H-1B wage hike: New Jersey court blow to Trump rule

RITU JHA

The ITServe Alliance was relieved after a New Jersey judge ruled in their favor December 3 by granting a preliminary injunction in its lawsuit against the H-1B wage-hike interim final rule of the Department of Labor.

The New Jersey court decision came just a day after he US District Court for the Northern District of California blocked two IFRs on H-1B regulations that significantly hiked H-1B holders’ wages and restricted the visa program.

Welcoming New Jersey US District Court Judge Stanley R Chesler’s ruling, Amar Varda, president of the Alliance, told indica News: “It’s a big relief to all ITServe members, the court has ruled again in favor of us. Though it is an injunction, we are sure that we will have judgment revoking the IFR.”

ITServe Alliance, Inc is a nonprofit trade organization based out of Dallas that has over 1,250 information technology companies as its members, mainly owned by people of Indian origin.

Jonathan Wasden, partner at Wasden Banias, LLC and attorney representing ITServe told indica News: “Yes, the hearing went well. The court agreed and ruled that the Department of Labor violated the law by not allowing comments prior to rule-making.”

Asked what to expect next, Wasden said: “The government may not enforce its new wage requirements.”

According to the court document, Judge Chesler said: “Plaintiffs’ motion for a preliminary injunction will be granted, thereby enjoining defendants from enforcing the relevant regulation against plaintiff during the pendency of this civil action, or until the Court issues a final judgment on the matter. An appropriate Order with be filed together with this Opinion.”

According to the court document, plaintiffs contended that the IFR is arbitrary and capricious.

The plaintiffs denied the reason given by Dol’s decision to raise the prevailing wage rates for H-1B workers. The department pointed to evidence that suggests that H-1B workers are often paid less than their domestic counterparts, which can then lead to domestic workers receiving lower wages or fewer job opportunities.

Plaintiff also argued that the DoL did not allow a notice and comment period before publishing the IFR, the department denied the plaintiffs, and the public in general, these important protections.

Thus, plaintiff requested the judge to grant a preliminary injunction because it will delay the effectiveness of the new regulation – it may ultimately result in the creation of a better rule, one that reflects a nuanced and intelligent decision, based on all of the relevant information made available to the Department.

The department argued that delay would have prevented it from protecting domestic workers during the Covid-19 pandemic and that a delay will allow employers to evade the new rates.

However, Judge Chesler stated that the department has not offered sufficient factual support for its conclusion that there is an emergency relating to the H-1B program, nor has it shown that its concern of regulatory evasion is reasonable in this context.

As such, the Court finds that the balance of equities tip in favor of Plaintiffs, and that an injunction is in the public interest.”

The court document also shows that the New Jersey Court’s conclusion is bolstered by the in favor decision in Chamber of Commerce case which invalidated the same IFR at issue in this case for failure to provide an opportunity for advance notice and comment, based on reasoning which, in many respects, is similar to this Court’s analysis.

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