ITServe Alliance first to go against Trump administration on H-1B wage hikes

Ritu Jha-

A consortium of one of the largest Information Technology mid-size companies in the United States has filed a lawsuit against the US Department of Labor (DoL) calling the new H-1B wage increase interim final rule (IFR) an arbitrary, capricious, and a political gimmick.

Amar Varda

Dallas based ITServe Alliance, Inc. is a nonprofit trade organization that has over 1250 IT companies as its members mainly owned by people of Indian origin filed a lawsuit in the New Jersey district court challenging DoL’s IFR. ITServe’s complaint alleges that not only the DoL’s wage calculations in this IFR are severely flawed but it causes irreparable harm to the American employers as well the overall economy.

Amar Varda, President ITServe told indica News after filing the case it’s a team effort. “We are confident that we will win our litigation. Their wage calculation is wrong and there is no emergency to circumvent the rulemaking process.”


DoL on October 6 issued an IFR to arbitrarily increase the ‘prevailing wages’ to hire H-1B employees. It stated.that the existing wage methodology leads to potential abuses of H-1B visa programs that in some cases undermine the wages and job opportunities of US workers.


These harms are exacerbated by the recent effects of the coronavirus public health emergency on the US labor market, and require immediate corrective action, according to the administration.


But Varda and the members of ITServe deny what Dol says, instead, they view the new rule that went into effect Oct 8, 2020, is designed to make it much more expensive to hire H-1B holders as well as to ‘punish’ those employers that rely on H-1B talent. By issuing this IFR DOL is not only circumventing the legislative process of Congress but also their own normal rulemaking process.


Varda says it’s not a coincidence that DoL issued such IFRs just four weeks away from the election. “They are trying if this could caste any advantage to them,” he said. We are first to file the case and we are going to file an injunction on Monday so that they can put a hold on new DOL wages.”


When asked who would be impacted the most, Varda said employees seeking extension and amendments is a big problem at this time. The main thing is companies cannot afford to pay.


“ And we had no other option left either we shut down the business or fight the case, “ said Varda and added many new IT firms have joined as members after Oct 6 ruling. “IT Serve has come to the voice of the industry and if there is an injunction on the case, then all ITserve members will be benefited.”


He said if you look at the data from the Bureau of Labor Statistics, the general unemployment rate in the United States for all occupations reached 15 percent in April 2020. However, the unemployment rate for computer occupations during that timeframe was only 2.8 percent.


Varda fears the IFR is going to drive hundreds of thousands of jobs to off-shore markets. Will leave no option but to let go of employees seeking visa renewal because DOL’s IFR raises the required prevailing wages to over 80% in some cases, overnight.


This haphazard and baseless rulemaking will hurt thousands of small and medium IT businesses. Instead of helping with job creation and economic growth in the middle of pandemic and recession, these agencies are hurting the small businesses that are at the forefront of rebuilding the economy”.


Pointing to ITServe landmark victory in a case earlier this year in which the presiding DC court judge ruled that the DHS violated the law by adjudicating H-1 applications based on internally created ‘memos’ rather than following legislative guidelines, Varda said now they found their own loophole and try to undermine IT companies. Indirectly they are coming with short-term approvals, itinerary requirements, and supervisory requirements. DHS then rescinded several memos that have put in practice for nearly ten (10) years. Instead of going through the legislation, DHS and DOL now have released IFRs to undo the judge’s decision through their own rulemaking.