WASHINGTON – A group of information technology companies filed a lawsuit on Friday night to challenge a Trump administration rule that increases the salaries that employers must pay to their foreign workers on H-1B visas, in order to strengthen eligibility for visas.
Last week, the Trump administration launched the long-awaited revision of the H-1B visa program for highly skilled workers, a program highly regarded by US high-tech companies and other employers.
A piece of that revamp published by the Department of Labor went into effect last Thursday, bypassing the usual public comment period. The departmental rule significantly increases the minimum wages companies are required to pay their H-1B employees.
The lawsuit by ITServe Alliance, a commercial group representing information companies, was filed against the United States District Court Department in New Jersey.
“Without giving notice and without giving plaintiffs or the general public an opportunity to comment, the Department of Labor has drastically changed the way it calculates prevailing wage rates for the H-1
The lawsuit argues that the Trump administration has cut corners by enacting the rule on an emergency basis, rather than conducting a full analysis of its impact on current visa holders and the economy, and incorporating potential changes based on public feedback.
The Labor Department did not immediately respond to a request for comment.
Separate lawsuits are expected next week against another set of rules, enacted by the Department of Homeland Security. These rules restrict eligibility for an H-1B visa and shorten its duration for some contract workers. This rule will take effect in December.
Under the Department of Labor’s new wage requirements, which are based on surveys of wages in the profession and locality, companies would be required to pay entry-level workers at the 45th percentile, compared to the current requirement that they should be paid at least at the 17th percentile. Tier one employees, who are currently required to receive a 67th percentile salary, should be paid at the 95th percentile.
An entry-level electrical engineer in San Jose, California, for example, would be paid at least $ 127,042, compared with $ 88,712 before the new rule went into effect, according to data from the Department of Labor.
The new rule has likely affected only a small subset of H-1B holders so far, only those who are in the early stages of submitting renewal applications. If it were to remain in place, however, it could have too much impact on smaller companies like tech startups that have limited liquidity to pay the higher wages.
Write to Michelle Hackman at Michelle.Hackman@wsj.com
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