3452 Federal Register / Vol. 76, No. 12 / Wednesday, January 19, 2011 / Rules and Regulations 

1See http://wdr.doleta.gov/directives. 

DEPARTMENT OF LABOR 

Employment and Training 

Administration 

20 CFR Part 655 

RIN 1205–AB61 

Wage Methodology for the Temporary 

Non-agricultural Employment H–2B 

Program 

AGENCY: Employment and Training 

Administration, Labor. 

ACTION: Final rule; request for comment 

on specific issues. 

SUMMARY: The Department of Labor (the 

Department or DOL) is amending its 

regulations governing the certification 

for the employment of nonimmigrant 

workers in temporary or seasonal nonagricultural employment. This Final 

Rule revises the methodology by which 

the Department calculates the prevailing 

wages to be paid to H–2B workers and 

United States (U.S.) workers recruited in 

connection with a temporary labor 

certification for use in petitioning the 

Department of Homeland Security 

(DHS) to employ a nonimmigrant 

worker in H–2B status. 

DATES: This Final Rule is effective 

January 1, 2012. Comments should be 

submitted by March 21, 2011. 

FOR FURTHER INFORMATION CONTACT: 

William L. Carlson, Ph.D., 

Administrator, Office of Foreign Labor 

Certification, ETA, U.S. Department of 

Labor, 200 Constitution Avenue, NW., 

Room C–4312, Washington, DC 20210; 

Telephone (202) 693–3010 (this is not a 

toll-free number). Individuals with 

hearing or speech impairments may 

access the telephone number above via 

TTY by calling the toll-free Federal 

Information Relay Service at 1–800– 

877–8339. 

SUPPLEMENTARY INFORMATION: 

I. Revisions to 20 CFR 655.10 

A. The Department’s Role in the H–2B 

Program 

As provided by section 

101(a)(15)(H)(ii)(b) of the Immigration 

and Nationality Act (INA or Act) (8 

U.S.C. 1101(a)(15)(H)(ii)(b)), the H–2B 

visa classification for non-agricultural 

temporary workers is available to a 

foreign worker ‘‘having a residence in a 

foreign country which he has no 

intention of abandoning who is coming 

temporarily to the United States to 

perform other [than agricultural] 

temporary service or labor if 

unemployed persons capable of 

performing such service or labor cannot 

be found in this country.’’ This visa 

status is granted by U.S. Citizenship and 

Immigration Services (USCIS), an 

agency within DHS, under its 

regulations at 8 CFR 214.2(h)(6) et seq. 

Section 214(c)(1) of the INA requires 

DHS to consult with appropriate 

agencies before approving an H–2B visa 

petition. 8 U.S.C. 1184(c)(1). That 

consultation occurs according to a 

USCIS regulatory requirement that an 

employer first obtain a temporary labor 

certification from the Secretary of Labor 

(the Secretary) establishing that U.S. 

workers capable of performing the 

services or labor are not available, and 

that the employment of the foreign 

worker(s) will not adversely affect the 

wages and working conditions of 

similarly employed U.S. workers. 8 CFR 

214.2(h)(6). 

The Secretary’s responsibility for the 

H–2B program is carried out by two 

agencies within the Department. 

Applications for labor certification are 

processed by the Office of Foreign Labor 

Certification (OFLC) in the Employment 

and Training Administration (ETA), the 

agency to which the Secretary has 

delegated those responsibilities 

described in the USCIS H–2B 

regulations. Enforcement of the 

attestations and assurances made by 

employers in H–2B applications for 

labor certification is conducted by the 

Wage and Hour Division (WHD) under 

enforcement authority delegated to it by 

DHS. 8 U.S.C. 1184(c)(14)(B). 

B. The Determination of the Prevailing 

Wage 

To comply with its obligations under 

the program, an employer must pay the 

H–2B workers hired in connection with 

the application a wage that will not 

adversely affect the wages of U.S. 

workers similarly employed. The 

Department’s H–2B procedures have 

always provided that adverse effect is 

prevented by requiring H–2B employers 

to offer and pay at least the prevailing 

wage to the H–2B workers and those 

U.S. workers recruited in connection 

with the job opportunity. To facilitate 

compliance with this requirement, the 

Department has established a process 

for providing to an employer a 

prevailing wage for the job opportunity 

for which certification is being sought. 

From the outset of the H–2B program, 

the Department directed that the same 

prevailing wage procedures be used for 

the permanent, H–1B, and H–2B 

programs. Although the Department did 

not promulgate a separate prevailing 

wage methodology until 1995, General 

Administration Letter (GAL) 10–84, 

‘‘Procedures for Temporary Labor 

Certifications in Non Agricultural 

Occupations’’ (April 23, 1984) provided 

guidance to the States on the 

administration of the H–2 

nonagricultural program (a predecessor 

of the H–2B program) requiring the 

States to determine the prevailing wage 

in accordance with regulations for the 

permanent program at 20 CFR 656.40. In 

1995, the Department issued separate 

prevailing wage guidance through GAL 

4–95, ‘‘Interim Prevailing Wage Policy 

for Nonagricultural Immigration 

Programs’’ (May 18, 1995), Attachment 

I,1 and again in 1998, through GAL 2– 

98 ‘‘Prevailing Wage Policy for 

Nonagricultural Immigration Programs’’ 

(November 30, 1998) that continued to 

extend the provisions of § 656.40 to the 

H–2B program. Under the two GALs, 

payment of the rates determined under 

the Davis-Bacon Act (DBA), 40 U.S.C. 

276a et seq., 29 CFR part 1, or the 

McNamara-O’Hara Service Contract Act 

(SCA), 41 U.S.C. 351 et seq., was 

mandatory for H–2B occupations for 

which such wage determinations 

existed. Starting in 1998, in the absence 

of SCA or DBA wage rates, prevailing 

wage determinations were based on the 

Occupational Employment Statistics 

wage survey (OES), compiled by the 

Bureau of Labor Statistics (BLS). The 

OES wage survey produces employment 

and wage estimates for about 800 

occupations and is based upon wage 

data covering full-time and part-time 

workers who are given monetary 

compensation for their labor or services. 

The OES survey is published annually 

and features data broken out both by 

geographic area and industry. The wage 

estimates in the survey are made 

available at the national, State and 

metropolitan and nonmetropolitan area 

levels. The OES survey directly collects 

a wage rate for all occupations defined 

by the Office of Management and 

Budget’s (OMB’s) occupational 

classification system, the Standard 

Occupational Classification (SOC) 

system code. Employers, however, have 

been able since at least 1995 to submit 

private wage surveys that met 

Department standards. 

Both the 1995 and the 1998 GALs 

provided that DOL would issue 

prevailing wage determinations at two 

levels, entry-level and experienced. At 

that time, there were not many H–2B 

program users, and new prevailing wage 

procedures were designed primarily to 

address the needs of the permanent and 

H–1B programs which were dominated 

by job opportunities in higher skilled 

occupations. There was considerable 

desire on the part of H–1B and 

permanent program users to have the 

Department create a multi-tiered wage 


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2http://www.foreignlaborcert.doleta.gov/pdf/ 

NPWHC_Guidance_Revised_11_2009.pdf. 

3The comment submitted by the Chief Counsel 

for Advocacy, SBA reflected not only that agency’s 

concerns but also those expressed by employers at 

a roundtable hosted by the SBA on October 20, 

2010. 

structure to reflect the largely selfevident proposition that workers in 

occupations that require sophisticated 

skills and training receive higher wages 

based on those skills. 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 surrogate for the entry-level 

wage. The Department did not conduct 

any meaningful economic analysis to 

test its validity and, most significantly, 

it did not consider whether assumptions 

about wages and skill levels for higher 

skilled occupations might be less valid 

when applied to lower skilled 

occupations. In December 2004, the 

Department revised its regulation 

governing the permanent program. 69 

FR 77326, Dec. 27, 2004. These 

revisions included changes to 20 CFR 

656.40 which governed the procedures 

for determining the prevailing wage. In 

particular, these revisions eliminated 

the requirement that SCA/DBA wage 

determinations be treated as the 

prevailing wage where such 

determinations existed. The regulation 

provided that use of available SCA/DBA 

wage rates would be only at the option 

of the employer. 

The preamble to the PERM regulation 

also discussed Congress’s enactment of 

the H–1B Visa Reform Act in the 

Consolidated Appropriations Act of 

2005, Public Law 108–447, Div. J., Title 

IV, section 423, which amended section 

212(p)(4) of the INA, 8 U.S.C. 

1182(p)(4), relating to the H–1B visa 

program. This legislation mandated that 

the Department issue prevailing wages 

at four levels when the prevailing wages 

were based upon a government survey. 

The legislation mandated how the four 

levels were to be calculated by 

mathematically manipulating the 

existing two level wages. Section 656.40 

of 20 CFR, the regulation implementing 

the H–1B Visa Reform Act, only 

specifically referenced prevailing wages 

established for the PERM and H–1B 

programs. 

Soon after the enactment of the new 

regulations, the Department issued 

comprehensive guidance on prevailing 

wage determinations. Following the 

practice in place since 1984, this 

guidance also applied to the H–2B 

program. ETA Prevailing Wage 

Determination Policy Guidance, Nonagricultural Immigration Programs, May 

2005, revised November 2009.2 The 

guidance included the use of the fourtier wage structure and the elimination 

of the mandatory application of the 

SCA/DBA wage determinations. 

In 2008, the Department issued the 

regulations that currently govern the H– 

2B temporary worker program. 73 FR 

78020, Dec. 19, 2008 (the 2008 Final 

Rule). The 2008 Final Rule addressed 

some aspects of the 2005 prevailing 

wage guidance. See 20 CFR 655.10(b)(2). 

However, the Department did not 

propose or seek comments on the 

methodology for determining prevailing 

wages. 

In early 2009, a lawsuit was filed 

challenging various aspects of the 

Department’s H–2B procedures 

included in the 2008 Final Rule; among 

the issues raised was the use of the fourtier wage structure in the H–2B program 

and the optional use of SCA and DBA 

wages. Comite ́ de Apoyo a los 

Trabajadores Agricolas (CATA) v. Solis, 

Civil No. 2:09–cv–240–LP, 2010 WL 

3431761 (E.D. Pa.). In its August 30, 

2010 decision, the court ruled that the 

Department had violated the 

Administrative Procedure Act (APA) in 

failing to adequately explain its 

reasoning for using skill levels as part of 

the H–2B prevailing wage 

determinations, and failing to consider 

comments relating to the choice of 

appropriate data sets in deciding to rely 

on OES data rather than SCA and DBA 

in setting the prevailing wage rates. The 

court ordered the Department to 

‘‘promulgate new rules concerning the 

calculation of the prevailing wage rate 

in the H–2B program that are in 

compliance with the Administrative 

Procedure Act no later than 120 days 

from the date of this order.’’ 

This rulemaking represents the 

Department’s efforts to address both 

substantive and procedural concerns 

about prevailing wages in the H–2B 

program. The Department promulgated 

and published an NPRM in accordance 

with the court’s order, allowing a 30-day 

comment period. 75 FR 61578, Oct. 5, 

2010. Several commenters requested 

that the Department provide additional 

time to comment on the proposed rule; 

the Department requested additional 

time from the court and was granted 

until January 18, 2011, to promulgate a 

Final Rule. The Department, in turn, 

provided the public an additional 8 

days for comment on the NPRM. 

The NPRM proposed to eliminate the 

use of the four-tier wage structure for 

the H–2B program in favor of the mean 

OES wage for each occupational 

category. It also provided that available 

SCA/DBA wage determination rates for 

those occupations for which H–2B 

certification is sought, or collective 

bargaining agreement (CBA) wages, if 

such an agreement exists, would be 

used if they reflected higher wages than 

the OES wage. The NPRM also proposed 

to eliminate the use of employerprovided surveys in the H–2B program. 

After a thorough review of the 

comments, the Department has decided 

to finalize these changes. 

C. Overview of Comments Received 

The Department received almost 300 

comments in response to the proposed 

rule. We have determined that 251 of 

these comments were completely 

unique, 8 were duplicates, and 39 were 

a form letter or based on a form letter. 

Commenters represented a broad range 

of constituencies for the H–2B program, 

including individual employers, worker 

advocacy groups, labor organizations, 

small business advocates, business 

associations, law firms, government 

agencies, including the Chief Counsel 

for the Office of Advocacy of the Small 

Business Association (Chief Counsel for 

Advocacy, SBA),3 Members of Congress 

and Congressional Committees, and 

various interested members of the 

public. These comments, both 

supporting and opposing the proposed 

regulation, are discussed in greater 

detail below. 

Some of the comments received were 

outside the scope of the proposed rule. 

The NPRM proposed a methodology for 

determining the prevailing wage for use 

in the H–2B program. Many comments 

went well beyond that issue, addressing 

matters such as comprehensive 

immigration reform, general 

immigration-related concerns, 

unemployment-related issues, the 

incorporation or continuation of special 

procedures in the H–2B program, 

enforcement, future regulatory actions, 

and various regulatory sections under 

Subpart A that are not part of this 

rulemaking. Comments submitted before 

the comment period began or after the 

comment period closed were not 

considered. 

Among those comments the 

Department deemed out of scope were 

several comments received about the 

use of the wage methodology within the 

Territory of Guam. A labor certification 

from the Secretary is not required for H– 


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4The Secretary of Labor is required, for certain 

military workforce projects, to consult with the 

Governor of Guam in a certification to the Secretary 

of Defense regarding the adequacy of recruitment of 

U.S. workers. Public Law 111–84, Subtitle C, 123 

Stat. 2672, section 2834 (October 28, 2009). This is 

a separate certification from that required to be 

given to the employer by the Governor of Guam 

under 8 CFR 214.2(h)(6)(iii). 

5H–2B Program: Hearing Before the 

Subcommittee on Immigration, Citizenship, 

Refugees, Border Security, and International Law of 

the H. Comm. On the Judiciary, 110th Cong. 5 

(2008) (statement of Ross Eisenbrey, Vice President, 

Economic Policy Institute). 

2B employment on Guam.4 Instead, an 

employer seeking a foreign labor 

certification on Guam is required to 

request and receive a certification from 

the Governor of Guam. 8 CFR 

214.2(h)(6)(iii). The Department did not 

propose in the NPRM to revise the 

certification process on Guam; therefore 

all comments received about Guam have 

been deemed out of scope. 

Additionally, several commenters 

asserted that the Interim Regulatory 

Flexibility Analysis (IRFA) in the NPRM 

failed to consider increased payroll 

costs associated with the wage increases 

for other workers who would be paid 

the prevailing wage. This rule is limited 

to the determination of methodology for 

the payment of a prevailing wage to H– 

2B workers and U.S. workers hired in 

response to the H–2B required 

recruitment. Any extension of the 

requirements to pay the prevailing wage 

to others is outside the scope of this 

rule. 

II. Discussion of Comments Received 

A. The Significance of Setting the 

Prevailing Wage at the Appropriate 

Level 

The Department’s role in the H–2B 

temporary nonimmigrant program is to 

certify to DHS that: (1) there are not 

sufficient U.S. workers available who 

are capable of performing the temporary 

services or labor at the time of filing of 

the petition for the H–2B classification 

and at the place where the foreign 

worker is to perform the work; and (2) 

the employment of the foreign worker 

will not adversely impact the wages and 

working conditions of U.S. workers 

similarly employed. 20 CFR 655.1(b), 8 

CFR 214.2(h)(6)(iii), and 8 CFR 

214.2(h)(6)(iv). These two findings 

address the statutory requirement that 

H–2B workers be admitted only if no 

unemployed persons capable of 

performing such service or labor in this 

country are available. 8 U.S.C. 

1101(a)(15)(h)(ii)(b). 

Historically, requiring an H–2B 

employer to pay the prevailing wage for 

the locality in which the worker will be 

employed has been the cornerstone of 

the required labor market test. The 

Department has consistently held that 

payment of the prevailing wage ensures 

that there is no adverse effect on the 

wages of similarly employed U.S. 

workers and provides meaningful access 

to these job opportunities. 

The Department proposed a 

prevailing wage methodology that will 

result in wages that more closely reflect 

the average of wages paid to similarly 

employed workers in the area of 

intended employment. In doing so, the 

Department ensures full compliance 

with the statutory intent of the H–2B 

program and that unemployed U.S. 

workers capable of performing the jobs 

for which H–2B workers are sought will 

have meaningful access to job 

opportunities. 

Several commenters claimed that 

regardless of the changes the 

Department makes to the wage 

methodology used in the H–2B program, 

H–2B employers will not be able to find 

interested U.S. workers for these job 

opportunities. The Department’s 

objective in this rulemaking is not to 

guarantee that U.S. workers will apply 

for these positions, but to provide a 

prevailing wage that does not adversely 

affect the wages of U.S. workers and 

provides them the opportunity for jobs 

sought by H–2B employers at 

competitive wages. 

One commenter agreed that setting 

the appropriate prevailing wage for the 

position is central to testing the labor 

market. This commenter argued that 

U.S. workers cannot be expected to 

accept employment under conditions 

below the established minimum levels, 

citing examples of high unemployment 

rates in industries in which employers 

tend to hire H–2B workers, including 

the construction industry, as well as 

high unemployment rates among 

specific groups of vulnerable low-wage 

workers: Youth, Hispanics, and African 

Americans. The same commenter 

indicated that a prevailing wage rate 

that ensures no adverse effect on wages 

and working conditions of U.S. workers 

is needed and that an increase in hourly 

wages for some H–2B guest workers and 

U.S. workers recruited and hired as part 

of the labor certification process is 

consistent with the INA’s statutory 

intent. 

Another commenter indicated that the 

primary goal of any change in the wage 

methodology is to ensure that there are 

no persons in the U.S. capable of 

performing the advertised unskilled 

labor. This commenter observed that if 

the wages are set high enough, U.S. 

workers will be interested in the work, 

but if the wages are set too low U.S. 

labor will not be interested. This 

commenter also noted that where there 

are genuine labor shortages, employers 

would normally attract workers by 

offering (among other things) higher 

wages, which would increase wages for 

U.S. workers. 

The Department agrees with the need 

to ensure there is no adverse effect by 

offering a wage that would be acceptable 

to U.S. workers. By proposing a 

prevailing wage methodology that will 

pay wages that more closely reflect the 

average of wages paid in any 

occupation, the Department creates 

conditions under which unemployed 

U.S. workers will have access to job 

opportunities that they would in fact 

seek out, rather than those in which the 

pay is too low. Testifying before the 

House Subcommittee on Immigration, 

Citizenship, Refugees, Border Security, 

and International Law in April 2008, 

Ross Eisenbrey, Vice President of the 

Economic Policy Institute, cited CPS 

data identified by Jin Dai and Jared 

Bernstein that examined labor market 

indicators for seven H–2B occupations 

that constituted the majority of H–2B 

employment. Annual wage data for 

these occupations had increased at a 

slower rate than has those in other 

occupations.5 The testimony points to 

the fact that economic theory suggests 

that employers who experience 

shortages of labor compete for available 

labor by increasing wages; however, 

under the H–2B program, if positions 

are not filled by U.S. workers at the 

wage offered by the employer, the 

employer may sidestep this effect by 

petitioning the Department for 

permission to bring in foreign workers 

at that lower wage. 

Some commenters questioned the 

appropriateness of the Department’s 

proposal, asserting that increasing 

wages of H–2B and U.S. workers 

recruited in the program is not 

synonymous with protecting the wages 

of U.S. workers from adverse effect. The 

DHS regulations explicitly require that 

certifications be granted only if they do 

not result in adverse impact on the 

wages and working conditions of U.S. 

workers. Since the inception of the 

program, the Department has 

determined that the best way to fulfill 

its mandate to protect wages is to 

require employers to pay a prevailing 

wage. In all labor certification programs, 

except for the unique requirements of 

the H–2A program, the Department has 

used a prevailing wage, however 

defined or calculated, as a means of 

protecting U.S. workers against adverse 

effect—as the INA requires in most 

programs in which the Department has 


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a role. The Department proposed no 

change to this longstanding approach 

and this Final Rule does not make any 

such change. 

Another commenter questioned why 

the Department, while asserting that the 

current wage methodology currently 

results in an adverse effect on U.S. 

workers, continues to certify H–2B labor 

applications as not adversely affecting 

U.S. workers, when the Department 

clearly states its belief that it does. The 

Department’s role in all its immigration 

programs is to ensure that there is no 

adverse effect on the wages (and 

working conditions) of similarly 

employed U.S. workers by requiring the 

payment of an appropriate prevailing 

wage. The Department’s concern that 

the current prevailing wage 

methodology may not be adequate to 

accomplish this task, together with the 

court’s decision, was the impetus for the 

development of the NPRM in which the 

Department provided notice of a 

proposed change to the methodology, 

and solicited comments in order to fully 

examine the issue and determine the 

most appropriate course for meeting its 

obligation. The Department must 

continue to meet its obligations under 

the existing regulations until such time 

as a new regulation is promulgated in 

accordance with APA requirements. 

Discontinuing the issuance of prevailing 

wage determinations would abrogate the 

Department’s obligation to administer 

the H–2B labor certification program. 

B. Highest of All Applicable Wages 

The Department proposed that the 

prevailing wage would be the highest of 

three wage rates: The wage established 

under an applicable CBA; the rate 

established under the DBA or SCA for 

that occupation in the area of intended 

employment; and the arithmetic mean 

wage rate established by the OES for 

that occupation in the area of intended 

employment. Several commenters 

approved of this approach, noting that 

this methodology better protects U.S. 

workers and is far more likely to ensure 

that jobs for which employers petition 

for H–2B workers go unfilled by able 

U.S. workers because there are no such 

workers available, not because 

employers are offering wages far below 

the rates normally paid and expected by 

domestic workers in the area of 

intended employment. Other 

commenters objected to this approach, 

asserting that the various sources of 

prevailing wage rates the Department 

proposed to consider are not of equal 

validity. 

The Department has concluded that 

the approach in the NPRM is most 

consistent with its responsibility under 

the applicable DHS regulations to grant 

certifications that avoid adverse effect 

on wages. The mandate to prevent 

adverse effect has existed for many 

years in all of the immigration programs 

administered by the Department and, 

except for the unique requirements of 

the H–2A program, has always been 

implemented by a requirement that 

employers offer and pay the prevailing 

wage. In situations where there is a SCA 

or DBA wage determination or 

collectively bargained wage rate in 

addition to the OES determination, it is 

compatible with our responsibility to 

avoid adverse effect to mandate that the 

employer pay the higher of these 

determinations. Such determinations 

are based on real wages being paid to 

workers in these areas for the same kind 

of work for which H–2B workers are 

sought—in other words, the labor pool 

of those U.S. workers the would-be H– 

2B employer should be seeking. By 

requiring the highest wage among these 

available, validated sources, the 

Department is guaranteeing that the jobs 

are offered to available workers at wages 

that do not create an adverse effect. 

1. Collective Bargaining Agreements 

The Department proposed retaining 

from the 2008 Final Rule the inclusion 

of a collective bargaining wage as the 

prevailing wage if the job opportunity is 

covered by an agreement that was 

negotiated at arms’ length between the 

collective bargaining unit and the 

employer. Several commenters 

supported this proposal, but suggested 

that the Department go further and 

require that whenever a CBA covers 

workers in a particular geographic 

region and a specific occupational 

classification, the wage rate negotiated 

in the CBA should apply to all 

employers in the region who wish to 

hire H–2B workers in the same 

occupation classification, even those 

that are not signatory to the CBA or who 

have no collective bargaining unit in 

that occupation. 

A CBA is a contractual agreement 

negotiated at arms’ length between more 

or less equal parties. The provisions of 

a CBA reflect a negotiation process and 

a series of concessions between the 

parties to the agreement that would not 

apply to other parties not involved in 

the negotiations. The negotiation of a 

CBA also involves agreement on a range 

of issues, wages, working conditions, 

work rules and many others, all of 

which combine to lead to a complete 

agreement, only one of whose elements 

involves wages. For example, one set of 

negotiating parties may agree to a lower 

wage in return for a guarantee of job 

security while another set may agree to 

higher wages at a greater risk of job cuts. 

Thus, the Department is unwilling to 

use a collectively-bargained wage 

outside the workplace for which it has 

been negotiated unless that wage has 

been determined to be prevailing 

through the SCA, DBA, or OES wage 

determination process. 

By contrast, another commenter 

objected to the use of a wage higher than 

a CBA wage in an employment situation 

in which a CBA applies, noting that 

where an employer is subject to a CBA, 

paying a wage other than the CBA scale 

rate may violate the terms of the 

agreement and have ramifications under 

contract and labor law. However, the 

Department must consistently use the 

prevailing wage rate under the H–2B 

program in order to ensure that U.S. 

workers have meaningful access to these 

positions and do not experience wage 

depression as a result of employers 

hiring foreign workers at less than 

prevailing wages. A CBA rate that had 

fallen below the minimum wage would 

not be valid. Similarly, a CBA rate 

below the prevailing wage would not be 

a valid wage for purposes of the H–2B 

program. 

2. Use of SCA and DBA Wages 

The Department also proposed to 

include consideration of the DavisBacon Act (DBA), 40 U.S.C. 3142 et seq., 

or the McNamara-O’Hara Service 

Contract Act (SCA), 41 U.S.C. 351 et 

seq., wage rate for occupations for 

which wage rates have been determined 

under either of the two Acts for the area 

of intended employment. After 

considering numerous comments, the 

Department adopts this proposal in the 

Final Rule. 

An employer association questioned 

the validity of SCA wage 

determinations, claiming that the data 

used for SCA wage determinations is 

inconsistent and that the use of Federal 

employee wage data invalidates SCA 

wage rates. Similarly, two associations 

representing employers expressed 

concerns about the methodology and 

accuracy of DBA surveys. The 

commenters cited a 1979 report from the 

General Accounting Office (now the 

Government Accountability Office, 

GAO), 1996 Congressional testimony 

from the GAO, and a 2004 report from 

the Department’s Office of Inspector 

General (OIG). One commenter 

suggested that DBA surveys take years 

to be distributed, collected, calculated 

and completed. Two of the commenters 

noted that survey completion is 

voluntary and the results may therefore 

be biased. Several commenters (an 

individual, two employer associations, 

and an employer) expressed concern 


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6 ‘‘Annual Report of the President’s Pay Agent’’, 

December 7, 2009. http://www.opm.gov/oca/ 

payagent/2009/2009PayAgentReport.pdf. 

that DBA wage rates are based on union 

wages, and therefore are not reflective of 

the market. 

After consideration, the Department 

concludes that the commenters’ 

concerns with the consistency, 

timeliness, and validity of SCA and 

DBA wage determinations are 

unfounded. The highly localized wages 

in the SCA present the best market 

information with which to ensure that 

those workers similarly employed are 

not being adversely affected. To help 

ensure reliability, SCA wage 

determinations are now reviewed on a 

yearly basis. Where a single rate is paid 

to a majority (50 percent or more) of the 

workers in a class of service employees 

engaged in similar work in a particular 

locality, that rate is determined to be 

prevailing. Where a single rate does not 

prevail, statistical measures of central 

tendency reflected in BLS surveys are 

considered when issuing SCA wage 

determinations. The BLS conducts two 

surveys that produce locality based 

wage data: The National Compensation 

Survey (NCS), which is the primary data 

source for SCA wage determinations, 

and the OES survey, which serves as 

either a supplement to NCS data or as 

the primary data source for areas or 

classifications not surveyed by NCS. See 

29 CFR 4.50–51. 

The NCS is conducted by personal 

visit. Consideration is paid to 

supplemental sources, such as the 

General Schedule locality pay 

schedules, Non-Appropriated Fund 

(NAF) surveys, surveys conducted by 

states, and the Federal Wage System 

Schedules for the comparable 

geographic area, which indicates what 

Federal employees would be paid if 

they worked in the SCA contract work 

positions. See 29 CFR 4.50. While the 

Department rarely consults these 

Federal employee pay systems in 

determining H–2B wage rates, the use of 

these data, contrary to the commenter’s 

claims, would likely not inflate wage 

rates: March 2009 NCS data reported by 

BLS and used by the Federal Office of 

Personnel Management and the Federal 

Salary Council showed that Federal 

employees make an average of 22 

percent less than their counterparts in 

the private sector.6

Prevailing wages under the DBA are 

established for the corresponding 

classes of laborers and mechanics 

employed on projects of a character 

similar to the contract work in the civil 

subdivision (usually a county) of the 

State in which the work is to be 

performed. 40 U.S.C. 3142(b). 

Department regulations establish that 

the prevailing wage is the wage paid to 

the majority (greater than 50 percent) of 

the workers in the classification on 

similar projects in the area during the 

relevant period. 29 CFR 1.2(a)(1). If the 

same wage is not paid to a majority of 

workers in the classification, then the 

prevailing wage is the weighted average 

of the wage rates paid to workers in that 

classification. 

The prevailing wage rates found in 

the WHD Administrator’s 

determinations are based on survey data 

derived from the information that 

responding contractors and other 

interested parties provide. 29 CFR1.1– 

1.7. The wage surveys collect 

information from all interested parties 

including unions, contractors, and 

associations. If insufficient wage data is 

received for a particular county, then 

the calculation will be expanded to a 

group of surrounding counties. 

The reports relied on by commenters 

who expressed concern about the 

accuracy of DBA wages are more than 6 

years old and not reflective of the 

current status of the wage 

determinations. The Department has 

successfully implemented significant 

improvements to the DBA wage 

determination process in the last 7 

years. As noted in the preamble to the 

proposed rule, WHD’s DBA survey 

program has undergone a significant reengineering effort, resulting in a greatly 

improved and timely prevailing wage 

rate determination process. By working 

with the Census Bureau at the U.S. 

Department of Commerce, the 

Department has successfully expedited 

the overall survey process. The Census 

Bureau now mails the data collection 

forms to employers and other interested 

parties and, upon their return, scans the 

completed form and loads the data into 

the electronic survey database. 

Additionally, the Department has 

significantly improved its timeframe for 

reviewing submitted survey data. As a 

result of these and other improvements, 

the Department recently published a 

statewide survey in less than 18 months. 

The Department anticipates that this 

will be the norm for future surveys. To 

increase survey participation and 

improve the accuracy of published 

survey data, the Department has 

developed newly enhanced postcollection activity, including more 

follow-up phone calls and on-site 

clarification and verification reviews. 

The surveys used to determine DBA 

wage rates are sent to all relevant 

employers within the locality as well as 

to all other interested parties, including 

labor organizations, contractors, and 

employers associations. No one source 

of wage data is determinative. The 

Department notes that while the DBA 

survey, like every other wage survey, is 

voluntary, and there is no statutory 

requirement that employers or labor 

organizations submit their wage data, 

the Department actively encourages 

participation; however, there is no 

statutory requirement that employers or 

labor organizations must submit their 

wage data. In order to mitigate any 

potential bias, the Department has taken 

and continues to take actions to improve 

completion rates, get the most 

representative sample possible, and 

ensure the accuracy of this data. First, 

it has expanded community outreach 

efforts and held additional public 

conferences. These efforts help 

responders to better understand the 

survey process and to appreciate the 

importance of survey participation. 

Additionally, an on-line response tool 

has been introduced, giving recipients 

the opportunity to submit data 

electronically. The Department has also 

engaged an outside contractor to 

randomly audit responses to improve 

accuracy and further mitigate any bias. 

In the rare event of misrepresentation in 

a survey response, fines and 

imprisonment can be pursued. Finally, 

the Department identifies the most fair 

and appropriate geographical statistical 

areas by relying on Census jurisdictions 

and OMB-defined Metropolitan 

Statistical Areas (MSAs). The 

Department believes these measures 

ensure that the DBA wages are reflective 

of the labor market. 

In calculating DBA wage rates, WHD 

follows several important and wellestablished policies. First, in order for a 

classification and rate to prevail, the 

minimum craft sufficiency standard 

must be met. Long-standing WHD 

procedures provide that wage data for a 

particular classification generally must 

be received for at least three workers 

employed by two contractors in order 

for a wage rate to be published for a 

classification. Second, in compiling data 

for building and residential wage 

determinations, WHD cannot use data 

from Federal or federally-assisted 

projects ‘‘unless it is determined that 

there is insufficient wage data to 

determine the prevailing wages in the 

absence of such data.’’ 29 CFR 1.3(d). 

Third, the county is the appropriate 

geographic unit for data collection, 

although data may be derived from 

groups of counties in some situations, as 

described below. 29 CFR 1.7(a), (b). 

Finally, data received from metropolitan 

and rural counties cannot be combined. 

29 CFR 1.7(b). 


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In accordance with these principles, 

WHD first attempts to calculate a 

prevailing wage based on private project 

survey data at the county level. See 

Mistick Construction, ARB No. 04–051, 

slip op. at 3 (Mar. 31, 2006). If there is 

insufficient private survey data for a 

particular county, then WHD considers 

any available survey data from Federal 

projects. If the combined Federal and 

non-federal survey data received from a 

particular county is still insufficient to 

establish a prevailing wage rate for a 

classification, then data from 

surrounding counties may be used, 

provided that data from metropolitan 

and rural counties are not combined. 

See 29 CFR 1.7(b); see also Mistick 

Construction, ARB No. 04–051, slip op. 

at 3 (Mar. 31, 2006). 

In considering survey data from 

surrounding counties, WHD first 

expands its calculation from the county 

alone to a group of counties. For 

metropolitan counties, WHD expands 

the county data to all of the other 

counties located in the same MSA, as 

determined by OMB. If private survey 

data from the established county group 

is still insufficient, then WHD will 

include Federal project data from all 

counties in the group. Rural county 

groups, which are defined by WHD, are 

made up of contiguous nonmetropolitan counties with similar wage 

patterns. 

OMB states that the ‘‘general concept 

of a metropolitan statistical area is that 

of an area containing a large population 

nucleus and adjacent communities that 

have a high degree of integration with 

that nucleus.’’ 2010 Standards for 

Delineating Metropolitan and 

Micropolitan Statistical Areas, 75 FR 

37,246, Jun. 28, 2010. The purpose of 

establishing MSAs is to provide ‘‘a 

nationally consistent set of delineations 

for collecting, tabulating, and 

publishing Federal statistics for 

geographic areas.’’ Id. OMB publishes 

and maintains official MSA lists, based 

primarily on decennial Census data. 

WHD strictly relies upon OMB’s MSA 

determinations in deciding which 

surrounding counties constitute a metro 

county ‘‘group’’ for DBA purposes, and 

WHD therefore does not reconfigure 

MSA groups. By using objective and 

well-established county group 

designations set by OMB, WHD avoids 

injecting bias and uncertainty into its 

wage determination process. 

If both private and Federal data for an 

established county group are still 

insufficient to determine a prevailing 

wage rate, then WHD may expand to a 

‘‘supergroup’’ of counties (either rural or 

metropolitan) or even to the statewide 

level; the expansion stops when 

sufficiently standard data have been 

attained for the craft. WHD only 

expands data to these levels, however, 

for classifications that have been 

designated as ‘‘key’’ crafts. A list of ‘‘key’’ 

crafts can be found in WHD’s Prevailing 

Wage Resource Book. See U.S. 

Department of Labor, Prevailing Wage 

Resource Book (July 2009), Davis-Bacon 

Surveys (Tab 12) at 3, available at http:// 

www.dol.gov/whd/recovery/pwrb/ 

toc.htm. For non-key crafts, data are not 

expanded beyond the county group 

level. 

One employer argued that using DBA 

wage rates would bypass the 

requirements of the National Labor 

Relations Act (NLRA). A DBA prevailing 

wage determination represents an 

accurate prevailing wage rate available 

for similar workers in a particular area 

of employment. Where a collectivelybargained wage rate prevails in a 

classification on similar projects in the 

area during the relevant period, then 

and only then is the resulting DBA 

prevailing wage the collectivelybargained wage rate. This does not, 

however, subject an employer to the 

collective bargaining agreement upon 

which the underlying wage rate is 

based. Rather, the rate is interpreted as 

a reflection of the prevailing wage in the 

area of employment. 

Several commenters suggested that 

the Department consider SCA and DBA 

rates in its prevailing wage 

determinations only when the 

applicant’s H–2B workers would work 

on projects subject to the SCA or DBA. 

SCA and DBA wage rates provide a 

reliable prevailing wage for certain 

occupations within specific localities. 

The commenters’ concerns that an SCA 

or DBA wage is a ‘‘government wage’’ are 

unfounded: the resulting wage closely 

approximates the prevailing wage for a 

particular occupation within a 

particular locality. Since SCA and DBA 

calculations incorporate workers and 

projects outside of government 

contracts, these rates are an appropriate 

source of prevailing wages. 

Some commenters requested that the 

SCA and DBA wage determinations not 

be consulted as prevailing wage sources 

for any occupations not covered by the 

SCA and DBA surveys. As indicated 

above, when determining prevailing 

wages, the Department will not consider 

either source unless it includes data 

appropriate for the actual tasks, duties, 

and activities the worker will perform in 

the area of intended employment, as 

described by the employer in the H–2B 

application. 

Similarly, a number of landscaping 

employers commented that the 

proposed wage sources (SCA, DBA, and 

OES) generalize the prevailing wage 

determination process and do not 

consider particular job classifications in 

areas of intended employment. 

However, the SCA, DBA, and OES wage 

rates are specific to occupations and 

areas of intended employment. National 

Prevailing Wage Center (NPWC) staff 

will match the job duties listed on the 

Application for Prevailing Wage 

Determination with the appropriate 

occupational definition contained in the 

O*Net Occupational Outlook Handbook, 

the SCA Dictionary of Occupations, or 

specific Davis-Bacon wage 

determinations. Only if an appropriate 

match can be made will the source be 

considered in determining the H–2B 

prevailing wage. 

Several submissions from various 

commenters noted that two different 

agencies within the Department collect 

wage data: BLS publishes OES, among 

other wage surveys, while WHD 

publishes SCA and DBA prevailing 

wage rates. Two of these commenters 

recommended that the Department 

consolidate wage calculations into fewer 

surveys, while others recommended that 

the Department give all of the 

responsibility for wage determinations 

to a single agency. The Department 

believes that OES survey data is distinct 

enough from SCA wage determinations 

and DBA surveys that all three should 

be retained, and that all are appropriate 

for use in the H–2B program. OES data 

encompasses occupations outside the 

scope of the SCA and DBA, while in 

certain instances the nature of 

government-contracted service work 

and construction projects requires SCA 

and DBA determinations to take into 

account more detailed information 

about how the work is performed (e.g., 

DBA wage rates reflect the work 

performed by various crafts determined 

by area practice). 

Two employer associations and two 

employers commented that any increase 

in H–2B wage rates would be arbitrary. 

One commenter elaborated, explaining 

that because the methodologies used to 

produce the SCA, DBA, and OES wage 

rates and data are different, none can be 

truly accurate. As explained above, the 

SCA, DBA, and OES methodologies use 

the best information available to 

establish prevailing wage rates for 

specialized occupations within specific 

occupational categories. OES data has 

been used historically as the basis for 

prevailing wage determinations in the 

H–2B and other DOL immigration 

programs, while SCA and DBA rates 

were used in the H–2B program before 

2005. Furthermore, the three wage rates 

are not fundamentally different: all are 

derived from employer survey data. 


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7Section 2(a)(2) of the McNamara O’Hara Service 

Contract Act, 41 U.S.C. 351(a)(2); 40 U.S.C. 

3141(2)(B). 

8For projects covered by DBA or SCA, employers 

are responsible for paying fringe benefits as 

required by those laws regardless of whether the 

workers are domestic or H–2B workers. 

A few commenters believed 

incorrectly that the Department’s use of 

SCA and DBA wage rates would require 

employers to provide fringe benefits or 

to pay workers the cash equivalent of 

such benefits. The Acts require 

contractors performing service or 

construction work, respectively, on 

covered Federal contracts to furnish, in 

addition to the prevailing hourly rate of 

pay, fringe benefits found prevailing in 

the locality (or the cash equivalent 

thereof).7 SCA and DBA wage 

determinations reflect two figures— 

wages and benefits. For purposes of the 

H–2B program, however, the SCA or 

DBA prevailing wage is only the wage 

component of the wage determination. 

This Final Rule therefore does not 

require the payment of fringe benefits; 

such benefits would, however, 

otherwise be required if the employer’s 

work involves a contract which is 

covered by one of the Acts. 

Numerous commenters urged the 

Department to include fringe benefits in 

all H–2B prevailing wage 

determinations. These commenters 

assert that not including fringe benefits 

would ‘‘give employers an incentive to 

hire H–2B workers instead of U.S. 

workers’’ in order to avoid additional 

labor costs, and would thus undermine 

the requirement that H–2B visas be 

issued only if no qualified U.S. workers 

are available. The Department 

recognizes these commenters’ concerns, 

particularly for H–2B positions that 

have been certified at an SCA or DBA 

wage rate. However, the Department 

historically has not required the 

payment of fringe benefits to H–2B 

workers, even before 2005, when SCA 

and DBA wage rates were mandatory for 

occupations where such wage 

determinations existed. See 75 FR 

61578, 61579 (Oct. 5, 2010) (‘‘Wage 

Methodology for the Temporary NonAgricultural Employment H–2B 

Program’’ Proposed Rule). In addition, 

no data exists to allow adequate 

computation and monetization of fringe 

benefits over all the occupations and 

locations covered by the H–2B program. 

Therefore, given the Department’s 

historical practice, and given that the 

Department cannot currently fully 

estimate the economic impact of 

requiring fringe benefits for H–2B 

positions, the Department will not 

require fringe benefit payments to H–2B 

workers, regardless of the source of the 

prevailing wage.8

3. The Elimination of the Four-tier Wage 

Structure 

In the NPRM, the Department 

proposed to eliminate the use of the 

four-tier wage structure and implement 

a single prevailing wage rate based on 

the arithmetic mean of the OES wage 

data for the job classification in the area 

of intended employment. The NPRM 

cited a number of reasons why the four 

tiers did not establish an adequate 

prevailing wage. After thorough 

consideration of the public comments, 

the Department has decided that the 

proposed elimination of the use of the 

four-tier wage structure is appropriate. 

The Department continues to believe 

that the OES wage data is an appropriate 

wage data available in the absence of a 

higher CBA, SCA, or DBA wage. 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 1 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, and it is for 

these reasons that the survey is also 

used in other foreign labor certification 

programs administered by the 

Department, including the H–1B and 

PERM programs. The frequency and 

precision of the data collected, as well 

as the comprehensive nature of the 

occupations for which such data is 

collected, make it an appropriate data 

source for determining applicable wages 

across the range of occupations found in 

the H–2B program. 

a. The Four-Tier Wage Structure is Not 

Suitable for Unskilled Jobs 

The Department received a number of 

comments in support of its proposal to 

eliminate the four-tier wage structure. 

Three Congressional commenters 

supported the proposal. One indicated 

that the four-tier wage structure is 

inappropriate for the H–2B program 

because the program involves relatively 

low-skilled occupations with few 

differences in skill or experience. 

Another commenter, a Congressional 

subcommittee, indicated that the 

structure is contrary to the Department’s 

obligation to ensure that H–2B 

employers offer wages that do not 

adversely affect the wages of the U.S. 

workforce. The third Congressional 

commenter argued that a tiered wage 

structure in the H–2B program 

undercuts Congressional intent to 

protect the wages of both U.S. and 

foreign workers. 

Additional commenters supported the 

Department’s decision to eliminate wage 

tiers, noting that the use of skill level 

wages in low-skill H–2B jobs causes an 

adverse effect because all workers in 

those job categories perform the same 

job duties and, in the commenters’ view, 

compete with one another for job 

openings, regardless of their cumulative 

experience levels. One commenter 

noted that even if experience in the job 

normally results in a higher wage level, 

the current methodology permits 

employers to pay the H–2B workers 

entry-level wages, thus placing U.S. 

workers seeking the same job openings 

at a disadvantage because their 

experience is not compensated. 

The Department also received a 

number of comments opposing the 

elimination of the four-tier wage 

structure; numerous commenters, 

including the Chief Counsel for 

Advocacy, SBA, offered arguments that 

wage tiers appropriately reflect the level 

of skill, education, experience and other 

requirements of the job. Several 

commenters opposed the elimination of 

the four-tier wage structure on the 

grounds that the skill levels allow 

employers to differentiate between 

employees based on their skills and 

level of experience. Some of these 

commenters expressed concern that the 

change to the arithmetic mean for all H– 

2B wages would result in an 

inappropriate averaging of the wages of 

entry-level and more experienced 

workers. Other commenters asserted 

that the use of a single wage would 

inflate the prevailing wages of entrylevel workers and deflate prevailing 

wages of highly-experienced workers 

because it would fail to take into 


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9The Chief Counsel for Advocacy, SBA’s 

comment reflected the suggestion of several 

businesses on this alternative. 

10The Executive Order (E.O.) 12866 analysis 

below analyzes FY 2007 through 2009 disclosure 

data that reflects the numbers of jobs certified in 

these occupations; the top five industries for which 

the average annual number of H–2B workers were 

certified are Construction—30,242; Amusement, 

Gambling, and Recreation—14,041; Landscaping 

Services—78,027; Janitorial Services—30,902; and 

Food Services and Drinking Places—22,948. 

11Level I wage rates under the Prevailing Wage 

Guidance are typically assigned to job offers for 

beginning level employees who have a basic 

understanding of the occupation. These employees 

perform routine tasks that require limited, if any 

exercise of judgment. The tasks provide experience 

and familiarization with the employer’s methods, 

practices, and programs. The employees may 

perform higher level work for training and 

developmental purposes. These employees work 

under close supervision and receive specific 

instructions on required tasks and results expected. 

Their work is closely monitored and reviewed for 

accuracy. See http:// 

www.foreignlaborcert.doleta.gov/pdf/ 

NPWHC_Guidance_Revised_11_2009.pdf. 

consideration wage differentiation 

factors such as supervisory duties, 

responsibilities, and seniority/tenure or 

experience, particularly for skilled 

positions in certain industries. One 

commenter indicated that the wage 

determination methodology would 

average in wages for higher skilled 

workers, and therefore contradicts the 

intent for establishing the H–2B 

program as one for the recruitment of 

unskilled workers. 

A few commenters argued against the 

elimination of skill levels, and 

presented an alternative in which 

employers could craft job descriptions 

in such a way as to couple the higher 

arithmetic mean-based wage with a 

requirement for more experience.9

Several commenters expressed concern 

that the Department’s proposal does not 

specify that employers will be able to 

increase their experience requirements 

as a result of the increased wages and 

requested that if the Department uses 

the OES arithmetic mean, H–2B 

employer-applicants should be allowed 

to specify the minimum experience 

requirements that are associated with 

the new wage. 

One commenter argued that the skills 

in the H–2B program may not be a 

matter of educational degrees or 

detailed training, but rather properly 

and efficiently performing the job. This 

commenter asserted that employers 

typically reward H–2B workers with 

higher wages and benefits based on job 

performance, and that raising the wages 

in the program to the mean would 

eliminate the employer’s ability to 

properly manage and reward those 

employees. 

Other commenters indicated that the 

elimination of the four-tier wage 

structure will not maintain fair wage 

calculations to ensure U.S. workers are 

not adversely affected by the 

employment of H–2B workers because 

the current system ensures unskilled 

and skilled workers have access to H– 

2B job positions according to their level 

of experience, education, and 

supervision required to perform the job 

duties. One of these commenters further 

claimed that because many H–2B 

workers are in low-skilled or unskilled 

positions, wage rates from a lower tier 

should correlate with lower skills and 

be close to the appropriate wage such 

that H–2B workers earn wages at similar 

levels as the wages of domestic workers. 

Several commenters representing the 

ski industry conceded that although not 

all positions in their industry reflect 

skill levels, their industry is unique in 

that certain positions, particularly those 

for ski and snowboard instructors, 

require certification and/or 

accreditation which reflects specific 

levels of skill and experience consistent 

with those established for the industry 

nationally and internationally. These 

commenters indicated that establishing 

a prevailing wage rate based on a single 

overall arithmetic mean fails to account 

for skill progressions required of the ski 

instructor positions. In addition, one 

commenter in the construction industry 

associated the wage tiers with important 

skills and knowledge pertaining to 

safety requirements and programs, 

noting that Level II and Level III 

workers are necessary to maintain 

workers’ safety. 

As discussed elsewhere in this Final 

Rule, the Department’s obligation to 

administer the H–2B program requires 

that the prevailing wage which is 

offered and paid in the program reflect 

the minimum requirements of the 

position. This requirement reflects the 

Department’s obligations to avoid 

adverse effect on the wages of workers 

and enable meaningful access to job 

opportunities for U.S. workers. Because 

the Department has determined that the 

majority of H–2B jobs reflect no or few 

skill differentials, the appropriate 

prevailing wage an employer must offer 

and pay, absent a higher CBA, SCA, or 

DBA wage, is the arithmetic mean of the 

OES wage data of workers who are 

similarly employed in the area of 

intended employment. Where an 

employer’s job opportunity requires 

skills beyond those minimally required 

for the position (which may include but 

are not limited to additional 

certifications based on experience, or 

safety accreditations), the employer is at 

liberty to offer and pay to its workers in 

excess of the prevailing wage to account 

for the additional skills or experience 

which the employer requires. 

One commenter noted that the 

assumption that H–2B workers fill the 

lower skilled and lower paid positions 

and that the higher skilled and higher 

paid positions are taken by U.S. workers 

leads to a conclusion that no adverse 

effect exists because the H–2B 

workforce simply fills a predictable 

labor shortage permitting U.S workers to 

consistently fill higher skilled 

complementary positions. 

As discussed in the NPRM, the 

Department has found that almost all 

jobs for which employers seek H–2B 

workers require little, if any, skill—an 

assertion with which few commenters 

disagreed. H–2B disclosure data from 

Fiscal Year (FY) 2007 to 2009 

demonstrates that most of the jobs 

included in the top five industries for 

which the greatest annual numbers of 

H–2B workers were certified— 

construction; amusement, gambling and 

recreation; landscaping services; 

janitorial services; and food services and 

drinking places—require minimal skill 

to perform, according to every 

standardized source available to the 

Department, such as the SOC, O*NET 

and the Occupational Outlook 

Handbook. These jobs include, but are 

not limited to, landscaper laborer, 

housekeeping cleaner, construction 

worker, forestry worker, and amusement 

park worker, which make up the 

majority of occupations certified in 

those years, all of which require less 

than 2 years of experience to perform, 

if that.10 This prevalence of job 

opportunities in low-skilled categories 

is generally reflected in the H–2B 

employer applications. These jobs have 

typically resulted in a Level I wage 

determination, which is lower than the 

average wage paid to similarly 

employed workers in job classifications 

in non-H–2B jobs. 

Under the Department’s 2005 

Prevailing Wage Guidance, the 

determination of an appropriate wage 

level is dependent upon the duties and 

requirements of the job opportunity as 

described by the employer on the 

‘‘Application for Prevailing Wage 

Determination,’’ ETA Form 9141. The 

Department applies a standard analysis 

of the job position (found in the 2005 

Prevailing Wage Guidance) to determine 

the appropriate wage level. In doing so, 

the Department compares the 

employer’s job requirements with those 

typical of the job classification. A Level 

I 11 wage is based on a determination 

that the job position described by the 

employer does not deviate, or only 

minimally deviates, from the typical 


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12For a full description of this job classification, 

see: http://online.onetcenter.org/link/summary/37– 

3011.00. 

minimum requirements of the 

corresponding SOC-based job 

classification contained in O*NET, 

including the specific Job Zone. A Job 

Zone reference indicates the level of 

skill, education, experience and/or 

preparation typically required to 

perform the job, and ranges from one 

(for which little or no preparation is 

needed) to five (in which extensive 

education, training, and preparation are 

required to adequately perform the job 

duties at the entry-level). For example, 

one of the most requested H–2B job 

classifications, landscaping and 

groundskeeping worker, is classified as 

falling within O*NET Job Zone One.12

All of the other frequently represented 

positions in the program: janitors and 

cleaners, housekeepers, construction 

laborers, and amusement and recreation 

attendants, also are categorized within 

Job Zone One. 

The notion that the four wage tiers 

have a meaningful relationship to skill, 

as expressed by many commenters 

including the Chief Counsel for 

Advocacy, SBA, represents a 

misunderstanding of the way in which 

the Department calculates the four tiers. 

The Department does not collect data 

associated with skill levels, but instead 

collects data across the job spectrum. 

The Department approximates skill 

levels from that generalized data, not 

because the data can be disaggregated by 

skill level, but because it is required to 

assign a value to four skill levels, in 

accordance with the formula set forth at 

section 212(p)(4) of the INA. The 

formula is artificial, designed to 

approximate arbitrary skill levels and 

has a skewing effect when applied to the 

wage rates applicable to typical H–2B 

jobs, in which there are fewer skill 

differentials. The four wage levels 

currently used by the Department are 

calculated by applying a statutory 

mathematical formula to the wage 

distribution corresponding to a 

particular occupational classification in 

the area of intended employment. The 

Level I wage is established by taking the 

arithmetic mean of the bottom one-third 

of the wage distribution; the Level IV 

wage rate is determined by establishing 

the arithmetic mean of the top twothirds of the wage distribution; the 

Level II and Level III wages are derived 

from a formula established by section 

212(p)(4) of the INA which provides for 

the reconstitution of two-level 

Government surveys and creation of two 

intermediate levels by dividing by the 

number three the difference between the 

initial two levels and adding the 

quotient to the first level to create Level 

II, and subtracting that quotient from the 

second level to create Level III. 

Thus, there is no correlation in the 

four-tier wage structure between the 

skill level required to perform a job and 

the wage attached to it. An employer 

can pay a higher wage for many reasons 

other than skill level. The lack of a 

meaningful nexus between the skill 

level and the compensation is 

significant where applied to the wage 

rates assigned to typical H–2B jobs in 

which there are fewer skill differences, 

because in most cases, a basic skill set 

is all that is required to adequately 

perform these jobs. The range of wages 

reported in these low-skilled 

occupations represents the range of pay 

in the occupation, not the range of pay 

for skills associated with the job 

opportunity. 

These comments did not identify any 

significant data or analysis that 

undermines the essential component of 

the analysis contained in the NPRM: 

that there are no significant skill-based 

wage differences in the occupations that 

predominate in the H–2B program, and 

to the extent such differences might 

exist, those differences are not captured 

by the existing four-tier wage structure. 

No commenter directly addressed the 

Department’s concerns about these 

deficiencies in the existing 

methodology. No commenter challenged 

the fact that the OES survey does not 

collect information about the skills or 

responsibilities of the workers whose 

wages are included in the survey. No 

commenter offered any analytical or 

empirical support for the notion that the 

mean of the lowest one-third of the 

workers in the survey somehow reflects 

the entry-level wage, nor offered an 

alternative to the OES wage 

methodology that might better reflect 

the purported differences in skills 

within an occupation. While skill-based 

wage differences may exist in these 

occupations, there is insufficient 

evidence to justify any judgment about 

what that wage rate should be within a 

particular occupational code, and it is 

more appropriate for the employer to 

select a different occupational code that 

is more suitable for the level of skills 

and responsibilities required for the 

position. In the absence of reliable 

information that would permit the 

Department to make and quantify such 

a judgment, our responsibility to avoid 

adverse effect mandates that the average 

of the OES wage for that occupation be 

considered in determining the 

prevailing wage for the occupation for 

which workers are sought. Again, as 

noted above, this does not prevent 

employers from offering higher wages if 

necessary to attract appropriate 

applicants. 

Even with the elimination of the fourtier wage structure from the H–2B 

program, employers would still be able 

to obtain wage determinations that 

account for differences in skill. The SOC 

classification system generally groups 

job classifications into larger categories 

encompassing related positions; for 

example, it recognizes entry-level 

positions such as the landscaping and 

groundskeeping workers, as well as 

positions requiring additional skills or 

experience such as first-line 

supervisors/managers of landscaping, 

lawn service, and groundskeeping 

workers. The latter are classified as Job 

Zone Two and contain different and/or 

additional job duties and requirements, 

which, if selected by the employer, 

yield a prevailing wage that is higher 

than that for the low-skilled worker in 

the same broader SOC category. The 

variety of SOC job classifications 

reflecting different kinds and levels of 

skills ensures that the employer has the 

latitude to select a different SOC code 

for the Department’s consideration to 

reflect a position which requires 

additional skills and experience, and 

which permits the employer to 

adequately compensate for those 

additional skills and experience. 

Therefore, the Department disagrees 

with some commenters’ assertions that 

raising the OES base wage to the mean 

necessarily means having to increase job 

requirements or otherwise justify that 

increase with additional skills. The jobs 

themselves are written to incorporate 

the basic skills at entry. Use of the 

arithmetic mean in determining the 

prevailing wage simply recognizes that 

those who are performing the tasks of 

the job at Level I are performing the 

same tasks at Level III, with the 

distinction between the wages for the 

two levels not being based on a 

differential in skills. 

If an employer chooses to increase its 

requirements for the position, it should 

consider classifying the occupation 

under an SOC code that more closely 

approximates the requirements and 

duties of the job; otherwise, the 

employer will need to justify the higher 

requirements as a business necessity. 

Additionally, nothing in this rule 

prevents an employer from paying a 

wage higher than the prevailing wage to 

a worker who possesses skills, licenses, 

certifications, etc. above those listed in 

its H–2B application. Employers who 

cannot use a different O*NET/OES 

category remain free to offer a wage 

higher than the established prevailing 

wage if they desire to do so. Employers 


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are also at liberty to specify experience 

or other requirements consistent with 

the long-standing program requirement 

that job qualification must be normal to 

the occupation, or are otherwise 

justified by business necessity. This rule 

does not prevent monetary rewards for 

those employees who have earned them 

through experience, skill acquisition, or 

even employer loyalty. Nothing in this 

Final Rule suggests nor should be 

construed to prevent the employer from 

paying its workers, U.S. and H–2B, more 

than the required prevailing wage. 

Some commenters indicated that 

particular industries, such as forestry, 

will fare poorly based on a change to a 

mean-based OES wage rate. These 

commenters contended that their job 

classifications contain numerous 

occupations that range from low-skilled 

to professional-skilled work. Their 

concern is that obtaining a mean-based 

wage in these classifications will 

produce a prevailing wage that exceeds 

the level for a low-skilled job under 

these classifications. 

The Department believes this concern 

to be misplaced given the way jobs are 

classified in OES. Each job family in 

O*NET, and by extension in the OES, 

contains numerous levels of jobs. That 

comprehensiveness is one of the reasons 

the Department has successfully used 

the OES for over a decade for this 

purpose. A general forest conservation 

worker is categorized separately from a 

forest conservation technician, allowing 

for two separate levels of compensation, 

each appropriate to the work being 

performed. Again, an employer has the 

opportunity in filing for the prevailing 

wage determination to select the 

occupational code it believes most 

appropriate. That selection is reviewed 

against the actual job description 

provided by the employer, and the 

Department’s final determination rests 

on the actual tasks, duties and activities 

in which the employer describes the 

worker as engaging. 

The purpose of establishing the 

prevailing wage is to establish the 

minimum wage that avoids adverse 

effect, considering the actual 

requirements of the position for which 

H–2B certification is being sought. It is 

not to ensure that H–2B workers or 

workers whose experience or skills 

exceed those of the position receive 

premium pay for having more in the 

way of skills, knowledge, or experience 

than what the position actually requires. 

The Department, by this Final Rule, is 

only setting the floor against which 

compensation for the basic occupation 

for which an employer seeks H–2B 

workers is to be measured, in 

accordance with its obligations under 

the H–2B program. 

b. Section 212(p)(4) of the INA Does Not 

Impose a Four-tier Wage Structure on 

the H–2B Program 

Several commenters opposed the 

Department’s proposal to eliminate the 

four-tier wage structure, indicating that 

the use of a tiered prevailing wage 

system was supported by the regulatory 

history of the program. Other 

commenters, however, noted that the 

use of skill levels is illogical given the 

reasoning behind the implementation of 

the four-tier wage structure in the H–1B 

program. 

The Department disagrees with the 

comment that suggests that the use of 

the four-tier wage structure is legally 

mandated. That contention was 

discussed and rejected by the district 

court in CATA v. Solis, 2010 WL 

3431761 at *19. fn. 22 (‘‘[A]ny appeal to 

§ 1182(p)(4) would not constitute a 

rational explanation for using skill 

levels in determining H–2B prevailing 

wage rates’’). The Department’s analysis 

in the NPRM and in this Final Rule 

reaches the same conclusion. While the 

Department had, for reasons of 

consistency and administrative 

efficiency, treated the application of 

skill levels in the H–2B, H–1B and 

PERM programs in the same manner, 

continuing a system that leads to the 

payment of wages below prevailing is 

contrary to the Department’s regulatory 

mandate to ensure against adverse 

effect. The application of tiers to the H– 

2B program has no rational basis beyond 

the efficiency served by having one 

methodology for all foreign labor 

certification programs. The H–2B 

program is obviously distinguishable 

from the H–1B program that was the 

focus of the Consolidated 

Appropriations Act of 2005 (Pub. L. 

108–447). The H–1B program is 

specifically designed to address the 

needs of employers of high-skilled, 

temporary workers and requires 

distinguishing among varying levels of 

skill by the nature of the kinds of jobs 

that it covers. Those jobs require 

theoretical and practical application of 

a body of highly specialized knowledge 

and attainment of a bachelor’s or higher 

degree in a specific specialty or its 

equivalent. As a result, the H–1B 

program reflects a wide range of 

experience, skills, and knowledge 

which appropriately correspond to 

stratified wage levels. The history of the 

H–2B program, by contrast, indicates 

that it grew out of its agricultural 

predecessor, the Bracero program, as a 

companion for employers requiring 

assistance with low-skilled nonagricultural work. Although the 

Department recognizes that not all 

positions requested through the H–2B 

program are for low-skilled labor, the 

program is still overwhelmingly used 

for work requiring lesser skilled 

workers—those occupations that require 

at most 2 years, and in most cases much 

less than 2 years, of education, training, 

or experience to perform the job duties, 

tasks, and activities. As discussed 

above, there is no justification for 

stratifying wage levels to artificially 

create wage-based skill levels when in 

fact there is no great difference in skill 

levels with which to stratify the job. 

c. Elimination of the Four-tier Wage 

Structure in the H–2A Program 

In proposing the elimination of the 

four-tier wage structure in favor of a 

single arithmetic mean wage, the 

Department noted that it had previously 

taken similar action in the H–2A 

program. One commenter disagreed 

with the Department’s reasoning behind 

the elimination of the four-tier wage 

structure arguing that the H–2A and H– 

2B programs are different and suggested 

that the Department continue to treat 

the H–2B program as distinct. Another 

commenter asserted that the 

Department’s rationale for the 

elimination of the four-tier wage 

structure in the H–2A program was 

based on the concern that the OES data 

is inaccurate and not concern over 

adverse effect. 

The H–2A and H–2B temporary 

programs are similar in that they both 

involve largely low-skilled occupations 

where skill-based wage differences do 

not appear to exist to any significant 

degree and to the extent they do exist, 

the differences are not reflected in the 

OES survey data. The Department 

especially limited its rationale to 

eliminating OES in the H–2A program 

to the inappropriateness of the OES in 

light of a more appropriate wage source 

(e.g., the Farm Labor Survey). No similar 

data source exists for the range of jobs 

in the H–2B program. Thus, the 

Department has adopted the OES as the 

best data source available for the H–2B 

program, absent an applicable CBA, 

SCA, or DBA wage rate. The lack of 

skill-based wage differences is a 

sufficient basis to support the 

determination that the four-tier wage 

structure should no longer be used in 

either program. 

d. Other Issues Related to Four-tier 

Wage Structure 

A number of commenters, including 

the Chief Counsel for Advocacy, SBA, 

argued that the ruling in CATA v. Solis 

did not identify anything inherently 


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wrong with the four skill levels as used 

in the current procedure. Several 

commenters asserted that the 

Department misconstrued the court’s 

ruling and went well beyond the focus 

of the order. At least one commenter 

accused the Department of using the 

CATA v. Solis decision to promote an 

agenda to raise wages and to prevent 

employers from using the H–2B 

program. 

These comments misconstrue our 

references to the CATA v. Solis ruling 

and demonstrate a misunderstanding of 

the Department’s obligation to 

administer the H–2B program. The 

court’s ruling in CATA v. Solis affected 

only the timing of the NPRM, not its 

content. The Department announced in 

the Fall 2009 Semiannual Regulatory 

Agenda its intention to propose a reexamination of the H–2B program. A 

review of the H–2B wage system was 

identified as part of that re-examination. 

The court’s conclusions about the legal 

necessity for the four-tier system 

parallel the tentative conclusions that 

the Department had already reached in 

its review. 

The CATA v. Solis court’s reasoning 

parallels the Department’s approach in 

some significant areas. The CATA v. 

Solis court’s principal concern about the 

four-tier wage structure was the fact that 

the Department had never published an 

explanation as to why the two-tier 

system, and later the four-tier wage 

structure, that were used in the PERM 

and H–1B programs were also adopted 

for use in the H–2B program. The 

court’s critique was largely correct, and 

this rulemaking is designed to provide 

the notice and comment process that 

was previously lacking. 

The commenters who observed that 

the CATA v. Solis court ordered the 

Department to simply ‘‘show its work’’ 

overlook the court’s clear disapproval of 

the use of the four-tier wage structure 

now used in the H–2B program. The 

Department based its methodology for 

the PERM, H–1B, and by extension, the 

H–2B programs, on the requirements 

now found in the INA at 8 U.S.C. 

1184(p)(4). The Court found that any 

such reliance on this statutory 

provision, developed for the use of the 

H–1B visa program, would be irrational 

and not an appropriate foundation for 

the use of skill levels in determining H– 

2B prevailing wage rates. See CATA v. 

Solis, 2010 WL 3431761, at *19 fn. 22. 

As explained in greater detail above, the 

Department believes that the use of skill 

levels in the H–2B program is 

inappropriate given the job duties, tasks, 

and experience required to perform 

them. 

C. The Arithmetic Mean Wage Rate 

Established by the OES Wage Survey Is 

the Most Appropriate Basis for 

Calculating the OES Component of the 

Prevailing Wage Rate 

The Department proposed to require 

that the arithmetic mean of the OES 

wage rates be the basis for determining 

the OES component of the prevailing 

wage rate in the H–2B program as the 

most effective available method for 

determining the prevailing wage. To 

determine the new wage calculation, the 

Department proposed to use the 

published arithmetic mean established 

by the BLS when compiling the OES 

survey. This mean is the average of all 

the survey’s wages in the occupation. It 

will produce a wage rate that is at a 

point between the current Level II and 

III wages. 

Several commenters, including the 

Chief Counsel for Advocacy, SBA, 

espousing the importance of the H–2B 

program to U.S. employers engaged in 

seasonal business, as well as its 

importance to both H–2B and U.S. 

workers, contended that selecting the 

arithmetic mean as a prevailing wage 

will result in increased H–2B wages, 

which will have a negative effect on 

employers for several reasons. The 

commenters first noted that some 

employers will not be able to afford to 

pay increased H–2B wages, which will 

be particularly problematic for small 

companies or those operating at 

marginal income levels. Commenters 

argue that this outcome favors larger 

companies that have greater economic 

ability to absorb an increase in wages, 

therefore, driving smaller companies out 

of business. Commenters, including the 

comments presented at the SBAsponsored roundtable (reflected in the 

Chief Counsel for Advocacy, SBA 

comment), also asserted that smaller 

employers may cease to operate if they 

are unable to pay the increased costs in 

H–2B wages, especially when such 

companies are faced with an extreme 

shortfall of available U.S. workers. 

Furthermore, some commenters asserted 

that the costs to employers resulting 

from the increase in wages will have an 

overreaching effect on their profitability 

and were concerned that the 

disappearance of small and marginal 

companies may have a resulting 

negative effect on U.S. workers who 

may lose their jobs as a result of a shutdown of such companies. 

Additionally, several commenters 

argued the Department did not take into 

account contracts employers have 

already put in place for the coming year; 

contracts that already established a set 

pricing for services. Employers 

participating in the H–2B program have 

always been required to meet the 

conditions of the labor certification, 

which include the payment of a valid 

prevailing wage. The fact that a new 

wage methodology may result in wages 

in excess of anticipated labor costs does 

not minimize the Department’s 

obligation. However, even though the 

NPRM provided current and future 

users of the H–2B program with some 

indication of what the Final Rule would 

require, we recognize that many 

employers already may have planned 

for their labor needs and operations for 

this year in reliance on the existing 

prevailing wage methodology. In order 

to provide employers with sufficient 

time to plan for their labor needs for the 

next year and to minimize the 

disruption to their operations, the 

Department is delaying implementation 

of this Final Rule so that the prevailing 

wage methodology set forth in this Rule 

applies only to wages paid for work 

performed on or after January 1, 2012. 

The Final Rule will be effective in its 

entirety on January 1, 2012. 

This is a final rule, without a phasein period. We, however, welcome 

information from the public on the 

feasibility, and implementation of 

phasing in the new prevailing wages. 

The Department recognizes that rapid 

wage increases may create burdens for 

employers that choose to participate in 

the H–2B program, while also providing 

potentially higher wages for U.S. and H– 

2B workers hired under the program. 

Comments should address: 

1. Is a phase-in desirable? 

2. What would the impact be of a 

phase-in of the prevailing wage 

methodology on employers and 

workers? 

3. Over what period and at what 

levels should any phase-in be 

implemented that would be consistent 

with the Department’s obligation under 

this program? 

While the Department recognizes the 

concerns of many commenters, it 

believes its responsibility to set the 

prevailing wage is most effectively 

fulfilled without regard to the size or 

economic state of the employer. No such 

qualifier is present in the relevant DHS 

H–2B regulations or statute. That 

decision cannot ultimately be 

influenced by the impact that requiring 

payment of the prevailing wage will 

have on any one individual employer. 

As the Court of Appeals for the First 

Circuit noted in one of the earliest cases 

examining the Department’s 

responsibilities under the predecessor 

H–2 program, ‘‘[t]o recognize a legal 

right to use alien workers upon a 

showing of business justification would 


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13The Department’s justification for its reliance 

on the OES data has previously been expressed. See 

69 FR 77368, Dec. 27, 2004. 14See Economic Effect of H–2B Workers, public 

comment ETA–2010–0004–0256.1. 15 Id. at 17. 

be to negate the policy which permeates 

the immigration statutes, that domestic 

workers rather than aliens be employed 

wherever possible.’’ Elton Orchards v. 

Brennan, 508 F. 2d 493, 500 (1st Cir. 

1974). Contrary to one commenter’s 

claim, the Department’s decision to 

require that the arithmetic mean of the 

OES wage rate as the basis for 

determining the OES component of the 

prevailing wage rate is not arbitrary, but 

a deliberate acknowledgment that the 

levels currently provided to employers 

for use in the program are too low when 

weighed against the data on wages 

which are currently paid in those 

occupations for the same jobs. Our 

responsibility to set wage rates that 

avoid adverse effect on wages compels 

us to look to the OES arithmetic mean 

as an appropriate wage-setting tool, 

along with the CBA, SCA, and DBA.13

As discussed earlier, the Department 

believes the arithmetic mean is far 

closer to the actual wage being paid in 

these same occupations and more 

closely approximates the prevailing 

wage which must be paid in order to 

avoid adverse effect. 

D. Evidence of Negative Effects on 

Wages 

The Department received a number of 

comments providing a variety of data 

and research attempting to refute the 

concept of wage depression resulting 

from the prevalence of low wages in the 

H–2B program. Additionally, several 

commenters, including the Chief 

Counsel for Advocacy, SBA, faulted the 

Department for not providing data and/ 

or studies as empirical support for 

eliminating the four-tier wage structure. 

Still others claimed that H–2B workers 

are already paid wages that are higher 

than those that predominate in the 

geographic area where the job 

opportunity is located. To refute the 

notion of wage depression caused by the 

H–2B program, some of the commenters 

relied on the Department’s Initial 

Regulatory Flexibility Analysis (IRFA) 

indicating that the relatively small effect 

of the H–2B program on the overall 

economy undermines the wage 

depression rationale for the elimination 

of the four-tier wage structure. 

Many of these commenters relied on 

a recent study, included in the 

rulemaking record by one commenter, 

which contains an economic analysis of 

the H–2B program by an academic 

economist, Madeline Zavodny.14 In 

concluding that the admission of H–2B 

workers on the national level does not 

have a negative correlation to U.S. 

workers’ employment or earnings and 

has no statistically valid relationship to 

the wages and employment levels of 

workers on the state level, the study 

compares wage changes ‘‘in sectors that 

rely heavily on H–2B visa holders with 

wages in other industries that hire few 

or no temporary workers.’’15

Additionally, the appropriate measure 

of adverse impact on the wages of U.S. 

workers is not assessed on the national 

or even the state level but rather must 

be considered in terms of the workers 

who are similarly employed. Under the 

Department’s regulations, being 

similarly employed generally means 

having substantially comparable jobs in 

the occupational classification in the 

area of intended employment. 

Therefore, any study purporting to 

measure a net effect of the employment 

of H–2B workers on the wages, working 

conditions and access to job 

opportunities for U.S. workers fails to 

take into account the lack of uniformity 

in distribution of H–2B workers, as well 

as a variety of factors which at any time 

may also correlate with the presence of 

H–2B workers in any localized labor 

market. 

The predominance of Level I wages in 

the program, wages based on the mean 

of the bottom one-third of all reported 

wages in the systems, is itself evidence 

of the adverse impact of those wages on 

those U.S. workers performing the same 

tasks and engaged in the same jobs. 

Specifically, a review of the 

Department’s records for the issuance of 

prevailing wages in calendar year 2010 

indicates that almost 75 percent of jobs 

are classified at a Level I wage, with the 

remaining 25 percent scattered in Levels 

II, III and IV. In a broader examination 

of wages offered over the past several 

years, in about 96 percent of cases, the 

H–2B wage is lower than the mean of 

the OES wage rates for the same 

occupation. 75 FR 61580, Oct. 5, 2010. 

In a low-skilled occupation, the mean 

for the occupation represents the wage 

that the average employer is willing to 

pay for unskilled workers to perform 

that job. The four-tier structure 

artificially lowers that wage to a point 

that it no longer represents a marketbased wage for that occupation. The H– 

2B worker, along with the domestic 

workers recruited against the 

application, who are being paid a 

significantly lower wage than two-thirds 

of those in that area of employment 

cannot help but have a depressive effect 

on the wages of those around him. An 

employer paying U.S. workers as well as 

H–2B workers has no incentive to pay 

the U.S. workers any higher 

compensation. The local competitors, by 

extension, have no incentive to pay a 

higher compensation. Therefore, it 

follows that if the employer must only 

offer and pay Level I wages, wages 

below what the average similarly 

employed worker is paid, those wages 

will make the U.S. workers less likely to 

accept those job opportunities or will 

require them to accept the job at a wage 

rate less than the market has determined 

is prevailing for the job. The net result 

is an adverse effect on the worker’s 

income. While an arithmetic mean is 

not an indicator of the single best wage 

at which U.S. workers are considered to 

be adversely affected, by its placement 

at the average wage rate it establishes a 

more accurate wage for the average U.S. 

worker. 

E. Alternatives for the Calculation of a 

Prevailing Wage 

1. OES Alternatives 

The Department received several 

proposals for alternative prevailing 

wage-setting methods, including those 

mentioned at the SBA roundtable later 

memorialized in the Chief Counsel for 

Advocacy, SBA comment. We 

considered alternatives such as using 

the OES median; using only the DBA 

wage for construction and using the 

SCA (or a regional) wage for 

reforestation; using some set percentile 

of some of these wages; and including 

fringe benefits. Our reasons for rejecting 

those alternatives are set out in the 

discussion of the RFA in the 

administrative section of this preamble. 

Other options presented as 

alternatives were not alternatives for the 

setting a prevailing wage but rather 

suggestions to change elements in the 

proposed wage-setting methodology and 

are dealt with elsewhere in this 

discussion. 

Other commenters noted that 

although the arithmetic mean represents 

an improvement to a stratified wage rate 

system, it will not do enough to protect 

U.S. workers from adverse effect. At 

least one such commenter suggested the 

Department set the OES wage at the 

90th percentile wage instead to account 

for any fringe benefits without which 

the wages of U.S. workers who are 

similarly employed would be depressed. 

The Department declines to do so. As 

discussed above, the Department 

historically has not required the 

payment of fringe benefits to H–2B 

workers, even when SCA and DBA wage 

rates were mandatory for occupations 

where such wage determinations 

existed. No data exists to allow the full 


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16This comment addresses a statement made in 

footnote 7 of the NPRM, in the economic analysis 

required under Executive Order 12866. 75 FR 

61582, Oct. 5, 2010. 

17 37–3011 for 2000001, at http:// 

www.flcdatacenter.com/ 

OesQuickResults.aspx?area=2000001&code=37– 

3011.00&year=11&source=1. 

18WD number 2005–2216, revision 13, 11/18/ 

2010. 

19The Department, in fact, recognized the need 

for consistency in the approach to establishing 

prevailing wages when it federalized the prevailing 

wage determination system in the 2008 Final Rule. 

20This proposal was also expressed in the 

comment submitted by the Chief Counsel for 

Advocacy, SBA. 

computation and monetization of fringe 

benefits over all the occupations and 

locations covered by the H–2B program. 

Nor is there any basis concluding that 

the 90th percentile represents any valid 

surrogate for such data. 

One commenter challenged the 

Department’s assertion that SCA rates 

do not differ substantially from the OES 

rates used in the H–2B program.16 To 

support its claim, this commenter cited 

a disparity of $2.27 in OES and SCA 

wage rates for landscaping and grounds 

keeping workers in Wichita County, 

Kansas. The Department was not able to 

replicate this commenter’s analysis; 

however, it appears that much of the 

difference between the two wage rates 

resulted from the inappropriate 

comparison of the SCA wage rate to the 

baseline, the Foreign Labor Certification 

Online Wage Library’s OES Level I 

wage. As explained above, the Level I 

wage rates are not representative of the 

prevailing wage paid to workers in the 

locality. If the Level III (mean) wage of 

$10.26 per hour 17 is used instead (as it 

would be under the final rule), the $2.27 

difference between the OES and SCA 

rates cited by this commenter shrinks to 

$0.29, with OES rate falling just short of 

the $10.55 per hour SCA wage.18 The 

Department acknowledges that for some 

occupations in some areas of intended 

employment there may appear to be a 

larger disparity between OES and SCA 

wage rates. However, many differences 

result from a comparison of similarsounding job titles; under this Final 

Rule the determination of appropriate 

wage will be based on actual job duties, 

which the Department believes will 

minimize false equivalencies and 

thereby reduce wage disparities. 

2. Non-OES Alternatives 

One commenter suggested a wage 

methodology that would have SWAs, 

rather than employers and/or the 

Department, conduct surveys to 

effectively determine the appropriate 

wage for any occupation in a particular 

State. Before 1998, when the program 

was much smaller, SWAs did in fact 

conduct surveys to produce prevailing 

wages. The financial resources available 

today to be devoted to such an activity, 

in particular given the expansion of the 

program and the resources available 

elsewhere (specifically, OES, SCA, and 

DBA) no longer make this a viable 

option. In addition, the inconsistencies 

that resulted from State to State in the 

treatment of the same job opportunity, 

reflecting not the local conditions but 

the quality of the surveyors and the 

collection instruments used, created 

difficulties that the benefits of using 

such surveys do not outweigh.19

Reliance on SWA surveys in our nonagricultural immigration programs was 

largely abandoned in 1998 because the 

OES provides a more reliable and costeffective means for producing prevailing 

wage rates on a consistent basis across 

the country. For these reasons, the 

Department has determined that the 

OES survey with its standardized job 

descriptions, compensation data 

collection and analysis, and SCA and 

DBA wage determinations provide a 

much more accurate portrayal of wage 

information than State surveys. 

Finally, one commenter representing 

reforestation employers suggested that 

the Department set as the prevailing 

wage 115 percent of the higher of the 

Federal or State minimum wage.20 The 

Department believes such a calculation 

would result in an arbitrary rate not 

based on labor market conditions. U.S. 

workers, for instance, may make far 

more than this rate, in which case the 

resulting prevailing wage would 

suppress U.S. worker earnings. On the 

other hand, U.S. workers could earn less 

than the 115 percent level, creating a 

scenario where employers are required 

to pay H–2B workers more than U.S. 

workers. 

One comment suggested the 

Department adopt methods of 

compensating reforestation workers that 

are more flexible and not based on 

specific locations, citing inevitable 

deviations (due to weather, ground 

conditions, contractor demands) in an 

itinerant work schedule. An alternative 

method proposed by a commenter was 

the establishment of a prevailing wage 

for a wider region—similar to the H–2A 

Adverse Effect Wage Rate (AEWR) 

which typically covers several states 

with a single wage rate—which would 

allow employers to deviate from 

identified worksites as long as they pay 

workers at least the established rate. The 

Department recognizes that the 

uncertainties inherent in reforestation 

can make it difficult to determine if and 

where employees will be working as 

conditions change during the contract 

period. That is an issue about the 

amount of work available, not the wages 

to be paid. The Department notes that in 

situations where projects stretch across 

multiple counties or states with 

different prevailing wages, the employer 

can avoid this complexity by paying the 

highest of the prevailing wages of those 

areas, which is similar to paying to a 

regional wage, such as the AEWR. 

Prevailing wage rates for forestry work 

are generally the same across contiguous 

counties—and frequently 

noncontiguous counties—in the same 

State. 

The Department has concluded that it 

is not feasible or desirable to establish 

regional wage rates for particular 

industries in the H–2B program. The 

prevailing wage rates are locality-based 

in order to prevent adverse effect on 

U.S. workers. The Department believes 

that using a regional wage rate could 

result in an arbitrary rate not based on 

labor market conditions. U.S. workers in 

some localities might make more than 

this rate, in which case the prevailing 

wage would suppress U.S. worker 

earnings, while U.S. workers in other 

localities might earn less than the H–2B 

workers earning the regional rate. 

3. Other Alternatives 

One commenter noted that the NPRM 

indicated that H–2B workers comprise a 

small proportion of the U.S. labor 

force—less than 1 percent of most job 

categories—and that since most of those 

positions are low skilled and low paid, 

it follows that U.S. workers occupy 99 

percent of highest paying jobs in any 

given category. Based on this 

conclusion, the commenter proposed 

that to prevent adverse effect on the 

wages of U.S. workers, the prevailing 

wage should be based on the BLS 10th 

percentile wage estimate for the 

occupation in the area of employment. 

The commenter further noted that this 

would keep the H–2B workers in the 

lowest 10 percent of the wage category 

and the U.S. workers in the highest 90 

percent of the wage category, therefore 

avoiding any adverse effect on the 

wages or working conditions of U.S. 

workers. 

While the Department appreciates the 

suggestion for avoiding the adverse 

effect on similarly employed U.S. 

workers, this commenter’s proposal 

reflects a misunderstanding of the 

purpose behind the change in prevailing 

wage methodology. The Department’s 

role in the H–2B program is not to 

determine the wages of H–2B workers, 

per se, but rather to set an appropriate 

prevailing wage—a floor—for the job 

opportunity that will ensure no adverse 


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effect on the wages of U.S. workers who 

are similarly employed or who could be 

similarly employed. As discussed 

earlier, the Department must set a 

prevailing wage that assures that U.S. 

workers who might be interested in a 

job will be paid a wage that 

approximates the wages available to 

other U.S. workers in the same 

occupation. Only if there are 

insufficient U.S. workers to fill that job 

at that wage may H–2B workers be hired 

to make up the labor shortfall. 

4. Piece Rates 

Several commenters in the seafood 

processing industry proposed that in 

light of the prevailing practice in the 

industry in which workers are paid a 

piece rate based on production, the 

Department should permit employers to 

pay a piece rate based on production for 

the production-based work and a 

prevailing wage rate for all nonprocessing work. The Department notes 

that it does not prohibit incentive piece 

rates, provided that the piece rates 

produce earnings that meet the required 

prevailing wage. 

Having considered the proposed 

alternatives, the Department has 

concluded that none would 

satisfactorily effectuate the 

Department’s objective of ensuring that 

wages and working conditions of U.S. 

workers are more adequately protected 

than under the current prevailing wage 

determination process, while 

maintaining an efficient and consistent 

administrative process. The Department 

believes the alternatives proposed 

would at worst reduce and at best not 

improve the efficiency and consistency 

of the prevailing wage determination 

process, or would directly or indirectly 

adversely effect the wages of U.S. 

workers who might take H–2B jobs. 

Finally, the Department must ensure 

that in the H–2B program the wages 

offered to H–2B workers and U.S. 

workers recruited under H–2B job 

orders are the same wages and terms of 

employment offered to U.S. workers 

recruited by employers not participating 

in the H–2B program, that is, are the 

prevailing wages. Any method that 

results in offering H–2B workers lower 

than average wages adversely affects 

U.S. workers responding to H–2Brelated recruitment. Similarly, any 

method that results in an employer 

recruiting for job opportunities using 

experience requirements that are higher 

than necessary or not normal to the 

occupation creates artificial entry 

barriers for potentially interested U.S. 

workers. While the Department 

appreciates the proposed alternatives 

received, it has concluded that none of 

the alternatives provided better 

accomplishes the Department’s policy 

objectives than the prevailing wage 

determination method contained in the 

Final Rule. 

F. Elimination of Private Wage Surveys 

The Department received a wide 

range of comments about its proposal to 

eliminate employer-provided surveys 

from the prevailing wage determination 

process in the H–2B program. Some 

commenters supported the Department’s 

proposal, some opposed it, and others 

sought to retain, but modify, the 

employer-provided survey review 

process. 

The commenters supporting the 

Department’s proposal to eliminate 

employer-provided surveys cited 

reasons including increased clarity and 

efficiency in the prevailing wage 

determination process; elimination of a 

wage source with inconsistent quality 

and accuracy; less uncertainty related to 

compliance; elimination of redundancy 

with the work the Department already 

performs in collecting vast amounts of 

representative wage data; and successful 

experience with OES. One commenter 

specifically noted that the Department’s 

progress in consolidating prevailing 

wage determination processing in one 

national center and the resulting 

increased consistency supports 

eliminating employer-provided surveys 

as inefficient and unnecessary. While 

several commenters asserted that the 

only way to determine the wage where 

there is no adverse impact on U.S. 

workers is through surveys, either 

conducted by the employer or the 

Government, one commenter further 

opined that the Government was in a 

better position to gather wage 

information and undertake wage 

surveys than a private employer. 

In contrast, commenters opposed to 

the Department’s proposal to eliminate 

employer-provided surveys argued that 

the value of private surveys in the 

prevailing wage determination process 

justifies the administrative cost. Many 

of the commenters who wished to retain 

the employer-provided survey review 

process acknowledged that the current 

process was not workable in a timesensitive program like H–2B, 

contending that more employers would 

use employer-provided surveys if the 

survey submission process was more 

user-friendly and survey review 

requirements were not so strict. The 

commenters who wished to retain, but 

modify, the employer-provided survey 

review process offered a variety of 

suggestions to do so. Some commenters 

suggested shifting review of private 

surveys to a disinterested third-party, 

with the cost of such review borne by 

the industry sponsoring the survey. One 

commenter suggested the Department 

require surveys to be conducted by a 

reliable third party, such as a state 

agency, or to be ‘‘peer reviewed.’’ Some 

commenters suggested the Department 

make approved employer-provided 

surveys available for use by all 

employers with the same occupation 

within the same area of intended 

employment. Other commenters 

suggested simplifying private survey 

submission instructions (but did not 

offer suggestions about how to do this), 

while others suggested revising the 

review criteria. 

After reviewing all of the comments 

on the employer-provided survey 

review process, the Department 

concludes that the prevailing wage rate 

is best determined through reliable 

Government surveys of wage rates, 

rather than employer-provided surveys 

that employ varying methods, statistics, 

and surveys. The Department has 

concluded that using only CBA, SCA, 

DBA, and OES to determine the 

prevailing wage is the most consistent, 

efficient, and accurate means of 

determining the prevailing wage rate for 

the H–2B program. The Department 

acknowledges, as it did in the preamble 

to the NPRM, that some private surveys 

may provide useful information. 

However, the Department agrees that 

employer-provided surveys, generally, 

are not consistently reliable. To 

illustrate, many H–2B employers in the 

ski industry and the crab processing 

industry in FY 2009 attempted to use 

surveys that did not meet the basic 

criteria outlined by the 2005 Prevailing 

Wage Guidance, but which had been 

previously accepted by the SWAs. 

Moreover, employers typically provide 

private surveys when the result is to 

lower wages below the prevailing wage 

rate. Such a result is contrary to the 

Department’s role in ensuring no 

adverse impact. While the Department 

appreciates commenters’ suggestions for 

alleviating the Department’s 

administrative costs, the Department 

will not endorse specific private surveys 

in the H–2B program, in part because of 

the comprehensive public surveys 

available to calculate the prevailing 

wage, and in part to avoid the 

administrative inefficiency of endorsing 

surveys that frequently change. The 

Department believes the values 

commenters identified, including 

expedience, consistency, fairness, and 

accuracy, are best accomplished by 

using CBA, SCA, DBA, and OES wages, 

not employer-provided surveys. 

Moreover, the Department has 


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21The Department has so far retained the use of 

private surveys in both the H–1B and the PERM 

programs. The H–1B program statutorily requires 

the use of some level of alternate information. 

While we may well in future review the use of 

private surveys in the PERM program, the 

Department has decided that this rule is not the 

vehicle in which to perform this activity. 

22As defined in O*NET, the classification 

includes the following tasks: Using knives, cleavers, 

meat saws, bandsaws, or other equipment to 

perform meat cutting and trimming; cutting and 

trimming meat to prepare for packing; obtaining 

and distributing specified meat or carcass; and 

separating meats and byproducts into specified 

containers and seal containers. 23See http://www.bls.gov/soc/revisions.htm. 

concluded that the use of CBA, SCA, 

DBA, and OES wages will not only 

protect U.S. worker wages, but also will 

simplify the H–2B process for both the 

Department and employers.21 Given the 

quality of the three public wage data 

sources the Department will use and the 

Department’s interest in providing 

accurate and consistent prevailing wage 

rates on a fast turn around, the cost of 

reviewing such private surveys far 

outweighs their usefulness in the H–2B 

program. 

Several submissions, including two 

from employers and one from an 

individual, suggested that the wage 

surveys used to determine H–2B 

prevailing wages should only sample 

temporary workers. However, a wage 

survey of temporary workers may 

include workers who provide short-term 

services to fill in for sick or vacationing 

employees, while H–2B workers 

essentially become full-time workers for 

the entire period of need which may last 

for most of the year. Moreover, limiting 

the survey universe in this way would 

produce results inconsistent with the 

Department’s responsibility to prevent 

the employment of temporary foreign 

workers under the H–2B program from 

adversely impacting U.S. workers, 

regardless of whether the U.S. workers 

are temporary or permanent. The sole 

use of temporary workers’ wages would 

depress prevailing wage calculations, 

applying substantial downward 

pressure on wages for similar, 

permanent work within the region. 

Therefore, the Department will continue 

to use wage surveys that include 

permanent workers. 

One commenter expressed concern 

that eliminating employer-provided 

surveys made Board of Alien Labor 

Certification Appeals (BALCA) review 

an insufficient legal recourse for 

employers, in that the review would 

evaluate only whether the Department 

had made an error in position 

classification rather than prevailing 

wage rate accuracy. It is correct that 

BALCA review will not permit the 

introduction of private surveys to 

challenge the determination; this is a 

necessary corollary to the elimination of 

private surveys in the program, and is 

a necessary product of the limitations 

upon BALCA as an administrative 

appellate unit charged with judging the 

Department’s compliance with its 

regulations. The proposed rule does not, 

moreover, eliminate BALCA’s role in 

the H–2B program. Employers may 

continue to request BALCA review 

when an employer disagrees with the 

Department’s application of the 

prevailing wage determination process 

at 20 CFR 655.11(e). 

Several commenters suggested that 

some jobs in some industries are so 

unique that they are not represented by 

any SOC classification or are so 

remotely located that OES wage data is 

too broad to produce a realistic wage 

rate. These commenters suggested that 

surveys other than OES are necessary to 

accurately assess prevailing wages for 

these unique or remote jobs. The 

Department believes, however, that 

almost every job opportunity is 

effectively captured in the OES or the 

SCA or DBA wage determination rates 

and remote locations are effectively 

incorporated into the areas of intended 

employment reported in these wage 

sources. 

The crab processing industry’s crab 

picker occupation was cited by many 

commenters, including the Chief 

Counsel for Advocacy, SBA, for 

instance, as an example of the 

mismatched job in OES. Others cited the 

ski instructor for a mismatched job 

classification. Under the OES, crab 

pickers are classified as Meat, Poultry, 

and Fish Cutters and Trimmers. The 

selection of this category when setting 

up the SOC was not inadvertent as 

evidenced by the crosswalk from the 

predecessor categorization, the 

Dictionary of Occupational Titles (DOT) 

from the job occupation of ‘‘crab meat 

processor’’ (DOT title 525.687–126) to 

the O*NET job classification of Meat 

Cutters. While specific duties of a crab 

picker are not included in the OES 

classification, a crab picker is an 

appropriate fit within that classification, 

since removing the meat from cooked 

crabs and sorting into categories 

(backfin, claw, etc.) for packaging and 

sale, as the job is described by many 

employers in that industry, could be 

easily encompassed by the duties 

outlined in the O*NET job classification 

of the meat cutter.22 The existence of a 

job in the DOT, and its mapping to an 

SOC code as evidenced in the crosswalk 

from DOT to SOC, is an objective 

demonstration that the Department 

deliberately considered and aligned that 

job to an SOC code, making the SOC 

code now in use equivalent for these 

purposes to the former job description 

in the DOT. The Department further 

notes that SOC code classification 

modifications may be requested through 

a process administered by the BLS that 

is specifically established for that 

purpose, in which members of the 

public, included affected industries, 

may participate. We encourage 

employers believing that the SOC code 

in which their position has been 

classified is not representative to 

participate in this established process.23

One commenter suggested that some 

private surveys sometimes produce 

results below the Federal, State, or local 

minimum wages and have been used as 

a mechanism to lower H–2B wages to a 

level that displaces U.S. workers and 

adversely affects U.S. workers’ wages 

and working conditions. Two 

commenters suggested that the 

Department, by accepting employerprovided surveys, would be authorizing 

the payment of wage rates lower than 

the prevailing wage rate as determined 

by reliable Government sources. One 

commenter argued that allowing private 

surveys, with wages below the 

prevailing wage rate, impedes the 

upward pressure on wages that would 

otherwise occur in a labor shortage 

situation. Similarly, other commenters 

asserted that acceptance of employerprovided surveys in industries or 

occupations dominated by temporary 

workers results in a stagnant and 

inaccurate prevailing wage rate. Yet 

another commenter suggested that 

employer-provided surveys undermine 

the consistency of prevailing wage rates 

in the program. 

The Department agrees that employerprovided surveys, generally, are not 

consistently reliable. Wage surveys that 

find that some employers are paying 

rates higher than the Department’s 

prevailing wage determination do not 

require review; employers are always 

able to pay higher than the required 

prevailing wage rate. The Department 

believes that administrative resources 

are not best spent on reviewing 

employer-provided surveys, especially 

when such surveys are provided 

typically to avoid using a survey that 

produces a higher wage. The 

Department, however, acknowledges 

that there are some very specific 

situations in which a survey can 

provide information to which the 

Department does not currently have 

access. For example, there are 

geographic locations that are not 

included in BLS’ data collection area 


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24We received a number of comments from the 

ski industry seeking the opportunity to continue to 

use the surveys it has submitted in the past. 

Whether ski instructors qualify under this standard 

will be assessed when and if a request is submitted 

under this regulation. 

(such as the Commonwealth of the 

Northern Mariana Islands (CNMI)). 

Where there is no data from which to 

determine an OES wage and where there 

are no applicable CBA, DBA or SCA 

wages, employers in those locations will 

continue to have the opportunity to 

submit wage surveys. 

The Department also acknowledges 

that there may be other very limited 

circumstances in which an employerprovided wage survey may be 

potentially appropriate. This would 

occur where the employer is able to 

demonstrate it cannot use a collective 

bargaining agreement wage because it is 

not a party to a CBA, and cannot use a 

DBA wage, an SCA wage, or an OES 

wage because the job opportunity is not 

accurately represented within the job 

classification used in those surveys. In 

this regard, we are also mindful that the 

migration to SOC codes was not a 

perfect match in every case. The 

Department is particularly aware of the 

use of the generalized set of occupations 

as ‘‘all other’’ categories in the SOC, in 

which a meaningful comparison to the 

DOT becomes more problematic. 

Accordingly, to show that a job 

opportunity is not accurately 

represented within the SOC job 

classification system, an employer must 

demonstrate that the job opportunity 

was not in the DOT or if the job 

opportunity was in the DOT, the 

crosswalk from the DOT to the SOC 

Codes places the DOT job in an ‘‘all 

other’’ category in the SOC. Accordingly, 

the employer must demonstrate that the 

job entails job duties which require 

knowledge, skills, abilities, and work 

tasks that are significantly different than 

those in any SOC classification other 

than with the ‘‘all other’’ category.24

Employers should submit a request to 

use a private survey no later than 180 

days before the initiation of planned 

recruitment. This will provide the 

Department with enough time to 

analyze the job duties submitted and 

request additional information. Job titles 

are not used consistently among 

employers, and the Department will 

conduct a careful review of the duties, 

activities and tasks associated with the 

job opportunity to determine whether 

the employer’s assessment of how the 

job opportunity was treated under the 

DOT is accurate and whether the job is 

actually significantly different than any 

job described in the SOC classification 

other than with the ‘‘all other’’ category. 

If the Department concludes that it is 

appropriate to allow the submission of 

a survey, the employer will then be 

permitted to submit its survey for 

evaluation to ensure that it meets the 

Department’s standards for the validity 

of the statistical methodology and the 

reliability of data. There will be no 

appeal from the determination of 

qualifying for use of a private survey, 

although there can be an appeal from 

the acceptability of the prevailing wage 

determination itself. The Department 

will issue revised Prevailing Wage 

Guidance, including changes necessary 

to conform to this regulation. This 

includes the requirement that any 

survey instrument submitted cannot 

include the wages of H–2B workers or 

other nonimmigrant workers in 

calculating the wages. The Department 

has added this requirement to ensure 

that wages of H–2B workers do not 

establish the parameters by which the 

wages of all workers would be 

measured, as this could have the net 

effect of creating a permanent subset of 

lower wages in that occupation or area 

of employment. 

A number of commenters expressed 

concern that there is currently no 

alternative mechanism for labor 

organizations, worker advocate 

organizations, or other worker 

representatives to submit alternative 

surveys supporting higher wage rates. In 

none of our immigration programs has 

the Department ever permitted entities 

other than the employer to submit 

prevailing wage surveys. We have found 

no justification for departing from this 

practice. 

G. Multiple Worksite Wage Methodology 

The Department received comments 

from individual employers, labor 

unions, worker advocate groups, and a 

Congressional committee proposing that 

we revise the current process for 

determining wage requirements in those 

occupations that consist of employment 

in multiple locations under an approved 

labor certification. These commenters 

suggested that the Department require 

an employer to pay the highest 

prevailing wage rate out of all the areas 

of employment in which workers will 

be assigned for all the work performed 

throughout the itinerary. Many of these 

commenters stated that such a change is 

needed to prevent employers from 

exploiting wage rates in the most 

economically depressed labor markets. 

However, historically, the Department 

has required that employers pay 

workers the prevailing wage rate for the 

job opportunity in the area of intended 

employment, as this is the most 

effective way to avoid adverse effect in 

that area. All proposed and existing 

wage calculations, whether based on the 

provisions of the SCA, DBA, OES, or 

applicable Federal, State, or local laws, 

are determined based on the area of 

intended employment. Revising the 

requirement to create a single wage 

determination regardless of the actual 

area of intended employment would be 

contrary to how the Department has 

determined and applied wage 

calculations for the H–2B program. The 

Department does not believe that there 

is a need at this time to revise this longstanding provision. Additionally, the 

Department in no way intends to hinder 

an employer’s ability to pay its H–2B 

and U.S. workers the highest prevailing 

wage rate for the areas in which they 

will be assigned for all the work to be 

performed under the H–2B application, 

if it so desires. 

Along similar lines, a commenter in 

the forest industry suggested the use of 

a regional wage methodology linking a 

number of worksites on an itinerary 

over a wide geographic area. The 

commenter takes no position on 

whether such a methodology would be 

appropriate for H–2B employers in other 

industries and occupations besides the 

forestry-related industry. Though the 

Department appreciates this suggestion, 

it has concluded that the SCA and OES 

provide various forestry occupations 

enough flexibility to accommodate the 

job opportunities in each area of 

intended employment. As discussed 

above, the Department has a history of 

determining wages based on the area of 

intended employment and we are not 

adopting alternative methodologies that 

would revise that position. 

III. Administrative Information 

A. Executive Order 12866 

Under Executive Order (E.O.) 12866, 

the Department must determine whether 

a regulatory action is economically 

significant and therefore subject to the 

requirements of the E.O. and to review 

by OMB. Section 3(f) of the E.O. defines 

an economically 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 and materially affects 

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 


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25For the purpose of this analysis, the 

Department considers H–2B workers as temporary 

residents of the U.S. 26A CBA wage may in fact be the highest of the 

applicable wages; even under the 2008 Final Rule, 

if the job opportunity were covered by a CBA, the 

wage rate in the CBA would be the required wage. 

Accordingly, including the wage rate set forth in the 

CBA in the definition of prevailing wage will not 

result in an increased cost to the employer. 

27Once this Final Rule is effective, the prevailing 

wage will be determined not by comparing job 

titles, but by comparing job duties listed on the 

employer’s application with the occupational 

definitions in the SOC (for OES), the Dictionary of 

Occupational Titles (for SCA), or the DBA wage 

determination. 

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. 

OMB has determined that this Final 

Rule is an economically significant 

regulatory action under section 3(f)(1) of 

E.O. 12866. This regulation would likely 

result in transfers in excess of $100 

million annually and, consequently, is 

economically significant. Accordingly, 

OMB has reviewed this Final Rule. 

1. Need for Regulation 

The Department has determined that 

a new wage methodology is necessary 

for the H–2B program. Although many 

commenters supported the Department’s 

proposal, others questioned the 

Department’s decision to change the 

methodology for determining the 

prevailing wage rate. The Department’s 

decision to evaluate the prevailing 

wage, however, aligns with the 

Department’s mandate under the H–2B 

program to ensure that U.S. workers are 

not adversely affected by the 

employment of H–2B workers. The 

order in the recent court decision in 

CATA v. Solis merely prompted a more 

expeditious review of this important 

issue. As noted in the NPRM, the 

Department has grown increasingly 

concerned that the current calculation 

method of the prevailing wage rate does 

not adequately reflect the appropriate 

prevailing wage necessary to ensure that 

U.S. workers are not adversely affected 

by the employment of H–2B workers. 

Some commenters stated that the 

Department lacked the data to support 

this decision. The Department analyzed 

the breakdown of wages by OES level of 

4,694 submitted requests for prevailing 

wages (all requests submitted from the 

inception of the electronic PWD request 

submission system on January 21, 2010 

to November 7, 2010). According to this 

analysis, 74 percent of H–2B positions 

were certified at the Level I wage rates 

during that period. The percentages of 

H–2B positions certified at Levels II, III, 

and IV were 10.5, 8.2, and 6.9, 

respectively. In approximately 96 

percent of the cases, the wage rates 

certified for the H–2B positions were 

lower than the mean of the OES wage 

rates for the same occupation. The 

Department therefore asserts that a 

reevaluation of the current prevailing 

wage determination methodology is 

empirically justified. 

The Final Rule defines the prevailing 

wage to be the highest of: (1) The wage 

rate set forth in the CBA, if the job 

opportunity is covered by a CBA that 

was negotiated at arms’ length between 

a union and an employer; (2) the wage 

rate established under the DBA or the 

SCA for the occupation in the area of 

intended employment, if the job 

opportunity is in an occupation for 

which such a wage rate has been 

determined; or (3) the arithmetic mean 

of the OES-reported wage. The OES 

wage level under the new methodology 

would effectively result in the payment 

of higher wages that would conform 

more closely to the wages paid by nonH–2B employers according to the results 

of the OES survey. Thus, it is the 

Department’s position that when the 

certified prevailing wage is based on the 

OES survey, using the arithmetic mean 

will ensure that H–2B workers are paid 

a wage that will not adversely affect the 

wages of U.S. workers similarly 

employed. 

2. Economic Analysis 

The Department’s analysis below 

compares the expected impacts of this 

Final Rule to the baseline (i.e., the 2008 

Final Rule). According to the principles 

contained in OMB Circular A–4, the 

baseline for this rule would be the 

situation in which the proposed rule is 

not adopted. Thus, the baseline for this 

H–2B prevailing wage regulation is the 

four-tier wage structure derived from 

the OES wage survey, as outlined in the 

2008 Final Rule. 

The change in the method of 

determining prevailing wages under this 

Final Rule will result in additional 

compensation for both H–2B workers 

and U.S. workers hired in response to 

the required recruitment. In this section, 

the Department discusses the relevant 

benefits, costs, and transfers that may 

apply to this Final Rule.25

This Final Rule changes the OES 

component of the prevailing wage 

determination to the arithmetic mean of 

the OES wages for a given area of 

employment and occupation. This Final 

Rule requires employers to offer H–2B 

workers and U.S. workers hired in 

response to the required H–2B 

recruitment a wage that is at least equal 

to the highest of the prevailing wage, or 

the Federal, State or local minimum 

wage. Under the Final Rule, the 

prevailing wage is the highest of the 

following: (1) The wage rate set in a 

CBA, if the job opportunity is covered 

by a CBA that was negotiated at arms’ 

length between a union and an 

employer; 26 (2) the wage rate 

established under the DBA or the SCA 

for the occupation in the area of 

intended employment, if the job 

opportunity is in an occupation for 

which a wage rate has been determined; 

or (3) the arithmetic mean of the OESreported wage. 

With two exceptions, noted below, 

the Department calculated the change in 

hourly wages by matching the OES 

arithmetic mean wage rates to the H–2B 

data by the standard occupational 

classification (SOC) code and the 

metropolitan statistical area (MSA) of 

employment. We also matched the SCA 

and DBA wage rates (exclusive of fringe 

benefits) to the H–2B data using the 

occupational title specified in the H–2B 

program data and the county of 

employment.27 For some occupations 

and counties, SCA and DBA wages had 

not been determined; in those cases, the 

SCA and DBA wages did not enter our 

calculations. In the Department’s 

experience under the H–2B program, the 

work of landscape laborers generally 

involves grounds maintenance of the 

kind contained in SCA and OES job 

descriptions. Construction related 

landscaping—the construction of 

planters, walkways and similar 

structures as part of building 

construction projects as used in DBA job 

descriptions—is rarely applicable to H– 

2B employment. Accordingly, either 

SCA or OES rates were used to estimate 

costs for landscape laborers. Similarly, 

SCA job descriptions are generally more 

reflective of H–2B reforestation 

occupations than are OES job 

descriptions; therefore, SCA wage rates 

were used to estimate the effect of the 

Final Rule on reforestation employers. 

This analysis is based on job titles rather 

than actual job duties. After 

implementation, the Department will 

closely compare the job duties listed on 

the Application to the job duties listed 

in the SOC, SCA Dictionary of 

Occupation Titles and the DBA wage 

determinations to identify the most 

appropriate basis for determining the 

prevailing wage. 

Using certified and partially certified 

applications in the H–2B program data, 

we calculated the increase in wages by 

selecting the highest wage among the 

OES arithmetic mean, the SCA, and 

DBA wage. We then subtracted the 

average H–2B hourly wage certified 

from the highest of the three wages, and 

we weighted this differential by the 


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28The Department weighted the wage 

differentials by the number of certified workers as 

opposed to the number of workers requested 

because a decrease in number of workers granted 

may occur for reasons other than that a U.S. worker 

was hired in response to the recruitment. 

29 In all wage calculations where we found that 

the baseline H–2B wage is higher than any 

alternative wage considered, we assumed that the 

baseline wage prevails. That is, we assumed that the 

wage increase is zero for those cases. This situation, 

however, is rare; the baseline prevailing wage 

exceeded the OES mean in approximately 4 percent 

of the cases. 

30These are hourly wage rates and do not include 

fringe benefits. 

31A recent Congressional Research Service (CRS) 

report used a wage calculation approach that is 

similar to that used in this Final Rule. The report 

found that the SCA and DBA wage rates are in some 

cases higher than the OES arithmetic mean for a 

given job opportunity. This is consistent with the 

findings of the analysis conducted for this Final 

Rule. The CRS report, however, did not rely on 

wage data for each county where the work actually 

took place. Also, the CRS report was limited to a 

selected group of occupations and counties. Source: 

‘‘Potential Impact of Proposed Regulations on the 

Wages of H–2B Workers,’’ Congressional Research 

Service, October 2010. 

32The Department’s program database does not 

collect city and zip code data for the work locations 

for the certifications. Therefore, in order to extract 

that data, the Department hand-selected a random 

sample from the CY 2009 filed applications to 

calculate the wage increases. The Department used 

CY 2009 as a representative year. Although some 

commenters suggested that FY 2009 was not a 

representative year for use of the H–2B program, the 

random sample chosen was consistent with 

standard statistical methods. Further, the 

Department selected the data from the calendar year 

rather than the fiscal year to allay such concerns, 

but at the same time, represent the most recent data 

available. 

33The 10-year analysis period starts on January 1, 

2012 and ends on December 31, 2021 since the 

Final Rule is effective for wages paid to H–2B 

workers and U.S. workers recruited in connection 

with an H–2B labor certification for all work 

performed on or after January 1, 2012. 

34For this and subsequent calculations, we used 

an estimated total of 115,500 H–2B workers because 

the number of visas available under the H–2B 

program is 66,000 (assuming no statutory increases 

in the number of visas available for entry in a given 

year) but employers can hire H–2B workers with 

existing visas for two additional years. Assuming 

that half of all such workers (33,000) in any year 

stay at least one additional year, and half of those 

workers (16,500) will stay a third year, there will 

be a total of 115,500 H–2B workers in a given year. 

That is, in our calculations, we use 66,000 as the 

annual number of new entrants and 115,500 as the 

total number of H–2B workers in a given year 

during the 10-year time horizon. Source: ftp:// 

ftp.bls.gov/pub/suppl/empsit.ceseeb1.txt. 

35One industry, forestry services, made the initial 

top-five list based on the number of H–2B workers 

certified; however, the employment data was 

insufficient to include it in this section. Data on 

employment size and business revenue were 

available for forestry and, thus, this industry is 

included in the Regulatory Flexibility Analysis at 

section B of this Administrative Information 

section. 

36The number of visas available under the H–2B 

program is 66,000, assuming no statutory increases 

in the number of visas available for entry in a given 

year. We also assume that half of all such workers 

(33,000) in any year stay at least one additional 

year, and half of those workers (16,500) will stay 

a third year, for a total of 115,500 H–2B workers in 

a given year. The scale factor (49.8 percent) was 

derived by dividing 115,500 by the total number of 

workers certified per year on average during FY 

2007–2009 (236,706). 

number of certified workers on each 

certified or partially certified 

application.28 We then summed those 

products and divided the sum by the 

total number of certified workers from 

the certified or partially certified 

applications.29 Based on this 

calculation, we estimate that the change 

in the method of determining wages will 

result in a $4.83 increase in the 

weighted average hourly wage for H–2B 

workers and similarly employed U.S. 

workers hired in response to the 

recruitment required as part of the H– 

2B application. 

This approach for calculating the 

expected changes in hourly wages 

relative to the baseline is more accurate 

than the approach the Department used 

in the analysis presented in the NPRM 

in two ways. First, the calculations 

presented in this analysis use the 

highest wage among the OES arithmetic 

mean, the SCA, and DBA wages.30 In the 

analysis presented in the NPRM, the 

SCA and DBA wages were not directly 

accounted for in these calculations. 

Second, the calculations presented in 

this analysis use wage data for each 

MSA or county where the H–2B work 

actually took place.31 In the analysis 

presented in the NPRM, on the other 

hand, the Department used the national 

values rather than location-specific data. 

More specifically, because the 

employer’s address frequently does not 

represent the area where the work 

actually takes place, the Department 

conducted a manual extraction of areaof-employment data from the submitted 

H–2B applications, including the city, 

state, and zip code corresponding to the 

area of employment. The Department 

used a random sample of 500 certified 

or partially-certified applications from 

Calendar Year (CY) 2009 H–2B program 

data.32 The $4.83 increase in the 

weighted average hourly wage for H–2B 

workers (and U.S. workers hired in 

response to the recruitment required as 

part of the H–2B application) was 

calculated using this data sample. 

The Department provides an 

assessment of transfer payments 

associated with increases in wages 

resulting from the change in the wage 

determination method. Transfer 

payments, as defined by OMB Circular 

A–4, are payments from one group to 

another that do not affect total resources 

available to society. Transfer payments 

are associated with a distributional 

effect but do not result in additional 

benefits or costs to society. The primary 

recipients of transfer payments reflected 

in this analysis are H–2B workers and 

any U.S. workers hired in response to 

the required recruitment under the H– 

2B program. The primary payors of 

transfer payments reflected in this 

analysis are H–2B employers. Under the 

higher wage obligation defined in the 

Final Rule, those employers who 

participate in the H–2B program are 

likely to be those that have the greatest 

need to access the H–2B program. When 

summarizing the benefits, costs, or 

transfers of this rule, we present the 10- 

year averages to reflect the typical 

annual effect.33

Employment in the H–2B program 

represents a very small fraction of the 

total employment in the U.S. economy 

both overall and in the industries 

represented in the program. The H–2B 

program is capped at 66,000 visas 

issued per year; assuming that half of all 

entering workers stay at least one 

additional year, and half of those 

workers stay a third year, H–2B workers 

represent approximately 0.09 percent of 

total U.S. nonfarm employment (130.9 

million).34

According to H–2B program data for 

FY 2007–2009, the average annual 

numbers of H–2B workers certified in 

the top five industries 35 were as 

follows: construction—30,242; 

amusement, gambling, and recreation— 

14,041; landscaping services—78,027; 

janitorial services—30,902; and food 

services and drinking places—22,948. 

When we scale these figures in 

accordance with the 66,000 cap, these 

certifications yield the following 

percentages of the total employment in 

each of these industries: Construction— 

0.2 percent (14,756/7,265,648); 

amusement, gambling, and recreation— 

0.5 percent (6,851/1,506,120); 

landscaping services—6.5 percent 

(38,073/589,698); janitorial services— 

1.6 percent (15,079/933,245); and food 

services and drinking places—0.1 

percent (11,197/9,617,597).36 Thus, as 

these data illustrate, the H–2B program 

represents a relatively small fraction of 

the total employment, even in each of 

the top five industries in which H–2B 

workers are found. 

In the remaining sections of this 

analysis, we first present the costs 

resulting from the Final Rule, including 

an increase in H–2B employer expenses 

that could lead to a decrease in 

production. The Department predicts 

that most of these costs, which would 

result from a decrease in current H–2B 

participation by employers who cannot 

afford the increased labor costs or who 


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37Although only four alternative arguments have 

undergone quantitative analysis in this section, 

there are an additional ten alternative suggestions 

that contain a qualitative discussion in section II.C 

of this Final Rule. 

38Although employers may pass costs onto their 

customers, data does not exist from which to 

estimate the amount or extent to which costs would 

be absorbed by customers. Therefore, the 

Department was not able to quantify this cost offset. 

39The output reduction impact of reducing labor 

demand may be in some cases partially offset by 

capital substitution and organizational substitution 

productivity effects. When substitution occurs, the 

deadweight loss will be reduced. 

40See, e.g., Hamermesh, Daniel S., Labor 

Demand, Princeton and Chichester, U.K.: Princeton 

University Press, 1993. 

can more easily fill empty positions 

with U.S. workers, will be borne by an 

influx of employers who have the need 

for additional temporary labor but do 

not currently participate in the H–2B 

program. We then discuss the transfers 

from H–2B workers to U.S. workers and 

from U.S. employers to U.S. and H–2B 

workers resulting from the change in 

wage determination methodology. 

Finally, we analyze a total of four 

alternatives 37 and explain why the 

Department chose to eliminate the fourtiered OES wage structure and adopt the 

OES arithmetic mean absent a higher 

CBA, DBA, or SCA wage. 

i. Costs 

In standard economic models of labor 

supply and demand, an increase in the 

wage rate represents an increased 

production cost to employers leading to 

a reduction in the demand for labor. 

Because production costs increase with 

an increase in the wage rate, a resulting 

decrease in profits is possible for H–2B 

employers that are unable to increase 

prices to cover the cost increase. Some 

H–2B employers, however, can be 

expected to offset the cost increase by 

increasing the price of their products or 

services.38 In addition, workers who 

would have been hired at a lower wage 

rate may not be hired at the higher wage 

rate, resulting in forgone earnings for 

workers. In this sense, to the extent that 

the higher wages imposed by the rule 

result in lower employment and lower 

output by firms who had employed 

those workers, the lost profits on the 

foregone output and the lost net wages 

to the foregone workers represent a 

deadweight loss. In economics, a 

deadweight loss is a loss of economic 

efficiency that can occur when 

equilibrium for a good or service is not 

optimal. This effect will be magnified 

during years in which the cap is not 

reached.39

In a practical sense, because the total 

employment under the H–2B program is 

capped at 66,000 visas, the 

macroeconomic effect of reductions in 

H–2B employment and, therefore, 

reductions in output are expected to be 

minimal. There has generally been 

excess demand for H–2B workers well 

beyond the 66,000 limit, and the 

Department believes that the increased 

wages resulting from the rule will not 

result in fewer than 66,000 visas for H– 

2B workers because, even if some 

employers decide not to participate in 

the H–2B program, other employers, 

who previously were unable to secure 

visas for H–2B workers before the cap 

was met, and therefore operated without 

a complete workforce, will participate. 

For example, for FY 2007 through 

2009, employers applied for an average 

of 236,706 certified H–2B positions per 

year. This number reflects the number 

of positions certified, rather than the 

number of actual workers who entered 

the program to fill those positions, 

which is capped at 66,000 per year. 

Using this number of certified workers 

to represent the quantity of labor 

demanded, and assuming an elasticity 

of labor demand of ¥0.3,40 a $4.83 (56 

percent) increase in wages would result 

in a 16.8 percent decline in the number 

of H–2B workers requested by 

employers, for a remaining total of 

196,939 H–2B certified positions 

requested by employers, which still far 

exceeds the 66,000 maximum visas 

allowed under the H–2B program. 

Therefore, any loss of production 

resulting from some employers 

dropping out of the program will be 

offset by production by other employers 

who would then be able to fill 

previously vacant positions. 

Thus, the Department believes that for 

years in which the number of 

applications exceeds the number of 

workers available under the cap, there 

will be no deadweight loss in the market 

for H–2B workers even if some 

employers do not participate in the 

program as a result of the higher H–2B 

wages. Indeed, the higher wages 

expected to result from the Final Rule 

could in turn result in a more efficient 

distribution of H–2B visas to employers 

who can less easily attract available U.S. 

workers. The Department believes that 

those employers who can more easily 

attract U.S. workers will be dissuaded 

from attempting to participate in the H– 

2B program after the Final Rule goes 

into effect, so that those employers 

participating in the H–2B program after 

the rule is in place will be those that 

have a greater need for the program, on 

average, than those employers 

participating in the H–2B program 

before the Final Rule goes into effect. 

Therefore, there would be no 

appreciable decline in employment 

under the program. 

In years in which the number of 

certified H–2B positions is less than the 

66,000 visa cap, the higher wages 

resulting from this Final Rule could be 

expected to result in a reduction in 

employment of H–2B workers and, 

therefore, a reduction in output by 

employers participating in the H–2B 

program. This employment reduction 

would be expected to be partially offset 

by increased employment of U.S. 

workers to the extent that employers 

could attract U.S. workers or could in 

some cases make other adjustments, 

such as substituting capital for labor; 

but, in a sense, the reduction in 

employment and output would not be 

completely offset, potentially resulting 

in some deadweight loss in production 

among H–2B employers. The history of 

the H–2B program, however, suggests 

that this situation is rare. In recent 

history, the number of H–2B visas has 

reached the 66,000 cap every year 

except FY 2009 and FY 2010. 

ii. Transfers 

The change in the method of 

determining wages results in transfers 

from H–2B workers to U.S. workers and 

from U.S. employers to both U.S. 

workers and H–2B workers. A transfer 

from H–2B workers to U.S. workers 

arises because, as wages increase, jobs 

that would otherwise be occupied by H– 

2B workers will be more acceptable to 

a larger number of U.S. workers. 

Additionally, faced with higher H–2B 

wages, some employers may find 

domestic workers relatively less 

expensive and may choose to not 

participate in the H–2B program and, 

instead, employ U.S. workers. Although 

some of these U.S. workers may be 

drawn from other employment, some of 

them may otherwise be or remain 

unemployed or out of the labor force 

entirely, earning no compensation. 

The Department is not able to 

quantify these transfer payments with 

precision, however. Difficulty in 

calculating these transfer payments 

arises primarily from uncertainty about 

the number of U.S. workers currently 

collecting unemployment insurance 

benefits who will become employed as 

a result of this rule. 

To estimate the total transfer to H–2B 

workers via the increased wages 

resulting from the new wage 

determination method, the Department 

multiplied the total number of H–2B 

workers in the U.S. in a given year 

(115,500), which includes both new 

entrants and an assumed portion of 

those who entered in each of the two 


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41The Department’s data on certified applications 

cannot be used to determine the actual number of 

H–2B workers in the country. Certifications are 

made without regard to the cap on the number of 

H–2B workers admissible each year and are not 

intended to indicate whether a worker actually 

entered the country to fill a position. Additionally, 

available DHS data is based on total entries of H– 

2B workers, which may or may not equal the 

admissions of H–2B workers in a given year. See 

http://www.dhs.gov/xlibrary/assets/statistics/ 

yearbook/2009/table25d.xls. The Department of 

State keeps records of visas issued but does not 

publicly break down these numbers based on 

subcategories within the H category. http:// 

travel.state.gov/visa/statistics/nivstats/ 

nivstats_4582.html. 

42For the number of hours worked per day, we 

use 7 hours as typical. For the number of days 

worked, we assume that the employer will retain 

the H–2B worker for the maximum time allowed (10 

months, or 304 days [10 months × 30.42 days]) and 

will employ the workers for 5 days per week. Thus, 

total number of days worked equals 217 [10 months 

× 30.42 days × (5⁄7)]. 

43An additional transfer noted by a commenter is 

increased remittances to the worker’s home 

country. The Department, however, does not have 

data on the remittances made by H–2B workers to 

their countries of origin. 

previous years,41 by the weighted 

average hourly wage increase ($4.83), 

the number of hours worked per day (7), 

and the total number of days worked 

(217).42 On this basis, we estimate the 

total annual average transfer incurred 

due to the increase in wages at $847.4 

million. As a result, OMB has 

determined that the rule is an 

economically significant rule. 

The increase in the wage rates 

induces a transfer from participating 

employers not only to H–2B workers, 

but also to U.S. workers hired in 

response to the required H–2B 

recruitment. The higher wages are 

beneficial to U.S. workers because they 

enhance workers’ ability to meet the 

cost of living and to spend money in 

their local communities, which has the 

secondary impact of increasing 

economic activity and, therefore, 

generates employment in the 

community. These are important 

concerns and a key aspect of the 

Department’s mandate to ensure that 

wages of similarly employed U.S. 

workers are not adversely affected.43

Several commenters indicated that the 

increase in the wages of H–2B workers 

could impact the career ladder 

established by H–2B employers for nonH–2B employees. The Department 

recognizes that career ladders of non-H– 

2B workers could potentially be 

impacted by the wage increase but is 

unable to quantify that impact because 

of the lack of data to ascertain the 

degree to which H–2B employers will 

react by increasing wages for their other 

workers. 

Similarly, our calculations do not 

include the wage increase of U.S. 

workers hired in response to the 

required recruitment because of lack of 

data on these workers. 

3. Alternatives 

Several commenters proposed 

alternatives to the wage calculation 

methodology. In response to these 

comments, the Department analyzed the 

following wage calculation alternatives: 

(1) To continue the current calculation 

methodology but provide a more 

complete justification for doing so; (2) to 

eliminate the four tiers and use the OES 

arithmetic mean as the OES component 

of the prevailing wage determination; 

(3) to eliminate the four tiers and use 

the OES median as the OES component 

of the prevailing wage determination; 

and (4) use the proposed methodology— 

alternative 2—but require the provision 

of fringe benefits. 

The Department conducted economic 

analyses of the four alternatives to better 

understand their impacts. Below is a 

discussion of each alternative along 

with an estimation of their associated 

transfers. Transfers for each alternative 

use the 2008 Final Rule as the baseline. 

In addition, for each alternative that was 

not chosen, we include a discussion on 

why the alternative was not chosen. 

Finally, we summarize the total 

transfers associated with each 

alternative considered. 

i. Continue the Current Calculation 

Methodology 

This alternative was espoused by 

several commenters, including the Chief 

Counsel for Advocacy, SBA. For the 

reasons discussed throughout this Final 

Rule, continuing the current calculation 

methodology that relies on the four tiers 

does not provide adequate protections 

to U.S. and H–2B workers. The existing 

procedure for extracting tiered wages 

from the basic OES wage survey data 

was adopted without any systematic 

effort to determine if that system was 

empirically justified. The OES wage 

surveys collect no data about the skill 

levels or duties performed by the 

workers at any particular wage level. 

Although lower wages may be 

associated with lower skill levels and 

responsibilities in professional 

occupations, there is no evidence to 

suggest that such a relationship exists in 

the lower skilled occupations that 

predominate in the H–2B program. Even 

if there were some evidence of the 

existence of skill-based wage differences 

with these occupations, the OES survey 

does not purport to capture such 

differences. In the absence of such 

information, our responsibility to set 

wage rates that avoid adverse effect on 

wages compels us to use the highest of 

the SCA or DBA rates, the wage 

established under an existing CBA, or 

the OES arithmetic mean wage as the 

principal wage-setting tool. The cost 

associated with this alternative is zero 

because it represents the baseline, that 

is, the alternative where no action is 

taken by the Department. The 

Department, therefore, rejected this 

alternative. 

ii. Eliminate the Four Tiers and Use the 

Highest of the Wage Rates Set Forth 

Under the CBA, DBA, SCA, or OES 

Arithmetic Mean 

This alternative is the method 

required by the Final Rule which 

defines the prevailing wage to be the 

highest of: (1) The wage rate set forth in 

the CBA, if the job opportunity is 

covered by a CBA that was negotiated at 

arms’ length between a union and an 

employer; (2) the wage rate established 

under the DBA or the SCA for the 

occupation in the area of intended 

employment, if the job opportunity is in 

an occupation for which such a wage 

rate has been determined; or (3) the 

arithmetic mean of the OES-reported 

wage. This alternative represents the 

policy that will best achieve the 

Department’s policy objectives of 

ensuring that wages and working 

conditions of U.S. workers are more 

adequately protected and, thus, will not 

be adversely affected by the admission 

of H–2B workers to the country. 

As discussed above, the elimination 

of the four tiers and the use of the 

highest of the wage rates set forth under 

the CBA, DBA, SCA, or OES where the 

arithmetic mean would constitute the 

OES wage rate will result in a total 

annual average transfer of $847.4 

million to H–2B workers. 

iii. Eliminate the Four Tiers and Use the 

Highest of the Wage Rates Set Forth 

Under the CBA, DBA, SCA, or OES 

Median 

This alternative represents the 

elimination of the four tiers and the 

highest of the wage rates set forth under 

the CBA, DBA, SCA, or OES where the 

OES median constitutes the OES wage 

rate. To estimate the total transfer to H– 

2B workers via the increased wages 

resulting from the use of the median, we 

used the same methodology discussed 

above to calculate the wage differential 

for the OES mean. The Department 

multiplied the total number of H–2B 

workers in a given year (115,500), which 

includes both new entrants and an 

assumed portion of those who entered 

in each of the two previous years, by the 

weighted average hourly wage increase 

estimated using the OES median ($4.64), 

the number of hours worked per day (7), 


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3472 Federal Register / Vol. 76, No. 12 / Wednesday, January 19, 2011 / Rules and Regulations 

44Health and welfare includes life, accident, and 

health insurance plans, sick leave, pension plans, 

civic and personal leave, severance pay, and 

savings and thrift plans. Minimum employer 

contributions costing an average of $3.35 per hour 

are computed on the basis of all hours worked by 

employees employed on the contract. 

45See the RFA analysis at section II.C of the 

Administrative Information section for a more 

descriptive analysis of the wage differential 

between DBA and fringe benefits and the prevailing 

wage under the OES mean for the construction 

industry. 

46The Final Rule is effective for wages paid to 

H–2B workers and U.S. workers recruited in 

connection with an H–2B labor certification for all 

work performed on or after January 1, 2012. 

and the total number of days worked 

(217). We estimate the total annual 

average transfer incurred due to the 

increase in wages represented by the 

median at $814.1 million. 

The Department rejected this 

methodology. Although the numbers are 

generally comparable to the arithmetic 

mean, the median does not represent the 

best ‘‘average’’ wage across a 

distribution. The median wage 

represents only the midpoint of the 

range of wage values; it does not 

account for the actual average. The 

mean is widely considered to be the best 

measure of central tendency for a 

normally distributed sample, as it is the 

measure that includes all the values in 

the data set for its calculation, and any 

change in any of the wage rates will 

affect the value of the mean. This is not 

the case with the median. The 

Department has traditionally relied on 

arithmetic means for wage programs and 

has determined that these reasons make 

continuing reliance on the mean, rather 

than the median, logical. 

iv. Use the Proposed Methodology but 

Require the Provision of Fringe Benefits 

To estimate the total transfer to H–2B 

workers from the increased wages 

resulting from the elimination of the 

four tiers and the inclusion of fringe 

benefits, the Department multiplied the 

estimated annual number of H–2B 

workers (115,500), by the weighted 

average hourly wage increase 

represented by the DBA wages plus 

fringe benefits ($7.20), the number of 

hours worked per day (7), and the total 

number of days worked (217). For 

records where DBA wages and fringes 

were not available, we used the OES 

mean (as calculated according to option 

2) plus the SCA health and welfare 

(H&W) $3.35 flat fringe.44 We estimate 

the total annual average transfer 

incurred due to the increase in wages 

represented by the wages plus fringe 

benefits at $1,263.2 million.45

The Department historically has not 

required the payment of fringe benefits 

to H–2B workers, even before 2005, 

when the payment of DBA wage rates 

was mandatory for occupations where 

such wage determinations existed. See 

75 FR 61578, 61579, Oct. 5, 2010 (‘‘Wage 

Methodology for the Temporary NonAgricultural Employment H–2B 

Program’’ Proposed Rule). Under this 

Final Rule, the Department will again 

certify the DBA wage as the prevailing 

wage rate that must be paid to H–2B 

workers if those rates are the highest in 

those occupations in the area of 

intended employment among the rates 

listed in § 655.10. For H–2B positions 

for which the DBA wage is not 

applicable, the Department believes that 

not requiring fringe benefit payments is 

an appropriate reflection of the 

Department’s historical practices. As 

previously noted, fringe benefits costs 

have never been included in H–2B wage 

determinations. The Department 

reaffirms its belief that requiring fringe 

benefit payments to H–2B workers is not 

necessary in order to prevent an adverse 

effect on the wages and working 

conditions of U.S. workers. 

v. Summary of Alternatives Analyzed 

Quantitatively 

Exhibit 1 below summarizes the total 

10-year transfers incurred for the wage 

methodology alternatives discussed 

above relative to the baseline. The 10- 

year analysis period starts on January 1, 

2012 46 and ends on December 31, 2021. 

The alternative of regional SCA wages 

applies to forestry workers only. We use 

discount rates of 7 and 3 percent to 

estimate the transfers over the 10-year 

analysis period. 


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47Source: ftp://ftp.bls.gov/pub/suppl/ 

empsit.ceseeb1.txt. 

48Although we were not able to obtain industry 

employment data for the forestry support services 

industry, we were able to obtain revenue and 

employment data for this industry from the 

business data provider ReferenceUSA. 

ReferenceUSA relies primarily on phone 

verification and public data sources to obtain 

employment and revenue figures for businesses of 

different sizes. 

49The scale factor was derived by dividing 

115,500 by the total number of workers certified per 

year on average during FY 2007–2009 (236,706). 

Please see the transfer payments subsection in the 

E.O.12866 section above for a discussion of how we 

derived the number of H–2B workers in a given year 

(115,500). 

B. Regulatory Flexibility Act 

The Regulatory Flexibility Act (RFA) 

at 5 U.S.C. 603 requires agencies to 

prepare a regulatory flexibility analysis 

to determine whether a regulation will 

have a significant economic impact on 

a substantial number of small entities. 

Section 605 of the RFA allows an 

agency to certify a rule in lieu of 

preparing an analysis if the regulation is 

not expected to have a significant 

economic impact on a substantial 

number of small entities. Further, under 

the Small Business Regulatory 

Enforcement Fairness Act of 1996, 5 

U.S.C. 801 (SBREFA), an agency is 

required to produce compliance 

guidance for small entities if the rule 

has a significant economic impact. For 

the reasons explained in this section, 

the Department believes this Final Rule 

is not likely to impact a substantial 

number of small entities and, therefore, 

a final regulatory flexibility analysis is 

not required by the RFA. However, in 

the interest of transparency, we have 

prepared the following Final Regulatory 

Flexibility Analysis to assess the impact 

of this regulation on small entities, as 

defined by the applicable Small 

Business Administration (SBA) size 

standards. 

Employers seeking to participate in 

the H–2B program come from virtually 

all industries and segments of the 

economy and industries. Participating 

businesses are a small portion of the 

national economy overall. A Guide for 

Government Agencies: How to Comply 

with the RFA, Small Business 

Administration, at 20 (‘‘the 

substantiality of the number of 

businesses affected should be 

determined on an industry-specific 

basis and/or the number of small 

businesses overall’’). Employment in the 

H–2B program represents a small 

percentage of the total employment in 

the U.S. economy, both overall and in 

the industries represented in the H–2B 

program. The H–2B program is capped 

at 66,000 visas issued per year; 

assuming that half of all entering 

workers stay at least one additional 

year, and half of those workers stay a 

third year, the 115,500 H–2B workers 

working in the U.S. in a year represent 

approximately 0.09 percent of total U.S. 

nonfarm employment (130.9 million).47

According to H–2B program data for 

FY 2007–2009, the average annual 

numbers of H–2B positions certified by 

ETA in the top six industries were as 

follows: construction—30,242; 

amusement, gambling, and recreation— 

14,041; landscaping services—78,027; 

janitorial services—30,902; food 

services and drinking places—22,948; 

and forestry services—18,387. As 

explained below, this Final Rule 

provides an enhanced analysis of the 

impact on small businesses, including 

extending the analysis to forestry 

services. Thus, we present analysis on 

the top six industries (rather than the 

top five industries presented in the 

NPRM).48

When the actual number of entries 

permitted each year (given the H–2B 

visa cap of 66,000 workers) is accounted 

for, H–2B workers represent the 

following percentages of the total 

employment in each of these industries: 

construction—0.2 percent (14,756/ 

7,265,648); amusement, gambling, and 

recreation—0.5 percent (6,851/ 

1,506,120); landscaping services—6.5 

percent (38,073/589,698); janitorial 

services—1.6 percent (15,079/933,245); 

and food services and drinking places— 

0.1 percent (11,197/9,617,597).49 As 

these data illustrate, the H–2B program 

represents a small fraction of the total 

employment in the top industries in 

which H–2B workers are found. The 

Economic Census does not contain 

industry employment data for forestry 

support services; therefore, the 

Department is not able to calculate the 

percentage of total employment 

represented by H–2B workers in that 

industry. 

1. Description of the Reasons That 

Action by the Agency Is Being 

Considered 

The Department has determined that 

a new wage methodology is necessary 

for the H–2B program. The Department’s 

decision to reevaluate the prevailing 

wage aligns with the Department’s 

mandate under the H–2B program to 

ensure that U.S. workers are not 

adversely affected by the employment of 

H–2B workers. The order in the recent 

court decision in CATA v. Solis, Civil 

No. 2:09–cv–240–LP, 2010 WL 3431761 

(E.D. Pa. Aug. 30, 2010) merely 

prompted a more expeditious review of 

this important issue. As noted in the 

NPRM, the Department has grown 

increasingly concerned that the current 

method of calculating the prevailing 

wage does not produce rates that 

adequately reflect the appropriate wage 

necessary to ensure that U.S. workers 

are not adversely affected by the 

employment of H–2B workers. 

As discussed in the E.O. 12866 

analysis, the Department analyzed the 

breakdown of wages by OES level of 

4,694 submitted requests for a 

prevailing wage submitted this calendar 

year. This analysis found that 74 

percent of H–2B positions were certified 

at the Level I wage rates; the percentages 

of H–2B positions certified at Levels II, 

III, and IV were 10.5, 8.2, and 6.9, 

respectively. 

The existing procedure for extracting 

tiered wages from the basic OES wage 

survey data was adopted without any 

systematic effort to determine if that 

system was empirically justified. The 

OES wage surveys collect no data about 

the skill levels or duties performed by 

the workers at any particular wage level. 

Although lower wages may be 

associated with lower skill levels and 

responsibilities in professional 

occupations, there is no evidence to 

suggest that such a relationship exists in 

the lower skilled occupations that 

predominate in the H–2B program. Even 

if there were some evidence of the 

existence of skill-based wage differences 

with these occupations, the OES survey 

does not purport to capture such 

differences. 

The Final Rule defines the prevailing 

wage to be the highest of: (1) The wage 

rate set forth in the CBA, if the job 

opportunity is covered by a CBA that 

was negotiated at arms’ length between 

a union and an employer; (2) the wage 

rate established under the DBA or the 

SCA for the occupation in the area of 

intended employment, if the job 

opportunity is in an occupation for 

which such a wage rate has been 

determined; or (3) the arithmetic mean 

of the OES-reported wage. The OES 

wage level under the new methodology 

would effectively result in the payment 

of wages that would conform more 

closely to the wages paid by non-H–2B 

employers according to the results of the 

OES survey. Thus, it is the Department’s 

position that when the certified 

prevailing wage is based on the OES 

survey, using the arithmetic mean will 

not adversely affect the wages of U.S. 

workers similarly employed. 

2. Succinct Statement of the Objectives 

of, and Legal Basis for, the Rule 

The Department is proposing to 

establish a new wage methodology that 

adequately protects the wages of U.S. 

and H–2B workers. The legal basis for 


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50According to H–2B program data, the average 

annual number of firms (of all sizes) and H–2B 

workers certified for these industries during FY 

2007–2009 were as follows: landscaping services, 

firms—2,754, workers—78,027; janitorial services, 

firms—788, workers—30,902; food services and 

drinking places, firms—851, workers—22,948; 

amusement, gambling, and recreation, firms—227, 

workers—14,041; construction, firms—860, 

workers—30,242; and forestry support services, 

firms—130, workers—18,387. 

51The SBA small business size standards for 

construction range from $7 million (land 

subdivision) to $33.5 million (general building and 

heavy construction). However, because employers 

representing all types of construction businesses 

may apply for certification to employ H–2B 

workers, the Department used the average of $20.7 

million as the size standard for construction. 

52As stated in the NPRM, the revenue figure is 

part of the information collection but is not 

required for successful completion of the 

application. It has also been part of the application 

only since the implementation of the ETA–9142 in 

2009. The Department began collecting revenue 

data at the behest of the SBA to be better able to 

calculate such figures but the data is at best 

minimal and sporadically provided and, in the 

Department’s view, the data that we have collected 

is not adequately representative of revenue figures 

for employers using the program. Therefore, the 

Department has concerns about the statistical 

validity of the data. This is why the Department 

chose to rely on an outside source (ReferenceUSA) 

for revenue and employment data that is more 

comprehensive than the data received in program 

applications. 

53The total number of firms classified as small 

entities in these industries is as follows: 

landscaping services, 63,210; janitorial services, 

45,495; food services and drinking places, 293,373; 

amusement, gambling, and recreation, 43,726; 

construction, 689,040; and forestry support 

services, 1,353. Source: 2002 County Business 

Patterns and 2002 Economic Census. http:// 

www.census.gov/econ/susb/data/susb2002.html. 

54Southern Offshore Fishing Association v. 

Daley, 97–1134–CIV–T–23C, slip op. (Oct. 16, 

1998); North Carolina Fisheries Association v. 

Daley, 27 F. Supp. 2d 650 (E.D. Va. 1998). 

the rule is the Department’s authority, 

delegated from DHS under its 

regulations at 8 CFR 214.2(h)(6), to grant 

temporary labor certifications under the 

H–2B program. Additionally, as 

discussed earlier, the Department is 

subject to the CATA v. Solis order, 

which requires the Department to 

‘‘promulgate new rules concerning the 

calculation of the prevailing wage rate 

in the H–2B program that are in 

compliance with the Administrative 

Procedure Act no later than 120 days 

from the date of this order.’’ That date 

was subsequently modified to give the 

Department until January 18, 2011 to 

promulgate the rule. 

3. Description of, and Where Feasible, 

an Estimate of the Number of Small 

Entities to Which the Rule Will Apply 

Definition of a Small Business 

A small entity is one that is 

independently owned and operated and 

that is not dominant in its field of 

operation. The definition of small 

business varies from industry to 

industry to properly reflect industry size 

differences. An agency must either use 

the SBA definition for a small entity or 

establish an alternative definition for 

the industry. The Department has 

conducted a small entity impact 

analysis on small businesses in the six 

industries with the largest number of H– 

2B workers, as mentioned above: 

landscaping services; janitorial services 

(includes housekeeping services); food 

services and drinking places; 

amusement, gambling, and recreation; 

construction; and forestry support 

services. These top six industries 

accounted for 82 percent of the total 

number of H–2B workers certified 

during FY 2007–2009.50

We have adopted the SBA small 

business size standard for each of the 

six industries, which is a firm with 

annual revenues equal to or less than 

the following: landscaping services, $7 

million; janitorial services, $16.5 

million; food services and drinking 

places, $7 million; amusement, 

gambling, and recreation, $7 million; 

construction, $20.7 million; and forestry 

support services, $7 million.51

Several commenters expressed a 

concern that the Department made the 

assumption in the NPRM analysis that 

50 percent of all H–2B employers are 

small businesses, asserting that this 

assumption was not based on data. In 

response to this concern, the 

Department has obtained third-party 

data to improve the analysis. 

Specifically, to identify annual revenue 

and employment for H–2B employers, 

the Department used data from the 

business data provider ReferenceUSA 

and matched them to H–2B program 

data. ReferenceUSA relies primarily on 

phone verification and public data 

sources to obtain employment and 

revenue figures for businesses of 

different sizes.52

In order to ensure that the interests of 

small business were adequately 

considered, the Department assumed 

that all H–2B employers with no 

revenue or employment data available 

from ReferenceUSA are small. 

4. Description of the Projected 

Reporting, Recordkeeping and Other 

Compliance Requirements of the Rule 

The rule does not impose any 

reporting or recordkeeping 

requirements. Other provisions in the 

current regulations impose those 

requirements. 

For other compliance requirements, 

this RFA estimates the incremental costs 

for small businesses from the baseline, 

that is, from the 2008 Final Rule. The 

baseline for this rule is the burden of 

participating in the program under the 

existing requirements, and is 

represented by a prevailing wage 

calculation methodology that uses the 

four tier wage structure based on the 

stratification of the OES survey. Using 

available data, we have estimated the 

costs of the increased wages and the 

time required to read and review the 

Final Rule. 

The Department receives an average 

of 8,717 applications annually (not 

necessarily the same as the number of 

applicants, because one employer may 

file more than one application) for the 

H–2B program, and the Department 

estimates that an average of 6,980 of 

those applications results in petitions 

for H–2B workers that are approved by 

DHS. Even if all 6,980 applications were 

filed by unique small entities, the 

percentage of small entities authorized 

to employ temporary non-agricultural 

workers would be less than 1 percent of 

the total number of small entities in the 

six industries with the largest number of 

H–2B workers.53 Based on this analysis, 

the Department estimates that the rule 

will impact less than 1 percent of the 

total number of small businesses in the 

top six industries. Because any small 

business could apply and receive 

certification under the program, the 

universe is all small businesses in the 

relevant industries that participate in 

the program. A detailed industry-byindustry analysis is provided below. 

Several commenters, including the 

Chief Counsel for Advocacy, SBA, cited 

two court decisions involving fishing 

quotas 54 to suggest that the Department 

incorrectly over-estimated the universe 

of potentially affected businesses. Those 

cases are not relevant because they 

resulted from an agency decision to 

issue a certification that the rule in 

question did not significantly impact a 

substantial number of small businesses. 

The Department has not made such a 

certification here. That being said, the 

Department does not believe it overestimated the number of potentially 

affected businesses based on the 

analysis presented above. 

To examine the impact of this rule on 

small entities, the Department evaluated 

the impact of the incremental costs on 

a hypothetical small entity of average 

size. We used individual employer 

revenue and employment data from 

ReferenceUSA to determine which 

certified or partially certified applicants 

were considered small by using the 

industry-specific SBA size standards. 

Using H–2B program data, the 

Department estimates the average 

number of H–2B workers for small 


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55The Department estimated that approximately 

28 percent of certified H–2B workers are actually 

hired by dividing the annual H–2B visa cap (66,000) 

by the total number of positions certified per year 

on average during FY 2007–2009 (236,706). We 

then applied this percentage to the number of 

workers certified in certifications granted in each of 

the six industries to approximate the distribution of 

the 66,000 H–2B visas by multiplying 28 percent by 

the number of workers certified for each certified 

or partially certified H–2B application. 

56As indicated above, the SBA small business 

size standards are highest for construction and 

janitorial services. 

57A CBA wage may in fact be the highest of the 

applicable wages; even under the 2008 Final Rule, 

if the job opportunity were covered by a CBA, the 

wage rate in the CBA would be the required wage. 

Accordingly, including the CBA wage rate in the 

definition of prevailing wage will not result in an 

increased cost to the employer covered by the CBA. 

58Once this Final Rule is effective, the prevailing 

wage will be determined not by comparing job 

titles, but by comparing job duties listed on the 

employer’s application with the occupational 

definitions in the SOC (for OES), the Dictionary of 

Occupational Titles (for SCA), or the DBA wage 

determination. 

59 In all wage calculations where we found that 

the baseline H–2B wage is higher than any 

alternative wage considered, we assumed that the 

baseline survey prevails. That is, we assumed that 

the wage increase is zero for those cases. This 

situation, however, is rare; the prevailing wage 

exceeded the OES mean in approximately 4 percent 

of the cases. 

60A recent Congressional Research Service (CRS) 

report used a wage calculation approach that is 

similar to that used in this Final Rule. The report 

found that the SCA and DBA wage rates are in some 

cases higher than the OES arithmetic mean for a 

given job opportunity. This is consistent with the 

findings of the analysis conducted for this Final 

Rule. The CRS report, however, did not rely on 

wage data for each county where the work actually 

took place. Also, the CRS report was limited to a 

selected group of occupations and counties. Source: 

‘‘Potential Impact of Proposed Regulations on the 

Wages of H–2B Workers,’’ Congressional Research 

Service, October 2010. 

61The Department used the Calendar Year 2009 

as a representative year. Although some 

commenters suggest that FY 2009 was not a 

representative year for use of the H–2B program, the 

random sample chosen was consistent with 

standard statistical methods and was selected from 

the calendar year, rather than the fiscal year, to 

reach data outside the FY 2009 data while 

representing the most recent data available. 

Calendar Year 2009 applications, for example, reach 

Continued 

businesses in the top six industries at 

any given time are as follows: 

landscaping services, 5.8 workers; 

janitorial services, 6.9 workers; food 

services and drinking places, 4.2 

workers; amusement, gambling, and 

recreation, 11.4 workers; construction, 

6.6 workers; and forestry support 

services, 25.4 workers.55

Using the data obtained from 

ReferenceUSA, we then derived the 

annual revenues for small entities in 

each of the top six industries. The 

Department estimates that small 

businesses in the top six industries have 

the following average annual revenues: 

landscaping services, $1.781 million; 

janitorial services, $4.240 million; food 

services and drinking places, $1.607 

million; amusement, gambling, and 

recreation, $1.490 million; construction, 

$4.788 million; and forestry support 

services, $1.299 million.56

i. Change in the Method of Determining 

Wages for H–2B Workers 

This Final Rule requires employers to 

offer H–2B workers and U.S. workers 

hired in response to the required H–2B 

recruitment, a wage that is at least equal 

to the highest of the prevailing wage, or 

the Federal, State, or local minimum 

wage. Under the Final Rule, the 

prevailing wage is defined as the highest 

of the following: (1) The wage rate 

established in the CBA, if the job 

opportunity is covered by a CBA that 

was negotiated at arms’ length between 

the union and the employer; (2) the 

wage rate established under the DBA or 

the SCA for the occupation in the area 

of intended employment, if the job 

opportunity is in an occupation for 

which such a wage rate has been 

determined; or (3) the arithmetic mean 

of the OES-reported wage.57 This Final 

Rule changes the methodology for 

calculating the prevailing wage to the 

arithmetic mean of the OES wages for a 

given area of employment and 

occupation. 

With two exceptions, noted below, 

the Department calculated the change in 

hourly wages by matching the OES wage 

rates to the H–2B data by the SOC and 

the MSA of employment. We also 

matched the SCA and DBA wage rates 

to the H–2B data using the occupational 

title specified in the H–2B program data 

and the county of employment.58 For 

some occupations and counties, SCA 

and DBA wages have not been 

determined; in those cases, the SCA and 

DBA wages did not enter our 

calculations. In the Department’s 

experience under the H–2B program, the 

work of landscape laborers generally 

involves grounds maintenance of the 

kind contained in SCA and OES job 

descriptions. Construction related 

landscaping—the construction of 

planters, walkways and similar 

structures as part of building 

construction projects as used in DBA job 

descriptions—is rarely applicable to H– 

2B employment. Accordingly, SCA and 

OES rates were used to estimate costs 

for landscape laborers. Similarly, SCA 

job descriptions are generally more 

reflective of H–2B reforestation 

occupations than are OES job 

descriptions; therefore, SCA wage rates 

were used to estimate the effect of the 

Final Rule on reforestation employers. 

This analysis is based on job titles rather 

than actual job duties. After 

implementation, the Department will 

closely compare the job duties listed on 

the Application to the job duties listed 

in the SOC, SCA Dictionary of 

Occupation Titles, and the DBA wage 

determinations to identify the most 

appropriate basis for determining the 

prevailing wage. 

Using certified and partially certified 

applications in the H–2B program data, 

we calculated the increase in wages by 

selecting the highest wage among the 

OES arithmetic mean, the SCA wage 

determination, and DBA wage 

determination. We then subtracted the 

average H–2B hourly wage certified 

from the highest of the three wages, and 

we weighted this differential by the 

number of certified workers on each 

certified or partially certified 

application. We then summed those 

products and divided the sum by the 

total number of certified workers from 

the certified or partially certified 

applications.59 Based on this 

calculation, the change in the method of 

determining wages will result in a $4.83 

increase in the weighted average hourly 

wage for H–2B workers (and similarly 

employed U.S. workers hired in 

response to the recruitment required as 

part of the H–2B application). 

This approach for calculating the 

expected changes in hourly wages 

relative to the baseline is more accurate 

than the approach the Department used 

in the analysis presented in the NPRM 

in two ways. First, the calculations 

presented in this analysis use the 

highest wage among the OES arithmetic 

mean and the SCA and DBA wage 

determinations. In the analysis 

presented in the NPRM, the SCA and 

DBA wages were not directly accounted 

for in these calculations. Second, the 

calculations presented in this analysis 

use wage data for each county where the 

H–2B work actually took place.60 In the 

analysis presented in the NPRM, on the 

other hand, the Department used the 

national values rather than locationspecific data. 

More specifically, because the 

employer’s address frequently does not 

represent the area where the work 

actually takes place, the Department 

conducted a manual extraction of areaof-employment data from the submitted 

H–2B applications, including the city, 

state, and zip code corresponding to the 

area of employment. The Department 

used a random sample of 500 certified 

or partially-certified applications from 

Calendar Year (CY) 2009 H–2B program 

data.61 The $4.83 increase in the 


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back to applications filed under the regulations in 

place before the 2008 Final Rule, and were filed 

using Form ETA 750. In addition, the Department’s 

program database does not collect city and zip code 

data for the work locations for the certifications. 

Therefore, to extract that data, the Department 

hand-selected a random sample from the CY2009 

filed applications to calculate the wage increases. 

62For the number of hours worked per day, we 

use 7 hours as typical for an average. For the 

number of days worked, we assumed that the 

employer would retain the H–2B worker for the 

maximum time allowed (10 months, or 304 days [10 

months x 30.42 days]) and would employ the 

workers for 5 days per week. Thus, total number of 

days worked equals 217 [10 months × 30.42 days 

× (5⁄7)]. 

63The hourly compensation rate for a human 

resources manager is calculated by multiplying the 

hourly wage of $42.95 (as published by the 

Department’s OES survey, O*NET Online) by 1.43 

to account for private-sector employee benefits 

(Source: Bureau of Labor Statistics). Thus, the 

loaded hourly compensation rate for a human 

resources manager is $61.42. 

64The number of small businesses that will read 

and review the Final Rule is likely to include some 

that will not apply for the program. There are no 

available data to quantify this possible effect. 

65The source of the numerator (i.e., the number 

of certified H–2B employers) is H–2B program data 

for FY 2009. The source of the denominator (i.e., 

the total number of U.S. businesses meeting the 

SBA small-size criteria) is the 2002 County 

Business Patterns and 2002 Economic Census. 

http://www.census.gov/econ/susb/data/ 

susb2002.html. 

weighted average hourly wage for H–2B 

workers (and similarly employed U.S. 

workers hired in response to the 

recruitment required as part of the H– 

2B application) was calculated using 

this data sample. 

These calculations yielded the 

following hourly wage increases by 

industry associated with this rule: 

landscaping services, $4.32; janitorial 

services, $5.81; food services and 

drinking places, $2.59; amusement, 

gambling, and recreation, $6.61; 

construction, $9.72; and forestry 

support services, $1.23.62

ii. Reading and Reviewing the New 

Processes and Requirements 

During the first year that this rule 

would be in effect, employers would 

need to learn about the new PWD. We 

estimate this cost for a hypothetical 

small entity which is interested in 

applying for H–2B workers by 

multiplying the time required to read 

the new rule and any educational and 

outreach materials that explain the wage 

calculation methodology under the rule 

by the average compensation of a 

human resources manager.63 In the first 

year of the rule, the Department 

estimates that the average small 

business participating in the program 

will spend approximately 1 hour of staff 

time to read and review the new 

regulation, which amounts to 

approximately $61.42 ($61.42 × 1) in 

labor costs in the first year.64

iii. Total Cost Burden for Small Entities 

This section presents the total cost 

burden for small entities, which 

includes both the wage cost (by far the 

largest component) and the cost to read 

and review the rule (applies to the first 

year only). The Department’s 

calculations indicate that for a 

hypothetical small entity in each of the 

top six industries that applies for one 

worker (representing the smallest of the 

small entities that hire H–2B workers), 

the total average annual costs of the rule 

are: landscaping services, $6,568; 

janitorial services, $8,832; food services 

and drinking places, $3,940; 

amusement, gambling, and recreation, 

$10,047; construction, $14,771; and 

forestry support services, $1,875. 

The analogous average annual costs 

for small employers in the top six 

industries that hire the average number 

of H–2B workers are as follows: 

landscaping services, $38,082; janitorial 

services, $61,286; food services and 

drinking places, $16,528; amusement, 

gambling, and recreation, $114,929; 

construction, $97,657; and forestry 

support services, $47,433. As a percent 

of revenue, these costs represent the 

following: landscaping services, 2.14 

percent; janitorial services, 1.45 percent; 

food services and drinking places, 1.03 

percent; amusement, gambling, and 

recreation, 7.71 percent; construction, 

2.04 percent; and forestry support 

services, 3.65 percent. 

The Department considers that a rule 

has a ‘‘significant economic impact’’ 

when the total annual cost associated 

with the rule is equal to or exceeds 1 

percent of annual revenue. Thus, the 

rule is expected to have a significant 

economic impact on the average 

participating small entity in each of the 

top six industries. Although applying to 

hire H–2B workers is voluntary, and any 

employer (small or otherwise) may 

choose not to apply, an employer, 

whether it continues to participate in 

the H–2B program or fills its workforce 

with U.S. workers, could face sizeable 

costs. However, increased employment 

opportunities for U.S. workers and 

higher wages for both U.S. workers and 

H–2B workers provide a broad societal 

benefit that, in the Department’s view, 

outweighs these costs. 

Several commenters indicated that the 

increase in the wages of H–2B workers 

could impact the career ladder 

established by H–2B employers for nonH–2B employees by adversely impacting 

the ability to pay those in career ladders 

a higher wage, thus compressing wages 

for supervisory positions. The 

Department recognizes that career 

ladders could potentially be impacted 

by the wage increase; however, a lack of 

data about the prevalence of such career 

ladders and the ways in which 

employers might restructure them 

makes any potential effect impossible to 

quantify. 

Similarly, our calculations do not 

include the wage increases of U.S. 

workers hired in response to the 

required recruitment who must be paid 

the same wages as H–2B workers 

because we do not have a basis for 

estimating how many of these workers 

are hired as a direct result of the 

recruitment effort. 

The small entities that have 

historically applied for H–2B workers 

represent relatively small proportions of 

all small businesses. The following are 

the percentages of firms that were 

certified for H–2B workers among all 

small U.S. businesses in their respective 

industries: Landscaping services, 2.3 

percent (1,462/63,210); janitorial 

services, 1.0 percent (436/45,495); food 

services and drinking places, 0.1 

percent (350/293,373); amusement, 

gambling, and recreation, 0.4 percent 

(164/43,726); construction, 0.1 percent 

(358/689,040); and forestry support 

services, 6.8 percent (92/1,353).65 Due 

to the statutory annual cap on available 

visas, the percentage of small entities 

receiving H–2B visas, to which the full 

cost burden would apply, would be 

even lower. 

The Department considers that a rule 

has an impact on a ‘‘substantial number 

of small entities’’ when the total number 

of small entities impacted by the rule is 

equal to or exceeds 10 percent of the 

relevant universe of small entities in a 

given industry. See, e.g., 73 FR 78049, 

Dec. 19, 2008. The Department has used 

the 10 percent threshold in previous 

regulations. Therefore, this rule is not 

expected to impact a substantial number 

of small entities. 

5. Identification of All Relevant Federal 

Rules That May Duplicate, Overlap or 

Conflict With the Rule 

The Department is not aware of any 

relevant Federal rules that duplicate, 

overlap or conflict with the rule. 

6. Summary of Issues Raised in 

Response to the IRFA 

The Department received a number of 

comments related to its IRFA analysis 

including, as mentioned above, one 

submitted by the Chief Counsel for 

Advocacy, SBA. Several of these 

comments, including the Chief Counsel 

for Advocacy, SBA comment, focused 

on the Department’s choice of the 

universe of potential H–2B participants. 


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66One commenter suggested the Department use 

the Department of State’s data regarding H–2B visas 

issued. The Department thanks the commenter for 

pointing out the availability of these numbers. 

However, even the number of H–2B visas issued in 

any given fiscal year does not necessarily represent 

actual employment of workers in H–2B status, 

much less in any given industry sector. That 

number does not take into account the number of 

those H–2B workers who do not enter or who are 

replaced with a U.S. worker prior to employment, 

or the changes or extensions of status granted for 

H–2B status. 

67The Department notes that although only four 

alternative arguments have undergone quantitative 

analysis in this section, there are an additional nine 

alternative suggestions that contain a qualitative 

discussion in section C of this Administrative 

Information section. 

Some of these comments asserted that 

the Department did not correctly 

identify the universe of small entities to 

whom the analysis must be directed, 

while other comments stated that the 

Department did in fact correctly identify 

the universe of small entities affected by 

the rule. 

Other comments, including the Chief 

Counsel for Advocacy, SBA comment, 

asserted that the Department did not use 

its own data with regard to the revenue 

and size of businesses participating in 

the program. Comments, including that 

submitted by the Chief Counsel for 

Advocacy, SBA, also asserted the 

Department did not include an analysis 

of the impacts on the forestry industry 

with respect to its IRFA analysis. These 

comments have been discussed 

previously in this Regulatory Flexibility 

Act analysis. For example, this 

Regulatory Flexibility Act analysis now 

includes an analysis of impacts in the 

forestry industry in response to these 

comments. 

Other commenters were critical of the 

fact that the RFA analysis did not 

consider the broader effects on the 

economy since companies using the H– 

2B program may be forced to scale back 

on employees or on downstream 

purchases of equipment, inventory or 

products as a result of increased labor 

costs. The Department cannot estimate 

such costs, even assuming their 

existence. 

The Department also received several 

comments recommending the use of the 

Department’s data on the H–2B 

program, available on its Web site, to 

demonstrate the impact on employers, 

particularly small employers, in various 

economic sectors. Several commenters, 

including the Chief Counsel for 

Advocacy, SBA, sought to derive 

applicable numbers of H–2B workers 

from the data available from the 

certifications employed by DOL. The 

Department does not believe that its 

data can be relied upon for the number 

of H–2B individuals employed in the 

U.S. at any one time. Employers may 

file an application as an extension of 

their normal recruitment efforts, which 

may or may not result in the hiring of 

H–2B workers. As discussed above, the 

Department certifies more workers than 

can be legally admitted under the H–2B 

program. The Department has no data 

that indicate the number of certified 

workers who are actually hired after a 

certification has been adjudicated.66

The Department believes its calculations 

in this final Regulatory Flexibility 

Analysis more accurately reflect the 

usage of the H–2B program by 

employers. 

Many commenters discussed the 

economic impact of the proposed rule 

on their own operations. These 

comments focused on the overall impact 

of the burden and specifically on the 

burden imposed on the imposition of a 

Final Rule, at a time when contracts and 

financial obligations have been set for 

the coming season and prices for 

services have been set and cannot be 

renegotiated. As discussed in detail 

above, employers participating in the 

H–2B program have always been 

required to meet the conditions of the 

labor certification, which include the 

payment of a valid prevailing wage. The 

fact that a new wage methodology may 

result in wages in excess of anticipated 

labor costs does not minimize the 

Department’s obligation to ensure the 

avoidance of adverse impact on the 

wages of U.S. workers. Even though the 

NPRM provided notice to program users 

of the Department’s intent with respect 

to recognizing that this adverse impact 

was not being met under the current 

methodology and so changes would be 

made, the Department recognizes the 

commitments that employers have made 

in reliance on the current methodology. 

In recognition of these comments and 

this impact, and in order to provide 

employers with sufficient time to plan 

for their labor needs for the next year 

and to minimize the disruption to their 

operations, the Department is delaying 

implementation of this Final Rule so 

that the prevailing wage methodology 

set forth in this Rule applies only to 

wages paid for work performed on or 

after January 1, 2012. Moreover, the 

Department has no data that indicate the 

number of certified workers who are 

actually hired after a certification has 

been adjudicated. The Department 

believes its calculations in this final 

Regulatory Flexibility Analysis more 

accurately reflect the usage of the H–2B 

program by employers. 

In addition, several commenters, 

including the Chief Counsel for 

Advocacy, SBA, asserted that the 

Department did not provide viable 

alternatives in its IRFA. A full 

discussion of alternatives is contained 

below. For the reasons stated in the 

quantitative and qualitative discussion 

of the alternatives, the Department has 

decided to retain the proposal of the 

NPRM of defining the prevailing wage 

to be the highest of the CBA, DBA or 

SCA wage determinations, or the 

arithmetic mean of the OES to best 

avoid adverse impact. 

7. Alternatives Considered as Options 

for Small Entities 

As noted in section 3 of the E.O. 

12866 analysis, several commenters 

proposed alternatives to the wage 

calculation methodology. In response to 

these comments, the Department 

analyzed the following wage calculation 

alternatives: (1) To continue the current 

calculation methodology but provide a 

more complete 000000justification for 

doing so; (2) to eliminate the four tiers 

and use the OES arithmetic mean as the 

OES component of the prevailing wage 

determination; (3) to eliminate the four 

tiers and use the OES median as the 

OES component of the prevailing wage 

determination; and (4) use the new 

methodology—alternative 2—but also 

require the provision of fringe 

benefits.67 Below is a discussion of each 

alternative along with an estimation of 

their associated impacts on small 

entities. 

i. Continue the Current Calculation 

Methodology 

For the reasons discussed throughout 

this Final Rule, continuing the current 

calculation methodology that relies on 

the four tier wage structure does not 

provide adequate protections to U.S. 

and H–2B workers. The existing 

procedure for extracting tiered wages 

from the basic OES wage survey data 

was adopted without any systematic 

effort to determine if that system was 

empirically justified. The OES wage 

surveys collect no data about the skill 

levels or duties performed by the 

workers at any particular wage level. 

Although lower wages may be 

associated with lower skill levels and 

responsibilities in professional 

occupations, there is no evidence to 

suggest that such a relationship exists in 

the lower skilled occupations that 

predominate in the H–2B program. Even 

if there were some evidence of the 

existence of skill-based wage differences 

with these occupations, the OES survey 

does not purport to capture such 

differences. In the absence of such 

information, our responsibility to set 

wage rates that avoid adverse effect on 


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68Health and welfare includes life, accident, and 

health insurance plans, sick leave, pension plans, 

civic and personal leave, severance pay, and 

savings and thrift plans. Minimum employer 

contributions costing an average of $3.35 per hour 

are computed on the basis of all hours worked by 

employees employed on the contract. 

69For the number of hours worked per day, we 

use 7 hours as typical for an average. For the 

number of days worked, we assume that the 

employer would retain the H–2B worker for the 

maximum time allowed (10 months, or 304 days [10 

months × 30.42 days]) and would employ the 

workers for 5 days per week. Thus, total number of 

days worked equals 217 [10 months × 30.42 days 

× (5⁄7)]. 

wages compels us to use the highest of 

the SCA or DBA rates, the wage 

established under an existing CBA, or 

the OES arithmetic mean wage as the 

principal wage-setting tool. The cost 

associated with this alternative is zero 

because it represents the baseline, that 

is, the alternative where no action is 

taken by the Department. The 

Department recognized that action 

needed to be taken and, therefore, 

rejected this alternative. 

ii. Eliminate the Four Tiers and Use the 

Highest of the Wage Rates Set Forth 

Under the CBA, DBA, SCA, or OES 

Arithmetic Mean 

This alternative is the method 

required by the Final Rule which 

defines the prevailing wage to be the 

highest of: (1) The wage rate set forth in 

the CBA, if the job opportunity is 

covered by a CBA that was negotiated at 

arm’s length between a union and an 

employer; (2) the wage rate established 

under the DBA or the SCA for the 

occupation in the area of intended 

employment, if the job opportunity is in 

an occupation for which such a wage 

rate has been determined; or (3) the 

arithmetic mean of the OES-reported 

wage. This alternative represents the 

arithmetic mean of the wages of workers 

in similar occupations in the area of 

employment, as determined by the OES. 

This method will best achieve the 

Department’s policy objectives of 

ensuring that wages of U.S. workers are 

more adequately protected and, thus, 

will not be adversely affected by the 

admission of H–2B workers into the 

country. 

As discussed above, the replacement 

of the four-tiered wage structure with 

the highest of the wage rates set forth 

under the CBA, DBA, SCA, or OES 

where the arithmetic mean would 

constitute the OES wage rate will result 

in the following total average annual 

cost for a hypothetical small entity that 

applies for one worker: landscaping 

services, $6,568; janitorial services, 

$8,832; food services and drinking 

places, $3,940; amusement, gambling, 

and recreation, $10,047; construction, 

$14,771; and forestry support services, 

$1,875. The analogous costs for 

employers that hire the average number 

of H–2B workers for their respective 

industries are as follows: landscaping 

services, $38,082; janitorial services, 

$61,286; food services and drinking 

places, $16,528; amusement, gambling, 

and recreation, $114,929; construction, 

$97,657; and forestry support services, 

$47,433. 

These increases are more than 

justified by the need for a wage rate that 

is based on the prevailing wage that is 

actually paid to similarly employed U.S. 

workers as demonstrated by OES mean 

wage rates, as well as the SCA and DBA 

wage rates. As noted above, the current 

methodology requires payment based on 

the unsupported assumption that skillbased wage differences are common in 

low-skilled H–2B jobs, and that the OES 

survey provides a basis for measuring a 

skill-based wage differential. 

iii. Eliminate the Four Tiers and Use the 

Highest of the Wage Rates Set Forth 

Under the CBA, DBA, SCA, or OES 

Median 

This alternative would replace the 

four-tiered wage structure with the 

highest of the wage rates set forth under 

the CBA, DBA, SCA, or OES where the 

OES median constitutes the OES wage 

rate. The Department used the same 

methodology discussed above to 

calculate the wage differential for this 

alternative. These calculations yielded 

the following hourly wage increases by 

industry associated with this rule: 

landscaping services, $4.18; janitorial 

services, $5.76; food services and 

drinking places, $2.47; amusement, 

gambling, and recreation, $6.38; 

construction, $9.39; and forestry 

support services, $1.23. 

Using the OES median hourly wages, 

the Department’s calculations indicate 

that for a hypothetical small entity that 

applies for one worker (representing the 

smallest of the small entities that hire 

H–2B workers), the total average annual 

costs of the rule are as follows: 

landscaping services, $6,356; janitorial 

services, $8,756; food services and 

drinking places, $3,758; amusement, 

gambling, and recreation, $9,697; 

construction, $14,270; and forestry 

support services, $1,875. The analogous 

costs for employers that hire the average 

number of H–2B workers for their 

respective industries are as follows: 

landscaping services, $36,848; janitorial 

services, $60,759; food services and 

drinking places, $15,762; amusement, 

gambling, and recreation, $110,930; 

construction, $94,342; and forestry 

support services, $47,433. 

The Department rejected this 

methodology. Although the median 

wage is generally comparable to the 

arithmetic mean, the median does not 

represent the most predominant wage 

across a distribution. The median wage 

represents only the midpoint of the 

range of wage values; it does not 

account for the actual average. The 

mean is widely considered to be the best 

measure of central tendency for a 

normally distributed sample, as it is the 

measure that includes all the values in 

the data set for its calculation, and any 

change in any of the wage rates will 

affect the value of the mean. This is not 

the case with the median. The 

Department has traditionally relied on 

arithmetic means for wage programs and 

has determined that these reasons make 

continuing reliance on the mean, rather 

than the median, logical. 

iv. Use the New Methodology but 

Require the Provision of Fringe Benefits 

This alternative would replace the 

four-tiered wage structure with the 

inclusion of fringe benefits. To calculate 

the change in hourly wages, the 

Department matched the DBA wages 

plus fringe benefits to the H–2B data for 

construction workers by the 

occupational title and the county of 

employment. Using certified and 

partially certified applications in the H– 

2B program data, we calculated the 

increase in wages by subtracting the 

average H–2B hourly wage certified 

from the DBA wages plus fringe 

benefits, and we weighted this 

differential by the number of certified 

workers on each certified or partially 

certified applications. For cases for 

which there was no applicable DBA 

wage or fringe available, we used the 

OES mean and the SCA health and 

welfare (H&W) $3.35 flat fringe.68 We 

then summed those products and 

divided the sum by the total number of 

certified workers from the certified or 

partially certified applications. This 

calculation yielded an hourly wage 

increase of $7.20. 

To estimate the total cost to the 

average small entity of increased wages 

for H–2B workers associated with the 

inclusion of fringe benefits, the 

Department multiplied the average 

hourly increase in wages by the average 

total number of days worked by H–2B 

workers, the number of hours worked 

per day, and the average number of H– 

2B workers employed by all small 

entities identified in the H–2B data 

sample.69 The Department’s 

calculations indicate that for a 

hypothetical small entity that applies 

for one worker (representing the 

smallest of the small entities that hire 

H–2B workers), the total average annual 


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costs (to include the wage increase and 

the cost to read the rule in the first year) 

of the rule is $10,943. The analogous 

cost for employers that hired the average 

number of H–2B workers is $70,002. 

The Department historically has not 

required the payment of fringe benefits 

to H–2B workers, even before 2005, 

when the payment of DBA wage rates 

was mandatory for occupations where 

such wage determinations existed. See 

75 FR 61578, 61579, Oct. 5, 2010 (‘‘Wage 

Methodology for the Temporary NonAgricultural Employment H–2B 

Program’’ Proposed Rule). Under this 

Final Rule, the Department will again 

certify the DBA wage as the prevailing 

wage rate that must be paid to H–2B 

workers if those rates are the highest in 

those occupations in the area of 

intended employment among the rates 

listed in § 655.10. For H–2B positions 

for which the DBA wage is not 

applicable, the Department believes that 

not requiring fringe benefit payments is 

an appropriate reflection of the 

Department’s historical practices. As 

previously noted, fringe benefits costs 

have never been included in H–2B wage 

determinations. The Department 

reaffirms its belief that requiring fringe 

benefit payments to H–2B workers is not 

necessary in order to prevent an adverse 

effect on the wages and working 

conditions of U.S. workers. 

v. Summary of Alternatives Analyzed 

Quantitatively 

According to the analysis, this 

regulation will not impact a substantial 

number of small entities. However, we 

recognize the potential impact on small 

businesses and have considered 

alternatives to minimize such impacts. 

Exhibit 2 below summarizes the average 

cost per average small entity (that is, a 

small entity with the average number of 

employees) for each industry. Exhibit 3 

presents the ratio of average cost to 

average revenue for each industry. The 

Department’s mandate under the H–2B 

program is to set requirements for 

employers that wish to hire temporary 

foreign non-agricultural workers. Those 

requirements are designed to ensure that 

foreign workers are used only if 

qualified domestic workers are not 

available and that the hiring of H–2B 

workers will not adversely affect the 

wages and working conditions of 

similarly employed domestic workers. 

These regulations set those minimum 

standards with regard to wages. The 

required wage rate is a critical aspect of 

the H–2B program that determines 

whether U.S. workers’ wages will be 

adversely affected by the admission of 

foreign workers. To create different and 

likely lower standards for one class of 

employers (e.g., small businesses) 

would essentially sanction the very 

adverse effect that the Department is 

compelled to prevent. Although the 

Final Rule can have a significant impact 

on small businesses that use the H–2B 

program, those costs can be avoided 

since ultimately an employer’s decision 

to petition to hire H–2B workers is 

voluntary. 

EXHIBIT 2—AVERAGE ANNUAL COST PER SMALL ENTITY OF AVERAGE SIZE

Landscaping 

services 

Janitorial 

services 

Food services & drinking places Amusement, 

gambling, & 

recreation 

Construction Forestry 

Take no action ................................................................. 0 0 0 0 0 0 

Highest of the CBA, DBA, SCA, and OES mean ............ $38,082 $61,286 $16,528 $114,929 $97,657 $47,433 

Highest of the CBA, DBA, SCA, and OES median ......... $36,848 $60,759 $15,762 $110,930 $94,342 $47,433 

Inclusion of fringe benefits ............................................... $70,002 

EXHIBIT 3—RATIO OF AVERAGE COST TO AVERAGE REVENUE FOR SMALL ENTITY OF AVERAGE SIZE

Landscaping 

services 

Janitorial 

services 

Food 

services 

& drinking 

places 

Amusement, 

gambling, 

& recreation 

Construction Forestry 

Take no action ......................................................................................... 0 0 0 0 0 0 

Highest of the CBA, DBA, SCA, and OES mean .................................... 2.14% 1.45% 1.03% 7.71% 2.04% 3.65% 

Highest of the CBA, DBA, SCA, and OES median ................................. 2.07% 1.43% 0.98% 7.44% 1.97% 3.65% 

Inclusion of fringe benefits ....................................................................... 2.89% 

8. Additional Alternatives 

As noted elsewhere in the 

Administrative Information section, the 

Department received many comments 

that suggested other alternatives to the 

prevailing wage methodology proposed 

in the NPRM. Four of those alternatives 

have been summarized in sections A 

and B of this Administrative 

Information section because the 

Department conducted quantitative 

analysis on those alternatives. The 

additional nine alternatives are 

summarized here. The Department 

conducted a qualitative rather than 

quantitative analysis on these 

alternatives because a quantitative 

analysis was either not possible or was 

unnecessary due to the nature of the 

alternative suggested. 

i. When Other Methods Are 

Inapplicable, Use a Multiplier of the 

Federal, State or Local Minimum Wage 

for a ‘‘Living Wage’’ That Is Higher Than 

the Federal, State or Local Minimum 

Wage 

Several commenters requested the 

Department to consider alternatives that 

could be used when none of the 

prevailing wage methodologies is 

available. In particular, one commenter 

found that the 2010 NPRM mentioned 

requiring employers to use the Federal, 

State or local minimum wage rates but 

did not actually include it as an option 

for determining the prevailing wage. 

This commenter further noted that 

S. 2910, a bill introduced by Senator 

Bernie Sanders in December 2009, 

included a provision that would make 

the minimum wage payable to H–2B or 

similarly employed U.S. workers 150 

percent of the Federal minimum wage 

under the FLSA. This commenter 

proposed that the Department adopt and 


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70The Department, in fact, recognized the need 

for consistency in the approach to establishing 

prevailing wages when it federalized the prevailing 

wage determination system in the 2008 Final Rule. 71 Id. 

72The Department does not find that the same 

issues apply to the use of a regional wage in the 

H–2A program, as there is typically little variation 

in agricultural wage rates within the USDA regions. 

expand this proposal to require a wage 

that is not less than 200 percent of the 

Federal, State, or local minimum wage. 

The Department rejects this proposal, 

along with the similar proposal that the 

prevailing wage for reforestation 

workers be set at 115 percent of the 

Federal or State minimum wage. The 

purpose of this rulemaking is to 

establish a methodology for calculating 

the prevailing wage for a specific 

occupation within a particular area of 

employment. Although raising the 

minimum wage payable under the 

program might be consistent with the 

program’s mandate to protect U.S. 

workers from adverse effect, a wage rate 

that is some multiple of the minimum 

wage is by definition not a prevailing 

wage, and therefore is not appropriate 

for this rulemaking. 

ii. Allow for Specific Experience-Based 

Wage Levels 

Many commenters requested that the 

Department continue to establish wage 

increases based on the experience of the 

worker. These commenters argue that 

employers should be permitted to 

increase the wages of an H–2B worker 

based on years of experience, that is, an 

entry-level worker should not earn the 

same wage as someone who has been 

performing the job for several years. 

Thus, these commenters argue that 

creating a ‘‘one-tiered’’ system as 

proposed by the Department would 

artificially inflate the wages of unskilled 

workers. Another commenter stated that 

under the proposed prevailing wage 

methodology, the Department removes 

the employer’s ability to properly 

manage and reward employees for a job 

well done. 

As noted in the NPRM, however, the 

Department does not believe that the 

level of experience a worker possesses 

should be a factor in determining 

minimum wages for low-skilled 

positions. It is the Department’s position 

that experience differentiation is 

unnecessary for this program for several 

reasons. 

First, the Department notes that the 

number of years of experience is 

irrelevant to the job description itself. In 

fact, 74.4 percent of the positions in the 

H–2B program are currently classified as 

Level I positions. For these positions, 

H–2B workers are hired if they can 

perform the task with little or no 

preparation. As discussed in this Final 

Rule, almost all jobs for which 

employers seek H–2B workers require 

little, if any, skill—an assertion with 

which few commenters disagreed. H–2B 

disclosure data from FY 2007 to 2009 

demonstrates that most of the jobs for 

which the greatest annual numbers of 

H–2B workers were certified in the top 

five industries—construction; 

amusement, gambling and recreation; 

landscaping services; janitorial services; 

and food services and drinking places— 

require minimal skill to perform, 

according to every standardized source 

available to the Department, such as the 

SOC, O*NET and the Occupational 

Outlook Handbook. These jobs, which 

made up the majority of occupations 

certified in those years, include, but are 

not limited to, landscaper laborer, 

housekeeping cleaner, construction 

worker, forestry worker, and amusement 

park worker, all of which require less 

than 2 years of experience to perform. 

These jobs have typically been granted 

a Level I wage determination, which is 

lower than the average wage paid to 

similarly employed workers in job 

classifications in non-H–2B jobs.70

Second, the Department noted in the 

NPRM that it was artificially 

manipulating the OES data to create the 

tiered wage system in 1998.71 The OES 

survey instrument in itself does not 

solicit data on skill level; the four-tiered 

wage structure therefore did not truly 

represent skills-based play. 

Moreover, this rule does not prevent 

monetary rewards for those employees 

who have earned them through 

experience, skill acquisition, or 

employer loyalty. Nothing in this Final 

Rule prevents, nor should be construed 

to prevent, the employer from paying its 

workers, U.S. or H–2B, more than the 

required prevailing wage. This Final 

Rule merely establishes a minimum 

wage for specific occupations in a 

locality. 

iii. Allow the Use of Regional Wages for 

the Reforestation Industry 

A few reforestation contractors 

recommended that the Department 

adopt methods of compensating 

reforestation workers that are not based 

on specific locations, citing inevitable 

deviations (due to weather, ground 

conditions, contractor demands) in an 

itinerant work schedule. One 

commenter proposed the use of a 

prevailing wage for a wider region, 

similar to the H–2A program’s AEWRs, 

which typically cover several states 

with a single wage rate. This would 

allow employers to deviate from 

identified worksites as long as they pay 

workers at least the established rate. The 

Department recognizes that the 

uncertainties inherent in reforestation 

can make it difficult to determine if and 

where employees will be working as 

conditions change during the contract 

period. The Department notes that in 

situations where projects stretch across 

multiple localities with different 

prevailing wages, the employer can 

avoid the complexity inherent in 

itinerant work by paying the highest of 

the prevailing wages of those areas 

listed on the job order, which would 

effectively act as a regional wage. 

Prevailing wage rates for reforestation 

work are generally the same across 

contiguous counties—and frequently 

noncontiguous counties—in the same 

State. 

The Department has concluded that it 

is not feasible or desirable to establish 

regional wage rates for particular 

industries in the H–2B program. The 

prevailing wage rates are locality-based 

in order to fulfill the Department’s 

requirement to prevent adverse effect on 

U.S. workers within the area of intended 

employment. The Department believes 

that the establishment of a regional 

wage rate could result in an arbitrary 

rate not based on labor market 

conditions—U.S. workers in some 

localities might make more than this 

rate, in which case the prevailing wage 

would suppress U.S. worker earnings— 

and therefore would be contrary to the 

intent of the H–2B program.72

iv. Use BLS Wages 

One commenter suggested that the 

Department use BLS wages that are the 

basis for OES wages. Rather than use the 

OES for MSAs, this commenter 

contends that the Department should 

just use the BLS wage as the prevailing 

wage for the intended area of 

employment for the job category that is 

the latest published 25 percentile rate. 

The Department notes that the BLS 

wages are already the basis for the OES 

prevailing wage rates proposed in the 

NPRM and adopted in this Final Rule. 

The OES rates represent a more 

localized wage rate based on more 

sophisticated analysis and are a more 

accurate indicator of the prevailing 

wages for a SOC classification in any 

given locality. 

Another commenter noted that the 

NPRM indicated that H–2B workers 

comprise a small proportion of the U.S. 

labor force—less than 1 percent of most 

job categories—and that since most of 

those positions are low skilled and low 

paid, it follows that U.S. workers 

occupy 99 percent of highest paying 

jobs in any given category. Based on this 


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conclusion, the commenter proposed 

that to prevent adverse effect on the 

wages of U.S. workers, the prevailing 

wage should be based on the BLS 10th 

percentile wage estimate for the 

occupation in the area of employment. 

The commenter further noted that this 

would keep the H–2B workers in the 

lowest 10 percent of the wage category 

and the U.S. workers in the highest 90 

percent of the wage category, therefore 

avoiding any adverse effect on the 

wages or working conditions of U.S. 

workers. 

Although the Department appreciates 

the suggestion for avoiding the adverse 

effect on similarly employed U.S. 

workers, this commenter’s proposal 

reflects a misunderstanding of the 

purpose behind the change in prevailing 

wage methodology. The Department’s 

role in the H–2B program is not to 

determine the wages of H–2B workers, 

per se, but rather to set an appropriate 

prevailing wage—a floor—for the job 

opportunity that will ensure no adverse 

effect on the wages of U.S. workers who 

are similarly employed or who could be 

similarly employed. As discussed 

earlier, the Department must set a 

prevailing wage that assures that U.S. 

workers who might be interested in a 

job will be paid a wage that 

approximates the wages available to 

other U.S. workers in the same 

occupation. Only if there are 

insufficient U.S. workers to fill that job 

at that wage may H–2B workers be hired 

to make up the labor shortfall. 

v. Collective Bargaining Agreements 

The Department proposed retaining 

from the 2008 Final Rule the inclusion 

of a collective bargaining wage as the 

prevailing wage if the job opportunity is 

covered by an agreement that was 

negotiated at arms’ length between the 

collective bargaining unit and the 

employer. Several commenters 

supported this proposal, but suggested 

that the Department go further and 

require that whenever a CBA covers 

workers in a particular geographic 

region and a specific occupational 

classification, the wage rate negotiated 

in the CBA should apply to all 

employers in the region who wish to 

hire H–2B workers in the same 

occupation classification, even those 

that are not signatory to the CBA or who 

have no collective bargaining unit in 

that occupation. 

A CBA is a contractual agreement 

negotiated at arms’ length between more 

or less equal parties. The provisions of 

a CBA reflect a negotiation process and 

a series of concessions between the 

parties to the agreement that would not 

apply to other parties not involved in 

the negotiations. The negotiation of a 

CBA also involves agreement on a range 

of issues, wages, working conditions, 

work rules and many others, all of 

which combine to lead to a complete 

agreement, only one of whose elements 

involves wages. For example, one set of 

negotiating parties may agree to a lower 

wage in return for a guarantee of job 

security while another set may agree to 

higher wages at a greater risk of job cuts. 

Thus, the Department is unwilling to 

use a collectively-bargained wage 

outside the workplace for which it has 

been negotiated unless that wage has 

been determined to be prevailing 

through the SCA, DBA, or OES wage 

determination process. 

By contrast, another commenter 

objected to the use of a wage higher than 

a CBA wage in an employment situation 

in which a CBA applies, noting that 

where an employer is subject to a CBA, 

paying a wage other than the CBA scale 

rate may violate the terms of the 

agreement and have ramifications under 

contract and labor law. However, the 

Department must consistently use the 

prevailing wage rate under the H–2B 

program in order to ensure that U.S 

workers have meaningful access to these 

positions and do not experience wage 

depression as a result of employers 

hiring foreign workers at less than 

prevailing wages. A CBA rate that has 

fallen below the minimum wage would 

not be valid. Similarly, a CBA rate 

below the prevailing wage would not be 

a valid wage for purposes of the H–2B 

program. 

vi. Set Wages at 90th Percentile Wage 

Because the Arithmetic Mean Wage Is 

Less Than the Average Worker’s 

Compensation 

Some commenters noted that 

although the arithmetic mean represents 

an improvement to a stratified wage rate 

system, it will not do enough to protect 

U.S. workers from adverse effect. At 

least one such commenter suggested the 

Department set the prevailing wage at 

the 90th percentile of the OES wage 

instead of the arithmetic mean to 

account for any fringe benefits without 

which the wages of U.S. workers who 

are similarly employed would be 

depressed. 

The Department rejects this 

commenter’s proposal. The 90th 

percentile is not a reflection of the 

prevailing wage of workers in the U.S. 

and therefore, is not appropriate for the 

purposes of this rulemaking. Setting the 

prevailing wage at the 90th percentile 

would be comparable to or slightly 

higher than the current Level IV wage, 

which applies to only 6.92 percent of 

the workers in the program, and 

therefore cannot be considered 

prevailing. Further, as discussed in 

another section, employers are not 

precluded from providing workers with 

a higher wage. Requiring the arithmetic 

mean will ensure that employers offer 

wages comparable to those that U.S. 

workers expect for a given occupation 

within a particular locality without 

unduly disadvantaging employers. 

vii. Allow Employers To Compensate 

Workers Through Production Rate (i.e., 

‘‘Piece Rate’’) During Processing and 

Prevailing Wage for all Non-processing 

Several commenters in the seafood 

processing industry proposed that in 

light of the prevailing practice in the 

industry in which workers are paid a 

piece-rate based on production, the 

Department should permit employers to 

pay a piece-rate based on production for 

the production-based work and a 

prevailing wage rate for all nonprocessing work. The Department notes 

that it does not prohibit incentive piece 

rates, provided that the piece rates 

produce earnings that meet the required 

prevailing wage. 

Having considered the proposed 

alternative, the Department has 

concluded that it would not 

satisfactorily effectuate the 

Department’s objective of ensuring that 

wages and working conditions of U.S. 

workers are more adequately protected 

than under the current prevailing wage 

determination process, while 

maintaining an efficient and consistent 

administrative process. The Department 

believes the alternatives proposed 

would at worst reduce and at best not 

improve the efficiency and consistency 

of the prevailing wage determination 

process, or would directly or indirectly 

adversely affect the wages of U.S. 

workers who might take H–2B jobs. 

Finally, the Department must ensure 

that in the H–2B program the wages 

offered to H–2B workers and U.S. 

workers recruited under H–2B job 

orders are the same wages and terms of 

employment offered to U.S. workers 

recruited by employers not participating 

in the H–2B program, that is, are the 

prevailing wages. Any method that 

results in offering H–2B workers lower 

than average wages adversely affects 

U.S. workers responding to H–2Brelated recruitment. Similarly, any 

method that results in an employer 

recruiting for job opportunities using 

experience requirements that are higher 

than necessary or not normal to the 

occupation creates artificial entry 

barriers for potentially interested U.S. 

workers. While the Department 

appreciates the proposed alternatives 

suggested, it has concluded that none of 


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the alternatives provided better 

accomplishes the Department’s policy 

objectives than the prevailing wage 

determination method contained in the 

Final Rule. 

viii. Reinstate the Use of SWA Surveys 

To Effectively Determine the 

Appropriate Wage for Any Occupation 

in That State 

One commenter suggested a wage 

methodology that would have SWAs, 

rather than employers and/or the 

Department, conduct surveys to 

effectively determine the appropriate 

wage for any occupation in a particular 

State. Before 1998, when the program 

was much smaller, SWAs did in fact 

conduct surveys to produce prevailing 

wages. The financial resources available 

today to be devoted to such an activity, 

in particular given the expansion of the 

program and the resources available 

elsewhere (specifically, OES, DBA, and 

SCA) no longer make this a viable 

option. In addition, the inconsistencies 

that resulted from State to State in the 

treatment of the same job opportunity, 

reflecting not the local conditions but 

the quality of the surveyors and the 

collection instruments used, created 

difficulties that the benefits of using 

such surveys do not outweigh. Reliance 

on SWA surveys in our non-agricultural 

immigration programs was largely 

abandoned in 1998 because the OES 

provides a more reliable and costeffective means for producing prevailing 

wage rates on consistent basis across the 

country. For these reasons, the 

Department has determined that the 

OES survey with its standardized job 

descriptions, compensation data 

collection and analysis, and DBA and 

SCA wage determinations provide a 

much more accurate portrayal of wage 

information than State surveys. 

ix. Include Only the Wages of 

Temporary Workers in Determining the 

Prevailing Wage for the H–2B Program 

Several submissions, including two 

from employers and one from an 

individual, suggested that the wage 

surveys used to determine H–2B 

prevailing wages should only sample 

temporary workers. However, a wage 

survey of temporary workers may 

include workers who provide short-term 

services to fill in for sick or vacationing 

employees, whereas H–2B workers 

essentially become full-time workers for 

the entire period of need. Moreover, 

limiting the survey universe in this way 

would produce results inconsistent with 

the Department’s responsibility to 

prevent the employment of temporary 

foreign workers under the H–2B 

program from adversely impacting U.S. 

workers, regardless of whether they are 

temporary or permanent. The sole use of 

temporary workers’ wages would 

depress prevailing wage calculations, 

applying substantial downward 

pressure on wages for similar, 

permanent work within the region. 

Therefore, the Department will continue 

to use wage surveys that include 

permanent workers to make H–2B 

prevailing wage determinations. 

x. Summary of Other Alternatives 

Having considered the proposed 

alternatives, the Department has 

concluded that none would 

satisfactorily effectuate the 

Department’s objective of ensuring that 

wages and working conditions of U.S. 

workers are more adequately protected 

than under the current prevailing wage 

determination process, while 

maintaining an efficient and consistent 

administrative process. The Department 

believes the alternatives proposed 

would at worst reduce and at best not 

improve the efficiency and consistency 

of the prevailing wage determination 

process, or would directly or indirectly 

adversely affect the wages of U.S. 

workers who might take H–2B jobs. 

Finally, the Department must ensure 

that in the H–2B program the wages 

paid to H–2B workers do not adversely 

affect the wages paid to U.S. workers 

and U.S. workers recruited under H–2B 

job orders by employers not 

participating in the H–2B program. Any 

method that results in offering H–2B 

workers lower than average wages 

adversely affects U.S. workers similarly 

employed. While the Department 

appreciates the proposed alternatives 

received, it has concluded that none of 

the alternatives provided better 

accomplishes the Department’s policy 

objectives than the prevailing wage 

determination method contained in the 

Final Rule. 

9. Steps To Minimize Economic Impact 

on Small Entities 

As the Department explained in its 

IRFA analysis, it recognizes the 

potential impact on small businesses 

that this Final Rule will have and has 

reviewed alternatives to minimize such 

impacts. The Department’s mandate 

under the H–2B program as extended to 

it by the Department of Homeland 

Security under the INA is to set 

requirements for employers that wish to 

hire temporary foreign non-agricultural 

workers. Those requirements are 

designed to ensure that foreign workers 

are used only if qualified domestic 

workers are not available and that the 

hiring of H–2B workers will not 

adversely affect the wages and working 

conditions of similarly employed 

domestic workers. This Final Rule sets 

those minimum standards with regard 

to wages. As discussed throughout this 

Final Rule, the required wage rate, as 

established by the methodology set in 

this rule, determines whether U.S. 

workers’ wages will be adversely 

affected by the hiring of an H–2B 

worker. A different and presumably 

lower standard applied to small 

business would potentially result in the 

very adverse effect that the Department 

is compelled to prevent. As a result, a 

different standard for this class of 

employers cannot be implemented by 

the Department. 

However, the Department recognizes 

the impact that wage increases are likely 

to have on businesses, including small 

businesses, that have in recent years 

relied on H–2B visas. In particular, the 

Department recognizes the 

commitments that employers have made 

in reliance on the current methodology, 

which has been expressed by many 

employers. In recognition of this impact, 

and in order to provide employers with 

sufficient time to plan for their labor 

needs for the next year and to minimize 

the disruption to their operations, the 

Department is delaying implementation 

of this Final Rule so that the prevailing 

wage methodology set forth in this Rule 

applies only to wages paid for work 

performed on or after January 1, 2012. 

C. Unfunded Mandates Reform Act of 

1995 

Title II of the Unfunded Mandates 

Reform Act of 1995 (2 U.S.C. 1531) 

directs agencies to assess the effects of 

Federal regulatory actions on State, 

local, and tribal governments, and the 

private sector. This Final Rule has no 

Federal mandate, which is defined in 2 

U.S.C. 658(6) to include either a 

‘‘Federal intergovernmental mandate’’ or 

a ‘‘Federal private sector mandate.’’ A 

Federal mandate is any provision in a 

regulation that imposes an enforceable 

duty upon State, local, or tribal 

governments, or imposes a duty upon 

the private sector which is not 

voluntary. A decision by a private entity 

to obtain an H–2B worker is purely 

voluntary and is, therefore, excluded 

from any reporting requirement under 

the Act. 

D. Small Business Regulatory 

Enforcement Fairness Act of 1996 

The Department has determined that 

this rulemaking does not impose a 

significant impact on a substantial 

number of small entities under the RFA; 

therefore, the Department is not 

required to produce any compliance 

guides for small entities as mandated by 


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the Small Business Regulatory 

Enforcement Fairness Act of 1996 

(SBREFA). The Department has, 

however, concluded that this rule is a 

major rule requiring review by the 

Congress under the SBREFA because it 

will likely result in: (1) An annual effect 

on the economy of $100 million or 

more; (2) a major increase in costs or 

prices for consumers, individual 

industries, Federal, State or local 

Government agencies, or geographic 

regions; or (3) significant adverse effects 

on competition, employment, 

investment, productivity, innovation, or 

on the ability of U.S.-based enterprises 

to compete with foreign-based 

enterprises in domestic or export 

markets. 

E. Executive Order 13132—Federalism 

The Department has reviewed this 

Final Rule in accordance with E.O. 

13132 regarding federalism and has 

determined that it does not have 

federalism implications. The rule does 

not have substantial direct effects on 

States, on the relationship between the 

States, or on the distribution of power 

and responsibilities among the various 

levels of Government as described by 

E.O. 13132. Therefore, the Department 

has determined that this rule will not 

have a sufficient federalism implication 

to warrant the preparation of a summary 

impact statement. 

F. Executive Order 13175—Indian 

Tribal Governments 

This Final Rule was reviewed under 

the terms of E.O. 13175 and determined 

not to have tribal implications. The rule 

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. As a 

result, no tribal summary impact 

statement has been prepared. 

G. Assessment of Federal Regulations 

and Policies on Families 

Section 654 of the Treasury and 

General Government Appropriations 

Act, enacted as part of the Omnibus 

Consolidated and Emergency 

Supplemental Appropriations Act of 

1999 (Pub. L. 105–277, 112 Stat. 2681) 

requires the Department to assess the 

impact of this Final Rule on family wellbeing. A rule that is determined to have 

a negative effect on families must be 

supported with an adequate rationale. 

The Department has assessed this 

Final Rule and determined that it will 

not have a negative effect on families. 

H. Executive Order 12630—Government 

Actions and Interference With 

Constitutionally Protected Property 

Rights 

The Final Rule is not subject to E.O. 

12630, Governmental Actions and 

Interference with Constitutionally 

Protected Property Rights, because it 

does not involve implementation of a 

policy with takings implications. 

I. Executive Order 12988—Civil Justice 

The Final Rule has been drafted and 

reviewed in accordance with E.O. 

12988, Civil Justice Reform, and will not 

unduly burden the Federal court 

system. The Department has developed 

the proposed rule to minimize litigation 

and provide a clear legal standard for 

affected conduct, and has reviewed the 

proposed rule carefully to eliminate 

drafting errors and ambiguities. 

J. Plain Language 

The Department drafted this Final 

Rule in plain language. 

K. Paperwork Reduction Act 

As part of its continuing effort to 

reduce paperwork and respondent 

burden, the Department conducts a 

preclearance consultation program to 

provide the general public and Federal 

agencies with an opportunity to 

comment on proposed and continuing 

collections of information in accordance 

with the Paperwork Reduction Act of 

1995 (PRA) (44 U.S.C. 3506(c)(2)(A)). 

This helps to ensure that the public 

understands the Department’s collection 

instructions; respondents can provide 

the requested data in the desired format, 

reporting burden (time and financial 

resources) is minimized, collection 

instruments are clearly understood, and 

the Department can properly assess the 

impact of collection requirements on 

respondents. 

Persons are not required to respond to 

a collection of information unless it 

displays a currently valid OMB control 

number as required in 5 CFR 1320.11(l). 

The information collection (IC) 

requirements for the current H–2B 

program are approved under OMB 

control number 1205–0466 (which 

includes ETA Form 9141 and ETA Form 

9142). This rule imposes no new 

information collection requirements and 

there are no burden adjustments that 

need to be made to the analysis. For an 

additional explanation of how the 

Department calculated the burden hours 

and related costs, the PRA packages for 

these information collections may be 

obtained from the RegInfo.gov Web site 

at http://www.reginfo.gov/public/do/ 

PRAMain or by contacting the 

Department at: Office of Policy 

Development and Research, Department 

of Labor, 200 Constitution Ave., NW., 

Washington, DC 20210 or by phone 

request to 202–693–3700 (this is not a 

toll-free number) or by e-mail at 

DOL_PRA_PUBLIC@dol.gov. 

List of Subjects in 20 CFR Part 655 

Administrative practice and 

procedure, Employment, Employment 

and training, Enforcement, Foreign 

workers, Forest and forest products, 

Fraud, Health professions, Immigration, 

Labor, Longshore and harbor work, 

Migrant workers, Nonimmigrant 

workers, Passports and visas, Penalties, 

Reporting and recordkeeping 

requirements, Unemployment, Wages, 

Working conditions. 

■ Accordingly, ETA amends 20 CFR 

part 655 as follows: 

PART 655—TEMPORARY 

EMPLOYMENT OF FOREIGN 

WORKERS IN THE UNITED STATES 

■ 1. The authority citation for part 655 

continues 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), 1182(m), (n) 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); 

Pub. L. 109–423, 120 Stat. 2900; and 8 CFR 

214.2(h)(4)(i). 

Section 655.00 issued under 8 U.S.C. 

1101(a)(15)(H)(ii), 1184(c), and 1188; and 8 

CFR 214.2(h). 

Subparts A and C 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). 

Subparts D and E authority repealed. 

Subparts F and G issued under 8 U.S.C. 

1288(c) and (d); and sec. 323(c), Pub. L. 103– 

206, 107 Stat. 2428. 

Subparts H and I issued under 8 U.S.C. 

1101(a)(15)(H)(i)(b) and (b)(1), 1182(n) and 

(t), and 1184(g) and (j); sec. 303(a)(8), Pub. L. 

102–232, 105 Stat. 1733, 1748 (8 U.S.C. 1101 

note); sec. 412(e), Pub. L. 105–277, 112 Stat. 

2681; and 8 CFR 214.2(h). 

Subparts J and K authority repealed. 

Subparts L and M issued under 8 U.S.C. 

1101(a)(15)(H)(i)(c) and 1182(m); sec. 2(d), 

Pub. L. 106–95, 113 Stat. 1312, 1316 (8 U.S.C. 

1182 note); Pub. L. 109–423, 120 Stat. 2900; 

and 8 CFR 214.2(h). 

■ 2. Amend § 655.10 by: 

■ a. Revising paragraphs (b) 

introductory text, (b)(1), and (2); 


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■ b. Removing paragraphs (b)(4) and 

(b)(5) and redesignating paragraph (b)(3) 

as (b)(4) and (b)(6) as (b)(5); 

■ c. Adding new paragraphs (b)(3), 

(b)(6), and (b)(7); and 

■ d. Removing paragraphs (f) and (g) 

and redesignating paragraphs (h) as (f), 

and (i) as (g). 

§ 655.10 Determination of prevailing wage 

for temporary labor certification purposes. 

* * * * * 

(b) Basis for prevailing wage 

determinations. The prevailing wage is 

the highest of the following: 

(1) The wage rate set forth in the CBA, 

if the job opportunity is covered by a 

CBA that was negotiated at arms’ length 

between the union and the employer; 

(2) The wage rate established under 

the DBA or SCA for the occupation in 

the area of intended employment if the 

job opportunity is in an occupation for 

which such a wage rate has been 

determined; or 

(3) The arithmetic mean of the wages 

of workers similarly employed in the 

occupation in the area of intended 

employment as determined by the OES. 

This computation will be based on the 

arithmetic mean wage of all workers in 

the occupation. 

* * * * * 

(6) In geographic areas where the OES 

does not gather wage data, including but 

not limited to the jurisdiction of the 

Commonwealth of the Northern Mariana 

Islands, and there is no CBA, DBA, or 

SCA wage available for the job 

opportunity, the NPC will consider 

wage information in the form of a wage 

survey provided by an employer in 

making a prevailing wage 

determination. Such a survey may only 

be submitted with a request for a 

prevailing wage determination. A 

request filed under this paragraph does 

not need to be preceded by a request 

and approval to submit wage 

information as described in paragraph 

(b)(7) of this section. 

(7)(i) An employer may submit a 

written request to the Administrator, 

OFLC to provide a private wage survey 

for OFLC to consider in making a 

prevailing wage determination which 

must demonstrate that the following 

factors are present: 

(A) There is no CBA, DBA, or SCA 

wage available for the job opportunity; 

(B) The job opportunity was not listed 

in the Dictionary of Occupational Titles 

(DOT) and is not listed in the Standard 

Occupational Classification (SOC) 

system, or if the job opportunity was 

listed in the DOT or is listed in the SOC 

system, the DOT crosswalk to the SOC 

system links to an occupational 

classification signifying a generalized 

set of occupations as ‘‘all other’’; and 

(C) The job description entails job 

duties which require knowledge, skills, 

abilities, and work tasks that are 

significantly different, as defined in 

guidance to be issued by the OFLC, than 

those in any other SOC occupation. 

(ii) The Administrator, OFLC may 

approve or deny an employer’s written 

request to provide a wage survey. If the 

Administrator, OFLC approves the 

employer’s written request, the 

Administrator, OFLC will send an 

approval letter to the employer. 

Approvals shall be valid for 1 year from 

the date of approval and only for the job 

opportunity and area of intended 

employment specified in the original 

written request. This approval does not 

constitute an acceptance of any 

particular wage survey. 

(iii) If approval is granted, the 

employer may submit a request for a 

prevailing wage determination to the 

NPC along with a copy of the 

Administrator, OFLC’s approval letter 

and a complete copy of the private 

survey. The NPC will evaluate the 

adequacy of the data provided and 

validity of the statistical methodology 

used in conducting the survey in 

accordance with guidance issued by the 

OFLC National Office. 

(iv) In each case where the employer 

submits a wage survey for which it 

seeks acceptance, the employer must 

provide specific information about the 

survey methodology, including such 

items as sample size and source, sample 

selection procedures, and survey job 

descriptions, to allow a determination of 

the adequacy of the data provided and 

validity of the statistical methodology 

used in conducting the survey in 

accordance with guidance issued by the 

OFLC National Office. 

(v) The survey must be based upon 

recently collected data: 

(A) Any published survey must have 

been published within 24 months of the 

date of submission, must be the most 

current edition of the survey, and must 

be based on data collected not more 

than 24 months before the publication 

date. 

(B) A survey conducted by the 

employer must be based on data 

collected within 24 months of the date 

it is submitted for consideration. 

(vi) The survey cannot as any part of 

its data wage information reflect the 

wages of H–2B workers or other 

nonimmigrant workers. 

(vii) If the NPC does not approve the 

survey for use in the H–2B program, the 

NPC shall inform the employer in 

writing of the reasons the survey was 

not accepted. An employer may appeal 

the NPC’s decision in accordance with 

§ 655.11. 

* * * * * 

Signed in Washington this 14th day of 

January 2011. 

Jane Oates, 

Assistant Secretary, Employment and 

Training Administration. 

[FR Doc. 2011–1117 Filed 1–18–11; 8:45 am] 

BILLING CODE 4510–FP–P 


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