A group of IT and computer service companies filed a lawsuit Friday to challenge the Labor Department’s new wage regulation. The regulation took effect Oct. 8 and significantly increases wage minimums employers must meet for the H-1B, H-1B1, and E-3 programs and permanent labor certifications (PERM).

Key Points:

  • The Labor Department’s Oct. 8 rule restructured the wage leveling system by which employers determine required wages under the H-1B, H-1B1 and E-3 nonimmigrant programs and PERM applications. The rule was issued as an Interim Final Rule and took effect immediately upon publication, but the agency is accepting comments from the public until Nov. 9.
  • The lawsuit, ITServe Alliance v. Scalia, filed in federal court in New Jersey, asks the government to halt enforcement of the rule. The companies allege that the Labor Department did not follow proper rulemaking procedures, that the regulation violates the Immigration and Nationality Act, and that it is “arbitrary and capricious” because the agency relied on outdated or incorrect data.
  • Additional litigation is expected.

Additional Information: The Department of Homeland Security (DHS) also published an H-1B rule this month that makes changes to the H-1B program, including narrowing the definition of “specialty occupation.” DHS also published its rule on Oct. 8, but it is not scheduled to take effect until Dec. 7, 60 days from publication. The DHS rule is not part of the ITServe litigation, but is also expected to be challenged in court.

BAL Analysis: The ITServe lawsuit challenges the legality of the Labor Department’s wage regulation, but the rule will remain in effect unless a judge rules that the government must stop enforcing it. Additional lawsuits seeking to block the DOL and DHS rules are expected. BAL continues to follow the litigation related to the new rules and will provide updates as information becomes available.

This alert has been provided by the BAL U.S. Practice group. For additional information, please contact berryapplemanleiden@bal.com.

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