Last week Federal Judge Frederick Motz dismissed all claims against 65 Maryland companies, most of which were landscape related businesses. The employers were named in a class action brought by H-2B visa guest workers regarding their ability to receive supplemental prevailing wages. Claims against the Department of Labor were also dismissed.
In March 2013, a court ordered DOL to stop using their current prevailing wage determination formula and gave DOL 30 days to come up with an alternative. DOL issued an Interim Final Rule (“IFR”) with a new formula. DOL then applied the new formula retroactively to prevailing wage determinations that it had already issued. For large numbers of H-2B employers, this meant a significant, unplanned increase in their wage obligations.
On December 3, 2013, the Department of Labor’s Board of Alien Labor Certification Appeals (“BALCA”) ruled that DOL’s H-2B prevailing wage regulation does not allow DOL to unilaterally raise prevailing wage rates mid-season. It therefore ordered DOL to set aside the supplemental prevailing wage determinations that DOL issued to all employers who had appealed.
The case sets an important precedent for seasonal employers who depend on the H-2B guest worker programs. These businesses play by the rules, provide compensation that is set at the prevailing wage, and make workforce decisions according to a budget based on prevailing wage rates. To change those rates mid-season and then try to retroactively force employers to use the new pay rates makes no sense, a sentiment expressed by BALCA and reinforced in Judge Motz’s decision.
