Payroll Briefs

DOL’s New Interim Final Rule Protects American Workers’ Wages

November 30, 2020

The U.S. Department of Labor (DOL) has recently issued a new interim final rule that reforms the current methodology used in multiple foreign worker programs, therefore protecting the wages and job security of American workers. After a lengthy review of the Permanent Employment Certification and visa programs, the DOL decided the present wage approach can lead to the potential abuse of these programs. In certain situations, these programs may undercut wages and job opportunities for U.S. workers, incentivizing companies to hire immigrant workers instead.

Concerns from American Workers

Given the ongoing COVID-19 pandemic and resulting turbulent economy, the concern for American wages and jobs is heightened. With a decreased labor market due to the health crisis, companies resorted to hiring foreign workers over Americans due to decreased pay rates. This caused many American workers to settle for lower pay rates or, for some, to not be considered for a position at all. After workers expressed their dismay, the DOL has answered.

According to U.S. Secretary of Labor, Eugene Scalia, “The U.S. Department of Labor is strengthening wage protections, addressing abuses in these visa programs, and ensuring American workers are not undercut by cheaper foreign labor.” He also stated the new interim final rule is intended to strengthen foreign worker programs while safeguarding American workers’ ability to secure well-paying jobs.

The Prevailing Wage Rate

The interim final rule is set to provide a more accurate understanding of wages paid to foreign workers by bringing them closer to the pay of American workers with similar jobs, also known as the prevailing wage rate. The DOL uses the prevailing wage rate as a large determinant to ensure U.S. workers are protected from the competition of lower-cost foreign labor. This method allows the DOL a more effective option for protecting Americans’ pay and jobs by eliminating the economic incentive to hire non-American workers instead of American workers, whether for permanent or temporary jobs.

What to Know When Hiring Immigrant Employees

If you’re in the process of hiring an employee with an H-1B, H-1B1 or E-3 visa, you must prove you will pay your American workers the higher of the prevailing wage rate or the wage offered to other employees with similar qualifications and work experience. If you are looking to hire an immigrant employee with an EB-2 or EB-3 visa, you must attempt to recruit American workers for the same position using the prevailing wage rate. If you are unsuccessful in finding an American worker to fill the position, you must pay a foreign worker the prevailing wage rate.

In order to obtain the prevailing wage rate for a position, you can submit a request to the National Prevailing Wage Center (NPWC).

DM Payroll Solutions will continue to keep you updated on the latest guidance from the DOL and provide your business with the resources it needs to successfully process payroll for your workforce.

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