Guest Workers Spur Debate

As the construction trades continue to bounce back from the severe recession and overhang of the housing market downturn, the U.S. Department of Labor (DOL) and business groups have been waging an important but overlooked battle over the future of the H-2B non-agricultural guest worker visa program.

On Feb. 10, 2012, the DOL’s Employment and Training Administration and Wage and Hour Division announced that it would issue a new regulation requiring employers that import foreign guest workers for seasonal positions to make a greater effort to recruit U.S. workers. Since then, the rule has become a hot button issue in both the federal courts and Congress. On April 23, a federal district court in Florida issued a temporary injunction against the implementation of the new regulation. Five companies, along with trade groups in the landscaping and forestry industries and the U.S. Chamber of Commerce, challenged the regulation on largely procedural grounds.

On June 14, 2012, a Senate Committee approved an appropriations bill amendment that, if passed, would effectively prevent the DOL from implementing the new regulation. The district court’s ruling remains on appeal, and the Senate bill is mired in the stalled budget process.

The H-2B guest worker visa program allows employers to hire non-skilled seasonal foreign workers, usually for less than a year, to come to the United States for non-agriculture jobs. Although demand for foreign workers in the construction industry has slowed along with the economy, the annual cap of 66,000 new visas has proven woefully inadequate. Many seasonal businesses, including food processors, municipalities, parks, hotels, resorts and landscaping companies compete with the construction industry for H-2B visas to fill seasonal needs. The H-2B visa program is one of the only foreign guest worker programs available to the construction industry. The DOL’s revised regulation would have a significant impact on the H-2B program.

Under the regulation proposed by the DOL, employers would follow stricter guidelines in an attempt to ensure that qualified U.S. workers are truly unavailable for jobs. The new regulations create a nationwide online registry where employers must post all potential H-2B jobs, and for longer periods. Under the current regulations, employers have no central registry and need only post jobs for ten days as early as four months before their start dates. Under the new requirements, employers must recruit and hire qualified domestic workers until 21 days before the job start date. The long posting period necessarily complicates employers’ abilities to recruit and transport sufficient numbers of foreign workers in advance of a project.

The DOL also proposed ending the current practice of allowing employers to self-certify that they had searched unsuccessfully for U.S. workers. The revised regulation requires employers to consult formally with their state workforce development agencies to oversee and document those recruitment efforts before the start of an H-2B contract. Employers would also be required to make any jobs available to U.S. workers they previously employed in those positions before seeking foreign workers under an H-2B contract. This new model injects additional bureaucracy and costs in H2-B contracts for construction industry employers.

In addition, the DOL included other provisions that appear to give unions some new leverage. Under both the current and proposed rule, employers of H-2B workers must offer 100 percent of the prevailing wage and must test the U.S. labor market to determine if there are sufficient numbers of qualified U.S. workers. Under the DOL’s new approach, though, in occupations that are customarily unionized like the construction trades, even if an employer is not a signatory to a collective bargaining agreement, the rule facilitates consultation with unions regarding wage levels and terms and conditions of employment for the vacancies.

Mixed Reactions

Reactions to the new regulation have been mixed. The potential wage increases and compliance costs under the rule led the Associated Builders and Contractors to lobby Congress to block the rule, saying that the DOL had “issued a rule that would have tremendously increased labor cost for employers that use this program that far exceeds rational economic levels.” On the other hand, the AFL-CIO’s Building and Construction Trades Department has called the Senate bill “outrageous” and claims that without the new rule, employers will use the existing H-2B program “to do construction work at below prevailing wages, thereby undercutting local standards.”

The news is not all bad for H-2B workers or the construction firms that hire them. The new regulations provide significant protections for H2-B guest workers, while potentially increasing costs for some employers. The DOL previously required employers to pay return travel expenses for guest workers only when the employer dismissed them before the end of the contract period. Employers must also pay those transportation costs after the worker completes at least half of the contract period or completes the contracted job, regardless of the length of time. Employers must also guarantee to employ the guest workers for at least three quarters of the workdays covered by the H-2B contract. The DOL has stated publicly that its goal is to eliminate foreign recruiter “middlemen” who often saddle migrant guest workers with heavy debts before they even arrive in the United States. Organizations including the Migrant Farmwork Justice Project and the National Guest Worker Alliance have hailed the proposed rule’s protections, which they say would make it more difficult for unscrupulous employers to exploit foreign migrants.

The regulation also broadened the definition of a “violation,” making multiple violations — and multiple fines up to $10,000 — easier to levy. The new rule addresses only the H-2B workers brought to the United States under visas that were approved by the DOL. They do not cover the workers imported under the State Department’s J-1 visa program.

The DOL published the full, 575-page rule in the Federal Register on Feb. 21. It also has posted a comparison with the current regulations, as well as a summary and other explanatory materials for employers on its website. Construction and construction-related firms also should continue to monitor the progress of the DOL’s appeal, as well as any legislative action in the Senate in the run-up to the November elections.

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