Wage Methodology for the Temporary Non-Agricultural Employment H-2B Program; Amendment of Effective Date, 45667-45673 [2011-19319]

Agencies

• Employment and Training Administration
• DEPARTMENT OF LABOR

[Federal Register Volume 76, Number 147 (Monday, August 1, 2011)]
[Rules and Regulations]
[Pages 45667-45673]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-19319]



[[Page 45667]]

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DEPARTMENT OF LABOR

Employment and Training Administration

20 CFR Part 655

RIN 1205-AB61


Wage Methodology for the Temporary Non-Agricultural Employment H-
2B Program; Amendment of Effective Date

AGENCY: Employment and Training Administration, Labor.

ACTION: Final rule.

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SUMMARY: The Department of Labor (we or us) is amending the effective 
date of Wage Methodology for the Temporary Non-agricultural Employment 
H-2B Program; Final Rule, 76 FR 3452, Jan. 19, 2011 (the Wage Rule). 
The Wage Rule revised the methodology by which we calculate the 
prevailing wages to be paid to H-2B workers and United States (U.S.) 
workers recruited in connection with a temporary labor certification 
for use in petitioning the Department of Homeland Security to employ a 
nonimmigrant worker in H-2B status. The effective date of the Wage Rule 
was set at January 1, 2012. This Final Rule revises the effective date 
of the Wage Rule to 60 days after the publication date of this Final 
Rule.

DATES: The effective date of the final regulations published in the 
Federal Register on January 19, 2011, at 76 FR 3452, is September 30, 
2011.

FOR FURTHER INFORMATION CONTACT: William L. Carlson, Ph.D., 
Administrator, Office of Foreign Labor Certification, ETA, U.S. 
Department of Labor, 200 Constitution Avenue, NW., Room C-4312, 
Washington, DC 20210; Telephone (202) 693-3010 (this is not a toll-free 
number). Individuals with hearing or speech impairments may access the 
telephone number above via TTY by calling the toll-free Federal 
Information Relay Service at 1-877-889-5627 (TTY/TDD).

SUPPLEMENTARY INFORMATION:

I. Amendment of Effective Date of the Wage Rule

 A. The Prevailing Wage Final Rule

    We published the Wage Rule on January 19, 2011. Under the Wage 
Rule, the prevailing wage for the H-2B program is based on the highest 
of the following: The wage rate established under an agreed-upon 
collective bargaining agreement; the wage rate established under the 
Davis-Bacon Act (DBA) or the McNamara O'Hara Service Contract Act (SCA) 
for that occupation in the area of intended employment; or the 
arithmetic mean wage rate established by the Occupational Employment 
Statistics (OES) wage survey for that occupation in the area of 
intended employment. The Wage Rule also permits the use of private wage 
surveys in very limited circumstances. Lastly, the Wage Rule required 
the new wage methodology to apply to all work performed on or after 
January 1, 2012. We selected the January 1, 2012 effective date because 
``many employers already may have planned for their labor needs and 
operations for this year in reliance on the existing prevailing wage 
methodology. In order to provide employers with sufficient time to plan 
for their labor needs for the next year and to minimize the disruption 
to their operations, the Department is delaying implementation of this 
Final Rule so that the prevailing wage methodology set forth in this 
Rule applies only to wages paid for work performed on or after January 
1, 2012.'' 76 FR 3462, Jan. 19, 2011.
    On January 24, 2011, the plaintiffs in CATA v. Solis, Civil No. 
2:09-cv-240-LP (E.D. Pa.), filed a motion for an order to require the 
Department to comply with the court's August 30, 2010 order,\1\ arguing 
that the Wage Rule violated the Administrative Procedure Act (APA) 
because ``it did not provide notice to Plaintiffs and the public that 
DOL was considering delaying implementation of the new regulation and 
because DOL's reason for delaying implementation of the new regulation 
is arbitrary.'' CATA v. Solis, Dkt. No. 103-1, Plaintiff's Motion for 
an Order Enforcing the Judgment at 2 (Jan. 24, 2011). On June 16, 2011, 
the court issued a ruling that invalidated the January 1, 2012 
effective date of the Wage Rule and ordered us to announce a new 
effective date for the rule within 45 days from June 16. The basis for 
the court's ruling was twofold: (1) That the almost one-year delay in 
the effective date was not a ``logical outgrowth'' of the proposed 
rule, and therefore violated the APA; and (2) that the Department 
violated the INA in considering hardship to employers when deciding to 
delay the effective date. The court held that ``it is apparent that in 
this case the notice of proposed rulemaking was deficient.'' CATA v. 
Solis, Dkt. No. 119, 2011 WL 2414555 at *4. The court noted that the 
NPRM said nothing about a delayed effective date, and accordingly ``the 
public would * * * be justified in assuming that any delay in the 
effective date would mirror the minimal delays associated with the 
issuance of similar wage regulations over the past several decades.'' 
Id. In finding a violation of the INA, the court relied extensively on 
the 1983 district court decision in NAACP v. Donovan, 566 F. Supp. 1202 
(D.D.C. 1983), which held that the Department could not phase in a wage 
regime based upon a desire to alleviate hardship on small businesses, 
because `` `[in] administering the labor certification program, DOL is 
charged with protection of workers.' '' CATA v. Solis, Dkt. No. 119, 
2011 WL 2414555 at *4 (citing NAACP v. Donovan, 566 F. Supp. at 1206).
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    \1\ On August 30, 2010, the U.S. District Court for the Eastern 
District of Pennsylvania in CATA v. Solis, 2010 WL 3431761 (E.D. 
Pa.) ruled that the Department had violated the Administrative 
Procedure Act by failing to adequately explain its reasoning for 
using skill levels as part of the H-2B prevailing wage 
determinations, and failing to consider comments relating to the 
choice of appropriate data sets in deciding to rely on OES data 
rather than SCA and DBA in setting the prevailing wage rates. The 
court ordered the Department to ``promulgate new rules concerning 
the calculation of the prevailing wage rate in the H-2B program that 
are in compliance with the Administrative Procedure Act no later 
than 120 days from the date of this order.'' The order was later 
amended to provide additional time, until January 18, 2011, to 
promulgate a final rule.
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    In response to the court's order, we issued a Notice of Proposed 
Rulemaking (NPRM) on June 28, 2011, which proposed that the Wage Rule 
take effect 60 days from the date of publication of a final rule 
resulting from this rulemaking. Because we anticipated the date of 
publication of the final rule to be on or about August 1, 2011, we said 
in the NPRM that the effective date of the Wage Rule would be on or 
about October 1, 2011. The Wage Rule would be effective for wages paid 
to H-2B workers and U.S. workers recruited in connection with an H-2B 
labor certification for all work performed on or after the new 
effective date.

II. Discussion of Comments

A. Overview of Comments Received

    We received 59 comments in response to the NPRM. Forty-two of the 
comments were completely unique, one was a duplicate, and the remainder 
were a form letter or based on a form letter. Commenters represented 
individual employers, worker advocacy groups, business associations, 
agents, the Chief Counsel for the Office of Advocacy of the Small 
Business Administration (Chief Counsel for Advocacy, SBA), Members of 
Congress, and various interested members of the public. The comments 
are discussed in greater detail below.
    Some of the comments were outside the scope of the proposed rule. 
The NPRM proposed a new effective date for the Wage Rule and 
specifically provided that any comments relating to the merits of the 
Wage Rule would be deemed out

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of scope and would not be considered. Furthermore, the NPRM stated that 
under the court's order, we cannot consider specific examples of 
employer hardship to delay the effective date of a new wage rule. See 
CATA v. Solis, Dkt. No. 119, 2011 WL 2414555 at *4. Many comments went 
well beyond the scope of amending the effective date of the Wage Rule. 
Among the comments that we deemed out of scope were comments that 
challenged the merits of the Wage Rule and asserted that the Wage Rule 
and/or the proposed effective date of the Wage Rule would result in 
employer hardship, including inadequate time to plan or prepare for the 
change in wages, cancellation of contracts, lower profits, and 
financial insolvency. Because the district court was clear that our 
consideration of hardship to employers when setting the January 1, 2012 
effective date was contrary to our responsibilities under the INA to 
protect the wages and working conditions of U.S. workers, we cannot 
consider these comments in this rulemaking. We also did not consider 
comments submitted before the comment period began or after the comment 
period closed.

B. Adequacy of Comment Period

    Several commenters did not believe that the ten day comment period 
provided an adequate amount of time for the public to comment on the 
NPRM, and several specifically requested extending the deadline for 
submission of comments, including up to 120 days. An agency is only 
required to provide a ``meaningful opportunity'' for comments on a 
proposed rule. See Grand Canyon Air Tour Coalition v. FAA, 154 F.3d 455 
(D.C. Cir. 1998). In Florida Power & Light Company v. NRC, 846 F.2d 765 
(D.C. Cir 1988), the court used a reasonableness standard to uphold the 
agency's 15 day comment period. Although the agency in that case was 
attempting to meet a Congressional deadline, we are under an analogous 
constraint here given the judicial requirement of the CATA order that a 
new effective date be announced within 45 days. As was true in Florida 
Power, despite the truncated comment period, we received more than 40 
substantive comments addressing every aspect of the issue. We issued an 
NPRM that simply proposed to move up the effective date of the Wage 
Rule by 3 months. Ten days is ample time for a member of the public to 
review the NPRM, which only consisted of 4 pages in the Federal 
Register, and formulate a meaningful response. The shorter timeframe is 
warranted here, given the limited scope of this rulemaking and the 
court's June 16, 2011 order that we announce a new effective date 
within 45 days. Because we had to draft an NPRM, review comments, draft 
a final rule and submit both the NPRM and the Final Rule for Executive 
Order 12866 review within the 45-day period ordered by the court, the 
ten-day comment period is the most generous period that we could 
provide.

C. Authority of CATA Decision

    An employer expressed its disagreement with the June 16, 2011 CATA 
decision, stating that the Department's consideration of employer 
hardship was appropriate and that the court misunderstood the 
procedural requirements of the H-2B program. An employer association 
chided the Department for its ``wholesale endorsement of the 
decision,'' arguing that the court's holding that the Department is not 
permitted to consider employer hardship was ``meaningless dicta,'' that 
the CATA case was not a legitimate case or controversy but more akin to 
an ``advisory opinion'' because both the plaintiffs' and our interests 
were aligned, and that the INA does not make any reference good or bad 
to employer hardship. While we understand that there may not be 
agreement with the merits of the June 16, 2011 CATA decision, it is 
binding on the Department and we must act in accordance with it. As to 
the commenter's claim that the plaintiffs' and our interests are 
aligned in the CATA litigation, we have vigorously defended our 
positions at all stages of the CATA case, including opposing the 
plaintiffs' January 24, 2011 motion. See CATA v. Solis, Dkt. No.105, 
Defendants' Opposition to Plaintiffs' Motion for Order Enforcing the 
Judgment.

D. Harm to H-2B and U.S. Workers

    Two employer associations asserted that employers and workers stand 
and fall together--specifically, that there is no distinction between 
the benefit of employers and the benefit of workers and that a negative 
impact on the employer has an immediate negative effect on the workers. 
In an effort to illustrate that point, a number of employers and 
employer associations stated that the accelerated effective date would 
result in having to lay off their H-2B workers because they simply 
would not be able to afford the increase in wages based on the Wage 
Rule's new wage methodology. Additionally, some employers commented 
that as a result of their H-2B worker layoffs, they would be forced to 
lay off their U.S. workers who are in supervisory, support, and 
administrative positions.
    Our responsibilities in the H-2B labor certification program first 
and foremost are to ensure that U.S. workers are given priority for 
temporary non-agricultural job opportunities and to protect U.S. 
workers' wages and working conditions from being adversely affected by 
the employment of foreign workers in such job opportunities. See 8 
U.S.C. 1101(a)(15)(H)(ii)(b). Only when we certify that U.S. workers 
capable of performing the services or labor are not available and that 
the employment of the foreign worker(s) will not adversely affect the 
wages and working conditions of similarly employed U.S. workers (see 8 
CFR 214.2(h)(6)) may an employer file an H-2B visa petition to bring in 
temporary foreign workers. The court was quite clear that ``[d]elaying 
the implementation of the Wage Rule requires, by necessity, the 
continued payment of a lower, invalid wage to H-2B workers.'' CATA v. 
Solis, Dkt. No. 119, 2011 WL 2414555 at *4. The payment of this lower, 
invalid wage clearly has an adverse effect on the wages of similarly 
employed U.S. workers.
    We do not dispute that the implementation of the Wage Rule, whether 
on the amended or original timeframe, regrettably may result in the 
layoffs of H-2B workers and possibly U.S. workers in positions that 
support those that are currently filled by H-2B workers. However, our 
role in the H-2B program, as further reinforced by the district court 
in CATA, is to protect the wages and working conditions of similarly 
employed U.S. workers--a constituency that few, if any, of the 
commenters acknowledge--but who are the very group the labor 
certification program was designed to protect.

E. Earlier Effective Date

    Two worker advocacy organizations and a labor organization 
supported putting the Wage Rule into effect as quickly as possible. A 
worker advocacy organization specifically requested ``the earliest 
administratively practical effective date'' for the Wage Rule and that 
the effective date be no later than 30 days after the publication of 
the final rule resulting from this rulemaking--i.e., August 31, 2011. 
The commenter stated that it disagreed with our suggestion in the NPRM 
that the fact that the Congressional Review Act (CRA) applied to the 
Wage Rule provided any basis for delaying the Wage Rule another 60 days 
from the date of publication of the final rule resulting from this 
rulemaking. The commenter believes that we have the authority under the 
APA to set an immediate effective date for the Wage

[[Page 45669]]

Rule upon publication of the final rule resulting from this rulemaking. 
The commenter contends that we would have good cause for doing so, as 
more than six months have passed without any action from Congress to 
vacate the Wage Rule under the CRA, while ``H-2B workers continue to be 
paid unlawfully low wages.'' While the commenter agreed that the 
Department's ``administrative needs in implementation of [the Wage 
Rule] is an appropriate factor to consider in establishing the 
effective date,'' the commenter believes that:

    It would be administratively practicable for DOL to immediately 
issue bulk interim prevailing wage determinations by electronic mail 
notifying all applicants for H-2B prevailing wage determinations 
submitted since October 1, 2010 that if they employed any H-2B 
workers after August 1, 2011, they would be immediately required to 
pay the FLC Data Center Level 3 wage based on 2011 OES data for the 
SOC (ONET/OES) code on their initial prevailing wage determination 
for their geographic area until such time as DOL determined if there 
were higher Service Contract Act (SCA) or Davis Bacon Act (DBA) wage 
rates for their H-2B workers and other workers in corresponding 
employment. Employers could be directed to https://www.flcdatacenter.com/OESWizardStart.aspx, the Online Wage Library--
FLC Wage Search Wizard, to mathematically calculate the appropriate 
prevailing wage rate pending an individualized further notice from 
DOL. Employers for whom SCA or DBA wages might be appropriate could 
be notified of procedures for submitting further information for 
determining those wage rates.

    The same commenter also stated that if we have an internal 
computerized system for tracking H-2B certification applications and 
decisions, identifying employers with certifications for periods of 
employment on or after August 1, 2011 should be relatively 
straightforward. Additionally, the commenter raised the possibility of 
whether the existing computerized data for the H-2B prevailing wage 
determinations could be used to automatically recompute new prevailing 
wage rates at the July 2011 OES Level 3 wage rates, which would relieve 
employers from having to re-calculate the new wage rates themselves. 
Lastly, the commenter stated that if we already have a cross reference 
by SOC (ONET/OES) codes for employment involving potential DBA or SCA 
wage rates, ``that possibility could be specifically flagged only for 
those codes and a questionnaire seeking additional information in 
relationship thereto could be generated.''

    We still consider the proposed 60 day delayed effective date to be 
necessary and appropriate, despite the commenter's proposal of various 
operational measures to implement the Wage Rule in a more expeditious 
manner. We do not dispute that the 60 day delayed effective date 
requirement of the CRA applied only to the publication of the Wage Rule 
in January 2011 and that we are not legally required under the CRA to 
delay by 60 days from the publication of this rulemaking the effective 
date of the rule. However, while we agree with the commenter that the 
Wage Rule should have the ``earliest possible administratively 
practical effective date,'' an effective date of 30 days after the 
publication of the final rule does not provide us with sufficient 
operational time to issue new prevailing wage determinations (PWDs) 
under the methodology prescribed by the Wage Rule.
    Because the new wage methodology under the Wage Rule would take 
effect for all wages paid to H-2B workers and U.S. workers recruited in 
connection with an H-2B labor certification for all work performed on 
or after the new effective date, we will have to issue PWDs using the 
Wage Rule methodology not only for all applications received after the 
new effective date but also for existing certifications for which work 
is to be performed on or after the new effective date. What this means 
is that our National Prevailing Wage Center (NPWC) will have to issue 
approximately 4,000 supplemental prevailing wage determinations.\2\ 
This is a manual process, as there is no way to automatically link the 
PWD requests that were submitted and processed in the iCert prevailing 
wage system with the actual H-2B applications that were subsequently 
filed and approved for work that will be performed on or after the 
effective date. Many of these requests involve multiple locations, some 
including dozens of locations, each of which requires a separate 
determination.\3\ While the NPWC anticipates being able to issue all of 
these 4,000 supplemental wage determinations before October 1, to do so 
before August 31 is physically and operationally impossible.
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    \2\ It has not been possible to perform recalculations of the 
prevailing wage before July 1, as the wages in OES are updated on or 
about that date each year, and were not available before that date 
for use in the H-2B program.
    \3\ Until we have reviewed all affected applications some of 
which are still in the process of adjudication we will not know the 
exact number of determinations that that the NPWC must issue.
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    We appreciate the commenter's suggestions for streamlining the PWD 
process in order to implement the new Wage Rule in the most expeditious 
manner possible. However, it is imperative that we issue individual 
PWDs for each employer that has an H-2B labor certification for work 
being performed on or after the new effective date to ensure the 
integrity and enforceability of the new prevailing wage. The 
commenter's suggestion that employers calculate their own prevailing 
wage would present us with substantial challenges in both 
implementation and enforcement. NPWC staff provide a level of 
consistency and accuracy that would not be replicable if responsibility 
for PWDs were devolved to hundreds, if not thousands, of individual H-
2B employers and their various representatives. In the simplest 
scenario proposed by the commenter, an employer with limited or no 
previous knowledge of the prevailing wage determination process would 
have to follow our instructions to use an unfamiliar set of online 
tools to determine their correct prevailing wage. In addition to 
possible errors caused by lack of familiarity with the system, further 
complications could arise for employers with certified occupations that 
are a blend of two unique occupations or with multiple areas of 
intended employment. There is potential for employer error at every 
step that could result in the unintentional payment of an incorrect 
wage rate to thousands of H-2B workers. Moreover, our ability to 
enforce an employer's failure to pay the correct wage would be 
compromised if we could not definitively show that the employer knew 
what the proper wage was (see 20 CFR 655.65(e)), which would be quite 
difficult, given the practical challenges just discussed.
    Moreover, obtaining the appropriate SCA and DBA wages for the job 
opportunity is not as simple a process as obtaining the OES wage, since 
the SCA and DBA wages are determined in a completely different manner 
and updated on a completely separate timeframe. We make SCA and DBA 
wage rates available to Federal contracting officers and the public 
through the https://www.wdol.gov Web site. While it is easy to use this 
Web site to locate wage determinations, selecting the appropriate 
occupations or job classification from the wage determination presents 
additional opportunities for employer error. Occupations under the SCA 
are determined using the Dictionary of Occupational Titles (DOT). 
Employers would be required to review the

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definitions in the DOT and determine the appropriate SCA occupation for 
their specific job opportunity. For example, an employer seeking to 
hire H-2B workers for its restaurant could be presented with SCA wage 
rates for a ``Cook I,'' ``Cook II,'' and ``Food Service Worker'' on the 
same wage determination. The employer would be required to analyze the 
DOT to determine the appropriate occupation.
    A similar challenge exists with DBA wage rates. DBA wage rates 
reflect the area practice concept which makes it difficult for someone 
inexperienced with those wage rates to determine which rate applies. 
For example, in some areas of the country, a rate is established for 
``welders,'' and in other areas welders receive the rate prescribed for 
the craft to which performance of the welding is an incidental 
operation, depending on whether it is the practice in the area to treat 
welding as a separate occupation. Therefore, we do not believe that 
employers could easily select the correct prevailing wage rate for the 
job opportunity without this specialized knowledge. The commenter 
implicitly acknowledges this complexity, as it offers no proposal for 
obtaining those wages in an expedited manner; instead, it proposes that 
employers be required to immediately begin paying the OES Level 3 wage 
and that the NPWC would determine the applicability of the SCA or DBA 
wage at a later date. This would serve further to undermine our ability 
to enforce the payment of the prevailing wage as of the new effective 
date if either the SCA or DBA wage eventually were found to be the 
highest wage (see 76 FR 3484 (Jan. 19, 2011) (to be codified at 20 CFR 
655.10(b)(2)), because the employer may not have been aware at the time 
that the work was performed after the new effective date that either 
the SCA or DBA wage was the prevailing wage.
    We do not think it appropriate to issue ``interim'' wage 
determinations and then issue corrected wage determinations at a later 
date, possibly requiring employers to pay make-up pay at a later date, 
or for workers to have their pay adjusted downward. Sound program 
administration and basic fairness require us to provide employers with 
a prevailing wage determination on which they can rely in time for them 
to make any needed adjustments in their payroll systems and pay the 
correct new wages when they are due. Issuing prevailing wage 
determinations as quickly as possible but in time for employers to 
implement them on the effective date avoids confusion for both 
employers and workers, and also reduces the necessity of enforcement 
actions and the possibility of litigation.

F. Later Effective Date

    Two employer associations asserted that the court in CATA did not 
mandate an earlier effective date but merely required that the 
effective date be subject to notice and comment. One employer suggested 
that any new wage changes apply to H-2B visas released after the new 
effective date. We do not believe, based on the CATA decision and on 
our mandate to ensure that the employment of foreign workers in 
temporary non-agricultural positions does not adversely affect 
similarly employed U.S. workers, that we can further delay implementing 
the Wage Rule beyond the time that it takes to issue and implement the 
new prevailing wage determinations, as described above. While the court 
did not order us to issue any particular effective date, its decision 
made it clear that the court was concerned with the ``critical 
importance of avoiding the depression of wages paid to U.S. and to H-2B 
workers, and * * * the already protracted delay in implementing a valid 
prevailing wage regime.'' CATA v. Solis, Dkt. No. 119, 2011 WL 2414555 
at *5. Applying the Wage Rule's prevailing wage methodology only to H-
2B visas issued after the new effective date would result in what the 
court in CATA specifically sought to avoid--prolonging the payment of a 
lower, invalidated wage to H-2B workers. We believe that, under the 
court's decision, we must do all we can that is administratively and 
operationally feasible to minimize the period in which these payments 
continue.

G. Impact of Changing the Prevailing Wage for Existing Certifications

    Several commenters objected to the application of the Wage Rule's 
prevailing wage methodology to existing certifications. An employer 
association asserted that we would be acting in conflict with our 
regulations providing that the prevailing wage would be valid 
throughout the intended of period employment. Similarly, another 
employer association claimed that allowing the new prevailing wage 
methodology to apply to existing certifications would violate the 
attestation on older versions of the ETA Form 9142, Appendix B.1 that 
``the offered wage equals or exceeds the highest of the prevailing 
wage, the applicable, Federal, State, or local minimum wage, and the 
employer will pay the offered wage during the entire period of the 
approved labor certification.''
    In the fall of 2010, the CATA plaintiffs moved for additional 
relief including seeking an order requiring the Department to condition 
future H-2B certifications on employer agreement to pay the wage rate 
under the Wage Rule once it became effective. We opposed this order, 
arguing that the regulation at 20 CFR 655.10(d) meant that once an 
employer had received a prevailing wage determination in any year, it 
is entitled to use that prevailing wage throughout the duration of its 
H-2B certification. In a November 24, 2010 ruling, the court rejected 
that argument:

    Nothing in Sec.  655.10(d), nor any related regulation, prevents 
the DOL from devising interim measures to reduce the impact of the 
deficient methodology. Thus an employer must pay a valid wage for 
the duration of employment, but it does not follow that an employer 
must continue paying that wage after it has been deemed to be the 
product of an invalid regulation.

CATA v. Solis, Dkt. No. 97, 2010 WL 4823236 at *2 (footnote omitted). 
Although the court did not order us to take any specific action, we 
reconsidered our position in light of the court's ruling that the 
current wage methodology is invalid and that we have the authority to 
require employers to pay wages other than those issued in a prevailing 
wage determination. Accordingly, in these special circumstances, we 
decided that it is not appropriate to allow wage determinations made 
under the invalidated current methodology to continue to govern the 
payment of wages beyond the effective date of the Wage Rule.

    While these commenters may not agree with the district court's 
rationale, as discussed above, the decision is nevertheless binding. As 
to the commenter's concern that an employer would be in violation of 
the attestation on the previous version of the ETA Form 9142, Appendix 
B.1, we do not consider the attestation to be inconsistent with an 
employer's payment of a higher wage rate once the Wage Rule takes 
effect. The attestation only requires that the offered wage equal or 
exceed the highest of the prevailing wage or applicable minimum wage 
and that the employer pay the offered wage during the time period the 
work is performed. If the prevailing wage increases as a result of the 
Wage Rule taking effect, then the employer's offered wage would need to 
increase in accordance with that change.
    Additionally, a commenter stated that because employers have a 
protected property interest in the validity of the prevailing wage 
throughout the period of intended employment, we would be

[[Page 45671]]

denying the employer due process to take away that right without notice 
and an opportunity for an individual hearing. The commenter's concerns 
about due process are not warranted. As a threshold matter, due process 
applies only to individualized determinations, and not to legislative 
rulemaking. See United States v. Florida East Coast Railway, 410 U.S. 
224, 244-46 (1973). We are not required to provide a hearing before 
taking an action that affects the property interest of a class of 
individuals or regulated entities. See McMurtray v. Holladay, 11 F.3d 
499, 504 (5th Cir. 1993). In any event, when employers operating under 
current certifications are notified of the new prevailing wage, the 
notice will provide them with appropriate appeal rights under section 
655.11, so that they can challenge the correctness of their 
individualized prevailing wage determination.
    Another employer association claimed that because an employer would 
have advertised and tested the labor market at a wage rate that is 
different than the new prevailing wage under the Wage Rule, the 
employer could be accused of applying a wage that is higher than the 
wage that was advertised to domestic workers, which could result in a 
revocation of the employers' petition by DHS. The commenter relies on 
what it deems to be the Department of State's interpretation that an 
employer may not pay above the prevailing wage that was advertised at 
the time the H-2B job was advertised per regulation. Along the same 
lines, one commenter called for the Department to provide extra time to 
re-apply to USCIS for continued certification under the new prevailing 
wage, and another commenter stated that any new changes to the wage 
rates must not require employers to complete the recruitment phase or 
obtain a new foreign labor certification once these steps have already 
been completed.
    The Department of State and USCIS, each of which play a role in the 
H-2B process, are aware of the unique circumstances of this 
supplemental wage determination process as outlined in the Wage Rule 
and in this Final Rule. We contacted each agency about this issue. The 
Department of State advised us that it might not issue a visa in some 
circumstances where the visa has not yet been issued but the wage will 
be higher than stated on the petition. However, because this is a 
regulatory change mandated by an agency with the authority to do so--
namely, the Department--this is not in itself a basis for petition 
revocation. USCIS advised that, while circumstances vary, they 
generally cannot deny or revoke a nonimmigrant visa petition for this 
reason. We will continue to advise both the Department of State and 
USCIS as the supplemental wage determinations are issued.

III. Administrative Information

 A. Executive Orders 12866 and 13563

    Under Executive Order (E.O.) 12866 and E.O. 13563, we must 
determine whether a regulatory action is significant and therefore, 
subject to the requirements of the E.O.s and subject to review by the 
Office of Management and Budget (OMB). Section 3(f) of E.O. 12866 
defines a ``significant regulatory action'' as an action that is likely 
to result in a rule that: (1) Has an annual effect on the economy of 
$100 million or more or adversely and materially affects a sector of 
the economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local or Tribal governments or communities 
(also referred to as ``economically significant''); (2) creates serious 
inconsistency or otherwise interferes with an action taken or planned 
by another agency; (3) materially alters the budgetary impacts of 
entitlement grants, user fees, or loan programs or the rights and 
obligations of recipients thereof; or (4) raises novel legal or policy 
issues arising out of legal mandates, the President's priorities, or 
the principles set forth in the E.O. Executive Orders 13563 and 12866 
direct agencies to assess all costs and benefits of available 
regulatory alternatives and, if regulation is necessary, to select 
regulatory approaches that maximize net benefits (including potential 
economic, environmental, public health and safety effects, distributive 
impacts, and equity). Executive Order 13563 emphasizes the importance 
of quantifying both costs and benefits, of reducing costs, of 
harmonizing rules, and of promoting flexibility.
    We have determined that this Final Rule is not an economically 
significant regulatory action under sec. 3(f)(1) of E.O. 12866. We 
have, however, determined that this Final Rule is a significant 
regulatory action under sec. 3(f)(4) of the E.O. and, accordingly, OMB 
has reviewed this Final Rule.

B. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) at 5 U.S.C. 603 requires 
agencies to prepare a regulatory flexibility analysis to determine 
whether a regulation will have a significant economic impact on a 
substantial number of small entities. Section 605 of the RFA allows an 
agency to certify a rule in lieu of preparing an analysis if the 
regulation is not expected to have a significant economic impact on a 
substantial number of small entities. Further, under the Small Business 
Regulatory Enforcement Fairness Act of 1996, 5 U.S.C. 801 (SBREFA), an 
agency is required to produce a compliance guidance for small entities 
if the rule has a significant economic impact. The Assistant Secretary 
of ETA has notified the Chief Counsel for Advocacy, Small Business 
Administration (SBA), under the RFA at 5 U.S.C. 605(b), and certified 
that this rule will not have a significant economic impact on a 
substantial number of small entities.
    We received a comment from the Chief Counsel for Advocacy, SBA, in 
which the Chief Counsel contended that we did not adequately provide a 
factual basis for the RFA certification and that the certification did 
not take into consideration the economic impact that this unexpected 
change in the effective date of the Wage Rule will have on small 
businesses. The Chief Counsel for Advocacy, SBA strongly encouraged us 
to complete an Interim Regulatory Flexibility Analysis of the NPRM. 
Several associations also asserted that we failed to consider the 
impact of this rulemaking on small businesses.
    In particular, the Chief Counsel for Advocacy, SBA, claimed that we 
offered no data or other analysis in support of the factual basis used 
to support the certification as required by the RFA beyond the 
statement ``[w]hile the change in the effective date of the Wage Rule 
that is being proposed in this NPRM may change the period in which the 
total cost burdens for small entities would occur, the Department 
believes that the amount of the total cost burdens themselves would not 
change.'' \4\ An employer association stated that if the effective date 
moves to October 1, 2011, its average member's payroll would increase 
from $79,840 to $159,680 and that their ``total cost of labor'' would 
likely double or even triple these figures. Another employer 
association argued that if the period that the Wage Rule is in effect 
is increasing, the total cost burden would increase along with the 
extended period, as the difference in implementing the Wage Rule on 
October 1, 2011 as opposed to January 1, 2012 would be $1,872 per 
worker.
---------------------------------------------------------------------------

    \4\ 76 FR 37686, 37688-89 (June 28, 2011).
---------------------------------------------------------------------------

    We disagree with the Chief Counsel for Advocacy, SBA's assessment 
that we did not provide a factual basis for the certification. As we 
stated in the NPRM, we already established in the Wage Rule that we 
believed that the Wage Rule was

[[Page 45672]]

not likely to impact a substantial number of small entities, and we 
provided an extensive analysis in the Wage Rule to support this 
conclusion. See 76 FR 3452, 3473-3482 (Jan. 19, 2011). Changing the 
effective date of the Wage Rule does not change the total cost burden 
for small entities as calculated under the Wage Rule. The total cost 
burden for small entities under the Wage Rule accounted for the 
increase in wage costs as a result of the new wage methodology (e.g., a 
$4.83 increase in the weighted average hourly wage for H-2B workers 
(and similarly employed U.S. workers hired in response to the 
recruitment required as part of the H-2B application)) \5\ and the cost 
of reading and reviewing the Wage Rule--neither of which accounted for 
or were impacted by the original January 1, 2012 effective date of the 
Wage Rule. While we found that the Wage Rule has a significant economic 
impact \6\ (contrary to a commenter's assertion that we did not make 
such a finding), we found that the Wage Rule did not impact a 
substantial number of small entities, as the small entities that have 
historically applied for H-2B workers represent relatively small 
proportions of all small businesses--i.e., less than 10% of the 
relevant universe of small entities in a given industry.\7\ The H-2B 
employers that the commenters cite are already captured by these 
numbers, as the determination of the number of small entities affected 
by the Wage Rule neither accounted for, nor was affected by, the 
original January 1, 2012 effective date of the Wage Rule. We do not 
dispute that as a result of the Wage Rule, employers may in the short 
term experience an increase in costs, but the increase in total costs 
of the H-2B program as a result of the Wage Rule during the first year 
of its implementation and annually thereafter would be the same, 
regardless of whether it goes into effect October 1, 2011 or January 1, 
2012. Therefore, the RFA analysis in the Wage Rule continues to be an 
accurate analysis of the impact of the Wage Rule on small businesses 
and would remain unaffected by the change in the effective date of the 
Wage Rule.
---------------------------------------------------------------------------

    \5\ 76 FR 3452, 3475 (Jan. 19, 2011).
    \6\ See id. at 3476.
    \7\ Id.
---------------------------------------------------------------------------

    The Chief Counsel, Office of Advocacy, SBA, also stated that 
``[t]here is nothing cited in the Proposed Rule that negates the 
agency's previous concern noted in the Wage Rule about the impact of 
the wage modification on small businesses, other than a court order 
mandating a new effective date,'' a sentiment that was echoed by a 
number of associations. However, the Chief Counsel is mistaken, as the 
NPRM clearly states that the need for the rulemaking arose from the 
CATA litigation under which the court specifically found that we 
violated the INA in considering hardship to employers (regardless of 
size) when deciding to delay the effective date. We do not dispute the 
Chief Counsel's observations that ``[s]mall businesses have made plans, 
commitments, and have expended money for the current year based on the 
January 1, 2012, effective date announced in the Wage Rule nearly six 
months ago'' but, as we discussed in the Wage Rule's RFA analysis, the 
rule does not impact a significant number of small businesses. 
Moreover, the court in CATA has explicitly prohibited us from 
considering these employer hardships when setting the effective date of 
the Wage Rule. Additionally, as we have explained above, we continue to 
rely on the total cost burden provided in the Wage Rule's RFA analysis, 
as it is not impacted by the change in the effective date of the Wage 
Rule.

C. Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 
1531) directs agencies to assess the effects of Federal regulatory 
actions on State, local, and tribal governments, and the private 
sector. The Final Rule has no Federal mandate, which is defined in 2 
U.S.C. 658(6) to include either a ``Federal intergovernmental mandate'' 
or a ``Federal private sector mandate.'' A Federal mandate is any 
provision in a regulation that imposes an enforceable duty upon State, 
local, or tribal governments, or imposes a duty upon the private sector 
which is not voluntary.

D. Small Business Regulatory Enforcement Fairness Act of 1996

    We have determined that this rulemaking does not impose a 
significant impact on a substantial number of small entities under the 
RFA; therefore, we are not required to produce any compliance guides 
for small entities as mandated by the SBREFA. We have similarly 
concluded that this Final Rule is not a major rule requiring review by 
the Congress under the SBREFA because it will not likely result in: (1) 
An annual effect on the economy of $100 million or more; (2) a major 
increase in costs or prices for consumers, individual industries, 
Federal, State or local government agencies, or geographic regions; or 
(3) significant adverse effects on competition, employment, investment, 
productivity, innovation, or on the ability of U.S.-based enterprises 
to compete with foreign-based enterprises in domestic or export 
markets. We received two comments that suggested that the earlier 
effective date of the Wage Rule would exacerbate the already negative 
impact that higher wages resulting from the Wage Rule would have on 
competition, employment, and investment and, in particular, the crab 
meat processing industry, as cheaper foreign crabmeat will completely 
displace domestically produced crabmeat in local markets. Another 
employer echoed this concern for the manufacturing industry in general, 
stating that the change in effective date would result in job losses 
either because the company fails or moves its operations outside the 
U.S.
    The only data offered by one of the commenters in support of these 
statements is an undated study on Maryland's crabmeat processing 
industry.\8\ This study not only appears to challenge the underlying 
merits of the Wage Rule, which would make it out of scope for purposes 
of this rulemaking, but also is premised on the assumption that 
absolutely no U.S. workers would be willing to work in any positions 
formerly held by H-2B workers, thereby resulting in major job losses in 
Maryland's crabmeat processing industry and in the loss of related jobs 
affected by the crabmeat processing industry. Given that the increase 
in wages not only would ensure against adverse effect but may also have 
the effect of causing U.S. workers to become more interested in these 
jobs, the study's assumption that no U.S. workers would ever replace 
the H-2B workers is fundamentally flawed. Therefore, neither of these 
commenters makes a sufficient case that changing the effective date of 
the Wage Rule would result in significant adverse effects on 
competition, employment, investment, productivity, innovation, or on 
the ability of U.S.-based enterprises to compete with foreign-based 
enterprises in domestic or export markets.
---------------------------------------------------------------------------

    \8\ Lipton, Douglas D. Analysis of Economic Impact of H-2B 
Worker Program on Maryland's Economy.
---------------------------------------------------------------------------

E. Executive Order 13132--Federalism

    We have reviewed this Final Rule in accordance with E.O. 13132 on 
federalism and have determined that it does not have federalism 
implications. The Final Rule does not have substantial direct effects 
on States, on the relationship between the States, or on the 
distribution of power and

[[Page 45673]]

responsibilities among the various levels of government as described by 
E.O. 13132. Therefore, we have determined that this Final Rule will not 
have a sufficient federalism implication to warrant the preparation of 
a summary impact statement.

F. Executive Order 13175--Indian Tribal Governments

    We reviewed this Final Rule under the terms of E.O. 13175 and 
determined it not to have tribal implications. The Final Rule does not 
have substantial direct effects on one or more Indian tribes, on the 
relationship between the Federal Government and Indian tribes, or on 
the distribution of power and responsibilities between the Federal 
Government and Indian tribes. As a result, no tribal summary impact 
statement has been prepared.

G. Assessment of Federal Regulations and Policies on Families

    Section 654 of the Treasury and General Government Appropriations 
Act, enacted as part of the Omnibus Consolidated and Emergency 
Supplemental Appropriations Act of 1999 (Pub. L. 105-277, 112 Stat. 
2681) requires us to assess the impact of this Final Rule on family 
well-being. A rule that is determined to have a negative effect on 
families must be supported with an adequate rationale. We have assessed 
this Final Rule and determined that it will not have a negative effect 
on families.

H. Executive Order 12630--Government Actions and Interference With 
Constitutionally Protected Property Rights

    The Final Rule is not subject to E.O. 12630, Governmental Actions 
and Interference with Constitutionally Protected Property Rights, 
because it does not involve implementation of a policy with takings 
implications.

I. Executive Order 12988--Civil Justice

    The Final Rule has been drafted and reviewed in accordance with 
E.O. 12988, Civil Justice Reform, and will not unduly burden the 
Federal court system. The Department has developed the Final Rule to 
minimize litigation and provide a clear legal standard for affected 
conduct, and has reviewed the Final Rule carefully to eliminate 
drafting errors and ambiguities.

J. Plain Language

    We drafted this Final Rule in plain language.

K. Paperwork Reduction Act

    As part of our continuing effort to reduce paperwork and respondent 
burden, we conduct a preclearance consultation program to provide the 
general public and Federal agencies with an opportunity to comment on 
proposed and continuing collections of information in accordance with 
the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3506(c)(2)(A)). 
This process helps to ensure that the public understands the collection 
instructions; that respondents provide requested data in the desired 
format; that reporting burden (time and financial resources) is 
minimized; that collection instruments are clearly understood; and that 
we properly assess the impact of collection requirements on 
respondents.
    The PRA requires all Federal agencies to analyze proposed 
regulations for potential time burdens on the regulated community 
created by provisions within the proposed regulations that require the 
submission of information. These information collection (IC) 
requirements must be submitted to the OMB for approval. Persons are not 
required to respond to a collection of information unless it displays a 
currently valid OMB control number as required in 5 CFR 1320.11(l) or 
it is exempt from the PRA.
    The majority of the IC requirements for the current H-2B program 
are approved under OMB control number 1205-0466 (which includes ETA 
Form 9141 and ETA Form 9142). There are no burden adjustments that need 
to be made to the analysis. For an additional explanation of how we 
calculated the burden hours and related costs, the PRA package for 
information collection OMB control number 1205-0466 may be obtained at 
https://www.RegInfo.gov.

IV. Change of Effective Date of Wage Rule

    In the final rule published January 19, 2011, 76 FR 3452, under the 
DATES section, the effective date of the final rule is amended to read 
as follows:
    This final rule is effective September 30, 2011.

    Signed in Washington, this 26th day of July 2011.
Jane Oates,
Assistant Secretary, Employment and Training Administration.
[FR Doc. 2011-19319 Filed 7-29-11; 8:45 am]
BILLING CODE 4510-FP-P