renewed on the terms that they were 

previously granted. Further, any such 

expectations are, in the Department’s 

view, outweighed by the need to guard 

against adverse effects on U.S. workers’ 

wages and job opportunities. 

Beyond concerns about being able to 

renew current H–1B workers generally, 

some commenters also noted that 

employers’ and guest workers’ reliance 

interests in the old wage methodology 

are particularly weighty in cases where 

the employer has sponsored the H–1B 

worker for LPR status. As one 

commenter noted, H–1B workers who 

are on the path to obtaining LPR status 

‘‘often have purchased a home, 

developed permanent ties to the United 

States, or made a decision to have 

children here, counting on obtaining 

Lawful Permanent Resident status.’’ 

That commenter also suggested that an 

immediate and abrupt change in the 

wage rates could mean that ‘‘65%–70% 

of all individuals being sponsored for 

green card status through a Permanent 

Employment Certification may be 

unable to continue in the process’’ as 

their employers will be unable to pay 

the increased wage rates. Relatedly, 

employers of such workers have 

undertaken additional investments in 

the workers beyond what would 

ordinarily be expended on sponsoring 

an H–1B worker as part of the 

permanent labor certification process. 

The Department agrees with 

commenters that H–1B workers who are 

on the path to becoming employmentbased lawful permanent residents 

present unique considerations for how 

the Department transitions current H– 

1B workers to wage rates produced by 

the new wage methodology. These 


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211dePape v. Trinity Health Sys., Inc., 242 F. 

Supp. 2d 585, 593 (N.D. Iowa 2003). 

212See Sadikshya Nepal, The Convoluted 

Pathway from H–1B to Permanent Residency: A 

Primer, Bipartisan Policy Center (2020); 

Congressional Research Service, The EmploymentBased Immigration Backlog (2020) (‘‘A primary 

pathway to acquire an employment-based green 

card is by working in the United States on an H– 

1B visa for specialty occupation workers, getting 

sponsored for a green card by a U.S. employer, and 

then adjusting status when a green card becomes 

available.’’). 

213U.S. Citizenship and Immigration Services, H– 

1B Authorized-to-Work Population Estimate (2020). 

214See Department of Homeland Security, 2017 

Yearbook of Immigration Statistics, Table 7. Persons 

Obtaining Lawful Permanent Resident Status by 

Type and Detailed Class of Admission: Fiscal Year 

2017, available at https://www.dhs.gov/ 

immigration-statistics/yearbook/2017/table7. 

215Office of Foreign Labor Certification, 

Permanent Labor Certification Program—Selected 

Statistics, FY 19, available at https://www.dol.gov/ 

sites/dolgov/files/ETA/oflc/pdfs/PERM_Selected_

Statistics_FY2019_Q4.pdf. 

216See Public Law 107–273, 11030A(a), 116 Stat. 

1836 (2002). 

217 Id. 

218See 8 U.S.C. 1152(a)(2); U.S. Department of 

State, Visa Bulletin For September 2020, https://

travel.state.gov/content/travel/en/legal/visa-law0/ 

visa-bulletin/2020/visa-bulletin-for-september2020.html. 

219See Save Jobs USA v. Dep’t of Homeland Sec., 

942 F.3d 504, 506–08 (DC Cir. 2019) (‘‘Recognizing 

the potential for delay in adjustment, Congress 

amended the Act to permit H–1B visa holders who 

have begun the employer-based immigration 

process to remain and work in the United States 

while awaiting decisions on their applications for 

lawful permanent residence.’’). 

220S. Rep. 106–260, 22. 

individuals, in many cases, have spent 

extended periods of time in the United 

States, during which they have 

developed greater connections to this 

country than the typical temporary visa 

holder. What’s more, they have done so 

under a legal regime established by 

Congress that permits and, indeed, 

encourages them to develop strong ties 

to the United States. In other words, not 

only have these individuals built lives 

in the United States in reliance on the 

prior wage methodology, which set the 

terms of their employment, but their 

expectation of being able to remain in 

the country indefinitely has been 

fostered by congressional enactments 

specifically designed to treat this group 

of individuals differently than other H– 

1B visa holders. For that reason, the 

Department has concluded that 

accelerated, significant increases in the 

wages employers owe these workers, 

insofar as it may result in large numbers 

of these workers losing their current 

employment, and therefore potentially 

being required to depart the country, 

would work a unique hardship and 

unfairness on both the workers 

themselves as well as the employers that 

have made greater investments in 

retaining these workers. In consequence, 

the Department has determined that a 

more gradual transition to the new wage 

rates for these workers is appropriate. 

As the Department noted in the IFR, 

unlike most nonimmigrant visas, H–1B 

visas are unusual in that they are ‘‘dual 

intent’’ visas, meaning under the INA 

H–1B workers can enter the U.S. on a 

temporary status while also seeking to 

adjust status to that of lawful permanent 

residents.211 One of the most common 

pathways by which H–1B visa holders 

obtain lawful permanent resident status 

is through employment-based green 

cards, and in particular EB–2 and EB– 

3 visas.212 USCIS has estimated that 

over 80 percent of all H–1B visa holders 

who adjust to lawful permanent resident 

status do so through an employmentbased green card.213 This is reflected in 

data on the PERM programs. In recent 

years, more than 80 percent of all 

individuals granted lawful permanent 

residence in the EB–2 and EB–3 

classifications have been aliens 

adjusting status, meaning they were 

already present in the U.S. on some 

kind of nonimmigrant status.214 Given 

that the H–1B program is the largest 

temporary visa program in the U.S. and 

is one of the few that allows for dual 

intent, it is a reasonable assumption that 

the vast majority of the EB–2 and EB– 

3 adjustment of status cases are for H– 

1B workers. This is corroborated by the 

Department’s own data, which shows 

that, in recent years, approximately 70 

percent of all PERM labor certification 

applications filed with the Department 

have been for H–1B nonimmigrants.215

Because of how many H–1B visa 

holders apply for EB–2 and EB–3 

classifications, Congress has repeatedly 

adapted the INA to account for the close 

connection between the programs. For 

example, while H–1B nonimmigrants 

are generally required to depart the U.S. 

after a maximum of six years of 

temporary employment, Congress has 

created an exception that allows H–1B 

nonimmigrants for whom PERM labor 

certification applications have been 

filed with the Department or petitions 

for employment-based immigrant visas 

have been filed with DHS that have 

been pending for longer than a year to 

be exempt from the six year period of 

authorized admission limitation if 

certain requirements are met.216 In such 

cases, the workers are able to renew 

their H–1B status in one-year 

increments indefinitely until the 

process by which they can obtain lawful 

permanent resident status is resolved.217

Similarly, aliens who are the 

beneficiaries of an approved petition for 

an EB–1, EB–2, or EB–3 green card and 

who are eligible to be granted LPR status 

but for application of the per country 

limitations are permitted to extend their 

stay beyond the usual six year limit in 

three year increments. 

Congress created these exceptions to 

the temporary limits of H–1B status in 

recognition of the fact that the method 

by which employment-based green 

cards are allocated—namely through the 

operation of caps on the number of visas 

that can be allocated to nationals of a 

given country in any given year—can 

result in significant delays between 

when an alien is approved for a green 

card and when the green card is actually 

issued.218 Put another way, the system 

for allocating employment-based green 

cards often results in protracted periods 

during which a worker can, in some 

sense, have one foot in the temporary 

H–1B program and another in the PERM 

program as they progress to LPR status. 

These workers, while not yet possessed 

of LPR status, have made substantial, 

formal steps toward acquiring such 

status, and, in so doing, acquired more 

permanent ties to the United States than 

does the typical temporary worker. 

Congress recognized as much and 

singled out this group for a special 

accommodation that allows their 

temporary status to continue 

indefinitely.219 In so doing, Congress 

further increased the degree to which 

such workers can reasonably expect to 

be permitted eventually to remain in the 

country on a permanent basis. 

Congress’s creation of exceptions to 

the six-year limit on H–1B status was 

also undertaken in recognition of the 

fact that requiring workers on track to 

receive LPR status to leave the United 

States after six years before they receive 

a green card would be disruptive to the 

employers of such workers. As noted 

above, employers that have sponsored 

H–1B workers for an employment-based 

green card have undertaken investments 

in retaining such workers beyond what 

would ordinarily be required to 

continue renewing such workers’ H–1B 

status. Similarly, in many cases these 

workers will likely have been with their 

employer for longer than the typical H– 

1B worker, meaning the employer may 

have developed a greater reliance on the 

services of these particular workers. 

Absent these workers being able to 

extend their stays indefinitely, they 

‘‘would otherwise be forced to return 

home at the conclusion of their allotted 

time in H–1B status, disrupting projects 

and American workers.’’ 220 As a result, 

Congress chose to allow ‘‘these 

individuals to remain in H–1B status 

until they are able to receive an 

immigrant visa and adjust their status 


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221 Id. 

222Employment Authorization for Certain H–4 

Dependent Spouses, 80 FR 10284, 10289–90. 

223See https://travel.state.gov/content/travel/en/ 

legal/visa-law0/visa-bulletin/2021/visa-bulletin-foroctober-2020.html. 

224 (RIA Data). 

225See 8 U.S.C. 1154(j). 

within the United States, thus limiting 

the disruption to American 

businesses.’’ 221

In sum, H–1B workers whose 

employers have taken substantial, 

formal steps toward obtaining an 

employment-based green card are 

uniquely situated as compared to other 

H–1B visa holders subject to the 

Department’s prevailing wage 

methodology such that applying a 

sudden and significant change in wages 

would work a special hardship to such 

workers and their employers to the 

extent it might result in some workers 

losing their H–1B status. Not only have 

many of these workers spent extended 

periods of time in the United States, and 

begun building lives here, but they have 

done so with a guarantee from Congress 

that they legally may remain here 

beyond the six year limit that usually 

applies to H–1B visa holders until their 

application for LPR status is resolved. 

And because such workers are seeking 

employment-based green cards, their 

employers in many cases also have 

substantial reliance interests on such 

workers’ continued presence in the 

country beyond what would normally 

be the case for other H–1B workers. The 

special status of workers who are the 

beneficiaries of an approved 

employment-based green card petition, 

or who are otherwise eligible to extend 

their status beyond the six-year limit, 

has also been recognized by the 

Department of Homeland Security in a 

separate rulemaking that singled this 

group out for unique treatment for many 

of the same reasons outlined above.222

Consequently, as suggested by some 

commenters, the Department is adopting 

a phase-in approach to how it applies 

the new wage methodology to job 

opportunities that will be filled by 

workers who are on track to obtaining 

employment-based green cards. While, 

for the reasons given above, the 

Department believes that a two-step 

transition is appropriate with respect to 

new H–1B workers and many other 

workers for whom their employer seeks 

renewed status, the Department has 

concluded that the unique 

circumstances of workers who are on 

track to receive LPR status warrant a 

longer transition period. These workers 

and their employers have more 

substantial expectations of their being 

able to remain employed in the United 

States that have been engendered by 

congressionally created exceptions to 

the six year limit on H–1B status. 

The Department is also cognizant of 

its obligation to ensure that U.S. 

workers’ wage and job opportunities are 

protected. That consideration, as 

elaborated previously, means that any 

transition to the new wage structure 

should be kept as short as reasonably 

possible while still accommodating the 

reliance interests identified by 

commenters. The Department believes 

that a delayed implementation period 

followed by a four-step adjustment 

occurring over a three and a half year 

period for job opportunities filled by 

workers on track to receive LPR status 

appropriately balances these competing 

considerations. 

By making the phase-in nearly twice 

as long for these workers, and stretching 

it out over a period of more than three 

years, the Department has taken into 

account the fact that most LCAs are 

approved for a three year period, 

meaning that all employers seeking to 

renew the status of H–1B workers on 

track to receive LPR status will be able 

to do so at least once at wage levels 

below the new levels set by this rule 

and that in many cases will be closer to 

the prevailing wage rates that would 

have obtained if the prior methodology 

had been left in place. This allows for 

a more gradual transition than would be 

achieved if these job opportunities were 

subject to the two-step phase-in 

occurring over a year and a half. 

Gradually increasing the wage rates that 

will be available for these job 

opportunities over a period of time also 

takes into account the need to protect 

U.S. workers by not allowing the 

current, inappropriately low wage levels 

to remain in place beyond the initial, 

delayed effective period, as well as the 

fact that wage increases that occur 

further out in time from the date this 

rule is published will be more 

manageable for both employers and 

workers to plan for. Moreover, the 

Department notes that, because 

employers have undertaken significant 

investments in the long-term 

employment of these workers, a longer 

transition period is also unnecessary 

insofar as such employers can be 

expected to have an incentive to 

undertake the additional expenditures 

needed to retain the workers at the new 

prevailing wage levels by the time the 

transition is complete. 

The Department recognizes that many 

H–1B workers on track to receive LPR 

status will still be on H–1B status and 

have their green card petitions pending 

at the time the transition to the new 

wage rates is complete. Workers in the 

green card backlog as of October 2020 

may not be able to obtain an 

employment-based green card for a 

decade or more.223 However, in the 

Department’s judgment, delaying full 

implementation of the new wage rates 

for what amounts to a significant share 

of the current H–1B population 224 until 

all workers on track to receive LPR 

status have had their green card 

petitions resolved would result in far 

too lengthy of a delay that would result 

in ongoing harm to U.S. workers’ wages 

and job opportunities. A three and a half 

year, graduated transition gives these 

workers adequate time to adjust to the 

new wage rates, whether by allowing 

their employers sufficient time to adapt 

or, in some cases, allowing such 

workers additional time to find a new 

employer that is able to pay the higher 

wage rates.225

Using the same methodology and data 

it used to set the wage rate at the 

intermediate step of the two-step 

transition, the Department has 

concluded that the wage rates for the 

three and a half year transition will be 

85 percent of the wage rates produced 

by the 35th and 90th percentiles 

beginning in July, 2021; 90 percent of 

such wage rates beginning in July, 2022; 

and 95 percent of such rates beginning 

in July, 2023. For the reasons given with 

respect to the year and a half transition, 

these rates allow for a gradual, even 

adjustment to the wage levels the 

Department has determined are 

appropriate. Beginning in July 2024, the 

wage rates provided for any job 

opportunity filled by an alien on track 

to receive LPR status will be the same 

as the wage rates provided for all H–1B 

job opportunities. 

Finally, the Department has decided 

that the job opportunities that should be 

eligible for these special transition wage 

rates are those that will be filled by any 

H–1B workers who, as of October 8, 

2020, were the beneficiaries of approved 

employment-based green card petitions, 

or who were otherwise eligible to 

extend their temporary status beyond 

the six year limit under the American 

Competiveness in the 21st Century Act. 

October 8th is the date the Department 

published the IFR and thereby gave 

notice to employers and workers that it 

would be increasing wage rates. It thus 

provides a clear, administrable 

delineation of the class of workers who 

can benefit from the three and a half 

year transition period, and takes into 

account the fact that workers whose 

expectation of being able to remain in 

the country indefinitely became settled 


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3648 Federal Register / Vol. 86, No. 9 / Thursday, January 14, 2021 / Rules and Regulations 

226https://www.bls.gov/oes/2016/may/methods_

statement.pdf (accessed December 4, 2020). 

before such notice was provided have 

the most compelling reliance interests 

in the prior wage methodology. 

5. Wage Data and Sources 

a. OES 

Summary of Comments 

Some commenters expressed concern 

about the Department’s exclusive 

reliance on the OES to determine 

prevailing wages. Citing an NFAP policy 

brief, a public policy organization 

commented the ‘‘fundamental problem’’ 

with prevailing wage determinations is 

that the ‘‘process requires statistical 

precision that simply is not available’’ 

because ‘‘no government survey [ ] 

collects data within occupations with 

detailed wage levels, much less a survey 

that seeks to assemble data to calculate 

wage levels based on experience, 

education or level of supervision.’’ The 

commenter further stated that the OES 

produces ‘‘two average wage figures, 

neither of which is based on the 

collection of data connecting 

compensation to education, experience 

or supervision.’’ The commenter 

expressed concern that this method is 

less reliable than ‘‘asking employers 

directly what they pay employees at 

different levels of education, 

experience, or supervision’’ and that ‘‘a 

government agency can adjust the 

formula in a way that makes the 

required wages far higher than the 

market rate.’’ An employer expressed 

concern the OES ‘‘does not measure 

workers’ skills or duties or ‘‘reflect what 

workers in the survey are paid’’ and 

instead ‘‘simply records [the] set of 

DOL-established pay bands’’ within 

which a worker can be classified. 

Several commenters also expressed 

concern that the OES fails to consider 

total compensation, including stock 

options and bonuses, for example, 

resulting in an underestimation of the 

total earnings of U.S. and foreign 

workers. An individual commenter 

noted that many workers, particularly 

those in information technology 

occupations, earn much more than their 

base salary when accounting for total 

compensation and asserted that the IFR 

unfairly advantages ‘‘companies with a 

cash-heavy pay structure’’ and harms 

small start-ups that are more likely to 

compete by providing ‘‘equity and stock 

options.’’ A trade association asserted 

the IFR ignores an ‘‘important 

evolution’’ in the compensation of 

professionals ‘‘whereby many 

employers add to annual salaries with 

variable compensation tied to 

productivity, performance, or other 

specific goals’’ and may ‘‘incentivize 

employers to abandon variable 

compensation schemes altogether, in 

order to use available resources in an 

attempt to meet the new required 

wages.’’ Citing a Society for Human 

Resources Management article stating 

‘‘85% of employers use variable 

pay. . .’’ an employer asserted that 

consideration of fixed pay exclusively is 

outdated because an increasingly 

important component of compensation 

packages is variable pay, including 

‘‘incentive plans, bonuses, profitsharing plans, performance-sharing 

plans, and equity.’’ 

Many commenters expressed concern 

that the Department would issue a 

prevailing wage of ‘‘exactly $100 an 

hour, or $208,000 a year, for any 

occupation and geographic area’’ for 

which the Department lacks sufficient 

OES wage data to determine a prevailing 

wage for each wage level. Many 

commenters cited a finding by a public 

policy organization that this $208,000 

wage requirement would apply to at 

least 18,000 combinations of 

occupations and geographic locations. A 

university stated that assigning a 

‘‘default wage rate of $100’’ per hour 

‘‘for each of the four wage levels . . . 

artificially inflates the wage data for 

each of the wage levels for affected 

occupations.’’ A trade association 

expressed concern that OES wage data 

is ‘‘skewed toward employers in large 

metro areas’’ and that the failure to 

collect sufficient wage data would result 

in many non-metropolitan employers 

receiving a ‘‘default’’ prevailing wage of 

$208,000 under the IFR. A professional 

association believed the lack of BLS 

data and resulting ‘‘default’’ wage of 

$208,000 was due to the Department’s 

decision to use data for a limited ‘‘pool 

of workers who use the H–1B . . . and 

PERM programs,’’ rather than using a 

‘‘prevailing wage data pool [ ] based on 

all wage data within the occupation, 

regardless of the number of years of 

education, experience, and level of 

responsibility.’’ A second professional 

association asserted assignment of a 

$208,000 wage in this context violates 

the INA, 8 U.S.C. 1182(p)(4), because 

the Department provides only one wage 

level, despite the four levels of wages 

required by Congress, and that it is 

contrary to a 1990 Congressional 

directive that BLS must ‘‘make 

determinations on prevailing wages’’ 

and make this information ‘‘readily 

available to employers and workers.’’ 

Many of these commenters provided 

examples of prevailing wages far 

exceeding the market wage, such as a 

prevailing wage of $208,000 for an 

entry-level software developer in 

California, despite a private wage survey 

determination that the prevailing wage 

is approximately $70,600 per year. 

A public policy organization and an 

academic commenter that supported the 

IFR wage increases urged the 

Department to clarify an employer’s 

wage obligation in these cases, 

expressing concern that the policy 

created confusion that threatens 

necessary wage reform efforts. 

Specifically, one of the commenters 

requested clarification of whether the 

employer must pay the $208,000 salary, 

must ‘‘use an alternative method to the 

OFLC-generated OES wage rates in these 

cases,’’ or may choose either option. 

Response to Comments 

The Department received many 

comments regarding the prevalence of 

the use of the OES footnote wage to set 

prevailing wage rates under the IFR’s 

wage levels. This issue arises when BLS 

cannot provide a wage estimate for a 

Level IV wage. BLS is unable, at times, 

to produce a wage estimate when the 

survey results at the upper end of the 

wage distribution exceed the highest 

wage interval BLS uses, which is $100 

an hour or $208,800 annually. In such 

cases, BLS reports a default wage, or 

footnote wage, of $208,000 for the Level 

IV wage to OFLC as that is the highest 

wage value available. Currently, BLS 

collects actual wage data from 

employers and then converts the actual 

wage data into wage intervals, which 

range from under $9.25 an hour to 

$100.00 an hour and over.226 In 

situations when BLS reports a footnote 

wage for the Level IV wage to the 

Department, the Department’s standard 

practice has been to note that leveled 

prevailing wages for an occupation and/ 

or geographic area was unavailable and 

only to provide the OES footnote wage 

for all four levels. 

Under the Department’s proposal in 

the IFR, the mean of the upper decile 

produced an OES footnote wage for 

more than 18,000 occupations, up from 

roughly 6,000 occupations under the old 

prevailing wage methodology. The 

higher prevalence of the use of the 

footnote wage under the IFR’s 

methodology resulted in the default 

wage of $208,000 per year being used 

for a number of occupations where its 

use was likely not appropriate, as some 

commenters noted. The Department has 

therefore determined that it a change to 

its standard practice of not providing 

leveled wages in these situations is 

warranted. 

Upon the effective date of this final 

rule, when BLS is able to report a Level 


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I wage, the Department will utilize the 

OES footnote only as the Level IV wage 

estimate in cases where the 90th 

percentile wage value exceeds the 

highest wage interval value used by 

BLS. This change will allow the 

Department to provide leveled wages 

even where the footnote wage must be 

used for the Level IV wage and ensure 

that entry-level wages are not 

improperly inflated. In making this 

change, the Department expects there 

will be far fewer instances of the 

Department being unable to provide 

leveled wages than was the case under 

the IFR, or even the old wage 

methodology. 

This change to how the Department 

handles situations where the footnote 

wage is used for the Level IV wage will 

ensure that leveled wages and an entrylevel wage appropriately set at the 35th 

percentile will be provided wherever 

possible. This change will largely 

eliminate those incidents commenters 

expressed concern about, such as in 

healthcare occupations, where even an 

entry-level wage under the IFR was set 

at $208,000 per year, and is thereby 

inflated well above both the previous 

entry-level wage as well as what the 

Department has determined is an 

appropriate entry-level wage. Like its 

decision to move the entry-level wage to 

the 35th percentile, this change will 

ensure that prevailing wage rates more 

accurately reflect actual market wages 

and are more manageable for employers. 

Further, as discussed in more detail 

below, the changes the Department is 

making to how it calculates the Level IV 

wage—namely by using the 90th 

percentile as the Level IV wage instead 

of the mean of the upper decile—will 

eliminate the influence of extreme 

outlier at the upper end of the 

distribution, thereby reducing the 

reported Level IV rate to a level that is 

not inflated by anomalous data, and 

thus potentially reducing the frequency 

with which the footnote wage is used 

even for Level IV wage. 

The Department acknowledges that 

there will continue to be instances, as 

there are currently, where BLS will 

report to OFLC an OES footnote wage 

for all levels in an occupation because 

the survey results received by BLS at 

and above the 35th percentile are all in 

the wage interval of $100.00 an hour 

and over. This will occur in a few very 

highly compensated occupations. 

Importantly, in such cases the use of the 

footnote wage will actually result in a 

lower prevailing wage rate than would 

otherwise be the case if actual wage data 

were available because BLS only reports 

up to the maximum interval of $100.00 

an hour and in these situations the 

actual wages are at or over $100.00 an 

hour. Put another way, the use of the 

footnote wage in these cases, unlike its 

use under the IFR, will not result in 

wages that are inflated beyond what the 

actual market wage would be if actual 

wage data were available. Until BLS 

moves away from collecting all wage 

data in intervals this will continue to 

occur. But the Department believes that 

as BLS expands its collection of actual 

wage data this issue will cease to occur 

even in those few very highly 

compensated occupations. The 

Department anticipates that this change 

to its standard procedures will allow the 

Department to report leveled wages in 

more occupations and/or geographic 

areas than has historically been the case. 

Relatedly, many commenters 

expressed concern that because the 

Department raised the Level IV wage to 

the mean of the upper decile, it caused 

more physician occupations, in 

particular, to default to the OES footnote 

wage of $100.00 an hour, or $208,000 

annually at an especially high rate. As 

discussed above, the Department’s 

changes to its standard procedures to 

use the OES footnote wage only as the 

Level IV wage estimate when a Level I 

wage is also reported from BLS will 

allow the Department to report leveled 

wages in these instances, thus reducing, 

if not altogether eliminating this 

concern. 

Similarly, many commenters 

suggested that the failure of the 

Department to provide leveled wages 

would disproportionately harm 

employers outside of large urban areas 

and cause rural communities to lose 

access to healthcare. Many of these 

commenters suggested that under the 

IFR the Department is unable to provide 

leveled wage estimates for physicians 

and researchers in rural areas who 

would therefore be provided the OES 

footnote that is significantly higher than 

what some of those employees’ 

supervisors are paid, which would be 

unsustainable and potentially result, 

among other things, in undermining the 

Conrad-30 program in certain areas. 

However, as previously stated, the 

Department has reviewed the 

commenters concerns and determined it 

is appropriate to make changes to the 

standard procedures of not providing 

leveled wage estimates in these 

situations. Instead, upon the effective 

date of this Final Rule the Department 

will use the OES footnote wage only as 

the Level IV wage estimate, allowing the 

Department to provide leveled wage 

estimates, except in those cases where 

the wage at the 35th percentile is also 

above the highest OES wage interval 

value. This will reduce if not eliminate 

the incidents of inappropriately high 

wages being provided for these specific 

occupations and areas. 

The Department also acknowledges 

commenters’ concerns with flaws in the 

OES collection of wage data from 

employers that result from BLS 

collecting data in 12 wage intervals as 

opposed to reporting actual wages. 

Though the OES survey does collect 

most wage data in wage intervals, BLS 

does collect actual wage data from 

employers in some instances and is 

exploring the ability to collect and 

report actual wage data from employers 

on a more consistent basis. As BLS 

phases in the collection of actual wage 

data from employers, wage estimates 

reported to the Department will become 

even more accurate and all instances of 

the OES footnote wage being used to set 

prevailing wage rates, which is a 

product of the current practice of using 

wage intervals, should cease. Further, 

even if BLS ultimately does not convert 

all wage data collection from employers 

to actual wages, this methodology of 

using wage intervals has been in place 

since the inception of the OES survey 

and has in most cases produced 

accurate wage estimates at the levels 

defined by the Department. Given the 

low incidence of the footnote wage 

being used; the modifications made by 

the Department to how it provides 

default wages that both further reduce 

the use of the footnote wage and 

eliminate its use in cases where it 

would result in an inappropriately 

inflated wage; and the other strengths of 

the OES data discussed below, the 

Department continues to believe that the 

OES survey serves as the best possible 

source of wage data for use in various 

foreign labor programs and that its 

reliance on wage intervals does not 

warrant the Department abandoning its 

longstanding practice of using the OES. 

As noted above, the Department 

received several more general comments 

regarding the suitability of the BLS OES 

data for setting wages in the foreign 

labor certification programs. Some of 

the comments cited the fact that the 

OES data uses broad occupational 

classifications that encompass a wide 

range of different positions, some of 

which only fall at the lower end of the 

pay scale. Others commented that the 

OES data does not survey for education 

and experience, making it a poor fit for 

use in setting H–1B wage levels. 

As the Department stated in the IFR, 

the Department reviewed the statutory 

framework of the INA and its interplay 

with the BLS OES survey data that the 

Department uses to calculate prevailing 

wages. This review demonstrated that, 

while the OES survey is the best source 


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227Wage Methodology for the Temporary Nonagricultural Employment H–2B Program, 76 FR 

3452, 3463 (Jan. 19, 2011). 

228See Ctr. for Biological Diversity v. EPA, 722 

F.3d 401, 410 (DC Cir. 2013) (observing that 

‘‘ ‘agencies have great discretion to treat a problem 

partially’’ ’) (quoting City of Las Vegas v. Lujan, 891 

F.2d 927, 935 (DC Cir. 1989)). 

229Wage Methodology for the Temporary NonAgricultural Employment H–2B Program, 80 FR 

24,146, 24,155 (Apr. 29, 2015). 

230 8 U.S.C. 1182(p)(4). 

231 80 FR 24,146, 24,159. 

232 8 U.S.C. 1182(n)(4)(A). 

233The CPS, sponsored jointly by the U.S. Census 

Bureau and BLS, is the primary source of labor 

force statistics for the population of the U.S. See 

United States Census Bureau, Current Population 

Survey, available at https://www.census.gov/ 

programs-surveys/cps.html. 

of wage data available for use in the 

Department’s foreign labor certification 

programs, it is not specifically designed 

for such programs, and therefore does 

not account for the requirement that 

workers in the H–1B program possess 

highly specialized knowledge in how it 

gathers data about U.S. workers’ wages. 

This fact necessarily shapes how the 

Department integrates the OES survey 

into its foreign labor programs. 

The Department has long relied on 

OES data to establish prevailing wage 

levels. That is because it is a 

comprehensive, statistically valid 

survey that is the best source of wage 

data available for satisfying the 

Department’s purposes in setting wages 

in most immigrant and nonimmigrant 

programs. As the Department has 

previously noted, the OES wage survey 

is among the largest continuous 

statistical survey programs of the federal 

government. BLS produces the survey 

materials and selects the nonfarm 

establishments to be surveyed using the 

list of establishments maintained by 

State Workforce Agencies (SWAs) for 

unemployment insurance purposes. The 

OES collects data from over one million 

establishments. Salary levels based on 

geographic areas are available at the 

national and State levels and for certain 

territories in which statistical validity 

can be ascertained, including the 

District of Columbia, Guam, Puerto 

Rico, and the U.S. Virgin Islands. Salary 

information is also made available at the 

metropolitan and nonmetropolitan area 

levels within a State. Wages for the OES 

survey are straight-time, gross pay, 

exclusive of premium pay. Base rate, 

cost-of-living allowances, guaranteed 

pay, hazardous duty pay, incentive pay 

including commissions and production 

bonuses, tips, and on-call pay are 

included. The features described above 

are unique to the OES survey, which is 

a comprehensive, statistically valid, and 

useable wage reference.227 The OES 

survey’s quality and characteristics have 

made it, and continue to make it, a 

useful tool for setting prevailing wage 

levels in the Department’s foreign labor 

programs. There are no consistently and 

readily available alternative surveys or 

sources of wage data that would provide 

DOL with wage information at the same 

level of granularity needed to properly 

administer the H–1B and PERM 

programs. For these reasons, the 

Department continues to believe that the 

OES survey is the best possible source 

of wage data for use in various foreign 

labor programs. 

The Department also notes that the 

OES survey is what is currently used to 

set prevailing wage rates in the H–1B 

and PERM programs. As a result, even 

if the modifications to the prevailing 

wage levels in this final rule were not 

adopted, the OES would continue to be 

the source used to produce prevailing 

wage rates by the Department. As 

explained, the Department believes that 

continuing to use the OES is the best 

way to advance the policy aims of the 

INA’s wage protections. However, even 

if reconsideration of the Department’s 

use of the OES were warranted, the 

Department believes that the more 

immediate goal of correcting how the 

wage levels are set is the appropriate 

focus of this rule.228

However, as noted, the OES survey is 

not specifically designed to serve these 

programs. For one thing, ‘‘the OES 

survey captures no information about 

differences within the [occupational] 

groupings based on skills, training, 

experience or responsibility levels of the 

workers whose wages are being 

reported’’ 229—the factors the INA 

requires the Department to rely on in 

setting prevailing wage levels.230

Relatedly, ‘‘there are factors in addition 

to skill level that can account for OES 

wage variation for the same occupation 

and location.’’ 231 Further, the 

geographic areas used by BLS to 

calculate local wages do not always 

match up exactly with the ‘‘area of 

employment’’ for which wage rates are 

set, as that term is defined by the INA 

for purposes of the H–1B program.232 So 

while the OES survey is the best 

available source of wage data for the 

Department’s purposes, it is not a 

perfect tool for providing wages in the 

H–1B, H–1B1, E–3, and PERM 

programs—a fact that the Department 

must take into consideration in how it 

uses the OES data. 

The Department also acknowledged in 

the IFR that the universe of workers 

surveyed by the OES for some of the 

most common occupational 

classifications in which H–1B workers 

are employed is larger than the pool of 

workers who can be said to have levels 

of education and experience comparable 

to those of even the least skilled H–1B 

workers performing work in a specialty 

occupation. Commenters are therefore 

correct that BLS’s occupational 

classifications are not delineated with 

the H–1B and PERM programs in mind. 

But, as explained in the IFR, the 

Department took steps to account for 

this potential mismatch. In particular, 

because the statutory scheme requires 

the Department to set the prevailing 

wage levels based on what workers 

similarly employed to foreign workers 

make, taking into account workers’ 

qualifications and, as noted, the large 

majority of foreign workers are H–1B 

workers, the Department determined it 

would be inappropriate to consider the 

wages of the least educated and 

experienced workers in these common 

H–1B occupational classifications in 

setting the prevailing wage levels. 

To address the fact that the OES 

survey does not itself contain 

information about experience and 

education, the Department sought to 

determine the wages typically earned by 

individuals having comparable levels of 

education, experience, and 

responsibility to the prototypical entrylevel H–1B and EB–2 workers working 

in the most common H–1B and PERM 

occupations by looking to other credible 

government surveys that do gather such 

information and comparing their data to 

the OES data. In particular, the 

Department consulted a variety of data 

sources, most importantly wage data on 

individuals with master’s degrees or 

higher and limited years of work 

experience from the 2016, 2017, and 

2018 CPS 233 conducted by the U.S. 

Census Bureau, and data on the salaries 

of recent graduates of master’s degree 

programs in STEM occupations 

garnered from surveys conducted by the 

NSF in 2015 and 2017. Both of these 

surveys represent the highest standards 

of data collection and analysis 

performed by the federal government. 

Both surveys have large sample sizes 

that have been methodically collected 

and are consistently used not just across 

the federal government for purposes of 

analysis and policymaking, but by 

academia and the broader public as 

well. Comparing their data to OES wage 

distributions thus allowed the 

Department to take into account 

education and experience in 

determining how to use OES data. 

Further, though the CPS and NSF 

surveys provide a good approximation 


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234 20 CFR 655.731(a)(2)(ii)(B) and (C). 

of where U.S. workers with similar 

skills to entry-level H–1B and EB–2 

workers, fall within the OES 

distribution; they are not conducted on 

a regular basis with enough granularity 

as the OES survey to produce wage 

estimates at the occupational and 

geographic levels, nor are the produced 

frequently enough to provide the up to 

date wage data necessary to ensure 

accurate prevailing wages. They thus are 

useful for assessing how the OES data 

should be used in the Department’s 

foreign labor programs, but could not be 

used as a substitute for the OES, which, 

as noted above, has unique attributes 

that make it, in the Department’s 

judgment, the best possible source of 

wage data even though it does not 

survey for education and experience. 

The Department is therefore confident 

that its use of the OES continues to be 

appropriate in the H–1B and PERM 

programs, and that the IFR’s 

methodology properly accounted for the 

fact that the OES does not survey for 

education and experience. 

As noted, some commenters suggested 

that the BLS OES survey is flawed 

because it is a voluntary survey and 

some smaller or more rural employers 

are less likely to respond to the survey, 

which in turn means, according to 

commenters, that such employers will 

be given inappropriately high wages 

because they will be grouped in with 

establishments in metropolitan 

statistical areas with higher labor costs 

due to a lack of survey responses. The 

Department recognizes that the BLS 

OES survey is voluntary. However, BLS 

sends the OES survey to over 1 million 

establishments and those establishments 

are encouraged to respond to the survey. 

The survey is recognized as a 

statistically valid, comprehensive 

source of wages nationwide. As the 

Department has discussed, the OES 

survey is not the perfect tool for setting 

wages in the foreign labor certification 

programs, but it is the largest and best 

single source of wage data available for 

setting wages across hundreds of 

occupational classifications in hundreds 

of geographical areas. The Department 

endeavors to produce as many 

statistically valid wage estimates as 

possible and therefore will move to the 

next geographic area until it can report 

a statistically valid wage. While it may 

be the case that in some instances wage 

rates provided for areas of the country 

with fewer establishments responding to 

the survey will result in those areas 

being grouped in with adjacent regions, 

the Department believes, as elaborated 

on previously, that the value in having 

a single, uniform survey that produces 

consistent and reliable results for its 

foreign labor programs outweighs any 

benefits that might result from using 

different sources of wage data for 

specific areas of employment. Moreover, 

the fact that the Department permits 

employers to use alternative sources of 

wage data to set prevailing wage rates 

gives employers some recourse if they 

believe, in certain instances, that the 

OES prevailing wage rate is not 

accurate. 

Some commenters suggested that the 

Department should use a separate 

survey for certain occupations, such as 

physicians, because there are better 

surveys for those specific occupations. 

The Department declines to make this 

change. As explained throughout, the 

Department has determined that the 

OES survey is the largest and best 

available survey to rely upon for setting 

wages in the foreign labor certification 

programs. The Department understands 

the shortfalls that a survey the size of 

the OES survey has, and, as discussed 

above, has taken various steps to 

account for the fact that the OES survey 

is not specifically designed for use in 

the Department’s foreign labor 

programs. For administrative uniformity 

the Department believes that providing 

one set of data, from a government 

conducted survey, has more benefits 

than using on potentially less reliable 

surveys conducted by private 

organizations that could be 

discontinued or have changes to their 

methodology made without the 

Department’s input. Further, as noted 

previously, employers already have a 

method for utilizing a survey other than 

the BLS OES survey. If employers 

believe there are better surveys for their 

occupations than the BLS OES survey, 

they may rely upon those surveys, either 

through the Prevailing Wage 

Determination process or listing a valid 

wage survey as the source of the 

prevailing wage when submitting an 

LCA in the FLAG system.234 Indeed, the 

Department notes that the AAMC survey 

itself is often used by employers as the 

source of the prevailing wage on their 

LCAs and PWD applications. 

6. The Upper and Intermediate Wage 

Levels 

Summary of Comments 

Several commenters expressed 

concern that use of the mean of the top 

decile of the OES distribution to 

approximate the prevailing wage for 

Level IV workers produces a Level IV 

wage above the 95th percentile due to 

outlier wages at the top of the 

distribution and that this, in turn, skews 

the intermediate wage levels because 

they are ‘‘set by statute by interpolating 

the data for levels’’ I and IV. Some 

commenters cited a Cato Institute 

finding that ‘‘extreme outliers’’ in the 

data used to determine the level IV wage 

resulted, in some cases, in Level II and 

III wage determinations ‘‘up to 26 

percent higher than predicted in’’ the 

IFR. A university commenter and an 

anonymous commenter stated that this 

methodology resulted in situations 

where the Level II wage increases to the 

78th percentile and the Level III wage 

increases to the 90th percentile. An 

employer stated that the IFR 

methodology would produce clearly 

inaccurate prevailing wages in 

industries with bi-modal salary 

distributions. An individual commenter 

stated that the 95th percentile 

represents workers ‘‘nearing the end of 

their career, with decades of 

experience.’’ 

Similarly, a few commenters 

expressed concern about specific errors 

or discrepancies in prevailing wages 

produced by the IFR at the intermediate 

levels. An individual commenter 

asserted that of ‘‘437,593 Area CodeSOC Code combinations’’ there are 

prevailing wage ‘‘discrepancies in 

228,836.’’ As an example, the 

commenter noted that the Level II wage 

for SOC 15–2031 in ‘‘[a]rea code 37980’’ 

based on what the Department 

estimated would be at the 62nd 

percentile is higher than the pre-IFR 

Level IV wage, which the Department 

estimated to be at the 67th percentile. 

Similarly, a trade association stated that 

its members reported that the Level II 

62nd percentile wage is higher in many 

cases than the pre-IFR Level IV 67th 

percentile wage. In these cases, 

commenters noted that the wage 

increases effected by the IFR appeared 

to be even greater than the Department 

anticipated or intended. By contrast, 

two commenters asserted that prevailing 

wages published in the Department’s 

Online Wage Library clearly were too 

low in some cases, citing examples like 

a level I wage of $22,000 for Electrical 

Engineers in College Station, Texas, 

much lower than entry-level wages 

indicated in a NSF survey. 

Response to Comments 

To begin, the Department agrees with 

commenters that setting the top wage at 

the mean of the upper decile skews the 

wages of the intermediate wage levels 

by including, sometimes extreme, 

outliers. For the reasons given below, 

the Department continues to believe that 

the Level IV wage should be placed at 

the uppermost end of the OES 


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3652 Federal Register / Vol. 86, No. 9 / Thursday, January 14, 2021 / Rules and Regulations 

235Edward P. Lazear, Productivity and Wages: 

Common Factors and Idiosyncrasies Across 

Countries and Industries, National Bureau of 

Economic Research, 11/2019, Working Paper 26428, 

available at http://www.nber.org/papers/w26428; 

David H. Autor & Michael J. Handel, Putting Tasks 

to the Test: Human Capital, Job Tasks and Wages, 

National Bureau of Economic Research, 6/2009, 

Working Paper 15116, available at http://

www.nber.org/papers/w15116. 

236 Data on the actual wages paid to H–1B 

workers shows that in some cases such workers are 

paid at or near the very top of the OES wage 

distribution. 

237This analysis is based on data provided by 

U.S. Citizenship and Immigration Services and 

2019 OFLC Disclosure Data. 

238Andy Oram & Greg Wilson, Making Software: 

What Really Works, and Why We Believe It (2010). 

distribution. However, to avoid the 

statistical issues that resulted in overly 

inflated wages at both the upper and 

intermediate wage levels under the IFR, 

the Department has adjusted the manner 

in which BLS will provide data for the 

Level IV wage. 

As the Department explained in the 

IFR, the highest wage level should be 

commensurate with the wages paid to 

the most highly compensated workers in 

any given occupation because such 

workers are also generally the workers 

with the most advanced skills and 

competence in the occupation, and 

therefore the type of workers who are 

similarly employed to the most highly 

qualified H–1B and PERM workers.235

Again, it is generally the case that, as a 

worker’s education and experience 

increase, so too do his wages. Further, 

while the INA places baseline, 

minimum skills-based qualifications on 

who can obtain an H–1B or EB–2 visa, 

it does not place any limit on how 

highly skilled a worker can be within 

these programs. Thus, while the 

Department necessarily discounted the 

lower end of the OES wage distribution 

in determining the entry-level wage, full 

consideration must be given to the 

uppermost portion of the distribution in 

adjusting the Level IV wage. 

H–1B workers can be, and at least in 

some cases already are among the most 

highly paid, and therefore likely among 

the most highly skilled workers within 

their respective occupations.236 This is 

demonstrated by a review of the highest 

salaries paid to H–1B workers in the 

most common occupations in which H– 

1B workers are employed. In Fiscal Year 

(FY) 2019, for example, the most highly 

compensated H–1B nonimmigrants 

employed as Computer Systems 

Analysts commanded annual wages as 

high as $450,000. That figure was 

$357,006 for H–1B workers in other 

Computer Occupations. The wages of 

workers at the 90th percentile of the 

OES distribution for these occupations, 

by contrast, are significantly lower. 

Computer Systems Analysts at the 90th 

percentile in the OES distribution make 

approximately $142,220. That figure is 

$144,820 for workers in other computer 

occupations. In other words, H–1B 

workers in some instances make wages 

far in excess of those earned by 90 

percent of all U.S. workers in the same 

occupation. Indeed, a review of the 

wages of the top five percent highest 

earners among H–1B nonimmigrants, 

and therefore the earners likely to have 

the highest levels of education, 

experience, and responsibility, in the 16 

occupational classifications that account 

for one percent or more of all approved 

H–1B petitions in FY2019 shows that 

such workers make wages that are, on 

average, at least 20 percent higher than 

those made by workers at the 90th 

percentile in the OES wage distribution. 

Further demonstrating that H–1B 

workers can be and sometimes are 

among the most skilled and competent 

workers in their occupations, an 

examination of the top end of the wage 

distribution within the H–1B program 

shows that, for H–1B nonimmigrants 

with graduate and bachelor’s degrees, 

the association between education and 

income level begins to break down to 

some extent. Among the most highly 

compensated H–1B workers, the higher 

the income level, the more likely the 

foreign worker beneficiary only has a 

bachelor’s degree.237 This strongly 

suggests that individuals at the fourth 

wage level truly possess the most 

advanced skills and competence—the 

only remaining parameters that can 

reasonably account for significant wage 

differentials—within their occupations, 

as additional years of education are 

largely irrelevant in explaining wages 

among top earners. The U.S. workers 

who are similarly employed to the most 

highly qualified H–1B workers are, 

therefore, also likely to be among the 

most highly skilled, and, therefore, the 

most highly compensated workers 

within the OES wage distribution. 

The high levels of pay that the most 

skilled H–1B workers can command is 

also shown by the fact that, due to their 

advanced skills, diversified knowledge, 

and competence, workers placed at the 

fourth wage level are likely to be far 

more productive than their less 

experienced and educated peers. 

Whereas experience itself generally 

increases on a linear basis, as a function 

of age and time spent in an occupation, 

productivity and an individual’s 

supervisory responsibilities, as a 

function of experience and skills, do 

not. For example, the nature of senior 

management or supervisory roles, in 

particular, means workers who serve as 

productivity multipliers are more likely 

to fill such positions, which in turn 

translates to higher wages. Perhaps even 

more relevant to the Department’s 

assessment of the wages paid to H–1B 

workers is the nature of the work these 

individuals do, which is highly 

specialized and typically occurs in 

computer or engineering-related fields. 

In such occupations, experience and 

abilities can result in exponentially 

divergent levels of productivity, which 

in turn means that workers with the 

most advanced skills and competence 

can command wages far above what 

other workers in those occupations 

do.238

All of these considerations strongly 

indicate that U.S. workers similarly 

employed to the H–1B and PERM 

workers with the most advanced skills 

and competence are themselves among 

the most highly skilled workers in any 

given occupation, and therefore the 

most highly compensated. Thus, 

because the INA requires wages for H– 

1B and PERM workers to be set based 

on the wages paid to similarly employed 

U.S. workers, taking into account 

education, experience, and 

responsibility, and the Level IV wage is 

used for job opportunities filled by the 

most highly skilled workers, the Level 

IV wage should, in the Department’s 

judgment be placed at the uppermost 

end of the OES distribution. 

Importantly, commenters by and large 

did not dispute the Department’s 

conclusion that H–1B workers in some 

cases are among the most skilled and 

educated workers in an occupation, and 

therefore should be compensated at 

rates that reflect what the most skilled 

and educated U.S. workers in those 

occupations make. Rather, as noted, 

commenters’ primary concern was with 

the statistical methodology the 

Department used to calculate the Level 

IV wage. Because the Department agrees 

with commenters that the methodology 

contained certain unforeseen flaws, it 

has decided to take a new approach in 

the final rule that, while still resulting 

in wage rates that reflect what some of 

the most highly skilled, and therefore 

the most highly compensated 

individuals in a given occupation, make 

will eliminate the influence of outliers 

on prevailing wage rates that result in 

anomalous and overly inflated rates at 

both the upper and intermediate wage 

levels. In consequence, the Department 

has determined that the Level IV should 

be calculated as the 90th percentile of 

the OES distribution, as opposed to the 

mean of the upper decile used in the 

IFR. This change will reduce 


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239 8 U.S.C. 1182(p)(4). 

240BLS also produces data for the public from the 

OES survey that is divided into five different wage 

levels. However, the public data BLS produces is 

Continued 

significantly, if not eliminate, the 

influence of outliers on wage rates 

because outlier data at the very upper 

end of the distribution will no longer be 

a significant factor in how the Level IV 

wage is calculated. 

In particular, as commenters noted, 

the extremely high wages paid to a few 

‘‘superstar’’ outliers in an occupation in 

a geographic area may raise the mean of 

the upper decile of workers in that 

occupation and geographic area far 

above the median of the upper decile, 

which is the 95th percentile. Thus, 

using the mean of the upper decile to 

calculate Level IV wages and derive 

Level II and III wages may boost Level 

II, III, and IV wages higher than the 

Department anticipated or intended in 

the IFR. Changing to the 90th percentile 

to calculate the Level IV wages and 

derive Level II and III wages means the 

Level IV wages will more accurately 

reflect the wages paid to workers with 

levels of education, experience, and 

responsibility comparable to the typical 

U.S. worker at the high end of the 

distribution, rather than workers with 

abnormally high levels of compensation 

even for that part of the distribution. For 

example, a ‘‘superstar’’ senior software 

designer (OES code 15–1256) that makes 

over $750,000 per year working in San 

Jose, California in 2019 would affect the 

mean of the top decile, but would not 

affect the 90th percentile wage figure of 

software engineers in San Jose, 

California, which was $207,200 in 2019, 

according to OES statistics. Thus, using 

the mean of the top decile to calculate 

Level IV wages and derive Levels II and 

III wages allows the presence of a few 

‘‘superstar’’ outliers in an occupation in 

a geographic area to inflate Level II, III, 

and IV wages for an occupation in a 

geographic area. 

In addition, there are other 

considerations weighing against using 

the mean of the upper decile to 

calculate Level IV wages and derive 

Levels II and III wages. The extremely 

high wages that employers pay to 

‘‘superstar’’ outliers in an occupation in 

a geographic area of course do not 

necessarily mean that employers also 

pay high wages to other workers in the 

same occupation in the same geographic 

area. Thus, using the mean of the top 

decile to calculate Level IV wages and 

derive Levels II and III wages not only 

inflate Level II, III and IV wages so that 

they do not accurately reflect the overall 

wage distribution for an occupation in 

a geographic area, but also introduces 

the potential for significant 

unpredictability in wages from year to 

year that is not based on any systemic 

change to the labor market. Consider the 

same ‘‘superstar’’ senior software 

designer that makes over $750,000 per 

year working in San Jose, California in 

2019 and suppose his employer agreed 

to let him work remotely in 2020, and 

he moved to Salt Lake City, Utah. That 

decision would affect the mean of the 

top decile, reducing it in San Jose and 

increasing it in Salt Lake City, but 

would not affect the respective 90th 

percentiles of $207,200 in San Jose and 

$157,290 in Salt Lake City. Changing the 

work location for one ‘‘superstar’’ 

outlier would not affect the distribution 

of wages for 80 percent of software 

developers earning between the 10th 

and 90th percentiles in either San Jose 

or Salt Lake City. Software developers 

would still make more on average at the 

every level in San Jose than in Salt Lake 

City. Moreover, because the OES survey 

does not necessarily capture the same 

workers year-over-year, the 

unpredictability in wages that can result 

from the presence and then absence of 

an outlier in the wage data can occur 

even if that same worker has not 

changed locations. The weakening of 

the linkage between supply and demand 

factors affecting wages for most workers 

in an occupation and the Level II, III, 

and IV wages was not the Department’s 

intention in the IFR, and is not 

consistent with the INA’s wage 

provisions. Using the 90th percentile 

instead to calculate the Level IV wages 

and derive Level II and III wages for an 

occupation in a geographic area 

eliminates the distortions and 

minimizes the excessive and 

unintended variability in Levels II, III, 

and IV wages arising from the inclusion 

of a few ‘‘superstar’’ outliers in the 

mean of top decile. 

Finally, the Department has decided 

to use a percentile calculation instead of 

a mean calculation because the 

Department can produce such data more 

efficiently. In addition, experience with 

the IFR’s methodology has 

demonstrated that taking the mean of a 

small portion of the OES distribution, 

such as of a decile, can in some cases 

result in exceedingly small sample sizes 

being used to produce the wage figure, 

which make the figure produced 

potentially less reliable. 

Based on its review of the comments 

received, the Department also believes 

that a percentile calculation will be 

easier for employers, workers, and the 

public to understand than a mean 

calculation. As noted above, some 

commenters challenged the wage figures 

provided under the IFR as being 

incorrect because some wages the 

Department estimated as falling at the 

62nd percentile wage were significantly 

higher than what the Department had 

described as the 67th percentile wage 

under the old methodology. While, for 

the reasons given above, it is likely that 

this occurred in some cases due to the 

presence of outliers in the data used to 

calculate the Level IV wage, there is also 

another explanation. Specifically, 

describing the wage figures produced 

under the old methodology and the 

IFR’s methodology as percentiles was, 

as explained in the IFR, simply a 

shorthand way of describing a rough 

approximation of what a mean 

calculation yields. For example, under 

the old methodology, the Level IV wage 

was provided as the mean of the upper 

two-thirds of the OES distribution, 

meaning the average of the wage data 

falling between the 33rd and 100th 

percentiles. The midpoint of that 

portion of the distribution is the 67th 

percentile, but its mean will not 

necessarily be the 67th percentile. Put 

more simply, the average of a set of 

numbers does not always fall at the 

median of those numbers. As a result, 

discussing two different means 

calculated based on different portions of 

the distributions by describing them as 

percentiles gives a false sense of 

comparability, as demonstrated by some 

of the discrepancies raised by 

commenters. 

To avoid confusion about how it 

describes the wages it provides going 

forward, the Department will speak 

more clearly about the kinds of data it 

is providing and will consequently 

report the wage based on a percentile 

calculation. This means that the 

Department will no longer take the 

average of portion of the wage 

distribution, but instead will provide a 

wage that falls at a particular 

predetermined point within the 

distribution. 

As to the precise values of the 

intermediate levels, the Department 

notes that it will continue to calculate 

the two intermediate wage levels in 

accordance with 8 U.S.C. 1182(p)(4), 

which provides that, in establishing a 

four-tier wage structure, ‘‘[w]here an 

existing government survey has only 2 

levels, 2 intermediate levels may be 

created by dividing by 3, the difference 

between the 2 levels offered, adding the 

quotient thus obtained to the first level 

and subtracting that quotient from the 

second level.’’ 239 The BLS OES survey 

is, as provided in the statute, an existing 

survey that has long provided two wage 

levels for Department’s use in setting 

the prevailing wage rates.240


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not broken down with the level of granularity by 

area of employment needed to administer the 

Department’s immigrant and nonimmigrant 

programs, which is why BLS has also long 

produced a separate dataset with two wage levels 

for the Department’s use. 

241 20 CFR 655.731 (b)(3)(iii). 

242 Id. at 655.731 (b)(3)(iii)(C)(4). 

The Department will apply the 

statutory formula as follows: the 

difference between the two levels 

provided by the OES survey data is 55 

percentiles. Dividing this by three yields 

a quotient of 18.33. This quotient, added 

to the value of the Level I wage at the 

35th percentile, yields a Level II wage 

at approximately the 53rd percentile. 

When subtracted from the value of the 

Level IV wage at the 90th percentile, the 

quotient yields a Level III wage at 

approximately the 72nd percentile of 

the OES distribution. 

Finally, while eliminating the 

influence of outliers on how the upper 

level wage is calculated and moving to 

percentile calculations will reduce 

unpredictability in the data, prevent the 

inflation of wages beyond the levels the 

Department has determined appropriate, 

and make the wage structure easier to 

understand for the public, it is possible 

that there will continue to be anomalies 

as the Department moves from a meanbased to a percentile-based 

methodology. However, the Department 

does not expect these will be common. 

7. Other Suggested Alternatives and 

Additional Comments 

One public policy organization 

suggested the Department should 

require use of a government survey to 

determine prevailing wages, stating the 

INA does not require the Department to 

permit use of other sources and 

expressing concern that employers 

‘‘have routinely relied on LCA 

prevailing wage sources that do not fit 

the ‘independent authoritative source’ 

or ‘another legitimate source of wage 

information.’’ 

The Department believes that 

allowing employers the flexibility of 

choosing to use an independent 

authoritative source or another 

legitimate source of wage data provides 

a backstop for cases in which OES data 

on an occupation in a given region is 

insufficient or the OES data provides an 

anomalous result. This flexibility serves 

the goal of ensuring that the wage 

requirement actually reflects the market 

wage for the job. 

Another public policy organization 

stated it is unclear how independent 

authoritative and other non-OES sources 

‘‘compare to OFLC-generated OES 

prevailing wage’’ and urged the 

Department to conduct a study 

comparing OES-based wages and wages 

produced by private surveys and nonOES sources ‘‘to identify whether there 

are any systematic biases’’ in non-OES 

sources. 

The quality of independent wage 

surveys is an important subject to which 

OFLC pays attention and will continue 

to pay attention. Although private 

surveys are conducted independently of 

the Department, the Department in its 

regulations and guidance has set 

standards that private surveys must 

attain. As discussed above, the 

regulations restrict independent 

authoritative sources to publications 

within 24 months of the application and 

require them to use recent and valid 

data.241 Independent sources must be 

‘‘reasonable and consistent with 

recognized standards and principals in 

producing a prevailing wage.’’ 242

Guidance that the Department issued 

in 2009 requires that wage data 

collected by an independent 

authoritative source is for similarly 

employed workers, meaning workers 

having substantially similar levels of 

skills. The survey should contain a 

representative sample of wages within 

the occupation that comports with 

recognized statistical standards and 

principles in producing prevailing 

wages. The Department provides a set of 

minimum survey standards in 

Appendix E of the 2009 Guidance and 

encourages employers to reference these 

standards when seeking to use an 

independent authoritative source as the 

prevailing wage. Written documentation 

on the methodology used to conduct the 

survey and the validity of the 

methodology used in computing the 

occupational wage data covering the 

area of intended employment must be 

kept in the employer’s data file and 

made available in the event of an 

investigation. Two commenters 

suggested the Department should 

combine data collected by the OES 

survey with ‘‘certain data from private, 

independently published compensation 

surveys’’ to produce prevailing wages 

that would more accurately reflect skill, 

education, and experience levels than 

wages determined using OES pay band 

data alone. One of these commenters 

suggested BLS could ‘‘layer’’ the private 

survey data ‘‘over the OES data’’ and 

asserted this would not be difficult 

because H–1B workers are heavily 

concentrated in IT occupations that are 

included in private surveys, though the 

commenter acknowledged private 

surveys are not available for all 

occupations and localities. Other 

general suggestions included applying a 

higher wage to ‘‘tech companies’’ or 

applying a higher wage as ‘‘the number 

of visas grow for an employer.’’ 

The Department does not believe that 

combining or layering data from studies 

that may not be measuring quite the 

same occupations in the same regions 

would yield more accurate results. OES 

data is comprehensive and reliable. As 

the commenter acknowledged, private 

survey data is not available for some 

occupations and localities. An 

advantage of the OES survey is that it 

allows uniformity in the Department’s 

methodology. That advantage would be 

lost if the Department adopted the 

commenters’ proposal. The system the 

Department has adopted allows for 

cases where private survey data may be 

more accurate. As discussed, using 

other authoritative or legitimate sources 

is an option available to employers. 

Various commenters asserted 

increased wages under the IFR 

methodology would have negative 

macroeconomic impacts, including: 

Brain drain and loss of American 

competitiveness in a global economy, 

stifling innovation in areas like artificial 

intelligence and manufacturing 4.0; 

increased prices for or elimination of 

products and services; elimination or 

increased outsourcing of jobs and a 

general reduction in labor demand; and 

reduced revenues, including local, 

State, and Federal tax revenue and 

reduced consumer spending from 

foreign workers and students. Many 

commenters also expressed concern that 

the higher IFR wages would result in 

increased outsourcing of jobs, rather 

than increased opportunities for U.S. 

workers. One of these commenters 

noted that U.S. employers can hire 

workers through foreign affiliates and 

cited a Wharton School of Business 

study finding H–1B restrictions ‘‘caused 

foreign affiliate employment increases at 

the intensive and extensive margins.’’ 

The Department does not anticipate 

that the harms the commenters envisage 

will be the consequences of more 

accurately calculating prevailing wages 

of H–1B and PERM workers. Some of 

the consequences are possible, but in 

setting wage requirements, Congress 

accepted that there would be costs 

resulting from its chosen means of 

protecting U.S. workers. The 

Department has not been assigned the 

function of reconsidering Congress’s 

decision. Rather, the Department’s 

obligation under the INA is to match as 

closely as possible workers’ pay with 

their occupations and qualifications. 

Two public policy organizations 

believed the Department must address 

employer misclassification of job 

opportunities by reviewing ‘‘the 

qualifications of individual workers 


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243See Exec. Order 13788, 82 FR 18,837 (Apr. 18, 

2017). 

244See 8 U.S.C. 1182(p)(4) (‘‘Where an existing 

government survey has only 2 levels, 2 intermediate 

levels may be created by dividing by 3, the 

difference between the 2 levels offered, adding the 

quotient thus obtained to the first level and 

subtracting that quotient from the second level.’’). 

before DHS petitions are approved to 

ensure that wage levels match up with 

age, education, and experience’’ to 

ensure the employer is paying an 

accurate prevailing wage. One of these 

commenters asserted some employer 

petitions contain the same prevailing 

wage for different job opportunities, 

such as listing the same wage for a 

software engineer and a senior software 

engineer. 

These comments propose actions that 

may be undertaken by DHS but not by 

the Department. The Department cannot 

review DHS petitions before DHS 

approves them. 

Some commenters suggested new 

definitions of the terms ‘employer’ and 

‘employment,’ enhanced regulation of 

foreign labor recruiters, a ban of staffing 

companies from the H–1B program, and 

enhanced wage protections in the H–2A 

program. Other commenters expressed 

concerns related to DHS regulations and 

recent rulemaking either unrelated or 

not directly related to this rulemaking, 

including a DHS IFR regarding specialty 

occupation determinations. 

These comments express concerns or 

provide suggestions that exceed the 

scope of this rulemaking. Accordingly, 

they need not be addressed in this 

preamble. 

IV. Amendments to the Computation of 

Prevailing Wage Levels Created by the 

Final Rule 

In light of the foregoing, this final rule 

amends the Department’s regulations at 

part 20, sections 656.40 and 655.731 to 

reflect the wage level computations the 

Department will use to determine 

prevailing wages in the H–1B, H–1B1, 

E–3, EB–2, and EB–3 classifications. 

These amendments are in accordance 

with the President’s Executive Order 

(E.O.) 13788, ‘‘Buy American and Hire 

American,’’ which instructed the 

Department to ‘‘propose new rules and 

issue new guidance, to supersede or 

revise previous rules and guidance if 

appropriate, to protect the interests of 

United States workers in the 

administration of our immigration 

system.’’ 243 Additionally, the 

Department has determined that the 

existing prevailing wage levels were 

artificially low and provided an 

opportunity for employers to hire and 

retain foreign workers at wages well 

below what their U.S. counterparts earn, 

creating an incentive to prefer foreign 

workers to U.S. workers, an incentive 

that is at odds with the statutory scheme 

and causes downward pressure on the 

wages of the domestic workforce. 

Therefore, the amendments discussed 

below revising the wage provisions at 20 

CFR 655.731 and 656.40 will ensure the 

prevailing wage levels reflect the wages 

paid to U.S. workers with similar 

experience, education, and 

responsibility to those possessed by 

similarly employed foreign workers. 

1. Prevailing Wage Levels Based on the 

OES in the Permanent Labor 

Certification Program (20 CFR 656.40) 

The IFR amended this section to 

codify the practice of using four 

prevailing wage levels and to specify the 

manner in which the wages levels are 

calculated. Additionally, the IFR 

incorporated minor technical 

amendments to clarify the prevailing 

wage process and to codify the 

Department’s practice of having the 

OFLC Administrator announce, via a 

notice of implementation, annual 

updates to OES wage data. After a 

careful review of the comments and as 

discussed above, this final rule adopts a 

revised wage level computation 

methodology and other clarifying and 

technical amendments to § 656.40. 

Paragraph (b)(2)(ii)(A) describes the 

computation of the Level I Wage 

following implementation of transition 

wage rates specified under paragraph 

(b)(2)(iii). This first wage level— 

calculated as the mean of the fifth decile 

of the OES wage distribution under the 

IFR—will now be calculated as the 35th 

percentile of the wage distribution for 

the most specific occupation and 

geographic area available. Roughly 

speaking, this means that the Level I 

Wage will be adjusted downward from 

the approximate 45th percentile under 

the IFR to the exact 35th percentile of 

the relevant OES wage distribution in 

this final rule. 

Next, paragraph (b)(2)(ii)(D) provides 

that the Level IV Wage—calculated as 

the mean of the upper decile of the OES 

wage distribution—will now be 

calculated as the exact 90th percentile 

of the wage distribution for the most 

specific occupation and geographic area 

available. This means the Level IV Wage 

will decrease approximately from the 

95th percentile under the IFR to exactly 

the 90th percentile of the relevant OES 

wage distribution. Further, where the 

Department is unable to compute a 

Level IV Wage for an occupation and 

geographic area due to wage values 

exceeding the uppermost interval of the 

OES wage interval methodology, the 

Level IV Wage will be the highest of: (1) 

The current hourly wage rate applicable 

to the highest OES wage interval for the 

specific occupation and geographic area 

(also known as the footnote wage), or (2) 

the mean of the wages of all workers for 

the most specific occupation and 

geographic area available. 

For the two intermediate levels, II and 

III, the Department will continue to rely 

on the mathematical formula Congress 

provided in the INA.244 Thus, new 

paragraph (b)(2)(ii)(B) states that the 

Level II Wage shall be determined by 

first dividing the difference between 

Levels I and IV by three and then adding 

the quotient to the computed value for 

Level I. The Level III Wage is defined in 

new paragraph (b)(2)(ii)(C) as a level 

determined by first dividing the 

difference between Levels I and IV by 

three and then subtracting the quotient 

from the computed value for Level IV. 

This yields second and third wage 

levels at approximately the 53rd and 

72nd percentiles, respectively, under 

this final rule as compared to the 

computations under the IFR, which 

placed Level II Wage at approximately 

the 62nd percentile and Level III Wage 

at approximately the 78th percentile. 

Section 656.40(b)(2)(ii) in the IFR 

explained that the OFLC Administrator 

will publish the prevailing wage rates at 

least once in each calendar year, on a 

date to be determined by the 

Administrator, codifying the 

Department’s current practice of 

announcing updates to OES wage data 

via a notice of implementation, rather 

than publishing multiple prevailing 

wage rates in the Federal Register. The 

Department has adopted the language of 

the provision without change, but has 

made a minor technical change moving 

the provision to paragraph (b)(2)(iv) in 

order to accommodate revisions to the 

wage level computation provisions in 

this final rule. 

The Department is adopting without 

change revisions to § 656.40(b)(2) that 

provide greater precision in the 

language used by changing the term 

‘‘DOL’’ to ‘‘BLS’’ when describing 

which entity administers the OES 

survey and eliminate redundancy by 

deleting the language ‘‘except as 

provided in (b)(3) of this section.’’ 

Because the Department is now 

specifying within the regulation exactly 

how the prevailing wage levels are 

calculated, the revised text also removes 

the existing reference to how the levels 

are calculated—namely the reference to 

the ‘‘arithmetic mean’’—and will 

instead read: ‘‘If the job opportunity is 

not covered by a CBA, the prevailing 

wage for labor certification purposes 

shall be based on the wages of workers 


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similarly employed using the wage 

component of the OES survey, in 

accordance with subparagraph (b)(2)(i), 

unless the employer provides an 

acceptable survey under paragraphs 

(b)(3) and (g) of this section or elects to 

utilize a wage permitted under 

paragraph (b)(4) of this section.’’ The 

Department also is adopting without 

change the revisions to paragraph (a) 

that remove an out-of-date reference to 

the role of the SWAs in the prevailing 

wage determination process and an 

unnecessary reference to ‘‘arithmetic 

mean’’ that is specified in other 

paragraphs. 

2. Amending the Wage Requirement for 

LCAs in the H–1B, H–1B1, and E–3 Visa 

Classifications (20 CFR 655.731) 

The IFR made minor technical 

amendments to this section to remove 

out-of-date references, clarify use of the 

BLS’s OES survey and other permissible 

wage sources to determine prevailing 

wages, and specify that these 

determinations will be made in a 

manner consistent with the amended 

section 656.40(b)(2). After a careful 

review of the comments and as 

discussed above, this final rule adopts, 

without change, these clarifying and 

technical amendments to § 656.731. 

This final rule adopts amendments to 

paragraph (a)(2)(ii)(A) that removes an 

out-of-date reference to SWAs’ role in 

the prevailing wage determination 

process to reflect current practice and to 

provide for operational flexibilities in 

the future with respect to where PWD 

requests are processed. Non-agricultural 

PWD requests are no longer processed 

by SWAs; since 2010 they have solely 

been processed by the Department at a 

National Processing Center (NPC). PWD 

requests are primarily adjudicated by 

the NPWC, located in Washington, DC, 

but through interoperability, they may 

be processed by any NPC. The 

regulatory text is amended to reflect 

current DOL practice and to provide 

maximum flexibility for DOL to ensure 

PWDs are issued in a timely manner. 

The Department also adopts without 

change revised language in § 655.731 

that more clearly explains the 

Department will use BLS’s OES survey 

to determine the prevailing wages under 

this paragraph, as well as an additional 

sentence that specifies these 

determinations will be made in a 

manner consistent with amended 

§ 656.40(b)(2). The revised language in 

paragraphs (a)(2)(ii), (a)(2)(ii)(A), and 

(a)(2)(ii)(A)(2) also includes technical 

and clarifying revisions regarding other 

permissible wage sources (i.e., 

applicable wage determinations under 

the Davis-Bacon Act or McNamaraO’Hara Service Contract Act), as well as 

other independent authoritative or 

legitimate sources of wage data in 

accordance with paragraph (a)(2)(ii)(B) 

or (C). 

This final rule adopts without change 

language that removed the reference to 

‘‘arithmetic mean’’ in paragraph 

(a)(2)(ii) and now states ‘‘. . . the 

prevailing wage shall be based on the 

wages of workers similarly employed as 

determined by the OES survey in 

accordance with 20 CFR. 656.40(b)(2)(i) 

. . .’’ The revisions also correct an error 

referencing ‘‘H–2B nonimmigrant(s)’’ by 

changing the reference to ‘‘H–1B 

nonimmigrant(s)’’ in paragraph 

(a)(2)(ii)(A)(2). The revisions further 

provide that an NPC will continue to 

determine whether a job is covered by 

a collective bargaining agreement that 

was negotiated at arms-length, but in the 

event the occupation is not covered by 

such agreement, an NPC will determine 

the wages of workers similarly 

employed using the wage component of 

the BLS OES, unless the employer 

provides an acceptable wage survey. An 

NPC will determine the prevailing wage 

in accordance with sections 212(n) and 

212(t) of the INA and in a manner 

consistent with the newly revised 20 

CFR 656.40(b)(2). 

3. Transition Wage Rates for 

Implementing Changes Created by the 

Final Rule 

As stated in the IFR, the Department 

applied the new regulations to 

applications for prevailing wage 

determination pending with the 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 the 

Department 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. 

However, the Department received a 

number of comments expressing 

concerns that immediate 

implementation of the revised wage 

levels may have a significant negative 

impact on the economy, and that a 

phased implementation of the revised 

wage levels is appropriate to allow 

employers to adjust to the new 

computation methodology and plan 

payroll, budget, and contractual 

obligations accordingly. 

To address these concerns and 

support an orderly and seamless 

transition between the rules, the 

Department is adding paragraph 

(b)(2)(iii) to this section to provide a 

phased implementation period to the 

new prevailing wage levels. A short 

transition period also allows the 

Department to implement necessary 

changes to program operations, OES 

wage databases, and technology 

systems, and to provide training and 

technical assistance to the NPC, 

employers, and other stakeholders in 

order to familiarize them with changes 

required by this final rule. The wage 

level computations contained in this 

section will only apply to applications 

for prevailing wage determination 

pending with the NPWC on or during 

the effective date(s) of each transition 

period; applications for prevailing wage 

determinations filed with the NPWC on 

or during the effective date(s) of each 

transition period; and LCAs filed with 

the Department on or during the 

effective date(s) of each transition 

period 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(s) 

of each transition period. 

Accordingly, paragraph (b)(2)(iii)(A) 

describes the computations of the wage 

levels for the period beginning on the 

effective date of this final rule through 

June 30, 2021. The Level I Wage will 

continue to be calculated as the mean of 

the lower one-third of the wage 

distribution for the most specific 

occupation and geographic area 

available, which roughly approximates 

the 17th percentile of the wage 

distribution. The Level IV Wage will 

continue to be calculated as the mean of 

the upper two-thirds of the wage 

distribution for the most specific 

occupation and geographic area 

available, which roughly approximates 

the 67th percentile of the wage 

distribution. For the two intermediate 

levels, II and III, the Department will 

continue to rely on the mathematical 

formula Congress provided in the INA. 

Paragraph (b)(2)(iii)(B) describes the 

computations of the wage levels for the 

period beginning on July 1, 2021, 

through June 30, 2022. The Level I Wage 

will be set as either (1) 90 percent of the 

wage value calculated at the 35th 

percentile of the wage distribution 

under paragraph (b)(2)(ii)(A), or (2) the 

mean of the lower one-third of the wage 

distribution under paragraph 

(b)(2)(iii)(A)(1), whichever is highest. 

The Level IV Wage will be set as either 

(1) 90 percent of the wage value 

calculated at the 90th percentile of the 

wage distribution under paragraph 

(b)(2)(ii)(D), or (2) the mean of the upper 

two-thirds of the wage distribution 

under paragraph (b)(2)(iii)(A)(2), 

whichever is highest. For the two 

intermediate levels, II and III, the 


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Department will continue to rely on the 

mathematical formula Congress 

provided in the INA based on the wage 

levels derived under this paragraph. 

Paragraph (b)(2)(iii)(C) describes 

transition wage rates that will apply 

only to LCAs and, as applicable, 

applications for prevailing wage 

determinations submitted by employers 

seeking to employ a H–1B 

nonimmigrant worker in job 

opportunity where such H–1B 

nonimmigrant worker was, as of October 

8, 2020, the beneficiary of an approved 

I–140 Petition or eligible for an 

extension of his or her H–1B visa status 

under AC21, and eligible to be granted 

immigrant status but for application of 

the per country visa limitations or 

remains eligible for an extension of his 

or her H–1B visa status at the time the 

LCA is filed. 

Where these requirements pertaining 

to job opportunities for which LCAs are 

filed are met, paragraph (b)(2)(iii)(C)(1) 

describes the computations of the wage 

levels for the period beginning on July 

1, 2021, through June 30, 2022. The 

Level I Wage will be set as either (1) 85 

percent of the wage value calculated at 

the 35th percentile of the wage 

distribution under paragraph 

(b)(2)(ii)(A), or (2) the mean of the lower 

one-third of the wage distribution under 

paragraph (b)(2)(iii)(A)(1), whichever is 

highest. The Level IV Wage will be set 

as either (1) 85 percent of the wage 

value calculated at the 90th percentile 

of the wage distribution under 

paragraph (b)(2)(ii)(D), or (2) the mean 

of the upper two-thirds of the wage 

distribution under paragraph 

(b)(2)(iii)(A)(2), whichever is highest. 

For the two intermediate levels, II and 

III, the Department will continue to rely 

on the mathematical formula Congress 

provided in the INA based on the wage 

levels derived under this paragraph. 

Paragraph (b)(2)(iii)(C)(2) describes 

the computations of the wage levels for 

the period beginning on July 1, 2022, 

through June 30, 2023. The Level I Wage 

will be set as either (1) 90 percent of the 

wage value calculated at the 35th 

percentile of the wage distribution 

under paragraph (b)(2)(ii)(A), or (2) the 

wage value provided from the 

calculation specified under paragraph 

(b)(2)(iii)(C)(1)(i), whichever is highest. 

The Level IV Wage will be set as either 

(1) 90 percent of the wage value 

calculated at the 90th percentile of the 

wage distribution under paragraph 

(b)(2)(ii)(D), or (2) the wage value 

provided from the calculation specified 

under paragraph (b)(2)(iii)(C)(1)(ii), 

whichever is highest. For the two 

intermediate levels, II and III, the 

Department will continue to rely on the 

mathematical formula Congress 

provided in the INA based on the wage 

levels derived under this paragraph. 

Paragraph (b)(2)(iii)(C)(3) describes 

the computations of the wage levels for 

the period beginning on July 1, 2023, 

through June 30, 2024. The Level I Wage 

will be set as either (1) 95 percent of the 

wage value calculated at the 35th 

percentile of the wage distribution 

under paragraph (b)(2)(ii)(A), or (2) the 

wage value provided from the 

calculation specified under paragraph 

(b)(2)(iii)(C)(2)(i), whichever is highest. 

The Level IV Wage will be set as either 

(1) 95 percent of the wage value 

calculated at the 90th percentile of the 

wage distribution under paragraph 

(b)(2)(ii)(D), or (2) the wage value 

provided from the calculation specified 

under paragraph (b)(2)(iii)(C)(2)(ii), 

whichever is highest. For the two 

intermediate levels, II and III, the 

Department will continue to rely on the 

mathematical formula Congress 

provided in the INA based on the wage 

levels derived under this paragraph. 

Following this transition period and 

beginning on July 1, 2024, paragraph 

(b)(2)(iii)(C)(4) requires that all 

prevailing wage calculations for job 

opportunities for which LCAs are filed 

shall be provided by the OFLC 

Administrator as specified under 

paragraph (b)(2)(ii) of this section. 

Where the Department is unable to 

compute a Level IV Wage under 

paragraph (b)(2)(iii) for an occupation 

and geographic area due to wage values 

exceeding the uppermost interval of the 

OES wage interval methodology, 

paragraph (b)(2)(iii)(D) specifies that the 

OFLC Administrator shall determine the 

Level IV Wage as the highest of: (1) The 

current hourly wage rate applicable to 

the highest OES wage interval for the 

specific occupation and geographic area, 

or (2) the mean of the wages of all 

workers for the most specific occupation 

and geographic area available. 

V. Statutory and Regulatory 

Requirements 

A. Executive Orders 12866 (Regulatory 

Planning and Review), Executive Order 

13563 (Improving Regulation and 

Regulatory Review), and Executive 

Order 13771 (Reducing Regulation and 

Controlling Regulatory Costs) 

Under E.O. 12866, the OMB’s Office 

of Information and Regulatory Affairs 

(OIRA) determines whether a regulatory 

action is significant and, therefore, 

subject to the requirements of the E.O. 

and review by OMB. 58 FR 51735. 

Section 3(f) of E.O. 12866 defines a 

‘‘significant regulatory action’’ as an 

action that is likely to result in a rule 

that: (1) Has an annual effect on the 

economy of $100 million or more, or 

adversely affects in a material way a 

sector of the economy, productivity, 

competition, jobs, the environment, 

public health or safety, or State, local, 

or tribal governments or communities 

(also referred to as economically 

significant); (2) creates serious 

inconsistency or otherwise interferes 

with an action taken or planned by 

another agency; (3) materially alters the 

budgetary impacts of entitlement grants, 

user fees, or loan programs, or the rights 

and obligations of recipients thereof; or 

(4) raises novel legal or policy issues 

arising out of legal mandates, the 

President’s priorities, or the principles 

set forth in the E.O. Id. Pursuant to E.O. 

12866, OIRA has determined that this is 

an economically significant regulatory 

action. However, OIRA has waived 

review of this regulation under E.O. 

12866, section 6(a)(3)(A). Pursuant to 

the Congressional Review Act (5 U.S.C. 

801 et seq.), OIRA has designated that 

this rule is a ‘‘major rule,’’ as defined by 

5 U.S.C. 804(2). 

E.O. 13563 directs agencies to propose 

or adopt a regulation only upon a 

reasoned determination that its benefits 

justify its costs; the regulation is tailored 

to impose the least burden on society, 

consistent with achieving the regulatory 

objectives; and in choosing among 

alternative regulatory approaches, the 

agency has selected those approaches 

that maximize net benefits. E.O. 13563 

recognizes that some benefits are 

difficult to quantify and provides that, 

where appropriate and permitted by 

law, agencies may consider and 

qualitatively discuss values that are 

difficult or impossible to quantify, 

including equity, human dignity, 

fairness, and distributive impacts. 

Outline of the Analysis 

Section III.B.1 describes the need for 

the final rule, and section III.B.2 

describes the process used to estimate 

the costs of the rule and the general 

inputs used to reach these estimates, 

such as wages and number of affected 

entities. Section III.B.3 explains how the 

provisions of the final rule will result in 

costs and transfer payments and 

presents the calculations the 

Department used to reach the cost and 

transfer payment estimates. In addition, 

this section describes the qualitative 

transfer payments and benefits of the 

changes contained in this final rule. 

Section III.B.4 summarizes the 

estimated first-year and 10-year total 

and annualized costs, perpetuated costs, 

and transfer payments of the final rule. 

Finally, section III.B.5 describes the 

regulatory alternatives that were 


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245The final rule will have an annualized net cost 

of $2.75 million and a total 10-year cost of $23.47 

million at a discount rate of 3 percent in 2019 

dollars. 

246The final rule will result in annualized 

transfer payments of $15.34 billion and total 10- 

year transfer payments of $130.83 billion at a 

discount rate of 3 percent in 2019 dollars. 

247To comply with E.O. 13771 accounting, the 

Department multiplied the initial and then constant 

rule familiarization costs (initial cost of $4,077,113; 

constant costs of $2,316,661 in 2019$) by the GDP 

deflator (0.94242) to convert the cost to 2016 dollars 

(initial cost of $4,077,113; constant costs of 

$2,316,661 in 2019$). The Department used this 

result to determine the perpetual annualized cost 

($2,431,831) at a discount rate of 7 percent in 2016 

dollars. Assuming the rule takes effect in 2020, the 

Department divided $2,431,831 by 1.074, which 

equals $1,855,232. This amount reflects 

implementation of the rule in 2020. 

248As explained, infra, the Department did not 

quantify transfer payments associated with new 

certifications under the Permanent Labor 

Certification Program (e.g., EB–2 and EB–3 

classifications) because they are expected to be de 

minimis. 

considered during the development of 

the final rule. 

Summary of the Analysis 

The Department expects that the final 

rule will result in costs and transfer 

payments. As shown in Exhibit 1, the 

final rule will have an annualized cost 

of $2.90 million and a total 10-year cost 

of $20.34 million at a discount rate of 

7 percent in 2019 dollars.245 The final 

rule will result in annualized transfer 

payments of $14.97 billion and total 10- 

year transfer payments of $105.16 

billion at a discount rate of 7 percent in 

2019 dollars.246 When the Department 

uses a perpetual time horizon to allow 

for cost comparisons under E.O. 13771, 

the annualized cost of this final rule is 

$1.86 million at a discount rate of 7 

percent in 2016 dollars.247

EXHIBIT 1—ESTIMATED MONETIZED COSTS AND TRANSFER PAYMENTS OF THE FINAL RULE

[2019 $ millions] 

Costs Transfer 

payments 

10-Year Total with a Discount Rate of 3% .............................................................................................................. $23.47 $130,830 

10-Year Total with a Discount Rate of 7% .............................................................................................................. 20.34 105,157 

Annualized at a Discount Rate of 3% ..................................................................................................................... 2.75 15,337 

Annualized at a Discount Rate of 7% ..................................................................................................................... 2.90 14,972 

Perpetuated Costs* with a Discount Rate of 7% (2016 $ Millions) ........................................................................ ........................ 1.86 

The total cost associated with the 

final rule includes only rule 

familiarization. The rule is not expected 

to result in any cost savings. Transfer 

payments are the result of changes to 

the computation of prevailing wage 

rates for employment opportunities that 

U.S. employers seek to fill with foreign 

workers on a temporary basis through 

H–1B, H–1B1, and E–3 nonimmigrant 

visas.248 See the costs and transfer 

payments subsections of section III.B.3 

(Subject-by-Subject Analysis) below for 

a detailed explanation. 

The Department was unable to 

quantify some transfer payments and 

benefits of the final rule. The 

Department describes them qualitatively 

in section III.B.3 (Subject-by-Subject 

Analysis). 

1. Need for Regulation 

The Department has determined that 

this rulemaking is needed to update the 

computation of prevailing wage levels 

under the existing four-tier wage 

structure to better reflect the actual 

wages earned by U.S. workers similarly 

employed to foreign workers, eliminate 

economic incentive or advantage in 

hiring foreign workers on a permanent 

or temporary basis in the United States, 

and further the goals of E.O. 13788, Buy 

American and Hire American. See 82 FR 

18837. The ‘‘Hire American’’ directive 

of the E.O. articulates the executive 

branch policy to rigorously enforce and 

administer the laws governing entry of 

nonimmigrant workers into the United 

States in order to create higher wages 

and employment rates for U.S. workers 

and to protect their economic interests. 

Id. sec. 2(b). It directs Federal agencies, 

including the Department, to propose 

new rules and issue new guidance to 

prevent fraud and abuse in 

nonimmigrant visa programs, thereby 

protecting U.S. workers. Id. sec. 5. 

The Department is therefore 

amending its regulations at Sections 

656.40 and 655.731 to update the 

methodology it will use to determine 

prevailing wages using wage data from 

the BLS OES survey for job 

opportunities in the H–1B, H–1B1, E–3, 

and permanent labor certification 

programs. The reports discussed and 

analyses provided in the preamble 

above explain how application of the 

current wage methodology for the fourtier OES wage structure fails to produce 

prevailing wages at a level consistent 

with the actual wages earned by U.S. 

workers similarly employed to foreign 

workers and, therefore, has a 

suppressive effect on the wages of U.S. 

workers similarly employed. The 

Department has a statutory mandate to 

protect the wages and working 

conditions of U.S. workers similarly 

employed from adverse effects caused 

by the employment of foreign workers 

in the United States on a permanent or 

temporary basis. 

2. Analysis Considerations 

The Department estimated the costs 

and transfer payments of the final rule 

relative to the baseline (the regulations 

governing permanent labor certifications 

at 20 CFR part 656 and labor condition 

applications at 20 CFR part 655, subpart 

H). 

In accordance with the regulatory 

analysis guidance articulated in OMB’s 

Circular A–4 and consistent with the 

Department’s practices in previous 

rulemakings, this regulatory analysis 

focuses on the likely consequences of 

the final rule (i.e., costs and transfer 

payments that accrue to entities 

affected). The analysis covers 10 years 

(from 2021 through 2030) to ensure it 

captures major costs and transfer 

payments that accrue over time. The 

Department expresses all quantifiable 

impacts in 2019 dollars and uses 

discount rates of 3 and 7 percent, 

pursuant to Circular A–4. 

Exhibit 2 presents the number of 

entities affected by the final rule. The 

number of affected entities is calculated 

using OFLC performance data from 

fiscal years (FY) 2018, 2019, and 2020. 

The Department uses them throughout 

this analysis to estimate the costs and 

transfer payments of the final rule. 


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249The total unique LCA employers in 2018, 

2019, and 2020 were 57,682, 63,027, and 55,540, 

respectively. 250The total number of worker positions 

associated with LCA certifications that use OES 

prevailing wages in 2018, 2019, and 2020 were 

1,022,908, 907,732, and 782,696, respectively. 

251The unique employers in 2018, 2019, and 

2020 were 28,856, 23,596, and 21,236, respectively. 

252Bureau of Labor Statistics. (2019). May 2019 

National Occupational Employment and Wage 

Estimates: 13–1071—Human Resources Specialist. 

Retrieved from: https://www.bls.gov/oes/current/ 

oes131071.htm. 

253Cody Rice, U.S. Environmental Protection 

Agency, ‘‘Wage Rates for Economic Analyses of the 

Toxics Release Inventory Program,’’ June 10, 2002, 

https://www.regulations.gov/document?D=EPA-HQOPPT-2014-0650-0005. 

254BLS. (2019). ‘‘2019 Employer Costs for 

Employee Compensation.’’ Retrieved from: https:// 

www.bls.gov/news.release/ecec.toc.htm. Ratio of 

total compensation to wages and salaries for all 

private industry workers. 

255Numbers may slightly differ due to rounding. 

EXHIBIT 2—NUMBER OF AFFECTED ENTITIES BY TYPE

[FY 2018–2020 average] 

Entity type Number 

Unique H–1B Program Certified Employers 249 .................................................................................................................................. 58,750 

H–1B Program Certified Worker Positions with Prevailing Wage Set by OES250 ............................................................................. 904,445 

Unique PERM Employers 251 .............................................................................................................................................................. 24,563 

Estimated Number of Workers and 

Change in Hours 

The Department presents the 

estimated average number of foreign 

worker applicants and the change in 

burden hours required for rule 

familiarization in section III.B.3 

(Subject-by-Subject Analysis). 

Compensation Rates 

In section III.B.3 (Subject-by-Subject 

Analysis), the Department presents the 

costs, including labor, associated with 

implementation of the provisions 

contained in this final rule. Exhibit 3 

presents the hourly compensation rates 

for the occupational categories expected 

to experience a change in the number of 

hours necessary to comply with the 

final rule. The Department used the BLS 

mean hourly wage rate for private sector 

human resources specialists.252 Wage 

rates were adjusted to reflect total 

compensation, which includes nonwage factors such as overhead and 

fringe benefits (e.g., health and 

retirement benefits). We used an 

overhead rate of 17 percent 253 and a 

fringe benefits rate based on the ratio of 

average total compensation to average 

wages and salaries in 2019. For the 

private sector employees, we used a 

fringe benefits rate of 42 percent.254

The Department received one 

comment on the adjustment of wage 

rates to reflect total compensation. One 

commenter said the Department had 

underestimated the cost of the program 

because fringe and overhead were 

included in calculations of costs and 

transfers. In response to the 

commenter’s concern, the wage transfer 

calculations in the IFR and the final rule 

do not include overhead or fringe 

benefits; they are raw wages. Overhead 

and fringe benefits were only applied to 

staffing wages in the cost section. The 

commenter’s calculation of fringe and 

overhead application was incorrect 

when suggesting how they were 

applied. The 17 percent overhead rate is 

not applied after calculating the fringe 

rate; instead, the fringe rate and the 

overhead rates are applied 

simultaneously to wages as shown in 

Exhibit 3. 

The fringe wage rate is based on 

Employer Costs for Employee 

Compensation data which includes paid 

leave; supplemental pay (i.e., overtime 

and premium, shift differentials, and 

nonproduction bonuses); insurance (i.e., 

life, health, short-term disability, and 

long-term disability); retirement and 

savings; and legally required benefits 

(i.e., Social Security, Medicare, federal 

unemployment insurance, state 

unemployment insurance, and workers’ 

compensation). As wages increase the 

costs associated with paid leave, 

retirement savings, and supplemental 

pay will also increase. 

The Department used the hourly 

compensation rates presented in Exhibit 

3 to estimate the labor costs. 

EXHIBIT 3—COMPENSATION RATES

[2019 dollars] 255

Position Base hourly 

wage rate Fringe rate Overhead costs Hourly compensation rate 

(a) (b) (c) d = a + b + c 

HR Specialist ....................................................................... $32.58 $13.81 ($32.58 × 0.42) $5.54 ($32.58 × 0.17) $51.93 

3. Subject-by-Subject Analysis 

The Department’s analysis below 

covers the estimated costs and transfer 

payments of the final rule. In 

accordance with Circular A–4, the 

Department considers transfer payments 

as payments from one group to another 

that do not affect total resources 

available to society. The regulatory 

impact analysis focuses on the costs and 

transfer payments that can be attributed 

exclusively to the new requirements in 

the final rule. 

Costs 

The following section describes the 

costs of the final rule. 

Rule Familiarization 

When the final rule takes effect, 

existing employers of foreign workers 

with H–1B, H–1B1, E–3 visas, and those 

employers sponsoring foreign workers 

for permanent employment, will need to 

familiarize themselves with the new 

regulations. Consequently, this imposes 

a one-time cost for existing employers in 

the temporary and permanent visa 

programs in the first year. Each year, 

there are new employers that participate 

in the temporary and permanent visa 

programs. Therefore, in each year 

subsequent to the first year, new 

employers will need to familiarize 

themselves with the new regulations. 

To estimate the first-year cost of rule 

familiarization, the Department 

calculated the average (83,312) number 

of unique employers requesting H–1B 

certifications and PERM 


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256The total number of unique employers 

requesting H–1B certifications and PERM 

certifications in FY18 (57,682 + 28,856 = 86,538), 

FY19 (63,027 + 23,596 = 86,623), and FY20 (55,540 

+ 21,236 = 76,776). 

257This final rule amends parts of an existing 

regulation. Therefore, the Department estimates 1- 

hour to review the rule assuming a high number of 

readers familiar with the existing regulation. 

258The total number of new employers in FY19 

was 51,289 (35,790 H1B + 15,499 PERM), and in 

FY20 was 43,389 (29,051 H1B + 14,338 PERM). 

certifications.256 The average number of 

unique H–1B and PERM employers 

(83,312) was multiplied by the 

estimated amount of time required to 

review the rule (1 hour).257 This number 

was then multiplied by the hourly, fully 

loaded compensation rate of Human 

Resources Specialists ($51.93 per hour). 

This calculation results in an initial cost 

of $4.33 million in the first year after the 

final rule takes effect. Each year after the 

first year the same calculation is done 

for the average number of new unique 

employers requesting H–1B and PERM 

certifications in FY 2019 and FY 2020 

(47,339).258 This calculation results in a 

continuing annual undiscounted cost of 

$2.46 million in years 2–10 of the 

analysis. The one-time and continuing 

cost yields a total average annual 

undiscounted cost of $2.65 million. The 

annualized cost over the 10-year period 

is $2.75 million and $2.90 million at 

discount rates of 3 and 7 percent, 

respectively. 

Transfer Payments 

Quantifiable Transfer Payments 

This section discusses the 

quantifiable transfer payments related to 

changes to the computation of the 

prevailing wage levels. 

As discussed in the preamble, the 

Department determined that current 

wage level methodology results in 

prevailing wage rates for temporary and 

permanent workers that are far below 

what their U.S. counterparts are likely 

paid, which has a suppressive effect on 

the wages of similarly employed U.S. 

workers. While allowing employers to 

access higher-skilled H–1B workers to 

fill specialized positions can help U.S. 

workers’ job opportunities in some 

instances, the benefits of this policy 

diminish or disappear when the 

prevailing wage levels do not accurately 

reflect the wages paid to similarly 

employed workers in the U.S. labor 

market. The distortions resulting from a 

poor calculation of the prevailing wage 

allow some firms to replace qualified 

U.S. workers with lower-cost foreign 

workers. 

Under this final rule, the Department 

will compute the Level I Wage for PERM 

labor certifications and LCAs as the 35th 

percentile of the OES wage distribution 

for the most specific occupation and 

geographic area available, rather than 

the mean of the fifth decile used in the 

IFR. Roughly speaking, this means that 

the first wage level will be decreased 

from the 45th percentile to the 35th 

percentile. The Department will 

compute the Level IV Wage as the 90th 

percentile of the OES wage distribution 

for the most specific occupation and 

geographic area available, rather than 

the arithmetic mean of the upper decile 

used in the IFR. This means the fourth 

wage level will decrease approximately 

from the 95th percentile to the 90th 

percentile. 

Consistent with the formula provided 

in the INA, the Level II Wage will be 

calculated by dividing by three, the 

difference between Levels I and IV, and 

adding the quotient to the computed 

value for Level I. The Level III Wage 

will be calculated by dividing by three 

the difference between Levels I and IV, 

and subtracting the quotient from the 

computed value for Level IV. This 

yields a Level II Wage at approximately 

the 53rd percentile and a Level III Wage 

at approximately the 72nd percentile, as 

compared to the current computation, 

which places Level II at approximately 

the 34th percentile and Level III at 

approximately the 50th percentile. 

This final rule also provides for a 

transition period from the current wage 

methodology to the wage methodology 

contained in this final rule to give 

foreign workers and their employers 

time to adapt to the new wage rates. For 

most job opportunities, the transition 

will occur in two steps, following a 

short delayed implementation period, 

and conclude on July 1, 2022. For job 

opportunities that will be filled by 

workers who are the beneficiary of an 

approved Immigrant Petition for Alien 

Worker, or successor form, or is eligible 

for an extension of his or her H–1B 

status under sections 106(a) and (b) of 

the American Competitiveness in the 

Twenty-first Century Act of 2000 

(AC21), Public Law 106–313, as 

amended by the 21st Century 

Department of Justice Appropriations 

Authorization Act, Public Law 107–273 

(2002), the transition will occur in four 

steps, following a short delayed 

implementation period, and conclude 

on July 1, 2024. 

For the two-step transition the current 

wage levels will be in effect from 

January 1, 2021 through June 30, 2021. 

From July 1, 2021 through June 30, 

2022, the prevailing wage will be 90 

percent of the final wage level. From 

July 1, 2022 and onward the prevailing 

wage will be the final wage levels. For 

the three and a half year transition the 

current wage levels will be in effect 

from January 1, 2021 through June 30, 

2021. From July 1, 2021 through June 

30, 2022 the prevailing wage will be 85 

percent of the final wage levels; from 

July 1, 2022 through June 30, 2023 the 

prevailing wage will be 90 percent of 

the final wage levels; from July 1, 2023 

through June 30 2024 the prevailing 

wage will be 95 percent of the final 

wage levels; and from July 1, 2024 

onwards the prevailing wage will be the 

final wage levels. 

Finally, the Department is revising 

§ 655.731 to explain that it will use the 

BLS’s OES survey wage data to establish 

the prevailing wages in the H–1B, H– 

1B1, and E–3 visa classifications. The 

Department added a sentence to explain 

that these determinations will be made 

by the OFLC NPC in a manner 

consistent with § 656.40(b)(2). 

The Department calculated the impact 

on wages that will occur from 

implementation of the prevailing wage 

computation changes contained in the 

final rule. It is expected that the 

increase in prevailing wages under the 

final rule will incentivize some 

employers to employ U.S. workers 

instead of foreign workers from the H– 

1B program, but nonetheless, the 

Department still expects that the same 

number of H–1B visas will be granted 

under the annual caps. For many years, 

the Department has observed that the 

number of petitions exceeds the 

numerical cap, as the annual H–1B cap 

was reached within the first five 

business days each year from FY 2014 

through FY 2020, and higher prevailing 

wage levels do not necessarily mean 

that demand for temporary foreign labor 

will fall below the available supply of 

visas. Under existing prevailing wage 

levels, which the Department has shown 

are too low and do not accurately reflect 

the wages paid to similarly employed 

U.S. workers, demand for temporary 

foreign labor far exceeds the statutory 

limits on supply. Usually prices rise in 

a market when demand exceeds supply. 

However, given the statutory framework 

of the H–1B system, along with the 

lower wages for comparable work in 

many other countries and the nonpecuniary benefits of participating the 

H–1B program, prices for temporary 

foreign labor under the H–1B program 

have stayed too low to depress overall 

employer demand. 

Under the final rule, wage transfers 

will still occur in cases where U.S. 

workers are employed instead of H–1B 

workers; therefore, no adjustments to 

the wage estimates are necessary due to 

this effect. However, it is possible that 

prevailing wage increases will induce 

some employers to train and provide 


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259Not all E–3 applicants need to file an I–129 

with USCIS. 

more working hours to incumbent 

workers, resulting in no increase in 

employment but an increase in earnings. 

It is also possible that prevailing wage 

increases will induce some employers to 

not hire a worker at all (either a U.S. 

worker or a worker from the H–1B 

program that is subject to the annual cap 

or not subject to the annual cap), 

resulting in a decrease in employment 

of guest workers. However, given that 

participation in temporary labor 

certification programs is voluntary, and 

there exists an alternative labor market 

of U.S. workers who are not being 

prevented from accepting work offered 

at potentially lower market-based 

wages, there is some reason to doubt 

whether an increase in prevailing wages 

will lead to an efficiency loss from 

decreased labor demand. Due to data 

limitations on the expected change in 

labor demand and supply of U.S. 

workers, the Department cannot 

accurately measure the efficiency gains 

or losses to the U.S. labor market 

created by the new prevailing wage 

system. The Department discusses this 

potential impact qualitatively; the 

Department invited comment on how to 

estimate changes to efficiency from the 

new prevailing wage levels, but did not 

receive any such comment. 

The Department received two 

comments suggesting that the transfers 

of the rule were underestimated. 

One commenter suggests that the 

analysis in the IFR underestimates the 

transfer payments of the IFR. They cite 

a 2020 Cato Institute study that found 

the wage increases, using interpolated 

wages from the publicly available BLS 

OES dataset resulted in underestimates 

of the wage impacts of the IFR. In 

addition, they suggested that the use of 

the 90th percentile as a proxy for the 

95th percentile significantly 

underestimated wages. 

In response to the commenter’s 

concern, the IFR estimate of wages was 

based on BLS OES data publicly 

available at the time of publication. 

Therefore, the estimated wage impacts 

in the IFR were conservative, 

particularly for workers with wages set 

at the 95th percentile where wage 

impacts were calculated based on the 

publicly available 90th percentile. In 

this final rule the Department revises its 

wage tier methodology, including 

setting the Level IV percentile at the 

90th percentile. The change in 

methodology will result in wage tiers 

that are set at percentiles that are lower 

than those presented in the IFR and that 

will be phased in over a period of 2 

years for applicants that are new to the 

H–1B program, and three and a half 

years for applicants on track for lawful 

permanent residency (LPR). 

Another commentator suggested the 

transfers were underestimated and they 

calculated that the IFR was based on 

wage increases of $4,825 to $9,651 per 

worker based on Exhibit 5 and Exhibit 

6 of the IFR. 

In response to the commenter’s 

concern, Exhibit 5 and Exhibit 6 of the 

IFR contained illustrative wage data for 

a particular SOC-code and area in BLS 

OES and do not reflect the average 

impact of the IFR. They instead serve 

the purpose of illustrating the 

Department’s wage impact calculations. 

Wage increases vary by SOC code and 

geographic area and therefore can be 

higher than these examples. The 

analysis for the IFR estimated that 

workers facing a wage increase (i.e., 

those that were offered less under the 

baseline than required by the IFR) had 

an average increase of $27,000. 

Under this final rule the Department 

revises the wage level percentiles of the 

IFR with some modifications to account 

for the two-step and three and a half 

year transition periods that are new to 

the final rule. Therefore, the final rule 

wage impact estimation follows four 

main steps: Step 1—simulate wage 

impacts with the revised percentiles for 

each transition wage level using 

historical certification data and adjust 

wage impacts for USCIS approval rates. 

Step 2—project 10-year series wage 

impacts incorporating the transition 

schedule. Step 3—during the transition 

period adjust the population of workers 

eligible for the two-step transition 

versus the three and a half year 

transition. Step 4—Estimate total 

transfers by combining adjusted twostep and three and a half year transition 

total wage impacts. This methodology is 

described in more detail below. 

Step 1—simulate wage impacts with 

the revised percentiles for each 

transition wage level and adjusted 

based on USCIS approval rates.259 For 

each H–1B certification in FY 2018, FY 

2019, and FY 2020, the Department 

used the difference between the 

estimated prevailing wage level under 

the final rule and the wage offered 

under the current baseline to establish 

the wage impact of the prevailing wage 

computation changes in each calendar 

year of the certification’s employment 

period. Under the H–1B visa 

classification, employment periods for 

certifications can last for up to three 

years in length and generally begin up 

to six months after a certification is 

issued by the Department. Therefore, a 

given fiscal year can have wage impacts 

that start in that calendar year and last 

up to three years, or wage impacts that 

could start in the following calendar 

year and have an end-date up to four 

calendar years past the fiscal year. For 

example, an employment start date in 

March of 2019 may be associated with 

an H–1B application certified by the 

Department during FY 2018 and, if that 

certified application contains a threeyear employment period, the wage 

impacts on the employer will extend 

through March of 2022. This final rule 

does not retroactively impact certified 

wages, so there will be new H–1B 

applications certified by the Department 

during FY 2020 that may extend well 

into the analysis period. Therefore, the 

first year of the rule will only impact 

new certifications, in the second year 

new and continuing certifications from 

year 1 will be impacted, and in the third 

year and beyond both new and 

continuing certifications from years 1 

and 2 will be impacted. 

To account for this pattern of wage 

impacts, we classify certifications into 

three length cohorts and calculate 

annual wage impacts for each length 

cohort based on FY 2018 through FY 

2020 data. The length cohorts are: 

Certifications lasting less than 1 year, 

certifications lasting 1–2 years, and 

certifications lasting 2–3 years. For each 

length cohort we calculate wage impacts 

for their first calendar year (‘‘new’’), 

their second calendar year (‘‘ongoing’’), 

and third or more calendar year 

(‘‘ongoing +’’) 

H–1B, H–1B1, or E–3 applications 

certified by the Department do not 

necessarily result in employer wage 

obligations. After obtaining a 

certification, employers applying under 

the H–1B and H–1B1 programs, and in 

certain situations, the E–3 program must 

then submit a Form I–129, Petition for 

a Nonimmigrant Worker for approval by 

U.S. Citizenship and Immigration 

Services (USCIS). USCIS may approve 

or deny the H–1B visa petition. USCIS 

approval data represents approvals of 

petitions based on both certifications 

issued by the Department that used OES 

data for the prevailing wage, or 

certifications that were based on other 

approved sources to determine the 

prevailing wage (e.g., Collective 

Bargaining Agreements, employerprovided surveys). Exhibit 4 

summarizes FY 2018 and FY 2019 data 

on H–1B, H–1B1, and E–3 certifications 

with their prevailing wage based on the 

OES survey, adjusted USCIS approvals, 


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260Form I–129 data for H–1B is obtained from the 

USCIS H–1B data hub. Retrieved from: https://

www.uscis.gov/tools/reports-and-studies/h-1bemployer-data-hub. 

261Both USCIS H–1B data and LCA data indicate 

the state for which the work is to be completed. 

Therefore, approval rates are calculated separately 

for each state and used in the analysis. 262BLS OES data for Metropolitan and 

Nonmetropolitan Areas acquired for each year 

required for the analysis: May 2016-May 2019. 

Retrieved from https://www.bls.gov/oes/current/ 

oessrcma.htm 

263For example, if OES reports a wage of $30 per 

hour at the 25th25th percentile and $40 per hour 

at the 50th50th percentile then the 35th35th 

percentile is interpolated as $30 + 

($40¥$30)*((35¥25)/(50¥35)) = $36.66 per hour. 

and approval rate.260 To account for 

approval rates that may differ by 

geographic location and whether a 

certification is new or continuing, we 

adjust each certification’s wage impact 

by the approval rate of the State of 

intended employment for the 

employer’s certification and whether it 

is a new or continuing application.261

EXHIBIT 4—LCA AND I–129 H–1B, H–1B1, AND E–3 APPROVALS AND DENIALS

FY 2018 FY 2019 Average 

percent 

LCA certified approved USCIS 

approved +

Percent 

approved LCA certified USCIS approved +

Percent 

approved 

Total .............................................................. 1,023,552 308,147 30 908,218 368,811 41 35 

New ............................................................... 423,174 80,855 19 378,175 132,965 35 27 

Continuing * ................................................... 600,378 227,292 38 530,043 235,846 44 41 

* Includes: ‘‘Continued Employment’’, ‘‘Change Previous Employment’’, ‘‘Change Employer’’, ‘‘Amended Petition’’, ‘‘New Concurrent Employment’’. 

+Approval numbers adjusted by 92% to account for approvals with prevailing wages set by sources other than OES. 

To estimate the wage impacts of new 

percentiles contained in this final rule, 

the Department used publicly available 

BLS OES data that reports the 10th, 

25th, 50th, 75th, and 90th percentile 

wages by SOC code and metropolitan or 

non-metropolitan area.262 In order to 

estimate wages for the new final rule 

levels of 35th, 53rd, 72nd, and 90th 

percentiles, the Department linearly 

interpolated between relevant 

percentiles for reported wages at each 

SOC code and geographic area 

combination.263 For each certification 

from FY 2018 through FY 2020 the new 

wage was estimated for the final rule 

wage levels as well as all transition 

periods (i.e., 90 percent for the two-step 

transition; 85 percent, 90 percent, and 

95 percent for the three and a half year 

transition). 

An illustrative example of 

calculations used to calculate wage 

impacts under the final rule is provided 

in Exhibit 5 and Exhibit 6 below. In 

Exhibit 5, to calculate projected wage 

impacts under the final rule, the 

Department first multiplied the number 

of certified workers by the number of 

hours worked in each calendar year 

(2,080 hours) and the new prevailing 

wage for the level the workers were 

certified at for their particular SOC and 

the geographic area combination. The 

examples in Exhibit 5 set forth how the 

Department calculated the final rule 

wage impact for an individual case of 

each length cohort. 

EXHIBIT 5—PREVAILING WAGE UNDER THE FINAL RULE

[Example cases] 

Length cohort 

Number of 

certified 

workers 

Prevailing 

wage 

(hour) 

Number of 

hours 

worked in 

2018 

Number of 

hours 

worked in 

2019 

Number of 

hours 

worked in 

2020 

Total wages 

2018 

Total wages 

2019 

Total wages 

2020 

Total wages 

2018–2020 

USCIS approval rate Adjusted 

total wages 

(a) (b) (c) (d) (e) (a*b*c) = (f) (a*b*d) = (g) (a*b*e) = (h) (f+g+h) = (i) (j) (i*j) 

<1 Year ................................. 100 $44.27 648 1,032 0 $2,868,437 $4,568,251 $0 $7,436,688 33% $2,444,080 

1–2 Years .............................. 100 34.76 0 2,080 2,080 0 7,230,496 7,230,496 14,460,992 49 7,097,181 

2–3 Years .............................. 100 27.37 528 2,080 2,080 1,445,030 5,692,544 5,692,544 12,830,118 31 4,002,637 

After the total wages for the final rule 

was determined, the Department 

calculated the baseline wage. The 

baseline wage is always equal to or 

greater than the baseline prevailing 

wage because some certifications offer a 

wage higher than the prevailing wage. 

The methodology is the same as that 

used to estimate the projected wages 

under the final rule: Number of certified 

workers is multiplied by the number of 

hours worked in each calendar year 

(based on 2,080 hours in a full year) of 

certified employment and the actual 

offered wage for the certified workers 

(Exhibit 6 provides an example of the 

calculation of the baseline wages for the 

same case as in Exhibit 5). 

EXHIBIT 6—CURRENT PREVAILING WAGE

[Example cases] 

Length cohort 

Number of 

certified 

workers 

Prevailing 

wage 

(year) 

Prevailing 

wage 

Number of 

hours 

worked in 

2018 

Number of 

hours 

worked in 

2019 

Number of 

hours 

worked in 

2020 

Total wages 

2018 

Total wages 

2019 

Total wages 

2020 

Total wages 

2018–2020 

USCIS approval rate Adjusted 

total wages 

(a) (b) (b/2080) = 

(c) 

(d) (e) (f) (a*c*d) = (g) (a*c*e) = (h) (a*c*f) = (i) (g+h+i) = (j) (k) (j*k) 

<1 Year ......... 100 $77,459 $37.24 648 1,032 0 $2,413,146 $3,843,158 $0 $6,256,304 33% $2,056,144 

1–2 Years ...... 100 41,163 19.79 0 2,080 2,080 0 4,116,300 4,116,300 8,232,600 49 4,040,404 

2–3 Years ...... 100 43,846 21.08 528 2,080 2,080 1,113,014 4,384,600 4,384,600 9,882,214 31 3,082,973 

Once the baseline offered wage was 

obtained, the Department estimated the 

wage impact of the final rule prevailing 

wage levels by subtracting the baseline 

offered wage for each calendar year from 

the final rule prevailing wage. The total 


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264 In FY 2018, 7 percent of certifications do not 

match, in FY 2019 9 percent, and FY 2020 21 

percent. 

265Approximately 85 percent of matched workers 

in FY 2019 certification data have wage impacts. 

wage impact was then multiplied by the 

average USCIS petition beneficiary 

approval rate for the State of intended 

employment. Here, the Department 

presents the wage impacts for the 

examples in Exhibits 5 and 6, above. For 

the length cohort less than 1 year, the 

impact in 2018 was $149,632 

(($2,868,437 ¥ $2,413,146) * 0.33) and 

$238,303 in 2019 (($4,568,251 ¥ 

$3,843,158) * 0.33). For the length 

cohort of 1–2 years, the impact in 2019 

was $1,528,388 (($7,230,496 ¥ 

$4,116,300) * 0.49), and in 2020 was 

$1,528,388 (($7,230,496 ¥ $4,116,300) * 

0.49). The example for length cohort 2– 

3 years had wage impacts in 2018, 2019, 

and 2020. In the 2018 the wage impact 

was $103,580 (($1,445,030 ¥ 

$1,113,014) * 0.31), $408,042 in 2019 

(($5,692,544 ¥ $4,384,600) * 0.31), and 

$2,947,905 in 2020 (($5,692,544 ¥ 

$4,384,600) * 0.31). 

Existing prevailing wage data from the 

Foreign Labor Certification (FLC) Data 

Center, accessible at http://

www.flcdatacenter.com, contains wage 

data for each SOC code and geographic 

area combination that are not readily 

available in the public OES data used to 

estimate new prevailing wage levels. For 

example, when an OES wage is not 

releasable for a geographic area, the 

prevailing wage available through the 

FLC Data Center may be computed by 

BLS for the geographic area plus its 

contiguous areas. Additionally, in 

publicly available OES data, some 

percentiles are missing for certain 

combinations of SOC codes and 

geographic areas. These two factors 

result in a small number of certifications 

having no match with a new prevailing 

wage level.264 To estimate wage impacts 

for workers associated with these 

certifications, the average wage impact 

per worker, for the given cohort and 

fiscal year the certification is associated 

with, is calculated and then applied to 

an adjusted number of workers 

associated with the certification that 

does not match. It is unlikely that all 

unmatched certifications will have a 

wage impact so the calculated wage 

impact per worker is applied to 85 

percent of workers associated with 

unmatched certifications.265 This 

produces a series of estimated wage 

impacts for workers that are not 

matched with new prevailing wages in 

the public OES data for each calendar 

year for which they have employment. 

These imputed wage impacts are then 

added to the calculated wage impact to 

produce a final total wage impact for 

each length cohort and percentile group 

in each calendar year. 

Exhibit 7 summarizes the wage 

impacts of each length cohort for all 

percentile groups involved in the two 

wage transitions based on FY 2018 

through FY 2020 certification data. The 

result of this analysis is an annual 

average wage impact for each length 

cohort and percentile group that is used 

in following steps to construct projected 

10-year wage impacts. In Exhibit 7 some 

calendar years do not have values 

because the cohort, based on FY 2018 

through FY 2020 data, does not have a 

full year of data for those years. For 

example, calendar year 2021 does have 

new entries from FY 2020 data but it is 

not a complete year of data as FY 2021 

would also have new entries, and 

therefore it is not included. 

EXHIBIT 7—WAGE TRANSFERS BY PERCENTILE GROUP AND LENGTH COHORT

[2019$ millions] 

Wage level 

transition group 

Length cohort CY18 CY19 CY20 CY21 CY22 Annual 

average 

85 Percent ............ <1 Year ................ New ...................... $7.89 $9.06 $5.21 NA NA $7.39 

Ongoing ................ 1.28 7.11 5.96 2.89 NA 4.31 

1–2 Years ............. New ...................... 29.58 24.59 12.43 NA NA 22.20 

Ongoing ................ NA 59.89 61.09 30.43 NA 50.47 

2–3 Years ............. New ...................... 831 742 352 NA NA 642 

Ongoing ................ NA 1,711 1,522 644 NA 1,292 

Ongoing + ............ NA NA 1,901 2,386 1,404 1,897 

90 Percent ............ <1 Year ................ New ...................... 13.92 16.71 8.85 NA NA 13.16 

Ongoing ................ 2.88 12.11 10.32 4.38 NA 7.42 

1–2 Years ............. New ...................... 65.74 51.67 24.13 NA NA 47.18 

Ongoing ................ NA 134.46 129.80 59.59 NA 107.95 

2–3 Years ............. New ...................... 2,007 1,820 829 NA NA 1,552 

Ongoing ................ NA 4,133 3,693 1,505 NA 3,110 

Ongoing + ............ NA NA 4,625 5,785 3,347 4,586 

95 Percent ............ <1 Year ................ New ...................... 21.30 25.64 13.26 NA NA 20.07 

Ongoing ................ 4.82 18.24 15.61 6.25 NA 11.23 

1–2 Years ............. New ...................... 109.28 84.09 38.43 NA NA 77.27 

Ongoing ................ NA 224.73 212.31 95.55 NA 177.53 

2–3 Years ............. New ...................... 3,386 3,075 1,405 NA NA 2,622 

Ongoing ................ NA 6,979 6,238 2,537 NA 5,251 

Ongoing + ............ NA NA 7,830 9,771 5,648 7,749 

100 Percent (Final 

Wage Level).

<1 Year ................ New ...................... 29.61 35.57 18.05 NA NA 27.74 

Ongoing ................ 6.99 25.12 21.56 8.30 NA 15.49 

1–2 Years ............. New ...................... 158.13 119.63 54.32 NA NA 110.70 

Ongoing ................ NA 325.78 270.70 135.79 NA 244.09 

2–3 Years ............. New ...................... 4,861 4,426 2,029 NA NA 3,772 

Ongoing ................ NA 10,022 8,983 3,653 NA 7,553 

Ongoing + ............ NA NA 11,258 14,056 8,135 11,150 

Step 3—project 10-year series of wage 

impacts incorporating transition 

schedule. To project 10-year wage 

transfers the average annual values from 

Exhibit 7 are used to construct a 10-year 

series that incorporates the transition 

schedule and change in worker 

population eligible for the two-step 

transition or three and a half year 

transition. Based on data provided by 

USCIS there are approximately 266,500 

workers in backlog for a Green Card that 


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3664 Federal Register / Vol. 86, No. 9 / Thursday, January 14, 2021 / Rules and Regulations 

266Based on applying the average approval rate 

of USCIS LCA and I–129 H–1B, H–1B1, and E–3 

applications (35%) to the average of annual 

certifications by DOL (905,271). 

267 84 percent derived from 266,500 workers 

divided by 316,845 total workers approved 

annually. 

268See Exhibit 8 transition schedule. 

are on continuing H–1B visas and are 

therefore eligible for the three and a half 

year transition. On average from FY 

2018 to FY 2020 316,845 workers were 

approved annually by USCIS.266

Therefore, approximately 84 percent of 

applications are currently eligible for 

the three and a half year transition and 

the remaining 16 percent will use the 

two-step transition.267 Over time USCIS 

estimates that 30,000 workers would be 

processed through the backlog every 

year resulting in a declining population 

of workers eligible in each subsequent 

year for wages under the three and a 

half year transition. The Department 

assumes that the total population of 

applicants will not change, therefore the 

percent of applicants applying to the H– 

1B visa program for two-step transition 

wages (or the final wage level after the 

transition) will grow over time and the 

population of workers eligible for wages 

under the three and a half year 

transition will decline. A summary of 

this population transition as well as the 

wage transition for each group is 

presented in Exhibit 8. 

EXHIBIT 8—WAGE AND POPULATION TRANSITION FOR THE TWO APPLICATION GROUPS

Year Months 

Wage transition Population transition 

Two-step Three and a half year Two-step 

(%) 

Three and a 

half year 

(%) 

2021 ................................ Jan–Jun ........................... Baseline .......................... Baseline .......................... 16% 84% 

Jul–Dec ........................... 90% ................................. 85% ................................. 16 84 

2022 ................................ Jan–Jun ........................... 90% ................................. 85% ................................. 25 75 

Jul–Dec ........................... Final Wage Level ............ 90% ................................. 25 75 

2023 ................................ Jan–Jun ........................... Final Wage Level ............ 90% ................................. 35 65 

Jul–Dec ........................... Final Wage Level ............ 95% ................................. 35 65 

2024 ................................ Jan–Jun ........................... Final Wage Level ............ 95% ................................. 44 56 

Jul–Dec ........................... Final Wage Level ............ Final Wage Level ............ * NA * NA 

2025–2030 ...................... .......................................... Final Wage Level ............ Final Wage Level ............ * NA * NA 

* Beginning July 1, 2024, the transitions are both complete and all workers are at the final wage level. 

To illustrate the application of the 

wage and population transitions to the 

average annual wages provided above in 

Exhibit 7 we describe an example of this 

calculation for new applications in 

2021. Exhibit 9, below, provides an 

example calculation for new applicants 

in 2021 under the two-step transition 

wage (90 percent of final wage levels). 

EXHIBIT 9—WAGE IMPACTS FOR TWO-STEP TRANSITION APPLICANTS IN 2021 

Length Cohort: 

Annual average wage impact * Adjustments Projected wage impact 

<1 Year 1–2 

Years 

2–3 

Years Transition Population <1 Year 1–2 Years 2–3 Years Total 

(a) (b) (c) (d) (e) (f) = (a * d * e) (g) = (b * d * e) (h) = (c * d * e) (f + g + h) 

Length Cohort: New 

2021 .............................. $13.16 $47 $1,552 50.60% 16% $1.07 $3.82 $125.62 $130.51 

Length Cohort: Ongoing 

2022 .............................. $7.42 $104 $3,110 50.60% 16% $0.60 $8.39 $251.82 $260.81 

Length Cohort: Ongoing + 

2023 .............................. NA NA $4,586 50.60% 16% NA NA $371.25 $371.25 

* Average annual wage impacts from Exhibit 7 for 90 percent wage level transition group. 

Average annual wage impacts for each 

length cohort represent a full year of 

wage impacts, however the wage 

transition does not begin until July 1, 

2021. Therefore, the proportion of 

working days in July 1, 2021 through 

December 31, 2021 (50.6%) is used to 

adjust each length cohort’s average 

annual wage impact. A second 

adjustment is made to account for the 

population transition (16% of the total 

applicant population faces wages under 

the two-step transition in 2021).268

Ongoing wages from new applications 

in 2021 occur in 2022 and 2023. 

Therefore, the estimates of ongoing 

wages from Exhibit 7 are included in 

2022 and 2023 and also adjusted by 

2021 transition and population 

adjustments (because these ongoing 

wages are associated with the 2021 new 

applicants). 

This process was repeated for each 

year of 2021–2024 to account for each 

new year of applicants (i.e., in 2022, 

under the two-step transition, half of 

applicants have impacts at 90 percent of 

final wage levels and half at the final 

wage levels). In addition, the population 

of applicants under the two-step 

transition increases from 16 percent in 

2021 to 25 percent in 2022. From 2025 

onwards all new applicants are subject 

to the final wage levels. 

Step 4—estimate total transfer 

payments. The Department determined 


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Federal Register / Vol. 86, No. 9 / Thursday, January 14, 2021 / Rules and Regulations 3665 

269For a full discussion of labor demand 

elasticity heterogeneity see Lichter, A., Peichl, A., 

& Siegloch, S. (2015). The own-wage elasticity of 

labor demand: A meta-regression analysis. 

European Economic Review, 94–119: Retrieved 

from: https://www.econstor.eu/bitstream/10419/ 

93299/1/dp7958.pdf. 

270This value is the best-guess in seminal work 

by Hamermesh, D. H. (1993). Labor Demand. 

Princeton University Press. Values around –0.3 

have been further estimated by additional studies 

including in meta-analysis studies as cited in 

footnote 10. 

271The average unadjusted total wages paid to 

employees impacted by the final rule in the FY18– 

FY20 datasets is $225.5 billion. The average 

unadjusted total wages paid to those same 

employees in the baseline in the FY18–FY20 

datasets is $189.8 billion. This represents an 18.8 

percent increase in wages. Not all of these wages 

are paid due to USCIS approval rates, but the wages 

would adjust proportionally (i.e., the percentage 

increase would remain the same). 

the total impact of the final rule by 

summing wage impacts from new 

applicants in each year and ongoing 

wage impacts from new applicants in 

prior years. The results of this is 

presented below in Exhibit 10. 

EXHIBIT 10—TOTAL TRANSFER PAYMENTS OF THE FINAL RULE

[2019$ millions] 

Cohort 

<1 1–2 Years 2–3 Years 

Total 

New Ongoing New Ongoing New Ongoing Ongoing + 

2021 .................................. $4 $0 $13 $0 $398 $0 $0 $416 

2022 .................................. 13 2 46 29 1,495 782 0 2,368 

2023 .................................. 20 7 79 103 2,674 2,992 1,150 7,026 

2024 .................................. 26 11 101 178 3,451 5,356 4,419 13,542 

2025 .................................. 28 14 111 226 3,772 6,911 7,903 18,964 

2026 .................................. 28 15 111 244 3,772 7,553 10,201 21,924 

2027 .................................. 28 15 111 244 3,772 7,553 11,150 22,872 

2028 .................................. 28 15 111 244 3,772 7,553 11,150 22,872 

2029 .................................. 28 15 111 244 3,772 7,553 11,150 22,872 

2030 .................................. 28 15 111 244 3,772 7,553 11,150 22,872 

10-year Total .............. 230 113 904 1,756 30,652 53,803 68,272 155,730 

The changes in prevailing wage rates 

constitute a transfer payment from 

employers to employees. The 

Department estimates the total transfer 

over the 10-year period is $130.83 

billion and $105.16 billion at discount 

rates of 3 and 7 percent, respectively. 

The annualized transfer over the 10-year 

period is $15.34 billion and $14.97 

billion at discount rates of 3 and 7 

percent, respectively. 

With the increases in prevailing wage 

levels under the final rule, some 

employers may decide not to hire a U.S. 

worker or a foreign worker on a 

temporary or permanent basis. The 

prevailing wage increase may mitigate 

labor arbitrage and induce some 

employers to train and provide more 

working hours to incumbent workers, 

resulting in no increase in employment. 

The Department is unable to quantify 

the extent to which these two factors 

will occur and therefore discusses them 

qualitatively. 

The labor economics literature has a 

significant volume of research on the 

impact of wages on demand for labor. Of 

interest in the context of the H–1B 

program is the long-run own-wage 

elasticity of labor demand that describes 

how firms demand labor in response to 

marginal changes in wages. There is 

significant heterogeneity in estimates of 

labor demand elasticities that can 

depend on industry, skill-level, region, 

and more.269 A commonly cited value of 

average long-run own-wage elasticity of 

labor demand is ¥0.3.270 This would 

mean that a one percent increase in 

wage would reduce demand for labor by 

0.3 percent. The average annual increase 

in wage transfers is anan 18.8 percent 

increase in wage payments,271 which 

would imply a potential reduction in 

labor demand by 5.64 percent (18.8 * 

.3). It is likely that U.S. employers will 

pay higher wages to H–1B workers or 

replace them with U.S. workers to the 

extent that is possible. However, we can 

approximate that, if U.S. employers 

were limited in the ability to pay higher 

wages and did reduce demand for 

workers in these roles, it would reduce 

the transfer payment by approximately 

5.64 percent. The annual average 

undiscounted wage transfer estimate of 

$15.57 billion would therefore be 

reduced to $14.69 billion. 

Non-Quantifiable Transfer Payments 

This section discusses the nonquantifiable transfer payments related to 

changes to the computation of the 

prevailing wage levels. Specifically, the 

Department did not quantify transfer 

payments associated with new 

certifications under the Permanent 

Labor Certification Program because 

they are expected to be de minimis. 

The PERM programs have a large 

proportion of certifications issued 

annually to foreign beneficiaries that are 

working in the U.S. at the time of 

certification and would have changes to 

wages under the final rule prevailing 

wage. Prior to the PERM certification, 

these beneficiaries are typically working 

under H–1B, H–1B1, and E–3 temporary 

visas and wage transfers for these PERM 

certifications are therefore already 

factored into our wage transfer 

calculations for H–1B, H–1B1, and E–3 

temporary visas. Below, Exhibit 11 

illustrates the percentage of PERM 

certifications that are on H–1B, H–1B1, 

or E–3 temporary visas, the percent that 

are not on a temporary visa and/or are 

not currently in the U.S. and would 

therefore enter on an EB–2 or EB–3 visa, 

and all other visa classes. 

EXHIBIT 11—PERM CERTIFICATIONS BY CLASS OF ADMISSION, FY18–FY20 

Category FY18 FY19 FY20 Average percent of total 

Not on a temporary visa/not currently residing in the United States .............. 10,047 9,841 9,166 10.1% 

H–1B visa ........................................................................................................ 74,454 63,976 58,390 68.0% 

H–1B1 visa ...................................................................................................... 109 81 83 0.1% 

E–3 visa ........................................................................................................... 471 280 280 0.4% 


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3666 Federal Register / Vol. 86, No. 9 / Thursday, January 14, 2021 / Rules and Regulations 

272Costa and Hira (2020), H–1B Visas and 

Prevailing Wage Levels, Economic Policy Institute: 

Retrieved August 12, 2020 from https://files.epi.org/ 

pdf/186895.pdf. 

273The reduction of the transfer payments in this 

final rule compared to the IFR is likely understated 

due to the fact that the Department used the 90th 

percentile instead of the 95th percentile wage for 

the Level IV in analyzing the economic impact of 

the IFR. This resulted in underestimation of the 

transfer payment in the IFR. 

EXHIBIT 11—PERM CERTIFICATIONS BY CLASS OF ADMISSION, FY18–FY20—Continued 

Category FY18 FY19 FY20 Average percent of total 

All other visa classifications* ........................................................................... 24,469 12,907 18,128 21.5% 

Total .......................................................................................................... 109,550 87,085 86,047 100% 

Other visa classes include: A1/A2, L–1, F–1, A–3, B–1, C–1, TN, C–3, E–2, B–2, D–1, D–2, H–4, O–1, E–1, EWI, J–1, TPS, F–2, L–2, G–4, 

H–2A, G–1, G–5, H–1A, Parolee, P–1, J–2, H–3, I, M–1, R–1, O–2, M–2, P–3, O–3, VWT, TD, P–2, P–4, Q, VWB, R–2, N, S–6, T–1, V–2, T–2, 

K–4, U–1. 

Approximately 10 percent of PERM 

certifications are issued annually by 

OFLC to foreign beneficiaries who do 

not currently reside in the U.S. and 

would enter on immigrant visas in the 

EB–2 or EB–3 preference category. 

Employment-based immigrant visa 

availability and corresponding wait 

times change regularly for different 

preference categories and countries. 

Foreign workers from countries with 

significant visa demand consistently 

experience delays, at times over a 

decade. Therefore, employers would not 

have wage obligations until, at the 

earliest, the very end of the 10-year 

analysis period, and the number of 

relevant certifications is a relatively 

small percent of all PERM certifications; 

the Department therefore has not 

included associated wage transfers in 

the analysis. 

Benefits Discussion 

This section discusses the nonquantifiable benefits related to changes 

to the computation of the prevailing 

wage levels. 

The Department’s increase in the 

prevailing wages for the four wage 

levels is expected to result in multiple 

benefits that the Department is unable to 

quantify but discusses qualitatively. 

One benefit of the final rule’s increase 

in prevailing wages is the economic 

incentive to increase employee 

retention, training, and productivity 

which will increase benefits to both 

employers and U.S. workers. The 

increase in prevailing wages is expected 

to induce employers—particularly those 

using the permanent and temporary visa 

programs—to fill critical skill shortages, 

to minimize labor costs by 

implementing retention initiatives to 

reduce employee turnover, and/or to 

increase the number of work hours 

offered to similarly employed U.S. 

workers. Furthermore, for employers in 

the technology and health care sectors, 

this could mean using higher wages to 

attract and hire the industry’s most 

productive U.S. workers and to provide 

them with the most advanced 

equipment and technologies to perform 

their work in the most efficient manner. 

This high-wage, high-skill approach 

to minimizing labor costs is commonly 

referred to as the ‘‘efficiency wage’’ 

theory in labor economics—a wellestablished strategy that allows 

companies employing high-wage 

workers to minimize labor costs and 

effectively compete with companies 

employing low-wage workers. The 

efficiency wage theory supports the idea 

that increasing wages can lead to 

increased labor productivity because 

workers feel more motivated to work at 

higher wage levels. Where these jobs 

offer wages that are significantly higher 

than the wages and working conditions 

of alternative jobs, workers will have a 

greater incentive to be loyal to the 

company, impress their supervisors 

with the quality of their work, and exert 

an effort that involves no shirking. 

Thus, if employers increase wages, 

some, or even all, of the higher wage 

costs can be recouped through increased 

staff retention, lower costs of 

supervision, and higher labor 

productivity. 

Strengthening prevailing wages will 

also help promote and protect jobs for 

American workers. By ensuring that the 

employment of any foreign worker is 

commensurate with the wages paid to 

similarly employed U.S. workers, the 

Department will be protecting the types 

of white-collar, middle-class jobs that 

are critical to ensuring the economic 

viability of communities throughout the 

country. 

There is some evidence that the 

existing prevailing wage levels offer 

opportunities to use lower-cost 

alternatives to U.S. workers doing 

similar jobs by offering at the two wage 

levels below the median wage. For 

example, in FY 2019, 60 percent of H– 

1B workers were placed at either the 

first or second wage level, meaning a 

substantial majority of workers in the 

program could be paid wages well 

below the median wage for their 

occupational classification.272 By setting 

the Level I wage level at the 35th 

percentile, employers using the H–1B 

and PERM programs will have less of an 

incentive to replace U.S. workers doing 

similar jobs at lower wage rates when 

there are available U.S. workers. This 

will increase earnings and standards of 

living for U.S. workers. It also will level 

the playing field by reducing incentives 

to replace similarly employed U.S. 

workers with a low-cost foreign 

alternative. 

In addition, because workers with 

greater skills tend to be more 

productive, and as a result can 

command higher wages, raising the 

prevailing wage levels will lead to the 

limited number of H–1B visas going to 

higher-skilled foreign workers, which 

will likely increase the spillover 

economic benefits associated with highskilled immigration. 

Finally, ensuring that skilled 

occupations are not performed at belowmarket wage rates by foreign workers 

will provide greater incentives for firms 

to expand education and job training 

programs. These programs can attract 

and develop the skills of a younger 

generation of U.S. workers to enter 

occupations that currently rely on 

elevated levels of foreign workers. 

4. Summary of the Analysis 

Exhibit 12 below summarizes the 

costs and transfer payments of the final 

rule. The Department estimates the 

annualized cost of the final rule at $2.90 

million and the annualized transfer 

payments (from H–1B, H–1B1, and E–3 

employers to workers) at $14.97 billion, 

at a discount rate of 7 percent.273 The 

Department did not estimate any cost 

savings. For the purpose of E.O. 13771, 

the annualized cost, when perpetuated, 

is $1.86 million at a discount rate of 7 

percent in 2016 dollars. 


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274See 5 U.S.C. 604. 

EXHIBIT 12—ESTIMATED MONETIZED COSTS AND TRANSFER PAYMENTS OF THE FINAL RULE

[2019$ millions] 

Year Costs Transfer 

payments 

2021 ......................................................................................................................................................................... $4.33 $416 

2022 ......................................................................................................................................................................... 2.46 2,368 

2023 ......................................................................................................................................................................... 2.46 7,026 

2024 ......................................................................................................................................................................... 2.46 13,542 

2025 ......................................................................................................................................................................... 2.46 18,964 

2026 ......................................................................................................................................................................... 2.46 21,924 

2027 ......................................................................................................................................................................... 2.46 22,872 

2028 ......................................................................................................................................................................... 2.46 22,872 

2029 ......................................................................................................................................................................... 2.46 22,872 

2030 ......................................................................................................................................................................... 2.46 22,872 

Undiscounted Total ........................................................................................................................................... 26.45 155,730 

10-Year Total with a Discount Rate of 3% ...................................................................................................... 23.47 130,830 

10-Year Total with a Discount Rate of 7% ...................................................................................................... 20.34 105,157 

10-Year Average .............................................................................................................................................. 2.65 15,573 

Annualized with a Discount Rate of 3% ........................................................................................................... 2.75 15,337 

Annualized with a Discount Rate of 7% ........................................................................................................... 2.90 14,972 

Perpetuated Net Costs with a Discount Rate of 7% (2016$ Millions) ............................................................. 1.86 

5. Regulatory Alternatives 

The Department considered two 

alternatives to the chosen approach of 

establishing the prevailing wage for 

Levels I through IV, respectively, at 

approximately 35th percentile, the 45nd 

percentile, the 72nd percentile, and the 

90th percentile with a transition period. 

First, the Department considered an 

alternative that would modify the 

number of wage tiers from four levels to 

three levels. Under this alternative, 

prevailing wages would be set for Levels 

I through III at the 35th, 72nd, and 90th 

percentile, respectively. Modifying the 

number of wage tiers to three levels 

would allow for more manageable wage 

assignments that would be easier for 

employers and employees to understand 

due to decreased complexity to 

matching wage tiers with position 

experience. A three-tiered prevailing 

wage structure would maintain the 

minimum entry-level and fully 

competent experience levels and 

simplify the intermediate level of 

experience by combining the current 

qualified and experienced distinctions. 

The Department prefers the chosen 

methodology over this alternative 

because the chosen four-tiered 

prevailing wage structure is likely to 

produce more accurate prevailing wages 

than a three-tiered structure due to the 

ability to have two intermediate wage 

levels. In addition, creating a threetiered prevailing wage structure would 

require a statutory change. 

The Department considered a second 

alternative that would modify the 

geographic levels for assigning 

prevailing wages for the SOC code 

within the current four-tiered prevailing 

wage structure, which ranges from local 

MSA or BOS areas to national, to a twotiered geographic area structure 

containing only statewide or national 

area estimates. By assigning prevailing 

wages at a statewide or, where statewide 

averages cannot be reported by the BLS, 

national geographic area, this second 

alternative would again simplify the 

prevailing wage determination process 

by reducing the number of distinct wage 

computations reported by the BLS and 

provide employers with greater 

certainty regarding their wage 

obligations, especially where the job 

opportunity requires work to be 

performed in a number of different 

worksite locations within a state or 

regional area. This process would also 

reduce variability in prevailing wages 

within a state for the same occupations 

across time, making prevailing wages 

more consistent and uniform. However, 

this method would not account for wage 

variability that may occur within states 

and that can account for within-state 

differences in labor market dynamics, 

industry competitiveness, or cost of 

living. 

The Department prefers the chosen 

methodology because it preserves 

important differences in county and 

regional level prevailing wages and 

better aligns with the statutory 

requirement that the prevailing wage be 

the wage paid in the area of 

employment. 

The Department received one 

comment on the regulatory alternatives 

considered in the IFR. One commenter 

representing 23 organizations suggested 

that the Department consider an 

alternative where data from private 

sector compensation surveys is layered 

on top of BLS OES data to provide more 

accurate prevailing wage data for certain 

occupations and localities where private 

sector compensation surveys may have 

coverage. 

Supplementing BLS OES data from 

private sector compensation surveys 

may result in an increased ability to 

quantitatively connect education, 

experience, or employee responsibility 

with wages for certain occupations and 

localities. However, this introduction of 

fidelity in certain locales and not others 

could lead to inconsistent treatment of 

wages in the same occupation in 

different geographic areas depending on 

whether prevailing wages are based on 

BLS OES or the private sector 

compensation survey. In addition, such 

an approach would reduce transparency 

of prevailing wages by introducing 

additional complexity in the wage 

determination as well as non-public 

data sources. 

B. Regulatory Flexibility Act 

The Regulatory Flexibility Act of 1980 

(RFA), 5 U.S.C. 601 et seq., as amended 

by the Small Business Regulatory 

Enforcement Fairness Act of 1996, 

Public Law 104–121 (March 29, 1996), 

hereafter jointly referred to as the RFA, 

requires that an agency prepare an 

initial regulatory flexibility analysis 

(IRFA) when proposing, and a final 

regulatory flexibility analysis (FRFA) 

when issuing, regulations that will have 

a significant economic impact on a 

substantial number of small entities. 

The agency is also required to respond 

to public comment.274 The Chief 

Counsel for Advocacy of the Small 

Business Administration submitted 


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275See 8 U.S.C. 1101(a)(5), 1101(a)(15)(E)(iii), 

1101(a)(15)(H)(i)(b), 1101(a)(15)(H)(i)(b1), 1182(n), 

1182(t)(1), 1184(c). 

276Small Business Administration Table of Small 

Business Size Standards Matched to North 

American Industry Classification System Codes. 

(Aug. 2019), https://www.sba.gov/document/ 

support--table-size-standards. 

277See http://www.sba.gov/advocacy/ 

regulatoryflexibility-act for details. 

public comment on the Initial 

Regulatory Flexibility Analysis (IRFA) 

which is addressed below. 

The Department believes that this 

final rule will have a significant 

economic impact on a substantial 

number of small entities and therefore 

the Department publishes this FRFA. 

1. Objectives of and Legal Basis for the 

Final Rule 

The Department has determined that 

new rulemaking is needed to better 

protect the wages and job opportunities 

of U.S. workers, minimize incentives to 

hire foreign workers over U.S. workers 

on a permanent or temporary basis in 

the United States under the H–1B, H– 

1B1, and E–3 visa programs and the 

PERM program, and further the goals of 

Executive Order 13788, Buy American 

and Hire American. Accordingly, this 

final rule revises the computation of 

wage levels under the Department’s 

four-tiered wage structure based on the 

OES wage survey administered by the 

BLS to ensure that wages paid to 

immigrant and nonimmigrant workers 

are commensurate with the wages of 

U.S. workers with comparable levels of 

education, experience, and levels of 

supervision in the occupation and area 

of employment. 

The Department is amending its 

regulations at Sections 656.40 and 

655.731 to reflect the methodology the 

Department will use to determine 

prevailing wages based on the BLS’s 

OES survey for job opportunities in the 

H–1B and PERM programs. The revised 

methodology will establish the 

prevailing wage for Levels I through IV, 

respectively, at approximately the 35th 

percentile, the 53rd percentile, the 72nd 

percentile, and the 90th percentile. In 

addition, the final rule allows for a 

transition period by setting an interim 

year of wages at 90 percent of the above 

wage levels for new H–1B visas, and a 

three and a half year transition period 

of 85 percent, 90 percent, 95 percent of 

the above wage levels for workers on 

track for lawful permanent residency 

(LPR). 

The INA assigns responsibilities to 

the Secretary relating to the entry and 

employment of certain categories of 

employment-based immigrants and 

nonimmigrants. This rule relates to the 

labor certifications that the Secretary 

issues for certain employment-based 

immigrants and to the LCAs that the 

Secretary certifies in connection with 

the temporary employment of foreign 

workers under the H–1B, H–1B1, and E– 

3 visa classifications.275 The 

Department has a statutory mandate to 

protect the wages and working 

conditions of similarly employed U.S. 

workers from adverse effects caused by 

the employment of foreign workers in 

the U.S. on a permanent or temporary 

basis. 

2. The Agency’s Response to Public 

Comments 

The Department did not receive 

public comment on the IRFA. 

3. Response to Comments by the Chief 

Counsel for Advocacy of the Small 

Business Administration 

The Department received a comment 

on the IRFA by the Chief Counsel for 

Advocacy of the Small Business 

Administration that suggested the 

Department underestimated the 

economic impacts of the IFR, and 

therefore underestimated the significant 

impacts on small entities. The comment 

suggested that the IFR underestimated 

impacts based on IFR RIA Exhibits 5 

and 6 which indicated a wage increase 

of $4,825 to $9,651 per worker and the 

comment provided examples from the 

Department’s online wage library 

showing examples of higher wage 

increases. 

IFR RIA Exhibit 5 and Exhibit 6 

contain illustrative wage data for a 

particular SOC-code and area in BLS 

OES and do not reflect the average 

impact of the IFR. They instead serve 

the purpose of illustrating the 

Department’s wage impact calculations. 

Wage increases vary by SOC code and 

geographic area and therefore can be 

higher than these examples. The 

analysis for the IFR estimated that 

workers facing a wage increase (i.e., 

those that were offered less under the 

baseline than required by the IFR) had 

an average increase of approximately 

$27,000. 

Under the final rule the Department 

revises its wage tier estimates so that 

wages will be transitioned over a period 

of two to three and a half years reducing 

impacts in some years. In addition, the 

final wage levels (after transition) will 

be set at lower percentiles than the IFR 

resulting in reduced wage obligations 

from the IFR, therefore reducing impacts 

on small businesses. Finally, 

Department wage estimates are based on 

DOL H–1B disclosure data. However, 

USCIS does not approve all 

certifications contained in the 

disclosure data. As a result, the 

estimated wage obligations for some 

small entities may be overestimated, 

and the overall number of impacted 

small entities at all levels of impact may 

be overestimated. 

4. Description of the Number of Small 

Entities to Which the Final Rule Will 

Apply 

i. Definition of Small Entity 

The RFA defines a ‘‘small entity’’ as 

a (1) small not-for-profit organization, 

(2) small governmental jurisdiction, or 

(3) small business. The Department used 

the entity size standards defined by 

SBA, in effect as of August 19, 2019, to 

classify entities as small.276 SBA 

establishes separate standards for 

individual 6-digit NAICS industry 

codes, and standard cutoffs are typically 

based on either the average number of 

employees, or the average annual 

receipts. For example, small businesses 

are generally defined as having fewer 

than 500, 1,000, or 1,250 employees in 

manufacturing industries and less than 

$7.5 million in average annual receipts 

for nonmanufacturing industries. 

However, some exceptions do exist, the 

most notable being that depository 

institutions (including credit unions, 

commercial banks, and non-commercial 

banks) are classified by total assets 

(small defined as less than $550 million 

in assets). Small governmental 

jurisdictions are another noteworthy 

exception. They are defined as the 

governments of cities, counties, towns, 

townships, villages, school districts, or 

special districts with populations of less 

than 50,000 people.277

ii. Number of Small Entities 


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278The PERM program has a large proportion of 

certifications issued annually to foreign 

beneficiaries that are working in the U.S. at the time 

of certification. Prior to the PERM certification, 

these beneficiaries are typically working under H– 

1B, H–1B1, and E–3 temporary visas. Therefore, the 

Department has not included estimates for PERM 

employers in the IRFA, consistent with the analysis 

and estimates contained in the E.O. 12866 section. 

The Department considered PERM employers for 

purposes of calculating one-time costs in the E.O. 

12866 section but did not consider these employers 

for purposes of cost transfers. 

279Small Business Administration, Table of 

Small Business Size Standards Matched to North 

American Industry Classification System Codes. 

(Aug. 2019), https://www.sba.gov/document/ 

support--table-size-standards. 

280 $51.93 = 1 hour × $51.93, where $51.93 = 

$32.58 + ($32.58 × 42%) + ($32.58 × 17%). 

281The Department considered PERM employers 

for purposes of calculating one-time costs in the 

E.O. 12866 section. 

The Department collected 

employment and annual revenue data 

from the business information provider 

Data Axle and merged those data into 

the H–1B, H–1B1, and E–3 visa program 

disclosure data (H–1B disclosure data) 

for FY 2019.278 This process allowed the 

Department to identify the number and 

type of small entities using the H–1B 

program and their annual revenues. A 

single employer can apply for H–1B 

workers multiple times; therefore, 

unique employers were identified. The 

Department was able to obtain data 

matches for 34,203 unique H–1B 

employers. Next, the Department used 

the SBA size standards to classify 

26,354 of these employers (or 77.1 

percent) as small.279 These unique small 

employers had an average of 75 

employees and average annual revenue 

of approximately $18.61 million. Of 

these unique employers, 22,430 of them 

had revenue data available from Data 

Axle. The Department’s analysis of the 

impact of this final rule on small 

entities is based on the number of small 

unique employers (22,430 with revenue 

data). 

To provide clarity on the types of 

industries impacted by this regulation, 

Exhibit 13 shows the number of unique 

H–1B small entity employers with 

certifications in FY 2019 within the top 

10 most prevalent industries at the 6- 

digit and 4-digit NAICS code level. 

Depending on when their employment 

period starts and the length of the 

employment period (up to 3 years), 

small entities with certifications in FY 

2019 can have wage obligations in 

calendar years 2018 through 2023. 

EXHIBIT 13—NUMBER OF H–1B AND PERM SMALL EMPLOYERS BY NAICS CODE

Description 

Number of employers 

2018 2019 2020 2021 2022 2023 

6-Digit NAICS: 

511210 ........... Software Publishers .............................. 435 (12%) 1,570 (6%) 1,577 (6%) 1,555 (6%) 1,463 (6%) 119 (14%) 

541511 ........... Custom Computer Programming Services.394 (11%) 1,149 (4%) 1,155 (4%) 1,141 (5%) 1,072 (5%) 95 (11%) 

621111 ........... Offices of Physicians (except Mental 

Health Specialists).

132 (4%) 1,091 (4%) 1,097 (4%) 1,081 (4%) 998 (4%) 36 (4%) 

541330 ........... Engineering Services ............................ 90 (3%) 973 (4%) 979 (4%) 965 (4%) 910 (4%) 13 (1%) 

611310 ........... Colleges, Universities, and Professional 

Schools.

106 (3%) 639 (2%) 644 (2%) 627 (2%) 588 (3%) 35 (4%) 

541110 ........... Offices of Lawyers ................................ 60 (2%) 606 (2%) 606 (2%) 596 (2%) 548 (2%) 13 (1%) 

611110 ........... Elementary and Secondary Schools .... 43 (1%) 625 (2%) 621 (2%) 577 (2%) 508 (2%) 10 (1%) 

541310 ........... Architectural Services ........................... 23 (1%) 501 (2%) 503 (2%) 499 (2%) 464 (2%) 1 (0%) 

541714 ........... Research and Development in Biotechnology (except Nanobiotechnology).49 (1%) 444 (2%) 445 (2%) 435 (2%) 405 (2%) 13 (1%) 

541614 ........... Process, Physical Distribution, and Logistics Consulting Services.87 (2%) 394 (2%) 399 (2%) 392 (2%) 368 (2%) 25 (3%) 

Other NAICS ......... ............................................................... 2,090 (60%) 1,7692 (69%) 17,755 (69%) 17,347 (69%) 15,755 (68%) 513 (59%) 

4-Digit NAICS: 

5112 ............... Software Publishers .............................. 435 (12%) 1,570 (6%) 1,577 (6%) 1,555 (6%) 1,463 (6%) 119 (14%) 

5413 ............... Architectural, Engineering, and Related 

Services.

121 (3%) 1,679 (7%) 1,689 (7%) 1,668 (7%) 1,568 (7%) 17 (2%) 

5415 ............... Computer Systems Design and Related 

Services.

500 (14%) 1,518 (6%) 1,526 (6%) 1,507 (6%) 1,415 (6%) 120 (14%) 

5416 ............... Management, Scientific, and Technical 

Consulting Services.

300 (9%) 1,437 (6%) 1,448 (6%) 1,425 (6%) 1,313 (6%) 59 (7%) 

6211 ............... Offices of Physicians ............................ 132 (4%) 1091 (4%) 1097 (4%) 1081 (4%) 998 (4%) 36 (4%) 

5417 ............... Scientific Research and Development 

Services.

93 (3%) 659 (3%) 663 (3%) 650 (3%) 600 (3%) 28 (3%) 

6113 ............... Colleges, Universities, and Professional 

Schools.

106 (100%) 639 (2%) 644 (2%) 627 (2%) 588 (3%) 35 (4%) 

5239 ............... Other Financial Investment Activities .... 68 (2%) 635 (2%) 638 (2%) 628 (2%) 564 (2%) 16 (2%) 

5411 ............... Legal Services ...................................... 61 (2%) 614 (2%) 614 (2%) 604 (2%) 555 (2%) 13 (1%) 

5412 ............... Accounting, Tax Preparation, Bookkeeping, and Payroll Services.41 (1%) 595 (2%) 598 (2%) 585 (2%) 551 (2%) 12 (1%) 

Other NAICS ......... ............................................................... 1,652 (47%) 15,247 (59%) 15,287 (59%) 14,885 (59%) 13,464 (58%) 418 (48%) 

iii. Projected Impacts to Affected Small 

Entities 

The Department has considered the 

incremental costs for small entities from 

the baseline (the regulations governing 

permanent labor certifications at 20 CFR 

part 656 and labor condition 

applications at 20 CFR part 655, subpart 

H) to this final rule. We estimated the 

cost of (a) the time to read and review 

the final rule and (b) wage costs. These 

estimates are consistent with those 

presented in the E.O. 12866 section. 

The Department estimates that small 

entities using the H–1B program, 22,430 

unique employers would incur a onetime cost of $51.93 to familiarize 

themselves with the rule.280 281

In addition to the total first-year cost 

above, each small entity using the H–1B 

program may have an increase in annual 

wage costs due to the revisions to the 

wage structure if they currently offer a 

wage lower than the final rule’s 

prevailing wage levels. For each small 

entity, we calculated the likely annual 

wage cost as the sum of the total final 


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282See, e.g., 79 FR 60634 (October 7, 2014, 

Establishing a Minimum Wage for Contractors), 81 

FR 39108 (June 15, 2016, Discrimination on the 

Basis of Sex), and 84 FR 36178 (July 26, 2019, 

Proposed Rule for Temporary Agricultural 

Employment of H–2A Nonimmigrants in the United 

States). 

283See, e.g., 79 FR 27106 (May 12, 2014, 

Department of Health and Human Services rule 

stating that under its agency guidelines for 

conducting regulatory flexibility analyses, actions 

that do not negatively affect costs or revenues by 

more than three percent annually are not 

economically significant). 

284See, e.g., 79 FR 60633 (October 7, 2014, 

Establishing a Minimum Wage for Contractors) and 

84 FR 36178 (July 26, 2019, Proposed Rule for 

Temporary Agricultural Employment of H–2A 

Nonimmigrants in the United States). 

rule wage minus the total baseline wage 

for each small entity identified from the 

H–1B disclosure data in FY 2019. We 

added this change in the wage costs to 

the total first-year costs to measure the 

total impact of the final rule on the 

small entity. Small entities with 

certifications in FY 2019 can have wage 

obligations in calendar years 2018 

through 2023, depending on when their 

employment period starts and the length 

of the employment period (up to 3 

years). Because USCIS does not approve 

all certifications, the estimated wage 

obligations for some small entities may 

be overestimated. The Department is 

unable to determine which small 

entities had certifications approved or 

not approved by USCIS and therefore 

estimates the total wage obligation with 

no adjustment for USCIS approval rates. 

As a result, estimates of the total cost to 

small entities are likely to be inflated. 

The Department sought public 

comments on how to best estimate 

which small entities had certifications 

approved by USCIS but did not receive 

any comments that discussed a method 

for estimating certification approval by 

USCIS. Exhibit 14 presents the number 

of small entities with a wage impact in 

each year, as well as the average wage 

impact per small entity in each year. 

EXHIBIT 14—WAGE IMPACTS ON H–1B PROGRAM SMALL ENTITIES

Proportion of revenue impacted 2018 2019 2020 2021 2022 2023 

Number of H–1B Small Entities with 

Wage Impacts ...................................... 2,577 19,948 20,036 19,679 18,293 635 

Average Wage Impact per Entity ............. $14,178 $96,828 $183,463 $179,455 $92,531 $19,464 

The Department determined the 

proportion of each small entity’s total 

revenue affected by the costs of the final 

rule to determine if the final rule would 

have a significant and substantial 

impact on small entities. The cost 

impacts included estimated first-year 

costs and the wage costs introduced by 

the final rule. Wage costs are based on 

the final wage levels as these represent 

the largest annual impacts a small entity 

would face (as opposed to wage impacts 

during the transition to the final wage 

levels). The Department used a total cost 

estimate of 3 percent of revenue as the 

threshold for a significant individual 

impact and set a total of 15 percent of 

small entities incurring a significant 

impact as the threshold for a substantial 

impact on small entities. 

The Department has used a threshold 

of three percent of revenues in prior 

rulemakings for the definition of 

significant economic impact.282 This 

threshold is also consistent with that 

sometimes used by other agencies.283

The Department also maintains that 15 

percent of small entities experiencing a 

significant impact represents an 

appropriate threshold to determine 

whether the rule has a substantial 

impact on small entities generally. The 

Department has used the same threshold 

in prior rulemakings for the definition 

of substantial number of small 

entities.284

Of the 22,430 unique small employers 

with revenue data, up to 13 percent of 

employers would have more than 3 

percent of their total revenue affected in 

2019, up to 22 percent in 2020 and 

2021, and up to 16 percent in 2022. 

Exhibit 15 provides a breakdown of 

small employers by the proportion of 

revenue affected by the costs of the final 

rule. 

EXHIBIT 15—COST IMPACTS AS A PROPORTION OF TOTAL REVENUE FOR SMALL ENTITIES

Proportion of revenue impacted 2018 2019 2020 2021 2022 2023 

<1% .......................................................... 2,689 (88%) 16,418 (75%) 13,286 (61%) 13,286 (61%) 13,705 (69%) 699 (95%) 

1%–2% ..................................................... 168 (6%) 1,884 (9%) 2,349 (11%) 2,349 (11%) 2,013 (10%) 23 (3%) 

2%–3% ..................................................... 70 (2%) 847 (4%) 1314 (6%) 1314 (6%) 1036 (5%) 5 (1%) 

3%–4% ..................................................... 22 (1%) 503 (2%) 794 (4%) 794 (4%) 567 (3%) 1 (0%) 

4%–5% ..................................................... 24 (1%) 325 (1%) 549 (3%) 549 (3%) 372 (2%) 2 (0%) 

>5% .......................................................... 69 (2%) 2,036 (9%) 3,352 (15%) 3,352 (15%) 2,172 (11%) 7 (1%) 

Total >3% ......................................... 115 (4%) 2,864 (13%) 4,695 (22%) 4,695 (22%) 3,111 (16%) 10 (1%) 

5. Projected Reporting, Recordkeeping, 

and Other Compliance Requirements of 

the Final Rule 

The final rule does not have any 

reporting, recordkeeping, or other 

compliance requirements impacting 

small entities. 

6. Steps the Agency Has Taken To 

Minimize the Significant Economic 

Impact on Small Entities 

The RFA directs agencies to assess the 

effects that various regulatory 

alternatives would have on small 

entities and to consider ways to 

minimize those effects. Accordingly, the 

Department considered two regulatory 

alternatives to the chosen approach of 

establishing the prevailing wage for 

Levels I through IV, respectively, at 

approximately the 35th percentile, the 

53rd percentile, the 72nd percentile, 

and the 90th percentile with a transition 

period. 

First, the Department considered an 

alternative that would modify the 

number of wage tiers from four levels to 

three levels. Under this alternative, the 

Department attempted to set the 

prevailing wages for Levels I through III, 


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285OMB Circular A–4 advises that agencies 

‘‘should discuss the statutory requirements that 

affect the selection of regulatory Approach. If legal 

constraints prevent the selection of a regulatory 

action that best satisfies the philosophy and 

principles of Executive Order 12866, [agencies] 

should identify these constraints and estimate their 

opportunity cost. Such information may be useful 

to Congress under the Regulatory Right-to-Know 

Act.’’ 

286See U.S. Bureau of Labor Statistics, Historical 

Consumer Price Index for All Urban Consumers 

(CPI–U): U.S. City Average, All Items, available at 

https://www.bls.gov/cpi/tables/supplemental-files/ 

historical-cpi-u-202003.pdf (last visited June 2, 

2020). 

Calculation of inflation: (1) Calculate the average 

monthly CPI–U for the reference year (1995) and the 

current year (2019); (2) Subtract reference year CPI– 

U from current year CPI–U; (3) Divide the difference 

of the reference year CPI–U and current year CPI– 

U by the reference year CPI–U; (4) Multiply by 100 

= [(Average monthly CPI–U for 2019 ¥ Average 

monthly CPI–U for 1995)/(Average monthly CPI–U 

for 1995)] * 100 = [(255.657 ¥ 152.383)/152.383] 

* 100 = (103.274/152.383) * 100 = 0.6777 * 100 = 

67.77 percent = 68 percent (rounded). 

Calculation of inflation-adjusted value: $100 

million in 1995 dollars * 1.68 = $168 million in 

2019 dollars. 

287See 2 U.S.C. 658(6). 

288See 2 U.S.C. 658(7)(A)(ii). 

respectively, at the 35th, 72nd, and 90th 

percentile. Modifying the number of 

wage tiers to three levels would allow 

for more manageable wage assignments 

that would be easier for small entities 

and their employees to understand due 

to decreased complexity to matching 

wage tiers with position experience. The 

Department decided not to pursue this 

alternative because the chosen fourtiered wage methodology is likely to be 

more accurate than the three-tiered 

wage level because it has two 

intermediate wage levels. In addition, 

creating a three-tiered wage level would 

require a statutory change. Although the 

Department recognizes that legal 

limitations prevent this alternative from 

being actionable, the Department 

nonetheless presents it as a regulatory 

alternative in accord with OMB 

guidance.285

The Department considered a second 

alternative that attempted to modify the 

geographic levels for assigning 

prevailing wages for the occupation 

from the current four-tiered structure, 

which ranges from local MSA or BOS 

areas to national, to a two-tiered 

structure containing statewide or 

national levels. By assigning prevailing 

wages at a statewide or national level 

(depending on whether statewide 

averages can be reported by BLS), this 

second alternative attempted to simplify 

the prevailing wage determination 

process by reducing the number of 

distinct wage computations reported by 

the BLS. It would also provide small 

entities with greater certainty regarding 

their wage obligations, especially where 

the job opportunity requires work to be 

performed in a number of different 

worksite locations within a State or 

regional area. The Department decided 

not to pursue this alternative because 

the chosen methodology preserves 

important differences in county and 

regional level prevailing wages, and 

because it would require a statutory 

change. 

C. Unfunded Mandates Reform Act 

The Unfunded Mandates Reform Act 

of 1995 (UMRA) is intended, among 

other things, to curb the practice of 

imposing unfunded Federal mandates 

on State, local, and tribal governments. 

Title II of UMRA requires each Federal 

agency to prepare a written statement 

assessing the effects of any Federal 

mandate in a proposed or final agency 

rule that may result in a $100 million or 

more expenditure (adjusted annually for 

inflation) in any one year by State, local, 

and tribal governments, in the aggregate, 

or by the private sector. The inflationadjusted value equivalent of $100 

million in 1995 adjusted for inflation to 

2019 levels by the Consumer Price 

Index for All Urban Consumers (CPI–U) 

is approximately $168 million based on 

the Consumer Price Index for All Urban 

Consumers.286

While this final rule may result in the 

expenditure of more than $100 million 

by the private sector annually, the 

rulemaking is not a ‘‘Federal mandate’’ 

as defined for UMRA purposes.287 The 

cost of obtaining prevailing wages, 

preparing labor condition and 

certification applications (including all 

required evidence) and the payment of 

wages by employers is, to the extent it 

could be termed an enforceable duty, 

one that arises from participation in a 

voluntary Federal program, applying for 

immigration status in the United 

States.288 This final rule does not 

contain such a mandate. The 

requirements of Title II of UMRA, 

therefore, do not apply, and DOL has 

not prepared a statement under UMRA. 

Therefore, no actions were deemed 

necessary under the provisions of the 

UMRA. 

D. Congressional Review Act 

The Office of Information and 

Regulatory Affairs, of the Office of 

Management and Budget, has 

determined that this final rule is a major 

rule as defined by 5 U.S.C. 804, also 

known as the ‘‘Congressional Review 

Act,’’ as enacted in section 251 of the 

Small Business Regulatory Enforcement 

Fairness Act of 1996, Public Law 104– 

121, 110 Stat. 847, 868, et seq. 

E. Executive Order 13132 (Federalism) 

This final rule would not have 

substantial direct effects on the states, 

on the relationship between the national 

government and the states, or on the 

distribution of power and 

responsibilities among the various 

levels of government. Therefore, in 

accordance with section 6 of Executive 

Order 13132, it is determined that this 

final rule does not have sufficient 

federalism implications to warrant the 

preparation of a federalism summary 

impact statement. 

F. Executive Order 12988 (Civil Justice 

Reform) 

This final rule meets the applicable 

standards set forth in sections 3(a) and 

3(b)(2) of Executive Order 12988. 

G. Regulatory Flexibility Executive 

Order 13175 (Consultation and 

Coordination With Indian Tribal 

Governments) 

This final rule does not have ‘‘tribal 

implications’’ because it does not have 

substantial direct effects on one or more 

Indian tribes, on the relationship 

between the Federal Government and 

Indian tribes, or on the distribution of 

power and responsibilities between the 

Federal Government and Indian tribes. 

Accordingly, E.O. 13175, Consultation 

and Coordination with Indian Tribal 

Governments, requires no further 

agency action or analysis. 

H. Paperwork Reduction Act 

The Paperwork Reduction Act of 1995 

(PRA), 44 U.S.C. 3501, et seq., and its 

attendant regulations, 5 CFR part 1320, 

require the Department to consider the 

agency’s need for its information 

collections and their practical utility, 

the impact of paperwork and other 

information collection burdens imposed 

on the public, and how to minimize 

those burdens. This final rule does not 

require a collection of information 

subject to approval by OMB under the 

PRA, or affect any existing collections of 

information. 

List of Subjects 

20 CFR Part 655 

Administrative practice and 

procedure, Australia, Chile, 

Employment, Employment and training, 

Immigration, Labor, Migrant labor, 

Wages. 

20 CFR Part 656 

Administrative practice and 

procedure, Employment, Foreign 

workers, Labor, Wages. 


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3672 Federal Register / Vol. 86, No. 9 / Thursday, January 14, 2021 / Rules and Regulations 

DEPARTMENT OF LABOR 

Accordingly, for the reasons stated in 

the preamble, the Department of Labor 

amends parts 655 and 656 of Chapter V, 

Title 20, Code of Federal Regulations, as 

follows: 

PART 655—TEMPORARY 

EMPLOYMENT OF FOREIGN 

WORKERS IN THE UNITED STATES 

■ 1. The authority citation for part 655 

is revised to read as follows: 

Authority: Section 655.0 issued under 8 

U.S.C. 1101(a)(15)(E)(iii), 1101(a)(15)(H)(i) 

and (ii), 8 U.S.C. 1103(a)(6), 1182(m), (n), (p), 

and (t), 1184(c), (g), and (j), 1188, and 1288(c) 

and (d); sec. 3(c)(1), Pub. L. 101–238, 103 

Stat. 2099, 2102 (8 U.S.C. 1182 note); sec. 

221(a), Pub. L. 101–649, 104 Stat. 4978, 5027 

(8 U.S.C. 1184 note); sec. 303(a)(8), Pub. L. 

102–232, 105 Stat. 1733, 1748 (8 U.S.C. 1101 

note); sec. 323(c), Pub. L. 103–206, 107 Stat. 

2428; sec. 412(e), Pub. L. 105–277, 112 Stat. 

2681 (8 U.S.C. 1182 note); sec. 2(d), Pub. L. 

106–95, 113 Stat. 1312, 1316 (8 U.S.C. 1182 

note); 29 U.S.C. 49k; Pub. L. 107–296, 116 

Stat. 2135, as amended; Pub. L. 109–423, 120 

Stat. 2900; 8 CFR 214.2(h)(4)(i); 8 CFR 

214.2(h)(6)(iii); and sec. 6, Pub. L. 115–218, 

132 Stat. 1547 (48 U.S.C. 1806). 

Subpart A issued under 8 CFR 214.2(h). 

Subpart B issued under 8 U.S.C. 

1101(a)(15)(H)(ii)(a), 1184(c), and 1188; and 8 

CFR 214.2(h). 

Subpart E issued under 48 U.S.C. 1806. 

Subparts F and G issued under 8 U.S.C. 

1288(c) and (d); sec. 323(c), Public Law 103– 

206, 107 Stat. 2428; and 28 U.S.C. 2461 note, 

Public Law 114–74 at section 701. 

Subparts H and I issued under 8 U.S.C. 

1101(a)(15)(H)(i)(b) and (b)(1), 1182(n), (p), 

and (t), and 1184(g) and (j); sec. 303(a)(8), 

Public Law 102–232, 105 Stat. 1733, 1748 (8 

U.S.C. 1101 note); sec. 412(e), Public Law 

105–277, 112 Stat. 2681; 8 CFR 214.2(h); and 

28 U.S.C. 2461 note, Public Law 114–74 at 

section 701. 

Subparts L and M issued under 8 U.S.C. 

1101(a)(15)(H)(i)(c) and 1182(m); sec. 2(d), 

Public Law 106–95, 113 Stat. 1312, 1316 (8 

U.S.C. 1182 note); Public Law 109–423, 120 

Stat. 2900; and 8 CFR 214.2(h). 

■ 2. Amend § 655.731 by revising 

paragraphs (a)(2)(ii) introductory text, 

(a)(2)(ii)(A) introductory text, and 

(a)(2)(ii)(A)(2) to read as follows: 

§ 655.731 What is the first LCA 

requirement, regarding wages? 

* * * * * 

(a) * * * 

(2) * * * 

(ii) If the job opportunity is not 

covered by paragraph (a)(2)(i) of this 

section, the prevailing wage shall be 

based on the wages of workers similarly 

employed as determined by the wage 

component of the Bureau of Labor 

Statistics (BLS) Occupational 

Employment Statistics Survey (OES) in 

accordance with 20 CFR 656.40(b)(2)(i); 

a current wage as determined in the area 

under the Davis-Bacon Act, 40 U.S.C. 

276a et seq. (see 29 CFR part 1), or the 

McNamara-O’Hara Service Contract Act, 

41 U.S.C. 351 et seq. (see 29 CFR part 

4); an independent authoritative source 

in accordance with paragraph 

(a)(2)(ii)(B) of this section; or another 

legitimate source of wage data in 

accordance with paragraph (a)(2)(ii)(C) 

of this section. If an employer uses an 

independent authoritative source or 

other legitimate source of wage data, the 

prevailing wage shall be the arithmetic 

mean of the wages of workers similarly 

employed, except that the prevailing 

wage shall be the median when 

provided by paragraphs (a)(2)(ii)(A), 

(b)(3)(iii)(B)(2), and (b)(3)(iii)(C)(2) of 

this section. The prevailing wage rate 

shall be based on the best information 

available. The following prevailing wage 

sources may be used: 

(A) OFLC National Processing Center 

(NPC) determination. The NPC shall 

receive and process prevailing wage 

determination requests in accordance 

with these regulations and Department 

guidance. Upon receipt of a written 

request for a PWD, the NPC will 

determine whether the occupation is 

covered by a collective bargaining 

agreement which was negotiated at 

arm’s length, and, if not, determine the 

wages of workers similarly employed 

using the wage component of the BLS 

OES and selecting an appropriate wage 

level in accordance with 20 CFR 

656.40(b)(2)(i), unless the employer 

provides an acceptable survey. The NPC 

shall determine the wage in accordance 

with secs. 212(n), 212(p), and 212(t) of 

the INA and in a manner consistent 

with 20 CFR 656.40(b)(2). If an 

acceptable employer-provided wage 

survey provides an arithmetic mean 

then that wage shall be the prevailing 

wage; if an acceptable employerprovided wage survey provides a 

median and does not provide an 

arithmetic mean, the median shall be 

the prevailing wage applicable to the 

employer’s job opportunity. In making a 

PWD, the NPC will follow 20 CFR 

656.40 and other administrative 

guidelines or regulations issued by ETA. 

The NPC shall specify the validity 

period of the PWD, which in no event 

shall be for less than 90 days or more 

than 1 year from the date of the 

determination. 

* * * * * 

(2) If the employer is unable to wait 

for the NPC to produce the requested 

prevailing wage for the occupation in 

question, or for the CO and/or the 

BALCA to issue a decision, the 

employer may rely on other legitimate 

sources of available wage information as 

set forth in paragraphs (a)(2)(ii)(B) and 

(C) of this section. If the employer later 

discovers, upon receipt of the PWD from 

the NPC, that the information relied 

upon produced a wage below the final 

PWD and the employer was not paying 

the NPC-determined wage, no wage 

violation will be found if the employer 

retroactively compensates the H–1B 

nonimmigrant(s) for the difference 

between the wage paid and the 

prevailing wage, within 30 days of the 

employer’s receipt of the PWD. 

* * * * * 

PART 656—LABOR CERTIFICATION 

PROCESS FOR PERMANENT 

EMPLOYMENT OF ALIENS IN THE 

UNITED STATES 

■ 3. The authority citation for part 656 

is revised to read as follows: 

Authority: 8 U.S.C. 1182(a)(5)(A), 1182(p); 

sec.122, Pub. L. 101–649, 109 Stat. 4978; and 

Title IV, Pub. L. 105–277, 112 Stat. 2681. 

■ 4. Amend § 656.40 by revising 

paragraphs (a) and (b)(2) and (3) to read 

as follows: 

§ 656.40 Determination of prevailing wage 

for labor certification purposes. 

(a) Application process. The employer 

must request a PWD from the NPC, on 

a form or in a manner prescribed by 

OFLC. The NPC shall receive and 

process prevailing wage determination 

requests in accordance with these 

regulations and with Department 

guidance. The NPC will provide the 

employer with an appropriate prevailing 

wage rate. The NPC shall determine the 

wage in accordance with sec. 212(p) of 

the INA. Unless the employer chooses to 

appeal the center’s PWD under 

§ 656.41(a) of this part, it files the 

Application for Permanent Employment 

Certification either electronically or by 

mail with the processing center of 

jurisdiction and maintains the PWD in 

its files. The determination shall be 

submitted to the CO, if requested. 

(b) * * * 

(2) If the job opportunity is not 

covered by a CBA, the prevailing wage 

for labor certification purposes shall be 

based on the wages of workers similarly 

employed using the wage component of 

the Bureau of Labor Statistics (BLS) 

Occupational Employment Statistics 

Survey (OES) in accordance with 

subparagraph (b)(2)(i), unless the 

employer provides an acceptable survey 

under paragraphs (b)(3) and (g) of this 

section or elects to utilize a wage 

permitted under paragraph (b)(4) of this 

section. 

(i) The BLS shall provide the OFLC 

Administrator with the OES wage data 


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Federal Register / Vol. 86, No. 9 / Thursday, January 14, 2021 / Rules and Regulations 3673 

by occupational classification and 

geographic area, which is computed and 

assigned at levels set commensurate 

with the education, experience, and 

level of supervision of similarly 

employed workers, as determined by the 

Department. 

(ii) Except as provided under 

paragraph (b)(2)(iii) of this section, the 

prevailing wage shall be provided by the 

OFLC Administrator at the following 

four levels: 

(A) The Level I Wage shall be 

computed as the 35th percentile of the 

OES wage distribution and assigned for 

the most specific occupation and 

geographic area available. 

(B) The Level II Wage shall be 

determined by first dividing the 

difference between Levels I and IV by 

three and then adding the quotient to 

the computed value for Level I and 

assigned for the most specific 

occupation and geographic area 

available. 

(C) The Level III Wage shall be 

determined by first dividing the 

difference between Levels I and IV by 

three and then subtracting the quotient 

from the computed value for Level IV 

and assigned for the most specific 

occupation and geographic area 

available. 

(D) The Level IV Wage shall be 

computed as the 90th percentile of the 

OES wage distribution and assigned for 

the most specific occupation and 

geographic area available. Where the 

Level IV Wage cannot be computed due 

to wage values exceeding the uppermost 

interval of the OES wage interval 

methodology, the OFLC Administrator 

shall determine the Level IV Wage using 

the current hourly wage rate applicable 

to the highest OES wage interval for the 

specific occupation and geographic area, 

or the arithmetic mean of the wages of 

all workers for the most specific 

occupation and geographic area 

available, whichever is highest. 

(iii) Transition Wage Rates: 

(A) For the period from the effective 

date of this rule through June 30, 2021, 

the prevailing wage shall be provided by 

the OFLC Administrator at the following 

four levels: 

(1) The Level I Wage shall be 

computed as the arithmetic mean of the 

lower one-third of the OES wage 

distribution and assigned for the most 

specific occupation and geographic area 

available. 

(2) The Level IV Wage shall be 

computed as the arithmetic mean of the 

upper two-thirds of the OES wage 

distribution and assigned for the most 

specific occupation and geographic area 

available. 

(3) The Level II Wage and Level III 

Wage shall be determined by applying 

the formulae provided in paragraphs 

(b)(2)(ii)(B) and (C) of this section to the 

Level I and Level IV values in 

paragraphs (b)(2)(iii)(A)(1) and (2) of 

this section. 

(B) For the period from July 1, 2021, 

through June 30, 2022, the prevailing 

wage shall be provided by the OFLC 

Administrator at the following four 

levels: 

(1) The Level I Wage shall be 90 

percent of the wage provided under 

paragraph (b)(2)(ii)(A) of this section, or 

the wage provided under paragraph 

(b)(2)(iii)(A)(1) of this section, 

whichever is higher. 

(2) The Level IV Wage shall be 90 

percent of the wage provided under 

paragraph (b)(2)(ii)(D) of this section, or 

the wage provided under paragraph 

(b)(2)(iii)(A)(2) of this section, 

whichever is higher. 

(3) The Level II Wage and Level III 

Wage shall be determined by applying 

the formulae provided in paragraphs 

(b)(2)(ii)(B) and (C) of this section to the 

wages established under paragraphs 

(b)(2)(iii)(B)(1) and (3) of this section. 

(C) Notwithstanding any other 

provision of this section, if the employer 

submitting the Form ETA–9035/9035E, 

Labor Condition Application for 

Nonimmigrant Workers and, as 

applicable, the Form ETA–9141, 

Application for Prevailing Wage 

Determination, will employ an H–1B 

nonimmigrant in the job opportunity 

subject to the Labor Condition 

Application for Nonimmigrant Workers 

who was, as of October 8, 2020, the 

beneficiary of an approved Immigrant 

Petition for Alien Worker, or successor 

form, or is eligible for an extension of 

his or her H–1B status under sections 

106(a) and (b) of the American 

Competitiveness in the Twenty-first 

Century Act of 2000 (AC21), Public Law 

106–313, as amended by the 21st 

Century Department of Justice 

Appropriations Authorization Act, 

Public Law 107–273 (2002), and the H– 

1B nonimmigrant is eligible to be 

granted immigrant status but for 

application of the per country 

limitations applicable to immigrants 

under paragraphs 203(b)(1), (2), and (3) 

of the INA, or remains eligible for an 

extension of the H–1B status at the time 

the Labor Condition Application for 

Nonimmigrant Workers is filed: 

(1) For the period from July 1, 2021, 

through June 30, 2022, the prevailing 

wage shall be provided by the OFLC 

Administrator at the following four 

levels: 

(i) The Level I Wage shall be 85 

percent of the wage provided under 

paragraph (b)(2)(ii)(A) of this section, or 

the wage provided under paragraph 

(b)(2)(iii)(A)(1) of this section, 

whichever is higher. 

(ii) The Level IV Wage shall be 85 

percent of the wage provided under 

paragraph (b)(2)(ii)(D) of this section, or 

the wage provided under paragraph 

(b)(2)(iii)(A)(2) of this section, 

whichever is higher. 

(iii) The Level II Wage and Level III 

Wage shall be determined by applying 

the formulae provided in paragraphs 

(b)(2)(ii)(B) and (C) of this section to the 

wages established under paragraphs 

(b)(2)(iii)(C)(1)(i) and (ii) of this section. 

(2) For the period from July 1, 2022, 

through June 30, 2023, the prevailing 

wage shall be provided by the OFLC 

Administrator at the following four 

levels: 

(i) The Level I Wage shall be 90 

percent of the wage provided under 

paragraph (b)(2)(ii)(A) of this section, or 

the wage provided under paragraph 

(b)(2)(iii)(C)(1)(i) of this section, 

whichever is higher. 

(ii) The Level IV Wage shall be 90 

percent of the wage established under 

paragraph (b)(2)(ii)(D) of this section, or 

the wage established under paragraph 

(b)(2)(iii)(C)(1)(ii) of this section, 

whichever is higher. 

(iii) The Level II Wage and Level III 

Wage shall be determined by applying 

the formulae provided in paragraphs 

(b)(2)(ii)(B) and (C) of this section to the 

wages established under paragraphs 

(b)(2)(iii)(C)(2)(i) and (ii) of this section. 

(3) For the period from July 1, 2023, 

through June 30, 2024, the prevailing 

wage shall be provided by the OFLC 

Administrator at the following four 

levels: 

(i) The Level I Wage shall be 95 

percent of the wage provided under 

paragraph (b)(2)(ii)(A) of this section, or 

the wage provided under paragraph 

(b)(2)(iii)(C)(2)(i) of this section, 

whichever is higher. 

(ii) The Level IV Wage shall be 95 

percent of the wage provided under 

paragraph (b)(2)(ii)(D) of this section, or 

the wage provided under paragraph 

(b)(2)(iii)(C)(2)(ii) of this section, 

whichever is higher. 

(iii) The Level II Wage and III Wage 

shall be determined by applying the 

formulae provided in paragraphs 

(b)(2)(ii)(B) and (C) of this section to the 

wages established under paragraphs 

(b)(2)(iii)(C)(3)(i) and (ii) of this section. 

(4) Beginning July 1, 2024, the 

prevailing wage shall be provided by the 

OFLC Administrator in accordance with 

the computations under paragraph 

(b)(2)(ii) of this section. 

(5) Where the Level I Wage or Level 

IV Wage provided under paragraphs 


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3674 Federal Register / Vol. 86, No. 9 / Thursday, January 14, 2021 / Rules and Regulations 

(b)(2)(iii)(C)(1) through (3) of this 

section exceeds the Level I Wage or 

Level IV Wage provided under 

paragraph (b)(2)(ii) of this section in a 

given period, the Level I Wage or Level 

IV Wage for that period shall be the 

wage provided under paragraph 

(b)(2)(ii), and the Level II Wage and 

Level III Wage for that period shall be 

adjusted by applying the formulae 

provided in paragraphs (b)(2)(ii)(B) and 

(C) of this section. 

(D) Where a Level IV Wage provided 

under paragraph (b)(2)(iii) of this 

section cannot be computed due to wage 

values exceeding the uppermost interval 

of the OES wage interval methodology, 

the OFLC Administrator shall determine 

the Level IV Wage using the current 

hourly wage rate applicable to the 

highest OES wage interval for the 

specific occupation and geographic area 

or the arithmetic mean of the wages of 

all workers for the most specific 

occupation and geographic area 

available, whichever is highest. 

(iv) The OFLC Administrator will 

publish, at least once in each calendar 

year, on a date to be determined by the 

OFLC Administrator, the prevailing 

wage levels under paragraphs (b)(2)(ii) 

and (iii) of this section as a notice 

posted on the OFLC website. 

(3) If the employer provides a survey 

acceptable under paragraph (g) of this 

section, the prevailing wage for labor 

certification purposes shall be the 

arithmetic mean of the wages of workers 

similarly employed in the area of 

intended employment. If an otherwise 

acceptable survey provides a median 

and does not provide an arithmetic 

mean, the prevailing wage applicable to 

the employer’s job opportunity shall be 

the median of the wages of workers 

similarly employed in the area of 

intended employment. 

* * * * * 

Signed in Washington, DC. 

John P. Pallasch, 

Assistant Secretary for Employment and 

Training, Labor. 

[FR Doc. 2021–00218 Filed 1–13–21; 8:45 am] 

BILLING CODE P 


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