WASHINGTON – A group of information technology companies filed a lawsuit Friday night challenging a Trump government rule that raised the wages employers must pay to their foreign workers on H-1B visas aimed at tightening access to visas.
The Trump administration completed its long-awaited revision of the H-1B visa program for highly educated workers last week, a program highly valued by U.S. high-tech companies and other employers.
A piece of the update issued by the Department of Labor went into effect last Thursday and bypassed the usual period of public comment. The department’s rule significantly raises the minimum wage that companies must pay their H-1B employees.
The lawsuit from ITServe Alliance, a trade group representing information companies, was filed against the U.S. District Court in New Jersey.
“Without giving prior notice and without giving plaintiffs or the public an opportunity to comment, the Department of Labor dramatically changed the way it calculates the applicable wage rates for the H-1
The case claims that the Trump administration cut corners by issuing the rule on an emergency, rather than conducting a full analysis of its impact on current visa holders and the economy and incorporating potential changes based on public feedback.
The Department of Labor did not immediately respond to a request for comment.
Separate lawsuits are expected as soon as next week against another set of rules, issued by the Department of Homeland Security. These rules restrict eligibility for an H-1B visa and shorten the duration of certain contract staff. This rule is expected to enter into force in December.
Under the Labor Department’s new wage requirements, which rely on cross-sectoral and location-based wage surveys, firms would be required to pay base-level workers at the 45th percentile compared to the current commitment, they are paid at least in the 17th. percentile. Top executives currently required to receive pay at the 67th percentile must be paid at 95th.
An electrical engineer in San Jose, California, for example, would be paid at least $ 127,042, compared to $ 88,712 before the new rule went into effect, according to Labor Department data.
The new rule has probably only affected a small subset of H-1B holders so far – only those who are in the early stages of filing renewal applications. However, should it remain in force, it could have an extraordinary impact on smaller companies like tech startups that have limited cash to pay the higher mandate salaries.
Write to Michelle Hackman at Michelle.Hackman@wsj.com
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