DOL Has Authority to Promulgate Rules Concerning H-2B Visa Program: Third Circuit

Practical Law Legal Update 8-557-1887 (Approx. 5 pages)

DOL Has Authority to Promulgate Rules Concerning H-2B Visa Program: Third Circuit

by Practical Law Labor & Employment

Background

On January 19, 2011, the DOL issued a new regulation governing the calculation of the minimum wage a US employer must offer to hire foreign workers under the H-2B visa program. In September 2011, the appellants, associations representing non-agricultural recruiters of H-2B workers, challenged the validity of the DOL regulation by bringing an action against the DOL, the Department of Homeland Security (DHS) and the Secretaries of those agencies.

The district court granted summary judgment for the DOL, the DHS, and the Secretaries of those agencies, finding that the DHS decision to adopt the DOL labor certification was entitled to deference under Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984). The appellants appealed to the Third Circuit.

Outcome

The Third Circuit affirmed the judgment of the district court, holding that:

The DOL has the authority to promulgate rules regarding the H-2B visa program.
The 2011 regulation governing the calculation of the minimum wage a US employer must offer to hire foreign workers under the H-2B visa program was validly implemented under that authority.

The Third Circuit found that it was appropriate to apply Chevron deference to the DHS decision to delegate rulemaking authority to the DOL for the H-2B visa program. Explaining the two-part Chevron deference test, the Third Circuit stated that the administrative implementation of a statutory provision qualifies for Chevron deference when it:

Appears that Congress delegated authority to the agency generally to make rules carrying the force of law.
The agency interpretation claiming deference was promulgated in the exercise of that authority.

Applying this test to the DHS delegation in the H-2B program, the Third Circuit found that:

Congress did not specify which agencies the DHS should consult with to determine the validity of H-2B petitions. This is unlike the H-2A visa program, which Congress specified must include consultation with the DOL and the Department of Agriculture. Congress's silence with respect to the H-2B program suggests that the DHS has discretion to fill the consequent statutory gap.
Generally, an agency may not subdelegate its authority to an outside entity absent express authorization by Congress. However, the DHS's actions regarding the H-2B program were not a delegation of authority. The DHS regulation designating the DOL as the agency from which it seeks "advice" in determining whether to grant H–2B visa petitions instead requires H-2B employers to obtain temporary labor certification from the DOL to certify:
- whether there are US workers capable of performing the job in question; and
- the impact of the alien's employment on US workers.
(8 C.F.R. § 214.2(h)(6)(iii).)
By adopting regulations that give the DOL discretion to issue limited rules governing certification, the DHS retains its broader authority to evaluate the specific "question of importing any alien" under the H-2B visa program. Therefore, the DHS does not subdelegate its authority to the DOL. Instead, it conditions its own authority to grant an H-2B petition on the DOL's consideration of a narrow area of interest that is within that agency's area of expertise. Accordingly, there is a reasonable connection between the DHS's determination of H-2B petitions and the DOL's decisions on temporary labor certification.

Having found that the DOL has authority to engage in rulemaking regarding the H-2B visa program, the Third Circuit next considered the appellant's argument that the DOL exceeded this rulemaking authority when it issued the 2011 regulation governing the calculation of the minimum wage a US employer must offer in order to hire foreign workers under the H-2B visa program. The Third Circuit found that the DOL:

Adequately explained the legal basis for and purpose of the 2011 regulation by thoroughly explaining the need for it and identifying its purpose.
Satisfied the requirements to consider relevant factors and provide adequate reasoned analysis in support of the rule. The DOL is not required to consider employer hardship under the statutory and regulatory framework from which its authority to issue labor certification originates.
Did not act contrary to the DHS requirement that it apply a four-tier prevailing wage system when it eliminated the four-tier scheme in the 2011 wage rule. The court found that the four-tier scheme was enacted as part of the L-1 Visa and H-1B Visa Reform Act and applies to permanent labor certification, and the H-1B, H-1B1 and E-3 visa programs (8 U.S.C. § 212(p)). The H-2B program was not mentioned at all in that Act, and is therefore omitted from its requirements.

In holding that the DOL has the authority to promulgate rules regarding the H-2B visa program, the Third Circuit acknowledges that it may be creating a split with the Eleventh Circuit. In Bayou Lawn Landscape Servs. v. Sec. of Labor, the Eleventh Circuit found that the DOL did not have rulemaking authority in the context of the H-2B visa program under the DHS's lawful conditioning of its authority to grant or deny H-2B petitions (, *16). However, the Third Circuit reasoned that this Eleventh Circuit case was a review of a preliminary injunction and not the Eleventh Circuit's final opinion on the matter.

Practical Implications

US employers that recruit foreign workers under the H-2B visa program should be aware that, under this decision, the 2011 regulation governing the calculation of the minimum wage a US employer must offer was validly promulgated by the DOL. There is a likelihood that certain employers that recruit H-2B workers may face higher labor costs as a result of this regulation. Employers should also be advised that, under this decision, the DOL has the authority to promulgate further rules regarding the H-2B visa program.

DOL Has Authority to Promulgate Rules Concerning H-2B Visa Program: Third Circuit | Practical Law