[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]


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DEPARTMENT OF HOMELAND SECURITY

8 CFR Part 214

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

DEPARTMENT OF LABOR

Employment and Training Administration

20 CFR Part 655

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.

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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)).
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    \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).
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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 Ass'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\
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    \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).
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    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.
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    \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).
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    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.
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    \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.
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    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.
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    \7\ http://www.foreignlaborcert.doleta.gov/pdf/NPWHC_Guidance_Revised_11_2009.pdf.
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    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.
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    \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 Ass'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