First lawsuit against H-1B wage hikes filed in US district court – Times of India


MUMBAI: ITServe Alliance, with a clutch of its member corporations has filed a lawsuit in a US district courtroom, in opposition to an ‘interim final rule’ issued lately by the US Department of Labour (DOL). This rule has reset wages upwards for H-1B staff throughout all 4 tiers or wage ranges (representing the vary of abilities from entry degree to extremely skilled).
The plaintiffs level out that beneath the DOL rule, wages have been hiked by twenty-four to fifty % or extra for pc operations, the place H-1B staff are usually employed, by them. Wage charges are additionally depending on the geographical location of employment.
ITServe’s members, which comprise of over 1,400 member corporations (lots of them are based by these of Indian origin), are unable to soak up, with out materials disruption to their operations, the associated fee enhance imposed on them beneath the IFR. Several of them have long-term contracts with their shoppers that can’t be renegotiated.
This lawsuit, which was filed on Friday, is the primary to problem the DOL rule. Other lawsuits, together with one led by the American Immigration Lawyers Association (AILA) are anticipated to be filed within the coming week.
As reported by TOI earlier, the interim closing rule (IFR) that was issued with out inviting public feedback, got here into impact from October 8, quickly after being printed within the Federal Register. All labour situation purposes (LCAs) filed on or after this date are topic to the brand new and better wage minimal requirements. According to DOL the target of the principles is to guard American jobs by enhancing accuracy of wages paid to overseas staff.

Simultaneously, the US Department of Homeland Security (DHS) had additionally issued its IFR which narrowed the eligibility standards for H-1B visas and diminished the visa tenure to one-year in case of third-party placements. However, this rule comes into impact solely in early December.
The plaintiffs state that DOL lacks the required factual and authorized justification to invoke the great trigger exception for avoiding the required discover and remark procedures. The company’s competition that H-1B staff are paid lower than American staff shouldn’t be supported by obtainable financial information and empirical research and relies on flawed reasoning, the lawsuit provides.
The lawsuit challenges the DOL’s resolution to set dramatically increased wage charges with out following the discover and remark rulemaking procedures required beneath the Administrative Procedure Act. Plaintiffs have additionally challenged the DOL’s new wage charges as a violation of the Immigration and Nationality Act.
“This new rule is designed to make it much more expensive to hire H-1B holders as well as to ‘punish’ those employers that rely on H-1B talent. By issuing this IFR, DOL is not only circumventing the legislative process of Congress but also their own normal rule making process. It’s not a coincidence that DOL and DHS issued interim final rules just four weeks away from the election,” states ITServe in its press launch.
A spokesperson added, “This IFR is going to drive hundreds of thousands of jobs to off-shore markets. DOL’s IFR raises the required prevailing wages to over 80% in some cases, overnight. This haphazard and baseless rulemaking will hurt thousands of small and medium IT businesses. Instead of helping with job creation and economic growth in the middle of pandemic and recession, these government agencies are hurting the small businesses that are at the forefront of rebuilding the economy”.



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