WASHINGTON – A group of information technology companies filed a lawsuit Friday night challenging the Trump administration’s rule to raise wages that employers must pay to their foreign workers on H-1B visas aimed at boosting visa rights.
Last week, the Trump administration began a long-awaited overhaul of the H-1B visa program for highly skilled workers, a program highly valued by US high-tech companies and other employers.
Part of this reconstruction, issued by the Ministry of Labor, went into effect last Thursday, bypassing the usual period of public comment. The department’s rule significantly raises the minimum wages that companies must pay to their H-1B employees.
The lawsuit was filed by the ITServe Alliance, a trading group representing information companies, against the department in the U.S. District Court in New Jersey.
“Without giving prior notice and without giving applicants or the general public the opportunity to comment, the Ministry of Labor has drastically changed the way it calculates the prevailing wage rates for the H-1
The lawsuit alleges that the Trump administration cut the corner by issuing the urgency rule instead of making a full analysis of its impact on current visa holders and the economy and including potential changes based on public feedback.
The Ministry of Labor did not immediately respond to a request for comment.
Separate lawsuits are expected immediately after next week against another set of rules issued by the Interior Ministry. These rules restrict the right to qualify for an H-1B visa and shorten its duration for certain contract workers. This rule should enter into force in December.
Under the new requirements of the Ministry of Labor for wages, which rely on studies of wages by occupation and location, companies will be required to pay employees at the 45th percentile, compared to the current obligation to pay them at least 17 percent. th percentile. Top-level employees, who currently have to receive salaries at the 67th percentile, will have to be paid at the 95th.
For example, an entry-level electrical engineer in San Jose, California, would receive at least $ 127,042, compared to $ 88,712, before the new rule went into effect, according to the Department of Labor.
So far, the new rule has probably affected only a small proportion of H-1B holders – only those in the early stages of applying for renewal. However, if it remains in place, it could have a huge impact on smaller companies, such as technology start-ups, which have limited cash to pay higher required salaries.
Write to Michelle Hackman at Michelle.Hackman@wsj.com
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