Federal Register, Volume 80 Issue 82 (Wednesday, April 29, 2015)
[Federal Register Volume 80, Number 82 (Wednesday, April 29, 2015)]
[Rules and Regulations]
[Pages 24145-24190]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-09692]



[[Page 24145]]

Vol. 80

Wednesday,

No. 82

April 29, 2015

Part V





Department of Homeland Security





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8 CFR Part 214





Department of Labor





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Employment and Training Administration





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20 CFR Part 655





Wage Methodology for the Temporary Non-Agricultural Employment H-2B 
Program; Final Rule

Federal Register / Vol. 80 , No. 82 / Wednesday, April 29, 2015 / 
Rules and Regulations

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DEPARTMENT OF HOMELAND SECURITY

8 CFR Part 214

[CIS No. 2536-13]
RIN 1615-AC02

DEPARTMENT OF LABOR

Employment and Training Administration

20 CFR Part 655

[Docket No. ETA-2013-0003]
RIN 1205-AB69


Wage Methodology for the Temporary Non-Agricultural Employment H-
2B Program

AGENCY: Employment and Training Administration, Labor; U.S. Citizenship 
and Immigration Services, Department of Homeland Security.

ACTION: Final rule.

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SUMMARY: The Department of Homeland Security (DHS) and the Department 
of Labor (DOL) are issuing final regulations governing certification of 
the employment of nonimmigrant workers in temporary or seasonal non-
agricultural employment. This final rule sets forth how DOL provides 
the consultation that DHS has determined is necessary to adjudicate H-
2B visa petitions by setting the methodology by which DOL calculates 
the prevailing wages to be paid to H-2B workers and U.S. workers 
recruited in connection with applications for temporary labor 
certification. Specifically, for the purposes of an H-2B temporary 
labor certification, this final rule establishes that, in the absence 
of a wage set in a valid and controlling collective bargaining 
agreement, the prevailing wage will be the mean wage for the occupation 
in the pertinent geographic area derived from the Bureau of Labor 
Statistics Occupational Employment Statistics survey, unless the H-2B 
employer meets the conditions for requesting that the prevailing wage 
be based on an employer-provided survey. Any such survey submitted must 
meet the new methodological criteria established in this final rule in 
order to be used to establish the prevailing wage. The final rule does 
not permit use of the wage determinations issued under the Service 
Contract Act or the Davis Bacon Act as sources to set the prevailing 
wage in the H-2B temporary labor certification context.
    DHS and DOL are issuing this final rule together because DHS, as 
the Executive Branch agency charged with administering the H-2B 
program, has determined that the most effective implementation of the 
statutory H-2B labor protections requires that DHS consult with DOL for 
its advice about matters with which DOL has expertise, including 
questions about the methodology for setting the prevailing wage in the 
H-2B program. DHS (and the former Immigration and Naturalization 
Service, Department of Justice, which was charged with administration 
of the H-2B program prior to enactment of the Homeland Security Act of 
2002) has long recognized that DOL is the appropriate agency with which 
to consult regarding the availability of U.S. workers and for assuring 
that wages and working conditions of U.S. workers are not adversely 
affected by the use of H-2B workers. This rule also adopts, without 
change, certain revisions made to DHS's H-2B regulations, to clarify 
that DHS is the Executive Branch agency charged with making 
determinations regarding eligibility for H-2B classifications, after 
consulting with DOL for its advice about matters with which DOL has 
expertise, including questions related to the methodology for setting 
the prevailing wage in the H-2B program. Finally, DHS and DOL are 
issuing, simultaneously with this rule, a companion H-2B rule governing 
the certification of the employment of nonimmigrant workers in 
temporary or seasonal non-agricultural employment and the enforcement 
of the obligations applicable to employers of such nonimmigrant 
workers.

DATES: This final rule is effective April 29, 2015.

FOR FURTHER INFORMATION CONTACT: 
    For further information on 8 CFR part 214, contact Steven W. Viger, 
Adjudications Officer (Policy), Office of Policy and Strategy, U.S. 
Citizenship and Immigration Services, Department of Homeland Security, 
20 Massachusetts NW., Washington, DC 20529-2060; Telephone (202) 272-
1470 (this is not a toll-free number).
    For further information on 20 CFR part 655, subpart A, contact 
William W. Thompson, II, Acting Administrator, Office of Foreign Labor 
Certification, Employment and Training Administration, 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. Background

A. The Statutory and Regulatory Framework

    The Immigration and Nationality Act (INA) establishes the H-2B visa 
classification for a non-agricultural temporary 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 . . . 
temporary [non-agricultural] service or labor if unemployed persons 
capable of performing such service or labor cannot be found in this 
country.'' 8 U.S.C. 1101(a)(15)(H)(ii)(b), INA section 
101(a)(15)(H)(ii)(b). Section 214(c)(1) of the INA, 8 U.S.C. 
1184(c)(1), requires an importing employer (H-2B employer) to petition 
the Department of Homeland Security (DHS) for classification of the 
prospective temporary worker as an H-2B nonimmigrant.\1\ DHS must 
approve this petition before the beneficiary can be considered eligible 
for an H-2B visa or H-2B status. Finally, the INA requires that ``[t]he 
question of importing any alien as [an H-2B] nonimmigrant . . . in any 
specific case or specific cases shall be determined by [DHS], after 
consultation with appropriate agencies of the Government, upon petition 
of the importing employer.'' 8 U.S.C. 1184(c)(1), INA section 
214(c)(1).
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    \1\ Under section 1517 of title XV of the Homeland Security Act 
of 2002 (HSA), Pub. L. 107-296, 116 Stat. 2135, any reference to the 
Attorney General in a provision of the INA describing functions that 
were transferred from the Attorney General or other Department of 
Justice official to DHS by the HSA ``shall be deemed to refer to the 
Secretary'' of Homeland Security. See 6 U.S.C. 557 (2003) (codifying 
HSA, title XV, sec. 1517); 6 U.S.C. 542 note; 8 U.S.C. 1551 note.
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    Pursuant to the above-referenced authorities, DHS has promulgated 
regulations implementing the H-2B program. See, e.g., 73 FR 78104 (Dec. 
19, 2008). These regulations prescribe the conditions under which DHS 
may grant an employer's petition to classify an alien as an H-2B 
worker. See 8 CFR 214.2(h)(6). U.S. Citizenship and Immigration 
Services (USCIS) is the component agency within DHS that adjudicates H-
2B petitions. Id.
    USCIS examines H-2B petitions for compliance with a range of 
statutory and regulatory requirements. For instance, USCIS will examine 
each petition to ensure, inter alia, (1) that the job opportunity in 
the employer's petition is of a temporary nature, 8 CFR 214.2(h)(2)(D), 
(6)(ii) and (6)(vi)(D); (2)

[[Page 24147]]

that the beneficiary alien meets the educational, training, experience, 
or other requirements, if any, attendant to the job opportunity 
described in the petition, 8 CFR 214.2(h)(6)(vi)(C); (3) that there are 
sufficiently available H-2B visas in light of the applicable numerical 
limitation for H-2B visas, 8 CFR 214.2(h)(8)(ii)(A); and (4) that the 
application is submitted consistent with strict requirements ensuring 
the integrity of the H-2B system, 8 CFR 214.2(h)(6)(i)(B), 
(6)(i)(F).\2\
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    \2\ DHS also publishes annually a list of countries whose 
nationals are eligible to participate in the H-2B visa program in 
the coming year. See 8 CFR 214.2(h)(6)(i)(E); see also, e.g., 79 FR 
3214 (Jan. 17, 2014) notice of eligible country list). As part of 
its adjudication of H-2B petitions, USCIS must determine whether the 
alien beneficiary is a national of a country on the list; if not, 
USCIS must determine whether it is in the U.S. interest for that 
alien to be a beneficiary of such petition. See 8 CFR 
214.2(h)(6)(i)(E).
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    DHS has implemented the statutory protections attendant to the H-2B 
program by regulation. See 8 CFR 214.2(h)(6)(iii), (iv), and (v). In 
accordance with the statutory mandate at 8 U.S.C. 1184(c)(1), INA 
section 214(c)(1), that DHS consult with ``appropriate agencies of the 
government'' to determine eligibility for H-2B nonimmigrant status, DHS 
(and the former Immigration and Naturalization Service) has long 
recognized that the most effective administration of the H-2B program 
requires consultation with the Department of Labor (DOL) to advise 
whether U.S. workers capable of performing the temporary services or 
labor are available. See, e.g., Temporary Alien Workers Seeking 
Classification Under the Immigration and Nationality Act, 55 FR 2606, 
2617 (Jan. 26, 1990) (``The Service must seek advice from the 
Department of Labor under the H-2B classification because the statute 
requires a showing that unemployed U.S. workers are not available to 
perform the services before a petition can be approved. The Department 
of Labor is the appropriate agency of the Government to make such a 
labor market finding. The Service supports the process which the 
Department of Labor uses for testing the labor market and assuring that 
wages and working conditions of U.S. workers will not be adversely 
affected by employment of alien workers.'').
    Accordingly, DHS regulations require that an H-2B petition for 
temporary employment in the United States must be accompanied by an 
approved temporary labor certification from DOL. 8 CFR 
214.2(h)(6)(iii)(A) and (iv)(A).\3\ The temporary labor certification 
demonstrates that DOL has evaluated, and is providing advice to DHS 
with respect to, whether a qualified U.S. worker is available to fill 
the petitioning H-2B employer's job opportunity and whether a foreign 
worker's employment in the job opportunity will adversely affect the 
wages or working conditions of similarly employed U.S. workers. See 8 
CFR 214.2(h)(6)(iii)(A) and (D). In addition, as part of DOL's 
certification, DHS regulations require DOL to ``determine the 
prevailing wage applicable to an application for temporary labor 
certification in accordance with the Secretary of Labor's regulation at 
20 CFR 655.10.'' 8 CFR 214.2(h)(6)(iii)(D).
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    \3\ The regulation establishes a different procedure for the 
Territory of Guam, under which a petitioning employer must apply for 
a temporary labor certification with the Governor of Guam. 8 CFR 
214.2(h)(6)(iii)(A).
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    DHS relies on DOL's advice in this area, as DOL is the appropriate 
government agency with expertise in labor questions and historic and 
specific expertise in addressing labor protection questions related to 
the H-2B program. This advice helps DHS fulfill its statutory duty to 
determine, prior to approving an H-2B petition, that unemployed U.S. 
workers capable of performing the relevant service or labor cannot be 
found in the United States. 8 U.S.C. 1101(a)(15)(H)(ii)(b), INA section 
101(a)(15)(H)(ii)(b); 8 U.S.C. 1184(c)(1), INA section 214(c)(1). DHS 
has therefore made DOL's approval of a temporary labor certification a 
condition precedent to the completion of the H-2B petition. 8 CFR 
214.2(h)(6)(iii) and (vi). Following receipt of an approved DOL 
temporary labor certification and other required evidence, USCIS may 
adjudicate an employer's complete H-2B petition. Id.
    Consistent with the above-referenced authorities, since at least 
1968,\4\ DOL has established regulatory procedures to certify whether a 
qualified U.S. worker is available to fill the job opportunity 
described in the employer's petition for a temporary nonagricultural 
worker, and whether a foreign worker's employment in the job 
opportunity will adversely affect the wages or working conditions of 
similarly employed U.S. workers. See 20 CFR part 655, subpart A. As 
part of DOL's temporary labor certification process, and as required by 
DHS regulations, 8 CFR 214.2(h)(6)(iii)(D) and (iv), DOL sets the wage 
that employers must offer and pay foreign workers admitted to the 
United States in H-2B nonimmigrant status. See 20 CFR 655.10. This 
final rule sets forth DOL's methodology for setting the wage, 
consistent with the INA and existing DHS regulations.
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    \4\ DHS has required a temporary labor certification as a 
condition precedent to adjudication of an H-2B petition for 
temporary employment in the United States since 2008. 73 FR 78103. 
DOL, however, has promulgated regulations governing its adjudication 
of employer applications for temporary labor certification since 
1968, when DOL promulgated regulations under which it would review, 
among other things, ``the employer's attempts to recruit workers and 
the appropriateness of the wages and working conditions offered.'' 
See 33 FR 7570 (May 22, 1968) (DOL final rule on certification of 
temporary foreign labor for industries other than agriculture and 
logging). Until 1986, there was a single H-2 temporary worker 
classification applicable to both temporary agricultural and non-
agricultural workers. In 1986, Congress revised the INA to create 
two separate programs for agricultural (H-2A) and non-agricultural 
(H-2B) workers. See 8 U.S.C. 1101(a)(15)(H)(ii), INA 
101(a)(15)(H)(ii), 66 Stat. 163 (June 27, 1952); Immigration Reform 
and Control Act of 1986, Public Law 99-603, Sec. 301, 100 Stat. 
3359. Under the 1968 final rule, DOL considered, ``such matter[s] as 
the employer's attempts to recruit workers and the appropriateness 
of the wages and working conditions offered.'' 33 FR at 7571.
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    As discussed above, DHS has determined that the most effective 
implementation of the statutory labor protections in the H-2B program 
requires that DHS consult with DOL for its advice about matters with 
which DOL has unique expertise, particularly questions about the 
methodology for setting the prevailing wage in the H-2B program. The 
most transparent and effective method for DOL to provide this 
consultation is by setting forth in regulations the standards it will 
use to provide that advice, as required by existing DHS regulations. 
DOL's rules set the standards by which employers demonstrate to DOL 
that they have tested the labor market and found insufficient numbers 
of qualified and available U.S. workers, and set the standards by which 
employers demonstrate to DOL that the offered employment does not 
adversely affect U.S. workers. By setting forth this structure in 
regulations, DHS and DOL ensure the provision of this advice by DOL is 
consistent, transparent, and provided in the form that is most useful 
to DHS.
    As discussed in greater detail below, DOL's authority to issue its 
own legislative rules to carry out its duties under the INA has been 
challenged in litigation. On April 1, 2013, the U.S. Court of Appeals 
for the Eleventh Circuit upheld a district court decision that granted 
a preliminary injunction against enforcement of the 2012 comprehensive 
H-2B rule (2012 H-2B rule) on the ground that the employers were likely 
to prevail on their allegation that DOL lacks H-2B rulemaking 
authority. Bayou Lawn & Landscape Servs. v. Sec'y of Labor, 713 F.3d 
1080

[[Page 24148]]

(11th Cir. 2013). On remand, the district court issued an order 
vacating the 2012 H-2B rule, and permanently enjoined DOL from 
enforcing the rule on the ground that DOL lacks rulemaking authority in 
the H-2B program. Bayou Lawn & Landscape Servs., No. 3:12-cv-183 (N.D. 
Fla. Dec. 18, 2014) (Bayou II). The Bayou II decision is currently on 
appeal to the 11th Circuit. However, on February 5, 2014, the U.S. 
Court of Appeals for the Third Circuit held that ``DOL has authority to 
promulgate rules concerning the temporary labor certification process 
in the context of the H 2B program, and that the 2011 Wage Rule was 
validly promulgated pursuant to that authority.'' La. Forestry ***'n v. 
Perez, 745 F.3d 653, 669 (3d Cir. 2014).
    In order to ensure that there can be no question about the 
authority for and validity of the regulations in this area, DHS and DOL 
(the Departments), together, are issuing this final rule. By proceeding 
together, the Departments affirm that this rule is fully consistent 
with the INA and existing DHS regulations implementing the H-2B program 
and is vital to DHS's ability to faithfully implement the statutory 
labor protections attendant to the program. See 8 U.S.C. 
1101(A)(15)(H)(ii)(b), INA section 101(a)(15)(H)(ii)(b); 8 U.S.C. 
1103(a)(6), INA section 103(a)(6); 8 U.S.C. 1184(c)(1), INA section 
214(c)(1); 8 CFR 214.2(h)(6)(iv). This final rule implements a key 
component of DHS's determination that it must consult with DOL on the 
labor market questions relevant to its adjudication of H-2B petitions. 
This final rule also affirms DHS's and DOL's determination that 
implementation of the consultative relationship may be established 
through regulations that determine the method by which DOL will provide 
the necessary advice to DHS.

B. The CATA I Litigation, 2011 Wage Rule, and Congressional Riders

    In 2008, DOL issued regulations governing DOL's role in the H-2B 
temporary worker program. The regulation established, among other 
things, a methodology for determining the wage that a prospective H-2B 
employer must pay. Labor Certification Process and Enforcement for 
Temporary Employment in Occupations Other Than Agriculture or 
Registered Nursing in the United States (H-2B Workers), and Other 
Technical Changes, 73 FR 78020 (Dec. 19, 2008) (the 2008 rule).\5\ The 
2008 rule provided that the prevailing wage would be the collective 
bargaining agreement (CBA) wage rate if the job opportunity was covered 
by an agreement negotiated at arms' length between a union and the 
employer; the Occupational Employment Statistics (OES) wage rate if 
there was no CBA; a survey if an employer elected to provide an 
acceptable survey; or a wage rate under the Davis-Bacon Act (DBA), 40 
U.S.C. 276a et seq., or the McNamara-O'Hara Service Contract Act (SCA), 
41 U.S.C. 351 et seq., if one was available for the occupation in the 
area of intended employment. See 20 CFR 655.10 (2009). In the absence 
of the CBA wage, the employer could elect to use the applicable SCA or 
the DBA wage in lieu of the OES wage. See 20 CFR 655.10(b) (2009). The 
2008 rule and the agency guidance implementing it required that when 
prevailing wage determinations were based on the OES wage survey, which 
is compiled by the Bureau of Labor Statistics (BLS), the wage had to be 
structured to contain four tiers to reflect skill and experience.\6\ 
DOL subjected most provisions of the 2008 rule to the Administrative 
Procedure Act's (APA) procedural requirements, but because the agency 
had already been implementing the four-tiered wages in the H-2B program 
pursuant to sub-regulatory guidance,\7\ DOL did not seek public 
comments on the use of the four-tiered wage methodology for determining 
prevailing wages when promulgating the 2008 rule. See 73 FR at 78031. 
In 2009, shortly after the promulgation of the 2008 H-2B regulation, a 
suit was filed under the APA challenging several aspects of the 2008 
rule. See Comite de Apoyo a los Trabajadores Agricolas (CATA) v. Solis, 
No. 2:09-cv-240-LP, 2010 WL 3431761 (E.D. Pa. 2010) (CATA I). Among the 
issues raised in that litigation was the use of the four-tiered wage 
structure in the H-2B program. In an August 30, 2010 decision, the 
court ruled that DOL had violated the APA by failing to adequately 
explain its reasoning for adopting skill and experience levels as part 
of the H-2B prevailing wage determination process. Id. at * 19. The 
court ordered promulgation of ``new rules concerning the calculation of 
the prevailing wage rate in the H-2B program that are in compliance 
with the [APA].'' Id. at * 27.
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    \5\ Before 2008, DOL set the prevailing wage in the H-2B program 
through sub-regulatory guidance. See, e.g., General Administration 
Letter (GAL) 10-84, ``Procedures for Temporary Labor Certifications 
in Non Agricultural Occupations'' (April 23, 1984); GAL 4-95, 
``Interim Prevailing Wage Policy for Nonagricultural Immigration 
Programs'' (May 18, 1995), Attachment I, available at http://wdr.doleta.gov/directives/attach/GAL4-95_attach.pdf; GAL 2-98, 
``Prevailing Wage Policy for Nonagricultural Immigration Programs'' 
(published Oct. 31, 1997; effective Jan. 1, 1998) available at 
http://wdr.doleta.gov/directives/attach/GAL2-98_attach.pdf.
    \6\ The 2008 rule required that when the prevailing wage was 
based on the OES, it should reflect skill levels. The agency's 
implementing guidance required that the prevailing wage contain four 
wage tiers based on skill level. As a result, we refer throughout 
this rule to the 2008 rule's requirement of four wage tiers.
    Because the OES survey captures no information about actual 
skills or responsibilities of the workers whose wages are being 
reported, the four-tiered wage structure, adapted from the 
statutorily required four tiers applicable to the H-1B visa program 
under section 212(p)(4) of the INA, 8 U.S.C. 1182(p), was derived by 
mathematical formula as follows to reflect ``entry level,'' 
``qualified,'' ``experienced,'' and ``fully competent'' workers: 
Level 1 is the mean of the lowest-paid \1/3\, or approximately the 
17th percentile; Level 2 is approximately the 34th percentile; Level 
3 is approximately the 50th percentile; and Level 4 is the mean of 
the highest-paid \2/3\, or approximately the 67th percentile.
    \7\ See supra n.5.
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    In response to the CATA I order, DOL published a final rule, Wage 
Methodology for the Temporary Non-agricultural Employment H-2B Program, 
on January 19, 2011, 76 FR 3452 (the 2011 Wage Rule). In that rule, DOL 
determined 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.'' 76 FR at 3460. Therefore, 
the 2011 Wage Rule revised the wage methodology by eliminating the 2008 
rule's four-tier wage structure on the ground that it violated the 
obligation to set H-2B wages at a rate that did not adversely affect 
U.S. workers' wages.\8\ Id. at 3458-3461.
    The new methodology set the prevailing wage as the highest of the 
OES arithmetic mean wage for each occupational category in the area of 
intended employment; the applicable SCA/DBA wage rate; or the CBA wage. 
The rule also eliminated the use of employer-provided surveys as 
alternative wage sources, except in

[[Page 24149]]

limited circumstances.\9\ The effective date of the 2011 Wage Rule was 
originally set for January 1, 2012. However, as a result of litigation 
challenging the effective date and following notice-and-comment 
rulemaking, DOL issued a final rule, 76 FR 45667 (Aug. 1, 2011), 
revising the effective date of the 2011 Wage Rule to September 30, 
2011, and a second final rule, 76 FR 59896 (Sept. 28, 2011), further 
revising the effective date of the 2011 Wage Rule to November 30, 2011.
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    \8\ DOL found that in 2010, almost 75 percent of H-2B jobs were 
certified at a Level 1 wage (the mean of the lowest one-third of all 
reported wages), and over a several year period, approximately 96 
percent of the prevailing wages issued were lower than the mean of 
the OES wage rates for the same occupation. 76 FR at 3463. DOL 
determined that in the low-skilled occupations in the H-2B program, 
the mean ``represents the wage that the average employer is willing 
to pay for unskilled workers to perform that job.'' Id. Therefore, 
DOL concluded that the use of skill levels adversely affected U.S. 
workers because it ``artificially lowers [wages] to a point that 
[they] no longer represent[ ] a market-based wage for that 
occupation.'' Id. The application of the four levels set a wage 
``below what the average similarly employed worker is paid.'' Id. 
DOL concluded that ``the net result is an adverse effect on the 
[U.S.] worker's income.'' 76 FR at 3463.
    \9\ These circumstances include very specific situations in 
which the job may be in a geographic location that is not included 
in BLS's data collection for the OES (e.g., the Commonwealth of the 
Northern Mariana Islands) or where the job opportunity is not 
``accurately represented'' within the job classification used in 
those surveys. 76 FR at 3466-3467.
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    Shortly before the 2011 Wage Rule was to become effective, Congress 
issued an appropriations rider effectively barring its implementation. 
The Consolidated and Further Continuing Appropriations Act, 2012, 
enacted on November 18, 2011, provided that ``[n]one of the funds made 
available by this or any other Act for fiscal year 2012 may be used to 
implement, administer, or enforce, prior to January 1, 2012 the [2011 
Wage Rule].'' Public Law 112-55, 125 Stat. 552, Div. B, Title V, sec. 
546 (Nov. 18, 2011) (the November 2011 Appropriations Act). In response 
to the Congressional prohibition on implementation, DOL delayed the 
effective date of the 2011 Wage Rule until January 1, 2012. 76 FR 73508 
(Nov. 29, 2011). The delayed effective date was necessary because, 
although the November 2011 Appropriations Act prevented the expenditure 
of funds to implement, administer, or enforce the 2011 Wage Rule, it 
did not prevent the 2011 Wage Rule from going into effect. 76 FR at 
73509. Had the 2011 Wage Rule gone into effect, it would have 
superseded and nullified the prevailing wage provisions from the 2008 
rule, leaving DOL without a methodology to make prevailing wage 
determinations. Id. Because the issuance of a prevailing wage 
determination is a condition precedent to approving an employer's 
request for an H-2B temporary labor certification, 20 CFR 655.10, DOL's 
H-2B temporary labor certification program would be inoperable without 
the ability to issue a prevailing wage pursuant to regulatory 
standards. Accordingly, DOL determined that it was necessary, in light 
of the November 2011 Appropriations Act, to delay the effective date of 
the 2011 Wage Rule to allow DOL to continue to make prevailing wage 
determinations under the wage provisions of the 2008 rule.
    Subsequent appropriations legislation \10\ contained the same 
restriction prohibiting DOL's use of appropriated funds to implement, 
administer, or enforce the 2011 Wage Rule. This legislation 
necessitated subsequent extensions of the effective date of that rule. 
See 76 FR 82115 (Dec. 30, 2011) (extending the effective date to Oct. 
1, 2012); 77 FR 60040 (Oct. 2, 2012) (extending the effective date to 
Mar. 27, 2013); 78 FR 19098 (Mar. 29, 2013) (extending the effective 
date to Oct. 1, 2013). While the 2011 Wage Rule implementation was 
suspended, DOL remained unable to implement the wage methodology that, 
among other things, eliminated the four-tier wage structure, and 
instead relied on the prevailing wage provisions of the 2008 rule, 
including the use of the four-tiered wage structure, when issuing a 
prevailing wage based on the OES.
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    \10\ These include the Consolidated Appropriations Act of 2012, 
Public Law 112-74, 125 Stat. 786 (Dec. 23, 2011); Continuing 
Appropriations Resolution, 2013, Public Law 112-175, 126 Stat. 1313 
(Sept. 28, 2012); Consolidated and Further Continuing Appropriations 
Act, 2013, Public Law 113-6, 127 Stat. 198 (Mar. 26, 2013); 
Continuing Appropriations Act, 2014, Public Law 113-46, 127 Stat. 
558 (Oct. 17, 2013); and Joint Resolution Making further Continuing 
Appropriations for Fiscal Year 2014, Public Law 113-73, 128 Stat. 3 
(Jan. 15, 2014).
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C. CATA II and the 2013 Interim Final H-2B Wage Rule

    Based on DOL's ongoing use of the 2008 rule's four wage tiers, the 
CATA I plaintiffs returned to court seeking immediate vacatur of the 
four-tiered wage structure from the 2008 rule. On March 21, 2013, the 
district court agreed with plaintiffs that its prior holding that the 
four-tiered wage structure was promulgated in violation of the APA 
remained unremedied.
    Therefore, the court vacated 20 CFR 655.10(b)(2), which was the 
basis for the four-tiered wage structure, and remanded the matter to 
DOL, ordering it to comply within 30 days. Comite de Apoyo a los 
Trabajadores Agricolas v. Solis, 933 F. Supp. 2d 700 (E.D. Pa. 2013) 
(CATA II). Shortly thereafter, on April 1, 2013, the U.S. Court of 
Appeals for the Eleventh Circuit upheld a separate district court 
decision that granted a preliminary injunction against enforcement of 
the 2012 H-2B rule on the ground that the employers are likely to 
prevail on their allegation that DOL lacks H-2B rulemaking authority. 
Bayou Lawn & Landscape Servs., 713 F.3d 1080.
    In response to the vacatur and 30-day compliance order in CATA II, 
and the Eleventh Circuit's decision in Bayou Lawn & Landscape Servs., 
the Departments \11\ promulgated an interim final rule, Wage 
Methodology for the Temporary Non-Agricultural Employment H-2B Program, 
Part 2, 78 FR 24047 (Apr. 24, 2013) (2013 IFR), which established a new 
wage methodology. In the 2013 IFR, the Departments struck the phrase, 
``at the skill level,'' from 20 CFR 655.10(b)(2). As a result of the 
deletion of this phrase, the Departments now require that prevailing 
wage determinations issued using the OES survey be based on the mean 
wage for the occupation in the area of intended employment. 78 FR at 
24053. The 2013 IFR became effective on April 24, 2013, the date of 
publication, because of the need to comply within the 30-day period 
ordered by the CATA II Court. The rule was published pursuant to 5 
U.S.C. 553(b)(B), which authorizes agencies to make a rule effective 
immediately upon a showing of ``good cause.'' Significantly, however, 
the 2013 IFR only implemented the court-ordered change to the wage 
methodology in 20 CFR 655.10(b)(2). It left intact all other provisions 
of the wage methodology and procedures contained in the 2008 rule at 20 
CFR 655.10, including allowing the use of employer-submitted surveys, 
and permitting voluntary use of an SCA or DBA wage if one was available 
for the occupation in the area of intended employment.
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    \11\ The Departments issued the 2013 IFR jointly to dispel 
questions that arose contemporaneously with its promulgation about 
the respective roles of the two agencies and the validity of DOL's 
regulations as an appropriate way to implement the interagency 
consultation specified in section 214(c)(1) of the INA, 8 U.S.C. 
1184(c)(1). See supra Sec. I.A.
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    Despite immediate implementation of the provisions of the 2013 IFR, 
the Departments requested comments on all aspects of the prevailing 
wage methodology of 20 CFR 655.10, including, among other things, 
whether the OES mean is the appropriate basis for determining the 
prevailing wage; whether wages based on the DBA or SCA should be used 
to determine the prevailing wage and if so, to what extent; and whether 
the continued use of employer-submitted surveys should be permitted and 
if so, how to better ensure their methodological soundness. The comment 
period closed on June 10, 2013, and the Departments received over 300 
comments on all aspects of the H-2B wage methodology from interested 
parties.\12\
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    \12\ A substantial number of comments on the IFR repeated, to a 
great extent, the same arguments that had been raised in connection 
with the 2011 rulemaking. See 76 FR at 3458-3463.

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[[Page 24150]]

    On July 23, 2013, DOL proposed the indefinite delay of the 
effective date of the 2011 Wage Rule, and accepted comments from the 
public on the proposed indefinite delay through August 9, 2013. 78 FR 
44054. The reasons for this delay were two-fold: First, at that time, 
Congress's continued denial of appropriated funds for this purpose, 
with no indication that the prohibition would be lifted in the future, 
made implementation of the 2011 Wage Rule effectively impossible. 
Second, at that time, the Departments were reviewing and analyzing the 
comments received on the 2013 IFR to determine whether changes to 20 
CFR 655.10 and 8 CFR 214.2(h)(6) were warranted in light of the public 
comments. For these reasons, on August 30, 2013, DOL published a final 
rule indefinitely delaying the effective date of the 2011 Wage Rule. 78 
FR 53643, 53645 (indefinite delay rule). In the final indefinite delay 
rule, DOL stated that when ``Congress no longer prohibits 
implementation of the 2011 Wage Rule, the Department [of Labor] will 
publish a document in the Federal Register within 45 days of that event 
apprising the public of the status of 20 CFR 655.10 and the effective 
date of the 2011 Wage Rule.'' Id. DOL also stated that, ``if Congress 
lifts the prohibition against implementation of the 2011 Wage Rule, the 
Department [of Labor] would need time to assess the current regulatory 
framework, to consider any changed circumstances, novel concerns or new 
information received, and to minimize disruptions.'' 78 FR at 53645.
    On January 17, 2014, the Consolidated Appropriations Act, 2014, 
Public Law 113-76, 128 Stat. 5, was enacted. In that law, for the first 
time in over two years, DOL's appropriations did not prohibit the 
implementation or enforcement of the 2011 Wage Rule. Moreover, on 
February 5, 2014, the U.S. Court of Appeals for the Third Circuit held 
that ``DOL has authority to promulgate rules concerning the temporary 
labor certification process in the context of the H-2B program, and 
that the 2011 Wage Rule was validly promulgated pursuant to that 
authority.'' La. Forestry ***'n v. Perez, 745 F.3d 653, 669 (3d Cir. 
2014). The Third Circuit further found that DOL did not act in 
contravention of the procedural requirements of the APA in issuing the 
2011 Wage Rule, and that the INA's requirement of the four wage tiers 
in the H-1B program, 8 U.S.C. 1182(p)(4), section 212(p)(4) of the INA, 
is not mandated in the H-2B program. Id. at 680. Under well-settled 
law, following the removal of the prohibitive rider, DOL was ``free to 
take any steps deemed necessary to implement, administer and enforce 
the regulations.'' Am. Fed'n of Gov. Employees v. OPM, 821 F.2d 761, 
764 (D.C. Cir. 1987).

D. The CATA III Decision and Its Impact on H-2B Wage Rulemaking

    As discussed above, given the swift deadline for compliance in the 
CATA II decision, the 2013 IFR adopted a focused approach, limited to 
eliminating the use of skill levels in setting wages under 20 CFR 
655.10(b)(2). 78 FR 24047, 24053. Although comments were solicited in 
the 2013 IFR on the use of employer-provided surveys and the use of the 
SCA and DBA wage determinations to set the prevailing wage, no changes 
were made in the 2013 IFR to 20 CFR 655.10(b)(4), (b)(5), or (f) from 
the 2008 rule, which governed those wage sources, or to the procedures 
for employers to request and receive a prevailing wage. Id. at 24053-
55.
    In 2014, CATA challenged the Departments' decision under the 2013 
IFR to continue to permit use of employer-provided surveys to set the 
prevailing wage under 20 CFR 655.10(f). Comite de Apoyo a los 
Trabajadores Agricolas v. Perez, No. 2:14-02657, 2014 WL 4100708 (E.D. 
Pa. July 23, 2014). In addition, CATA challenged DOL's continued use 
under the 2013 IFR of the 2009 Prevailing Wage Guidance,\13\ which 
continued to permit surveys to incorporate skill levels even though DOL 
had eliminated skill levels from prevailing wage determinations based 
on the OES methodology. Id. The District Court dismissed the case on 
procedural grounds. On December 5, 2014, the appellate court reversed 
the dismissal in Comite de Apoyo a los Trabajadores Agricolas v. Perez, 
774 F.3d 173, 191 (3d Cir. 2014) (CATA III), vacating both 20 CFR 
655.10(f), which established the conditions under which DOL would 
accept employer-provided surveys to set the prevailing wage, as well as 
the 2009 Prevailing Wage Guidance.
---------------------------------------------------------------------------

    \13\ The 2009 Prevailing Wage Guidance set the methodology for 
employer-provided surveys across the DOL-administered programs. See 
Prevailing Wage Determination Policy Guidance, Nonagricultural 
Immigration Programs, Revised (revised Nov. 2009) (``2009 Prevailing 
Wage Guidance'' or ``2009 guidance''), available at http://www.flcdatacenter.com/download/NPWHC_Guidance_Revised_11_2009.pdf.
---------------------------------------------------------------------------

    The CATA III court invalidated the use of employer-provided surveys 
in the H-2B program on both substantive and procedural grounds under 
the APA. First, the court held that DOL's failure to explain the broad 
acceptance of employer-provided surveys where an OES wage is available 
was procedurally invalid, particularly because this decision was a 
policy change from the 2011 Wage Rule's prohibition of most employer-
provided surveys as an alternative to the OES. 774 F.3d at 187-188. 
Next, the court held that Section 655.10(f) was arbitrary, and 
therefore substantively invalid under the APA, given DOL's findings in 
the 2011 Wage Rule, 76 FR at 3465, that the OES is the ``most 
consistent, efficient, and accurate means of determining the prevailing 
wage rate for the H-2B program.'' The court further considered issues 
that DOL had not addressed as part of the development of the 
administrative record in the 2011 Wage Rule; it held that the survey 
provision of the 2013 IFR was substantively invalid under the APA 
because the survey provision permitted wealthy employers to commission 
surveys that resulted in a lower prevailing wage than that paid by less 
affluent employers without means to produce such surveys, and resulted 
in significant variations in the prevailing wage within a single 
occupation in the same geographic location. 774 F.3d at 189-190. 
Finally, the court held that the 2009 Wage Guidance violated the APA 
because it allowed employers to submit employer-provided surveys that 
contained tiered wages based on skill levels. The court held that this 
conflicted with the CATA II order, which required prevailing wages to 
be calculated based on the mean of wages in the occupation without 
regard to skill levels, and 20 CFR 655.10(b) of the 2013 IFR, which 
eliminated tiered wages in the calculation of the OES wage. 774 F.3d at 
190-191.
    The court justified its decision to vacate the wage survey 
provision of the IFR, 20 CFR 655.10(f), along with the Wage Guidance. 
``[I]f we did not do so, we would leave in place a rule that is causing 
the very adverse effect that DOL is charged with preventing, and we 
would be `legally sanction[ing] an agency's disregard of its statutory 
or regulatory mandate.''' 774 F.3d at 191 (quoting CATA II, 933 F. 
Supp. 2d at 714). Thus, the court ``direct[ed] that private surveys no 
longer be used in determining the mean rate of wage for occupations 
except where an otherwise applicable OES survey does not provide any 
data for an occupation in a specific geographical location, or where 
the OES survey does not accurately represent the relevant job 
classification.'' Id. The court concluded by suggesting the immediate 
implementation of the 2011 Wage Rule on employer-provided surveys as an 
interim final rule,

[[Page 24151]]

explaining: ``That rule offers rational, lawful limits on the use of 
employer surveys, already has gone through notice and comment, has been 
funded by Congress in its 2014 authorization, and has been upheld by 
this Court. . . .'' Id. Because of CATA III's vacatur of that part of 
the wage regulation permitting the use of employer-provided surveys to 
set the prevailing wage, DOL immediately ceased accepting all employer-
provided surveys. In light of the vacatur of 20 CFR 655.10(f), DOL 
lacked legal authority to accept such surveys without engaging in 
additional rulemaking.
    Given the substantive concerns expressed by the CATA III court 
about the validity of employer-provided surveys in the H-2B program, 
DOL's options for accepting such surveys under this final rule are now 
necessarily more limited than under the 2013 IFR. The 2011 Wage Rule 
generally prohibited surveys, but allowed exceptions in specific 
situations in which the job may be in a geographic location that is not 
included in BLS's data collection for the OES or where the job 
opportunity is not ``accurately represented'' within the job 
classification used in those surveys, and those determinations were 
supported by DOL's contemporaneous fact-finding. 76 FR at 3466-3467. We 
asked the public in the 2013 IFR for any ``additional data on the 
accuracy and reliability of private surveys covering traditional H-2B 
occupations to allow for further factual findings on the sufficiency of 
private surveys for setting prevailing wage rates'' in light of the 
concerns expressed in the 2011 Wage Rule, 78 FR at 24055, and this 
preamble reviews below that input and makes additional administrative 
factual determinations.
    On March 14, 2014, DOL announced its decision to engage in further 
notice and comment rulemaking ``working off the 2011 Wage Rule as a 
starting point.'' 79 FR 14450, 14453. DOL concluded at that point that 
``recent developments'' in the H-2B program required additional 
consideration of the comments submitted in connection with the 2013 
IFR, and that further notice and comment was appropriate. Id. However, 
the U.S District Court for the Northern District of Florida's decision 
in Perez v. Perez, No. 3:14-cv-682 (N.D. Fla. Mar. 4, 2015) (Perez), 
discussed below now requires us to address the H-2B wage issues more 
expeditiously than planned in March 2014.
    In finalizing the 2013 IFR, the Departments underscore that 
stakeholders have had several opportunities since 2008 to comment on 
the three primary issues covered by this final rule: (1) The 
appropriateness of using the mean wage or tiered wage when basing the 
prevailing wage on the OES; (2) the appropriate role of the SCA and DBA 
wage rates in setting the H-2B prevailing wage; and (3) whether and 
under what circumstances an employer-provided survey could be used to 
set the prevailing wage. Most recently, we provided the public with the 
opportunity to comment on all aspects of this final rule in response to 
the 2013 IFR, and we received over 300 comments from a range of 
interested parties, including employers, worker advocates, and members 
of Congress. Therefore, we have balanced the Departments' and the 
public's interest in additional notice and opportunity for public 
comment against our current need to timely act in response to the Perez 
decision, discussed below, as well as our need to achieve some 
stability in the administration of the H-2B program. For these reasons, 
we have assessed the input received in response to the request for 
comments in the 2013 IFR, and we issue a final rule today based on the 
review and analysis of those comments.

E. Perez and Good Cause To Issue This Final Wage Rule With an Immediate 
Effective Date

1. The Perez Vacatur and Its Impact on Program Operations
    Three months after the CATA III decision, on March 4, 2015, the 
U.S. District Court for the Northern District of Florida, which 
previously had vacated DOL's 2012 H-2B rule and enjoined its 
enforcement in Bayou II, vacated the 2008 rule and permanently enjoined 
DOL from enforcing it. Perez v. Perez, No. 14-cv-682 (N.D. Fla. Mar. 4, 
2015). As in its decision in Bayou II vacating the 2012 H-2B rule, the 
court in Perez found that DOL had no authority under the INA to 
independently issue legislative rules governing the H-2B program. 
Perez, slip op. at 6. Based on the Perez vacatur order and the 
permanent injunction, DOL ceased operating the H-2B program to comply 
immediately with the court's order. Shortly after the court issued its 
decision, DOL posted a notice on its Web site informing the public that 
``effective immediately, DOL can no longer accept or process requests 
for prevailing wage determinations or applications for labor 
certification in the H-2B program.'' \14\
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    \14\ Employment and Training Administration, Announcements, 
http://www.foreignlaborcert.doleta.gov (Mar. 4, 2015).
---------------------------------------------------------------------------

    At the time of the Perez vacatur order on March 4, 2015, DOL had 
pending over 400 requests to set the prevailing wage for an H-2B 
occupation, and almost 800 applications for H-2B temporary labor 
certification representing approximately 16,408 workers. In order to 
minimize disruption to the H-2B program and to prevent economic 
dislocation to employers and employees in the industries that rely on 
H-2B foreign workers and to the general economy of the areas in which 
those industries are located, on March 16, 2015, DOL filed an unopposed 
motion requesting a temporary stay of the Perez vacatur order. On March 
18, 2015, the court entered an order temporarily staying the vacatur of 
the H-2B rule until and including April 15, 2015. On April 15, 2015, at 
the request of proposed intervenors, the court entered a second order 
extending the temporary stay up to and including May 15, 2015. The 
court in Perez requested briefing on several issues, including whether 
the plaintiff had standing to challenge the 2008 rule. The court's 
extension of the stay on April 15 occurred late in the day, after DOL 
had already initiated processes necessary to provide for an orderly 
cessation of the H-2B program and after DOL had already posted a notice 
to the regulated community on its Web site that the H-2B program would 
be closed again the next day. On April 16, 2015, following the court's 
stay extension, DOL immediately posted a new notice on its Web site 
that it would continue to operate the H-2B program as it existed at the 
time of the Perez vacatur order and resume normal operations.
    The court order in Perez did not vacate the 2013 IFR, and the 
court's concerns about DOL's independent regulatory authority do not 
impact the authority for issuing the 2013 IFR, which was promulgated 
jointly by DOL and DHS. However, although the Departments requested 
comment on all of the prevailing wage methodology for the H-2B program 
when they issued the 2013 IFR as discussed above, the 2013 IFR only 
amended the H-2B prevailing wage methodology in one way: it made a 
single change to 20 CFR 655.10(b)(2) to eliminate the use of skill 
levels in setting wages based on the OES. The 2013 IFR left the rest of 
the wage methodology and procedures from the 2008 rule untouched, and 
those provisions remained in effect until CATA III vacated 20 CFR 
655.10(f). The court order in Perez then vacated the remainder of 20 
CFR 655.10, except for 20 CFR 655.10(b)(2), which was amended in the 
2013 IFR and thus not subject to the Perez vacatur. Thus, the

[[Page 24152]]

Perez vacatur eliminated virtually all of DOL's wage methodology and 
procedures for setting prevailing wages, including the crucial 
regulatory provision that ``[t]he employer must request a prevailing 
wage determination from the NPC in accordance with the procedures 
established by this regulation'' set out at 20 CFR 655.10(a); the 
requirement that the prevailing wage be set at a CBA wage rate that was 
negotiated at arms' length between the union and the employer if there 
was a CBA covering the job opportunity in 20 CFR 655.10(b)(1); and the 
provision permitting the employer to request a DBA or SCA wage rate in 
20 CFR 655.10(b)(5). The combination of the vacatur of 20 CFR 655.10(f) 
in CATA III and the decision in Perez left DOL without a complete 
methodology or any procedures to set prevailing wages in the H-2B 
program.\15\
---------------------------------------------------------------------------

    \15\ While the provisions of 20 CFR 655.10 continued to be 
published in the Federal Register following the Perez decision, only 
20 CFR 655.10(b)(2), which was altered in the 2013 IFR, remains 
operative following Perez. Accordingly, the Departments discuss all 
provisions of 20 CFR 655.10 contained in the Federal Register on the 
date of the Perez decision in the past tense in this final wage 
rule, except for those contained in subparagraph (b)(2).
---------------------------------------------------------------------------

    DHS is charged with adjudicating petitions for a nonimmigrant 
worker (commonly referred to as Form I-129 petitions or, in this rule, 
``H-2B petitions''), filed by employers seeking to employ H-2B workers. 
But, as discussed earlier, Congress directed the agency to issue its 
decisions relating to H-2B petitions ``after consultation with 
appropriate agencies of the Government.'' 8 U.S.C. 1184(c)(1), INA 
section 214(c)(1). Legacy INS and now DHS have historically consulted 
with DOL on U.S. labor market conditions to determine whether to 
approve an employer's petition to import H-2B workers. See 73 FR 78104, 
78110 (DHS) (Dec. 19, 2008); 55 FR 2606, 2617 (INS) (Jan. 26, 1990). 
DOL plays a significant role in the H-2B program because DHS ``does not 
have the expertise needed to make any labor market determinations, 
independent of those already made by DOL.'' 73 FR at 78110; see also 55 
FR at 2626. Without consulting with DOL, DHS lacks the expertise to 
adequately make the statutorily mandated determination about the 
availability of United States workers to fill the proposed job 
opportunities in the employers' Form I-129 petitions. See 8 U.S.C. 
1101(a)(15)(H)(ii)(b), INA section 101(a)(15)(H)(ii)(b); 78 FR 24047, 
24050 (DHS-DOL) (Apr. 24, 2013). DHS regulations therefore require 
employers to obtain a temporary labor certification from DOL before 
filing a petition with DHS to import H-2B workers. See 8 CFR 
214.2(h)(6)(iii)(A), (C), (iv)(A). In addition, as part of DOL's 
certification, DHS regulations require DOL to ``determine the 
prevailing wage applicable to an application for temporary labor 
certification in accordance with the Secretary of Labor's regulation at 
20 CFR 655.10.'' 8 CFR 214.2(h)(6)(iii)(D).
    DOL has fulfilled its consultative role in the H-2B program through 
the use of legislative rules to structure its advice to legacy INS and 
now DHS for several decades. See 33 FR 7570-71 (DOL) (May 22, 1968); 73 
FR 78020 (DOL) (Dec. 19, 2008). Before DOL issued the 2008 rule, it 
supplemented its regulations with guidance documents that set 
substantive standards for wages and recruitment and structured the 
manner in which the agency processed applications for H-2B labor 
certification. See 73 FR at 78021-22. One district court has held that 
DOL's pre-2008 H-2B guidance document was a legislative rule that 
determined the rights and obligations of employers and employees, and 
DOL's failure to issue the guidance through the notice and comment 
process was a procedural violation of the APA. As a result, the court 
invalidated the guidance. See CATA I, 2010 WL 3431761, at *19, 25. 
Similarly, the U.S. Court of Appeals for the DC Circuit has held that 
DOL violated the procedural requirements of the APA when it established 
requirements that ``set the bar for what employers must do to obtain 
approval'' of the H-2A labor certification application, including wage 
and housing requirements, in guidance documents. Mendoza v. Perez, 754 
F.3d 1002, 1024 (D.C. Cir. 2014) (setting substantive standards for 
labor certification in the H-2A program requires legislative rules 
subject to the APA's notice and comment procedural requirements). The 
APA therefore prohibits DOL from setting substantive standards for the 
H-2B program through the use of guidance documents that have not gone 
through notice-and-comment rulemaking.
    The Departments are again facing the prospect of experiencing 
another program hiatus if and when the temporary stay expires on or 
before May 15, 2015. DOL's 2008 rule, which includes all the procedural 
provisions necessary for employers to request and DOL to issue a 
prevailing wage determination, is the only comprehensive mechanism in 
place for DOL to provide advice to DHS because the 2008 rule sets the 
framework, procedures, and applicable standards for receiving, 
reviewing, and issuing H-2B prevailing wages and labor certifications. 
DHS regulations require employers to obtain a temporary labor 
certification from DOL before filing a petition with DHS to import H-2B 
workers, and DHS is precluded by its own regulations from accepting any 
H-2B petition without a temporary labor certification from DOL. See 8 
CFR 214.2(h)(6)(iii)(A), (C), (iv)(A). In addition, as part of DOL's 
certification, DHS regulations require DOL to ``determine the 
prevailing wage applicable to an application for temporary labor 
certification in accordance with the Secretary of Labor's regulation at 
20 CFR 655.10.'' 8 CFR 214.2(h)(6)(iii)(D). Moreover, without advice 
from DOL, DHS lacks the capability to test the domestic labor market or 
determine whether there are available U.S. workers to fill the 
employer's job opportunity. As a result, if and when the stay concludes 
as currently scheduled on or before May 15, 2015 the vacatur of DOL's 
2008 rule will require DOL to once again cease operating the H-2B 
program, and DOL will again be unable to process employers' requests 
for prevailing wage determinations and temporary employment 
certification applications until the agencies can put in place a new 
mechanism for fulfilling the statutory directive to ensure that the 
importation of foreign workers will not harm the domestic labor market. 
See 8 U.S.C. 1101(a)(15)(H)(ii)(b), INA section 101(a)(15)(H)(ii)(b).
2. Good Cause To Make This Final Rule Effective Immediately
    The APA authorizes agencies to make a rule effective immediately, 
instead of imposing a 30-day delay, upon a showing of good cause. 5 
U.S.C. 553(d)(3). The APA's good cause exception to a delayed effective 
date is easier to meet than the APA's exception at 5 U.S.C. 553(b)(B) 
for dispensing with notice-and-comment.\16\ Riverbend Farms, Inc. v. 
Madigan, 958 F.2d 1479, 1485 (9th Cir. 1992); Am. Fed'n of Gov't Emp., 
AFL-CIO v. Block, 655 F.2d 1153, 1156 (D.C. Cir. 1981); U.S. Steel 
Corp. v. EPA, 605 F.2d 283, 289-90 (7th Cir. 1979). An agency can show 
good cause for eliminating the 30-day waiting period when it 
demonstrates the existence of urgent conditions the rule seeks to 
correct or seeks to address unavoidable time limitations. U.S. Steel 
Corp., 605 F.2d at 290; United States v.

[[Page 24153]]

Gavrilovic, 551 F.2d 1099, 1104 (8th Cir. 1977).
---------------------------------------------------------------------------

    \16\ The APA's good cause exception to notice and comment 
applies upon a finding that those procedures are ``impracticable, 
unnecessary, or contrary to the public interest.'' 5 U.S.C. 
553(b)(B).
---------------------------------------------------------------------------

    Under the APA's ``good cause'' exception, an agency can take steps 
to minimize discontinuity in its program after a court has vacated a 
rule by making a new rule effective immediately. Mid-Tex Elec. Coop. v. 
FERC, 822 F.2d 1123, 1131-34 (D.C. Cir. 1987) (upholding good cause to 
issue a post-remand interim rule without notice and comment or 30-day 
delayed effective date); see also Shell Oil Co. v. EPA, 950 F.2d 741, 
752 (D.C. Cir. 1991) (observing that where the agency had a regulatory 
void as the result of a vacatur of its rule, it should consider issuing 
an interim rule under the good cause exception because of the 
disruptions posed by discontinuity in the regulations); Action on 
Smoking and Health v. Civil Aeronautics Bd., 713 F.2d 795, 800 (D.C. 
Cir. 1983) (same). Moreover, courts find ``good cause'' to make a rule 
effective immediately under the APA when an agency is moving 
expeditiously to eliminate uncertainty or confusion that, left to 
linger, could cause tangible harm or hardship to the agency, the 
program, program users, or other members of the public. See, e.g., Mid-
Tex, 822 F.2d at 1133-34 (agency had good cause to proceed without 
notice and comment or 30-day delayed effective date to promote 
continuity and prevent ``irremedial financial consequences'' and 
``regulatory confusion''); Nat'l Fed'n of Fed. Employees v. Devine, 671 
F.2d 607, 609, 611 (D.C. Cir. 1982) (agency had good cause to proceed 
without notice and comment or 30-day delayed effective date based on 
emergency circumstances, including uncertainty created by pending 
litigation about significant aspects of the program, and potential harm 
to agency, to program, and to regulated community); AFGE. v. Block, 655 
F.2d at 1157 (agency had good cause to proceed without notice and 
comment or 30-day delayed effective date where absence of immediate 
guidance from agency would have forced reliance upon antiquated 
guidelines, creating confusion among field administrators, and caused 
economic harm and disruption to industry and consumers); Woods 
Psychiatric Inst. v. United States, 20 Cl. Ct. 324, 333 (1990), aff'd, 
925 F.2d 1454 (Fed. Cir. 1991) (agency had good cause when program 
would continue to suffer administrative difficulties that had 
previously resulted in litigation and might continue to result in 
litigation due to uncertainty and confusion over scope of benefits, 
program standards, and eligibility requirements).
    As a result of the Perez vacatur, DOL has already had to cease 
operating the H-2B program for two weeks in March 2015. DOL faces this 
prospect again at the expiration of the stay on or before May 15, 2015. 
The on-again-off-again nature of H-2B program operations has created 
substantial confusion, uncertainty and disarray for the agencies and 
the regulated community. The original vacatur order in Perez left DOL 
with hundreds of pending and time-sensitive applications for prevailing 
wages and temporary labor certifications. Two weeks later, following 
the court's stay of the vacatur and upon resumption of the H-2B 
program, those cases pending on the date of the vacatur created a 
backlog of applications, while, at the same time, employers began 
filing new applications for prevailing wages and certifications. DOL 
worked diligently and quickly to address the backlog and simultaneously 
keep up with new applications. Then, facing the expiration of the stay 
on April 15, 2015, DOL once again prepared to cease H-2B operations, 
which included posting a notice to the regulated community on its Web 
site that day announcing another closure, which was then obviated at 
the last minute by the court's extension of the stay late in the day on 
April 15. The next day, DOL announced that despite its earlier 
announcement, it would continue to operate the H-2B program as a result 
of the stay extension. These circumstances, which are beyond the 
Departments' ability to control, have resulted in substantial disorder 
and upheaval for the Departments, as well as employers and employees 
involved in the H-2B program.
    The Departments have concluded that because of the program hiatus 
caused by the Perez vacatur, the anticipated additional hiatus at the 
expiration of the stay of that order, and the uncertainty and confusion 
surrounding operation of the H-2B program, we have good and substantial 
cause to rely on the APA's exception, 5 U.S.C. 553(d)(3), to make this 
rule effective immediately.\17\ DHS and DOL must act expeditiously to 
enable the agencies to meet their statutory obligations under the INA 
and to prevent any further program disruption and economic dislocation. 
This final wage rule--which addresses a necessary component of the 
broader mandate of ensuring an adequate test of the U.S. labor market--
must come into effect on the same day as the companion H-2B 
comprehensive rule, in order to provide for a seamless continuity of 
the H-2B program administration and enforcement, and complete 
implementation of all regulatory provisions.\18\ Any delay in the 
effective date of this wage rule will require implementation of 20 CFR 
655.10 without all the provisions necessary to its complete 
implementation. Accordingly, the Departments are relying on the APA's 
good cause exception to the 30-day delayed effective date, 5 U.S.C. 
553(d)(3), to issue this new final rule establishing the methodology 
for DOL to determine the prevailing wage in the H-2B program with an 
immediate effective date.
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    \17\ We note that the Departments are not invoking the good 
cause exception to forego the APA's requirement of notice and 
comment, because this wage rule is a final rule following the 
request for comment in the 2013 IFR, and this preamble sets forth 
our consideration of those comments on all aspects of the wage 
methodology.
    \18\ The procedures for requesting a wage determination are set 
forth in the new comprehensive H-2B rule entitled, Temporary Non-
agricultural Employment of H-2B Aliens in the United States, and 
published simultaneously as a companion rule to this final wage 
rule.
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F. Comments Regarding DHS's Authority To Consult With DOL and To Set 
Wages

    While the comments received from the public overwhelmingly focused 
on the changes to the DOL prevailing wage methodology, a few 
submissions focused on DHS's authority to consult with DOL and to set 
wages. Some of these comments welcomed DHS's and DOL's joint 
promulgation of the 2013 IFR. Commenters stated that the IFR is 
consistent with statutory authority and that consultation with DOL is 
appropriate in light of DOL's expertise. A few commenters, however, 
stated that DHS improperly delegated its authority regarding the H-2B 
program to DOL. Another commenter also questioned why DHS does not 
consult with other government entities apart from DOL. Commenters also 
asked whether DOL had authority to promulgate the 2013 IFR. Finally, 
some commenters questioned DHS's statutory authority to set H-2B wages, 
stating that the INA does not support DHS's requirement that H-2B 
employment not adversely affect the wages and working conditions of 
United States workers.
1. DHS's Authority To Consult With DOL
    DHS disagrees with the comments that DHS improperly delegated its 
authority involving the H-2B visa classification to DOL. The general 
provision at 8 U.S.C. 1184(c)(1), INA section 214(c)(1) requires DHS to 
consult with other ``appropriate agencies of the Government'' in 
adjudicating a variety of nonimmigrant

[[Page 24154]]

visa petitions, including petitions for H (such as H-2B) nonimmigrants, 
based on the specific requirements of each visa category. The H-2B 
nonimmigrant classification allows employers to petition for H-2B 
beneficiaries only ``if unemployed persons capable of performing such 
service or labor cannot be found in this country.'' 8 U.S.C. 
1101(a)(15)(H)(ii)(b), INA section 101(a)(15)(H)(ii)(b). In compliance 
with the statutory requirement under 8 U.S.C. 1184(c)(1), INA section 
214(c)(1), DHS has identified DOL as the most appropriate agency to 
consult regarding the availability of U.S. workers and their wages and 
working conditions for purposes of classifying aliens as H-2B 
nonimmigrants under 8 U.S.C. 1101(a)(15)(H)(ii)(b), INA section 
101(a)(15)(H)(ii)(B), given DOL's expertise regarding U.S. labor. To 
satisfy the statutory consultation requirement, DHS regulations require 
that an H-2B petition for temporary employment in the United States be 
accompanied by an approved temporary labor certification from DOL. 8 
CFR 214.2(h)(6)(iii)(A) and (iv)(A). These regulations require DOL to 
make the threshold determination of whether a qualified U.S. worker is 
available to fill the petitioning H-2B employer's job opportunity. See 
8 CFR 214.2(h)(6)(iii)(A) and (D). Thus, DHS has permissibly 
conditioned part of its own decision to grant an H-2B visa petition on 
DOL's expert advisory opinion, that is, on DOL's determination whether 
a temporary labor certification should be granted. See La. Forestry, 
745 F.3d at 673-74 (citing U.S. Telecom ***'n v. FCC, 359 F.3d 554, 567 
(D.C. Cir. 2004)). In addition, as part of DOL's certification, DHS 
regulations require DOL to ``determine the prevailing wage applicable 
to an application for temporary labor certification in accordance with 
the Secretary of Labor's regulation at 20 CFR 655.10.'' 8 CFR 
214.2(h)(6)(iii)(D). It is similarly permissible for DHS to ``adopt a 
regulatory provision allowing the DOL to promulgate a narrow class of 
rules governing the temporary labor certification process. Without the 
ability to establish procedures to administer the temporary labor 
certification process, the DOL would not be able to fulfill the 
consulting role defined by DHS's charge to the DOL to issue temporary 
labor certifications.'' La. Forestry, 745 F.3d at 674.\19\
---------------------------------------------------------------------------

    \19\ DOL is presently litigating its independent authority to 
issue legislative rules in the H-2B program. See Bayou Lawn and 
Landscape Servs. v. Perez, No. 3:12-cv-183, 2014 WL 7496045 (N.D. 
Fla. Dec. 18, 2014), appeal pending, No. 15-10623E (11th Cir.); G.H. 
Daniels III & Assocs. v. Solis, No. 12-cv-01943, 2013 WL 5216453, at 
*5 (D. Colo. Sept. 17, 2013), appeal pending, No. 13-1479 (10th 
Cir.). The analysis provided in this rule concerning the 
Departments' consultative relationship under the INA makes clear 
that DOL has the statutory authority to issue legislative rules 
governing the temporary labor certification process. Thus, while 
there are other arguments that would equally justify DOL's issuance 
of legislative rules in this circumstance, the Departments do not 
think it necessary to provide a further discussion of this issue for 
the purposes of this rule.
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    Finally, DHS's authority to administer and enforce immigration laws 
is longstanding. See section 102 of the Homeland Security Act of 2002, 
Public Law 107-296, 116 Stat. 2135, 6 U.S.C. 112, and 8 U.S.C. 1103(a), 
INA section 103(a). To ensure that there can be no question about the 
authority and validity of DOL's prevailing wage determination 
regulations in fulfilling its consultative role with DHS, this final 
rule includes 8 CFR 214.2(h)(6)(iii)(D), which specifically sets forth 
DOL's role as the appropriate consultative agency for purposes of 
assisting DHS in addressing questions necessary to DHS's adjudication 
of H-2B petitions. Similarly, to ensure the validity of the regulations 
outlining procedures to determine prevailing wages, DHS and DOL are 
jointly issuing this final rule.
2. DHS's Authority To Set H-2B Wages
    DHS disagrees with comments stating that DHS lacks legal authority 
to set H-2B wages, and in particular, its authority to rely on DOL's 
advice, as a threshold matter, as to what constitutes the prevailing 
wage for H-2B occupations. DHS's authority to administer and enforce 
immigration laws through regulations is well established. See section 
102 of the Homeland Security Act of 2002, Public Law 107-296, 116 Stat. 
2135, 6 U.S.C. 112, and 8 U.S.C. 1103(a), INA section 103(a). Further, 
8 U.S.C. 1101(a)(15)(H)(ii)(b), INA section 101(a)(15)(H)(ii)(b) 
establishes the H-2B visa classification for a nonagricultural 
temporary worker ``. . . who is coming temporarily to the United States 
to perform . . . temporary [nonagricultural] service or labor if 
unemployed persons capable of performing such service or labor cannot 
be found in this country'' (emphasis added). In order to meet the 
statutory obligations required under 8 U.S.C. 1101(a)(15)(H)(ii)(b), 
INA section 101(a)(15)(H)(ii)(b), and to determine whether ``unemployed 
persons capable of performing such service or labor cannot be found in 
this country,'' an adequate testing of the U.S. labor market is 
necessary. Any meaningful test of the U.S. labor market requires that 
H-2B petitioning employers must attempt to recruit U.S. workers at the 
prevailing wage and pay H-2B beneficiaries such prevailing wages. As 
noted in detail above, DOL is the appropriate Government agency to set 
standards for testing the U.S. labor market, and to determine the 
manner in which prevailing wages affect such tests of the U.S. labor 
market. DHS has permissibly conditioned its approval of an H-2B 
petition on DOL's determination whether the U.S. labor market was 
adequately tested using the applicable prevailing wage. DHS retains the 
authority to deny a petition notwithstanding DOL's decision to grant a 
temporary labor certification. The regulatory provisions involving the 
determination of prevailing wages, which are jointly promulgated here, 
are necessary in order for DHS to meet the statutory obligations 
imposed under 8 U.S.C. 1101(a)(15)(H)(ii)(b), INA section 
101(a)(15)(H)(ii)(b).
    Accordingly, in this rule, DHS is adopting the revision to 8 CFR 
214.2(h)(6)(iii)(D) in this rulemaking without change.

II. Methodology for Determining the Prevailing Wage

A. Use of the Occupational Employment Statistics Survey

1. Application of Two- and Four-tiered Wage Structures to OES in H-2B: 
1998-2011
    In 1998, DOL first implemented use of the OES survey as an 
efficient and cost-effective way to develop consistent and accurate 
prevailing wage determinations in the H-2B program. See GAL 2-98, 
``Prevailing Wage Policy for Nonagricultural Immigration Programs'' 
(November 30, 1998). The OES wage survey, issued by the Bureau of Labor 
Statistics (BLS), is among the largest continuous statistical survey 
programs. 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 obtained, 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,

[[Page 24155]]

tips, and on-call pay are included. These features are unique to the 
OES survey, which is a comprehensive, statistically valid, and useable 
wage reference, and widely used in the DOL's other foreign labor 
certification programs (H-1B and PERM). 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.
    BLS surveys workers' wages based on the 2010 Standard Occupational 
Code (SOC) system, which is used by Federal statistical agencies to 
classify workers into occupational categories for the purpose of 
collecting, calculating, or disseminating data.\20\ All workers are 
classified into one of 840 detailed occupations according to their 
occupational definition.\21\ To facilitate classification, detailed 
occupations are combined to form 461 broad occupations, 97 minor 
groups, and 23 major groups. Detailed occupations in the SOC with 
similar job duties, and in some cases skills, education, and/or 
training, are grouped together. However, the OES survey captures no 
information about differences within the groupings based on skills, 
training, experience or responsibility levels of the workers whose 
wages are being reported.
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    \20\ The OES data are used for many purposes in government. For 
example, BLS uses the data to make quarterly benchmark adjustments 
for the Employment Cost Index. See http://www.bls.gov/news.release/eci.toc.htm. BLS also uses the OES employment data as the 
``denominator'' to calculate rates for the Occupational injury and 
illness rates. See http://www.bls.gov/news.release/osh.toc.htm. OES 
employment and wage distributions are used by the Bureau of Economic 
Analysis to estimate social security receipts. See http://www.bea.gov/newsreleases/national/pi/pinewsrelease.htm. See also 
``What are the OES data used for?'' http://www.bls.gov/oes/oes_ques.htm.
    \21\ On May 22, 2014, the Office of Management and Budget (OMB) 
published a Federal Register notice announcing its periodic review 
of the 2010 SOC manual for revision in 2018 and soliciting public 
comment. For a timetable of the SOC revision process, see http://www.bls.gov/soc/.
---------------------------------------------------------------------------

    Despite the change in 1998 from reliance on State workforce agency 
surveys to the OES survey in the H-2B program, DOL continued its prior 
practice of setting a prevailing wage based on two skill levels--
``entry level'' and ``experienced level''--as previously set out in GAL 
4-95 and subsequently reiterated in GAL 2-98. Because, as noted above, 
the OES does not provide data about skill differential within SOC 
codes, DOL established the entry and experienced skill levels 
mathematically. In 1998, the entry level, or Level I, wage was set at 
the mean of the lower one-third of the survey universe (approximately 
the 17th percentile), and the experienced level, or Level II, wage was 
the mean wage of workers in the upper two-thirds of the survey universe 
(approximately the 67th percentile). These two ``skill level'' tiers 
were expanded in 2005 guidance to include four ``skill levels''--
``entry level,'' ``qualified,'' ``experienced,'' and ``fully 
competent''--and, based on a linear interpolation, Levels 1 through IV 
were set, respectively, at approximately the 17th percentile, the 34th 
percentile, the 50th percentile, and the 67th percentile.\22\ In 2008, 
DOL proposed and finalized regulations governing the H-2B temporary 
worker program, and that rule essentially codified various aspects of 
the 2005 guidance, including the requirement that the prevailing wage 
for labor certification must include skill levels (73 FR 29942, May 22, 
2008 (2008 NPRM); 73 FR 78020, Dec. 19, 2008 (2008 rule), and DOL's 
sub-regulatory guidance continued to require four skill levels. Because 
the four-tiered wage structure had already been implemented through 
guidance documents, the 2008 rule did not seek comment on the 
codification of four ``skill levels'' in the H-2B regulations.
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    \22\ The expansion from two to four skill levels in 2005 stemmed 
from 2004 legislation enacting section 212(p)(4) of the INA, 8 
U.S.C. 1182(p)(4), requiring the prevailing wage issued by DOL in 
the H-1B temporary specialty worker visa program to include four 
tiers commensurate with experience, education, and level of 
supervision. The DOL applied that statutory formula to H-2B 
temporary labor certification applications as well as the H-1B and 
permanent labor certification programs although there was no 
corresponding statutory provision for the H-2B program. See ETA 
Prevailing Wage Determination Policy Guidance, Nonagricultural 
Immigration Programs (revised May 9, 2005) (``2005 PWD guidance'' or 
``2005 guidance''), available at http://www.foreignlaborcert.doleta.gov/pdf/policy_nonag_progs.pdf.
---------------------------------------------------------------------------

2. Elimination of Tiered Wage Structure in H-2B: 2011-present

    As discussed above in Sec. I. B., supra, the lack of notice-and-
comment rulemaking in the 2008 rule on the issue of the four-tiered 
wage structure in the H-2B program resulted in a court ruling in 2010 
that the implementation of the tiered wages violated the APA. CATA I, 
2010 WL 3431761. The CATA I decision required DOL to, among other 
things, issue a new wage methodology rule that complied with the APA's 
notice and comment requirements. Accordingly, DOL engaged in notice-
and-comment rulemaking that resulted in the elimination of the tiered 
wage structure in its 2011 Wage Rule. 75 FR 61578 (Oct. 5, 2010); 76 FR 
3452 (Jan. 19, 2011). DOL based the elimination of the ``skill levels'' 
in the 2011 Wage Rule on the conclusion 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. 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.

76 FR at 3459 (footnote omitted). DOL further concluded that ``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.'' 76 FR at 3460. 
Noting that the comments on the 2010 proposal did not present data or 
analysis to the contrary, DOL concluded in the final rule 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.'' Id. Ultimately, DOL concluded that the use of 
tiered wages in the H-2B program adversely affected U.S. workers 
because it ``artificially lowers [wages] to a point that [they] no 
longer represent[] a market-based wage for that occupation.'' 76 FR at 
3463. The application of the four tiers set a wage ``below what the 
average similarly employed worker is paid[,]'' and ``the net result is 
an adverse effect on the [U.S.] worker's income.'' Id. With the 
elimination of the wage tiers in the 2011 Wage Rule, when the 
prevailing wage determination was based on the OES survey, the 
prevailing wage was set at the mean of the wages of workers in the 
occupation in the area of intended employment.
    As noted above, because of Congressional riders, the 2011 Wage Rule 
was never implemented, and DOL continued to implement the four-tiered

[[Page 24156]]

approach established in the 2008 rule. In 2013, the CATA II decision 
permanently enjoined DOL from using the four-tiered approach and 
vacated the corresponding provision in the 2008 rule. 933 F. Supp. 2d 
700, 711-716. CATA II held that because DOL concluded in the 2011 Wage 
Rule that the four wage tiers ``artificially lower[ ] wage[s] to a 
point that [they] no longer represent . . . market-based wage[s] for 
the occupation'' and ``have a depressive effect on the wages of [United 
States workers,]'' 76 FR at 3477, they were in violation of the INA and 
DHS regulations, each of which explicitly preclude the grant of labor 
certifications to foreign workers whose employment may ``adversely 
affect wages and working conditions of similarly employed United States 
workers.'' CATA II, 933 F. Supp. 2d at 712-713 (citing 8 U.S.C. 
1101(a)(15)(H)(ii)(b), INA section 101(a)(15)(H)(ii)(b); 8 CFR 
214.2(h)(6)(iv)(A)). In response to CATA II, DOL and DHS issued the 
2013 IFR, which, for the OES component of the prevailing wage 
determination, again eliminated the four-tiered wages, and established 
the mean of workers' wages in the occupation in the area of intended 
employment as the set point for a prevailing wage determination based 
on the OES survey. 78 FR 24047.
3. Comments on the IFR's Elimination of Wage Tiers
    In the 2013 IFR, the Departments specifically invited comments on 
``whether the OES mean is the appropriate basis for determining the 
prevailing wage.'' 78 FR at 24053. All worker advocates who commented 
expressed general support for the continued use of the OES mean, 
stating it was far preferable to the 2008 rule's four-tiered approach. 
They agreed with the Departments' finding in the IFR that dividing 
wages into four skill levels artificially lowered wages. In their view, 
the use of the OES mean substantially improves the protection of the 
wages and working conditions of U.S. workers because most H-2B jobs 
require little or no prior training or experience. They also agreed 
with the Departments' conclusion that a four-tiered approach is 
inappropriate because there are no significant skill-based wage 
differences in the H-2B occupations. Numerous H-2B employers and 
associations of employers generally opposed the use of the OES mean 
wage, and most advocated for a return to the four-tiered structure.\23\ 
In their view, the OES mean overstates the prevailing wage for most H-
2B positions because H-2B workers typically possess only entry level 
skills, yet under the OES mean they are paid a rate higher than more 
skilled permanent workers. Thus, in their view, H-2B workers typically 
should be compensated at the lowest of the four tiers established for a 
position. These commenters emphasized the impact of the substantially 
increased labor costs associated with the use of the OES mean wage and 
the detrimental effect on the profitability of their businesses. Many 
commenters expressed particular concern about the impact of the OES 
mean on small businesses, many predicting that it would make it 
impossible for many employers to continue in business, resulting in a 
direct ``adverse effect'' on the employment of U.S. workers.
---------------------------------------------------------------------------

    \23\ Although most employers advocated for a return to the 
practice under the 2008 rule, several also supported as an 
alternative the approach included in the Border Security, Economic 
Opportunity, and Immigration Modernization Act, S. 744, 113th Cong. 
(2013), which was adopted by the Senate in June 2013 as part of its 
consideration of comprehensive immigration reform (hereinafter S. 
744). S. 744's relevant provision, section 4211(a), reads, in part, 
``if there is no [CBA or DBA/SCA wage], the wage level [shall be] 
commensurate with the experience, training, and supervision required 
for the job based on Bureau of Labor Statistics data.'' Although it 
calls for wage levels or tiers, the bill does not specify the 
requisite number of levels. Moreover, as noted above, BLS does not 
issue data that takes these factors into account within an SOC.
---------------------------------------------------------------------------

    Some commenters disagreed with DOL's premise in 2011, i.e., that a 
single prevailing wage is appropriate for each occupation in the H-2B 
program because ``the majority of H-2B jobs reflect no or few skill 
differentials[.]'' 76 FR at 3459. They asserted that if the premise was 
true, there should be no significant differences between the average 
wage and the Level I wage under the four-tier wage system (the average 
wage paid to workers in the lower third of the wage distribution for 
the occupation). In their view, the significant difference between the 
OES mean wage and the mean wages computed for the lowest tier under the 
four-tier approach demonstrates that significant skill differentials 
exist within H-2B occupations.
a. Support for Using the OES Mean
    Several worker advocates included the same basic position in their 
comments that a four-tier approach is inappropriate because there are 
no significant skill-based wage differences in the occupations that 
predominate in the H-2B program, and to the extent such differences 
exist, the differences are not captured by the existing four-tier 
system. In their view, eliminating tiers is appropriate because H-2B 
jobs require little or no experience and the use of the OES mean better 
protects U.S. wages and working conditions.
    One commenter, an economic advocacy group, acknowledged that the 
use of the OES mean was a significant improvement over the approach 
taken in the 2008 rule. In its view, however, the IFR does not 
sufficiently protect the wages and working conditions of all workers in 
positions using H-2B workers. Setting the wage at the OES mean will 
pressure employers to establish the OES mean as the norm for a 
position, resulting in the eventual reduction in higher wages now 
received by U.S. workers in the position. According to this commenter, 
the only way to ensure that there is no reduction in wages paid to U.S 
workers would be to set the H-2B wage at the highest wage for a 
position. As an alternative to this method, it suggested that the 
Employment and Training Administration (ETA) use the OES 90th 
percentile wage rate for a position, which the commenter asserted would 
adequately protect the interests of U.S. workers.
    The Departments received extensive comments from the forestry 
industry. One commenter suggested that the OES mean should be used for 
all H-2B jobs requiring little or no training (all O*NET Job Zone 1 
positions) absent higher wages under a CBA, SCA, or DBA for a 
particular job. For H-2B jobs requiring some training (O*NET Job Zone 2 
and 3 positions), it stated that the OES mean should also generally be 
used.\24\ However, as discussed in the section that follows on the use 
of the SCA and DBA wage determinations to set the prevailing wage, a 
number of commenters stated that the SCA occupational codes and job 
descriptions generally better fit the forest industry's H-2B jobs than 
those used in the OES.
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    \24\ See Procedures for O*NET Job Zone Assignment (March 2008), 
Appendix, available at: http://www.onetcenter.org/dl_files/JobZoneProcedure.pdf. In short, the 5 Job Zones are as follows: Job 
Zone 1 requires little or no preparation; Job Zone 2 requires some 
preparation; Job Zone 3 requires medium preparation; Job Zone 4 
requires considerable preparation; and Job Zone 5 requires extensive 
preparation.
---------------------------------------------------------------------------

b. Opposition to Using the OES Mean
    Several employers and associations of employers preferred the use 
of tiered wage rates because such rates, in their view, reflect the 
actual demands of the positions for which they seek H-2B or U.S. 
workers. Most of these commenters expressed an interest in preserving 
the approach set forth in the 2008 rule. Some commenters asserted that 
DOL was bound by the appropriations legislation to apply the four-
tiered

[[Page 24157]]

approach.\25\ Many commenters expressed an interest in preserving a 
tiered approach, without expressing a strong preference among the 2008 
rule, ETA's 2005 PWD guidance,\26\ or the approach outlined in 
bipartisan immigration reform legislation considered and passed out of 
the U.S. Senate in 2013 (S. 744). Others supported one or more of these 
approaches as alternatives to their preferred approach; others 
preferred the S. 744 approach alone.
---------------------------------------------------------------------------

    \25\ Although this argument is not developed at length by the 
commenters, they appear to contend that because Congress previously 
had barred implementation of the 2011 Wage Rule, which eliminated 
the use of tiered wages, it intended to deny the use of appropriated 
funds to promulgate any rule, such as the IFR, which also eliminates 
their use.
    \26\ 2005 PWD guidance explained supra.
---------------------------------------------------------------------------

    Many commenters cited to a study conducted by an H-2B employer 
coalition, predicting a substantial across-the-board increase in labor 
costs from the use of the OES mean rather than tiered wages. Some 
commenters emphasized the impact that use of the OES mean would have on 
wages within particular industries. For example, one commenter asserted 
that in the forestry industry wage-rate increases would exceed 20 
percent in most areas and exceed 60 percent in Arkansas, Idaho, and 
Virginia. Another commenter stated that landscape employers, based on 
new wage determinations, would face an average wage increase in H-2B 
wage rates of $3.27 an hour, or more than 36.9 percent. To emphasize 
its point about the large, unexpected increases experienced by 
employers within its industry, this commenter included a chart showing 
by state the amount and percentage of increases. To underscore a 
similar point across industries, the workforce coalition included a 
chart showing, by state and occupation, the amount and percentage 
increases that result from using the OES mean. While many commenters 
complained about the effect of using the H-2B rule on their particular 
industries (e.g., landscaping, transient amusement, lodging), a few 
commenters sought specific exemptions for their industries.
    One commenter (describing itself as a group of ``H-2B employers, 
agents who help small businesses . . ., and legal and economic 
experts'') made the following claims to support its view that the OES 
skill-levels should be used to set prevailing wages:
     use of tiered wage levels could not allow employers to pay 
H-2B workers a lower wage than was appropriate because ETA certified 
the wage level;
     the OES mean wage inflates the wages for more than half 
the H-2B workers in a particular occupation;
     the 2011 Wage Rule's focus on wage depression for H-2B 
workers should have been outweighed by concerns about the impact of the 
ultimate wage depression on U.S. workers--the loss of their jobs;
     preventing wage deflation for H-2B workers does not 
protect domestic workers because the vast majority of H-2B applications 
involve 25 or fewer workers and the total number of H-2B workers is too 
small to impact domestic workers; \27\
---------------------------------------------------------------------------

    \27\ This group provided an extensive submission on the tiered 
wage issue, and the comment contained numerous exhibits, including 
articles, wage comparisons, and declarations submitted in lawsuits 
involving the H-2B program.
---------------------------------------------------------------------------

     the 2013 IFR's analysis of wage depression was flawed 
because ``the mean exceeds the median of the [wage] distribution. This 
means that a majority of workers, permanent or temporary, skilled or 
entry level, earn less than the arithmetic mean'';
     the 2013 IFR inappropriately did not consider that the 
presence of temporary foreign workers is complementary and improves the 
job security of permanent U.S. workers, making ``[t]he wage depression 
issue'' irrelevant;
     the 2013 IFR's stated premise, i.e., that tiered wage 
rates are inappropriate because ``almost all H-2B jobs involve 
unskilled occupations requiring few or no skill differentials,'' 78 FR 
24047, 24053, is incorrect because, in the commenter's view, wage 
variation within H-2B occupations necessarily indicates differing skill 
levels for workers in the H-2B program; and
     the use of a single prevailing wage for a classification 
that includes different tasks, skills, and experience, ``makes no 
economic sense'' and will prevent the hiring of workers with the lowest 
skills in those categories.\28\
---------------------------------------------------------------------------

    \28\ It provided the following examples from DOL's Standard 
Occupational Classification system to assert that workers are not 
``similarly employed'' or ``substantially comparable.'' 
``Landscaping and Grounds Keeping Workers'' includes workers who 
install sprinkler equipment as well as workers who pull weeds; 
``Amusement and Recreation Attendants'' includes workers in video 
arcades, marinas, golf courses, and ski resorts; and ``Lifeguards'' 
includes lifeguards at the local public swimming pool as well as 
members of a ski patrol at winter ski resorts.
---------------------------------------------------------------------------

    A different commenter, an association of H-2B employers, stated 
that by requiring H-2B workers to be paid at the OES mean, the 
Departments denied some H-2B workers wages they were previously paid at 
a higher skill level. Several other commenters expressed similar 
concerns, and made the following points:
     DOL should provide data to support its position that 
``skill levels as determined currently do not reflect wage levels in 
lower skilled jobs.'' It is arbitrary to require the same rate be paid 
for a hotel housekeeping position without regard to whether the 
employee is able to clean 5 or 15 rooms per day;
     wages must be market driven, reflecting both the demand 
for workers for various seasonal positions not filled locally and the 
levels of experience available within the labor pool of seasonal and 
visitor workers;
     conflating tiers 1 through 4 compels employers to pay a 
wage rate that is appropriate for a more skilled worker than the lower-
skilled worker requested by its application, which upwardly skews its 
labor costs not only for the H-2B workers but also for other 
individuals it employs;
     use of the OES mean is based on the false premise that 
unskilled entry-level positions should be paid an amount that greatly 
exceeds the Federal minimum wage;
     use of the OES mean requires an employer to pay an H-2B 
wage that is not based on the appropriate entry-level wage for the 
position, but instead a rate that includes wages paid to more 
experienced workers in the position or those with supervisory duties. 
The ``premium'' paid to the more experienced workers and supervisors 
appropriately reflected the nature of their jobs as year-round, 
permanent employees, differentiating them from temporary, supplemental 
employees;
     the OES mean reflects, in part, the wages paid to workers 
that have greater training, experience, and education than entry-level 
H-2B employees. It is inappropriate to include in the prevailing wage 
computation the rates paid to senior, experienced workers whose 
contributions to the employer's operations are greater than the H-2B 
workers because the senior workers require less supervision and are 
involved in fewer accidents than the entry-level workers; and
     the OES mean arbitrarily inflates the wages of entry-level 
workers and deflates the wages of more experienced workers. A ``one-
size-fits all approach ignores real-world wage differentiation factors 
such as supervisory duties, responsibilities, seniority/tenure, talent, 
dependability and efficiency.'' The regulatory history supports the use 
of setting wages based on the skill required for a position. Before 
2005, where an applicant was the only employer in an area of intended 
employment, setting the H-2B wage required an analysis of

[[Page 24158]]

the skill and experience levels of the occupation. The term ``similarly 
employed'' was defined, in part, in DOL's permanent labor certification 
(PERM) regulations as ``jobs requiring a substantially similar level of 
skills within an area of intended employment.'' 20 CFR 656.40(b).
c. Comments Specific to the Forestry Industry
    A number of commenters, including worker advocates and employers in 
the industry, expressed the view that the SCA rates better reflect 
wages paid in the forestry industry than the OES mean.\29\ A group of 
worker advocates favored the general use of the SCA rates where they 
apply, instead of the OES mean for H-2B jobs in this industry. This 
comment asserted that where H-2B jobs are grouped together with other 
jobs that cannot be included accurately in the same O*NET Job Zone, ETA 
should establish O*NET sub-codes for such positions.\30\ It explained 
that where a particular SOC code contains a mix of jobs--some requiring 
little preparation, but many others requiring substantially more 
preparation--the OES mean wage inflates the wages for jobs requiring 
little preparation. The group proposed that where ETA and its O*NET 
partners have identified sub-occupations with different O*NET levels 
within a single SOC code, ETA, in consultation with BLS, should 
establish a methodology to determine the prevailing wages for those 
positions. It proposed that in the interim ETA should adjudicate, on a 
case-by-case basis, the wage rates for affected occupations. 
Apparently, the group would have ETA determine whether a particular 
position requires more or less preparation than typical for other jobs 
within the OES classification, and then provide notice of such 
adjudication and an opportunity for labor organizations and worker 
advocacy groups to participate. Additionally, it stated that, absent 
strong evidence to the contrary, ETA should establish as a floor for 
``mixed occupational SOC codes'' a wage rate not less than 95% of the 
OES rate for that code. The group asserted that relatively few H-2B 
jobs require substantial prior training (O*NET Job Zones 4 and 5) and 
questioned whether such jobs are appropriate for H-2B certification. 
For such positions, however, it stated that the presumption should be 
that the OES mean wage is appropriate.
---------------------------------------------------------------------------

    \29\ These comments are also addressed in Sec. II.B., infra, in 
the discussion of the use of the SCA wage determinations to set the 
prevailing wage in the H-2B program.
    \30\ O*NET is sponsored by ETA through a grant to the North 
Carolina Department of Commerce, which operates the National Center 
for O*NET Development through a partnership of public and private-
sector organizations. The O*NET program is the nation's primary 
source of occupational information. Central to the project is the 
O*NET database, containing information on hundreds of standardized 
and occupation-specific descriptors. The database, which is 
available to the public at no cost, is continually updated by 
surveying a broad range of workers from each occupation. The O*NET 
program groups occupations into five ``Job Zones.'' Each Job Zone 
acts as a grouping of occupations that are similar with regard to: 
How much education is needed to do the work, how much related 
experience people need to do the work, and how much on-the-job 
training people need to do the work. See http://www.onetcenter.org/about.html and https://www.onetonline.org/help/online/zones.
---------------------------------------------------------------------------

    An employer stated that gaps in the OES survey data result in 
extreme differences from county to county when compared year to year 
and that wide variations in required OES wages for adjoining counties 
demonstrate that the rates do not reflect actual wage rates paid to 
workers in the counties. In its view, the SCA rates better reflect the 
true prevailing wage for forestry occupations in an area, but it 
suggested that the H-2A program provided a better model for its 
industry. This commenter stated that ETA should establish state or 
regional rates for forestry work based on wages paid within the same 
multi-state regions used in the H-2A program. Alternatively, it 
suggested that ETA could establish larger geographical regions that 
follow the seasonal migratory patterns for forestry-related work: A 
Northeast Region, a Midwest and Great Lakes Region, a Pacific and 
Northwest Region, a Southwest Region, and a Southern Region. As a 
second possible alternative to the existing system, the commenter 
advocated the use of an average state-wide wage to avoid the wide 
divergence in rates from one particular local area of employment to 
another.
d. Other Comments
    An individual commenter in the public sector stated that the use of 
skill levels, where level one becomes the default level for H-2B 
workers, could have an adverse effect on U.S. workers. At the same 
time, the commenter expressed concern that the use of the OES mean 
rate--without regard to skill--could lead to workers with different 
skills and education receiving the same level of pay. As an example he 
chose the OES ``Construction Managers'' category, which groups 
construction foreman and job superintendent, positions that in his view 
both required job experience but only one of which (job superintendent) 
required a college degree. The commenter suggested that each position 
likely would receive the same H-2B rate of pay, despite the different 
educational requirements for the two positions. He suggested that the 
use of some tiers, but not necessarily four, would be more appropriate 
than using the OES mean.
    Another individual commenter suggested that ETA create a two-tiered 
system based on the percentage differences between the average wage 
issued for a position in fiscal years 2011 and 2012 and the mean wage 
for that position. He characterized his approach as follows: ``Wage 
Tier 1 = the mean of the lowest \1/3\ of the wages reported. Wage Tier 
2 = the mean of the top \2/3\ of wages reported.''
    Some commenters, including a group of employers, employer agents, 
lawyers and economists, criticized DOL's reading of the court's order 
in CATA II to require the OES mean wage. This group claimed that the 
use of the OES mean is not required by CATA II; in its view, the 
decision only required DOL to stop using the skill levels that the 
Office of Foreign Labor Certification (OFLC) had long been using. Two 
associations of H-2B employers asserted that the Departments presented 
no evidence that H-2B workers occupy positions where similarly employed 
U.S. workers are actually paid the mean OES wage. They also asserted 
that DOL does not apply the arithmetic mean for wage determinations in 
its other labor certification programs.
4. Decision To Retain the Mean Wage When Issuing a Prevailing Wage 
Based on the OES
    After reviewing the use of the OES survey in setting the prevailing 
wage in the H-2B program, including consideration of all the comments 
received on the 2013 IFR, the Departments have decided to continue to 
set the prevailing wage at the mean wage of all workers in the 
occupation in the area of intended employment when the prevailing wage 
is based on the OES survey. As discussed in the preambles to the 2010 
NPRM, the 2011 Wage Rule, and the 2013 IFR, it remains our view that 
the OES mean better protects U.S. workers from adverse effect than the 
tiered-wage approach used previously in the H-2B program.
    A basic principle of supply-and-demand theory in economics is that 
in market economies, shortages signal that adjustments should be made 
to maintain equilibrium. Therefore, if employers experience a shortage 
of available workers in a particular region or occupation, compensation 
should rise as needed to attract workers. Market signals such as labor 
shortages that would normally drive wages up may become distorted by 
the availability of

[[Page 24159]]

foreign workers for certain occupations, thus preventing the optimal 
allocation of labor in the market and dampening increased compensation 
that should result from the shortage. In enacting the foreign worker 
programs, generally, Congress has recognized the potential for market 
distortion by requiring in labor certification programs generally that 
the availability of foreign workers must not adversely affect the wages 
and working conditions of U.S. workers. See, e.g., 8 U.S.C. 
1182(a)(5)(A)(i)(II), INA section 212(a)(5)(A)(i)(II); 8 U.S.C. 
1188(a)(1)(B), INA section 218(a)(1)(B). In its long-standing 
regulations, DHS has required this showing for the H-2B program. See, 
e.g., 8 CFR 214.2(h)(6)(iii)(A).
    As in 2010 and 2013, we considered, but ultimately rejected, 
reinstituting a tiered wage system for H-2B employment.\31\ We have 
revisited the question whether we should return to the practice used 
between 1995 and 2008, in which DOL employed a two-tiered system 
composed of an ``entry level'' and an ``experienced level'' wage as an 
alternative to the OES mean. However, we conclude that such an approach 
would not adequately protect the wages and working conditions of U.S. 
workers. This position is informed by DOL's prior conclusion that 
``there are no significant skill-based wage differences in the 
occupations that predominate in the H-2B program. . . .'' 76 FR at 
3460. In the 2011 Wage Rule, DOL analyzed 4694 wage determinations over 
a ten-month period in 2010, and found that 74 percent of the 
determinations were issued at Level I; 10.5 percent were issued at 
Level II; 8.2 percent were issued at Level III; and 6.9 percent were 
issued at Level IV. 76 FR at 3468. Overall, in approximately 93 percent 
of those cases analyzed (summing the percentage of determinations 
issued at Levels I, II and III), wage rates were issued for H-2B 
occupations that were below the OES mean for the same occupation. Based 
on those findings, DOL concluded that the use of skill levels adversely 
affected U.S. workers because it ``artificially lowers [wages] to a 
point that [they] no longer represent[ ] a market-based wage for that 
occupation[,]'' and that ``the net result is an adverse effect on the 
[U.S.] worker's income.'' 76 FR at 3463; see also 75 FR 61578, 61580-
81. Similarly, the preamble to the 2013 IFR stated that the OES mean is 
the appropriate wage level because almost all H-2B jobs involve 
unskilled occupations requiring few or no skill differentials. 78 FR at 
24053. The 2013 IFR reiterated the conclusion that ``there was 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.'' Id.
---------------------------------------------------------------------------

    \31\ In light of the CATA II holding and the findings by the DOL 
on which it is based, we concluded that a return to the four-tiered 
approach was not feasible.
---------------------------------------------------------------------------

    DOL continues to see the pattern identified in 2011, in which Level 
I wages (approximately the 17th percentile) predominate where a tiered 
wage structure is in place. DOL conducted a fresh analysis for this 
rule of the frequency with which the former Level I wages occur in 
prevailing wage determinations under a tiered wage structure. In a 
statistically significant random sample of 472 wage determinations 
issued in FY 2012, before implementation of the IFR, DOL found that 344 
determinations, or 72.88 percent of the sample, were issued at Level I; 
68 wage determinations, or 14.41 percent of the sample, were issued at 
Level II; 41 wage determinations, or 8.69 percent of the sample, were 
issued at Level III; and 19 wage determinations, or 4.03 percent of the 
sample, were issued at Level IV. As a result, approximately 96 percent 
of the wage determinations analyzed in the 2012 sample (summing the 
percentage of determinations issued at Levels I, II and III) were below 
the OES mean wage. Based on this analysis, DOL remains convinced that 
when tiered wages are available and the tiers are set below the mean, 
the average wage of workers in the occupation is driven down, resulting 
in an adverse effect on U.S. workers' wages caused by the influx of 
foreign workers.
    Moreover, a tiered approach in the H-2B program has been an 
inadequate proxy for skill or other characteristics associated with 
wages, thereby discrediting comments on the 2013 IFR suggesting that 
any variation in wage payments when tiers are in place reflects 
remuneration for relative skill or proficiency. These commenters argued 
that if the premise that there are a few or no skill differences in H-
2B work were accurate, we would not see the range of wages, and the 
dispersal away from the mean, that can be observed on an H-2B wage 
distribution. The wage differential, they say, must reflect a skill 
differential. However, many more factors can account for the H-2B wage 
differential than skill level. The literature reflects that there are 
factors in addition to skill level that can account for OES wage 
variation for the same occupation and location, which include, but are 
not limited to: Size of employer; seniority; rate of worker turnover; 
union status; gender, race, ethnicity, or nationality; work hour 
schedule; age; availability of benefits in the form of training 
opportunity, health insurance, paid time off, and other benefits; sub-
location within the same area of intended employment; and pay structure 
(performance-based pay vs. fixed pay per hour).\32\
---------------------------------------------------------------------------

    \32\ See BLS, ``How much could I be earning? Using Occupational 
Employment Statistics data during salary negotiations'' (2014), 
http://www.bls.gov/oes/earnings.pdf; BLS, ``Measuring the 
distribution of wages in the United States from 1996 through 2010 
using the Occupational Employment Survey'' (2014). http://www.bls.gov/opub/mlr/2014/article/measuring-the-distribution-of-wages-in-the-united-states-from-1996-through-2010-using-the-occupational-employment-survey-1.htm; BLS, ``How Jobseekers and 
Employers Can Use Occupational Employment Statistics (OES) Data 
during Wage and Salary Discussions'' (2010), http://www.bls.gov/oes/highlight_wage_discussions.pdf; Krista Sunday and Jordan Pfuntner, 
``How widely do wages vary within jobs in the same establishment?'' 
(2008), http://www.bls.gov/opub/mlr/2008/02/art2full.pdf; Charles 
Brown, et. al., ``The Employer Size-Wage Effect'' (1989), http://unionstats.gsu.edu/8220/Brown-Medoff_Wage-Size_JPE_1989.pdf; John 
Buckley, ``Wage differences among workers in the same job and 
establishment'' (1985), http://stats.bls.gov/opub/mlr/1985/03/art2full.pdf.
---------------------------------------------------------------------------

    In the absence of a tiered wage system, the Departments must assign 
prevailing wages in the H-2B program in a manner in which does not 
depress wages for U.S. workers because of the artificially elevated 
labor supply in the market. Thus, we must identify the point on the OES 
wage distribution that protects the wages of U.S. workers from the 
depressive effect of the influx of surplus labor. In 2011 and in 2013, 
DOL concluded that the mean was that point (76 FR at 3462; 78 FR at 
24053), and we rely on that same finding following public comment for 
the purposes of this final rule. The mean is the average of all wages 
surveyed in an occupation in the geographic area, and in the low-
skilled occupations in the H-2B program, the mean represents the 
average wage paid to unskilled workers to perform that job. If the 
prevailing wage is set below the mean, the average wage of workers in 
the occupation would be drawn down, resulting in a depressive effect on 
U.S. workers' wages overall. In addition, we have set the wage rate at 
the mean rather than at the median because the mean provides equal 
weight to the wage rate received by each worker in the occupation 
across the wage spectrum and maintaining the OES mean provides 
regulatory continuity. As a result, when the prevailing wage is based 
on the OES survey, we will set it at the mean because it is the most 
appropriate wage to use in order to avoid immigration-induced labor 
market distortions

[[Page 24160]]

inconsistent with the requirements of the INA.
    For all these reasons, we have not returned to a tiered system as a 
basis for setting the prevailing wage for H-2B workers. We recognize 
that the use of the OES mean, rather than the use of tiered wages, has 
in some cases resulted in an increase in the wages paid to H-2B 
workers, which may result in overall increases in labor costs for some 
U.S. businesses that employ H-2B workers. The Departments also 
recognize that the use of the OES mean may impose particular burdens on 
small businesses. However, DOL is obligated to set a prevailing wage 
that protects all U.S. workers from adverse effect; this requirement 
could not be met by setting a lower wage for small businesses. In 
addition, most H-2B employers now have experience paying workers at the 
OES mean, which was established in the H-2B program two years ago. DOL 
concludes that the impact on small businesses of having to pay the OES 
mean wage will be less than that incurred under the 2013 rule, given 
that employers have been able since then to base projections of future 
labor costs on these wage rates. As discussed above, DOL concludes that 
use of the OES mean best meets the Departments' obligation to protect 
against adverse effect, while setting the prevailing wage at a 
threshold based on artificial skill levels likely distorts the labor 
market for U.S. workers, driving down wages.

B. Use of the SCA and DBA as Wage Sources in H-2B Prevailing Wage 
Determinations

1. History of the SCA and DBA Prevailing Wage Determinations in the H-
2B Program
    DOL historically relied on the prevailing wage regulations used for 
permanent labor certifications in the immigrant labor program, as 
codified at 20 CFR 656.40, to determine prevailing wages in the H-2B 
program. Versions of section 656.40(a)(1) that pre-date 2005 set wage 
rates at the levels mandated by the DBA and the SCA ``if the job 
opportunity is in an occupation which is subject to a wage 
determination'' in the area of intended employment under either 
statute. As a result, before 2005, if an H-2B job fell within an 
occupation for which an SCA or DBA wage determination had been issued 
in the area of intended employment, that wage rate became the H-2B 
prevailing wage, even in cases in which the OES survey may have 
identified a wage for a comparable occupation. DOL abandoned this 
approach in the same 2005 guidance that introduced skill-based tiered 
wages, which gave employers the option to request the SCA or DBA 
prevailing wage determination, but did not mandate its application. See 
2005 PWD Guidance. The H-2B rule issued in 2008 similarly permitted, 
but did not require, use of the SCA and DBA prevailing wage 
determinations. 73 FR 78020. As a result, under the 2008 rule DOL set 
the prevailing wage as: The collective bargaining agreement (CBA) wage 
rate; the OES four-tier wage rate if there was no CBA; an acceptable 
survey provided at the employer's election; or a wage rate under DBA or 
SCA at the employer's request, if one was available for the occupation 
in the area of intended employment. See 20 CFR 655.10 (2009). In the 
absence of a CBA wage, the employer could elect to use the applicable 
SCA or DBA wage in lieu of the OES wage. Id.
    In DOL's 2010 H-2B Wage NPRM, DOL proposed revisions to the wage 
methodology that set the prevailing wage as the highest of: The OES 
arithmetic mean wage for each occupational category in the area of 
intended employment; the applicable SCA/DBA wage rate (if one was 
available); or the CBA wage. 75 FR 61578 (Oct. 5, 2010). This approach 
was finalized in 2011, 76 FR 3452, although never implemented as a 
result of Congressional riders, as discussed above. Because the riders 
prevented implementation of the 2011 ``highest of'' approach, DOL 
continued to use the approach in the 2008 rule, which permitted 
employers to request prevailing wages based on the SCA and DBA, if 
applicable and available.
    The 2013 IFR retained the ``employer's option'' approach. 78 FR 
24047. The preamble to the IFR explained that ``although there are 
various ways to define or calculate the prevailing wage rate, [DOL 
concludes] that, under the present circumstances in which we must act 
expeditiously in response to the CATA II order, the use of any of these 
three wage rates [the OES mean, the SCA or the DBA] will serve to meet 
DOL's obligation to determine whether U.S. workers are available for 
the position and that the employment of H-2B workers will not adversely 
affect U.S. workers similarly employed.'' 78 FR at 24054.
2. Comments on the 2013 IFR's Use of the SCA and DBA Wage 
Determinations to Set the Prevailing Wage
    The 2013 IFR sought ``comment on the use of the DBA and the SCA in 
making prevailing wage determinations, and if these wage rates should 
apply, to what extent.'' 78 FR at 24054 (emphasis added). We identified 
three ways in which we could continue to incorporate DBA and SCA wage 
determinations in the H-2B program if we elected to use those wage 
sources: (1) Applying the DBA or SCA wage determinations if they 
represent the highest available prevailing wage determination for the 
job opportunity in question (the 2011 approach); (2) making the SCA and 
DBA wage determinations available to the employer if it chooses to rely 
on them for that job opportunity, regardless of whether the wage is the 
highest or lowest available (the 2008 Rule and 2013 IFR approach); and 
(3) in the absence of a CBA wage, mandating use of the SCA or DBA wage 
determination applicable to that job opportunity (the pre-2005 
approach). Id.
    As a general matter, many worker advocates supported the mandatory 
application of SCA and DBA prevailing wage determinations where they 
are available for the occupation in the area of intended employment for 
which certification is being sought. These commenters often argued that 
the SCA and DBA wage determinations were the most complete and accurate 
measure of appropriate compensation levels for the occupations covered 
by those statutes in the geographic areas for which such wage rates 
have been determined. Many such commenters argued in favor of DOL's 
pre-2005 approach in which the SCA and DBA wage determinations must be 
used where applicable to the job in the area of intended employment. 
However some commenters did not clearly state whether they advocated 
for use of the SCA and DBA wage determinations in the H-2B program as 
part of the unimplemented 2011 ``highest of'' methodology, in which SCA 
and DBA wage determinations are used only if they are higher than the 
OES mean and/or a CBA wage.
    Similarly, many employers and employer associations advocated in 
favor of the approach in the 2008 rule, but did not identify whether 
this preference was specifically tied to the 2008 rule's voluntary use 
of the SCA and DBA wage determinations, or whether it reflected a 
preference for the four-tiered OES structure over the OES mean. In 
addition, many of the same commenters suggested that, in the event we 
do not employ the 2008 rule's voluntary use of the SCA and DBA wage 
determinations, we should adopt the 2005 guidance, which mirrors the 
2008 rule's employer election to use SCA or DBA wage determinations. 
Many commenters also suggested that the Departments adopt the wage 
standards set out in S. 744, as alternative

[[Page 24161]]

acceptable wage methodologies.\33\ With respect to the SCA and the DBA, 
these commenters appear to suggest that S. 744's reliance on the use of 
the ``best available information'' to set the prevailing wage indicates 
that the SCA and DBA wage determinations should be used only when those 
wage determinations independently apply to the work the relevant H-2B 
employees will perform, i.e., when H-2B personnel perform work under a 
Government contract subject to the statutes.
---------------------------------------------------------------------------

    \33\ See Sec. II.A., supra, for the text of the wage provision 
in S. 744.
---------------------------------------------------------------------------

    One employer who is an extensive user of the H-2B program suggested 
that the SCA is a more appropriate rate-setting device for forestry 
occupations than is the OES because of the OES's single category of 
forestry worker, rather than the SCA's three categories. This commenter 
submitted that for forestry workers, the OES artificially inflates the 
wages of lower paid, manual labor-type forestry work and suggested that 
the SCA's use of three categories better recognizes the distinction 
between forestry work that requires solely manual labor and skilled 
forestry work performed by college graduates. This commenter further 
suggested that, with respect to the ``range of'' forestry-related 
occupations, the Departments should issue ``regional'' SCA rates as 
well as a ``regional'' OES wage rate with four skill levels, from among 
which an employer could select its preferred option.\34\ Employers in 
the seafood processing industry asserted that the SCA and DBA job 
classifications (as well as the OES/SOC classifications) did not 
reflect well the production-based jobs in the seafood industry.
---------------------------------------------------------------------------

    \34\ This commenter relied on the comment it had submitted for 
consideration during the 2011 Wage Rule proceeding. In the preamble 
to the 2011 Wage Rule, DOL rejected the proposal to establish 
regional prevailing wage rates for reforestation, explaining that an 
employer can avoid the complexity of paying various wage rates where 
projects stretch across multiple counties or states with different 
wage rates by paying the highest of the prevailing wages of those 
areas, which is similar to paying a regional wage, particularly 
because ``[p]revailing wage rates for forestry work are generally 
the same across contiguous counties--and frequently noncontiguous 
counties--in the same State.'' 76 FR 3452, 3464. In addition, DOL 
concluded that it ``is not feasible or desirable to establish 
regional wage rates for particular industries in the H-2B program'' 
because the wage rates must be locality-based in order to prevent 
adverse effect on U.S. workers. Id. We reiterate that conclusion in 
this rulemaking as well.
---------------------------------------------------------------------------

    An association of contractors criticized the DBA wage 
determinations. This commenter argued that DBA rates are ``grossly 
inflated'' due to the ``unscientific methodology'' used to create them, 
and underscored that the surveys used to collect the information for 
the DBA wage determination are voluntary. As a result, this commenter 
suggested that labor organizations and large government contractors 
disproportionately submit the required data, resulting in wage 
determinations that are inconsistent with the actual prevailing wage 
rates. This comment also suggested that the system of deferring to the 
local area practice in defining the job duties of a particular 
classification makes it ``difficult to determine the appropriate wage 
rate for many construction-related jobs.''
    We received virtually identical submissions from a dozen worker 
advocacy groups who advocated that DOL return to the pre-2005 approach, 
which required the use of the SCA or DBA wage determinations if the job 
opportunity was in an occupation subject to a wage determination in the 
area of intended employment under either statute. Most of the entities 
submitted the same statement advancing this position, expressing the 
view that the SCA and DBA wage rates ``are the most complete and 
accurate measure of determining appropriate compensation levels for the 
occupations covered by those Acts in those geographic areas for which 
such wage rates have been determined'' and asked that SCA and DBA wage 
rates be required in all circumstances in which they were available. 
The commenter further noted that requiring the use of SCA and DBA wage 
rates wherever available would be consistent with DOL's approach prior 
to 2005.
    Moreover, as discussed above regarding the use of the OES mean to 
set the prevailing wage, a comment submitted by a worker advocacy 
project on behalf of a large consortium of worker groups underscored 
the view that the SCA wage determinations are particularly apt in the 
forestry and logging occupations because they are more ``closely 
tailored'' to the jobs and the SCA ``classification includes many jobs 
that demand more knowledge, training and experience and pay higher 
wages.'' \35\ This comment, which was joined by a number of other 
advocacy organizations, discussed alternative approaches depending upon 
Job Zone. The comment suggested that the OES mean should ``at all 
times'' be the prevailing wage for Job Zone 1 jobs, unless there was a 
higher CBA, SCA or DBA rate, and that the OES mean ``should generally 
be used to determine the prevailing wage rate'' for Job Zone 2 and 3 
occupations. However, the comment also recommended that the SCA should 
be used for forest and conservation workers (citing specifically SOC 
Code 45-4011, ``Forest and Conservation Workers,'' classified as Zone 3 
in O*NET) because the commenter suggested that the SOC occupations for 
these jobs include both jobs that require little to no preparation and 
those that require more knowledge and training.
---------------------------------------------------------------------------

    \35\ As noted above, an employer in the forestry industry 
articulated a similar point in advancing a preference for the SCA 
over the OES to set the prevailing wage for forestry occupations. 
However, no other comments singled out any other particular industry 
or occupation to which the SCA was better suited to set the 
prevailing wage.
---------------------------------------------------------------------------

    As discussed in the OES section above, the same comment also 
suggested that if there were additional occupations beyond forestry for 
which many H-2B certifications were issued that were grouped in an SOC 
code with other occupations requiring different levels of preparation, 
DOL should develop new sub-codes using the O*NET system. Pending the 
development of these sub-codes, the comment asked that DOL use a case-
by-case method to determine the appropriate wage rate. For Job Zones 4 
and 5 (occupations requiring considerable preparation and occupations 
requiring extensive preparation), the group suggested the OES mean 
should be the presumed rate absent strong evidence to the contrary. The 
commenter discussed the use of O*NET Job Zones where the SOC code 
includes a mix of jobs and some require substantially more preparation 
than others, and concluded that O*NET sub-classifications should be 
created for any Job Zones 2 and 3 jobs that require mixed levels of 
skills and training ``to permit a separate treatment of lower skilled 
jobs in a SOC class appropriately to reflect actual wage differences 
based upon the real differences in the training and skills needed to do 
the job.'' The comment again emphasized that classifying H-2B forest 
and conservation workers in a Job Zone 3 classification ``is misleading 
as to the actual job duties performed for the positions certified for 
H-2B workers,'' so they again recommended using SCA wage rates for such 
workers. They also identified other H-2B jobs that fall within Job Zone 
3, and stated that many of them may be appropriate, but that there may 
be circumstances where the H-2B jobs ``do not require Zone 3 levels of 
experience and training, similar to forestry. In cases where this is 
identified, if there are SCA or Davis Bacon rates that apply, they 
should be used.'' If not, they again recommended creating sub-
classifications and using ad hoc adjudication to set rates in the 
meantime.
    An individual commenter stated that the U.S. workers would be 
adversely

[[Page 24162]]

affected if the regulations ``retain the component of the 2008 final 
rule that permits, but does not require, an H-2B employer to use . . . 
DBA or SCA wage determinations.'' Finally, a federation of labor 
organizations suggested that ``[w]here the DOL has already calculated a 
prevailing wage rate under the DBA or SCA in order to ensure that wages 
for currently-employed workers are not adversely affected, it would 
border on irrational for the agency to ignore such a wage determination 
when setting a prevailing wage rate for workers employed in the H-2B 
program.'' We considered all the comments addressing the use of the SCA 
and DBA wage determinations to set the prevailing wage, as well as the 
DOL's historical practice, and its current procedures.
3. ETA's Process for Determining the Prevailing Wage Based on the SCA 
or DBA
    ETA used the following process to issue prevailing wage 
determinations under the 2008 rule, as modified at 20 CFR 655.10(b)(2) 
by the 2013 IFR. ETA issued a prevailing wage determination for a 
specific job performed in a specific geographic area. In order to do 
so, H-2B jobs or tasks were structured into occupational titles. These 
occupations were catalogued in taxonomies, which established how the 
occupations were defined, organized and presented. Taxonomies would 
vary depending on the wage survey used. For example, as discussed 
above, when conducting the OES survey, BLS surveys of workers' wages 
are based on the 2010 SOC system, which contains 840 detailed 
occupations, each one of which has its own definition. Detailed 
occupations in the SOC with similar job duties, and in some cases 
skills, education, and/or training, are grouped together to form 461 
broad occupations, 97 minor groups, and 23 major groups. The SOC 
classifies all occupations in the economy, including private, public, 
and military occupations, in order to provide a means to compare 
occupational data produced for statistical purposes across agencies. It 
is designed to reflect the current occupational work structure in the 
U.S. and to cover all occupations in which work is performed for pay or 
profit.
    By contrast, the Wage and Hour Division (WHD) employs the SCA 
Directory of Occupations (SCA Directory), which classifies occupations 
for the purposes of issuing SCA prevailing wage determinations.\36\ The 
SCA Directory provides a list of occupations with accompanying position 
descriptions. The current edition of the directory contains 408 
occupations, of which 339 are ``standard'' occupations applicable to 
both metropolitan and non-metropolitan areas; the remaining 69 are 
``non-standard'' occupations. The DBA prevailing wage determinations 
are based on a third and separate occupational taxonomy, which, rather 
than relying on general task descriptions for each occupation, is 
defined according to local practice.\37\ As a result, under the DBA, 
occupations with similar tasks may have different occupational titles 
based on variations in local area practice.
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    \36\ The current 5th edition of the SCA Directory was published 
on April 17, 2006, and can be accessed at http://www.dol.gov/whd/regs/compliance/wage/SCADirV5/SCADirectVers5.pdf.
    \37\ See http://www.wdol.gov/dba.aspx.
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    Although WHD is the agency responsible for the administration and 
enforcement of the SCA and DBA, all prevailing wage determinations 
requested through the H-2B program, regardless of whether the wage 
source is the OES, the SCA or the DBA, were set by ETA's National 
Prevailing Wage Center (NPWC). In order to issue a prevailing wage 
determination for a position requested in the H-2B program, the NPWC 
needed to first match the job duties identified on the employer's 
request for a prevailing wage, Form 9141, to an occupational title for 
which a prevailing wage determination exists. On the Form 9141, the 
employer requested a wage for an H-2B job that the employer identified 
by both SOC code and by the job's duties and tasks.
    For all prevailing wage requests, the NPWC assessed the employer's 
job description, checked the employer's submitted SOC code against the 
job description, and determined the most accurate SOC code for the 
position. If the prevailing wage was based on the OES survey, which is 
keyed to the SOC system, the NPWC found the SOC occupation on its 
online wage library \38\ and assigned the OES wage. However, where the 
employer requested a prevailing wage based on the SCA or the DBA, the 
NPWC not only matched the employer's job description to an SOC 
occupation, but also conducted the same matching process to find the 
appropriate occupational title in the SCA directory or the DBA online 
tool.
---------------------------------------------------------------------------

    \38\ See Foreign Labor Certification Data Center Online Wage 
Library, available at http://www.flcdatacenter.com/.
---------------------------------------------------------------------------

    Although there is some overlap in the occupational titles and 
descriptions, the SOC, the SCA and DBA taxonomies can vary in ways that 
are challenging in setting the prevailing wage. The occupations 
contained in the SCA Directory and the DBA taxonomies are often defined 
more narrowly than are the corresponding occupations in the SOC 
system.\39\ Furthermore, there may not be a corresponding SCA or DBA 
wage for every SOC code because the classifications included in SCA and 
DBA prevailing wage determinations are not always as comprehensive as 
the SOC code. As a result, this matching process required NPWC analysts 
to exercise professional judgment in determining whether an 
occupational taxonomy contains a particular title applicable to the 
employer's job description, and which occupation in the applicable 
taxonomy most closely resembled the position requested by the employer 
on the Form 9141.
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    \39\ For example, in the SCA Directory, a General Forestry 
Laborer, code 08520, may, among other things, sow seeds and lift 
seedlings, and hand scalp the seedlings. A Brush/Precommercial 
Thinner, SCA code 08010, may use a chainsaw, brush blade, or other 
hand-held equipment to remove excess trees and other vegetation. 
Finally, a Tree Planter, SCA code 08370, may plant trees using 
shovels or hoes, but may perform only part of the tree planting 
functions, while a Tree Planter, Mechanical, SCA code 08400, would 
complete the planting process using a mechanical planter. Although 
these tasks are all related, they are separated into different 
occupations in the SCA directory, with separate prevailing wages. 
Under the OES/SOC system, however, these tasks could all be captured 
under the same SOC code, 45-4011--Forest and Conservation Workers, 
which applies to workers who perform manual labor necessary to 
develop or protect forest areas, and includes forest aides, seedling 
pullers, and tree planters. These workers may cut trees, thin trees 
using saws, plant trees, or sow and harvest crops such as alfalfa.
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    Often, the job duties listed on a Form 9141 requesting an SCA or 
DBA wage either did not correspond to the job duties of the 
occupational classification in the SCA and DBA systems, or contained a 
combination of duties that cross one or more occupational titles, while 
the work performed under an H-2B job order ordinarily fits within a 
single SOC. In the former case, where the duties described by the 
employer were incompatible with the duties in an occupation within the 
relevant SCA or DBA wage determination, the NPWC would issue a default 
OES-based prevailing wage determination. In the latter case, where the 
duties described by the employer crossed occupational titles, the NPWC 
would issue a prevailing wage that is the highest wage of the SCA or 
DBA occupations encompassing the employer's job duties.\40\ See 2009 
Guidance at 4.
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    \40\ By contrast, SCA and DBA implementing regulations allow 
contractors to compensate employees at the rate specified for each 
classification in the applicable wage determination, provided they 
maintain payroll records accurately reflecting the hours spent 
working at each of the jobs. See 29 CFR 4.169 (SCA); 29 CFR 
5.5(a)(1)(i) (DBA).

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[[Page 24163]]

    By contrast, when an SCA- or DBA-covered contract requires the 
performance of work for which the applicable wage determination 
contains no corresponding classification, the WHD engages in a 
conformance process to determine what the appropriate prevailing wage 
should be for the unlisted, relevant occupation. This generally entails 
identifying a wage rate that is reasonable in relationship to the wage 
rates of listed occupations in the applicable wage determination. 29 
CFR 4.6(b)(2).\41\ It would not be feasible to adopt such procedures 
for the H-2B program because the conformance process generally takes 
longer than is compatible with NPWC's obligation to set an accurate 
prevailing wage rate in time for an employer to recruit U.S. workers at 
the appropriate prevailing wage.
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    \41\ See SCA and DBA Conformance Processes, available at http://www.dol.gov/whd/recovery/pwrb/Tab7SCACnfrmncPrcss.pdf; 29 CFR 
5.5(a)(ii) and http://www.wdol.gov/aam/aam213.pdf.
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    Finally, once the proper occupational title was identified, a 
similar matching process needed to occur to determine the proper area 
of intended employment. In the DBA context, however, the area of 
intended employment might determine not just the appropriate wage, but 
also the title and description of the job itself, because the DBA 
taxonomy varies from area to area and is determined by local area 
practice. Issuing a DBA prevailing wage determination thus required the 
NPWC to match the Form 9141 tasks to a specific job taxonomy for every 
area of intended employment.
4. Decision Not To Allow Use of SCA and DBA Wage Determinations in the 
H-2B Program
    In the 2013 IFR, the Departments asked whether and to what extent 
SCA and DBA wage determinations should be used in the H-2B program. 78 
FR at 24054. This request for input reflected, in part, DOL's past 
practice of using the SCA and DBA wage determinations in the H-2B 
program in a variety of ways, and whether those methods effectively 
served our obligation to prevent against adverse effect to the wages of 
U.S. workers. Our previously varied use of the SCA and DBA wage 
determinations to set the H-2B prevailing wage included relying on them 
as the sole, mandatory source for determining the prevailing wage 
before 2005, allowing their use at the employer's discretion in 2008, 
and requiring their use if they were the highest of an array of wage 
sources in the unimplemented 2011 wage rule. Under each of those 
scenarios, some groups strongly favored the approach, and others 
strongly objected. Comments on this subject in response to the 2013 IFR 
generally reflected the same divergence of opinion, with some groups 
favoring the mandatory use of the SCA and DBA wage determinations, 
others favoring only their discretionary use, and still others favoring 
their use only where the wage determinations were higher than the OES 
mean. In considering the competing interests of the regulated community 
with respect to using the SCA and DBA wage determinations to set the H-
2B prevailing wage, the Departments' challenge is to protect against 
adverse wage effects resulting from the importation of foreign workers, 
establish a policy that promotes regulatory stability, and address the 
administrative challenges in conforming the SCA and DBA wage 
determinations in the H-2B program. Our decision, as outlined below, 
reflects these considerations.
    This rule does not provide the option to request, for purposes of 
the H-2B program, a prevailing wage determination under the SCA or the 
DBA. The decision will result in the use of the SOC-based OES as the 
basis for all prevailing wage determinations in the H-2B program, 
unless an employer has a CBA or meets one of the conditions that would 
permit the submission of an employer-provided wage survey as discussed, 
infra, in Sec. II.C. In making this decision, we underscore that the 
SCA and DBA wage determinations remain the only appropriate wage 
sources for establishing the prevailing wages for use in the federal 
contracts to which they apply. However, for the reasons that follow, we 
are not allowing the use of the SCA and DBA prevailing wage 
determinations in the H-2B program, and the regulatory text that 
follows reflects that the option to use the SCA or DBA wage 
determinations as a source for an H-2B prevailing wage is not 
available. Thus, subsection (b)(5) in the 2008 rule does not appear in 
20 CFR 655.10 of this final rule. This decision will have no impact on 
the independent statutory requirements imposed by the SCA and DBA on 
any employers employing H-2B or non-H-2B workers on a federal 
government contract covered by those statutes.\42\
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    \42\ The SCA and DBA wage rates will remain in force and effect 
for all workers, including H-2B workers, who perform work on 
government contracts, but under this rule, the SCA and DBA wage 
determinations will not be used as wage sources to set the 
prevailing wage in the H-2B program. Therefore, when an H-2B 
employer with an SCA or DBA contract requests a prevailing wage from 
ETA's National Prevailing Wage Center, the NPWC will give the 
employer a prevailing wage based on the OES survey, with a reminder, 
as is currently issued, that the employer must comply with all 
applicable wage obligations. As is the case now, this obligation to 
comply with all applicable wage standards effectively results in the 
obligation to pay the highest legally applicable wage (i.e., the 
SCA, DBA, the OES mean, or state or local minimum wages) regardless 
of the prevailing wage determination issued by OFLC.
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a. Challenges Conforming the SCA and DBA Prevailing Wage Determinations 
to the H-2B Program
    Our decision not to allow the use of the SCA and DBA wage 
determinations for establishing prevailing wage rates in the H-2B 
program is based largely on DOL's challenges conforming the SCA and DBA 
taxonomies and wage determinations to requests for prevailing wages in 
the H-2B program, including to avoid the potential for inconsistent 
prevailing wage determinations in the H-2B program. The substantial 
distinctions between the SOC system and the SCA and DBA occupation 
taxonomies, as discussed above, make the tasks of issuing and enforcing 
SCA and DBA prevailing wages in the H-2B program more complex than 
necessary to assure that U.S. workers experience no adverse wage 
effects when foreign workers are employed on a temporary basis.
    As noted above, the SCA and DBA classifications are defined more 
narrowly than those in the SOC system, and job duties captured by an 
SOC occupation often span two or more applicable occupational titles in 
the SCA and DBA. Because the NPWC assigned the prevailing wage from the 
occupation with the higher wage in those cases where the employer's job 
duties cross more than a single SCA or DBA occupation, employers had an 
economic incentive to tailor their job descriptions on the Form 9141 to 
fit within the lower-paid occupational title.\43\ The NPWC's experience 
has shown that in mixed-occupation cases in which it has issued an SCA 
prevailing wage determination and assigned the higher prevailing wage, 
it was not uncommon for the same employer to submit a new Form 9141 for 
the same job, and revise the job duties to conform to the lower-paying 
SCA occupation. In such circumstances, the NPWC then issued the lower 
wage because the new Form 9141 request then conformed to a single SCA 
or DBA

[[Page 24164]]

occupation. However, if WHD later enforced the prevailing wage in cases 
where employees were performing job duties beyond the occupation 
assigned, employers might be required to pay the higher wage to the 
misclassified workers. But even requiring back wages and assessing 
civil money penalties does not provide an adequate approach, because no 
enforcement scheme can reach every violator. In addition, such relief 
will not typically reach potential U.S. applicants who may have sought 
the position if the employer had advertised the job with the 
appropriate wage. As a result, the incentive to craft job descriptions 
to fit the relatively more narrow SCA and DBA occupational categories 
thus compromises protections otherwise afforded to U.S. workers seeking 
to perform similar work in the area of intended employment.
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    \43\ By contrast, the SCA and DBA systems, when administered by 
WHD for the purpose of application to government contracts, create 
considerably less economic incentive to tailor job descriptions 
because the contracting agency specifies job duties for the purposes 
of a government contract based upon the work to be performed, 
without regard to profit maximization.
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    The use of SCA and DBA wage determinations in the H-2B program has 
never carried with it the implementing tools established in the SCA and 
DBA regulations, such as the ability to prorate mixed-duty job 
descriptions or the conformance process that accompanies those wage 
determinations when administered by WHD. As discussed above, the 
conformance process used by WHD cannot be used by NPWC to issue H-2B 
prevailing wage determinations because the conformance process 
generally takes significantly longer than the timeframe under which the 
NPWC must issue prevailing wages. The absence of the SCA and DBA 
regulatory structures that facilitate WHD's effective implementation of 
the wage determinations, coupled with the frequent mismatch between the 
SOC occupations and the SCA and DBA classifications, could result in 
varying applications of the wage determinations between ETA and WHD. 
This is particularly true because ETA issues a single prevailing wage 
for the job opportunity in the H-2B program, while, in the SCA and DBA 
programs, multiple wage rates may apply to a single worker, depending 
on the tasks performed at various points during the job. In order to 
eliminate confusion concerning implementation of the SCA and DBA wage 
determinations, DOL will not rely on SCA and DBA wage determinations as 
a source for H-2B prevailing wage determinations. WHD is the agency 
statutorily tasked with the administration of the SCA and DBA, and has 
extensive experience issuing prevailing wage determinations in the 
specific classifications within the SCA and DBA, and that agency will 
have sole authority within DOL to issue a prevailing wage based on 
those wage determinations. Without the regulatory structure attendant 
to the SCA and DBA wage determinations and because of the misalignment 
in their taxonomies as compared to the default SOC system currently in 
use, we conclude that the use of those wage determinations in the H-2B 
program is not feasible, and we are not allowing their use as 
prevailing wage determination sources.
    The challenges noted above--the distinctions between the 
occupational categories under the SOC codes and those in the SCA and 
DBA and the absence of the same regulatory structures that promote 
effective implementation of those wage determinations--have caused 
uncertainty and confusion in the H-2B program, which in turn has 
resulted in complex litigation over the proper wage. Pacific Coast 
Contracting, Inc., Case No. 2014-TLN-00012 (Board of Alien Labor 
Certification Appeals (BALCA), March 5, 2014) illustrates the manner in 
which distinctions in occupational classification can create confusion 
and uncertainty for employers requesting SCA- and DBA-based prevailing 
wage determinations in the H-2B program. In that case, an employer 
requested and received two prevailing wage determinations under the SCA 
based on different job descriptions, one for a ``''Brush/Precommercial 
Thinner'' and one for a ``Tree Planter.'' The employer's advertisements 
offered the job at a wage range that included both the lower and the 
higher wages from the two wage determinations. ETA denied the temporary 
labor certification because the job opportunity involved duties from 
both tree planting and pre-commercial thinning, and the employer should 
have offered the wage for the higher-paid job that encompassed all the 
duties the employer expected to be performed. The employer argued that 
the SCA regulation, 29 CFR 4.169, governed. That regulation permits 
government contractors to pay different wage rates to a service 
employee who performs work within more than one classification in a 
workweek, provided the contractors maintain payroll records accurately 
reflecting such hours. The Board of Alien Labor Certification Appeals 
(BALCA) properly rejected this argument, concluding that the ``H-2B 
temporary labor certification program is not governed by the SCA 
implementing regulations,'' but is governed solely by the H-2B 
regulations. Pacific Coast, slip. op. at 4.\44\ As with Pacific Coast, 
DOL has experienced an increase in litigation involving the 
misalignment of the employer's job description to that in the SCA wage 
determination, and DOL concludes that the risk of such litigation and 
the potential for inconsistent prevailing wage determinations will be 
mitigated by no longer relying on the SCA and DBA wage determinations 
for establishing H-2B prevailing wage rates.
---------------------------------------------------------------------------

    \44\ The BALCA consists of Administrative Law Judges assigned to 
DOL and designated to be members of BALCA, and decides immigration-
related administrative appeals. 20 CFR 655.4.
---------------------------------------------------------------------------

    The challenges identified above in using the SCA and DBA wage 
determinations as prevailing wage sources would be alleviated by 
relying solely on the SOC-based OES as the primary wage source for 
prevailing wage determinations in the H-2B program. SOC occupational 
titles are broadly defined, and therefore capture a wider range of job 
duties than do the SCA and DBA occupational titles. As such, small 
differences in the requested job duties reported on a Form 9141 will 
not often result in differences in the prevailing wage issued under the 
OES. On the other hand, the very fact that SCA and DBA often provide 
more tailored occupational titles posed challenges in the H-2B program 
because in many cases duties for a single H-2B job opportunity cross 
multiple SCA or DBA occupations. The problems presented in Pacific 
Coast, supra, likely would not have arisen had the employer requested 
an OES prevailing wage determination because a single relevant SOC code 
would have captured all of the job requirements identified by the 
employer. Furthermore, centralizing the SCA and DBA prevailing wage 
determination process within WHD will reduce the potential for 
inconsistencies between the programs.\45\
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    \45\ As we explain more fully in Sec. II.C., infra, DOL will 
accept an employer-provided survey under very limited conditions. 
However, where those conditions may be met, an SCA or DBA wage 
determination may not be submitted as an ``employer-provided 
survey'' under this rule because of the challenges conforming the 
SCA and DBA wage determinations to the H-2B prevailing wage process 
as discussed above. If an employer submitted SCA and DBA wage 
determinations as an employer-provided survey, the NPWC would still 
conduct the extra analysis described above, i.e., analysts must 
align the SOC code and the job duties submitted by the employer to 
that occupation in the SCA or DBA taxonomy. The NPWC's challenge in 
implementing the SCA and the DBA wage determinations rests not in 
defining the proper wage for an SCA or DBA occupational title--WHD 
has already accomplished this task and published this information--
but rather in cross-walking the employer's identified position to an 
established SCA or DBA occupation. By contrast, in order for an 
employer to base a request for a prevailing wage on an employer-
provided survey, the duties of the occupation surveyed have likely 
already been tailored to match those in the employer's job opening. 
Therefore, permitting the submission of SCA and DBA wage 
determinations as employer-provided surveys would only create the 
same challenges for the NPWC as if they were allowed as an optional 
basis upon which to set the prevailing wage for H-2B purposes. 
Accordingly, this final rule does not permit the use of SCA and DBA 
wage determinations as sources to set the prevailing wage in the H-
2B program, whether employers ask for them expressly in their 
prevailing wage requests, or rely on them indirectly through the 
submission of an employer-provided survey under the narrow 
conditions in which DOL will accept such surveys.

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[[Page 24165]]

b. Improved Prevailing Wage Procedures Without Adverse Effect to U.S. 
Workers
    Declining to allow employers the option to request an H-2B 
prevailing wage based on an SCA or DBA wage determination will 
streamline the H-2B prevailing wage determination process and expedite 
review of applications by the NPWC. As mentioned above, to issue a 
prevailing wage determination, the NPWC matched the tasks identified in 
the Form 9141 to an SOC code for every prevailing wage application 
received. Because the OES wage data is aligned with the SOC taxonomy, 
once the SOC code has been identified, it is relatively easy for NPWC 
to issue an OES-based prevailing wage for the occupation. An additional 
step is required, however, to match the position the employer has 
described on the Form 9141 to the corresponding occupation in the SCA 
Directory or the DBA local practice, which can be a cumbersome process 
because the duties identified on the Form 9141 do not always coincide 
with the duties reflected in the SCA and DBA occupational titles. As 
was recognized in the preamble to the 2013 IFR, determining whether 
multiple wage rates exist for every application is a time consuming 
process. 78 FR at 24054. If the H-2B regulation does not permit the 
optional use of the SCA and DBA wage determinations as sources to set 
the H-2B prevailing wage, the administration of the wage process will 
be streamlined and expedited, and disputes over their application and 
the attendant litigation will be reduced.
    It is particularly time consuming for the NPWC to issue H-2B 
prevailing wage determinations based on DBA wage determinations because 
the same occupations can sometimes encompass different job duties based 
on the prevailing practice in the locality in question. The result is 
that the matching process described above must be completed for each 
area of intended employment identified in the Form 9141. Issuing an H-
2B prevailing wage determination based on DBA wage rates differs from 
the process for determining the prevailing wage in an area of intended 
employment for the OES and the SCA. When issuing an H-2B prevailing 
wage determination based on a DBA wage rate, the NPWC does not identify 
the appropriate occupation only once and then locate that occupation's 
proper wage in each geographic area applicable to the employer's job 
opportunity. Rather, the job descriptions themselves change based on 
the local practice. This requires the NPWC to sort through each 
locality's taxonomy to find a position that matches the job duties 
identified on the Form 9141 for each area of intended employment. This 
particular complexity in relying on DBA wage determinations for 
determining H-2B wage rates further underscores how the decision not to 
permit their use in the H-2B program will streamline the wage 
determination process, and reduce disputes over their application and 
any attendant litigation.
    The percentage of H-2B prevailing wage requests seeking an SCA- or 
DBA-based prevailing wage determination steadily increased over the 
last few years, thereby increasing the amount of time and resources 
that are devoted to issuing these determinations. Although there is 
some fluctuation, in the three fiscal years (FYs 2010, 2011, and 2012) 
before implementation of the wage provisions in the 2013 IFR, the NPWC 
issued H-2B prevailing wage determinations based on SCA and DBA wage 
rates, on average, in slightly more than one percent of all H-2B wage 
determinations.\46\ In FY 2014, the first complete fiscal year after 
implementation of the 2013 IFR, the NPWC issued H-2B prevailing wage 
determinations based on SCA and DBA wage rates in approximately seven 
percent of all H-2B wage requests.\47\ For the first quarter of FY 2015 
(October 1, 2014-December 31, 2014), SCA and DBA wage rates were issued 
for approximately 14 percent of all H-2B prevailing wage 
determinations.\48\ Thus, the NPWC experienced an approximately six-
fold increase in the issuance of H-2B prevailing wage rates based on 
SCA and DBA wage determinations through FY 2014 and an even greater 
increase for the beginning of FY 2015, a figure that does not take into 
account requests submitted but rejected because the NPWC determined, 
following its analysis, that the employer's job opening did not fit the 
SCA or DBA occupation. The decision not to permit the issuance of H-2B 
prevailing wage determinations based on the SCA and DBA wage rates will 
allow the NPWC to redirect those resources for use in processing OES 
prevailing wage determinations and for reviewing employer-provided 
surveys, thereby increasing the efficiency, consistency and speed with 
which all prevailing wage determinations are processed.
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    \46\ There is no direct link between the number of prevailing 
wage determinations and the number of temporary employment 
certifications. For example, an employer may request one PWD and 
then a second PWD for the same job opportunity, but would use only 
one of those two PWDs for its temporary employment certification 
application. NPWC issued 45 SCA and DBA PWDs in fiscal year 2010 for 
the H-2B program (out of 4,096 total H-2B determinations), 77 in 
2011 (out of 4,551 total), and 110 in 2012 (out of 8,370 total).
    \47\ 634 SCA or DBA H-2B wage determinations out of 9,250 total.
    \48\ 936 SCA or DBA H-2B wage determinations out of 6,427 total.
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    The 2013 IFR acknowledged that the SCA and DBA wage rates 
constituted sound and reliable evidence of a wage that would ``not 
adversely affect U.S. workers similarly employed,'' 78 FR at 24054, and 
this rule does not reach a different conclusion. Instead, the rule is 
based on the ``extensive discretionary authority [granted to] the 
Secretary of Labor [under the INA to use] any of a number of reasonable 
formulas to prevent the employment of [temporary] foreign workers from 
having an adverse effect upon domestic workers. The immigration statute 
does not specify the particular way in which avoidance of this adverse 
effect must be determined.'' Florida Sugar Cane League, Inc., v. Usery, 
531 F.2d 299, 303-304 (5th Cir. 1976). Thus, based on this wide 
latitude, we have determined that not issuing H-2B prevailing wage 
determinations based on SCA and DBA wage determinations will improve 
the administration and efficiency of the H-2B program, including 
promoting consistency in prevailing wage determinations, and that the 
remaining sources relied on to set the prevailing wage will adequately 
protect U.S. workers against adverse effect in their wages and working 
conditions arising from the employment of foreign workers. Workers who 
are currently working in H-2B occupations in which the SCA or DBA wages 
are higher than the OES mean are unlikely to be affected by the 
decision not to allow SCA and DBA wage determinations because most 
employers will have already chosen to pay the lower OES mean in that 
situation (unless those employers are required to pay the SCA or DBA 
wage rates under a government contract, as explained above).

C. Use of Employer-Provided Surveys To Set the Prevailing Wage

1. History of Employer-Provided Wage Surveys in the H-2B Program
    Before 1998, in the absence of an applicable SCA or DBA wage

[[Page 24166]]

determination or a CBA, DOL determined the applicable prevailing wage 
rate based on a wage survey provided by the local State Employment 
Service Agency (SESA). See GAL 4-95 at p. 1-2.\49\ Employer-provided 
surveys were permitted for setting prevailing wage rates only where the 
results of the employer-provided survey were ``more comprehensive'' 
than the SESA survey. Id. at 7.\50\
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    \49\ State Employment Service Agencies were the predecessors to 
the State Workforce Agencies.
    \50\ This final rule uses the term ``employer-provided survey'' 
to mean any survey that an employer submits to DOL for use in 
setting the prevailing wage. This term does not distinguish between 
different types of surveyors, and includes both surveys conducted by 
a government entity and those conducted by private entities. Where 
this final rule makes distinctions based on the type of entity 
conducting the survey, it uses specific terminology, such as 
``state-conducted survey.''
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    In 1998, DOL began using the OES to set prevailing wages in the H-
2B program where there was no available CBA, SCA, or DBA wage rate, but 
continued to allow employers to submit employer-provided surveys in the 
absence of a CBA, SCA, or DBA wage rate for the employer's job, even 
where there was an available OES wage. See GAL 2-98 at pp. 1, 7. GAL 2-
98 eliminated the requirement that the employer-provided survey must be 
``more comprehensive'' than the SESA survey. Id. Instead, employers 
submitting a survey had to disclose the survey methodology in enough 
detail ``to allow the SESA to make a determination with regard to the 
adequacy of the data provided and its adherence to [survey] criteria.'' 
Id. The guidance required that the survey data be recently collected:

    (1) The data upon which the survey was based must have been 
collected within 24 months of the publication date of the survey or, 
if the employer itself conducted the survey, within 24 months of the 
date the employer submits the survey to the SESA.
    (2) If the employer submits a published survey, it must have 
been published within the last 24 months and it must be the most 
current edition of the survey with wage data that meet the criteria 
under this section.

Id.

    In 2005, DOL issued revised prevailing wage guidance that allowed 
employers to continue to submit surveys. See 2005 PWD Guidance. If the 
job opportunity was not covered by a CBA, the 2005 PWD guidance allowed 
an employer to submit a wage survey even if there was an OES, SCA, or 
DBA wage. Id. at 14. This guidance maintained the timeliness of data 
requirements from GAL 2-98 and included a requirement that the employer 
provide ``the methodology used for the survey to show that it is 
reasonable and consistent with recognized statistical standards and 
principles in producing a prevailing wage (e.g., contains a 
representative sample) . . .'' Id. at 15-16.
    In the 2008 rule, DOL continued to allow use of employer-provided 
wage surveys in the absence of a CBA, provided that the surveys met 
minimum standards for validity. See 73 FR at 78,056 (20 CFR 655.10(f)). 
In the 2008 rule, DOL codified its historical standards for evaluating 
employer-provided wage surveys, stating that in each case where the 
employer submits a survey or other wage data 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. The 2008 rule also 
codified the timeliness of data requirements under GAL 2-98. Id.
    In November 2009, shortly before DOL centralized prevailing wage 
determinations with the NPWC, it issued a new prevailing wage guidance 
document reiterating the standards carried over from the May 2005 
guidance document, now reflected in the 2008 rule. See 2009 PWD 
Guidance. The 2009 PWD Guidance retained the standards for evaluating 
employer-provided wage surveys, including the requirement that the 
employer submit recent data along with information pertaining to the 
survey's methodology. Id. at pp. 14-16, Appendix F.
    In the 2011 Wage Rule, DOL eliminated the use of employer-provided 
wage surveys, except under limited circumstances. The 2011 Wage Rule 
stated that where there was no CBA, DBA, or SCA wage available for the 
job opportunity, an employer could submit a survey if the employer's 
job opportunity was in a geographic area where OES wage data is not 
available, or where the OES does not accurately represent the 
employer's job opportunity. See 20 CFR 655.10(b)(6) and (7) at 76 FR 
3484. However, as discussed above, because the 2011 Wage Rule was never 
implemented, DOL continued to rely on the 2008 rule to implement the H-
2B program. In response to the vacatur order in CATA II, DOL published 
the 2013 IFR, which eliminated the use of skill levels in setting the 
wages for the OES but otherwise left the 2008 rule unaltered. 78 FR at 
24053. The 2013 IFR continued to allow employer-provided surveys under 
the terms of the 2008 rule, and DOL continued to use the 2009 
Prevailing Wage Guidance to govern the review of such surveys.
2. Comments on Employer-Provided Surveys
    As discussed above, the 2013 IFR made no changes to the provisions 
of 20 CFR 655.10 dealing with employer provided surveys, which were 
maintained from the 2008 rule until vacated in CATA III. However, in 
the 2013 IFR, the Departments requested public comment on ways that 
``the validity and reliability of employer-submitted surveys can be 
strengthened,'' among other matters. 78 FR at 24055. In response, we 
received many comments from worker advocates, as well as from employers 
and their advocates.
    Worker advocates argued for a move from the status quo under the 
2008 rule--permissive use of employer-provided surveys--which the 2013 
IFR did not modify, and which remained in place until the CATA III 
vacatur. The advocates submitted detailed proposals for limiting 
employer-provided surveys, generally raising concerns that the surveys 
are inconsistent; are unreliable; are artificially low; contribute to 
wage depression; are based on a conflict of interest where employers or 
their agents conduct or fund them; and create a burden on the agency to 
review. To ameliorate some or all of these concerns, worker advocates 
supported various survey reforms. Comments from a union federation, a 
labor-based think tank, and a consortium of worker advocates offered 
many of the criticisms of surveys, and presented many of the reform 
ideas.
    More specifically, worker advocacy groups echoed concerns, 
expressed in the 2011 Wage Rule and 2013 IFR, about the consistency, 
reliability, and validity of employer-provided surveys, and the groups 
stated that such surveys are only used to depress wages.\51\ One labor-
based think tank asserted that such surveys are ``fundamentally flawed, 
regardless of the methodology used, because employer surveys are 
conducted and/or funded by the employer or its agent,'' creating an 
inherent pro-employer survey bias.
---------------------------------------------------------------------------

    \51\ Several cited seafood processing as an example of an 
occupation where employer-provided surveys have been used to 
suppress wages.
---------------------------------------------------------------------------

    If the Departments elect to permit in the future employer-provided 
surveys beyond those allowed under the 2011 Wage Rule, worker advocacy 
groups, including a labor-based think tank and a federation of unions, 
overwhelmingly

[[Page 24167]]

asked that we establish significant limitations for them. One labor-
based think tank suggested it that if the Departments were to permit 
any employer-provided surveys, it should require each survey to be 
publicly posted for 30 days before acceptance and create a new 
adjudicatory process permitting members of the public or workers to 
challenge the survey.
    In addition, we received virtually identical submissions from a 
dozen worker advocacy groups who recommended that, if we did not adopt 
the 2011 Wage Rule, which they favored, we should adopt a multi-part 
test for assessing employer-provided surveys. Most of these entities 
submitted the same statement advancing the following position:
     Recommended that the Departments never permit employer-
provided surveys if the resulting wage would be lower than the DBA, 
SCA, or CBA wage, consistent with DOL policy before 2005;
     Asked that the Departments require any employer to 
demonstrate that the OES mean is inaccurate and inappropriate for the 
position. In the view of these commenters, the OES mean wage is the 
only accurate and appropriate wage for Zone 1 occupations if BLS has 
sufficient data to calculate the mean wage for the SOC. They stated 
that employer-provided surveys should only be permitted for Zones 2 and 
3 if the employer can demonstrate that the job requires no pre-hire 
training or experience or requires less training or experience than 
other jobs in that occupational group; \52\
---------------------------------------------------------------------------

    \52\ See the explanation of O*NET Job Zones in Sec. II. A., 
supra.
---------------------------------------------------------------------------

     Recommended that we incorporate by reference the standards 
for employer-provided surveys in the PERM rule at 20 CFR 656.40(g), 
``including requiring that employer-provided surveys must be 
statistically accurate and independently verifiable'';
     Recommended that we ``not accept employer-provided surveys 
that are based on data from H-2B employers whose wages have been 
depressed by participation in the prior four-tiered system or by 
reliance on prior employer wage surveys that did not meet the [PERM] 
requirements at 20 CFR 656.40(g)'';
    A comment submitted by a worker advocacy project on behalf of a 
large consortium of worker advocacy groups reiterated the proposals 
above and offered further explanation. Instead of asking the 
Departments to use the survey standards from the PERM regulation, this 
comment advocated the use of survey standards from the 2009 Prevailing 
Wage Guidance [which already applied to the H-2B program at the time 
the 2013 IFR was published], emphasizing the requirement that any 
survey be conducted ``across industries that employ workers in the 
occupation.'' The comment further asked us to define the ``occupation'' 
in a manner consistent with the SOC. In addition, this comment 
recommended that, if there were occupations in which ETA receives a 
significant number of H-2B applications for which it determines that a 
job in Zone 2 or above requires less skill or experience than other 
jobs within the SOC (suggesting forestry as such an example), ETA 
should consult with its O*NET partners to establish appropriate O*NET 
sub-codes for that occupation. After completing this process, the 
comment further requested that ETA consult with BLS to establish 
methodologies that would allow the modification of OES-reported wage 
rates for those within the new sub-code. This comment asked that in all 
cases where an employer seeks to challenge the appropriateness of the 
BLS OES mean wage rate for a position within an SOC, we establish 
procedures to provide public notice of that application, including 
notice to labor organizations and others representing the economic 
interests of workers, allowing them to participate in the 
determination.
    This same comment provided several additional recommendations. 
First, it stated that the wages of nonimmigrant workers should be 
excluded from any survey because the wages of such workers have been 
depressed by earlier wage rules. Second, it suggested a three-year 
phase-in of the new OES wage rate for employers who have long relied on 
employer-provided surveys if the industry is impacted by international 
trade, including in the seafood industry, in lieu of broader use of 
employer-provided surveys. Third, on the subject of state-conducted 
surveys, it expressed the view that: ``The H-2B program has been 
adopted by some industries as a source of cheap labor at rates below 
the competitive market rates for such labor. State or maritime surveys 
that document the degree to which certain industries have been able to 
exploit nonimmigrant labor to pay below the prevailing market rates in 
that occupational classification should not be the basis for setting 
future wage rates.''
    On the other hand, we received several comments from employers and 
employer associations in favor of the use of employer-provided 
surveys.\53\ These comments tended to provide only general support for 
the use of employer-provided surveys with little explanation and 
largely advocated in favor of the status quo established in the 2008 
rule, which remained unchanged under the 2013 IFR, before the CATA III 
vacatur. Comments by several employers and employer associations in the 
seafood industry, as well as two U.S. Senators, are representative of 
this group of comments, by offering general support for surveys, 
particularly where conducted by a state agency. Several comments 
generally noted that employer-provided surveys are necessary where the 
type of work to be performed is not sufficiently aligned with the SOC-
based OES.
---------------------------------------------------------------------------

    \53\ As discussed above, in Sec. II.A. and B, we also received a 
number of comments that advocated using the wage methodology from 
the Border Security, Economic Opportunity, and Immigration 
Modernization Act, S. 744, 113th Cong. (2013). These comments 
advocated returning to a tiered OES wage, and we understand these 
comments to refer to the appropriate OES wage rate. We note, 
however, that the bill also contained a provision on private 
surveys. Sec. 4211(a)(1) would have permitted an employer to use ``a 
legitimate and recent private survey of the wages paid for such 
positions in the metropolitan statistical area'' only where ``the 
wage level commensurate with the experience, training, and 
supervision required for the job based on Bureau of Labor Statistics 
data . . . is not available.'' Because BLS never issues data that 
takes these factors into account within an SOC, it is unclear 
whether this provision was intended always to permit use of private 
surveys, to allow such surveys only where there was no BLS wage for 
the SOC, or to use a methodology other than the SOC to determine 
whether the ``job'' was represented.
---------------------------------------------------------------------------

    Several commenters noted DOL's long history of permitting employer-
provided surveys across multiple programs and asserted that the 
methodology standards in place at the time the 2013 IFR was published 
are sufficient. For example, one employer association promoted the use 
of employer-provided surveys as an ``important safeguard'' for 
employers whose work ``does not align with OES wage categories,'' but 
did not identify any specific occupation for which there was a 
mismatch. This comment further provided that ``the current provision 
provides more than enough safeguards to ensure such surveys are valid 
and reliable'' and such surveys have been ``long utilized by the 
Department [of Labor] across several temporary worker programs.''
    Comments offered by several associations of seafood processing 
employers, individual employers, and members of Congress specifically 
endorsed use of employer-provided, state-conducted surveys by seafood 
processing employers. These comments considered state surveys to be 
reliable, cited the ``unique'' nature of seafood processing 
occupations, and asserted that the broader SOC category

[[Page 24168]]

encompassing seafood processing was inappropriate to set prevailing 
wages for these jobs. These comments stated that the work of seafood 
processors is not accurately represented by the DBA, SCA, or OES job 
classifications, necessitating the use of employer-provided surveys 
compiled by state agriculture or maritime agencies. For example, one 
comment noted that ``the job category of `seafood processor/picker' is 
considered under the much broader categories that do not accurately 
reflect the wages of crab pickers in the Maryland seafood industry.'' 
In addition, a seafood processing employer asserted that wages for 
seafood processers were based on particular industry challenges, 
including foreign competition and natural disasters that disrupt crops, 
and are generally based on a piece rate, making use of the OES survey 
data inappropriate in that industry.
    Finally, although the 2013 IFR requested public comment on ways 
that ``the validity and reliability of employer-submitted surveys can 
be strengthened,'' 78 FR at 24055, we did not receive any comments from 
any source that provided suggestions on sample size, response rates, or 
other data improvements that might make such surveys more reliable.
3. The Final Rule Permits Submission of an Employer-Provided Survey 
Only in Limited Circumstances
    Based on DOL's administrative experience with employer-provided 
surveys, the comments received, and the court's decision on CATA III, 
the Departments have decided to allow the submission of employer-
provided surveys to set the prevailing wage in H-2B in limited 
circumstances. We discuss first the exceptions that CATA III 
recognized, where employer-provided surveys may be permitted in cases 
in which the OES does not provide data in the geographic area or where 
the OES does not accurately represent the relevant job classification, 
which may be conducted by private-sector, nongovernmental entities. We 
then discuss permissible employer-provided surveys conducted and issued 
by a state agency even where the OES may provide data to establish a 
prevailing wage.
a. Wage Surveys Conducted by Nongovernmental Entities
    As discussed earlier in this preamble, given the substantive 
concerns expressed by the court in CATA III about the use of employer-
provided surveys in the H-2B program, the options for accepting such 
surveys under this final rule are now necessarily more limited than 
when the Departments published the 2013 IFR. The court ``direct[ed] 
that private surveys no longer be used in determining the mean rate of 
wage for occupations except where an otherwise applicable OES survey 
does not provide any data for an occupation in a specific geographical 
location, or where the OES survey does not accurately represent the 
relevant job classification.'' 774 F.3d at 191.
    These exceptions identified in CATA III are the exceptions DOL set 
out in the 2011 Wage Rule, 76 FR at 3466-3467, which were supported by 
contemporaneous fact-finding. The court underscored this by suggesting 
that DOL could publish the survey provision in the 2011 Wage Rule 
immediately as an IFR to satisfy its decision. In the preamble to that 
rule, DOL recognized that in limited circumstances, some employer-
provided surveys might provide useful information--e.g., where the OES 
survey does not provide data for a job opportunity in a specific 
geographic area or where a job opportunity is not accurately 
represented within a job classification used by the OES or alternative 
government surveys--and that use of an employer-provided survey would 
be appropriate in those cases. 76 FR at 3465, 3467. However, DOL found 
that, as a general rule, employer-provided surveys should not be used 
to establish the prevailing wage, in part because they had been used 
``typically . . . to lower wages below the prevailing wage rate'' or 
``to avoid using [a government] survey that produces a higher wage.'' 
Id. at 3465, 3466. The decision to reject the routine use of employer-
provided surveys in the 2011 Wage Rule was based on DOL's assessment 
that employer-provided surveys were not consistently reliable and 
because their review was administratively inefficient. Id. at 3465-
3466.
    DOL continues to have concerns about the consistency, reliability, 
and validity of employer-provided surveys set out in the 2011 Wage Rule 
and in the 2013 IFR, 78 FR at 24055. Moreover, DOL experience reviewing 
employer-provided surveys since 2011 has not provided any demonstrable 
evidence that the wage information produced from non-government surveys 
is any more consistent or reliable than DOL determined was the case 
four years ago. These ongoing concerns were echoed in many comments 
submitted by worker advocates. The court underscored those concerns in 
the CATA III decision. In fact, the court went further, finding that 
DOL had arbitrarily allowed wealthy employers to pay for expensive 
private surveys to lower the prevailing wage when, at the same time, 
other employers in the same location and occupation who cannot afford 
such surveys pay the higher OES mean wage. 774 F.3d at 189-190. The 
court also noted the arbitrariness of the ``considerable'' wage 
disparities permitted by this system, which fails to set a consistent 
prevailing wage across an employment area. Id. 774 F.3d at 190. This 
kind of disparity, the court concluded, ``harms workers whether foreign 
or domestic, is readily avoidable, and [is] completely unjustified.'' 
Id.
    We conclude that, given the reliability and comprehensiveness of 
the OES survey, the 2011 Wage Rule reflects reasonable limitations on 
an employer's ability to submit an employer-provided survey. That 
rule's two limited exceptions identify the only circumstances in which 
employer-provided surveys may provide DOL with wage information to 
which DOL does not currently have access. Some comments suggested that 
there are other categories of jobs beyond those identified in the 2011 
Wage Rule in which the OES is somehow mismatched to the H-2B job 
opportunity. However, despite some general criticisms about a 
particular H-2B job's inclusion in an overly broad SOC category, none 
of these comments established with any conclusiveness that a specific 
occupation is not included in the particular SOC surveyed by the OES. 
Accordingly, we continue to hold the view that the OES adequately 
covers all occupations outside of the two exceptions identified in the 
2011 Wage Rule and upheld in CATA III. In addition, except for the 
limited circumstances discussed here, it is not administratively 
efficient to expend resources reviewing employer-provided surveys if a 
robust and accurate prevailing wage under the OES is available.
    Accordingly, consistent with the 2011 Wage Rule and pursuant to the 
court's decision in CATA III, this final rule permits the use of a 
nongovernmental employer-provided survey to set the prevailing wage 
only where the OES survey does not provide any data for an occupation 
in a specific geographical location, or where the OES survey does not 
accurately represent the relevant job classification. In reviewing 
these exceptions from the 2011 Wage Rule, we note that the 
characterization of both exceptions in the preamble to the rule 
contained ambiguities, which are clarified in this final rule. With 
respect to the 2011 exception that permitted

[[Page 24169]]

surveys where the OES does not provide any data for an occupation in a 
specific geographic area, the regulatory text of the rule allowed 
surveys in ``geographic areas where the OES does not gather wage data, 
including but not limited to . . . the Commonwealth of the Northern 
Mariana Islands[.]'' Sec. 655.10(b)(6), 76 FR at 3484. This suggests 
that the exception was limited to those geographic areas in which the 
OES did not actually collect wage data, such as the CNMI. However, the 
preamble to the 2011 Wage Rule further described this exception as 
applicable ``[w]here there is no data from which to determine an OES 
wage[.]'' 76 FR at 3476 (emphasis added). This suggests that the no-
OES-data exception is somewhat broader, and will also apply where the 
BLS may collect data in a geographic area but cannot report a wage for 
the SOC in that area, possibly because the sample size is so small for 
that area that it does not meet BLS methodological criteria for 
publication.
    DOL intended in the 2011 Wage Rule to permit surveys in both cases, 
that is, where the OES does not collect data in a geographic area and 
where the OES does not report a wage in a geographic area, and we adopt 
this construction of the exception in this final rule. In both cases, 
there is no BLS data from which to access a wage in the particular 
geographic area. This is also the reading the CATA III court gave to 
this exception when it directed that private surveys no longer be used 
``except where an otherwise applicable OES survey does not provide any 
data for an occupation in a specific geographical area.'' 774 F.3d at 
191 (emphasis added). Accordingly, the regulatory text in section 
655.10(f)(1)(ii) of this final rule permits surveys where the OES does 
not collect data in a geographic area, or where the OES reports a wage 
for the SOC based only on national data. We adopt this construction 
because, where the OES reports wages for a geographic area based on a 
national average, that wage is not sufficiently tailored to the 
geographic area in which the job opportunity exists. Therefore, where 
the OES does not report wages for the area of intended employment--
generally the metropolitan statistical area (MSA), or more broadly at 
the level of the MSA plus its contiguous areas, or even more broadly at 
the state level--this exception will apply. An example of a survey for 
an H-2B job opportunity that would meet this exception in some 
geographic areas involves SOC Code 45-3011--Fishers and Related Fishing 
Workers. The OES provides data for this category only for California 
and Washington State, and beyond those states it reports only the 
national wage. Therefore, surveys for Fishers and Related Fishing 
Workers would not be permitted in California or Washington State, but 
would be permitted in locations outside of those states. We expect that 
determining whether this exception applies should be relatively easy 
for both employers and DOL because it is based on objective, publicly 
available criteria that cannot be influenced.\54\
---------------------------------------------------------------------------

    \54\ DOL's analysis of FY 2013 H-2B data shows that of the top 
ten SOC codes used in the H-2B program, only two--Fishers and 
Related Fishing Workers and Forest and Conservation Workers--may be 
eligible for this exception because the OES may only report a 
national wage for the SOC in a particular geographic area. Certified 
H-2B applications involving those SOC codes combined constitute only 
5 percent of all such certified applications. Furthermore, only 2 
percent, which is a subset of this 5 percent of all such certified 
applications, involve geographic areas where the SOC reports only a 
national mean wage.
---------------------------------------------------------------------------

    Similarly, the description of the second exception in the 2011 Wage 
Rule--where the OES does not accurately represent the job opportunity--
also contained an ambiguity that is corrected here. The regulatory text 
set forth a somewhat unwieldy two-part test that would have led to 
confusion and subjectivity.\55\ Sec. 655.10(b)(7)(i), 76 FR at 3484. 
However, the preamble to the 2011 Wage Rule suggested the employer's 
sole burden in invoking this exception was ``[t]o show that a job is 
not accurately represented within the SOC job classification system, an 
employer must demonstrate that the job opportunity was not in the 
[Dictionary of Occupational Titles (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.'' 76 FR at 3467. In further 
describing this burden, the preamble stated that ``[a]ccordingly, 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.'' Id.
---------------------------------------------------------------------------

    \55\ Under the 2011 regulatory text, a survey is permissible if 
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 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.
---------------------------------------------------------------------------

    DOL intended in the 2011 Wage Rule to permit surveys where the job 
opportunity is not within an SOC occupation, or if it is within an SOC 
occupation, it is designated in an SOC ``all other'' classification. 
The regulatory text at Sec. 655.10(f)(1)(iii) has been modified to 
reflect that.\56\ We have concluded that in order to effectively 
implement this exception, it does not matter whether the job 
opportunity was included in the DOT and, similarly, the use of the DOT 
crosswalk to the SOC is no longer essential to establish this 
exception. What matters is whether or not the job is included within 
the SOC, and if it is, whether it is included within an SOC ``all 
other'' classification. For clarity and uniformity of application, in 
order to use this exception, a job opportunity must not be included 
within an SOC classification, or if it is, it must fall into the SOC 
``all other'' classification. We further clarify that if an occupation 
is appropriately placed in an ``all other'' classification, it 
necessarily involves job duties which require knowledge, skills, 
abilities, and work tasks that are significantly different than those 
in other SOCs. Therefore, this final rule requires an employer to 
demonstrate only that its job appropriately falls within the ``all 
other'' classification to avail itself of the exception, and does not 
require a separate showing of uniqueness. This clarification is also 
consistent with the Third Circuit's reading of the exception, namely, 
that a private survey is available ``where the OES survey does not 
accurately represent the relevant job classification.'' 741 F.3d at 
191. As with the first exception described above, we expect that 
determining whether a job opportunity fits this exception will be 
relatively straight-forward for all involved. Moreover, DOL will not 
accept an employer-provided survey on the basis that the job 
opportunity is within an ``all other'' SOC if the duties of the job 
opportunity or the employer's prior filing history suggests that a more 
specific SOC is applicable.
---------------------------------------------------------------------------

    \56\ This exception will apply if (A) the job opportunity is not 
included within an occupational classification of the SOC system; or 
(B) the job opportunity is within an occupational classification of 
the SOC system designated as an ``all other'' classification.
---------------------------------------------------------------------------

b. State-Conducted Surveys
    After considering the comments submitted in response to the 2013 
IFR and re-examining the administrative findings from the 2011 Wage 
Rule, we have determined that it is appropriate to permit prevailing 
wage surveys that are conducted and issued by a state as a third, 
limited category of acceptable employer-provided surveys, even where 
the occupation is sufficiently

[[Page 24170]]

represented in the OES. In 2011, DOL rejected a comment suggesting that 
the SWAs rather than employers themselves should conduct surveys to 
determine the prevailing wage. 76 FR at 3464. DOL concluded then that 
SWA surveys resulted in inconsistent treatment of the same job 
opportunity from state to state that reflected ``not the local 
conditions but the quality of the surveyors and the collection 
instruments used[.]'' Id. However, DOL also concluded in 2011 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 [because using 
only government wage surveys] to determine the prevailing wage is the 
most consistent, efficient, and accurate means of determining the 
prevailing wage rate for the H-2B program.'' 76 FR at 3465.\57\ 
Consistent with this assessment, we conclude that surveys conducted and 
issued by a state represent an additional category of reliable 
government surveys, and will not suffer the same infirmities as other 
employer-provided surveys as long as the state-conducted surveys meet 
the methodological standards included in this rule. The requirement 
that the state must independently conduct and issue the survey means 
that the state must design and implement the survey without regard to 
the interest of any employer in the outcome of the wage reported from 
the survey. In addition, to satisfy this requirement, a state official 
must approve the survey.
---------------------------------------------------------------------------

    \57\ For the reasons discussed above, this rule differs from the 
2011 Wage Rule in that it does not require an employer to pay the 
highest of the OES, SCA, DBA, and CBA wage rates, and instead 
eliminates the use of the SCA and DBA wage rates as a source for 
determining H-2B prevailing wages. Similarly, this final rule does 
not require an employer to demonstrate that there is no available 
SCA or DBA wage rate before submitting an employer-provided survey.
---------------------------------------------------------------------------

    This result has support in comments offered by worker advocates. 
Many commenters argued that, if permitted, employer-provided surveys 
must be conducted by third parties disinterested in the results. In 
addition, many survey advocates pointed to state-conducted surveys as 
ones undertaken by neutral third parties free from bias related to the 
outcome. Finally, no comments suggested that state-conducted surveys 
suffer from an inherent pro-employer bias, and we conclude that they do 
not so long as they are conducted using the survey standards we adopt 
here. Further, we understand that state-conducted surveys are 
ordinarily provided free of charge, and so allowing this limited 
exception does not implicate the court's concern in CATA III that the 
2013 IFR permitted wage disparities based solely on the financial 
resources available to employers to purchase surveys. 774 F.3d at 189-
190.
    Moreover, DOL has substantial experience with wage surveys 
conducted by the states, and DOL concludes that they are generally 
reliable and an adequate substitute for the OES, provided that they 
meet sufficient methodological standards.\58\ Although ETA no longer 
funds the states to conduct prevailing wage surveys for the H-2B 
program given the availability of the OES survey, states continue to 
play an important role in the collection of prevailing wages for both 
the OES survey itself, as well as in DOL's H-2A program. As BLS 
explains in its technical notes for the OES survey, ``[t]he OES survey 
is a cooperative effort between BLS and the State Workforce Agencies 
(SWAs). BLS funds the survey and provides the procedures and technical 
support, while the State Workforce Agencies collect most of the data.'' 
\59\ Given DOL's extensive experience partnering with the states to 
collect wage data, we now conclude that where a state elects to conduct 
a survey meeting the methodological requirements in this final rule, it 
is appropriate to permit that state-conducted wage survey to be used as 
a permissible alternative to the OES mean wage. This rule permits 
surveys conducted by state agencies, such as state agriculture or 
maritime agencies, or state colleges and universities because those 
sources are reliable and independent of employer influence.
---------------------------------------------------------------------------

    \58\ Because DOL lacks similar relationships and experience with 
prevailing wage surveys conducted by local governments, employers 
may not submit surveys conducted by any unit of government other 
than the state, unless the employer falls within one of the other 
two permissible exceptions in this final rule for a job in which the 
OES does not collect or report data for a geographic area or does 
not adequately represent the occupation.
    \59\ Technical Notes for May 2013 Estimates, available at http://www.bls.gov/oes/current/oes_tec.htm.
---------------------------------------------------------------------------

    DOL stated in the 2011 Wage Rule that some wage surveys conducted 
by states did not meet DOL's methodological standards. However, rather 
than barring all state-conducted surveys because some do not pass 
muster, we conclude that the appropriate course is to permit the 
submission of state-conducted surveys, but for DOL to review them 
carefully, and reject those that do not meet methodological 
requirements. In addition, DOL is no longer concerned about the 
depletion of administrative resources in the review of employer-
submitted surveys noted in 2011 for the following reasons. See 76 FR at 
3465, 3466. First, far fewer employers will be permitted to submit wage 
surveys under this final rule than were allowed under either the 2013 
IFR or the 2008 Rule. In addition, because employers will no longer 
have the option to request SCA and DBA wage determinations, resources 
typically devoted to review of requests to use the SCA and DBA wage 
determinations can be reallocated to review employer-provided surveys. 
Finally, as discussed in greater detail below, this final rule will 
require a uniform cover sheet for all surveys submitted that will 
facilitate a more streamlined, consistent, and effective review. 
Accordingly, we conclude that the review of state-conducted wage 
surveys--in addition to those employer-provided surveys that may be 
submitted as permitted by the 2011 Wage Rule--will not place a 
significant burden on DOL resources or measurably impact processing 
times.
    DOL's experience to date shows that state-conducted surveys have 
produced prevailing wage rates below the OES mean. However, we conclude 
that this is likely the result of those instruments surveying the wages 
of only entry level workers. The now-vacated 2009 Prevailing Wage 
Guidance permitted surveys using skill levels and, as a result, under 
the 2013 IFR, the state surveys submitted by some employers surveyed 
only entry level workers. We think that this explains much of the wage 
gap between the wages issued under these surveys and the OES mean. As 
the court held in CATA III, acceptance of such skill-level surveys 
incentivized some employers to submit a survey to receive a skill level 
wage rate that was no longer permitted under the OES. Moreover, as this 
rule is implemented, DOL will continue to monitor closely the 
methodological standards employed and the results produced by state-
conducted surveys. Consistency in setting the prevailing wage is best 
promoted by requiring both state-conducted and other employer-provided 
surveys to meet the same methodological standards.
    Because many state-conducted surveys use their own occupational 
taxonomy in conducting prevailing wage surveys, we received comments 
asking us to standardize job classifications by requiring all employer-
conducted surveys to use the OES SOC taxonomy. We decline to impose 
such a standard because it would be inconsistent with DOL's current 
practice in other immigrant and nonimmigrant programs. Where the survey 
reflects the actual job duties to be performed by the H-2B workers, it

[[Page 24171]]

remains an adequate basis upon which to set the prevailing wage, and 
will not have an adverse effect on the wages and working conditions of 
U.S. workers. Accordingly, this final rule will permit employer-
provided surveys, including those conducted by a state, to survey an 
``occupation'' based on the job duties performed, consistent with DOL 
practice across labor certification programs. This practice may result 
in a reported wage that is below the SOC-based OES mean, which we 
conclude will not have adverse effect on the wages of U.S. workers 
because it is an accurate representation of the wages paid to other 
workers performing the same duties, given the use of an alternate, non-
SOC-based taxonomy.\60\ As discussed below, however, consistent with 
DOL's practice across other programs and under earlier H-2B rules, DOL 
will require that employer-provided surveys report wages across 
industries that employ workers in the occupation surveyed and will use 
the same cross-industry standard for surveys that are conducted by 
states as well as those that are allowed under the two 2011 categories. 
Indeed, because this final rule permits employer-provided surveys where 
the SOC does not adequately represent the occupation, it would 
frustrate the purpose of that exception to then require employer-
provided surveys to be conducted across the SOC.
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    \60\ A comment submitted by a worker advocate project on behalf 
of a large consortium of worker groups provided evidence that some 
employer-provided surveys submitted under the 2008 Rule in FY-2012 
resulted in wages below the OES Level One Wage. It appears that some 
of the wages cited by the commenter as below the OES Level One wage 
were issued based on a state-conducted survey. As discussed above, a 
tiered wage rate was permitted for both OES wages and wages issued 
based on an employer-provided survey under the 2008 Rule. For the 
reasons discussed elsewhere in this final rule, we have now 
eliminated the use of skill levels in both OES and employer-provided 
survey wage rates and have eliminated the option for employers to 
submit any wage survey conducted by a non-governmental entity other 
than in very limited circumstances.
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4. Methodological Standards Applicable to All Employer-Provided Surveys
    For the reasons discussed above, this final rule permits the 
prevailing wage to be set based on an employer-provided survey only 
where the survey was conducted by a state or in the two limited 
circumstances where this final rule concludes that the OES wage does 
not provide adequate information for the geographic area or occupation. 
DOL will provide all other employers with a prevailing wage determined 
by either a collective bargaining agreement negotiated at arms' length 
or the OES mean wage for the occupation.
    For the limited class of employer-provided surveys that are 
permitted, this final rule imposes methodological requirements to 
ensure that the survey is sufficiently reliable as the basis for 
setting the prevailing wage. Many of the requirements are imposed to 
provide consistency between the OES and an employer-provided survey to 
the extent possible, and were contained in the 2009 Prevailing Wage 
Guidance that DOL uses to implement the PERM rule.\61\ Many worker 
advocates asked the Departments to include the PERM standards by 
reference in this final rule. Other requirements in this section are 
imposed to ensure compliance with the court's decision and order in 
CATA III. Finally, this rule requires use of a standard survey 
attestation that will provide needed consistency across surveys that 
are submitted and add efficiencies to the DOL survey review process.
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    \61\ The 2009 Prevailing Wage Guidance is also used to assess 
employer-provided surveys submitted in the H-1B program. It was also 
used to assess surveys in the H-2B program until the CATA III court 
vacated the guidance as it was applied in the H-2B program. The 
court's vacatur of the guidance related primarily to its 
authorization of skill levels in H-2B surveys and most aspects of 
the guidance document remain reasonable general standards for 
application to survey assessment.
---------------------------------------------------------------------------

    Some commenters asked us to adopt additional requirements, beyond 
those included in the 2009 Prevailing Wage Guidance that was in effect 
at the time the 2013 IFR was published, for the limited class of 
employer-provided surveys permitted under this final rule. The 
commenters suggested creating an adjudicatory process to allow worker 
advocates to submit competing evidence in response to an employer-
provided survey. DOL has never required such a process in any of the 
prevailing wage programs that ETA administers, and the agency declines 
to do so now. ETA analysts review surveys submitted across the 
immigrant and nonimmigrant programs within DOL's jurisdiction and 
possess the expertise needed to review an employer-provided survey to 
determine whether it falls into one of the permissible categories and 
meets methodological requirements. Accordingly, we determine that any 
value from this additional information is outweighed by the costs and 
delays that such a requirement would impose.
a. The Final Rule Bars the Use of Skill Levels in Employer-Provided 
Surveys and Requires All Surveys To Report the Mean or Median Wage of 
Workers Similarly Employed in the Area of Intended Employment
    This final rule requires that, in the limited circumstances where 
an employer-provided survey is permitted, the survey must provide the 
arithmetic mean of the wages of all workers similarly employed in the 
area of intended employment, except that if the survey provides only a 
median, the prevailing wage will be based on the median of the wages of 
workers similarly employed in the area of intended employment.\62\ This 
provision largely mirrors the language in paragraph (b)(2) applicable 
to use of the OES to set the prevailing wage, and requires an employer-
provided survey to include all workers in the occupation regardless of 
skill level, experience, education, and length of employment. This 
provision reflects the limitations imposed by the court in the CATA III 
decision, which concluded that surveys based on skill levels 
impermissibly conflict with the agency's rejection of skill level-based 
wage determinations in the IFR. See 774 F.3d at 190-191.\63\
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    \62\ The 2008 rule at 20 CFR 655.10(b)(4), which remained 
unchanged under the 2013 IFR, likewise permitted the use of the 
median if a mean wage was not provided in the survey. This provision 
permitting the median wage to be used is consistent with the rule 
for employer-provided surveys across DOL's other programs. See, 
e.g., 20 CFR 656.40(b)(3) (PERM).
    In addition, while 20 CFR 655.10(b)(4) of the 2008 Rule provided 
that any median from an employer-provided survey must be the 
``median of the wages of U.S. workers similarly employed,'' we do 
not include the ``U.S.'' from this language in the new regulatory 
text at 20 CFR 655.10(f)(2). DOL has never had a rule in effect for 
the H-2B program that limited employer-provided surveys that provide 
a mean wage rate to U.S. workers, and the limitation on surveys 
providing the median in the 2008 Rule appears to be the result of a 
drafting error. A discussion of the inclusion of nonimmigrant 
workers in employer-provided surveys is provided below.
    \63\ Before the court vacated 20 CFR 655.10(f) of the 2013 IFR 
in CATA III, DOL continued to permit employers to submit surveys 
that used skill levels, including surveys seeking wages of only 
``entry level'' workers or workers with less than a year of 
experience based on the 2009 Prevailing Wage Guidance. That guidance 
required employers to survey workers who are ``similarly employed,'' 
which was defined as ``jobs requiring substantially similar levels 
of skills.'' 2009 Prevailing Wage Guidance at p. 15.
---------------------------------------------------------------------------

    The court held in CATA III that permitting employers to submit 
surveys that used skill levels was a substantive APA violation in light 
of DOL's finding in the 2011 Wage Rule and the 2013 IFR that the use of 
skill levels to issue OES prevailing wages would depress the wages of 
U.S. workers because most H-2B jobs involve unskilled occupations

[[Page 24172]]

requiring few or no skill differentials. 774 F.3d at 190-191. 
Accordingly, to achieve consistency with our methodology for prevailing 
wages issued under the OES and to comply with the CATA III decision, 
this final rule prohibits employer-provided surveys in the H-2B program 
that report wages based on skill levels. See 20 CFR 655.10(f)(2) of 
this final rule.
    In addition, the requirement that the survey provide the mean or 
median of the wages of all workers ``similarly employed'' requires the 
survey to be conducted without regard to the immigration status of the 
workers surveyed. In imposing this requirement, we revisit DOL's 
administrative finding in the 2011 Wage Rule that including the wages 
of H-2B or other nonimmigrant workers in the survey may depress wages. 
76 FR at 3467. In addition, some comments in response to the 2013 IFR 
asked that we bar employer-provided surveys that include the wages of 
nonimmigrant workers on the same grounds. However, we now conclude, for 
the reasons stated below, that requiring surveys to collect data 
without consideration of the immigration status of nonimmigrant workers 
is appropriate. We caution that this final rule does not allow the 
selective reporting of only nonimmigrant workers, but requires all 
similarly employed workers to be included in the sample, regardless of 
immigration status. DOL will not accept wage surveys that exclude the 
wages of U.S. workers or exclude the wages of nonimmigrant workers.
    DOL's determination in the 2011 Wage Rule was not based on 
empirical data showing that excluding the wages of nonimmigrant workers 
from a survey would result in a more accurate prevailing wage. In 
addition, the commenters did not submit any data supporting their 
request to exclude nonimmigrant workers from surveys. Requiring the 
survey to be collected without regard to immigration status will 
promote consistency with the OES, which does not bar the inclusion of 
nonimmigrant workers.\64\ Further, commercial wage surveys generally do 
not exclude workers from the survey based on immigration status, and, 
where this final rule concludes that the OES does not provide adequate 
information for the occupation or geographic location, we are concerned 
that requiring the exclusion of nonimmigrant workers would effectively 
bar employers from using such wage surveys. See 20 CFR 655.10(f)(2) of 
this final rule.\65\
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    \64\ The OES instructs employers to exclude the wages of workers 
``not covered by unemployment insurance.'' See, e.g., OMB Form 1220-
0042 at p. 1, available at http://www.bls.gov/respondents/oes/pdf/forms/311000.pdf. State law governs whether nonimmigrant workers, 
including H-2B workers, are covered by unemployment insurance, and 
so this instruction may have the incidental effect of excluding the 
wages of some categories of nonimmigrant workers from the OES survey 
in some states.
    \65\ As discussed in Sec. II.C.2, we also received comments 
asking that DOL ``not accept employer-provided surveys that are 
based on data from H-2B employers whose wages have been depressed by 
participation in the prior four-tiered system or by reliance on 
prior employer wage surveys that did not meet the requirements at 20 
CFR 656.40(g).'' Because nearly all employers who have participated 
in the H-2B program in recent years paid a wage based on wage tiers 
until the 2013 IFR, this comment suggests the exclusion from surveys 
of nearly all H-2B employers, an outcome that would go beyond the 
position that we adopted in the 2011 Wage Rule. We decline to take 
this suggestion because it requests that the surveyor exclude 
workers performing identical tasks included in the survey. We 
conclude that this selective sampling suggested is inconsistent with 
both the requirements for random or universe sampling discussed 
below and with the OES methodology.
---------------------------------------------------------------------------

b. This Final Rule Requires Employers To Provide a Standard Attestation 
With an Employer-Provided Survey That Provides Basic Methodological 
Information Needed To Evaluate the Request
    The content of employer-provided surveys in the H-2B program has 
varied widely and has not been consistently reliable, which is why such 
surveys are generally not permitted in this final rule. To enhance the 
consistency of the limited class of employer-provided surveys that are 
acceptable under this final rule and ensure that surveys provide 
sufficient information to allow DOL to make a finding that the survey 
is reliable, this final rule requires that each employer-submitted 
survey include a standard attestation, signed by the employer, based on 
information provided by the surveyor. The attestation must set forth 
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. The form, provided as an appendix to this final rule, 
addresses each of the methodological requirements in this final 
rule.\66\ Submission of this form will not preclude the NWPC from 
requesting additional information as necessary to evaluate and 
determine the validity of the survey for the purposes of issuing a 
prevailing wage determination.
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    \66\ The methodological standards required in this rule are 
consistent with--and in some circumstances more extensive than--the 
methodological standards from the PERM rule that some commenters 
urged us to apply to the H-2B program. The Paperwork Reduction Act 
implications of this attestation are discussed in Sec. III.C., 
infra.
---------------------------------------------------------------------------

    Much of the information required by the new form was already 
required to be provided under the 2008 rule. This information was 
unchanged as to employer-provided surveys under the 2013 IFR, and 
required an employer to provide, among other things: ``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.'' See 20 CFR 655.10(f)(2) of the 2008 rule. The 2009 Prevailing 
Wage Guidance provided further instructions on employer-provided 
surveys, and the NPWC could issue a request for information to seek 
additional information needed to evaluate a survey that was submitted. 
However, in practice, employers often submitted information of varying 
quality and detail. Whether information required by this final rule is 
new or based on established survey requirements is discussed for each 
survey requirement in this preamble.
    The enhanced survey consistency enabled by the new form will make 
DOL's review more efficient. In addition, the required attestation will 
increase the transparency of the survey review process by providing all 
employers the criteria against which DOL will assess the surveys in an 
easily accessible format. This will reduce the number of instances 
where DOL will reject an employer-provided survey because it provides 
insufficient information to assess its validity.
    Although employer-provided surveys are limited to those conducted 
by bona fide third parties for occupations and geographic areas where 
the OES does not provide adequate information (as discussed in Sec. 
II.C.4.f below) or surveys conducted by states (as discussed in Sec. 
II.C.3 and II.C.4.f), it is appropriate to require the employer to 
attest to the methodology in the survey to the best of its knowledge 
and belief. Because the employer is seeking to use the survey to set 
the prevailing wage, the employer is ultimately responsible for 
ensuring that the survey meets all required standards. We expect that 
in many cases the employer will be able to obtain the basic 
methodological information required to complete the attestation from 
the survey instrument

[[Page 24173]]

itself. See 20 CFR 655.10(f)(4) of this final rule.
c. The Final Rule Requires Surveyors To Either Make a Reasonable, Good 
Faith Effort To Sample All Employers With Workers Similarly Employed in 
the Occupation and Area Surveyed or Base the Survey on a Random Sample 
of Such Employers
    The 2009 Prevailing Wage Guidance suggested, but did not expressly 
require, that an employer-provided survey use random sampling. See 2009 
Prevailing Wage Guidance, Appendix F at p. 2. We are concerned that 
leaving random sampling as only an option rather than a requirement may 
result in employer-provided surveys that use selective sampling or 
other techniques that do not result in a reliable prevailing wage. To 
address this concern and ensure that surveys submitted are sufficiently 
reliable, this final rule requires that the surveyor either make a 
reasonable, good faith attempt to contact all employers employing 
workers in the occupation and area surveyed, or survey a random sample 
of such employers.
    Where the universe of employers is small, it may be necessary to 
attempt to contact all employers with workers similarly employed in the 
occupation and geographic area to ensure that the minimum sample size 
is met. A reasonable, good faith attempt to contact all employers with 
workers similarly employed in the occupation means, for example, that 
the surveyor might send the survey through mail or other appropriate 
means to all employers in the geographic area and then follow-up by 
telephone with all non-respondents.
    On the other hand, if there are a large number of employers in the 
geographic area, surveyors will likely use the random sample option. 
Proper randomization requires the surveyor to determine the appropriate 
``universe'' of employers to be surveyed before beginning the survey 
and to select randomly a sufficient number of employers to survey to 
meet the minimum criteria on the number of employers and workers who 
must be sampled, as discussed below. See 20 CFR 655.10 (f)(4)(i) of 
this final rule.
d. The Final Rule Requires All Employer-Provided Surveys To Include the 
Wages of at Least Three Employers and 30 Workers
    Consistent with OES methodology, this final rule requires an 
employer-provided survey to include wages collected from at least three 
employers and 30 workers. BLS requires wage information from a minimum 
of three employers and 30 workers (after raw OES survey data is 
appropriately scrubbed and weighted) before it deems data of sufficient 
quality to publish on its Web site. In addition, these standards are 
consistent with the methodology from the 2009 Prevailing Wage Guidance 
that was in effect for the H-2B program at the time the 2013 IFR was 
published and with standards for the PERM program that some commenters 
recommended we apply to any H-2B surveys accepted. See 2009 Prevailing 
Wage Guidance, Appendix F at p. 2. Further, although the 2013 IFR 
sought comments on ways to improve the methodology for employer-
provided surveys, 78 FR at 24055, we did not receive any comments 
recommending that we change these minimum sample sizes.
    Based on DOL's experience reviewing employer-provided surveys and 
the desire to provide consistency between the OES methodology and the 
methodology for employer-provided surveys, we conclude that three 
employers and 30 workers is the minimum number of data points required 
to produce a reliable arithmetic mean wage for an occupation in a given 
area of intended employment. Under this final rule, the surveyor would 
take into account the nature and duties of the job opportunity, and 
contact a large enough sample of employers to yield usable data for at 
least three employers and 30 workers similarly employed, regardless of 
immigration status, as discussed further in Sec. II.C.4.a above. 
Employers responding to the survey may not report wages selectively or 
base responses on only a portion of the workers similarly employed in 
the occupation that is the subject of the survey; rather, each employer 
responding to the survey must collect and report wage data for all of 
its workers in the occupation regardless of their level of skill, 
education, seniority, or experience. Under this final rule, if a 
surveyor could not obtain wage results for 30 workers, the area 
surveyed may be expanded beyond the area of intended employment under 
the guidelines discussed further below. However, as DOL stated in the 
2009 Prevailing Wage Guidance (see Appendix F at p. 2), in most cases a 
surveyor should be able to report data for at least 30 workers and 
three employers in the occupation and area of intended employment 
without expanding the survey beyond the area of intended employment. 
See 20 CFR 655.10(f)(4)(ii) of this final rule.
e. The Final Rule Allows the Area Surveyed to be Expanded Beyond the 
Area of Intended Employment in Certain Limited Circumstances
    In any of the three limited categories in which an employer-
provided survey may be submitted, this final rule permits the survey to 
cover a geographic area larger than the area of intended employment 
only if all of the following conditions are met: (1) The expansion is 
limited to geographic areas that are contiguous to the area of intended 
employment; (2) the expansion is required to meet either the 30-worker 
or three-employer minimum; and (3) the geographic area is expanded no 
more than necessary to meet these minimum requirements. The H-2B 
program has always required that surveys reflect wage data for the area 
of intended employment, but has allowed states and employers to expand 
wage survey boundaries under limited circumstances, such as where the 
employer submitting the prevailing wage request is the only entity in 
the area employing persons in a given occupation,\67\ or when the 
survey elicits an insufficient response from employers.\68\ When the 
number of workers in the area of intended employment \69\--that is, the 
metropolitan statistical area of the job opportunity and the area 
within normal commuting distance from the job opportunity--is 
insufficient to meet survey standards, DOL has also allowed surveys to 
include data from employers located outside the area of intended 
employment.\70\ This final rule codifies the practice.
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    \67\ See GAL 4-95 (May 18, 1995) at p. 4 (``If the employer 
requesting a prevailing wage determination is the only employer [in 
the area of employment] employing workers in the occupation for 
which the prevailing wage request was made, the SESA may . . . . 
[s]urvey jobs outside the area of employment with the same 9-digit 
DOT code as was assigned to the job opportunity/occupation for which 
the employer requested a prevailing wage determination[.]'').
    \68\ See id. at p. 4 (``SESAs can also . . . survey jobs outside 
the area of intended employment if a sufficient number of employers 
fail to respond to a survey to provide a reliable prevailing wage 
determination.'').
    \69\ The term ``area of intended employment'' is defined at 20 
CFR 655.5 of the companion H-2B rule issued on the same day as this 
final wage rule.
    \70\ See ETA, Prevailing Wage Determination Policy Guidance 
(November 2009), Appendix F, at p. 1; ETA, Prevailing Wage 
Determination Policy Guidance (May 17, 2005), Appendix F, at p. 1; 
GAL 2-98 (Oct. 31, 1997) at p. 8 (``A valid arithmetic mean for an 
area larger than an OES wage area, whether MSA, PMSA, or OES Balance 
of State area, may only be used if there are not sufficient workers 
in the specific occupational classification relevant to the 
employer's job opportunity in the area of intended employment.'').
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    This final rule also requires that the area to which the survey 
expands be

[[Page 24174]]

contiguous to the area of intended employment. OFLC's program 
experience demonstrates that some employers have submitted surveys that 
expanded the survey area using remote geographic areas located far from 
the job opportunity. We see no reason for a survey to ignore areas 
immediately surrounding the job opportunity in favor of geographic 
areas located large distances from the job In practice, the NPWC 
rarely, if ever, has found a reason to accept surveys from remote 
locations. Thus, codifying this limitation will give surveyors clearer 
guidance and save employers the cost and effort of commissioning 
surveys the NPWC will not use. The new requirement would also save 
processing time, as NPWC staff would no longer be presented with 
surveys for areas not narrowly tailored to suit the job opportunity.
    The final rule further requires that surveyors expand the 
geographic area only to the extent necessary to meet the minimum sample 
size requirements of this final rule. DOL has traditionally cautioned 
states and employers that, for purposes of surveys, the geographic area 
should be expanded only to the extent necessary to produce a 
representative sample,\71\ and this provision codifies that 
expectation. This limitation reflects DOL's view that surveys submitted 
for labor certification purposes must take a careful approach to 
expansion rather than default immediately to state-wide coverage. As 
always, if the NPWC, in the course of its prevailing wage review, 
believes that the geographic area is overly broad, the NPWC may ask the 
employer for additional information and/or reject the survey under this 
subsection.
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    \71\ See GAL 4-95 (May 18, 1995) at p. 4 (``If it is necessary 
to include jobs outside the area of intended employment, the 
geographic area of consideration should not be expanded more than is 
necessary to obtain a representative number of employers employing 
workers in the occupation for which a determination is to be made. 
For example, it is appropriate to survey cities and counties that 
are in close proximity to the area of intended employment rather 
than using a State-wide average wage rate.''), GAL 2-98 (Oct. 31, 
1997) at p. 8 (``However, the area of intended employment [for 
survey purposes] should not be expanded beyond that which is 
necessary to produce a representative sample. In all cases where an 
area that is larger than an OES wage area is used, the employer must 
establish that there were not sufficient workers in the area of 
intended employment, thus necessitating the expansion of the area 
surveyed.''), and GAL 1-00 (May 16, 2000), Attachment A, p. 2, 
available at http://wdr.doleta.gov/directives/corr_doc.cfm?DOCN=1214 
(restating this principle).
---------------------------------------------------------------------------

    Incremental, tailored expansion is consistent with OES survey 
methodology. The OES data used in the foreign labor certification 
program (which appears on DOL's Online Wage Library) uses the concept 
of geographic ``levels'' to allow expansion of the area for which wages 
are reported. Geographic levels are indicators of the breadth of the 
area. When the OES survey fails to collect enough usable data for a 
given geographic area (for example, an MSA or a ``balance of state'' 
area), BLS rolls over to the next largest geographic area until it 
reaches an area large enough that it has enough data to report. BLS 
will expand the area for which it reports data only as necessary, and 
will report wage data for the smallest area for which reliable data is 
available.\72\
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    \72\ The BLS practice is generally described in GAL 2-98, at p. 
4 (``Expansion of Area of Intended Employment . . . The OES survey 
data will represent all responding employers in the area of intended 
employment who employ workers in that OES occupational code. If the 
OES survey does not include enough responses in that area and 
occupation to allow BLS to publish the data, the OES system will 
default to all MSAs, PMSAs, and Balance of State areas contiguous to 
the requested area within that State. If this still does not result 
in publishable data, the system will default to statewide 
information for that occupation. Because of the size of the sample, 
it is unlikely this will occur except in very unusual occupations or 
in small States.''). See also OFLC's explanation of ``geographic 
level'' at: http://flcdatacenter.com/faq.aspx.
---------------------------------------------------------------------------

    Surveyors may approach this requirement in two ways. In cases where 
an employer contracts with a surveyor familiar with the area of 
employment, the surveyor may determine before beginning the survey that 
the survey will not elicit a sufficient response to meet the regulatory 
requirements--for example, if there are not enough employers or workers 
in the area. In these cases, the surveyor may elect, at the outset, to 
survey a geographic area larger than the area of employment. The 
employer, when completing the survey attestation, discussed above at 
Sec. II.C.4.b, must explain the decision to expand the survey area at 
the outset, and describe the extent of the expansion and the reason why 
expansion was needed to meet the regulatory requirements based on 
information provided by the surveyor.
    In other cases, a surveyor may use a more incremental approach. For 
example, the surveyor may survey the area of intended employment, but 
the survey still yields an insufficient response. In such cases, the 
surveyor must either make a reasonable, good faith effort to contact 
all employers employing workers in the occupation in the expanded area 
or survey a new, random sample of such employers in the expanded area, 
as discussed further in Sec II.C.4.c. See 20 CFR 655.10(f)(3) of this 
final rule.
f. The Survey Collection Must Be Conducted by a State or, in a Case 
Where the OES Does Not Provide Adequate Data for the Geographic Area or 
the Occupation, a Bona Fide Third Party
    This final rule requires that if an employer provides a survey 
because the OES survey does not provide data for the SOC in a 
geographic area under 20 CFR 655.10(f)(1)(ii) or the OES does not 
provide adequate information for the occupation as provided under 20 
CFR 655.10(f)(1)(iii), a bona fide third party must conduct the 
collection.\73\ For purposes of this rule, H-2B employers and H-2B 
employers' agents, representatives, and attorneys are not bona fide 
third parties.\74\ These exclusions are intended to prevent self-
interest and other biases from affecting the reliability of employer-
provided surveys under this rule, which is also why privately-conducted 
employer-provided wage surveys are barred in all circumstances where 
the OES provides adequate data. Such concerns were raised in the 
comments of many worker advocates in response to the 2013 IFR. These 
concerns are particularly acute in the case of surveys conducted by H-
2B employers, representatives, agents, and attorneys. Even H-2B 
employers, representatives, agents, and attorneys who are not directly 
involved in the application for which the survey is submitted are 
barred from conducting a wage survey under this final rule because we 
conclude that H-2B employers and the entities that represent them are 
likely to share common interests and biases that may affect the 
reliability of such surveys. See 20 CFR 655.10(f)(4)(iii) of this final 
rule.
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    \73\ This requirement does not bar an employer from paying an 
otherwise bona fide third party to conduct the survey. In addition, 
employers who are eligible to submit a survey under Sec. 
655.10(f)(1)(ii) or (iii) may submit a survey conducted and issued 
by a state.
    \74\ Employer associations may be bona fide third-parties for 
the purposes of this rule.
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    This rule reflects our determination that DOL will accept non-state 
surveys only where the OES either does not cover the geographic area 
and occupation or does not adequately provide data about the job. In 
these limited circumstances in which the OES does not provide adequate 
data, it would be inappropriate to require the employer to submit only 
a state-conducted survey because such a survey may not be available. As 
discussed in Sec. II.C.3, where an OES wage adequately represents the 
occupation, thus making the exceptions in 20 CFR 655.10(f)(1)(ii) or 
(iii) of this final rule inapplicable, a survey conducted and

[[Page 24175]]

issued by a state is the only type of employer-provided survey that may 
be submitted. See 20 CFR 655.10(f)(1)(i). This reflects our 
determination, discussed above, that use of privately-conducted wage 
surveys would depress the wages of U.S. workers where OES wages 
adequately represent the occupation.
g. This Final Rule Requires the Wage Reported by an Employer-Provided 
Survey To Include All Types of Pay as Set Out in Form ETA-9165
    This final rule requires that the wage reported from any employer-
provided survey must include all types of ``pay'' to workers in the 
survey as required by new Form ETA-9165. Form ETA-9165 uses the 
definition of pay from the OES. The OES requires surveys to consider as 
pay and convert into the hourly rate reported to the surveyor the base 
rate of pay, commissions, cost-of-living allowance, deadheading pay, 
guaranteed pay, hazard pay, incentive pay, longevity pay, piece rate, 
portal-to-portal rate, production bonus, and tips. See, e.g., 
Occupational Report of Food Manufacturing (311000) at p.2, OMB No. 
1220-0042.\75\ For example, if an employer guarantees a minimum hourly 
wage, but pays other types of monetary compensation, including tips, 
commission, or piece rate, in excess of the hourly guarantee, the total 
of the hourly guarantee and this additional compensation must be 
reported in the survey as the hourly wage paid. This requirement is 
needed for consistency with the OES. If we did not require inclusion in 
the survey wage reported of all of the types of pay reported to the 
OES, those limited surveys permitted by this final rule would 
necessarily undercut the OES by not reporting the complete wage paid. 
We understand that employers ordinarily calculate the wage paid for OES 
purposes by consulting payroll records. We conclude that, given this 
swift and accurate means of providing the complete rate of ``pay'' in a 
survey, this requirement is not unduly burdensome. See 20 CFR 
655.10(f)(4)(v) of this final rule.
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    \75\ Available at http://www.bls.gov/respondents/oes/pdf/forms/311000.pdf.
---------------------------------------------------------------------------

h. The Final Rule Requires All Employer-Provided Surveys To Be the Most 
Recent Edition of the Survey and Be Based on Wages Paid No More Than 24 
Months Before the Date of Submission to DOL
    This final rule requires that the data reported in an employer-
provided survey must be based on wages paid no more than 24 months 
before the survey is submitted to ETA. The relevant provision of the 
2008 Rule at 20 CFR 655.10(f)(3) (which was unchanged in the 2013 IFR 
until vacated by the CATA III decision) required surveys to be based on 
``recently collected data[,]'' which, for ``employer-conducted'' 
surveys meant that the survey data must have been collected within 24 
months of its submission.\76\ The standard was somewhat different for 
``published'' surveys, which were permitted to rely on data published 
within 24 months of submission, but the data could be collected up to 
24 months prior to publication. As a result, at the time they were 
submitted to the NPWC, published surveys could contain data collected 
up to 48 months before submission.\77\ To ensure that no employer 
submitted-surveys are based on out-of-date wage information, this final 
rule requires that all surveys, regardless of when or whether they are 
published, be based on wages paid not more than 24 months before 
submission. Thus, this final rule retains the 24-month standard that 
was applicable to employer-conducted surveys under the 2008 Rule. In 
addition, by eliminating the ``published'' survey distinction, this 
final rule broadens the application of the 24-month rule to all 
employer-provided surveys. The final rule also changes the event that 
delineates the 24 month period under earlier rules--the survey 
submitted to the NPWC must be based on wages paid, rather than wage 
data collected, within the 24 months prior to submission.
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    \76\ Before the 24-month standard was codified in 2008, it 
appeared for years in the program's prevailing wage guidance to the 
states.
    \77\ For purposes of comparison, OES survey estimates are based 
on data collected over a three-year period, with the survey updated 
every six months based on more recent data. In addition, in the 
1990s, the DOL recommended that state employment service agencies 
use their in-house wage surveys for only two years. See GAL 4-95 at 
pp. 9-10 (``SESA Conducted Prevailing Wage Surveys . . . Length of 
Time Survey Results are Valid . . . SESAs may use survey results for 
up to 2 years after the data are collected. After 2 years, the 
results of a new survey should be implemented.'').
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    This final rule updates and strengthens the data timeliness 
requirements from earlier rules, starting with the distinction between 
types of surveys. Over the years, the program and its stakeholders have 
developed a vocabulary referring to the source of surveys supporting 
prevailing wage requests. These include, for example, ``published,'' 
``unpublished,'' ``commercial,'' and ``private.'' In the digital age, 
these distinctions are no longer as meaningful or as helpful for 
prevailing wage determination purposes. Today, technology often allows 
professional surveyors and users of surveys alike to post or make 
surveys widely available on the Internet, thus blurring the clear 
distinctions that once existed between published and private surveys. 
In addition, the survey landscape has changed dramatically, as the 
production of surveys has developed into an industry with multiple 
choices, prices, and arrangements that include, for example, survey 
search services, survey subscription services, traditional surveyors 
for hire, and more informal or customized surveys conducted directly by 
private employers or their agents for limited purposes. Thus, we have 
concluded that these distinctions made in the 2008 Rule are less 
relevant, and we eliminate them.
    This allows us to collapse the requirements on age of data. To be 
relevant and reliable, survey data must, among other things, be 
contemporary. Wage data, in particular, quickly becomes stale in a 
growing economy, and we have determined that data over 24 months old is 
sufficiently out-of-date that it does not permit us to set an accurate 
prevailing wage in the area of intended employment. Moreover, in the 
information age, it is no longer appropriate for the foreign labor 
certification program to use employer-provided wage data that at times 
may be up to four years old. In addition, many professional wage survey 
services update their surveys annually or quarterly. Requiring wage 
data to be based on wages paid no more than 24 months before submission 
in all instances, and accepting only the current edition of the survey, 
adds rigor and improves data quality for the limited class of employer-
provided surveys permitted under this final rule. See 20 CFR 
655.10(f)(5) of this final rule.

D. Use of a Collective Bargaining Agreement Wage To Set the Prevailing 
Wage

    As discussed above, the 2011 Wage Rule would have required the 
prevailing wage to be set at the wage rate contained in a collective 
bargaining agreement only where the CBA rate was the highest of the OES 
mean, SCA, DBA, and CBA wage rates. In explaining its decision to set 
the prevailing wage at the CBA wage only where it is the highest 
applicable wage, DOL stated that ``a CBA rate below the prevailing wage 
would not be a valid wage for purposes of the H-2B program.'' 76 FR at 
3455.
    In contrast, the 2008 Rule at 20 CFR 655.10(b)(1), which was 
unchanged in the 2013 IFR, included the requirement that, unless the 
job opportunity was covered by a sports league's rules or

[[Page 24176]]

regulations, ``if the job opportunity is covered by a collective 
bargaining agreement (CBA) that was negotiated at arms' length between 
the union and the employer, the wage rate set forth in the CBA is 
considered as not adversely affecting the wages of U.S. workers, that 
is, it is considered the `prevailing wage' for labor certification 
purposes.'' 20 CFR 655.10(b)(1). Thus, these rules required the 
applicable CBA wage rate to be paid in all cases where the job 
opportunity is covered by the agreement, and would not require the H-2B 
employer to offer and pay a higher OES, SCA or DBA wage.
    In response to the 2013 IFR, we received several comments about the 
appropriate role of CBA wage rates in the H-2B program. Worker 
advocates, including a federation of unions and a worker advocate 
project representing a large consortium of worker advocate groups, 
asked the Departments to adopt the 2011 Wage Rule's position on the 
application of the CBA wage rate to the H-2B prevailing wage, and 
require the CBA wage rate to be paid only where it is the highest wage. 
These comments generally reflected the concern that a wage rate is 
often only one of a package of terms and conditions of employment 
negotiated between an employer and the employees' representative, and 
the negotiated wage rate may reflect a quid pro quo in exchange for 
another improved term in the package.
    After considering these comments, we adopt the approach under the 
2008 Rule, which was unchanged by the 2013 IFR, in which the CBA wage 
rate is the prevailing wage where it is applicable to the H-2B 
employer's job opportunity, regardless whether the OES mean is higher. 
When negotiated at arms' length by a duly elected or recognized 
bargaining representative, the CBA wage accurately represents the 
``wage paid to similarly employed workers in a specific occupation in 
the area of intended employment[,]'' which is DOL's definition of the 
prevailing wage for the purposes of its labor certification 
programs.\78\ We are not persuaded by the argument that because the CBA 
wage may be offset by improvements in other terms and conditions of 
employment, the wage may not be an accurate representation of the 
prevailing wage. In setting the prevailing wage, we do not consider or 
adjust for the many factors that may influence a particular wage, 
beyond the occupational classification and the geographic area in which 
the H-2B job opportunity exists. Moreover, as with a CBA wage rate, the 
OES mean wage reflects only those forms of monetary compensation that 
the OES classifies as pay, and does not contain any non-monetary 
compensation that may exist in an occupation in a geographic area.\79\ 
We conclude that a prevailing wage rate based on a CBA wage negotiated 
at arms' length by the employer and a proper employee representative 
does not have an adverse effect on the wages of U.S. workers because it 
reflects the agreement of the parties on the appropriate wage for the 
job opportunity. Accordingly, the CBA wage should be paid in all 
circumstances \80\ where the job opportunity is covered by the 
agreement. See 20 CFR 655.10(b)(1) of this final rule.
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    \78\ See http://www.foreignlaborcert.doleta.gov/pwscreens.cfm.
    \79\ The OES excludes attendance bonuses, back pay, draw, 
holiday bonuses, holiday premium pay, jury duty pay, lodging 
payments, meal payments, merchandise discounts, nonproduction 
bonuses, on-call pay, overtime pay, perquisites, profit-sharing 
payments, relocation allowances, severance pay, shift differential, 
stock bonuses, tool allowance, tuition repayment, uniform allowances 
and weekend pay from the definition of pay. See http://www.bls.gov/oes/oes_ques.htm.
    \80\ As under the 2008 Rule, this final rule at 20 CFR 
655.10(b)(1) excludes those occupations covered by a sports league's 
rules or regulations. Prevailing wages for occupations covered by a 
sports league's rules or regulations are set through the methodology 
in 20 CFR 655.10(i), as provided in the companion H-2B comprehensive 
rule entitled, Temporary Non-agricultural Employment of H-2B Aliens 
in the United States, published the same day as this final wage 
rule.
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E. Implementation

    This final rule will apply to all new prevailing wage requests 
submitted on or after the effective date of this rule. Any prevailing 
wage request submitted before the effective date of this rule and 
pending at the time this rule is published will be processed under the 
standards of the rule in effect on the date that the prevailing wage 
request was filed.

III. Administrative Information

A. Executive Orders 12866 and 13563

    Executive Order 13563 directs agencies to propose or adopt a 
regulation only upon a reasoned determination that its benefits justify 
its costs; tailor the regulation to impose the least burden on society, 
consistent with achieving the regulatory objectives; and in choosing 
among alternative regulatory approaches, select those approaches that 
maximize net benefits. Executive Order 13563 recognizes that some 
benefits are difficult to quantify and provides that, where appropriate 
and permitted by law, agencies may consider and discuss qualitatively 
values that are difficult or impossible to quantify, including equity, 
human dignity, fairness, and distributive impacts.
    Under Executive Order 12866, the Office of Management and Budget's 
(OMB's) Office of Information and Regulatory Affairs determines whether 
a regulatory action is significant and, therefore, subject to the 
requirements of the Executive Order and review by OMB. 58 FR 51735. 
Section 3(f) of Executive Order 12866 defines a ``significant 
regulatory action'' as an action that is likely to result in a rule 
that: (1) Has an annual effect on the economy of $100 million or more, 
or adversely affects in a material way a sector of the economy, 
productivity, competition, jobs, the environment, public health or 
safety, or State, local or tribal governments or communities (also 
referred to as economically significant); (2) creates serious 
inconsistency or otherwise interferes with an action taken or planned 
by another agency; (3) materially alters the budgetary impacts of 
entitlement grants, user fees, or loan programs, or the rights and 
obligations of recipients thereof; or (4) raises novel legal or policy 
issues arising out of legal mandates, the President's priorities, or 
the principles set forth in the Executive Order. Id.
    This final rule is a significant regulatory action under section 
3(f)(4) of Executive Order 12866. The results of the Departments' cost-
benefit analysis under this Part (III.A) are meant to satisfy the 
analytical requirements under Executive Orders 12866 and 13563. These 
longstanding requirements ensure that agencies select those regulatory 
approaches that maximize net benefits--including potential economic, 
environmental, public health and safety, and other advantages; 
distributive impacts; and equity--unless otherwise required by statute. 
The Departments did not use the cost-benefit analysis under this Part 
(III.A) for purposes forbidden by or inconsistent with the Immigration 
and Nationality Act, as amended.
    The following analysis evaluates the expected impacts of this final 
rule. According to the principles contained in OMB Circular A-4, the 
baseline for the economic analysis of this rule is the situation most 
recently in effect, as described in detail below, which is based on the 
2008 rule and the 2013 IFR, as modified by the CATA III court decision 
on December 5, 2014. As discussed in the preamble, on March 4, 2015, 
the district court in Perez vacated the 2008 rule, effectively ending 
DOL's ability to issue any prevailing wage determinations (PWDs). On 
March 18, 2015, the Perez court granted a

[[Page 24177]]

temporary stay of the vacatur order. The court ordered a further 
extension of its temporary stay on April 15, 2015. Therefore, the 
Departments conclude that it is most appropriate to assess the impact 
of this final rule compared to the situation that existed immediately 
prior to the court's vacatur order and during the period of the stay, 
i.e., the rules governing the most recent PWDs actually issued. 
Accordingly, we compare this final rule to the situation under the 2008 
rule and the 2013 IFR, as modified by CATA III (hereinafter referred to 
for ease of reference as ``the 2013 IFR'' unless a more specific 
reference to the 2008 rule is required).
    The 2013 IFR establishes that when the prevailing wage 
determination (PWD) is based on the Occupational Employment Statistics 
(OES) survey, the wage rate is the arithmetic mean of the OES wages for 
a given geographic area of employment and occupation. The 2013 IFR 
permits, but does not require, an employer to use a PWD based on 
employer-provided surveys approved by DOL or Service Contract Act (SCA) 
and Davis-Bacon Act (DBA) wage determinations. The 2013 IFR also 
requires the use of an applicable Collective Bargaining Agreement (CBA) 
wage rate, if one exists. Finally, the 2013 IFR requires that employers 
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.
    On December 5, 2014, the Court of Appeals for the Third Circuit in 
CATA III vacated the provision of DOL's regulation permitting the use 
of employer-provided surveys as a basis for PWDs. Accordingly, after 
that date, DOL no longer accepted such wage surveys when issuing PWDs. 
Therefore, under the baseline, H-2B employers can use PWDs based on the 
OES mean, the SCA or DBA wage rate, or the CBA wage rate if one exists.
    This final rule retains the OES mean as the default wage, does not 
permit the use of wage determinations under the SCA or DBA as H-2B wage 
sources, and establishes three circumstances in which employer-provided 
surveys may be accepted for PWDs. They are as follows:
     The survey is submitted for a geographic area where the 
OES does not collect data, or in a geographic area where the OES 
provides an arithmetic mean only at a national level for workers 
employed in the Standard Occupation Classification (SOC); \81\
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    \81\ BLS publishes data at the national level only when data for 
smaller geographic areas are not available.
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     The job opportunity is not included within an occupational 
classification of the SOC system or is within an occupational 
classification of the SOC system designated as an ``all other'' 
classification; or
     The survey was conducted and issued by a state, including 
any state agency, state college, or state university.
    The final rule continues to use the OES mean as the basis for 
setting H-2B prevailing wage rates. The OES mean wage rate conforms 
more closely to the wages paid by employers in a given geographic area 
of employment and occupation and, as discussed above, is the most 
appropriate wage to use to prevent adverse immigration-induced labor 
market distortions inconsistent with the requirements of the 
Immigration and Nationality Act. The use of the OES mean is consistent 
with the 2013 IFR in which we explained that the four-tier skill levels 
used in the 2008 rule did not adequately ensure that H-2B workers are 
paid a wage that will not adversely affect the wages of similarly 
employed U.S. workers.
    Historically, SCA and DBA wage determinations developed for work on 
government contracts were used as sources for H-2B prevailing wages 
before the OES survey began to dominate the wage survey landscape. In 
the 2008 rule, SCA and DBA wage rates became permissive sources; 
employers could request their use as a source for PWDs among an array 
of sources. The 2013 IFR retained the 2008 rule's approach, allowing 
employers to select among the array of available sources (OES mean, 
SCA, DBA, or employer-provided surveys).
    The final rule does not permit the use of SCA and DBA wage 
determinations as sources for the H-2B prevailing wage. SCA and DBA 
wage determinations would still be applicable to and enforced in H-2B 
work covered by a government contract, but the prevailing wage issued 
by OFLC would be based on the OES mean, unless an employer-provided 
survey was submitted and approved. The primary benefits of this 
approach are the resulting streamlined PWD process, the removal of 
challenges associated with conforming the SCA and DBA wage 
determinations into the H-2B prevailing wage process, and the 
alleviation of the administrative burden associated with matching 
employers' job descriptions submitted in prevailing wage requests with 
the appropriate SCA or DBA job classifications.
    The final rule allows the use of employer-provided surveys in 
limited circumstances for determining H-2B prevailing wages. First, in 
specific geographic locations where OES does not collect wage data or 
the OES reports only a national-level wage for the SOC, employers are 
permitted to use a survey that meets the methodological standards 
required by this final rule. The only geographic area where OES wage 
data are not collected is the Commonwealth of the Northern Mariana 
Islands (CNMI).\82\ Of the top ten occupations that account for 
approximately 70 percent of all certified H-2B applications during FY 
2013, workers engaged in ``Forest and Conservation'' and ``Fishers and 
Related Fishing'' related positions are the two occupations for which 
the OES reports a wage at the national level in some geographic areas. 
Based on this analysis, certified H-2B applications involving those two 
SOC codes in geographic areas where wages are reported only at the 
national level combined constitute no more than 2 percent of all such 
certified applications.
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    \82\ Currently, employers are not using the H-2B program in the 
CNMI. In fiscal years 2013-14, DOL issued four PWDs for H-2B 
positions in the CNMI: Three based on the OES mean wages in Guam and 
one based on the DBA. However, no H-2B positions were certified 
during the same period.
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    Second, employers will be able to submit a survey if the job 
opportunity is not included in the SOC or is in a SOC ``all other'' 
category. Based on an analysis of approximately 9,250 H-2B PWDs issued 
during FY 2014, DOL issued a PWD using a SOC ``all other'' category in 
only 6 instances, constituting less than 0.1 percent of all PWDs 
issued. Therefore, DOL believes the category is largely unavailable and 
it has received H-2B certification requests that would meet this 
category only on very rare occasions.
    Third, the final rule permits employers to request a PWD based on a 
wage survey of all similarly employed workers in the job and area of 
intended employment where such a survey is conducted and issued by a 
state. Such a survey must also meet the new methodological standards 
contained in the final rule.\83\ Approximately 1 percent of employers 
used state surveys as the basis for their PWDs under the 2013 IFR.\84\
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    \83\ A state survey refers to a survey conducted by any state 
agency, state college, or state university.
    \84\ Source: A random sample of 524 employers with 10,282 
certified H-2B positions between May 1, 2013, and April 30, 2014.
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    The 2008 rule and the 2013 IFR permitted employers to submit

[[Page 24178]]

employer-provided surveys as a wage source in lieu of the OES or other 
sources. The 2011 rule virtually eliminated the use of employer-
provided surveys to set the prevailing wage in the H-2B program.
    After the issuance of the 2013 IFR and the establishment of the 
default wage at the OES mean, the use of employer-provided surveys grew 
exponentially. Pre-IFR use of these surveys included about 1 percent of 
all PWDs, while post-IFR use climbed to about 30 percent of all 
PWDs.\85\ A review of some post-IFR employer-provided surveys used as 
wage sources indicated that, in many cases, employers reported wages of 
workers at the entry-level of the occupation. This may be a key reason 
why some employer-provided surveys have resulted in wages far below the 
OES mean.
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    \85\ Source: H-2B PWDs issued FY 2012 and first quarter of FY 
2014.
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    In addition, in many cases the survey methodology employed was 
insufficient to produce a reliable and valid wage for the occupation, 
largely because the current survey standards do not adequately promote 
valid and reliable results. Given the low quality of many of the 
surveys deemed acceptable under the existing wage guidance, we have 
determined that if employer-provided surveys continue to be available, 
additional methodological rigor is needed to support their continued 
use. Therefore, the final rule improves the methodological standards 
required for employer-provided surveys to improve their reliability and 
validity. Key improvements to the methodological standards generally 
are as follows:
    1. Require the survey to include the mean or median wage of all 
similarly employed workers in the area of intended employment, 
regardless of skill level, experience, education, and length of 
employment;
    2. Require the survey to make a reasonable, good faith attempt to 
contact all employers employing workers in the occupation and 
geographic area surveyed or conduct a randomized sample of such 
employers;
    3. Require the survey to be independently conducted and issued by a 
state and approved by a state official or, in the limited circumstances 
where the OES wage does not provide adequate data for the occupation or 
geographic area, a bona fide third party;
    4. Require the survey to include at least thirty employees and 
three employers in a sample;
    5. Require that surveys include all types of pay set out in the OES 
survey instrument, including payment of piece rates or production 
bonuses in the wages reported; \86\
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    \86\ The types of pay that must be reported in the OES survey 
include: Base rate of pay, commissions, cost-of-living allowance, 
deadheading pay, guaranteed pay, hazard pay, incentive pay, 
longevity pay, piece rate, portal-to-portal rate, production bonus, 
and tips.
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    6. Require the wages reported in the survey be no more than twenty-
four months old;
    7. Require that that surveys be conducted across industries that 
employ workers in the occupation; and
    8. Require that employers submit a new Employment and Training 
Administration (ETA) Form ETA-9165, which permits DOL to better assess 
the validity and reliability of the survey.
    Changes in the method of determining prevailing wages required by 
this final rule will result in additional compensation (i.e., transfer 
payments) for both H-2B workers and U.S. workers hired in response to 
the required recruitment. In addition, some employers will face 
additional costs to meet the higher methodological standards of the 
employer-provided survey. In this section, the Departments discuss the 
relevant costs, transfers, and benefits that may apply to this final 
rule.
    The impact of wage increases to employers was measured by comparing 
the prevailing wages under the final rule to the H-2B hourly wages 
under the baseline (i.e., the 2013 IFR, as modified by the CATA III 
court decision). Under this final rule, DOL would base PWDs on the OES 
mean, the CBA, and employer-provided surveys in very limited 
circumstances. For this economic analysis, DOL first calculated the 
increase in wages as the difference between the prevailing wages under 
the final rule and the H-2B hourly wages under the baseline for each 
certified or partially certified application. Next, DOL weighted this 
wage differential by the number of certified workers on each certified 
or partially certified application. DOL then summed those products to 
calculate the weighted average wage differential for all certified H-2B 
applications under the baseline.
    The equation below shows the formula that DOL used to calculate the 
weighted average wage differential (WWD). In the formula, Prevailing 
Wage is the arithmetic mean of the OES-reported wage, the CBA wage, or 
the wage from an employer-provided survey under the final rule; and 
Certified H-2B Wage is the H-2B hourly wage under the baseline.
[GRAPHIC] [TIFF OMITTED] TR29AP15.152

    Finally, to estimate the total transfer to all H-2B workers that 
results from the increase in wages due to the application of the final 
rule's new PWD method, DOL multiplied the weighted average wage 
differential by the total number of H-2B workers in the United States 
in a given year.
    Under the current baseline, employers could select their prevailing 
wage source from the OES mean, the SCA or DBA wage, or the CBA wage if 
one exists. DOL believes employers that select prevailing wages based 
on the OES mean under the current baseline would continue to select the 
OES mean, except for those employers who elect to submit a survey in 
the three circumstances in which surveys are accepted for PWDs under 
the final rule. As a result, the final rule will have no impact on the 
employers who continue to use the OES mean. Employers who use the OES 
mean account for

[[Page 24179]]

approximately 95 percent of the total PWDs under the current 
baseline.\87\
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    \87\ In the first quarter of FY 2014, approximately 65 percent 
of the total H-2B PWDs were based on the OES, 30 percent were based 
on employer-provided surveys, and 5 percent were based on SCA or DBA 
wage determinations. The 30 percent of the total PWDs that were 
based on employer-provided surveys before the December 5, 2014, CATA 
III decision are now issued based on the OES mean. Therefore, under 
the current baseline the OES mean accounts for about 95 percent of 
the total PWDs.
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    One of the more challenging aspects of this economic analysis is 
accurately determining the expected prevailing wages for the employers 
that selected their prevailing wage sources from the SCA and DBA wage 
determinations (approximately 5 percent of employers under the current 
baseline). Employers that submitted an SCA or DBA wage determination as 
a source for their prevailing wage under the current baseline will no 
longer be able to use the SCA or DBA wage determinations under the 
final rule. Therefore, they can either request the OES mean wage as the 
prevailing wage source or submit a survey conducted and issued by a 
state or third party, if one is available and permissible and the wage 
from the survey is lower than the OES mean.\88\ However, DOL expects 
few, if any, employers will be able to use a state survey because they 
currently are available on a limited basis for the seafood industry, 
while the industries that use SCA or DBA wages as their prevailing wage 
sources are construction, forestry, and landscaping. A small number of 
employers in the forestry industry will be eligible to submit an 
employer-provided survey because OES data is reported only at the 
national level; however, due to the fact that employers in these 
industries typically operate on multi-state itineraries on a single H-
2B certification and different prevailing wage rates exist within each 
area of employment within each itinerary, DOL does not have sufficient 
data to identify the employers that would be able to switch from the 
SCA or DBA to an employer-provided survey as their prevailing wage 
source under the final rule. Therefore, DOL assumed that all the 
employers that selected their prevailing wage sources from the SCA and 
DBA wage determinations will select the OES mean as their prevailing 
wage source under the final rule. This represents a conservative, 
upper-bound assumption.
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    \88\ Although an employer-conducted survey may also be provided 
under this final rule if it is higher, we expect that an employer 
will only submit a survey to set the prevailing wage if the survey 
wage would be lower than the OES mean.
---------------------------------------------------------------------------

    Employers that received a prevailing wage determination based on a 
survey under the 2013 IFR before the CATA III decision have not been 
able to use a survey as a prevailing wage source since that decision. 
Thus, the baseline for this analysis includes no surveys. However, 
employers will be able to use a survey conducted by a state if the 
survey meets the new methodological standards under the final rule. DOL 
cannot estimate with reasonable accuracy which employers will be able 
to submit a state survey that meets the new methodological standards 
under the final rule. Furthermore, no information exists that allows 
DOL to measure how much the new survey standards will affect the number 
of state surveys submitted or their resulting wages. Therefore, we are 
required to make certain assumptions, which are described in the 
following discussion.
    Employers that submitted a state survey as their PWD source under 
the 2013 IFR prior to the CATA III decision will likely continue to 
submit such a survey if they can still obtain a wage rate that will 
cost them less than the OES mean. Otherwise, these employers will 
select the OES mean as their prevailing wage source. DOL anticipates 
that the wage rates from state surveys will increase because the final 
rule requires these surveys to include the mean wage of all similarly 
employed workers, while most state surveys submitted under the 2013 IFR 
included only entry-level workers.\89\ Therefore, it is expected that 
the new wage rates from state surveys that meet the new methodological 
standards will increase, but not to the level of the OES mean (the 
current baseline) or employers would not submit these surveys. 
Accordingly, it is assumed that for an employer that submitted a state 
survey under the 2013 IFR before the CATA III decision, the new survey 
wage rate would increase to the OES wage level 2 if the wage rate from 
the survey that the employer previously submitted was below this 
level.\90\ It is also assumed that if an employer submitted a state 
survey under the 2013 IFR with a wage rate between OES wage levels 2 
and 3, the new wage rate from a state survey that meets the new 
methodological standards would increase to the OES mean. Therefore, the 
employer would select the OES mean as the prevailing wage source rather 
than use a new state survey. Approximately 84 percent of previous state 
survey wage rates were between OES wage levels 1 and 2.
---------------------------------------------------------------------------

    \89\ Even if the new wage rates from state surveys that meet the 
new methodological standards are expected to increase from the wage 
rates in the surveys that employers submitted under the 2013 IFR 
before CATA III, these employers will experience wage decreases 
under this final rule because they currently use the OES mean as 
their prevailing wage source under the current baseline.
    \90\ The OES level 2 wage is approximately the 34th percentile 
on the OES wage distribution for that occupation in the applicable 
geographic area. The OES level 3 is the same as the OES median. See 
Sec. II.A.1, supra, for an explanation of the linear interpolation 
that set the four wage levels in H-2B.
---------------------------------------------------------------------------

    Under certain circumstances, employers requesting H-2B 
certifications are permitted to use an employer-provided survey that 
meets the methodological standards required under this final rule. Such 
employers must be operating in geographic areas where the OES does not 
collect data or where the OES reports a wage for the SOC at the 
national level only. In addition, employers requesting H-2B 
certifications for an occupation not included in the SOC or designated 
as an ``all other'' classification will be able to use an employer-
provided survey. However, DOL does not have enough information to 
predict with reasonable accuracy which employers are going to submit 
the OES mean as the prevailing wage source or which employers are going 
to submit an employer-provided survey. In addition, DOL has no 
information about how much the new survey requirements will affect the 
number of surveys submitted or the resulting wages. Therefore, DOL 
estimated the upper-bound wage impact of this final rule by applying 
the OES mean wages to employers that potentially fall into the two 
categories described above. DOL estimated that employers in these two 
categories represent approximately 2 percent of all employers in the H-
2B Program. Therefore, the upper-bound estimate of the impact would not 
substantially overstate the true wage impact of this final rule.\91\
---------------------------------------------------------------------------

    \91\ At least some of the employers in these two categories that 
represent approximately 2 percent of all employers in the H-2B 
program would be able to submit an employer-provided survey that 
provides a lower wage than the OES mean. DOL could not take this 
into account in its analysis to estimate the changes in their 
prevailing wages due to data limitations on which employers are 
going to submit an employer-provided survey and the resulting wages. 
However, as discussed infra, DOL estimated the cost of conducting an 
employer-provided survey by a third party for all these employers 
and included it in the total cost of this rule, again presenting an 
upper-bound estimate of the cost of this final rule.
---------------------------------------------------------------------------

    DOL based its analysis on sample data drawn from a pool of 3,593 
employers with 92,602 certified H-2B positions between May 1, 2013, and 
April 30, 2014, to represent the most recent data available for the 
one-year period following the publication of the 2013 IFR on April 24, 
2013. A statistically valid sample that accurately represents the 
employers with certified H-2B

[[Page 24180]]

positions between May 1, 2013, and April 30, 2014, was drawn to provide 
a timely measure of the change in hourly wages that would result from 
this final rule without having to include all the employers with 
certified H-2B positions following the publication of the 2013 IFR. 
Consequently, DOL used a random sample of 524 employers with 10,282 
certified H-2B positions between May 1, 2013, and April 30, 2014, and 
conducted a manual extraction of area-of-employment data from these 
certified H-2B applications, including the city, county, state, and zip 
code corresponding to the area of employment. DOL then obtained the 
prevailing wage rate actually certified, the source of the PWD, and the 
OES mean wage for each employer with certified H-2B positions in the 
random sample of 524 by SOC code and county of employment from H-2B 
program data between May 1, 2013, and April 30, 2014.\92\ This random 
sample of 524 employers is consistent with standard statistical methods 
and exceeds the minimum sample size requirement.\93\
---------------------------------------------------------------------------

    \92\ Depending on the scope of work required by H-2B workers, 
multiple PWDs may be needed if the work will be performed in 
multiple locations for a certified or partially certified 
application (such as those involving carnival or reforestation 
workers). While the DOL's program database collects the total number 
of H-2B workers certified for each certified or partially certified 
application, the DOL has limited information about H-2B workers 
certified on the same application who were paid different prevailing 
wages because they performed work in multiple locations. In this 
analysis for the certified and partially certified applications with 
multiple prevailing wage rates, DOL used the average wage rate for 
each application.
    \93\ The statistically valid minimum sample size with 95 percent 
confidence level and 5 percent margin of error is 347. DOL selected 
a much larger sample than 347 to strengthen the statistical results 
of the sample in this analysis.
---------------------------------------------------------------------------

    Using the random sample of 524 employers, DOL calculated the 
increase in wages as the difference between the baseline \94\ and the 
Final rule. This differential was weighted by the number of certified 
workers on each certified or partially certified application.\95\ Those 
products were then summed to calculate the weighted average wage 
differential for the randomly selected sample of 524 employers. DOL 
estimated that the changes in the method of determining wages under 
this final rule would result in an hourly wage increase of $0.16. The 
actual wage change for employers will vary depending on the current 
source for their prevailing wage determinations. For example, employers 
in the forestry industry may experience greater increases than the 
average wage increase of $0.16 because more employers in that industry 
previously selected SCA and DBA wage determinations as their prevailing 
wage sources. On the other hand, employers in the seafood industry may 
experience a wage decrease due to the fact that these employers have 
historically used state-conducted wage surveys not based on the SOC, 
and such surveys are allowed in certain circumstances under the final 
rule. Finally, many employers in the food services industry will 
experience no wage change because almost all employers in that industry 
already selected the OES mean wage as their prevailing wage source.
---------------------------------------------------------------------------

    \94\ Of the random sample of 524 employers following the 
publication of the 2013 IFR, 30 percent of the total PWDs were based 
on employer-provided surveys. DOL replaced the prevailing wages from 
employer-provided surveys with the OES mean to accurately represent 
the current baseline.
    \95\ DOL weighted the wage differentials by the number of 
certified workers as opposed to the number of workers requested 
because a decrease in the number of workers granted may occur for 
several reasons, including the hiring of a U.S. worker in response 
to required recruitment.
---------------------------------------------------------------------------

    The remaining sections of this analysis present the estimated costs 
of the final rule, the transfer payments associated with the increased 
wages resulting from the changes in the wage determination method, and 
the benefits of the final rule.
1. Costs
    During the first year that this rule is in effect, employers would 
need to learn about the new rule and its requirements. DOL estimates 
this cost for a hypothetical entity interested in applying for H-2B 
workers by multiplying the time required to read the final rule and/or 
any educational and outreach materials explaining the wage calculation 
methodology under the rule by the average compensation of a human 
resources manager (SOC code 11-3121).\96\ In the first year of the 
rule, if adopted, DOL estimates that the average business participating 
in the program will spend approximately one hour of staff time to read 
and review the new regulation. This amounts to approximately $76.43 
($76.43 x 1 hour) in labor costs in the first year. Therefore, DOL 
calculated the total estimated cost to employers with certified H-2B 
positions as $274,613 (1 hour x $76.43 x 3,593).
---------------------------------------------------------------------------

    \96\ The hourly compensation rate for a human resources manager 
is calculated by multiplying the hourly wage of $53.45 (derived from 
the 2013 Occupational Employment Statistics) 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 $76.43.
---------------------------------------------------------------------------

    Employers are allowed to submit wage surveys as long as they meet 
the criteria set forth in the final rule. DOL estimated that 
approximately up to 185 or 2 percent of H-2B PWDs could be based on 
private wage surveys.\97\ Because a survey can be valid for 24 months, 
it is estimated that there will be 93 new private wage surveys 
conducted by third parties for employers each year (93 = \185/2\).
---------------------------------------------------------------------------

    \97\ During the fiscal years 2013-14, there were on average 
9,253 PWDs. DOL estimated that 2 percent of 9,253, or 185, could be 
based on private wage surveys under the final rule.
---------------------------------------------------------------------------

    Accordingly, these employers will incur additional costs. The cost 
of conducting a wage survey by a third party can vary widely depending 
on various factors, such as the scope of the survey, the survey 
methodology used, the number of respondents, and the nature of the 
sample. After reviewing pricing information provided by some survey 
service providers,\98\ DOL estimates that it would take a manager (SOC 
code 11-0000) 8 hours at $76.00 per hour to review and a survey 
researcher (SOC code 19-3022) a total of 40 hours at $36.58 per hour to 
randomly select at least 3 employers and 30 employees (8 hours), 
collect their wage data (16 hours), calculate the hourly average wage 
(8 hours), and write a report and provide it to the employer (8 
hours).\99\ Therefore, the direct cost of conducting a wage survey by a 
third party is estimated at $2,071.20 (= $76 x 8 + $36.58 x 40). DOL 
then added 10 percent to $2,071.20 to account for a profit for the 
third party surveyor and the full cost of conducting a wage survey is 
$2,278.32 (= $2,071.20 x 1.1).\100\ In addition, a human resources 
manager (SOC code 11-3120) at $76.43 and a payroll and timekeeping 
clerk (SOC code 43-3051) at $27.40, would need to spend one hour and 
four hours, respectively, for each employer to provide wage information 
for all of its employees in the same occupation to the third-party 
agent. This amounts to an additional $186.03 for each employer

[[Page 24181]]

surveyed and $558.09 for all three employers surveyed. Therefore, the 
total cost of conducting an employer-provided survey that meets the 
requirements of this rule is estimated at $2,836.41 (= $2,278.32 + 
$558.09). Assuming that 93 employers will conduct a private wage survey 
by a third-party each year that is valid for two years, DOL estimates 
that the total cost of conducting a private wage survey per year at 
$263,786 annually ($2,836.41 x 93).\101\
---------------------------------------------------------------------------

    \98\ Custom-Insight: Employee Survey Pricing, http://www.custominsight.com/employee-engagement-survey/pricing.asp.
    Salary Basics--Compensation Surveys, http://www.salary.com/Small-Business-Advice/advice.asp?part=par408
    HRA-NCA 2014 Benefit and Compensation Survey, http://www.hra-nca.org/sites/default/files/survey-documents/HRA%202014%20Order%20Form.pdf.
    \99\ Hourly wages were derived from the 2013 Occupational 
Employment Statistics (OES) wage data (http://www.bls.gov/oes/#data) 
and were multiplied by 1.43 to reflect a fully loaded wage rate.
    \100\ Profit is the amount a business charges above their direct 
cost. Profit percentage varies widely by industry, and may also vary 
from business to business within the same industry. DOL used 10 
percent because profit typically varies from 3 to 12 percent for the 
Corps of Engineers contracts. http://www.nws.usace.army.mil/Portals/27/docs/construction/Preconstruction%20packet/Fig%208-2%20Modification%20Pricing%20Guidelines.pdf.
    \101\ This is an overestimation because some employers would 
have the option to use surveys published by the state or other 
employers in the same area of employment for a minor fee. Therefore, 
the actual number of employer-provided surveys conducted per year 
would likely be fewer than 93 per year.
---------------------------------------------------------------------------

    In addition to the 185 employers that will submit an employer-
provided survey, DOL estimated that approximately 93 employers \102\ 
will submit a state survey for their PWDs. As discussed in the PRA 
section of the preamble, for each submission, the employer's human 
resource manager ($76.43) will take 25 minutes to complete and sign 
Form ETA-9165 once the third-party surveyor's survey researcher 
($36.58) takes 50 minutes supplying the necessary information. The 
resulting cost for all 278 employers who submit a private or state 
survey is $17,352 [($76.43 x 116 hours) + ($36.58 x 232 hours)].
---------------------------------------------------------------------------

    \102\ During the fiscal years 2013-2014, there were on average 
9,253 PWDs. DOL estimated based upon data from the random survey of 
524 employers that 1 percent of 9,253, or 93, would be based on 
state surveys under the final rule.
---------------------------------------------------------------------------

    The total cost of the final rule is estimated at $555,751, which is 
the sum of the regulatory familiarization cost ($274,613), the cost of 
conducting private wage surveys ($263,786), and the cost of completing 
and signing Form ETA-9165 ($17,352).
2. Transfers
    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 U.S. workers hired in response to the required 
recruitment under the H-2B program. The primary payers of transfer 
payments reflected in this analysis are H-2B employers. Under the 
higher wage obligation established in this final rule, those employers 
who participate in the H-2B program are likely to be those who have the 
greatest need to access the H-2B program.
    Employment in the H-2B program represents a very small fraction of 
the total employment in the U.S. economy as well as in the industries 
represented in the program. The H-2B program is capped at 66,000 visas 
issued per year, but an H-2B worker who extends his/her stay in H-2B 
status may remain in the country and not count against the cap. The 
2013 IFR assumed that half of all such workers (33,000) in any year are 
able to extend their stay at least one additional year and that half of 
those workers (16,500) are able to extend their stay a third year. See 
78 FR 24059 (April 24, 2013). Therefore, DOL used 115,500 as the total 
number of H-2B workers in a given year. The change in the method of 
determining the prevailing wage rate will result 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 for H-2B workers, jobs that would otherwise 
be occupied by H-2B workers may be more acceptable to a larger number 
of U.S. workers who will apply for the jobs. Additionally, faced with 
higher H-2B wages, some employers may find domestic workers relatively 
less expensive and may choose not to participate in the H-2B program 
and, instead, may employ U.S. workers. Although some of these U.S. 
workers may be drawn from other employment, some of them may currently 
be unemployed or out of the labor force entirely. DOL is not able to 
quantify these transfers with precision. Difficulty in calculating 
these transfers arises primarily from uncertainty about the number of 
U.S. workers currently collecting unemployment insurance benefits who 
would become employed as a result of this rule.
    To estimate the total transfer to H-2B workers that results from 
the increase in wages due to application of the final rule's new method 
of determining the prevailing wage, DOL multiplied the weighted average 
wage differential ($0.16) by the total number of H-2B workers estimated 
to be in the United States in a given year (115,500). For the number of 
hours worked per day, seven hours were used as typical. For the number 
of days worked, DOL assumed that the employer would retain the H-2B 
worker for the maximum time allowed (9 months or 274 days) and would 
employ the workers for five days per week. Thus, the total number of 
days worked equals 196 (274 x \5/7\). The following equation shows the 
formula used to compute the total upper-bound impact per year:

$0.16 (Weighted average wage differential)
x 7 (Working hours per day)
x 196 (Total number of of days worked)
x 115,500 (Total number of H-2B workers)
= $25.35 million (Total impact per year)

We estimated the total impact associated with the increased wages at 
$25.35 million per year. These calculations also do not include the 
wage increase for U.S. workers hired in response to the required H-2B 
recruitment due to a lack of data regarding key points such as the 
number of U.S. workers hired in response to the employer's recruitment 
efforts who would be entitled to the H-2B wage rate and what those 
workers currently earn.
3. Benefits
    The Departments have determined that a new wage methodology is 
necessary for the H-2B program, particularly in light of the CATA III 
decision vacating the regulation authorizing the use of employer-
provided surveys as a basis for PWDs. We want to ensure that the method 
for calculating the prevailing wage rate results in the appropriate 
prevailing wage necessary to ensure that U.S. workers are not adversely 
affected by the employment of H-2B workers, including when it results 
from a survey. The decision to discontinue use of the SCA and DBA wage 
determinations as a wage source and heighten the methodological 
standards of employer-provided surveys would help ensure that H-2B 
workers are paid a wage that will not adversely affect the wages of 
similarly employed U.S. workers.
    The increase in the prevailing 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 
increase in the prevailing wage rates is expected to improve workers' 
productivity and the quality of their work, thereby mitigating the 
higher labor costs to employers. Furthermore, higher prevailing wages 
promote the retention of experienced workers and minimize the costs of 
hiring and training new employees, and also create an environment of 
increased compliance with workplace safety and workers' compensation 
rules and regulations.\103\ These are important benefits and a key 
aspect of the Departments' mandate to ensure that the

[[Page 24182]]

wages of similarly employed U.S. workers are not adversely affected by 
H-2B workers.
---------------------------------------------------------------------------

    \103\ Hamid Azari-Rad et al., ``State Prevailing Wage Laws and 
School Construction Costs,'' Industrial Relations, vol. 42, No. 3 
(July 2003), available at http://ohiostatebtc.org/wp-content/uploads/2014/04/School_Costs_9.pdf.
---------------------------------------------------------------------------

    The discontinued use of the SCA and DBA wage determinations as a 
source for the prevailing wage in the H-2B program offers additional 
benefits. The primary benefits of this approach are the streamlining of 
the PWD process, the removal of challenges associated with conforming 
the SCA and DBA wage determinations into the H-2B prevailing wage 
process, and the alleviation of the administrative burden associated 
with matching employers' job descriptions submitted in prevailing wage 
requests with the appropriate SCA or DBA job classifications.
    A review of post-IFR employer-provided surveys used as wage sources 
indicated that, in many cases, employers report wages of workers at the 
entry level of the occupation instead of reporting the mean wage of all 
workers in the occupation as required when the prevailing wage is based 
on the OES. In addition, in many cases the survey methodology employed 
was insufficient to produce a reliable and valid wage for the 
occupation. Therefore, we have decided to raise the methodological 
standards required for employer-provided surveys to improve their 
reliability and validity so the prevailing wage rate adequately 
reflects the appropriate prevailing wage necessary to ensure that U.S. 
workers are not adversely affected by the employment of H-2B workers.

B. Regulatory Flexibility Act

    The Regulatory Flexibility Act, 5 U.S.C. 601 et seq. (RFA), imposes 
certain requirements on Federal agency rules that are subject to the 
notice and comment requirements of the APA, 5 U.S.C. 553(b), and that 
are likely to have a significant economic impact on a substantial 
number of small entities. Under the APA, a general notice of proposed 
rulemaking is not required when an agency, for good cause, finds that 
notice and public comment thereon are impracticable, unnecessary, or 
contrary to the public interest. 5 U.S.C. 553(b)(B). The Departments' 
interim final rule issued in 2013 was exempt from the notice and 
comment requirements of the APA because DOL and DHS made a good cause 
finding in the preamble of that rule, 78 FR at 24055, that a general 
notice of proposed rulemaking is impracticable and contrary to the 
public interest under 5 U.S.C. 553(b)(B). Therefore, the requirements 
of the RFA applicable to notices of proposed rulemaking, 5 U.S.C. 603, 
did not apply to that rule. Similarly, the requirements of the RFA that 
pertain to final rules, 5 U.S.C. 604, issued by an agency following the 
publication of a proposal on which notice and comment is required by 
the APA, 5 U.S.C. 553(b), are inapplicable to this final rule. 
Therefore, the Departments are not required to either certify that the 
rule would not have a significant economic impact on a substantial 
number of small entities or conduct a regulatory flexibility analysis.
    Consistent with the policy of the RFA, the Departments encouraged 
the public to submit comments that suggested alternative rules that 
would accomplish the stated purpose of the 2013 IFR and minimize the 
impact on small entities. We received just a handful of comments 
responsive to this request, including one from the Office of the Chief 
Counsel for Advocacy of the Small Business Administration (SBA 
Advocacy). SBA Advocacy noted that the IFR would suddenly increase the 
wages that small businesses must pay to hire foreign workers under the 
H-2B program mid-season, and that employers have told SBA Advocacy that 
the IFR would have significant economic impacts on their businesses 
because they operate on narrow margins. In particular, SBA Advocacy 
obtained input from employer associations in landscaping, seafood 
processing, and lodging industries, and all those associations asserted 
that the higher labor costs resulting from the 2013 IFR negatively 
impacted their businesses. The Departments received similar comments 
from some small businesses indicating that the 2013 IFR unnecessarily 
encumbered those businesses with increased wage costs. We also 
recognize that wage increases may impose unique burdens on small 
businesses. However, as further explained in Section II.A.4 above, a 
prevailing wage that protects all U.S. workers from adverse effect is a 
legal requirement, and this requirement could not be met by setting a 
lower wage for small businesses. As previously discussed, use of the 
OES mean best meets the Departments' obligation to protect against 
adverse effect, whereas setting the prevailing wage at a threshold 
based on artificial skill levels likely distorts the labor market for 
U.S. workers, driving down wages. Wage increases from the 2013 IFR 
resulted for some H-2B employers, but most H-2B employers now have 
experience paying workers at the OES mean. Moreover, most H-2B 
employers now have experience paying workers at the OES mean, and DOL 
concludes it is likely that H-2B employers have incorporated the new 
wage requirements, which were established in the H-2B program two years 
ago. This final rule is estimated to increase wages on average only 
$0.16 per hour above the levels that have been required for two years 
under the 2013 IFR.

C. Paperwork Reduction Act

    The final rule modifies the standards associated with the 
submission by employers of surveys as an alternative to establishing 
the prevailing wage based on the OES survey. As noted above, we are 
modifying the H-2B regulation to set new standards for permissible 
employer-provided surveys in order to improve their reliability and 
validity. The new standards require: (1) The survey to include the mean 
or median wage of all workers regardless of skill or experience; (2) 
the survey collection must be independently conducted and issued by a 
state and approved by a state official or, in limited circumstances, a 
bona fide third party; (3) that surveyors make a reasonable good-faith 
effort to survey all employers in the occupation and area surveyed or 
base the survey on a random sample; (4) the survey to include at least 
3 employers and 30 employees in a sample; (5) that any wage survey 
submitted report all types of pay; (6) that surveys be conducted across 
industries that employ workers in the occupation; (7) that wages paid 
and reported in the survey be no more than 24 months old; and (8) that 
employers submit new Form ETA-9165 that permits DOL to better assess 
the validity and reliability of the survey.
    New Form ETA-9165, which is attached as an Appendix to this final 
rule, asks the employer to respond to a number of questions about the 
underlying methodology used to develop the wage surveyed. Most of the 
questions require a yes/no response or the selection of a response from 
an array of two to four standard choices. There are a few questions 
that require a fill-in-the-blank response, such as the survey name, 
title of the job opportunity, the duties of the job, the area of 
intended employment, and the resulting wage found by the survey. The 
responses to all of the questions on the form are intended to provide 
that the third-party who conducts the survey for the H-2B employer 
complies with the new survey standards, that the employer is aware of 
the compliance standards and certifies that they have been met, and 
permits the agency to more easily assess compliance. Once the survey is 
designed and conducted with the new standards in mind, the third-party 
surveyor should have at its ready disposal the responses to the 
questions in the new Form ETA-9165, and should be able to transmit them 
to the employer

[[Page 24183]]

quickly so that the employer may complete the form.
    Form ETA-9165 is an information collection subject to the Paperwork 
Reduction Act of 1995 (PRA), 44 U.S.C. 3501 et seq. and subject to 
Office of Management and Budget (OMB) review and clearance under the 
PRA. In order to have the information collections take effect on the 
same dates as all other parts of the Final Rule, DOL submitted an ICR 
to OMB under the emergency processing procedures codified in 
regulations 5 CFR 1320.13. OMB approved the information collection for 
6 months, during which time DOL will publish Notices in the Federal 
Register that invite public comment on the collection requirements, in 
anticipation of extending the ICR.
    Overview of Information Collection
    Type of Review: New.
    Agency: Employment and Training Administration.
    Title: Employer-Provided Survey Certification to Accompany H-2B 
Prevailing Wage Determination Request Based on a Non-OES Survey.
    OMB Number: 1205-NEW.
    Agency Number(s): Form ETA-9165.
    Annual Frequency: On occasion.
    Affected Public: Individuals or Households, Private Sector--
businesses or other for profits, Government, State, Local and Tribal 
Governments.
    Total Respondents: 556.
    Total Responses: 556.
    Estimated Total Burden Hours: 75 minutes. DOL views the burden on 
respondents to complete the Form ETA-9165 as a two-step process. DOL 
concludes that third-party surveyors, including States, will take, on 
average, 50 minutes to compile the information necessary for the 
employer to complete Form ETA-9165. In turn, DOL concludes that 
employers will take, on average, 25 minutes to complete and sign Form 
ETA-9165 once the third-party surveyor supplies the necessary 
information.
    Total Burden Calculation: 348.
    Total Burden Cost (capital/startup): 0.
    Total Burden Cost (operating/maintaining): 0.

D. Unfunded Mandates Reform.

    Executive Order 12875--This rule will not create an unfunded 
Federal mandate upon any State, local or tribal government.
    Unfunded Mandates Reform Act of 1995--This rule does not include 
any Federal mandate that may result in increased expenditures by State, 
local, and tribal governments, in the aggregate, of $100 million or 
more. It also does not result in increased expenditures by the private 
sector of $100 million or more, because participation in the H-2B 
program is entirely voluntary.

E. The Congressional Review Act

    The Congressional Review Act (5 U.S.C. 801 et seq.) requires rules 
to be submitted to Congress before taking effect. We will submit to 
Congress and the Comptroller General of the United States a report 
regarding the issuance of the final rule prior to its effective date, 
as required by 5 U.S.C. 801(a)(1).

F. Executive Order 13132--Federalism

    The Departments have 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 Departments have 
determined that this rule will not have a sufficient federalism 
implication to warrant the preparation of a summary impact statement.

G. Executive Order 13175--Indian Tribal Governments

    This final rule was reviewed under E.O. 13175 and determined not to 
have tribal implications. The final 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.

H. 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 Departments to assess the impact of this final rule 
on family well-being. A rule that is determined to have a negative 
effect on families must be supported with an adequate rationale. The 
Departments have assessed this final rule and determined that it will 
not have a negative effect on families.

I. Executive Order 12630--Government Actions and Interference With 
Constitutionally Protected Property Rights

    This 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.

J. Executive Order 12988--Civil Justice

    This 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 Departments have developed the final rule to 
minimize litigation and provide a clear legal standard for affected 
conduct, and has reviewed the rule carefully to eliminate drafting 
errors and ambiguities.

K. Plain Language

    The Departments have drafted this final rule in plain language.

List of Subjects

8 CFR Part 214

    Administrative practice and procedure, Aliens, Cultural exchange 
programs, Employment, Foreign officials, Health professions, Reporting 
and recordkeeping requirements, Students.

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.

Department of Homeland Security

8 CFR Chapter I

Authority and Issuance

    Accordingly, for the reasons stated in the joint preamble, the 
interim final rule amending 8 CFR part 214, which was published at 78 
FR 24047 on April 24, 2013, is adopted as a final rule without change.

Department of Labor

Employment and Training Administration

20 CFR Chapter V

Authority and Issuance

    Accordingly, for the reasons stated in the joint preamble, part 655 
of title 20 of the Code of Federal Regulations is amended as follows:

[[Page 24184]]

PART 655--TEMPORARY EMPLOYMENT OF FOREIGN WORKERS IN THE UNITED 
STATES

0
1. The authority citation for part 655 continues to read in part as 
follows:

    Authority: Section 655.0 issued under 8 U.S.C. 
1101(a)(15)(E)(iii), 1101(a)(15)(H)(i) and (ii), 8 U.S.C. 
1103(a)(6), 1182(m), (n) 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. 733, 1748 (8 U.S.C. 1101 note); sec. 323(c), Pub. L. 103-206, 
107 Stat. 2428; sec. 412(e), Pub. L. 105-277, 112 Stat. 2681 (8 
U.S.C. 1182 note); sec. 2(d), Pub. L. 106-95, 113 Stat. 1312, 1316 
(8 U.S.C. 1182 note); 29 U.S.C. 49k; Pub. L. 107-296, 116 Stat. 
2135, as amended; Pub. L. 109-423, 120 Stat. 2900; 8 CFR 
214.2(h)(4)(i); and 8 CFR 214.2(h)(6)(iii).
* * * * *

0
2. Amend Sec.  655.10 by adding paragraphs (b) and (f) to read as 
follows:


Sec.  655.10  Determination of prevailing wage for temporary labor 
certification purposes.

* * * * *
    (b) Determinations. Prevailing wages shall be determined as 
follows:
    (1) Except as provided in paragraph (i) of this section, if the job 
opportunity is covered by a collective bargaining agreement (CBA) that 
was negotiated at arms' length between the union and the employer, the 
wage rate set forth in the CBA is considered as not adversely affecting 
the wages of U.S. workers, that is, it is considered the ``prevailing 
wage'' for labor certification purposes.
    (2) If the job opportunity is not covered by a CBA, the prevailing 
wage for labor certification purposes shall be the arithmetic mean of 
the wages of workers similarly employed in the area of intended 
employment using the wage component of the BLS Occupational Employment 
Statistics Survey (OES), unless the employer provides a survey 
acceptable to OFLC under paragraph (f) of this section.
* * * * *
    (f) Employer-provided survey. (1) If the job opportunity is not 
covered by a CBA, or by a professional sports league's rules or 
regulations, the NPWC will consider a survey provided by the employer 
in making a Prevailing Wage Determination only if the employer 
submission demonstrates that the survey falls into one of the following 
categories:
    (i) The survey was independently conducted and issued by a state, 
including any state agency, state college, or state university;
    (ii) The survey is submitted for a geographic area where the OES 
does not collect data, or in a geographic area where the OES provides 
an arithmetic mean only at a national level for workers employed in the 
SOC;
    (iii)(A) The job opportunity is not included within an occupational 
classification of the SOC system; or
    (B) The job opportunity is within an occupational classification of 
the SOC system designated as an ``all other'' classification.
    (2) The survey must provide the arithmetic mean of the wages of all 
workers similarly employed in the area of intended employment, except 
that if the survey provides a median but does not provide an arithmetic 
mean, the prevailing wage applicable to the employer's job opportunity 
shall be the median of the wages of workers similarly employed in the 
area of intended employment.
    (3) Notwithstanding paragraph (f)(2) of this section, the 
geographic area surveyed may be expanded beyond the area of intended 
employment, but only as necessary to meet the requirements of paragraph 
(f)(4)(ii) of this section. Any geographic expansion beyond the area of 
intended employment must include only those geographic areas that are 
contiguous to the area of intended employment.
    (4) In each case where the employer submits a survey under 
paragraph (f)(1) of this section, the employer must submit, 
concurrently with the ETA Form 9141, a completed Form ETA-9165 
containing 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 addition, the information provided by the 
employer must include the attestation that:
    (i) The surveyor either made a reasonable, good faith attempt to 
contact all employers employing workers in the occupation and 
geographic area surveyed or conducted a randomized sampling of such 
employers;
    (ii) The survey includes wage data from at least 30 workers and 
three employers;
    (iii) If the survey is submitted under paragraph (f)(1)(ii) or 
(iii) of this section, the collection was administered by a bona fide 
third party. The following are not bona fide third parties under this 
rule: Any H-2B employer or any H-2B employer's agent, representative, 
or attorney;
    (iv) The survey was conducted across industries that employ workers 
in the occupation; and
    (v) The wage reported in the survey includes all types of pay, 
consistent with Form ETA-9165.
    (5) The survey must be based upon recently collected data: The 
survey must be the most current edition of the survey and must be based 
on wages paid not more than 24 months before the date the survey is 
submitted for consideration.
* * * * *
    Note: This appendix will not appear in the Code of Federal 
Regulations.

Appendix

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    Signed: at Washington, DC this 22nd of April, 2015.
Thomas E. Perez,
Secretary of Labor.
    Signed: at Washington, DC this 22nd of April, 2015.
Jeh Charles Johnson,
Secretary of Homeland Security.
[FR Doc. 2015-09692 Filed 4-28-15; 8:45 am]
 BILLING CODE 4510-FP-C; 9111-97-C