United States – Legal Challenge Mounted Against New DOL and DHS Rules
US–Legal Challenge Mounted Against New DOL & DHS Rules
Legal challenges to recent U.S. Department of Labor and Department of Homeland Security rules have been launched in federal courts by several different plaintiffs. The rules have to do with the H-1B program and the narrowing of the definition of “specialty occupation,” as well as increasing the wage minimums associated with the H-1B, H-1B1, E-3, and permanent labor certification programs. This newsletter looks at the implications arising from these challenges for organizations looking to recruit/hire mobile employees, as well as foreign students, academic staff, etc.
A U.S. Department of Labor (DOL) regulation took effect on October 8, 2020, which significantly increased the wage minimums associated with the H-1B, H-1B1, E-3, and permanent labor certification programs. The Department of Homeland Security (DHS) also published a rule on October 8, 2020, that will make sweeping changes to the H-1B program, including narrowing the definition of “specialty occupation.” The new DHS rule is scheduled to take effect on December 7, 2020. (For related coverage, see GMS Flash Alert 2020-424, 7 October 2020.)
Legal challenges to the DOL and DHS rules have recently been launched in federal courts by several different plaintiffs. The lawsuits are Chamber of Commerce et al. v. DHS et al., Case No. 20-CV-7331 (N.D. Ca., October 19, 2020) , Purdue, et al. v. Scalia, Case No. 1:20-CV-03006 (D.D.C., October 19, 2020) and ITServe Alliance Inc., et al. v. Scalia, Case No. 3:20-14604 (D.N.J., October 16, 2020).1
WHY THIS MATTERS
The plaintiffs in the aforementioned cases are seeking injunctions to temporarily halt the enforcement of the DOL and DHS rules while their legality is under dispute. There is no defined timeline within which the courts will rule on the requests for injunctive relief.
For now, the DOL wage rule remains in effect, meaning that employers may be required to pay significantly higher wages to employees sponsored for permanent labor certification, or classification in the H-1B, H-1B1, and E-3 categories. Also, the DHS rule could be implemented on December 7, 2020, if a temporary injunction is not granted by this date. This rule would restrict H-1B eligibility and invariably result in a higher percentage of H-1B petition denials.
Some Details on Arguments before the Courts
The plaintiffs argue that the DOL and DHS did not follow federal procedure when they published the regulations without adequate notice or an opportunity for the public to provide feedback. The lawsuits also assert that the rules are arbitrary and capricious. The plaintiffs further allege that the DOL wage regulation is based on incorrect and outdated data, as well as reasoning that conflicts with basic economic theory.
KPMG Law LLP is carefully following the progress of the challenges against the DOL and DHS rules. We will endeavor to provide updates as they become available.
1 See Chamber of Commerce et al. v. DHS et al., Case No. 20-CV-7331 (N.D. Ca., October 19, 2020), on the U.S. Chamber of Commerce website at: https://www.uschamber.com/sites/default/files/2020-07-21_-_complaint_for_declaratory_injunctive_relief.pdf.
See Purdue, et al. v. Scalia, Case No. 1:20-CV-03006 (D.D.C., October 19, 2020) at: https://www.pacermonitor.com/public/case/36755981/PURDUE_UNIVERSITY_et_al_v_SCALIA_et_al.
See ITServe Alliance Inc., et al. v. Scalia, Case No. 3:20-14604 (D.N.J., October 16, 2020) at: https://www.courtlistener.com/docket/18547103/itserve-alliance-inc-v-scalia/.
Note that these are 3rd party (non-governmental, non-KPMG) websites. Providing these links does not represent an endorsement of these websites by KPMG.
* Please note that KPMG LLP (U.S.) does not provide any immigration or labor law services. However, KPMG Law LLP in Canada can assist clients with U.S. immigration and labor matters.
The information contained in this newsletter was submitted by the KPMG International member firm in Canada.
To subscribe to GMS Flash Alert, fill out the subscription form.
© 2023 KPMG LLP, a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.
For more detail about the structure of the KPMG global organization please visit https://kpmg.com/governance.
GMS Flash Alert is a Global Mobility Services publication of the KPMG LLP Washington National Tax practice. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.
Connect with us
- Find office locations kpmg.findOfficeLocations
- Social media @ KPMG kpmg.socialMedia
Stay up to date with what matters to you
Gain access to personalized content based on your interests by signing up today