First of Many Lawsuits Launched against DOL’s Wage Level Hikes

By: Rachel Horner

The federal court in New Jersey is now home to a significant new lawsuit, entitled ITServe Alliance, Inc. v. Scalia, regarding the recent changes to the H-1B program. Filed by ITServe Alliance, Inc., the lawsuit challenges the Department of Labor’s interim final rule, “Strengthening Wage Protections for the Temporary and Permanent Employment of Certain Aliens in the United States.” The IFR was published October 8, just days after the DOL announced its proposal of the rule. The rule raises the wages of H-1B workers by up to 40% (you can read more about the rule here).

ITServe claims that both the reasoning behind the rule and the manner in which it was published are incorrect.

For one, the lawsuit states that the DOL is relying on incorrect data. After looking at research conducted by the National Foundation of American Policy on DOL wage data, ITServe’s lawyers were able to conclude that the new wage system would force employers to pay H-1B employees salaries significantly higher than the market wage. The new wage levels bear little resemblance to the real salaries most employers actually pay.

The lawsuit further states the rule was published “without providing prior notice and without affording plaintiffs or the general public an opportunity to comment.” The DOL has tried to justify the move, arguing that the economic emergency caused by COVID-19 necessitated the IFR ruling.

But many, including ITServe Alliance, believe that the IFR ruling was the wrong way to go about the issue. A spokesperson for the group commented that “There is no basis for this IFR to be issued. Not only the underlying argument is severely flawed but also the timing is obvious. This is merely a stunt to get political sound bites of the day at the expense of American businesses and the economy.”

The lawsuit is only the first step in getting the IFR removed. The rule itself would need to be banned by a judge in order to officially stop its enforcement, as seen in a previous case made by a California judge who denied the Trump Administration’s ban on certain visas. This and other events suggest that the rule may not be enforced for long. Earlier this year, ITServe Alliance won a similar case, where the courts ruled that DHS must adjudicate H-1 applications based on legal guidelines, outlawing the practice of relying on internal “memos” for adjudication guidance.

The IFR is expected to face more challenges in court in the near future.