On December 1, a federal district court judge disrupted the Trump administration’s relentless attack on legal immigration by halting two new sets of regulations.
The U.S. Chamber of Commerce and others challenged interim final rules issued by the U.S. Departments of Homeland Security (DHS) and Labor (DOL) impacting the H-1B category. The DOL interim final rule took effect when issued on October 8, while the DHS rule would have taken effect on December 7.
The DOL rule raised the minimum salaries companies must pay to qualify to sponsor a worker in the H-1B category, placing these workers out of reach for many companies. The DHS rule restrictively redefined which jobs would qualify as specialty occupations and placed unreasonable limitations on the placement of H-1B workers at third-party sites.
When agencies want to change existing regulations or issue new ones, they normally must give the public notice by publishing proposed rules. They also must accept and consider public comments before issuing final regulations.
There are only a few exceptions—including when an agency for “good cause” finds advance notice and comment are “impracticable, unnecessary, or contrary to the public interest.” The court decided that DHS and DOL had not met this “good cause” exception when issuing these rules without notice and comment.
DHS and DOL claimed that high rates of U.S. unemployment due to the COVID-19 pandemic provided “good cause.” The court explained that the unprecedented scope of the pandemic is not at issue.
Instead, the court had to decide if the agencies had shown that the impact on domestic unemployment rates justified making such substantial changes to the H-1B program without “due deliberation.”
First, the court noted that the agencies took more than six months to issue regulations for which they claimed there was an “immediate need.” The court found DOL’s claim that it could not anticipate the potential impact on domestic unemployment “particularly implausible” when it was responsible for tracking unemployment rates.
The court also pointed out that the agencies had identified the problems as early as 2017—years before issuing these regulations as a correction for a claimed emergency due to the pandemic.
Second, the court found a “significant mismatch in facts” regarding unemployment due to the pandemic and the type of jobs impacted by the rules. Unemployment rates in H-1B jobs have not typically been affected by the pandemic, which require at least a bachelor’s degree in a specific specialty. The court also was concerned that the agencies were changing policies on which U.S. employers had relied for years without getting their input on the potential impact.
The court also rejected DOL’s claim that it lawfully made its rule effective when issued.
The agency argued that it needed to keep the change in prevailing wage rates “secret” to prevent U.S. employers from obtaining certifications of wages at the prior wage levels, valid for up to six months, which the employers could use to file H-1B petitions with U.S. Citizenship and Immigration Services (USCIS).
If USCIS approved the H-1B petition, then an H-1B worker could be employed for up to a three-year period. This would prolong what DOL claimed was a wage level system that needed updating.
DOL claimed that if it had set a comment period, certification filings would have increased. But the court said the factual bases for that argument were “sparse.” The court also found the DOL’s secrecy claims were undermined by the fact that in June 2020, Trump administration officials announced that the president had instructed DOL to change the prevailing wage rates.
The decision reinforces that agencies will rarely be permitted to forego advance notice and comment. Agencies benefit from considering comments from those who have relied on existing regulations before making substantial changes.
While these regulations have been set aside, this does not mean the administration will stop trying to restrict U.S. employers and foreign nationals from using the H-1B visa category. The agencies may try to re-issue the regulations as proposed rules and use the comments they have already requested.
If the agencies can act quickly enough, and the Office of Management and Budget again waives review, it is still possible that new final rules could be issued before the end of the Trump administration. Or they may be stopped again if there are grounds to challenge the procedures by which they were re-issued.
FILED UNDER: covid-19, Department of Homeland Security, Department of Labor, H-1B