Thu. Dec 3rd, 2020

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Second lawsuit challenging new H-1B rules to be filed in US court today

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H-1B Nonimmigrant Visa

Opposition to the Donald Trump government’s new H-1B rules is mounting with a second lawsuit challenging them set to be filed in the Washington DC Court on 19th October 2020.

On October 16th, 2020 the first claim was filed in the District Court of New Jersey by the ITServe Alliance. Which represents US IT firms, and joined by seven different firms. Aside from these, there is one more in the offing from the US Chamber of Commerce and others, and it will be filed in North California, said Siskind.

On 6th October the Trump government published two rules. H-1B wage hikes by the Department of Labor (DOL) and tightening of guidelines by the Department of Homeland Security (DHS). To make it harder to meet all requirements for an H-1B visa.

H-1B Rules

The wage hikes came into effect on October 8th, 2020 and the DHS’s regulation will become effective 60 days later. Right now it is open for comments.

However, the main aim of the pay increase is to make it harder for organizations to employ H-1B laborers and to empower local hiring.

These regulations will have a considerable effect on large Indian IT firms. And are probably going to affect their margins despite their localization strategy. As of now, the majority of these organizations have more than 60% of their workforce in the US as local people.

Indians are one of the enormous beneficiaries of H-1B visas. In FY19, they represented around 70% of the 1.8 lakh H-1B visas that were given or expanded.

Mounting lawsuits

Clarifying the grounds for his claim, Siskind, stated. “The case is focussed on the illegal way in which the rule was turned out (focussing on the Administrative Procedure Act requirements) … the faulty math and economic assumptions in the rule…”

For one, the DOL’s compensation hike rule was executed without the usual notification and public comment period, making it vulnerable to lawsuits.

Secondly, the DOL and DHS have brought up the expanding unemployment in the US as one reason for executing the rules. However, specialists said the reasoning is faulty.

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The unemployment rate in computer-related occupations, where most of the H-1B workers have been utilized. It has been the least, at 3.5 percent, in September 2020. Stuart Anderson, Executive Director, National Foundation for American Policy (NFAP), brought up those job vacancies. Also, that has increased by 4.7 percent to 655,386 in September compared to 625,702 in April-May.

Additionally, these wages well exceed market compensation if they need to hire an H-1B visa holder. Overall, NFAP research brought up employers will have to pay software developers 45 percent more.

NFAP research further points out that by expanding the wages. The “DOL has exceeded its power by making employers pay salaries that look to some extent like market compensation or even the wages under the system the Department of Labor operated before publishing its new pay rule.”

Also, specialists have pointed out that the agencies executed the rule without an economic effect analysis of these new guidelines, making them vulnerable to lawsuits.

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