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New Federal Law on H2B Wages

6/25/2013 | Construction Blog

An emergency interim final rule issued by the US Department of Homeland Security and the US Department of Labor in April of this year has gone into effect. Under the new application, the 2008 methodology using a 4-tier wage system in determining wages for non-agricultural H2B workers is being replaced with the average wage from the Bureau of Labor Statistics Occupational Statistic Survey. The new rule permits employers to use wages calculated under the Davis-Bacon Act, but does not require that Davis-Bacon wage scales be used unless the H2B workers are working on federal construction projects. The rule also maintains the previously existing carve out that requires signatories to union collective bargaining agreements to pay the wage rates stipulated in those collective bargaining agreements.

This new rule results from a 2011 final rule that was being blocked on a continuing basis through an appropriations resolution in Congress. Until now, the initiative remained unfunded for tactical reasons. The significant change that resulted in passage is the lack of language requiring employers to pay the highest wage of the various wage options. Many argued against this because it could set wages well above market value and expand Davis-Bacon requirements beyond non-federal work.

The new rule is already in effect and enforceable and companies should act accordingly.