On its way out the door, the Trump administration’s Department of Labor (DOL) finalized a rule that increased the prevailing wage—the minimum wage—for foreign workers in the H‑1B and permanent immigration programs. The final rule updated an interim final rule effective October 2020, which, as I have previously explained, the DOL misrepresented in multiple ways. And while the wage increases are lower in the new rule than the October rule, DOL is still justifying the rule with misrepresentations. It claims in the final rule that data provided by commenters on the interim final rule support its higher wage levels, but the opposite is true.

The law requires DOL to set the prevailing wage with “at least 4 levels of wages commensurate with experience, education, and the level of supervision.” The Level 1 wage is the entry level. The level 4 wage is the “fully competent” or supervisory wage. DOL uses the Bureau of Labor Statistics’ Occupational Employment Statistics (OES) survey to identify the wage for each occupation-area combination.

The OES survey doesn’t capture information about skills, so DOL has for as long as it has used the OES survey (since 1998) created the entry level wage by averaging the bottom third of wages in the occupation in the area based on the assumption that lower wages reflect lower skilled. It then averaged the rest of the wages (top two thirds) to create the level 4 wage. The other two levels are equally distributed between the level 1 and level 4.

The level 1 wage (average of the bottom third of wages) is about the 17th percentile. DOL’s January final rule will raise the level 1 prevailing wage to the 35th percentile, which is lower than the interim final rule for October that had set it at the 45th percentile. To justify setting the wage at the 35th percentile, the final rule cited several comments that it received in the interim final rule providing private wage data for various occupations. DOL makes this comment on the data:

In general, the Department found that the annual wage data for specific jobs in specific metropolitan areas offered by commenters were clustered around percentiles in the 30s. Some annual wage data offered by commenters fell in lower percentiles, and a few fell higher in the distribution.

DOL listed wages that it received before concluding:

In sum, most of the wage data offered by commenters was for salaries paid by employers to entry-level workers in positions typically filled by H‑1B workers. While there are outliers, most of these wage observations fell between the 30th and 40th percentiles of the OES distribution.

In other words, DOL is stating that private wage data from the commenters support its rule, but that is false. Most of the wages from commenters as listed by DOL did not fall between the 30th and 40th percentiles. It is almost like these passages were written before DOL had analyzed the data that commenters provided. But Table 1 provides the entry level 1 data that DOL cited and what percentile DOL identified those wages falling in the OES data. It shows only one high end wage of the 15 ranges provided that was above the 35th percentile. The majority of the DOL-cited data points was at the 20th percentile or below.

In other words, the private wage data provided to DOL and cited by the rule are much closer to the existing prevailing wage structure than the DOL’s rule. DOL also provided a few data points for wage levels 2 and 4 (Table 2). Wage level 2 will increase from about the 34th to 53rd percentile. Yet the only two data points that DOL provides show percentiles closer to the original prevailing wage. The level 4 wage will increase from the 67th to 90th percentile, but again the only comment cited by DOL shows wages close to the original prevailing wage.

This is not DOL’s only argument for its new rule, but it is an important one nonetheless. By misrepresenting—again—wage data to support its misguided approach, DOL undermines its credibility. Courts have enjoined the October interim final rule on procedural grounds since December. Hopefully, if courts reach the substance of the final rule, they will find it wanting as well.