Pro-American Worker H-1B Rules Challenged in Court

Business lobbying groups, universities, and technology associations launched lawsuits against the Trump administration’s recent H-1B reforms. These groups – including the U.S. Chamber of Commerce, National Association of Manufacturers, and ITServe Alliance – allege that the recent federal rules reforming the H-1B guestworker program will harm businesses and hurt the American economy. Among other things, the rule changes will raise the cost of hiring an H-1B worker by about 30 percent – thereby eliminating the incentive for employers to hire a cheaper foreign guestworker instead of an American.

The new rules come from the Department of Homeland Security (DHS) and the Department of Labor (DOL). DOL’s rule changes the way that the department sets wage levels for H-1B workers, who for decades earned significantly less than Americans in the same line of work, thereby giving employers an enormous incentive to hire foreigners instead of Americans. The DHS rule gives the agency new tools to enforce existing laws and monitor worksites and employers that abuse the H-1B program in order to avoid hiring American workers.

The first lawsuit is ITServe Alliance v. Scalia (Case No. 3:20-cv-14604), filed in the U.S. District Court for New Jersey. ITServe Alliance sued DOL over its decision to change the way it calculates prevailing wage rates. Employers use those rates to determine how much H-1B workers are paid. Those rates are often well below the actual rates that an American would earn performing the same job. ITServe Alliance’s complaint reads, “the Department of Labor dramatically altered the manner in which it calculates prevailing wage rates for the H-1B program… the Department of Labor made those exponentially higher wage rates effective immediately on October 8, 2020, without prior notice.” In plain English, ITServe Alliance sued DOL so their members don’t have to pay foreign guestworkers higher wages.

The second lawsuit is Chamber of Commerce v. Wolf (Case No. 20-CV-7331). The plaintiffs include the U.S. Chamber of Commerce, National Retail Federation, National Association of Manufacturers, Cornell University, University of Southern California, and others. This lawsuit charges that the Trump administration “tried to use the COVID-19 pandemic as pretext to fundamentally disrupt high-skilled immigration.” In addition to claiming financial hardship from the decision, the plaintiffs argue that the administration did not follow the Administrative Procedure Act (APA). Failure to follow the APA doomed other administration attempts to curtail bad immigration policies and programs. In June 2020, the Supreme Court struck down President Trump’s attempt to end the Deferred Action for Childhood Arrivals (DACA) program because of the administration’s supposed failure to follow the APA.

These lawsuits reflect a dark reality that big business and higher education do not care about American workers. If they did, why would they file lawsuits in a desperate attempt to keep H-1B wages cheap? If successful, these lawsuits will roll back important, FAIR-supported changes to the H-1B program that the Trump administration pursued to protect American workers.

FAIR will continue to monitor both ITServe Alliance v. Scalia and Chamber of Commerce v. Wolf as they make their way through the courts.