The U.S. Department of Labor (DOL) Employment and Training Administration (ETA) Jan. 18 released a final rule that replaces the methodology for establishing wage rates for H-2B temporary workers with a system emphasizing Davis-Bacon Act wage determinations.
In August, DOL was ordered by the U.S. District Court for the Eastern District of Pennsylvania to provide the public with an opportunity to comment on the existing four-tier wage determination system, and then to establish a rule using the results. Instead of issuing a notice requesting comments,
DOL proposed a new wage methodology that would require the employer to pay the highest of the following:
- wages established under a collective bargaining agreement;
- wages established under the Davis-Bacon Act or Service Contract Act for the appropriate occupation in the area of employment; or
- the mean wage rate established by the Bureau of Labor Statistics. The new system is estimated to raise H-2B hourly wages in the construction industry by a minimum of $10.65 per hour.
Employers will be required to use the new wage rates for any work performed on or after Jan. 1, 2012.
ABC in November opposed the proposed rule due to the unscientific methodology used by the Wage and Hour division to establish Davis-Bacon Act rates that often results in inflated wages. ABC noted that using inflated H-2B wage rates would make it almost impossible for smaller businesses to absorb the cost and cited a recent study by the U.S. Small Business Administration’s Office of Advocacy that shows small businesses are already paying $10,585 per employee in annual regulatory costs.
To read the final rule, visit the DOL website.