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  • News: DHS Publishes Interim Final Rule On Wage Methodology for H-2B Workers

    Federal Register, Volume 78 Issue 79 (Wednesday, April 24, 2013)
    [Federal Register Volume 78, Number 79 (Wednesday, April 24, 2013)]
    [Rules and Regulations]
    [Pages 24047-24061]
    From the Federal Register Online via the Government Printing Office [www.gpo.gov]
    [FR Doc No: 2013-09723]
    
    
    =======================================================================
    -----------------------------------------------------------------------
    
    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
    
    RIN 1205-AB69
    
    
    Wage Methodology for the Temporary Non-Agricultural Employment H-
    2B Program, Part 2
    
    AGENCY: Employment and Training Administration, Labor; U.S. Citizenship 
    and Immigration Services, DHS.
    
    ACTION: Interim final rule; request for comments.
    
    -----------------------------------------------------------------------
    
    SUMMARY: The Department of Homeland Security (DHS) and the Department 
    of Labor (DOL) (jointly referred to as the Departments) are amending 
    regulations governing certification for the employment of nonimmigrant 
    workers in temporary or seasonal non-agricultural employment. This 
    interim final rule revises how DOL provides the consultation that DHS 
    has determined is necessary to adjudicate H-2B petitions by revising 
    the methodology by which
    
    [[Page 24048]]
    
    DOL calculates the prevailing wages to be paid to H-2B workers and U.S. 
    workers recruited in connection with the application for certification; 
    the prevailing wage is then used in petitioning DHS to employ 
    nonimmigrant workers in H-2B status. DOL and DHS are jointly issuing 
    this rule in response to the court's order in Comit[eacute] de Apoyo a 
    los Trabajadores Agricolas v. Solis, which vacated portions of DOL's 
    current prevailing wage rate regulation, and to ensure that there is no 
    question that the rule is in effect nationwide in light of other 
    outstanding litigation. This rule also contains certain revisions to 
    DHS's H-2B rule to clarify that DHS is the Executive Branch agency 
    charged with making determinations regarding eligibility for H-2B 
    classification, after consulting with DOL for its advice about matters 
    with which DOL has expertise, particularly, in this case, questions 
    about the methodology for setting the prevailing wage in the H-2B 
    program.
    
    DATES: This interim final rule is effective April 24, 2013. Interested 
    persons are invited to submit written comments on this interim final 
    rule on or before June 10, 2013.
    
    ADDRESSES: You may submit comments, identified by Regulatory 
    Information Number (RIN) 1205-AB69, by any one of the following 
    methods:
         Federal e-Rulemaking Portal www.regulations.gov. Follow 
    the Web site instructions for submitting comments.
         Mail or Hand Delivery/Courier: Please submit all written 
    comments (including disk and CD-ROM submissions) to Michael Jones, 
    Acting Administrator, Office of Policy Development and Research, 
    Employment and Training Administration, U.S. Department of Labor, 200 
    Constitution Avenue NW., Room N-5641, Washington, DC 20210.
        Please submit your comments by only one method. Comments received 
    by means other than those listed above or received after the comment 
    period has closed will not be reviewed. The Departments will post all 
    comments received on http://www.regulations.gov without making any 
    change to the comments, including any personal information provided. 
    The http://www.regulations.gov Web site is the Federal e-rulemaking 
    portal and all comments posted there are available and accessible to 
    the public. The Departments caution commenters not to include personal 
    information such as Social Security Numbers, personal addresses, 
    telephone numbers, and email addresses in their comments as such 
    information will become viewable by the public on the http://www.regulations.gov Web site. It is the commenter's responsibility to 
    safeguard his or her information. Comments submitted through http://www.regulations.gov will not include the commenter's email address 
    unless the commenter chooses to include that information as part of his 
    or her comment.
        Postal delivery in Washington, DC, may be delayed due to security 
    concerns. Therefore, the Departments encourage the public to submit 
    comments through the http://www.regulations.gov Web site.
        Docket: For access to the docket to read background documents or 
    comments received, go to the Federal eRulemaking portal at http://www.regulations.gov. The Departments will also make all the comments 
    either Department receives available for public inspection during 
    normal business hours at the Employment and Training Administration 
    (ETA) Office of Policy Development and Research at the above address. 
    If you need assistance to review the comments, DOL will provide you 
    with appropriate aids such as readers or print magnifiers. DOL will 
    make copies of the rule available, upon request, in large print and as 
    an electronic file on computer disk. DOL will consider providing the 
    interim final rule in other formats upon request. To schedule an 
    appointment to review the comments and/or obtain the rule in an 
    alternate format, contact the ETA Office of Policy Development and 
    Research at (202) 693-3700 (VOICE) (this is not a toll-free number) or 
    1-877-889-5627 (TTY/TDD).
    
    FOR FURTHER INFORMATION CONTACT: 
        Regarding 8 CFR Part 214: Kevin J. Cummings, Chief, Business and 
    Foreign Workers Division, Office of Policy and Strategy, U.S. 
    Citizenship and Immigration Services, Department of Homeland Security, 
    20 Massachusetts Ave. NW., Suite 1100, Washington, DC 20529-2120, 
    telephone (202) 272-1470 (not a toll-free call).
        Regarding 20 CFR Part 655: William L. Carlson, Ph.D., 
    Administrator, Office of Foreign Labor Certification, ETA, U.S. 
    Department of Labor, 200 Constitution Avenue NW., Room C-4312, 
    Washington, DC 20210; Telephone (202) 693-3010 (this is not a toll-free 
    number). Individuals with hearing or speech impairments may access the 
    telephone number above via TTY by calling the toll-free Federal 
    Information Relay Service at 1-877-889-5627 (TTY/TDD).
    
    SUPPLEMENTARY INFORMATION: 
    
    I. The H-2B Program, the Prevailing Wage Methodology and Revisions to 8 
    CFR 216.2(h)(6) and 20 CFR 655.10(b)
    
    A. The Department of Homeland Security's Role in the H-2B Program
    
        As provided by section 101(a)(15)(H)(ii)(b) of the Immigration and 
    Nationality Act (INA or Act), 8 U.S.C. 1101(a)(15)(H)(ii)(b), the H-2B 
    visa classification for non-agricultural temporary workers is available 
    to a worker ``having a residence in a foreign country which he has no 
    intention of abandoning who is coming temporarily to the United States 
    to perform other [than agricultural] temporary service or labor if 
    unemployed persons capable of performing such service or labor cannot 
    be found in this country.'' Section 214(c)(1) of the INA (8 U.S.C. 
    1184(c)(1)) requires an importing employer to petition DHS for 
    classification of the prospective temporary worker as an H-2B 
    nonimmigrant as a prerequisite to the worker obtaining an H-2B visa or 
    being granted H-2B status. U.S. Citizenship and Immigration Services 
    (USCIS) is the component agency within DHS that adjudicates H-2B 
    petitions. See 8 CFR 214.2(h)(6) et seq.
        Section 214(c)(1) of the INA requires DHS to consult with 
    ``appropriate agencies of the Government'' before adjudicating an H-2B 
    petition. DHS has determined that, under this statutory provision, it 
    must consult with DOL as part of the process of adjudicating H-2B 
    petitions because DOL is the agency best situated to provide advice 
    regarding whether ``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). DHS, in conjunction with DOL, has determined 
    that the best way to provide this consultation is by requiring the 
    employer (other than in the Territory of Guam),\1\ prior to filing an 
    H-2B petition, to first apply for a temporary labor certification from 
    the Secretary of Labor. 8 CFR 214.2(h)(6)(iii)(A). The temporary labor 
    certification serves as DOL's advice to DHS that the employer has tried 
    unsuccessfully to recruit sufficient U.S. workers at a DOL-determined 
    prevailing wage for the position for which it now seeks H-2B workers, 
    and that the employer has provided assurance that it will pay its H-2B 
    workers and any successfully recruited U.S. workers at least the same 
    prevailing wage. Thus, the certification serves as expert consultation 
    and advice to USCIS on whether U.S. workers capable of
    
    [[Page 24049]]
    
    performing the services or labor are available, and whether the 
    employment of the foreign worker(s) will adversely affect the wages and 
    working conditions of similarly employed U.S. workers. The fulfillment 
    of the required consultation with DOL in this fashion represents good 
    and efficient government, inasmuch as it avoids potentially significant 
    and unnecessary cost that the federal government would otherwise incur 
    if it was required to replicate within DHS the unique expertise already 
    existing within DOL. DHS and DOL recognize the Congressional aim in 
    enacting the consultation requirement in section 214(c)(1) of the INA 
    to effectively utilize governmental resources by requiring DHS to 
    solicit the expertise of other Federal agencies without having to 
    independently and needlessly develop the same or overlapping expertise 
    simply as a means to question the advice it receives. Under current DHS 
    regulations, an employer may not file a petition with USCIS for an H-2B 
    temporary worker unless it has received a labor certification from the 
    Secretary of Labor (or the Governor of Guam, as appropriate). 8 CFR 
    214.2(h)(6)(iii)(C), (iv)(A), (vi)(A). DHS relies on DOL's advice in 
    this area, as the appropriate government agency with expertise in labor 
    market questions, to fulfill DHS's statutory duty of determining that 
    unemployed persons capable of performing the relevant service or labor 
    cannot be found in the United States and to approve H-2B petitions. INA 
    101(a)(15)(H)(ii)(b) (8 U.S.C. 1101(A)(15)(H)(ii)(b)); and INA 
    214(c)(1), (8 U.S.C. 1184(c)(1)).
    ---------------------------------------------------------------------------
    
        \1\ In the Territory of Guam, the petitioner must apply to the 
    Governor of Guam for a temporary labor certification. See 8 CFR 
    214.2(h)(6)(iii).
    ---------------------------------------------------------------------------
    
    B. The Department of Labor's Role in the H-2B Program
    
        The Secretary of Labor's responsibility for the H-2B program is 
    carried out by two agencies within DOL. Applications for temporary 
    labor certification are processed by ETA's Office of Foreign Labor 
    Certification, the agency to which the Secretary of Labor has delegated 
    those responsibilities described in the USCIS H-2B regulations. 
    Enforcement of the attestations and assurances made by employers on H-
    2B applications granted temporary labor certification is conducted by 
    the Wage and Hour Division (WHD) under enforcement authority delegated 
    to it by DHS on January 16, 2009 (effective January 18, 2009). See 8 
    U.S.C. 1184(c)(14)(B).
    
    C. The Consultative Function in the Administration and Implementation 
    of the H-2B Program
    
        Since 1968, DHS's, and its predecessor INS's, consultation with DOL 
    in the H-2 non-agricultural program has been implemented through the 
    agencies' use of a combination of legislative rules and guidance 
    documents. As noted above, DHS's current consultation with DOL in the 
    H-2B program under Section 214(c)(1) of the INA is based on DHS's 
    regulatory requirement that an employer first obtain a temporary labor 
    certification from the Secretary of Labor establishing that U.S. 
    workers capable of performing the services or labor are not available, 
    and that the employment of the foreign worker(s) will not adversely 
    affect the wages and working conditions of similarly employed U.S. 
    workers. 8 CFR 214.2(h)(6)(iii). The first step in DOL's certification 
    process is the determination of the prevailing wage in the occupation 
    that is the subject of the application for temporary labor 
    certification. DOL has established a methodology for its determination 
    of the prevailing wage rate through regulation, 20 CFR 655.10, and this 
    regulation now requires revision in light of Comit[eacute] de Apoyo a 
    los Trabajadores Agricolas (CATA) v. Solis, Civ. No. 09-cv-240, (E.D. 
    Pa.) (March 21, 2013), which is 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. Specifically, a 
    group of employers challenged the regulations DOL issued on February 
    21, 2012, (77 FR 10038) (2012 H-2B rule) implementing its consultative 
    responsibilities under the H-2B program. The 2012 rule implements all 
    of DOL's responsibilities under the H-2B program except for determining 
    the prevailing wage, which, as noted above, is now set forth in a 
    separate regulation at 20 CFR 655.10. In their challenge to DOL's 2012 
    H-2B rule, the employers argued that DOL does not have independent 
    rulemaking authority to issue the 2012 rule under the H-2B program. 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 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. et al. v. Secretary 
    of Labor,-- F.3d--, 2013 WL 1286129, No. 12-12462 (11th Cir. Apr. 1, 
    2013). The court stated that, ``DHS was given overall responsibility, 
    including rulemaking authority, for the H-2B program. DOL was 
    designated a consultant. It cannot bootstrap that supporting role into 
    a co-equal one.'' 2013 WL 1286129 at *2.
        In substantial contrast, when faced with a similar employer 
    challenge to DOL's rulemaking authority with respect to an H-2B wage 
    rule issued on January 19, 2011 (76 FR 3452) (2011 Wage Rule),\2\ the 
    district court in Louisiana Forestry ***'n v. Solis, 889 F.Supp.2d 711 
    (E.D. Pa. 2012), held that DOL does have independent H-2B rulemaking 
    authority. The court stated ``the history of the H-2B program 
    demonstrates Congress's expectation that the DOL would engage in 
    legislative rulemaking * * * at the time of [the Immigration Reform and 
    Control Act (IRCA)]'s enactment, the DOL regulations governing the 
    labor certification process for non-agricultural, unskilled guest 
    workers already had been in place for many years. There is no evidence 
    that Congress intended to alter or disrupt the DOL's rulemaking when it 
    enacted IRCA and created the H-2B visa program.'' 889 F.Supp.2d at 728. 
    The court also approved of DHS's decision to ``consult'' with DOL by 
    adopting the labor certification requirement, finding persuasive the 
    DHS rationale that it does not have the expertise to make labor market 
    determinations. 889 F.Supp.2d at 724-25. Oral argument is currently 
    scheduled for May 2013 in the U.S. Court of Appeals for the Third 
    Circuit in that lawsuit.\3\
    ---------------------------------------------------------------------------
    
        \2\ As discussed further below, the 2011 Wage Rule has not been 
    implemented due to Congressional prohibition contained in riders to 
    DOL's appropriations.
        \3\ Accord G.H. Daniels & Assocs. v. Solis, No. 12-cv-1943-CMA 
    (D. Col. Sept. 17, 2012), Doc. 38 (Mot. Hrg. Tr.) at 4 (concurring 
    with Louisiana Forestry opinion and rejecting, in the context of an 
    enforcement action under the 2008 H-2B rule, the argument that DOL 
    lacks rulemaking authority).
    ---------------------------------------------------------------------------
    
        Notwithstanding the Eleventh Circuit's decision in Bayou, or the 
    Departments' joint issuance of this interim rule, DOL and DHS continue 
    to maintain, as the Louisiana Forestry Association court held, that DOL 
    does have independent legislative rulemaking authority for the H-2B 
    program. However, due to these inconsistent court rulings on DOL's 
    authority to issue independent legislative rules, DOL and DHS are 
    issuing this joint regulation revising the prevailing wage methodology 
    in the H-2B program in order to respond to the court order in CATA v. 
    Solis, and also to dispel questions regarding the respective roles of 
    the two agencies and the validity of DOL's regulations as an 
    appropriate way to implement the consultation specified in section 
    214(c)(1) of the INA. DHS has determined that, under section 214(c)(1) 
    of the INA, it must consult with DOL as
    
    [[Page 24050]]
    
    the agency with expertise on labor market questions, which includes 
    determining the prevailing wages that must be paid to workers in 
    connection with the H-2B program, when adjudicating H-2B petitions.\4\ 
    DHS and DOL have determined that the best way for DOL to fill this 
    statutory role as a consultant to DHS is for DOL to provide its advice 
    with respect to whether U.S. workers capable of performing the services 
    or labor are available, and whether the employment of the foreign 
    worker(s) will adversely affect the wages and working conditions of 
    similarly employed U.S. workers. DHS and DOL have further determined 
    that the most effective method for DOL to provide this advice--a key 
    component of which is establishing the prevailing wage methodology--is 
    by setting forth in regulations the standards it will use to advise DHS 
    regarding whether U.S. workers capable of performing the services or 
    labor are unavailable and whether the employment of the H-2B workers 
    will not adversely affect the wages and working conditions of similarly 
    employed U.S. workers. DOL's rules, including this prevailing wage 
    rule, set the standards by which employers demonstrate to DOL that they 
    have tested the labor market and found no or insufficient numbers of 
    U.S. workers, and also set the standards by which employers demonstrate 
    to DOL that the offered employment does not adversely affect US 
    workers. By setting forth this structure in regulations, DHS and DOL 
    will ensure the provision of this advice by DOL is consistent, 
    transparent, and provided in the form that is most useful to DHS.
    ---------------------------------------------------------------------------
    
        \4\ 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, Public Law 107-296, 116 Stat. 2142) 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. See 55 FR 2606, 2617 (Jan. 26, 1990).
    ---------------------------------------------------------------------------
    
        This interim final rule is necessary because, in the absence of 
    regulations to structure DOL's consultative responsibilities, DOL will 
    be forced to cease processing employers' requests for prevailing wage 
    determinations and temporary labor certifications and thus will be 
    unable to continue to provide the advice that DHS has determined is 
    necessary under section 214(c)(1) of the INA for DHS to fulfill its 
    statutory responsibility under section 101(a)(15)(H)(ii)(b) of the INA 
    to adjudicate H-2B petitions, as implemented in the DHS regulation at 8 
    CFR 214.2(h)(6). In particular, this will leave DHS incapable of 
    meeting its statutory responsibility to meaningfully consult with DOL, 
    the Government agency DHS has determined is the appropriate agency with 
    the requisite expertise with respect to labor market questions. Without 
    this statutory consultation, USCIS will be unable to adjudicate H-2B 
    petitions, as 214(c)(1) of the INA requires that a petition cannot be 
    adjudicated by DHS ``until after consultation with appropriate agencies 
    of the Government.'' Further, in order to maintain the integrity of the 
    consultative process, and provide DHS with the best possible advice 
    relating to the U.S. labor market concerns required by section 
    101(a)(15)(H)(ii)(b) of the INA, DOL must have certainty that it can 
    enforce the assurances provided by employers who desire to participate 
    in the H-2B program, such as those relating to the wages and working 
    conditions that must be offered to H-2B workers and U.S. workers 
    recruited in connection with the application for certification.
        In order to ensure that there can be no question about the 
    authority for and validity of the DOL's regulations governing the 
    methodology for determining prevailing wages in the H-2B program, DHS 
    and DOL are jointly publishing this regulation, which 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 regulation also executes DHS's and DOL's determination that 
    implementation of the consultative relationship may be established 
    through jointly adopted regulations that determine the method by which 
    DOL will provide the necessary advice to DHS. Accordingly, DHS is 
    amending its own regulations at 8 CFR 214.2(h)(6)(iii)(D) to clarify 
    that DOL will establish regulatory procedures for administering 
    elements of the program necessary to provide DHS with the requisite 
    advice with respect to the labor market. This amendment will underscore 
    that the consultative process has occurred and that DHS adopts DOL's 
    prevailing wage methodology as part of the advice required for the 
    administration of temporary labor certifications.
    
    D. The Determination of the Prevailing Wage
    
        To comply with its obligations under the program, an employer must 
    pay the H-2B workers hired in connection with the application a wage 
    that will not adversely affect the wages of U.S. workers similarly 
    employed. DOL's H-2B procedures have always provided that adverse 
    effect is prevented by requiring H-2B employers to offer and pay at 
    least the prevailing wage to the H-2B workers and those U.S. workers 
    recruited in connection with the job opportunity. To facilitate 
    compliance with this requirement, DHS and DOL have set forth a number 
    of specific provisions governing the system by which DOL will determine 
    the prevailing wage for the job opportunity for which temporary labor 
    certification is being sought.
        From the outset of the H-2B program, DOL directed that the same 
    prevailing wage procedures be used for the permanent and H-2B labor 
    certification programs and the H-1B labor condition application 
    program. Although DOL did not promulgate a separate prevailing wage 
    methodology until 1995, DOL provided guidance to the States, which 
    provided prevailing wage determinations until 2010, on the 
    administration of the H-2 nonagricultural program (a predecessor of the 
    H-2B program) requiring the States to determine the prevailing wage in 
    accordance with regulations for the permanent program at 20 CFR 
    656.40.\5\ In 1995, DOL issued separate prevailing wage guidance 
    through GAL 4-95, ``Interim Prevailing Wage Policy for Nonagricultural 
    Immigration Programs'' (May 18, 1995), Attachment I,\6\ and again in 
    1998, through GAL 2-98, ``Prevailing Wage Policy for Nonagricultural 
    Immigration Programs'' (November 30, 1998) that continued to extend the 
    provisions of Sec.  656.40 to the H-2B program. Under the two GALs, 
    payment of the rates determined under the Davis-Bacon Act (DBA), 40 
    U.S.C. 276a et seq., 29 CFR part 1, or the McNamara-O'Hara Service 
    Contract Act (SCA), 41 U.S.C. 351 et seq., was mandatory for H-2B 
    occupations for which such wage determinations existed. Starting in 
    1998, in the absence of SCA or DBA wage rates, prevailing wage 
    determinations were based on the Occupational Employment Statistics 
    (OES) wage survey, compiled by the Bureau of Labor Statistics (BLS). 
    The OES wage survey produces employment and wage estimates for 
    approximately 800 occupations and is based upon wage data covering 
    full-time and part-time workers who are given monetary compensation for 
    their labor or services. The OES survey is published annually and 
    features data broken out both by geographic area and industry. The wage 
    estimates in the survey are made
    
    [[Page 24051]]
    
    available at the national, State and metropolitan and nonmetropolitan 
    area levels. The OES survey directly collects a wage rate for all 
    occupations defined by the Office of Management and Budget's (OMB) 
    occupational classification system, the Standard Occupational 
    Classification (SOC). Employers have also been able to use wages based 
    on private wage surveys that meet Department standards since at least 
    1995.
    ---------------------------------------------------------------------------
    
        \5\ See General Administration Letter (GAL) 10-84, ``Procedures 
    for Temporary Labor Certifications in Non Agricultural Occupations'' 
    (April 23, 1984),
        \6\ See http://wdr.doleta.gov/directives.
    ---------------------------------------------------------------------------
    
        Both the 1995 and the 1998 GALs provided that, absent a DBA or SCA 
    rate, DOL would issue prevailing wage determinations at two levels or 
    tiers, an entry-level wage and an experienced wage. At that time, there 
    were not many H-2B program users, and new prevailing wage procedures 
    were designed primarily to address the needs of the permanent and H-1B 
    programs, which were dominated by job opportunities in higher skilled 
    occupations. There was considerable desire on the part of permanent and 
    H-1B program users to have DOL create a multi-tiered wage structure to 
    reflect the widely-held view that workers in occupations that require 
    sophisticated skills and training receive higher wages based on those 
    skills. Since the OES survey captures no information about actual 
    skills or responsibilities of the workers whose wages are being 
    reported, the two-tier wage structure introduced in 1998 was based on 
    the assumption that the mean wage of the lowest paid one-third of the 
    workers surveyed in each occupation could provide a reasonable proxy 
    for the entry-level wage. DOL did not conduct any meaningful economic 
    analysis to test the validity of that assumption and, most 
    significantly, it did not consider whether assumptions about wages and 
    skill levels for higher skilled occupations might be less valid when 
    applied to lower skilled occupations. In December 2004, DOL revised its 
    regulation governing the permanent program. 69 FR 77326, Dec. 27, 2004. 
    These revisions included changes to 20 CFR 656.40, which governed the 
    procedures for determining the prevailing wage. In particular, these 
    revisions eliminated the requirement that SCA/DBA wage determinations 
    be treated as the prevailing wage where such determinations existed. 
    The regulation provided that use of available SCA/DBA wage rates would 
    be only at the option of the employer.
        The preamble to the permanent regulation, 69 FR 77326-27, also 
    discusses Congress's enactment of the H-1B Visa Reform Act in the 
    Consolidated Appropriations Act of 2005, Public Law 108-447, Div. J., 
    Title IV, section 423, which amended section 212(p)(4) of the INA, 8 
    U.S.C. 1182(p)(4), relating to the H-1B visa program. This legislation 
    required DOL to issue prevailing wages at four levels when the 
    prevailing wages were based upon a government survey. The legislation 
    mandated how to calculate the four levels through a mathematical 
    formula that created two additional wage levels in between the existing 
    two level wages. Section 656.40 of 20 CFR, the regulation implementing 
    the H-1B Visa Reform Act, only specifically referenced prevailing wages 
    established for the permanent and H-1B programs.
        Soon after the enactment of the new regulations, DOL issued 
    comprehensive guidance on prevailing wage determinations. Following the 
    practice in place since 1984, this guidance also applied to the H-2B 
    program. ETA Prevailing Wage Determination Policy Guidance, Non-
    agricultural Immigration Programs, May 2005, revised November 2009.\7\ 
    The guidance included the use of the four levels and the elimination of 
    the mandatory application of the SCA/DBA wage determinations.
    ---------------------------------------------------------------------------
    
        \7\ http://www.foreignlaborcert.doleta.gov/pdf/NPWHC_Guidance_Revised_11_2009.pdf.
    ---------------------------------------------------------------------------
    
        In 2008, DOL issued regulations governing DOL's role in the H-2B 
    temporary worker program. 73 FR 78020, Dec. 19, 2008 (the 2008 rule). 
    The 2008 rule addressed some aspects of the 2005 prevailing wage 
    guidance, and adopted the four-level wages from the prior guidance by 
    requiring wages based on the OES mean to reflect four ``skill levels.'' 
    See 20 CFR 655.10(b)(2).\8\ As described above, this guidance converted 
    the two-level wages, containing an entry level and experienced wage, 
    into a four-tier system by mathematically adjusting the two tiers in 
    the manner prescribed by Congress in the context of H-1B specialty 
    occupations. 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 the union and the employer; the OES four-tier wage rate if 
    there was no CBA; a survey if an employer elected to provide an 
    acceptable survey; or a DBA or SCA rate if the employer elected to use 
    those determinations. See 20 CFR 655.10(b). DOL did not seek comments 
    on the use of the four-level wage methodology for determining 
    prevailing wages when promulgating the 2008 rule. 73 FR 78031.
    ---------------------------------------------------------------------------
    
        \8\ The invalidated provision from the 2008 rule read: ``If the 
    job opportunity is not covered by a CBA, the prevailing wage for 
    labor certification purposes shall be the arithmetic mean, except as 
    provided in paragraph (b)(4) of this section, of the wages of 
    workers similarly employed at the skill level in the area of 
    intended employment. The wage component of the BLS Occupational 
    Employment Statistics Survey (OES) shall be used to determine the 
    arithmetic mean, unless the employer provides a survey acceptable to 
    OFLC under paragraph (f) of this section.'' (emphasis added).
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    E. CATA v. Solis and the 2011 Wage Rule
    
        In early 2009, a lawsuit was filed challenging various aspects of 
    DOL's H-2B procedures included in the 2008 rule. Comit[eacute] de Apoyo 
    a los Trabajadores Agricolas (CATA) v. Solis, Civ. No. 09-cv-240, 2010 
    WL 3431761 (E.D. Pa. 2010). Among the issues raised in this litigation 
    were the use of the four-level wage structure in the H-2B program and 
    the optional use of SCA and DBA wages. In an August 30, 2010 decision, 
    the court ruled that DOL had violated the Administrative Procedure Act 
    (APA) by failing to adequately explain its reasoning for adopting skill 
    levels as part of the H-2B prevailing wage determination process, and 
    by failing to accept comments relating to the choice of appropriate 
    data sets in deciding to rely on OES data rather than SCA and DBA in 
    setting the prevailing wage rates. The court ordered DOL to 
    ``promulgate new rules concerning the calculation of the prevailing 
    wage rate in the H-2B program that are in compliance with the 
    Administrative Procedure Act no later than 120 days from the date of 
    this order.'' CATA, 2010 WL 3431761, at *27.
        Following the CATA court's 2010 ruling, and following consultation 
    with DHS, DOL engaged in rulemaking to address both substantive and 
    procedural concerns about setting prevailing wages in the H-2B program. 
    DOL published a Notice of Proposed Rulemaking (NPRM) in accordance with 
    the court's order. 75 FR 61578, Oct. 5, 2010. The NPRM proposed to 
    eliminate the use of the four-level wage structure for the H-2B program 
    in favor of the mean OES wage for each occupational category. It also 
    provided that available SCA and DBA wage determination rates for those 
    occupations for which H-2B certification is sought, or collective 
    bargaining agreement wages, if such an agreement exists, would be used 
    if they reflected higher wages than the OES wage. The NPRM also 
    proposed to eliminate the use of employer-provided surveys in the H-2B 
    program.
        After a thorough review of the comments, and with input from DHS, 
    DOL promulgated a final rule, with some modifications relating to 
    surveys. 76 FR 3452, Jan. 19, 2011 (the 2011 Wage Rule). DOL determined 
    that ``there are no significant skill-based wage
    
    [[Page 24052]]
    
    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. at 3460. 
    DOL found that in 2010 almost 75 percent of H-2B jobs were certified at 
    a Level 1 wage, which is defined as 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. Id. at 3463. 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.; see also 75 FR 61577, 61580-81. DOL concluded that ``the net 
    result is an adverse effect on the [U.S.] worker's income.'' 76 FR 
    3463.
        The 2011 Wage Rule permitted the use of employer-submitted surveys 
    only in very limited circumstances, such as where the job opportunity 
    is not covered by a CBA and is not accurately represented within the 
    available wage data under the DBA, SCA, or OES. 76 FR 3467. In those 
    circumstances, the employer could submit a wage survey that would be 
    used if it met the methodological standards that were applicable to 
    employer-submitted surveys in the 2008 rule. Compare 20 CFR 
    655.10(f)(2), (3)(i) and (ii) (2012 ed.) with 20 CFR 655.10(b)(7)(iv), 
    (v)(A) and (B) (2012 ed. Note).
        The 2011 Wage Rule required the use of wage determinations based on 
    the DBA and SCA if a job opportunity involved an ``occupation in the 
    area of intended employment * * * for which such a wage has been 
    determined.'' 20 CFR 655.10(b)(2) (2012 ed. Note). Finally, the 2011 
    Wage Rule concluded that the prevailing wage would be the highest of 
    the wage rates established in the various wage sources--the applicable 
    CBA wage, the arithmetic mean as found in the OES, or the applicable 
    DBA or SCA wage--because that approach would be most consistent with 
    DOL's responsibility to avoid an adverse effect on wages of similarly 
    employed U.S. workers. After two adjustments to the effective date of 
    the 2011 Wage Rule, it was set to become effective on November 30, 
    2011.\9\
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        \9\ DOL originally set the effective date of the Wage Rule for 
    January 1, 2012. However, as a result of the CATA litigation and 
    following notice-and-comment rulemaking, DOL issued a final rule, 76 
    FR 45667, August 1, 2011, revising the effective date of the 2011 
    Wage Rule to September 30, 2011, and a second final rule, 76 FR 
    59896, September 28, 2011, further revising the effective date of 
    the 2011 Wage Rule to November 30, 2011.
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    F. Congressional Response to the 2011 Wage Rule
    
        On November 18, 2011, Congress enacted the Consolidated and Further 
    Continuing Appropriations Act, 2012, Public Law 112-55, 125 Stat. 552 
    (November 2011 Appropriations Act), a spending bill that contained 
    DOL's appropriations. That Act 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, div. B, tit. V, Sec.  546 (Nov. 18, 
    2011). The conference report accompanying the November 2011 
    Appropriations Act stated that the purpose of the postponement was to 
    ``allow Congress to address'' the 2011 Wage Rule. H.R. Rep. No. 112-284 
    (2011) (Conf. Rep.).
        Since the enactment of the November 2011 Appropriations Act, each 
    subsequently enacted appropriations act has contained the same 
    prohibition preventing implementation of the 2011 Wage Rule.\10\ 
    Because the Department was prohibited from spending funds to implement 
    the 2011 Wage Rule, it was necessary to revert to the 2008 wage 
    provisions for as long as the 2011 Wage Rule was blocked legislatively. 
    The program could not continue to function without a wage rule in 
    effect, and the 2008 rule was the only available option. In order to 
    prevent the nullification of the wage provisions of the 2008 H-2B rule, 
    20 CFR 655.10, which would have occurred had the 2011 Wage Rule taken 
    effect, DOL has extended the effective date of the 2011 Wage Rule four 
    times.\11\ Implementation of the effective date of the 2011 Wage Rule 
    is currently extended to October 1, 2013.
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        \10\ These include the Consolidated Appropriations Act of 2012, 
    Public Law 112-74, 125 Stat. 786, which was enacted on December 23, 
    2011; Continuing Appropriations Resolution, 2013, Public Law 112-
    175, 126 Stat. 1313, which was enacted on September 28, 2012; and 
    Consolidated and Further Continuing Appropriations Act, 2013, Public 
    Law 113-6, 127 Stat. 198, enacted on March 26, 2013, which 
    establishes DOL's appropriations through September 30, 2013.
        \11\ Because of the prohibition on expenditures to implement the 
    2011 Wage Rule, its effective date has been extended to January 1, 
    2012, 76 FR 73508 (Nov. 29, 2011); to October 1, 2012, 76 FR 82115 
    (Dec. 30, 2011); to March 27, 2013, 77 FR 60040 (Oct. 2, 2012); and 
    to October 1, 2013, 78 FR 19098 (posted on the public Web site of 
    the Office of the Federal Register on March 26, 2013, and appeared 
    in print on March 29, 2013).
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    G. Further Activity in CATA v. Solis
    
        As a result of the appropriations riders, DOL continued to rely 
    upon the 2008 rule, including its prevailing wage provisions. On 
    September 27, 2012, the CATA plaintiffs filed a motion for preliminary 
    and permanent injunction seeking to prevent DOL from using the four-
    level wage system in determining H-2B prevailing wages. Memorandum of 
    Law in Support of Plaintiffs' Motion for a Temporary Restraining Order 
    and Preliminary and Permanent Injunctive Relief, CATA v. Solis, Dkt. 
    152. Accordingly, they asked the court to vacate the phrase ``at the 
    skill level'' from the prevailing wage formula at 20 CFR 655.10(b)(2). 
    Id. at 1. Plaintiffs argued that DOL's continued reliance on the four-
    level OES wages contravened the court's 2010 holding that the provision 
    was procedurally invalid. Id. at 1-2. Plaintiffs further argued that 
    continued reliance on the four-level OES wages was in derogation of 
    DOL's own finding, described in promulgating the 2011 Wage Rule, that 
    the use of the four-level structure created an adverse effect on 
    workers' wages. Id.
        On March 21, 2013, the CATA court issued a permanent injunction 
    against the operation of the skill levels contained in the wage 
    provision, 20 CFR 655.10(b)(2), of the 2008 rule. CATA v. Solis, -- 
    F.Supp. --, 2013 WL 1163426, *13 (E.D. Pa. 2013) (CATA II). The court 
    noted that DOL continued to use the prevailing wage provisions of the 
    2008 rule, ``nearly thirty (30) months after Judge Pollak invalidated 
    the Rule, and two years after the DOL found that the Rule violates the 
    DOL's statutory and regulatory mandates.'' Id. at *5. The court held 
    that DOL has authority to grant labor certifications only if it can 
    assure that they will not adversely affect the wages and working 
    conditions of U.S. workers. Id. at *8. Because prevailing wage 
    determinations issued based upon the four-level OES wage rates do 
    result in adverse effect, the labor certifications based on such 
    prevailing wages ``exceed the bounds of DOL's delegated authority.'' 
    Id. The court also found that the four-level component of the 2008 rule 
    violated section 706(2)(A) of the APA, because it had consequences that 
    ``plainly contradict congressional policy.'' Id. at *10. The court 
    rejected DOL's request to leave the 2008 rule in effect while it 
    promulgated another regulation in order to avoid disruption to the H-2B 
    program, stating that in these circumstances ``to leave an invalid rule 
    in place is for a reviewing court to
    
    [[Page 24053]]
    
    legally sanction an agency's disregard of its statutory or regulatory 
    mandate.'' Id. at *11. The court further stated that vacating the four-
    level component of the 2008 rule ``will only disrupt the H-2B program 
    to the extent that the DHS and DOL use the program to issue H-2B visas 
    that they are expressly prohibited from granting.'' Id. at *12. 
    Accordingly, the court vacated section 655.10(b)(2), remanded the 
    matter to DOL, and gave DOL 30 days to come into compliance. Id. at 
    *13. As a result of the court's order, DOL is currently unable to issue 
    a prevailing wage determination based on the OES survey, which is the 
    basis of more than 95 percent of DOL's H-2B prevailing wage 
    determinations.\12\ Therefore, under the court's order, we must now act 
    expeditiously to close the regulatory gap created by the court order 
    and promulgate a regulation that sets prevailing wages in the H-2B 
    program in a manner that does not adversely affect U.S. workers' wages, 
    so that DOL may provide the advice DHS has determined is necessary for 
    it to adjudicate H-2B petitions.
    ---------------------------------------------------------------------------
    
        \12\ However, if a job opportunity for which a prevailing wage 
    determination is sought is covered by a collective bargaining 
    agreement, or the wage can be set based on the employer's voluntary 
    reliance on the SCA, the DBA, or the submission of an acceptable 
    private wage survey, DOL may issue a prevailing wage determination 
    and comply with the March 21 court order.
    ---------------------------------------------------------------------------
    
    H. The Interim Wage Methodology
    
        The wage methodology in the 2008 rule requires that if a job 
    opportunity is covered by a collective bargaining agreement, the 
    prevailing wage applicable to that job is the wage set in the CBA. 20 
    CFR 655.10(b)(1). However, if the job opportunity for which a 
    prevailing wage determination is sought is not covered by a CBA, the 
    prevailing wage is determined according to 20 CFR 655.10(b)(2). Under 
    that now-vacated provision, the prevailing wage was the arithmetic mean 
    of the OES wages of workers similarly employed ``at the skill level'' 
    in the area of intended employment. 20 CFR 655.10(b)(2). Other wage 
    provisions of the 2008 rule were not vacated. First, the 2008 rule also 
    permits employers to submit their own wage surveys in lieu of the OES 
    wage, under certain conditions. 20 CFR 655.10(b)(4), (f). In addition, 
    employers are permitted, but not required, to use wage determinations 
    issued by DOL under either the DBA or SCA. 20 CFR 655.10(b)(5).
        By contrast, as noted above, the 2011 Wage Rule establishes a 
    regime in which the prevailing wage would be the ``highest of'' either 
    the wage applicable under the CBA, the DBA, the SCA, or the OES mean. 
    20 CFR 655.10(b)(1)-(3) (2012 ed. Note). The 2011 Wage Rule eliminates 
    from the OES mean the four-level wages, and disallows the use of 
    employer-submitted surveys if the prevailing wage could be determined 
    based on the OES, the DBA, or the SCA. 20 CFR 655.10(b)(3), (6), (7) 
    (2012 ed. Note). In the very limited circumstances in which employer-
    submitted surveys would be permitted, the 2011 Wage Rule continues 
    DOL's role in reviewing such surveys for methodological soundness. 20 
    CFR 655.10(b)(7) (2012 ed. Note).
    1. Prevailing Wages Based on the OES
        In developing the wage methodology for this interim final rule in 
    order to provide the requisite advice to DHS, DOL will not divide the 
    OES wage into four levels because the CATA court has concluded, based 
    on DOL's administrative findings, 76 FR 3463, that the four levels 
    substantively violate the INA, and has vacated that aspect of the 2008 
    rule. CATA II, 2013 WL 1163426, at *9-10. The OES wage survey formed 
    the basis of the prevailing wage determination in both the 2008 and 
    2011 rules. Therefore, in order to avoid creating an adverse effect on 
    U.S. workers, DOL will base prevailing wage determinations on the 
    arithmetic mean wage established in the OES survey, without the four 
    levels. The prevailing wage will no longer be the mean of the 
    particular wage level, but will be the overall mean of all persons in 
    the occupation in question. Accordingly, this interim rule promulgates 
    the regulatory text contained in the 2008 version of 20 CFR 
    655.10(b)(2), but strikes from that provision the phrase, ``at the 
    skill level.'' Striking this phrase from the 2008 version of 20 CFR 
    655.10(b)(2) results in the use of the OES mean without the wage tiers. 
    See revised 20 CFR 655.10(b)(2) below.
        The OES survey is an appropriate basis for issuing H-2B prevailing 
    wages because it is among the largest, most comprehensive, and 
    continuous statistical survey programs of the Federal Government. The 
    OES collects data from more than 1 million establishments, and salary 
    information is available for all occupations in the SOC. Occupational 
    wage data is available at state levels and at metropolitan and 
    nonmetropolitan area levels within a state. For these reasons, the OES 
    is also used in other foreign labor certification programs administered 
    by DOL. See 76 FR 3458. DOL has decided to use the OES mean as the 
    appropriate wage level in the H-2B program because almost all H-2B jobs 
    involve unskilled occupations requiring few or no skill differentials 
    (such as landscape laborer, housekeeping cleaner, forestry worker, and 
    amusement park worker). There is no basis, under the existing statutory 
    and regulatory framework, for creating wage levels since there are no 
    skill-based wage differentials in these occupations. See 76 FR 3458-60. 
    As DOL concluded in 2011, 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. Moreover, based on publicly available program data, DOL found 
    during notice and comment rulemaking leading up to the 2011 rule that 
    the predominance of Level I wages under the 2008 rule's four-tier 
    regime results in an adverse impact on similarly situated U.S. workers, 
    in violation of the INA. 75 FR 61580; 76 FR 3463. Under these 
    circumstances, DOL cannot continue using the four-tier wage regime 
    without violating the INA and USCIS's regulations. CATA II, 2013 WL 
    1163426, *8. In addition, DOL has the capacity to operationalize the 
    OES mean wage rate at once based on the immediately available data from 
    the Bureau of Labor Statistics, which will allow DOL to issue 
    prevailing wage determinations without delay. This will allow for the 
    smoothest transition with the least disruption and cost to the 
    Department while acting in compliance with the CATA II court's vacatur 
    and remand order.
        The Departments invite comments on whether the OES mean is the 
    appropriate basis for determining the prevailing wage.
    2. Prevailing Wages Based on Collective Bargaining Agreements
        Similarly, both the 2008 and 2011 wage rules use the CBA wage as an 
    alternate basis for determining the prevailing wage. DOL has left the 
    CBA provision of the 2008 wage rule, 20 CFR 655.10(b)(1), intact. DOL 
    and DHS invite comment on whether the CBA wage should continue to be 
    used as the prevailing wage in all instances in which there is a CBA 
    wage, or whether the CBA wage should only be required if it is higher 
    than the OES wage.
    3. Prevailing Wages Based on the Davis-Bacon Act and the Service 
    Contract Act
        As noted above, DOL historically relied on the prevailing wage 
    regulations used for permanent labor certifications, as codified at 20 
    CFR 656.40, to determine prevailing wages in the H-2B program. In 
    versions of section 656.40(a)(1) that pre-date 2005,
    
    [[Page 24054]]
    
    wage rates were set 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. In 2008, DOL eliminated the requirement to apply DBA and SCA 
    wages, and allowed employers to request voluntarily a prevailing wage 
    based on those sources. The 2011 Wage Rule reinstated the mandatory use 
    of the DBA and the SCA if they were the highest rate ``for the 
    occupation in the area of intended employment if the job opportunity is 
    in an occupation for which such a wage rate has been determined.'' 20 
    CFR 655.10(b)(2) (2012 ed. Note).
        For purposes of this interim rule, DOL has decided to continue the 
    2008 rule's approach, which permits, but does not require, an employer 
    to use a prevailing wage determination based on the DBA or SCA. 
    However, nothing precludes an employer from paying a higher DBA or SCA 
    wage should they choose to do so. In addition, any employer employing 
    H-2B and corresponding workers on particular contracts subject to the 
    DBA or the SCA must comply with the wage provisions under DBA or SCA.
        The mandate to prevent adverse effect has existed for many years in 
    the immigration programs administered by DOL and, except for certain 
    unique requirements of the H-2A program, has always been implemented by 
    a requirement that employers offer and pay the prevailing wage, however 
    defined or calculated. The three prevailing wage rates used in this 
    interim final rule (OES mean, SCA and DBA) all are determined by DOL, 
    albeit using different methodologies and samples. Nevertheless, these 
    three rates are based on actual wages being paid to workers in the 
    particular area for the same kind of work for which H-2B workers are 
    sought. Therefore, although there are various ways to define or 
    calculate the prevailing wage rate, DOL and DHS conclude 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 
    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. Adopting 
    this standard from the 2008 rule with respect to the SCA and the DBA 
    wages will allow for more efficient and consistent prevailing wage 
    determinations that are in compliance with the INA and USCIS's 
    regulations. It will allow DOL to begin to issue wage determinations 
    upon publication of this interim rule, and begin to eliminate as 
    quickly as possible the backlog of prevailing wage determination 
    requests that has built up since the CATA II order. Approaches other 
    than the voluntary application of the DBA and SCA wage rates (such as 
    the ``higher of'' standard used in the 2011 Wage Rule) would require 
    DOL to determine whether multiple wage rates exist for every 
    application and would significantly impede DOL's ability to issue new 
    prevailing wages to those employers in the backlog as well as to 
    employers who previously received the now-invalidated prevailing wages. 
    Any delay in issuing new prevailing wage rates would work to the 
    detriment of employees working under the now-invalidated rates because 
    it would extend the time period during which they would be paid under 
    those invalid rates. Additionally, it would prolong the depressive 
    effect on the wages of similarly-employed U.S. workers, which was the 
    ground for vacatur in the CATA II order.
        DOL and DHS seek 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. DBA and SCA wage determinations, when they exist 
    for the occupation for which certification is being sought and in the 
    area of intended employment, could be used in the H-2B program in at 
    least three possible ways:
        a. They will apply if they represent the highest available 
    prevailing wage determination for the job opportunity in question. This 
    is the approach used in the 2011 rule.
        b. They are available to the employer if it chooses to rely on them 
    for that job opportunity, regardless whether the wage is the highest or 
    lowest available. This is the approach used in the 2008 rule and in 
    this interim final rule.
        c. They constitute the only prevailing wage determination 
    applicable to that job opportunity unless there is a CBA wage. This is 
    the approach that was followed before 2005.
    
    DOL and DHS invite comments on these and other alternatives that may be 
    considered, especially the reasons for or against the use of a 
    particular option. Comments on use of the SCA and/or the DBA in setting 
    prevailing wages will be thoroughly considered, and the Departments 
    will explain fully the policy adopted on these issues following 
    comment.
    4. Prevailing Wages Based on Employer-Submitted Surveys
        DOL's 2008 rule permits employers to submit independent wage 
    surveys under certain guidelines, and provides for an appeal process in 
    the event of a dispute. Under the 2008 regulation, if an employer 
    submits a survey, it 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'' 
    DOL to determine the adequacy of the data provided and validity of the 
    statistical methodology used in conducting the survey. 20 CFR 
    655.10(f)(2). DOL has issued guidance that sets out the standards by 
    which it will determine the adequacy and validity of the survey 
    methodology.\13\ In addition, the survey must be based upon recently 
    collected data, i.e., generally within 24 months of the date of 
    submission. 20 CFR 655.10(f)(3)(ii).
    ---------------------------------------------------------------------------
    
        \13\ See http://www.foreignlaborcert.doleta.gov/pdf/NPWHC_Guidance_Revised_11_2009.pdf at 14-16.
    ---------------------------------------------------------------------------
    
        In the 2011 rule, DOL concluded that, given the quality, 
    reliability and consistency of the three public surveys that would be 
    used to make prevailing wage determinations--the OES, the DBA and the 
    SCA--we would allow the submission of other surveys by employers as the 
    basis for a prevailing wage determination only in limited 
    circumstances. Those circumstances include specific situations in which 
    the public surveys may not provide useful wage information about, for 
    instance, geographic locations that are not included in BLS's data 
    collection area (such as the Commonwealth of the Northern Mariana 
    Islands), where the job opportunity is not accurately represented 
    within the job classification used in the OES, DBA or SCA surveys, or 
    where the job opportunity is not accurately represented within the 
    Standard Occupational Classification System published by the BLS. In 
    virtually all other cases, the prevailing wage determination would be 
    made based on the OES, the DBA or the SCA wages. However, if 
    circumstances permitted the use of an employer-submitted survey as the 
    basis for a prevailing wage determination, the 2011 regulation required 
    the same ``fresh'' data standards as did the 2008 rule, and also 
    required that DOL review the survey methodology in the same manner as 
    the 2008 rule. 20 CFR 655.10(b)(7) (2012 ed. Note).
        This interim final rule will permit the use of employer-provided 
    surveys in lieu of wages derived from the other sources, in order for 
    DOL to provide the advice DHS has determined is necessary for it to 
    adjudicate H-2B petitions. Accordingly, we do not revise or amend
    
    [[Page 24055]]
    
    in this interim rule 20 CFR 655.10(b)(4) and (f) of the 2008 rule. 
    However, DOL still has the concerns expressed in the 2011 rule about 
    the consistency, reliability and validity of these surveys, as well as 
    the costs and delays involved in DOL's review of surveys. 76 FR 3465-
    67. The Department would like to collect 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. Therefore, DOL and 
    DHS invite comment on whether to permit the continued use of employer-
    submitted surveys, and especially seek input on the ways in which, if 
    permitted, the validity and reliability of employer-submitted surveys 
    can be strengthened. Are there methodological standards that can or 
    should be included in the regulation that would ensure consistency, 
    validity and reliability of employer-provided surveys? Are there 
    industries in which employers historically and routinely rely on 
    employer-submitted surveys that should be permitted to do so because of 
    the well-developed, historical, industry-wide practice, or for other 
    reasons? Are there state-developed wage surveys, such as state 
    agricultural surveys, or surveys from other agencies, such as maritime 
    agencies, that could provide data that would be useful in setting 
    prevailing wages? Should employer surveys that include data based on 
    wages paid to H-2B or other nonimmigrant workers be permitted in 
    establishing a prevailing wage that does not adversely affect U.S. 
    workers? If so, under what circumstances? See 655.10(b)(7)(vi) (2012 
    ed. Note).
    
    I. The Interim Final Rule is Effective Immediately
    
        The CATA II court order vacating 20 CFR 655.10(b)(2) in the 2008 
    rule prevents DOL from issuing any prevailing wage determinations based 
    on the four-tiered version of the OES survey. Because prevailing wage 
    determinations are a condition precedent to an employer's filing an 
    application for temporary labor certification, which is the means by 
    which DOL provides the advice that DHS has determined is necessary, and 
    there is no prior regulation that DOL can use to issue prevailing wage 
    determinations based on the OES, DOL has suspended issuance of 
    prevailing wage determinations and certification of the vast majority 
    of those applications (those which had not requested a determination 
    based on a CBA, the DBA, the SCA, or an employer-provided survey) until 
    this interim wage methodology becomes effective. Due to the suspension 
    of most wage determinations created by the CATA II court order, and 
    because DOL has only 30 days to comply with the court's order, this 
    interim rule is effective immediately. In response to the vacatur of 
    the existing wage rule and in order to come into compliance quickly, 
    this rule applies to all requests for prevailing wage determinations 
    and applications for temporary labor certification in the H-2B program 
    issued on or after the effective date of this interim rule. Upon 
    individual notification to the employer of a new prevailing wage, the 
    new wage methodology will also apply to all previously granted H-2B 
    temporary labor certifications for any work performed on or after the 
    effective date of this interim rule. In addition to the requirements 
    that follow directly from the CATA II court's vacatur, the employer's 
    obligation to pay the wage under the interim rule is reflected in 
    Appendix B.1 to the ETA Form 9142, H-2B Application for Temporary 
    Employment Certification, in which employers have certified as a 
    condition of employment under the H-2B program that they will offer and 
    pay ``the most recent prevailing wage * * * issued by the Department to 
    the employer for the time period the work is performed[.]'' 76 FR 
    21039.
        Further, 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 DOL's 2012 H-2B 
    comprehensive rule on the ground that the plaintiffs (employers) are 
    likely to prevail on their allegation that DOL lacks H-2B rulemaking 
    authority. Bayou Lawn & Landscape Servs. v. Sec'y of Labor, ------ F.3d 
    ------, 2013 WL 1286129, No. 12-12462 (11th Cir. Apr. 1, 2013). DOL and 
    DHS strongly disagree with the Eleventh Circuit's decision and are 
    defending on appeal to the U.S. Court of Appeals for the Third Circuit 
    the district court's decision in Louisiana Forestry ***'n v. Solis, 889 
    F. Supp. 2d 711 (E.D. Pa. 2012), which came to the conclusion that DOL 
    does have independent H-2B rulemaking authority. Nevertheless, DHS and 
    DOL have concluded it is necessary to dispel any questions about the 
    validity of the H-2B program or how it operates. As explained above, 
    DHS has determined that, to exercise its statutory responsibilities to 
    administer the H-2B program, it requires advice from DOL regarding the 
    labor market, and DOL is unable to provide a key component that 
    underlies this advice, namely the prevailing wage determination, 
    without being assured a valid rule is in place. Therefore, based upon 
    the Eleventh Circuit's affirmance of the preliminary injunction against 
    the implementation of the 2012 rule, DOL and DHS are making effective 
    immediately this interim final rule and revising DHS's regulations to 
    resolve any doubt about the consultative role DOL plays in in the H-2B 
    program with respect to prevailing wage determinations. However, this 
    wage methodology is established on an interim basis while the public 
    submits comments on the methodology, and DOL and DHS will promulgate a 
    final rule following thorough consideration of the comments received. 
    DOL and DHS will act as quickly as possible in reviewing comments and 
    in promulgating a final wage methodology regulation in light of those 
    comments.
        The Administrative Procedure Act (APA) authorizes agencies to make 
    a rule effective immediately without public participation upon a 
    showing of good cause. 5 U.S.C. 553(b)(B),(d)(3). The APA's good cause 
    exception to public participation and a delayed effective date 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, ```(i)mpracticable' means a situation in which the due and 
    required execution of the agency functions would be unavoidably 
    prevented by its undertaking public rule-making proceedings.'' S. Rep. 
    No.752, 79th Cong., 1st Sess. 200 (1945). The ```[p]ublic interest' 
    supplements * * * `impracticable' [and] requires that public rule-
    making procedures shall not prevent an agency from operating.'' Id.
        In this case, DOL and DHS consider that it is impracticable to 
    adopt a new prevailing wage methodology, which is the first step in 
    DOL's consultative role in assessing employers' requests for temporary 
    labor certifications, only after the consideration of public comments 
    and the passage of 30 days following the publication of a final rule, 
    as normally required by the APA (and after 60 days, pursuant to the 
    Congressional Review Act's provision for major rules). 5 U.S.C. 553(b), 
    (d); 5 U.S.C. 801. DHS and DOL must act under an extremely short 
    deadline, outside the control of either agency, to come into compliance 
    with the CATA II court's vacatur order. Neither DHS nor DOL may use the 
    vacated 2008 prevailing wage rule, which effectively leaves the 
    Departments without a wage regime by which they may operate a 
    congressionally created program. DOL and DHS must take action within 30 
    days to come into compliance with the
    
    [[Page 24056]]
    
    CATA II court order, and also must establish as quickly as possible a 
    wage methodology so that DOL may fully resume providing advice that DHS 
    requires by issuing prevailing wage determinations, which is a 
    condition precedent to an employer's application for temporary labor 
    certification. If this interim wage methodology did not become 
    effective until after the submission and consideration of comments and 
    after a 30-day period following the publication of a final rule, DOL's 
    H-2B certifications and DHS's H-2B petition adjudications would be 
    suspended for that period of time, likely several months. Under such a 
    scenario, the H-2B program could not operate, which would have the dual 
    effects of depriving employers of H-2B workers and depriving workers, 
    both U.S and foreign, of job opportunities with legally sustainable 
    wages.
        Moreover, under the CATA II court's order, and DOL's own factual 
    findings, the U.S. workers and H-2B workers currently employed under 
    approved certifications, based on the invalid wage rates under the 2008 
    rule, are being underpaid in violation of the INA. CATA II, 2013 WL 
    1163426, *11-12; 76 FR 3463. To come into compliance with the court's 
    order and to ensure that DHS and DOL fulfill the statutory mandate to 
    protect the domestic labor market, DHS and DOL must immediately set new 
    and legally valid prevailing wage rate standards to allow for an 
    immediate adjustment of the wage rates for these currently employed 
    workers. Further delay in setting a legally valid prevailing wage 
    regime will cause continued harm to U.S. workers, foreign workers, and 
    the domestic labor market.
        In addition, the Departments must forego full notice and comment 
    rulemaking to provide immediate regulatory guidance for the operation 
    of the H-2B program, which will avoid continued confusion and 
    disruption to sectors of the economy that may need to supplement their 
    workforce with H-2B workers. The ongoing suspension of the H-2B program 
    beyond the period it has taken DOL and DHS to issue this interim rule 
    would create a significant impact on the H-2B program. For instance, as 
    of late March (shortly after the CATA II court order), DOL had in 
    process approximately 287 applications for H-2B prevailing wage 
    determinations. Over the next month, DOL anticipates receiving requests 
    for an additional 265 H-2B prevailing wage determinations. As shown 
    below in Table 1, based on present and historical filing trends, we 
    anticipate receiving an estimated additional 3,023 H-2B prevailing wage 
    requests over the next six months, the amount of time it would likely 
    take to fully implement the APA procedures related to public 
    participation and a 30-day delay in the effective date.\14\
    ---------------------------------------------------------------------------
    
        \14\ This forecast estimate of incoming H-2B prevailing wage 
    requests includes the 4.4 percent decrease in H-2B prevailing wage 
    requests submitted so far in this fiscal year (FY 2013) as compared 
    the number of H-2B prevailing wage requests submitted during the 
    same time period last fiscal year (FY 2012).
    
        Table 1--Six-Month Forecast of H-2B Prevailing Wage Applications
    ------------------------------------------------------------------------
                                                                    Month by
                                Month                                month
                                                                    forecast
    ------------------------------------------------------------------------
    March-April..................................................        265
    May..........................................................        456
    June.........................................................        355
    July.........................................................        377
    August.......................................................        675
    September....................................................      1,160
                                                                  ----------
        Total....................................................      3,023
    ------------------------------------------------------------------------
    
    Therefore, the suspension of processing OES-based prevailing wage 
    determinations for this period of time will create a significant 
    backlog for DOL's National Prevailing Wage Center. Without this 
    fundamental advice from DOL, DHS will be unable to adjudicate H-2B 
    petitions, which will significantly hinder employers' ability to use 
    the program to meet temporary labor shortages and will deprive workers 
    of job opportunities during that suspension.
        A months-long program suspension would also significantly delay the 
    issuance of temporary labor certifications, which, under the 
    Departments' consultative framework, are a predicate to H-2B petitions 
    adjudicated by USCIS. The INA limits the number of H-2B visas to 66,000 
    visas per year, one half of which, or 33,000, can be allocated during 
    the first six months of each fiscal year, and the remainder of which 
    may be allocated during the second half of each fiscal year. For 
    applications for temporary labor certification filed in October 2013, 
    recruitment of U.S. workers would typically begin as early as June 1, 
    2013. Requests for prevailing wage determinations are generally made 
    between 30 and 60 days in advance of when prevailing wage 
    determinations are needed, i.e., by April or May of 2013. Because an 
    extended suspension of H-2B prevailing wage determinations will prevent 
    the required recruitment of U.S. workers before filing a temporary 
    labor certification application, and H-2B petitions cannot be filed 
    with USCIS without an approved temporary labor certification 
    application, the process will be backlogged significantly, and 
    employers will forego workers necessary to conduct business and workers 
    will forfeit job opportunities. Moreover, if DOL took months to 
    implement a new wage methodology after notice and comment, upon 
    resuming the issuance of prevailing wages, there would be a large 
    backlog and unusually longer wait times that would have an adverse 
    impact on employers' ability to file timely petitions for H-2B workers 
    and for DHS to timely adjudicate those petitions. As of April 10, 2013, 
    there are approximately 682 H-2B petitions, consisting of around 10,117 
    beneficiaries, on hold at DHS.\15\
    ---------------------------------------------------------------------------
    
        \15\ This figure does not include any Form I-129 H-2B petitions 
    filed at DHS from Guam.
    ---------------------------------------------------------------------------
    
        Finally, DHS and DOL note that the regulated public already had a 
    significant opportunity to comment on the substantive prevailing wage 
    regime that DHS and DOL are adopting through this interim final rule. 
    DOL already accepted public comments on the proposed use of the mean 
    OES wage rates for the H-2B program. 75 FR 61580-87. DOL subsequently 
    considered and responded to public comments on this issue. 76 FR 3458-
    67. In addition to the reasons stated above, the Departments find good 
    cause to implement the prevailing wage standards in this interim final 
    rule immediately on a temporary basis because the regulated public is 
    familiar with the prevailing wage regime adopted in this rule. The 
    Departments do not contend that public comments will not be helpful; 
    rather, under the particular circumstances and history of this program, 
    the emergency situation created by the CATA II court's order justifies 
    an immediate effectiveness of a prevailing wage standard of which the 
    regulated public is well aware. The Departments still request and will 
    accept and consider additional public comments on all of the prevailing 
    wage issues addressed in this interim final rule.
        For these good and sufficient reasons, DOL and DHS have determined 
    that there is good cause to dispense with the APA's notice and public 
    comment and 30-day effective date requirements.
    
    II. Regulatory Procedures
    
    A. Executive Order 12866
    
        Under Executive Order (E.O.) 12866, DOL and DHS must determine 
    whether a regulatory action is economically significant and therefore 
    subject to the requirements of the E.O. and to review
    
    [[Page 24057]]
    
    by OMB. Section 3(f) of the E.O. defines an economically significant 
    regulatory action as an action that is likely to result in a rule that: 
    (1) Has an annual effect on the economy of $100 million or more, or 
    adversely and materially affects a sector of the economy, productivity, 
    competition, jobs, the environment, public health or safety, or State, 
    local or tribal governments or communities (also referred to as 
    economically significant); (2) creates serious inconsistency or 
    otherwise interferes with an action taken or planned by another agency; 
    (3) materially alters the budgetary impacts of entitlement grants, user 
    fees, or loan programs, or the rights and obligations of recipients 
    thereof; or (4) raises novel legal or policy issues arising out of 
    legal mandates, the President's priorities, or the principles set forth 
    in the E.O.
    
    IV. Administrative Information
    
    A. Executive Orders 12866 and 13563
    
        Under Executive Order (E.O.) 12866 and E.O. 13563, the Departments 
    must determine whether a regulatory action is significant and therefore 
    subject to the requirements of the E.O. and to review by OMB. Section 
    3(f) of the E.O. 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 and materially 
    affects a sector of the economy, productivity, competition, jobs, the 
    environment, public health or safety, or State, local or tribal 
    governments or communities (also referred to as economically 
    significant); (2) creates serious inconsistency or otherwise interferes 
    with an action taken or planned by another agency; (3) materially 
    alters the budgetary impacts of entitlement grants, user fees, or loan 
    programs, or the rights and obligations of recipients thereof; or (4) 
    raises novel legal or policy issues arising out of legal mandates, the 
    President's priorities, or the principles set forth in the E.O.
        The Departments have determined that this interim final rule is an 
    economically significant regulatory action under section 3(f)(1) of 
    E.O. 12866. In response to the court's March 22, 2013 order in CATA II, 
    which vacated the prevailing wage methodology in 8 CFR 655.10(b)(2) 
    because of its depressive effect on wages, the Department of Labor has 
    been unable to provide prevailing wage determinations calculated 
    according to four skill levels based on the OES mean wage. The 
    Department has, however, continued to provide prevailing wage 
    determinations based on those portions of section 655.10(b) that the 
    court did not vacate, i.e., those determinations based on the 
    applicable collective bargaining wage or those determinations in which 
    the employer has requested a wage based on an applicable Service 
    Contract Act wage, Davis Bacon Act wage, or an appropriate private wage 
    survey. No more than approximately five percent of all prevailing wage 
    requests are based on these wages. The revision to section 655.10(b)(2) 
    will bring the Department into compliance with the court's order by 
    establishing a prevailing wage based on the OES mean without four 
    tiers, thereby eliminating any depressive effect on wages. This will 
    allow the Department to resume issuing prevailing wages to all 
    employers requesting them. In order to evaluate the economic impact of 
    this interim final rule, it is necessary to project what would happen 
    in the future if the rule is not adopted and to compare this to what is 
    expected to happen in the future if the rule is adopted. In this case, 
    the Department is unable to project what would happen to wage and visa 
    requests under the program since the majority of wage requests have 
    been made based on the four-tiered wage methodology, which is no longer 
    available. The Department has been unable to estimate the economic 
    effects of the rule, but has determined that due to the change in the 
    prevailing wage provisions, this interim final rule is likely an 
    economically significant regulatory action under section 3(f)(1) of 
    E.O. 12866, because without the rule H-2B applications might fall 
    precipitously. The analysis below is not an estimate of the effect of 
    the rule, but instead quantifies the economic significance of the 
    interim final rule's change in the prevailing wage provisions when 
    compared to the wage provisions under the previous wage rule.
        The Departments' economic analysis under this section is limited to 
    meeting the requirements under Executive Orders 12866 and 13563. The 
    Departments did not use the economic analysis under this section as a 
    factor or basis for determining the scope or extent of the Departments' 
    obligations under the Immigration and Nationality Act, as amended.
    Need for Regulation
        The Departments have determined that a new wage methodology is 
    necessary for the H-2B program, based on the recent court decision in 
    CATA v. Solis vacating section 655.10(b)(2) of the 2008 rule because it 
    did not adequately ensure that U.S. workers were not adversely affected 
    by the employment of H-2B workers and the 2008 rule had not been 
    properly promulgated under the APA. The Departments are issuing the 
    interim final rule pursuant to the court's order requiring the 
    Department of Labor to come into compliance with its ruling within 30 
    days.
        According to the distribution of the 59,694 H-2B prevailing wage 
    determinations the Department of Labor issued based on the Occupational 
    Employment Statistics (OES) wage survey in FY 2011 and 2012,\16\ 72.3 
    percent of H-2B prevailing wage determinations based on the OES were at 
    Level I. The percentages of H-2B prevailing wage determinations based 
    on the OES at Levels II, III, and IV were 14.4, 5.9, and 7.4, 
    respectively. In over 90 percent of those cases, the H-2B prevailing 
    wage was determined at the wage rate lower than the mean of the OES 
    wage rates for the same occupation.
    ---------------------------------------------------------------------------
    
        \16\ In FY 2011 and 2012, a total of 72,037 prevailing wage 
    determinations were issued by the Department of Labor's National 
    Prevailing Wage Center (NPWC) for employers seeking wage rates for 
    H-2B workers. Of the 72,037, 59,694 determinations (82.9%) were 
    based on the OES and 12,343 determinations were based on a 
    collective bargaining agreement (CBA), the Davis-Bacon Act (DBA), or 
    the Service Contract Act (SCA) prevailing wage, or employer-
    submitted wage surveys.
    ---------------------------------------------------------------------------
    
        As the Department of Labor found in its 2011 Final Wage Rule, 76 FR 
    3452, 3458-63 (Jan. 19, 2011), and as the CATA court concurred, this 
    distribution of wage rates does not adequately protect U.S. workers 
    from adverse effect. Therefore, as explained in the preamble to this 
    interim rule, because the OES mean wage rate conforms more closely to 
    the wages actually paid by employers in the area for the occupation, 
    the Departments have decided to use the OES mean when the certified 
    prevailing wage is based on the OES survey. Using the arithmetic mean 
    is one way to ensure that H-2B workers are paid a wage that will not 
    adversely affect the wages of similarly employed U.S. workers.
    2. Economic Analysis
        The Departments' analysis below compares the expected impacts of 
    this interim final rule to the baseline (i.e., the 2008 rule). 
    According to the principles contained in OMB Circular A-4, the baseline 
    for this rule would be the situation that exists if this interim final 
    rule is not adopted. Thus, the baseline for this H-2B prevailing wage 
    regulation is the four-tier wage structure derived from the OES wage 
    survey, as implemented in the 2008 rule. The 2008 rule also permits the 
    use of certain employer-submitted surveys, the DBA, or the SCA wages as 
    the basis for a prevailing wage determination. The 2008 rule also 
    requires the use of the CBA wage rate when a CBA exists that was 
    negotiated at arms' length.
    
    [[Page 24058]]
    
        This interim final rule establishes that when the prevailing wage 
    determination is based on the OES, the wage rate is the arithmetic mean 
    of the OES wages for a given area of employment and occupation. The 
    median does not represent the most predominant wage across a 
    distribution. The median wage represents only the midpoint of the range 
    of wage values; it does not account for the actual average. The mean is 
    widely considered to be the best measure of central tendency for a 
    normally distributed sample, as it is the measure that includes all the 
    values in the data set for its calculation, and any change in any of 
    the wage rates will affect the value of the mean. The Department has 
    traditionally relied on arithmetic means for wage programs and has 
    determined that these reasons make continuing reliance on the mean, 
    rather than the median, logical. This interim final rule eliminates the 
    four-tier wage structure of the 2008 final rule. For the purposes of 
    this interim final rule, the Departments have decided to retain the 
    component of the 2008 final rule that permits, but does not require, an 
    employer to use a prevailing wage determination based on employer-
    provided alternatives from legitimate sources such as employer-
    submitted surveys, DBA, or SCA wage determinations. It also retains the 
    component of the 2008 final rule that requires the use of an applicable 
    CBA wage rate, if one exists. Finally, this interim final rule retains 
    the requirement 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.
        The change in the method of determining prevailing wages under this 
    interim final rule will result in additional compensation for both H-2B 
    workers and U.S. workers hired in response to the required recruitment. 
    In this section, the Departments discuss the relevant costs, transfers, 
    and benefits that may apply to this interim final rule.
        The Departments calculated the change in hourly wages that would 
    result from the interim final rule by comparing the prevailing wage 
    rates to the H-2B hourly wages actually certified by standard 
    occupational classification (SOC) code and county of employment, using 
    a randomly selected sample of 512 certified or partially certified H-2B 
    applications from FY 2012. Under this interim final rule, the 
    Departments will base prevailing wage determinations on the OES mean 
    wage, the SCA or DBA wage, the CBA wage, or wage based on an employer-
    submitted survey.
        Using certified and partially certified applications from the 
    random sample, we calculated the increase in wages as the difference 
    between the prevailing wages and the H-2B hourly wages actually 
    certified in FY 2012.\17\ We weighted this differential by the number 
    of certified workers on each certified or partially certified 
    application.\18\ We then summed those products to calculate the 
    weighted average wage differential for the randomly selected sample 
    drawn from FY 2012 H-2B program data.
    ---------------------------------------------------------------------------
    
        \17\ Depending on the scope of work required by H-2B workers, 
    multiple prevailing wage determinations 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 Department of Labor's program 
    database collects the total number of H-2B workers certified for 
    each certified or partially-certified application, the Department of 
    Labor 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, we used prevailing wage rates that occurred 
    most frequently in each application for certification.
        \18\ The Departments weighted the wage differentials by the 
    number of certified workers as opposed to the number of workers 
    requested because a decrease in number of workers granted may occur 
    for reasons other than that a U.S. worker was hired in response to 
    the recruitment.
    ---------------------------------------------------------------------------
    
        The equation below shows the formula that we used to calculate the 
    weighted average wage differential (WWD). In the formula, ``Prevailing 
    Wage'' is the arithmetic mean of the OES-reported wage, the SCA or DBA 
    wage, whichever is lowest.
    [GRAPHIC] [TIFF OMITTED] TR24AP13.004
    
        In order to accurately calculate the expected changes in hourly 
    wages relative to the baseline, the Departments used wage data for each 
    county where the H-2B work was expected to be performed. The Department 
    of Labor's program database does not contain all work locations for the 
    H-2B certifications; further, the employer's address frequently does 
    not represent the area where the work actually takes place. 
    Consequently, the Departments used a stratified random sample of 512 
    certified or partially-certified applications from FY 2012 H-2B program 
    data \19\ 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.
    ---------------------------------------------------------------------------
    
        \19\ The stratified random sample chosen was consistent with 
    standard statistical methods.
    ---------------------------------------------------------------------------
    
        Using this sample data, we estimated that this interim final rule's 
    change in the method of determining wages will result in, at most, a 
    $2.12 increase \20\ in the weighted average hourly wage for H-2B 
    workers and similarly employed U.S. workers hired in response to the 
    recruitment required as part of the H-2B application.
    ---------------------------------------------------------------------------
    
        \20\ This is an upper bound estimate because, due to the lack of 
    data on employer surveys in our sample, we were not able to fully 
    calculate the increase in the weighted average hourly wage. Our 
    estimate of the increase in the weighted average hourly wage at 
    $2.12 was calculated as the difference between the OES mean wage (or 
    the SCA or DBA wage, whichever is lower) and the wage actually 
    certified. However, we assume that employers would choose an 
    available survey wage where it is lower than the OES mean wage and 
    the SCA and/or DBA wage. Therefore, our estimated weighted average 
    hourly wage increase is likely an overestimate. We also did not have 
    data on CBA rates. However, if an employer has a higher CBA rate, 
    this interim final rule will not result in a transfer payment 
    because the employer already would be legally bound to pay the CBA 
    wage.
    ---------------------------------------------------------------------------
    
        The Departments provide an assessment of transfer payments 
    associated with increases in wages resulting from the change in the 
    wage determination method. Transfer payments, as defined by OMB 
    Circular A-4, are payments from one group to another that do not affect 
    total resources available to society. Transfer payments are associated 
    with a distributional effect but do not result in additional benefits 
    or costs to society. The primary recipients of transfer payments 
    reflected in this analysis are H-2B workers and 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 interim 
    final rule, those employers who
    
    [[Page 24059]]
    
    participate in the H-2B program are likely to be those that have the 
    greatest need to access the H-2B program.
        The H-2B program is capped at 66,000 visas issued per year but H-2B 
    workers with existing visas may remain in the country for two 
    additional years if an H-2B employer petitions for them to remain. 
    Assuming, as the Department of Labor did in its 2011 Final Wage Rule, 
    that half of all such workers (33,000) in any year stay at least one 
    additional year, and half of those workers (16,500) stay a third year, 
    there will be a total of 115,500 H-2B workers in a given year. That is, 
    in our calculations, we used 66,000 as the annual number of new 
    entrants and 115,500 as the total number of H-2B workers in a given 
    year.
        In the remaining sections of this analysis, we first present the 
    estimated costs resulting from the interim final rule, including an 
    increase in H-2B employer expenses that could lead to a decrease in 
    production. The Departments predict that most of these costs, which 
    would result from a decrease in current H-2B participation by employers 
    who cannot afford the increased labor costs, or who can more easily 
    fill empty positions with U.S. workers, will be borne by the additional 
    employers who have the need for additional temporary labor but do not 
    currently participate in the H-2B program. We then discuss the 
    transfers from H-2B workers to U.S. workers and from employers to U.S. 
    and H-2B workers resulting from the change in wage determination 
    methodology.
    i. Costs
        In standard economic models of labor supply and demand, an increase 
    in the wage rate represents an increase in production costs to 
    employers, which leads to a reduction in the demand for labor. Because 
    production costs increase with an increase in the wage rate, a 
    resulting decrease in profits is possible for H-2B employers that are 
    unable to increase prices to cover the labor cost increase. Some H-2B 
    employers, however, can be expected to offset the cost increase by 
    increasing the price of their products or services.\21\ In addition, 
    workers who would have been hired at a lower wage rate may not be hired 
    at the higher wage rate, resulting in forgone earnings for H-2B and 
    U.S. workers. In this sense, to the extent that the higher wages 
    imposed by the rule result in lower employment and lower output by 
    firms that had employed those workers, the lost profits on the foregone 
    output and the lost net wages to the foregone workers represent a 
    deadweight loss. In economics, a deadweight loss is a loss of economic 
    efficiency that can occur when equilibrium for a good or service is not 
    optimal. This effect will be magnified during years in which the H-2B 
    visa cap is not reached.\22\
    ---------------------------------------------------------------------------
    
        \21\ Although employers may pass costs onto their customers, 
    data does not exist from which to estimate the amount or extent to 
    which costs would be absorbed by customers. Therefore, the 
    Departments are not able to quantify this cost offset.
        \22\ The output reduction impact of reducing labor demand may be 
    in some cases partially offset by capital substitution and 
    organizational substitution productivity effects. When substitution 
    occurs, the deadweight loss is reduced.
    ---------------------------------------------------------------------------
    
        The Department of Labor certified employers for 79,305 H-2B 
    positions on average for both FY 2011 and 2012. This number reflects 
    the number of positions certified, rather than the number of actual 
    workers who entered the program to fill those positions because, as 
    previously stated, the H-2B program is capped at 66,000 visas per year. 
    Using this number of certified positions to represent the quantity of 
    labor demanded, and assuming an elasticity of labor demand of -0.3,\23\ 
    a $2.12 (21.4 percent) increase in the average H-2B prevailing wage 
    rate would result in a 6.4 percent decline in the number of H-2B 
    positions requested by employers, for a remaining total of 74,229 H-2B 
    certified positions,\24\ which is still larger than the maximum number 
    of visas allowed under the H-2B program. Therefore, any loss of 
    production resulting from some employers dropping out of the program 
    will be offset by the increase in production by other employers who 
    would then be able to fill previously vacant positions.
    ---------------------------------------------------------------------------
    
        \23\ Hamermesh estimated that the elasticity of labor demand 
    ranged from -0.21 to -0.45 by industry with an average of about -
    0.30 (Hamermesh Daniel S., Labor Demand, Princeton and Chichester, 
    U.K.: Princeton University Press, 1993). Although this is a 20-year 
    old study, it has been cited recently by Leif Danzier (2007) and 
    Pedro Trivin (2012). We did not use these more recent studies of 
    elasticity of labor demand because they are limited to the 
    manufacturing sector or low-wage workers.
        \24\ 79,305--(79,305 - 6.4%) = 74,229.
    ---------------------------------------------------------------------------
    
        Thus, the Departments believe that for years in which the number of 
    certified positions exceeds the number of positions available under the 
    annual cap, there will be no deadweight loss in the market for H-2B 
    workers even if some employers do not participate in the program as a 
    result of the higher H-2B wages. Indeed, the higher wages expected to 
    result from the interim final rule could in turn result in a more 
    efficient distribution of H-2B visas to employers who can less easily 
    attract available U.S. workers. The Departments believe that, under 
    this interim final rule, those employers who can more easily attract 
    U.S. workers will be dissuaded from attempting to participate in the H-
    2B program, so that those employers participating in the H-2B program 
    after the rule is in place will be those that have a greater need for 
    the program, on average, than those employers not participating in the 
    H-2B program. Therefore, there would be no appreciable decline in the 
    total employment under the program.
    ii. Transfers
        The change in the method of determining the prevailing wage rate 
    results in transfers from H-2B workers to U.S. workers and from U.S. 
    employers to both U.S. workers and H-2B workers. A transfer from H-2B 
    workers to U.S. workers arises because, as wages increase, jobs that 
    would otherwise be occupied by H-2B workers will be more acceptable to 
    a larger number of U.S. workers 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, employ U.S. workers. 
    Although some of these U.S. workers may be drawn from other employment, 
    some of them may otherwise be or remain unemployed or out of the labor 
    force entirely, earning no compensation.
        The Departments are 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 all H-2B workers that results 
    from the increase in wages due to application of the interim final 
    rule's new prevailing wage determination method, the Departments 
    multiplied the weighted average wage differential ($2.12) by the total 
    number of H-2B workers in the United States in a given year 
    (115,500).\25\ We estimated the total impact incurred due to the 
    increase in wages at $371.82 million per year. For the number of hours 
    worked per day, we used 7 hours as typical. For the number of days 
    worked, we assumed that the employer would retain the H-2B worker for 
    the maximum time allowed (10 months or 304 days) and would employ the 
    workers for 5 days per week. Thus,
    
    [[Page 24060]]
    
    the total number of days worked equals 217 (304 x \5/7\). The following 
    equation shows the formula used to compute the total impact per year, 
    which likely will be lower due to the use of other lower wage rates:
    ---------------------------------------------------------------------------
    
        \25\ The Department's data on certified applications cannot be 
    used to determine the actual number of H-2B workers in the country. 
    Certifications are made without regard to the cap on the number of 
    H-2B workers admissible each year and are not intended to indicate 
    whether a worker actually entered the country to fill a position.
    [GRAPHIC] [TIFF OMITTED] TR24AP13.005
    
        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 higher 
    wages are beneficial to U.S. workers because they enhance workers' 
    ability to meet the cost of living and to spend money in their local 
    communities, which has the secondary impact of increasing economic 
    activity and, therefore, generates employment in the community. An 
    additional transfer is increased remittances to the H-2B worker's home 
    country. The Departments, however, do not have data on the remittances 
    made by H-2B workers to their countries of origin. Our calculations 
    also do not include the wage increase for U.S. workers hired in 
    response to the required recruitment because of the lack of data on 
    these workers. The annual transfer of this interim final rule was 
    calculated based on the stratified random sample of 512 certified or 
    partially-certified applications from FY 2012 H-2B program data, which 
    are the most recent data available. Because we are assuming no 
    statutory increases in the number of H-2B visas available for entry in 
    a given year or in the maximum employment period of 10 months per year, 
    it is unlikely that the selection of a different fiscal year (or years) 
    would significantly affect the amount of transfers calculated in this 
    analysis.
    
    B. Regulatory Flexibility Act
    
        The Regulatory Flexibility Act, 5 U.S.C. 601 et seq. (RFA), imposes 
    certain requirements on Federal rules that are subject to the notice 
    and comment requirements of section 553(b) of the APA (5 U.S.C. 551 et 
    seq.) and that are likely to have a significant economic impact on a 
    substantial number of small entities. Under Section 553(b) of 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. This 
    interim final rule is exempt from the requirements of section 553(b) of 
    the APA because DOL and DHS have made a good cause finding earlier in 
    this preamble that a general notice of proposed rulemaking is 
    impracticable and contrary to the public interest. Therefore, the RFA 
    does not apply, and 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 encourage the public to submit comments that suggest 
    alternative rules that accomplish the stated purpose of this interim 
    final rule and minimize the impact on small entities.
    
    C. 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.
    
    D. Paperwork Reduction Act
    
        This interim rule contains no new information collection 
    requirements for purposes of the Paperwork Reduction Act of 1995 (44 
    U.S.C. 3501 et seq.).
    
    E. The Congressional Review Act
    
        Consistent with the Congressional Review Act, 5 U.S.C. 808(2), this 
    interim final rule will take effect immediately because the Departments 
    have found, as stated earlier in this preamble, that there is good 
    cause to conclude that notice, the opportunity for public 
    participation, and a delay in the effective date are impracticable and 
    contrary to the public interest. However, consistent with the CRA, 5 
    U.S.C. 801, DOL will, upon publication, submit to Congress and the 
    Comptroller General of the United States the reports required by the 
    Act.
    
    F. Executive Order 13132--Federalism
    
        DOL and DHS 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, DOL has 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 interim rule was reviewed under the terms of E.O. 13175 and 
    determined not to have tribal implications. The rule does not have 
    substantial direct effects on one or more Indian tribes, on the 
    relationship between the Federal Government and Indian tribes, or on 
    the distribution of power and responsibilities between the Federal 
    Government and Indian tribes. As a result, no tribal summary impact 
    statement has been prepared.
    
    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 interim 
    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 interim 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 interim rule is not subject to E.O. 12630, Governmental 
    Actions and Interference with Constitutionally Protected Property 
    Rights, because it
    
    [[Page 24061]]
    
    does not involve implementation of a policy with takings implications.
    
    J. Executive Order 12988--Civil Justice
    
        This interim 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 interim 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
    
        DOL and DHS have drafted this interim rule in plain language.
    
    List of Subjects
    
    8 CFR Part 214
    
        Administrative practice and procedure, Aliens, 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 and 
    pursuant to the authority vested in me as the Secretary of Homeland 
    Security, part 214 of chapter I of title 8 of the Code of Federal 
    Regulations is amended as follows:
    
    PART 214--NONIMMIGRANT CLASSES
    
    0
    1. The authority citation for part 214 continues to read as follows:
    
        Authority: 8 U.S.C. 1101, 1102, 1103, 1182, 1184, 1186a, 1187, 
    1221, 1281, 1282, 1301-1305 and 1372; sec. 643, Pub. L. 104-208, 110 
    Stat. 3009-708; Public Law 106-386, 114 Stat. 1477-1480; section 141 
    of the Compacts of Free Association with the Federated States of 
    Micronesia and the Republic of the Marshall Islands, and with the 
    Government of Palau, 48 U.S.C. 1901 note, and 1931 note, 
    respectively; 48 U.S.C. 1806; 8 CFR part 2.
    
    0
    2. Section 214.2 is amended by revising paragraph (h)(6)(iii)(D) to 
    read as follows:
    
    
    Sec.  214.2  Special requirements for admission, extension, and 
    maintenance of status.
    
        (h) * * *
        (6) * * *
        (iii) * * *
        (D) The Governor of Guam shall separately establish procedures for 
    administering the temporary labor program under his or her 
    jurisdiction. The Secretary of Labor shall separately establish for the 
    temporary labor program under his or her jurisdiction, by regulation at 
    20 CFR 655, procedures for administering that temporary labor program 
    under his or her jurisdiction, and shall determine the prevailing wage 
    applicable to an application for temporary labor certification for that 
    temporary labor program in accordance with the Secretary of Labor's 
    regulation at 20 CFR 655.10.
    
    Department of Labor
    
    20 CFR Part 655
    
    Authority and Issuance
    
        Accordingly, for the reasons stated in the joint preamble and 
    pursuant to the authority vested in me as the Acting Secretary of Labor 
    of the United States, part 655 of title 20 of the Code of Federal 
    Regulations is amended as follows:
    
    PART 655--TEMPORARY EMPLOYMENT OF FOREIGN WORKERS IN THE UNITED 
    STATES
    
    0
    3. The authority citation for part 655 is revised to read as follows:
    
        Authority: Section 655.0 issued under 8 U.S.C. 
    1101(a)(15)(E)(iii), 1101(a)(15)(H)(i) and (ii), 8 U.S.C. 
    1103(a)(6), 1182(m), (n) and (t), 1184(c), (g), and (j), 1188, and 
    1288(c) and (d); sec. 3(c)(1), Pub. L. 101-238, 103 Stat. 2099, 2102 
    (8 U.S.C. 1182 note); sec. 221(a), Pub. L. 101-649, 104 Stat. 4978, 
    5027 (8 U.S.C. 1184 note); sec. 303(a)(8), Pub. L. 102-232, 105 
    Stat. 1733, 1748 (8 U.S.C. 1101 note); sec. 323(c), Pub. L. 103-206, 
    107 Stat. 2428; sec. 412(e), Pub. L. 105-277, 112 Stat. 2681 (8 
    U.S.C. 1182 note); sec. 2(d), Pub. L. 106-95, 113 Stat. 1312, 1316 
    (8 U.S.C. 1182 note); 29 U.S.C. 49k; Pub. L. 109-423, 120 Stat. 
    2900; 8 CFR 214.2(h)(4)(i); and 8 CFR 214.2(h)(6)(iii).
    
    
    0
    4. Amend Sec.  655.10 by revising paragraph (b)(2) to read as follows:
    
    
    Sec.  655.10  Determination of prevailing wage for temporary labor 
    certification purposes.
    
    * * * * *
        (b) * * *
        (2) If the job opportunity is not covered by a CBA, the prevailing 
    wage for labor certification purposes shall be the arithmetic mean, 
    except as provided in paragraph (b)(4) of this section, of the wages of 
    workers similarly employed in the area of intended employment. The wage 
    component of the BLS Occupational Employment Statistics Survey (OES) 
    shall be used to determine the arithmetic mean, unless the employer 
    provides a survey acceptable to OFLC under paragraph (f) of this 
    section.
    * * * * *
    
        Signed at Washington, DC, this 19th of April 2013.
    Janet Napolitano,
    Secretary of Homeland Security.
    Seth D. Harris,
    Acting Secretary of Labor.
    [FR Doc. 2013-09723 Filed 4-22-13; 4:15 pm]
    BILLING CODE 9111-97-P; 4510-FP-P
    
    
    
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