In March of this year, the Department of Labor issued a regulatory proposal that would fundamentally redesign the H-2B Temporary Worker Program. The H-2B program enables employers to hire foreign workers on a temporary or seasonal basis, generally up to 10 months, if sufficient numbers of U.S. workers are unavailable. Employers in the program are subjected to a host of requirements, including paying workers a government-imposed hourly wage that varies by occupation and location.
Hospitality employers located in resort and vacation areas and those with a significant seasonal aspect to their business frequently utilize H-2B workers to supplement their domestic workforce. The program is capped at 66,000 visas a year and hospitality is one of the largest industries utilizing the program, along with landscaping, forestry and construction. Traditionally, there has been intense competition for the limited number of visas, although during the recession of the past couple of years, not all of the 66,000 annual visas have been claimed.
The Department’s proposal would impose numerous burdensome and costly new requirements on employers. Among the proposed changes is a requirement that every domestic worker that performs a task that is also performed by an H-2B worker has to be paid the same wage as the H-2B worker. This one change alone will likely render the program too expensive for most employers given that the Department has already issued a Final Rule increasing the wages of H-2B workers by about 50 percent for many positions. That so-called “wage rule” is scheduled to take effect in January 2012.
In addition, the proposal requires that an employer guarantee the H-2B worker that they will be paid for at least 3/4 of the hours described on the application in each 4-week period. Thus, if the worker was hired with the expectation of working 40 hours a week, then the employer would have to pay the worker for at least 120 hours of work in each 4-week period. This requirement applies even if there is a temporary downturn in business and there is not enough work for the H-2B employee to perform. The regulatory changes also include an additional required step to the application process, which now would have to begin as much as 7 months before the workers are even needed. This will be a difficult requirement to meet for most employers who cannot forecast their labor needs that far in advance.
The Department claims that its proposed changes are intended to improve access to jobs for U.S. workers. But the H-2B program already requires employers to complete a lengthy application process that includes advertising and recruiting U.S. workers for the positions. Only after the Department of Labor “certifies” that there are insufficient U.S. workers available for the job is the employer permitted to hire from abroad.
Notably, these proposed changes would reverse many of the important reforms to the H-2B program that were put in place by the Department in 2008 and which reduced duplicative bureaucracy and improved processing times
times and predictability for employers. The Department’s latest proposal to redesign the H-2B program follows a similar effort last year in the H-2A Temporary Agriculture Worker Program. Those H-2A program changes, which added layers of bureaucracy and delays, have caused endless headaches for employers and have reportedly resulted in scores of employers abandoning the program.
It appears that H-2B employers may soon be faced with a similar fate. At the same time, however, increased government I-9 audits and state-based mandatory E-Verify means many employers will increasingly need to rely on temporary worker programs like H-2B. Unfortunately, rather than improving the operation of the program, the Department’s proposal would make it much more complex, burdensome and expensive.
The period to comment on the Department’s proposed regulatory changes ended on May 17. A number of individual hospitality employers, as well as trade associations, filed comments with the Department. Seyfarth Shaw assisted in the preparation of comments for the National Restaurant Association, click here to read. The Department is expected to issue a Final Rule later this year.