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Federal Register / Vol. 86, No. 91 / Thursday, May 13, 2021 / Rules and Regulations
4. Implementing, Instead of Delaying, the Rule as the Department Conducts Its Review
a. Impact of Not Delaying the Rule on Academic Institutions and International Students
Many commenters supporting the proposed delay noted the harm that immediate implementation of the Final Rule could cause stakeholders.
According to several individual commenters, stakeholders who would benefit from the proposal include 1
prospective or current H1B applicants planning their careers or career transitions; 2 recent university graduates or students close to completing their education who will soon enter the labor market; and 3
employers such as academic institutions and entities in other industries who would otherwise need to adjust their hiring practices or staffing models in response to the Final Rule. Commenters explained that a delay is needed because of inaccuracies with the computation of wage levels in the Final Rule, because the rule did not properly consider the impact on certain industries or types of workers, and because the rule will not have its intended impact. Commenters also stated that a delay is necessary as the U.S. economy is still recovering from the impact of the COVID19 pandemic and employers need time to adjust to the salary fluctuations caused by the rule should it be implemented.
According to these commenters, if the Final Rule went into effect now, it would be harmful to employers and workers in various industries. The comments discussed in this section further highlight potential substantive errors with the underlying rulemaking and the harmful impact of these errors on the regulated community should the Final Rule go into effect, especially now. The concerns raised in the comments discussed below support the Department adopting its proposed delay of the rule, rather than allowing it to take effect, while the Department conducts its review and considers additional action. Even if some of the concerns raised below could be alleviated or eliminated as a result of the rules transition provisions, the procedural and substantive concerns discussed above remain, calling into question the appropriateness of the wage rates established in the Final Rule, including the transition rates, and support the Departments decision to delay implementation of a potentially procedurally and substantively flawed rule before it takes effect.

Many commenters supported delaying the Final Rule on the basis that immediate implementation of the rule would potentially cause harm to academic institutions and international students. Two academic institutions provided an overview of how H1B
workers enrich their campuses, serving as faculty members, researchers, scholars, medical residents and fellows, and professional staff. Commenters stated that academic institutions, research institutions, and non-profit organizations would not be able to meet the prevailing wage requirements in the rule to retain the requisite talent should it be implemented immediately. For example, an academic institution explained that for some of its positions, immediate implementation of the rule would result in a required wage increase of more than $40,000 annually per employee. Such increases, according to the commenter, would be challenging economically and academically, particularly in light of budget pressures caused by the pandemic. The commenter expressed support for delaying the effective and transition dates of the flawed rulerather than allowing it to go into effectso as to minimize confusion and unnecessary complications during the Departments review and consideration of additional action. Commenters also noted it will be difficult for U.S. colleges and universities to attract and retain international students because the rule, by setting entry-level wages too high, will damage new graduates employment prospects and discourage talented foreign students or workers from coming to the United States to study or work. Commenters explained that the proposed delay will allow H1B workers, new graduates, and prospective H1B workers and their employers time to adjust to the rule should the Department implement it after its review The Department appreciates that the comments provided practical information related to potential impacts of the rule on academic institutions, international students, and other individual commenters. The Department is taking a comprehensive look at the rules impact on the regulated community and may take additional action as necessary after it completes its review.

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b. Impact of Not Delaying the Rule on Workers Many commenters supporting the delay stated the Final Rule was flawed or would not achieve its intended objectives to revise prevailing wage levels and would adversely affect workers instead. The commenters recommended that the Department take additional time to assess the rule and design a more effective rule to serve its intended purpose, including an assessment of the appropriate point in the OES wage distribution at which to establish the entry-level wage under the four-tiered wage structure. For example, an employer expressed concern that the 35th percentile for Level I wages is too high and does not accurately reflect the wage of entry-level workers because the 35th percentile is usually given to candidates with a masters degree and two to three years of relevant work experience, whereas the minimum requirement for a H1B visa is a bachelors degree. Similarly, other commenters argued that the Final Rules Level IV wage was set too high, even for workers with many years of experience, and that the rule would diminish the pool of skilled laborers in the United States. A commenter supported the delay to allow the Department time to adjust the wage levels to a more reasonable percentile. Another commenter elaborated on potential adverse effects that workers would experience by explaining that without the delay, many people who are currently applying for H1B and employment-based permanent residence will be given only a months notice before the new rule takes place, which could adversely affect a lot of people who just received job offers and are preparing to file their applications.
Several commenters warned that a sudden change to the prevailing wage levels would cause some employers to lose employees or access to talented workers, including those with skills and backgrounds in science, technology, engineering, and mathematics STEM
fields, and would exacerbate the shortage of high-level talent in certain industries, such as the technology industry. Commenters also noted immediate implementation of higher prevailing wage levels could result in layoffs or the firing of U.S. and H1B
workers, which would exacerbate the unemployment rate and harm the U.S.
economy, and potentially result in the offshoring of work by U.S. businesses. A
few individual commenters explained immediate implementation of the rule would hurt both employers and jobseekers, with some arguing that the
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