Colleges Sue Trump Administration Over H-1B Rules

Colleges joined with major business and industry groups in filing a lawsuit challenging new Trump administration rules that would narrow the eligibility requirements for H-1B skilled worker visas and increase the wages employers would have to pay visa holders.

Colleges use H-1B visas to hire international professors and researchers, and the visas are a common route international graduates of U.S. universities use to stay in the U.S. and work after completing their degrees.

Trump administration officials have framed the new rules as intended to "restore integrity" to the H-1B visa program and protect American workers. In announcing the rules two weeks ago, Kenneth T. Cuccinelli, the senior official performing the duties of the deputy secretary for the Department of Homeland Security, said he expected the changes to cut the number of petitions for H-1B visas by one-third.

“The higher education institutions have thousands of professors and research scholars on faculty pursuant to H-1B,” states a lawsuit filed Monday in U.S. District Court for the Northern District of California, one of at least two lawsuits filed by higher education institutions opposing the new rules. “Defendants’ plan to forcibly disrupt at least a third of those employment relationships, by virtue of the DHS Rule alone, will cause hospitals, universities, and employers of all shapes to lose their enormous investments in this skilled-workforce.”

The legal challenge centers around two rules, both of which are being promulgated without normal public notice-and-comment rule-making processes and one of which is already in effect.

The first rule, published by the Homeland Security Department as an interim final rule with an effective date of Dec. 7, would narrow the definition of “specialty occupations” that would be eligible for H-1Bs.

Among other changes, applicants would need a specialized degree that matches closely with the position sought rather than a more general degree. “For example, a requirement of a general engineering degree for a position of software developer would not satisfy the specific specialty requirement,” the interim final rule states.

The DHS rule also includes new restrictions on H-1B visa holders who are placed by their employers at third-party worksites.

The second rule, promulgated by the Department of Labor on Oct. 8 with immediate effect, substantially increases the wages that employers, including colleges, have to pay H-1B visa holders.

The lawsuit says that the rule would require colleges to give dramatic pay increases to current employees in order to re-up their visas, which must be renewed after three years.

“To take just one concrete example, the University of Utah, a plaintiff here, currently seeks to renew an existing H-1B employee,” the lawsuit filed in California's Northern District states. “That individual is currently paid approximately $80,000, far above the pre-rule required wage of $62,760. Under the DOL Rule, however, the University of Utah would be obligated to pay this same individual $208,000. That is untenable.”

The lawsuit also cites the situation of H-1B researchers employed by the University of Rochester's Center for RNA Biology.

"When their H-1B renewal comes due, the DOL Rule would obligate the University to increase their salaries by amounts ranging up to 127 percent, which would very likely preclude their renewal if the University is unable to make the major financial investment required to maintain the positions at the newly mandated salary levels," the lawsuit states. "The DOL Rule would thus disrupt important employment relationships and undermine critical ongoing research.”

The lawsuit describes the economic consequences of the rules as "staggering."

"Although its own data is mistaken in several important respects, DOL itself calculates that its Rule alone will result in at least $198.29 billion in costs imposed on employers over a 10-year period. This is not a wage increase designed to protect workers. It is the imposition of astronomically high wages -- increasing pre-Rule wages by 35 percent to 200 percent or more -- in order to destroy the H-1B program," the lawsuit alleges.

The plaintiffs argue that the new rules should be set aside for bypassing normal public notice-and-comment rule-making processes, arguing that the administration’s rationale for doing so -- unemployment related to the COVID-19 pandemic -- is "mere pretext." They further argue that the rules themselves are arbitrary and capricious.

Along with the Universities of Rochester and Utah, other academic entities joining the lawsuit are California Institute of Technology, Cornell University, Stanford University, the University of Southern California, as well as the Presidents Alliance on Higher Education and Immigration, a membership group representing about 500 colleges, and ARUP Laboratories, an academic lab affiliated with the University of Utah. The academic organizations joined with the U.S. Chamber of Commerce, the National Association of Manufacturers and the American Association of International Healthcare Recruitment, among other entities, in bringing the suit.

“The Presidents’ Alliance challenged these interim final rules not only because the administration procedurally short-circuited congressionally mandated public comment requirements, but also because these rules are substantially unreasonable and would cut off an important pipeline of talent, innovation and knowledge," Miriam Feldblum, the executive director of the Presidents' Alliance, said in a statement.

A number of other higher education institutions -- including Arizona State, Indiana and Purdue Universities and the Universities of Denver and Michigan -- filed a separate lawsuit in U.S. District Court for the District of Columbia seeking an injunction of the Labor Department's wage rule.

The universities argue that the new wage rules "prices the hiring of recent graduates in H-1B status out of reach for employers" and that increasing salaries for international faculty and postdoctoral scholars would drive up wages for all faculty at a time when colleges cannot afford the expense.

"Overall, the wage rate imposed by the new DOL rules creates significant barriers to engaging talent Universities need to prepare the next generation of students to solve the most complex issues facing the country and the world," that lawsuit states.

The Departments of Homeland Security and Labor did not respond to requests for comment Tuesday. In an Oct. 6 statement about the new rules, Acting Homeland Security Secretary Chad Wolf described a need to "do everything we can within the bounds of the law to make sure the American worker is put first."

“The U.S. Department of Labor is strengthening wage protections, addressing abuses in these visa programs, and ensuring American workers are not undercut by cheaper foreign labor,” U.S. Secretary of Labor Eugene Scalia said in a parallel statement Oct. 6. “These changes will strengthen our foreign worker programs and secure American workers’ opportunities for stable, good-paying jobs.”