(CN) - The Labor Department has no "rational justification" for its current rules permitting employers to set the prevailing wage rate for H-2B workers, which results in a wide wage disparity between foreign and domestic workers, a panel for the 3rd Circuit ruled.
The H-2B visa program allows employers to bring foreign workers to the U.S. to perform temporary, unskilled work. The Department of Homeland Security and the Labor Department administer the program.
Prior to filing an H-2B petition with DHS, an employer must apply for a temporary labor certification from the Secretary of Labor, confirming that no "qualified" U.S. workers are available to perform the position sought at its "prevailing wage."
Over the past three decades, the DOL has periodically changed its method for calculating prevailing wages.
The department first permitted employers in several fields to use privately funded wage surveys to set the prevailing market wage for certain occupations rather than an official Bureau of Labor Statistics survey in 2005. This initial guidance was made into a rule in 2008.
Comité de Apoyo a los Trabajadores Agrícolas and other farmworker associations challenged the rule, alleging that it permitted employers to hire foreign workers and substantially below average wages.
A federal judge invalidated the rule last year, but the DOL continued to use the invalid wage guidance because a Congressional appropriations rider currently bars the department from implementing a revised wage guidance promulgated in 2011.
The workers filed a new complaint this year due to the continuing uncertainty of how to calculate the prevailing wage. But a federal judge dismissed the suit, stating that a prospective change of the rules in 2014 made the claims unripe for court review.
The 3rd Circuit disagreed, and vacated the 2008 rules as arbitrary and capricious.
"When making a shift in policy, an agency 'must examine the relevant data and articulate a satisfactory explanation for its action including a 'rational connection between the facts found and the choice made,'" Judge Morton Greenberg said, writing for the three-judge panel.
Prior to 2005, the Labor Department did not consider employer wage surveys when determining the prevailing wage. It then changed its policy without offering any explanation of its decision.
It reversed this policy in 2011, admitting that employer surveys tended to report lower wages below the prevailing rate. Yet this change was also made without a full explanation of its new policy.
The 3rd Circuit upheld the 2011 wage guidance against an employer challenge earlier this year, but it still has not gone into effect.
"After years of litigation, DOL cannot offer any rational justification for this policy as it leads to similarly situated workers in the same market in the same season bringing home widely disparate paychecks," Greenberg wrote.
The agency's failure to consider relevant factors or respond to public comments expressing reservations about using employer surveys support plaintiff's claim that the DOL has not made a reasoned choice, the court determined.
"DOL has perpetuated a system by which employers are benefited financially by submitting private surveys to justify wages lower than the OES [Occupational Employment Statistics] wages, a practice that the interested parties in this case have well understood," the judge said.
In addition, the 2008 rules place smaller employers at a disadvantage, because they often cannot afford commissioning an expensive wage survey, according to the 39-page judgment.
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