IT industry body Nasscom on Wednesday welcomed a US court's order blocking two rules around H-1B regulations, saying the move recognises the importance of the high-skill visa programs and will help US businesses access critical talent. On December 1, 2020, Judge Jeffrey White of the US District Court for the Northern District of California issued an order blocking two Interim Final Rules (IFRs) on H-1B regulations proposed by the Departments of Labor and Homeland Security to restrict the ability of US companies to hire foreign-born employees on H-1B visas.
The Department of Homeland Security (DHS) Interim Final Rule was set to go into effect December 7, 2020, but will not as a result of this ruling, Nasscom said in a statement. The Department of Labor (DOL) IFR went into effect on October 8, 2020, and is now no longer in effect, Nasscom said adding that this decision effectively enjoins DOL and DHS from further implementing the rules unless an appeals court finds otherwise.
"We welcome the court decision that clearly recognises the importance of the high-skill visa programs to the US; and that the IFRs issued previously did not hold legal statute. Nasscom believes this will help US businesses access talent critical to the economic recovery phase in the post-COVID world," it said. The industry body noted that the DOL IFR changed the manner in which the DOL calculates prevailing wage rates and adjusted the prevailing wage percentiles for Levels I and IV upward.
The DHS IFR concurrently made a number of changes to the H-1B visa program, including revisions to the regulatory definitions of "specialty occupation" and the employer-employee relationship and reductions to the validity period for H-1B workers employed at third party job sites from three years to one year. "In his ruling, Judge White found that the US Departments of Labor and Homeland Security had violated the Administrative Procedures Act (APA) when issuing two new regulations as IFRs and denying the public the opportunity to provide comment," Nasscom pointed out.
The Court's decision hinged on whether the US government demonstrated that the impact of the COVID-19 on domestic unemployment justified dispensing with the "due deliberation" that normally accompanies rule making to make changes to the H-1B visa program, it added. The Court concluded, however, that the US government did not show good cause to excuse notice and comment procedures.
Specifically, the Court held that the evidence did not support the US government's assertion that the ongoing impact of the pandemic on the domestic labour market made it "impracticable" to allow for notice and comment before it issued the Rules, Nasscom said in its statement. The industry body said it had submitted comments on behalf of thousands of its member companies, objecting to the IFRs on both procedural and substantive grounds.
"We viewed the rule as unjustified and had sought for rescinding the IFR's in its entirety, given the significant harm it would do to American businesses, American workers, and to the United States' economy as a whole. It clearly was not supported by statute or procedure," Nasscom said. permit public review and comment, DOL did not receive stakeholder input that would have pointed out the flaws in the new calculations for wage rate determinations, and the reliance interests affected by the sudden imposition of this IFR, it noted.
Nasscom emphasised that multiple studies have demonstrated that the H-1B program plays an essential role in helping American enterprises secure skill sets that they cannot find locally and that these high-skilled employees provide tremendous benefit to their employers and the US as a whole. Even during the height of the unemployment spike this year created by the COVID-19 pandemic, unemployment in the IT sector remained extremely low going from 3 per cent in January 2020 to 3.5 per cent in September 2020, it added.
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