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H-2B Rule Blocked

May 15, 2012

Below is a SHRM-produced discussion re. court blocking DOL's H-2B visa rule: 

 

 



H-2B Rule Blocked
By Allen Smith

Employers that hire H-2B visa holders are sighing with relief following an April 26, 2012, preliminary injunction that blocked the implementation of the U.S. Department of Labor’s (DOL) new H-2B regulations.

“Plainly, the rule sought to make the H-2B process much more difficult for employers. Supervised recruitment and pre-application registration, among other additional obligations, were anticipated by business to make the H-2B program unusable,” remarked Kevin Lashus, an attorney with Jackson Lewis in Austin, Texas. 

“Returning to a certification-based model was akin to parole. Rather than trust business, the government proposed monitoring all of the employer’s activity prior to and during the application process and after the workers arrived. Clearly, the government wanted to impose continuing opportunities for it to deny a business’s participation in the program.”

District Court Decision

The U.S. District Court for the Northern District of Florida ruled that the plaintiffs established a substantial likelihood of success on the merits of their claim that the DOL lacked to promulgate the rule at issue in this case. 

The court noted that the DOL “acknowledges that it has no express congressional grant of authority to engage in legislative rule-making under the H-2B program and that such authority was vested instead in the secretary of the Department of Homeland Security.” And the court rejected the DOL’s argument that its rule-making authority could be inferred from the Immigration and Nationality Act of 1952 (INA).

Bayou Lawn & Landscape Services and professional associations, including the U.S. Chamber of Commerce, challenged rules that:

Decreased the maximum number of months an employer may employ an H-2B worker from 10 to nine.

Required employers to guarantee that H-2B employees will work at least 75 percent of the hours certified in any 12-week period and, if not, pay employees the difference for the time not worked.

Required employers to pay non-H-2B workers’ wages and benefits at least equal to those paid to H-2B employees if the two performed substantially the same work.

Required employers to pay for the round-trip airfare and subsistence costs of H-2B employees.

Imposed additional bureaucratic requirements, such as the filing of job orders, extensive domestic recruitment and an application for a temporary labor certification.

James Allen, the owner and president of Bayou Lawn & Landscape Services, testified that the rule would increase costs, forcing it to submit higher contract bids and losing contracts. If the business did not pass on the additional costs, it would lose money on awarded contracts. Either way, according to Allen, Bayou Lawn would be affected immediately and negatively by the new rules, which ultimately could force it out of business. 

The court noted that the DOL does not dispute that the new rule would result in increased costs to the plaintiffs. And it ruled that the plaintiffs demonstrated that the rule would hurt them in the bidding processes, resulting in lost revenue, customers and goodwill.

The preliminary injunction lasts 60 days from the date of the court’s order, during which time the parties have 60 days to file motions for summary judgment. They will have an additional 14 days to respond to the opposing parties’ motion (Bayou Lawn & Landscape v. Solis, No. 3:12cv183/MCR/CJK (N.D. Fla. 2012)).

Visa Hurdles

“H-2B visas are not nearly as common as they used to be,” Lashus said. He added that the government’s “ever-changing schemes have made participation a lot less attractive.”

Mary Pivec, an attorney with Williams Mullen in Washington, D.C., noted that each year H-2B visas “go to unskilled laborers needed to supplement the local labor force due to seasonal or peak load needs. H-2B visas are not a springboard to green card status. The maximum stay is three years.” By contrast, H-1B visas are awarded to professional employees who can apply for green cards while in H-1B status based on employer sponsorship.

“The 2008 Bush-era rule permitted employers to file and obtain a temporary labor certification under the honor system, meaning DOL assumed the employer was meeting its obligations under the rules, as it attested in the application,” Pivec added. Compliance monitoring was conducted through spot audits. The new rule would put the Wage and Hour Division on the beat as compliance cop, she said. And under the rule, the division “has license to audit, audit, audit without a complaint.”

“The H-2B program rule in my opinion is intended to prevent U.S. employers from legally hiring needed foreign workers,” stated Mira Mdivani, an attorney with the Mdivani Law Firm in Overland Park, Kan. “The rule is based on a false presumption that U.S. employers want to exploit these foreign workers as cheap labor while turning their back on available U.S. labor.”

Mdivani emphasized, “Having worked with many H-2B employers, I can say that nothing is further from the truth. Most H-2B employers want to do the right thing. They pay their foreign workers well and only turn to the expensive, hurdle-ridden H-2B program in desperation, after having faced labor shortages and 100 percent turnover when trying to hire local labor for very hard jobs, such as trying to hire roofing laborers in Kansas to work in 110-degree heat.”

The most typical recipients of H-2B visas, according to Lashus, are seasonal employees in unskilled labor, such as harvesters, machinists, welders, commercial painters, roofers and landscapers. “Participating in the H-2B program is expensive. Employers would really rather not participate,” Lashus remarked. “It is because their business depends on these artisan employees that they must participate, because the domestic workers are simply not available elsewhere.”

Mdivani said that “return to certification-based rather than attestation-based [labor] means more work for DOL—more red tape, cost and delays for employers.”

She explained that the attestation-based model in use has employers go through recruitment prior to filing for the H-2B labor certification and attest to the fact that U.S. workers are not available for the open position. 

The certification-based model “means DOL will actually direct and supervise the recruitment after the application is filed. A variation of this model was used until several years ago, with directed/ supervised recruitment being done by the officers working for state departments of labor or workforce. States were happy to get rid of it because of how many resources it consumed from them and how much grief seasonal employers gave them. Now DOL wants to reinstate it, to the astonishment of the business community.”

Blueprint for Future Agenda?

Amy Nice, executive director of immigration policy at the U.S. Chamber of Commerce, said the Chamber “remains concerned that several of the principles pushed by DOL in the H-2B rulemaking could become the blueprint for its future agenda in other employment-based visa processes.”

For example, DOL’s new H-2B rule creates a new concept of “corresponding employment,” replacing the concept that similarly situated employees should be similarly compensated. “In the rules governing the H-1B program, it is clear that an employer can identify any legitimate business reason to differentiate between the actual wages paid to staff within job families. The new concept establishes that certain permanent U.S. employees will be deemed to be performing jobs that ‘correspond’ to the work being performed by temporary visa holders, such that all foreign and corresponding U.S. workers are obligated to be paid the same salaries,” she cautioned.

Unlike other immigration programs, where employers must test the U.S. labor market or document that industry standards for recruitment were followed, “the new H-2B rules establish that DOL has unlimited authority to require more advertising or recruitment beyond the parameters identified in the regulations in ‘areas of substantial unemployment,’ defined as any ‘area’ where there is a 6.5 percent unemployment rate,” Nice added. “This means that employers will be unable to have certainty as to recruitment obligations and [will be] subjected to increased advertising and interviewing obligations without advance notice even if unemployment in the particular occupation is low and/or even if unemployment in the particular county or locale is low because ‘area’ is defined as either the metropolitan statistical area or standard metropolitan statistical area, which is a large geographic area.”

Injunction Opposed

However, the Lawyers’ Committee for Civil Rights Under Law voiced concern about the preliminary injunction, saying in a release that the rule “would have provided modest, common-sense requirements and greatly increased protections for U.S. workers and H-2B guestworkers against various forms of abuse, including safeguards against retaliation, fair compensation for travel expenses and an opportunity for U.S. workers to seek and obtain these jobs first.”

The committee added, “The preliminary injunction leaves in place prior DOL regulations issued in 2008 by the outgoing Bush administration. The 2008 regulations provide far less protections to the workers, and they inhibit the federal government’s ability to comply with its obligation of protecting wages and working conditions in the United States. For these reasons, the Lawyers’ Committee is staunchly opposed to any efforts to block these new regulations.”

Allen Smith, J.D., is manager, workplace law content, for SHRM.

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