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The first lawsuit against the H-1B salary increase was filed in the U.S. District Court



MUMBAY: The ITServe Alliance, along with its member companies, has filed a lawsuit in the U.S. District Court against a “temporary final rule” recently issued by the U.S. Department of Labor (DOL). This rule redefined the salaries of H-1B employees at all four levels or salary levels (representing the range of skills from entry to advanced).
The plaintiffs note that under the DOL rule, wages are increased by twenty-four to fifty percent or more for computer operations where they typically work in the H-1B. Wage rates also depend on the geographical location of employment.
ITServe members, which include more than 1,400 member companies (many of which are based in Indian companies), cannot absorb, without significantly disrupting their activities, the increase in costs imposed on them under IFR. Some of them have long-term contracts with their clients, which cannot be renegotiated.
This lawsuit, which was filed on Friday, is the first to challenge the DOL rule. Other lawsuits, including those led by the American Association of Immigration Lawyers (AILA), are expected to be filed in the coming week.
As previously reported by the TOI, the Interim Final Rule (IFR), which was issued without invitation to public comment, came into force on October 8, shortly after its publication in the Federal Register. All declarations of employment (LCA) submitted on or after this date are subject to new and higher minimum wage standards. According to the DOL, the purpose of the rules is to protect jobs in America by improving the accuracy of wages paid to foreign workers.

At the same time, the US Department of Homeland Security (DHS) also issued its IFR, which narrowed the eligibility criteria for H-1B visas and reduced the validity of visas to one year in the case of outsiders. However, this rule comes into force only in early December.
The plaintiffs allege that DOL does not have the necessary factual and legal justification to refer to the exception for good reasons to avoid the necessary notification and comment procedures. The agency’s claim that H-1B employees are paid less than American employees is not supported by available economic data and empirical research and is based on erroneous considerations, the lawsuit is attached.
The lawsuit challenges DOL’s decision to set sharply higher wage rates without following the notification and comment procedures provided by the Administrative Procedure Act. The plaintiffs also challenged the new DOL wage rates as a violation of the Immigration and Citizenship Act.
“This new rule is designed to make it much more expensive to hire H-1B owners, as well as to” punish “those employers who rely on H-1B talent. By issuing this IFR, the DOL not only circumvents the legislative process of Congress, but also its own normal rule-making process. It is no coincidence that DOL and DHS issued temporary final rules just four weeks before the election, ”ITServe said in a press release.
The spokesman added: “This IFR is going to send hundreds of thousands of jobs to offshore markets. IFR DOL raises the required preferential salary to more than 80% in some cases overnight. This unsystematic and unjustified rulemaking will hurt thousands of small and medium-sized IT businesses. “Instead of helping create jobs and economic growth in a pandemic and recession, these government agencies are hurting small businesses that are at the forefront of economic recovery.”


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