Third Circuit Rules That H-2B Regulation on Minimum Wage Is Valid

The U.S. Court of Appeals for the Third Circuit ruled February 5, 2014, that a Department of Labor (DOL) regulation on the minimum wage required under the H-2B temporary worker visa program was validly promulgated.

The appellants were a group of associations representing employers in nonagricultural industries. Joining them was another group of individuals and organizations representing foreign and U.S. workers affected by the H-2B program who had successfully challenged a predecessor to the current regulation. The appellants argued that the DOL exceeded its authority by enacting the regulation, which governs the calculation of the minimum wage a U.S. employer must offer to recruit foreign workers under the H-2B program. The employers stood to face higher labor costs as a result of the regulation. The District Court granted summary judgment for the DOL and its codefendants (the Secretary of Labor, the Department of Homeland Security (DHS), and the Secretary of Homeland Security).

Among other things, the court noted that the DOL is not required to consider employer hardship but instead must balance the interests of ensuring an adequate labor force with protecting the jobs of U.S. workers. The court also disagreed with appellants’ contention that the DOL must use a four-tier wage methodology from the H-1B program as the prevailing wage calculation mechanism in the H-2B program. The court found the actions of the DOL and DHS reasonable with respect to application of their respective authorities regarding the H-2B program and what constitutes permissible consultation between agencies. The court also noted that the DOL promulgated the wage rule after “reasoned analysis,” which is required. The court noted that the DOL had discussed the 300 comments submitted in an entire section of the final rule.

The related regulations and litigation have a complicated history that is summarized in the Third Circuit’s decision. Among other things, the effective date of the 2011 regulation was moved forward and backward, and its implementation was defunded by Congress. As a result, the DOL fell back on an earlier 2008 rule that a district court had found procedurally invalid. That court had ordered the DOL to vacate the earlier rule and come into compliance. The DOL issued a final interim rule in April 2013, effective immediately, which made some changes to the 2011 rule. Congress later lifted the appropriations ban on the 2011 rule as of January 17, 2014.

The regulation recently declared valid by the Third Circuit was published at 76 Fed. Reg. 3452 (Jan. 19, 2011) (20 C.F.R. § 655.10). The decision, Louisiana Forestry Association v. Secretary of Labor, is as PDF. Additional litigation continues regarding whether the DOL has the authority to issue supplemental prevailing wage determinations under the 2013 interim final rule.