United States | H-1B Denial Rates Up Slightly From 2022

H-1B denial rates in fiscal year 2023 increased slightly from FY 2022, according to a National Foundation for American Policy analysis of U.S. Citizenship and Immigration Services data.

Despite the increase, H-1B denial rates for FY 2023 still remain substantially lower than during the Trump administration when they peaked in FY 2018.

Fiscal Year New Employment H-1B Denial Rate
2023 3.5%
2022 2.2%
2021 4%
2020 13%
2019 21%
2018 24%
2017 13%

The low denial rate in recent years is at least in part due to legal challenges that forced USCIS to issue new guidance on the adjudication of H-1B visas in June 2020.

The NFAP analysis stated that “H-1B temporary status remains often the only practical way for an international student or other high-skilled foreign national to work long term in the United States” and said the 85,000 H-1B cap “remains the leading immigration problem for most tech companies.” The report can be read here.

For more on H-1B, visit the NLR Immigration section.

Minimizing National Labor Relations Act Liability for Employers with Non-Unionized Workforces

This post continues our consideration of comments submitted in response to proposed regulations under the Mental Health Parity and Addiction Equity Act (MHPAEA).

Under current law, if a plan provides any mental health or substance use disorder (MH/SUD) benefits in any classification of benefits, benefits for that condition or use disorder must be provided in every classification in which medical/surgical (M/S) benefits are provided. Classifications for this purpose include inpatient, in-network; inpatient, out-of-network; outpatient, in-network; outpatient, out-of-network; emergency care; and prescription drugs. The proposed regulations modify this standard by providing that a plan does not provide benefits for MH/SUD benefits in every classification in which M/S benefits are provided unless the plan provides meaningful benefits for treatment for the condition or disorder in each such classification “as determined in comparison to the benefits provided for medical/surgical conditions in the classification.”

The term “meaningful benefits” is nowhere defined. The regulators nevertheless “recognize that the proposal to require meaningful benefits [ ] is related to scope of services.” “Scope of services” for this purpose generally refers to the types of treatments and treatment settings that are covered by a group health plan or health insurance issuer. The preamble to the proposed regulation invites comments on how the meaningful benefits requirement “would interact with the approach related to scope of services adopted under the 2013 final regulations.” The preamble of the 2013 final regulations addressed an issue characterized as ‘‘scope of services’’ or ‘‘continuum of care’’ but otherwise failed to provide any substance. Two examples from the proposed regulations do, however, give us a sense of what the regulators have in mind.

  • A plan that generally covers treatment for autism spectrum disorder (ASD), a mental health condition, and covers outpatient, out-of-network developmental evaluations for ASD but excludes all other benefits for outpatient treatment for ASD, including applied behavior analysis (ABA) therapy, when provided on an out-of-network basis. (ABA therapy is one of the primary treatments for ASD in children.) The plan generally covers the full range of outpatient treatments and treatment settings for M/S conditions and procedures when provided on an out-of-network basis. The plan in this example violates the applicable parity standards.
  • In another example, a plan generally covers diagnosis and treatment for eating disorders, a mental health condition, but specifically excludes coverage for nutrition counseling to treat eating disorders, including in the outpatient, in-network classification. Nutrition counseling is one of the primary treatments for eating disorders. The plan generally provides benefits for the primary treatments for medical conditions and surgical procedures in the outpatient, in-network classification. The exclusion of coverage for nutrition counseling for eating disorders results in the plan failing to provide meaningful benefits for the treatment of eating disorders in the outpatient, in-network classification, as determined in comparison to the benefits provided for M/S conditions in the classification. Therefore, the plan violates the proposed rules.

Notably, the newly proposed meaningful benefits requirement is separate from, and in addition to, the newly prescribed nonquantitative treatment limitation (NQTL) testing standards. These latter standards include a “no more restrictive” requirement, a “design and application” requirement and an “outcomes data and network composition” requirement. A handful of comments nevertheless urge the regulators to add scope of services to its non-exhaustive list of NQTLs. As a result, a plan’s scope of services would be subject to comprehensive NQTL testing. Or, put another way, they would be fed back into the NQTL testing loop. Using the first of the examples above, this would require that ABA therapy to be first compared to the treatment limitations imposed on some M/S benefits in each classification. But what benefits, exactly? The problem is that a plan’s scope of services – what types of treatments a plan will pay for and in what settings – is a high-level plan design feature and not an NQTL.

While reasonable minds can and do differ on much of the substance of the proposed regulations, we doubt that anyone would claim that they streamline or simplify compliance. Compliance with these rules is already complicated and expensive; if the final rule looks anything like the proposed regulations, compliance will only get more complicated and more expensive. The proposed meaningful benefits requirement is intended to prevent plans, as a matter of plan design, from satisfying the parity rules by offering nominal or insubstantial MH/SUD benefits when compared to similar M/S benefits in each classification. Treating a plan’s scope of services as itself a separate NQTL does not advance this goal.

U.S. Immigration Strategies to Attract, Retain, and Develop Talent

Amid the evolving global economy throughout the past year, employers may be reassessing their approach to talent acquisition and retention. Companies are navigating uncertainty by recalibrating mobility programs, aiming to not only attract but also retain talent to fulfill a skills gap in the U.S. workforce. Central to leveraging foreign talent is the power of immigration branding and messaging. A strategic emphasis on employee longevity proactively curtails workforce attrition and preempts potential labor shortages in the future.

Attracting talent

Understanding and leveraging avenues offered by U.S. immigration laws can be pivotal in securing the right skills and meeting business demands to drive success. Employers commonly leverage F-1 student OPT/STEM OPT training and the H-1B and L-1 work visa programs to source foreign workers in the talent ecosystem.

Foreign students with work authorization pursuant to OPT/STEM OPT are prime candidates for expanding a company’s talent pool with long-term development potential. Employers may attract foreign students through internships while the student completes their academic program, post-graduation employment pursuant to OPT/STEM OPT, and subsequent work visa and green card sponsorship. For most foreign students, switching from a student visa to a work permit is often challenging due to the restrictions and limited availability of H-1B visas. However, companies with an overseas presence may be able to set up strategically located hubs abroad to recruit and employ foreign nationals who were not able to obtain an H-1B visa, and then transfer them back to the United States with L-1 intracompany transfer visas following their employment abroad over at least one year. A company’s corporate immigration policy outlining support of various immigration pathways, and benchmarked against the policy of industry peers, is a competitive tool to meet foreign workers’ needs and attract high-potential talent.

Retaining talent

In response to the need for talent retention, employers are strategically tapping into their existing talent pool to bolster operational efficiency. With post-COVID-19 employees seeking greater fulfillment, employers may want to consider proactively refining their retention efforts to include top-tier foreign talent.

Companies are increasingly turning to their internal talent reservoirs to bridge skill gaps and curtail additional hiring costs. Retaining current talent is becoming pivotal for success, mobility, and business continuity. To address the evolving landscape of talent retention and the demand from foreign talent for immigration support, employers may consider several key strategies.

Various immigration pathways offer avenues for continued employment, providing stability to existing talent. For example, some companies leverage sponsorship for work visa programs and employment-based green cards to retain skilled foreign workers. Payment of legal fees and the provision of immigration counsel are initial steps in this effort, and other offerings including immigration seminars for employees and family members, an internal immigration portal with FAQs and self-service features that provide status reports, and access to documents and opportunities for interaction with the immigration team are also important. Employers leverage streamlined extension processes for work authorization to ensure continuity for employees and the business without disruptions. Embracing technological advancements in immigration processes may streamline procedures, reduce processing times, and minimize errors. Further, a robust green card sponsorship program signals a long-term commitment to retain valuable talent and grants employees a sense of security and stability in their professional journey within the company. Clearly defined benchmarks when the company initiates green card sponsorship are not only a recruitment and retention tool but also ensure that foreign workers do not lose immigration status or work authorization.

Adaptability and foresight also benefit companies navigating corporate immigration policy frameworks. Companies can implement consistent yet flexible approaches to immigration sponsorship that cater to both business needs and the foreign worker’s circumstances. For example, timing adjustments in initiating green card sponsorship may prevent work authorization gaps. Evaluating risks versus benefits might lead to early green card sponsorship for students to safeguard their status and work authorization if they are not selected in the H-1B lottery. Exploring alternative sponsorship options, such as supporting family-based or self-sponsored petitions, could be viable alternatives for a company to retain critical talent and may streamline the process and save time. Finally, recognizing and addressing the needs of dependents, such as spouses and children, within the immigration sponsorship process may be determinative to retain valuable talent.

Developing talent

Companies recognize the importance of not just attracting and retaining foreign talent but also developing their skills and potential. With strategic planning, immigration strategies can help advance the capabilities of international talent within a corporate setting.

Demand for H-1B visas has increased while the number of available visas has remained static. In response, employers are assisting international talent to develop their credentials to become eligible for an O-1 visa as an alternative. The O-1 visa for individuals with extraordinary abilities allows companies to support foreign workers in advancing their careers by recognizing their exceptional talent and contributions. Although the standard to qualify is high, for many foreign workers there are specific steps they can take to proactively bolster their resume toward becoming “O-1 visa ready.”

Sponsorship of certain visa categories, such as EB-1A for individuals with extraordinary ability or a National Interest Waiver to bypass the requirement to test the labor market, may encourage innovation and leadership among an employer’s foreign workers. Elevating a green card process to a higher preference category generally accelerates the process and the prospect of a higher preference category may lead foreign nationals to excel in their fields, drive innovation, and propel critical progress for the company.

Multinational employers are increasingly implementing international rotational programs and cross-border exchanges to foster skill development and broaden experiences. This approach not only addresses internal labor shortages but also mitigates the need for expensive talent searches and replacements. These programs offer benefits akin to longer-term assignments, facilitating knowledge transfer and nurturing company culture at a reduced cost. Such exposure can empower foreign workers with diverse market insights, enriching their skill sets and fostering a global perspective. Moreover, it allows businesses to harness internal expertise to bolster critical initiatives. However, the rise in popularity of these short-term rotation and remote work programs may invite heightened compliance measures, including increased audits and inspections. Hence, employers should anticipate a trend towards more rigorous immigration requirements aligning with labor, tax, and social security laws.

Another Government Shutdown Looms: What It Means For Employers With Foreign National Employees

Only two days before the deadline in November 2023, the U.S. Senate passed a temporary budget to fund federal agencies through Jan. 19, 2024, marking the first time since 2012 that Congress entered a holiday season without the threat of a December shutdown. Now, following the start of a new year, lawmakers have less than two weeks to advance a recent spending agreement and reach a more permanent solution.

The November 2023 vote marked the second time Congress extended the budget for fiscal year 2023, which expired in September, to avert a government shutdown.

IMPACT ON IMMIGRATION

For employers, immigration funding and legislation are top of mind whenever a shutdown looms. Each time the government is on the verge of a shutdown, employers must identify cases that are affected and attempt to locate an avenue to mitigate the impact of the potential shutdown. This increases costs and reduces efficiency, among other complex consequences.

During the 2019 government shutdown, the U.S. Department of Justice suspended 60,000 hearings for non-detained migrants, causing significant delays in the immigration system. Rescheduling an appearance on the immigration docket can often take years, leaving migrants and their families to wait in uncertainty in the interim.

On the employment-based side of immigration, a mad dash ensues each time a government shutdown becomes imminent because applications made to the Department of Labor that are critical steps in both nonimmigrant and immigrant visa categories come to a halt. With already lengthy processing times, foreign national beneficiaries and their employers cannot afford to wait 90 days, as we saw in 2019, for government processing to resume.

Employers and their legal teams would be wise to shift their focus during these times to pushing forward the submission of as many Labor Condition Applications (LCAs), permanent labor certification applications (PERM), and prevailing wage determination requests as possible. A missed window of opportunity can result in years-long delays, or worse, the loss of work authorization, for critical foreign national talent in the U.S.

HOW TO PREPARE

With deadline déjà vu, now is the time for employers to prepare. Employers should consider the following three actions:

1) Submit Labor Condition Applications for all foreign nationals with a nonimmigrant visa (NIV) status expiring within the next six months, should the relevant nonimmigrant visa category require an application, such as for H-1B, H-1B1, and E-3 visa classifications

2) Submit Prevailing Wage Requests for all initiated PERM processes

3) File any PERM applications of individuals for whom the requisite recruitment steps and waiting periods have been completed

New Year, (Potentially) New Rules?

SOMETIMES, THE ONLY CONSTANT IS CHANGE. THIS NEW YEAR IS NO DIFFERENT.

In 2023, we saw several developments in labor and employment law, including federal and state court decisions, regulations, and administrative agency guidance decided, enacted, or issued. This article will summarize five proposed rules and guidance issued by the Department of Labor (“DOL”), the National Labor Relations Board (“NLRB”), the United States Equal Employment Opportunity Commission (“EEOC”), and the Occupational Safety and Health Administration (“OSHA”), which will or may be enacted in 2024.

DOL’s Proposed Rule to Update the Minimum Salary Threshold for Overtime Exemptions

In 2023, the DOL announced a Notice of Proposed Rulemaking (“NPRM”) recommending significant changes to overtime and minimum wage exemptions. Key changes include:

  • Raising the minimum salary threshold: increasing the minimum weekly salary for exempt executive, administrative, and professional employees from $684 to $1,059, impacting millions of workers;
  • Higher Highly Compensated Employee (HCE) compensation threshold: increasing the total annual compensation requirement for the highly compensated employee exemption from $107,432 to $143,988; and
  • Automatic updates: automatically updating earning thresholds every three years.

These proposed changes aim to expand overtime protections for more employees and update salaries to reflect current earnings data. The public comment period closed in November 2023, so brace yourselves for a final rule in the near future. For more information: https://www.federalregister.gov/documents/2023/09/08/2023-19032/defining-and-delimiting-the-exemptions-for-executive-administrative-professional-outside-sales-and

DOL’s Proposed Rule on Independent Contractor Classification under the Fair Labor Standards Act

The long-awaited new independent contractor rule under the Fair Labor Standards Act (“FLSA”) may soon be on the horizon. The DOL proposed a new rule in 2022 on how to determine who is an employee or independent contractor under the FLSA. The new rule will replace the 2021 rule, which gives greater weight to two factors (nature and degree of control over work and opportunity for profit or loss), with a multifactor approach that does not elevate any one factor. The DOL intends this new rule to reduce the misclassification of employees as independent contractors and provide greater clarity to employers who engage (or wish to engage) with individuals who are in business for themselves.

The DOL is currently finalizing its independent contractor rule. It submitted a draft final rule to the Office of Management and Budget (OMB) for review in late 2023. While an exact date remains unknown, the final rule is likely to be announced in 2024. More information about the rule can be found here: https://www.federalregister.gov/documents/2022/10/13/2022-21454/employee-or-independent-contractor-classification-under-the-fair-labor-standards-act

NLRB’s Joint-Employer Standard

The NLRB has revamped its joint-employer standard under the National Labor Relations Act (“NLRA”). The NLRB replaced the 2020 standard for determining joint-employer status under the NLRA with a new rule that will likely lead to more joint-employer findings. Under the new standard, two or more entities may be considered joint employers of a group of employees if each entity: (1) has an employment relationship with the employees and (2) has the authority to control one or more of the employees’ essential terms and conditions of employment. The NLRB has defined “essential terms and conditions of employment” as:

  • Wages, benefits, and other compensation;
  • Hours of work and scheduling;
  • The assignment of duties to be performed;
  • The supervision of the performance of duties;
  • Work rules and directions governing the manner, means, and methods of the performance of duties and the grounds for discipline;
  • The tenure of employment, including hiring and discharge; and
  • Working conditions related to the safety and health of employees.

The new rule further clarifies that joint-employer status can be based on indirect control or reserved control that has never been exercised. This is a major departure from the 2020 rule, which required that joint employers have “substantial direct and immediate control” over essential terms and conditions of employment.

The new standard will take effect on February 26, 2024, and will not apply to cases filed before the effective date. For more information on the final rule: https://www.federalregister.gov/documents/2023/10/27/2023-23573/standard-for-determining-joint-employer-status

EEOC’s Proposed Enforcement Guidance on Harassment

A fresh year brings fresh guidance! On October 2023, the EEOC published a notice of Proposed Enforcement Guidance on Harassment in the Workplace. The EEOC has not updated its enforcement guidance on workplace harassment since 1999. The updated proposed guidance explains the legal standards for harassment and employer liability applicable to claims of harassment. If finalized, the guidance will supersede several older documents:

  • Compliance ManualSection 615: Harassment (1987);
  • Policy Guidance on Current Issues of Sexual Harassment(1990);
  • Policy Guidance on Employer Liability under Title VII for Sexual Favoritism (1990);
  • Enforcement Guidance on Harris v. Forklift Sys., Inc. (1994); and
  • Enforcement Guidance on Vicarious Employer Liability for Unlawful Harassment by Supervisors(1999).

The EEOC accepted public comments through November 2023. After reviewing the public comments, the EEOC will decide whether to finalize the enforcement guidance. While not law itself, the enforcement guidance, if finalized, can be cited in court. For more information about the proposed guidance: https://www.eeoc.gov/proposed-enforcement-guidance-harassment-workplace

OSHA’s Proposed Rule to Amend Its Representatives of Employers and Employees Regulation

Be prepared to see changes in OSHA on-site inspections. Specifically, OSHA may reshape its Representatives of Employers and Employees regulation. In August 2023, OSHA published an NPRM titled “Worker Walkaround Representative Designation Process.” The NPRM proposes to allow employees to authorize an employee or a non-employee third party as their representative to accompany an OSHA Compliance Safety and Health Officer (“CSHO”) during a workplace inspection, provided the CSHO determines the third party is reasonably necessary to conduct the inspection. This change aims to increase employee participation during walkaround inspections. OSHA accepted public comments through November 2023. A final rule will likely be published in 2024.

For more information about the proposed rule to amend the Representatives of Employers and Employees regulation: https://www.federalregister.gov/documents/2023/08/30/2023-18695/worker-walkaround-representative-designation-process

Preparing for 2024

While 2023 proved to be a dynamic year for Labor and Employment law, 2024 could be either transformative or stagnant. Some of the proposed regulations mentioned above could turn into final rules, causing significant changes in employment law. On the other hand, given that 2024 is an election year, some of these proposed regulations could lose priority and wither on the vine. Either way, employers should stay informed of these ever-changing issues.

       
For more news on 2024 Labor and Employment Laws, visit the NLR Labor & Employment section.

Non-Negotiable Arbitration Agreements May Be Required as a Condition of Employment

On February 15, 2023, the Ninth Circuit struck down AB 51, a California statute that imposed criminal and civil penalties against employers who required employees to enter into an arbitration agreement as a condition of employment, finding the statute to be an “unacceptable obstacle to the accomplishment and execution of the full purposes and objectives” of the Federal Arbitration Act (“FAA”).  Chamber of Commerce of the United States of America, et al. v. Bonta, et al., No. 20-15291 (9th Cir. 2023).

As discussed in our prior post and articles (link here), in August 2022 the Ninth Circuit withdrew its prior decision, which had upheld portions of AB 51, following the United States Supreme Court’s June 2022 decision in Viking River Cruises v. Moriana.

AB 51, embodied in California Labor Code §432.6 effective January 1, 2020, prohibited an employer from entering into a non-negotiable agreement that required the employee to waive “any right, forum, or procedure” for a violation of the Fair Employment and Housing Act or the California Labor Code, including “the right to file and pursue a civil action.”  Further, AB 51 imposed harsh penalties for employers who violated the statute, including a fine of up to $1,000 and up to six months’ imprisonment, as well as the potential for civil litigation by the State of California or by private individuals.  In an effort to avoid Supreme Court decisions striking down state laws that improperly targeted arbitration agreements, the California legislature also created the confusing outcome that potentially criminalized the formation of non-negotiable arbitration agreements, but permitted their enforcement once executed.

Noting that arbitration agreements by their very nature require parties to waive their rights to bring disputes in court, and crediting the plaintiffs’ evidence that the possible imposition of civil and criminal penalties deterred employers from attempting to enter into non-negotiable agreements with employees, the court affirmed the district court’s preliminary injunction in favor of several trade associations and business groups who sought to block the implementation of the statute.  Relying on principles of preemption and judicial precedent striking down similar state laws or judge-made rules that singled out executed arbitration agreements, the Court found AB 51 improperly “burden[s]” the formation of arbitration agreements in violation of the FAA.

Having written the previous 2-1 decision upholding AB 51, Judge Lucero now found himself dissenting.  Arguing that the majority “misconstrue[d] the jurisprudence” of the Supreme Court, the dissent claimed that arbitration was permissible only if consensual and that AB 51 only applied to conduct occurring prior to the formation of the contract and thus was not an obstacle to the objectives of the FAA.

Employers may require their California employees to sign non-negotiable arbitration agreements to obtain or maintain their employment.  Arbitration agreements may still be unenforceable however if they are procedurally and substantively unconscionable, if the agreement lacks mutual consent because a party was forced to sign by threats or physical coercion or “upon such grounds as exist at law or in equity for the revocation of any contract.”  Thus, employers should review their agreements to ensure they are in compliance with other California requirements, that the terms are not unfair or one-sided, and, the agreement presented is not unfair, surprising or oppressive.

© 2023 Vedder Price

Biden Administration Sets New Course on ESG Investing in Retirement Plans

In late 2022, the Department of Labor finalized a new rule titled “Prudence in Selecting Plan Investments and Exercising Shareholder Rights,” largely reversing Trump-era guidance that had strictly limited the ability of plan fiduciaries to consider “environmental, social, and governance” (ESG) factors in selecting retirement plan investments and generally discouraged the exercise of proxy voting. In short, the new rule allows a fiduciary to consider ESG factors in selecting investment options, provided that the selection serves the financial interests of the plan and its participants over an appropriate time horizon, and encourages fiduciaries to engage in proxy voting.

The final rule moves away from 2020 Trump-era rulemaking by allowing more leeway for fiduciaries to consider ESG factors in selecting investment options. Specifically, the rule states that a “fiduciary’s duty of prudence must be based on factors that the fiduciary reasonably determines are relevant to a risk and return analysis and that such factors may include the economic effects of climate change and other ESG considerations on the particular investment or investment course of action.” The rule makes clear, however, that there is no requirement to affirmatively consider ESG factors, effectively limiting its scope and effect and putting the onus on fiduciaries to determine whether they want to incorporate ESG factors into their assessments of competing investments.

Overview

  • Similar to the Trump-era guidance, there is no definition of “ESG” or an “ESG”-style fund. Debate continues over what kinds of funds can be considered ESG investments, especially in light of the fact that some companies in industries traditionally thought to be inconsistent with ESG conscious investing are now trying to attract ESG investors (e.g. industrials, energy).
  • Fiduciaries are not required to consider ESG factors in selecting investment options. However, the consideration of such factors is not a presumed violation of a fiduciary’s duty of loyalty or prudence. Unlike the prior rule, which suggested that consideration of ESG factors could only be considered if all other pecuniary factors between competing investments were equal (the “tiebreaker” approach), the new rule allows a fiduciary to consider potential financial benefits of ESG investing in all circumstances.
  • Plan fiduciaries may take into account participant preferences in constructing a fund lineup. Therefore, if participants express a desire for ESG investment options, then it may be reasonable for plan fiduciaries to add ESG funds or to consider ESG factors in crafting the fund lineup.
  • ESG-centric funds may be used as qualified default investments (QDIAs) within retirement plans, reversing the prior outright prohibition on use of such funds as QDIAs.
  • In some situations, fiduciaries may be required to exercise shareholder rights when required to protect participant interests. It is unclear whether the exercise of such rights is only limited to situations that have an economic impact on the plan, or applies to additional situations. The clarification suggests that the exercise of proxy voting is not disfavored as an inefficient use of fiduciaries’ time and resources, as the prior iteration of the rule suggested.

Effective Date and Challenges to the Regulation

The new rule became effective in January 2023, except for delayed applicability of proxy voting provisions. However, twenty five state attorneys general have joined a lawsuit in federal court in Texas that seeks to overturn the regulation. The court is in the Fifth Circuit, which historically has been hostile to past Department of Labor regulations (including Obama-era fiduciary rules overturned in 2018, though the ESG rule is less far-reaching than the fiduciary rule and may survive a challenge even in the Fifth Circuit). Congressional Republicans have also introduced a Congressional Review Act (CRA) review proposal to repeal the regulation that has gained the support of Joe Manchin (D-WV). Although CRA actions are not subject to Senate filibuster rules, they are subject to presidential veto, which President Biden is sure to do if the repeal reaches his desk.

Action Steps

Employers should assume that the ESG rules will remain in effect and engage with plan fiduciaries, advisors, and employees and determine the extent to which ESG considerations should (or should not) enter into fiduciary deliberations when considering plan investment alternatives. Some investment advisors have already begun to include separate ESG scorecards for mutual funds and other investments in their regular plan investment reviews. Fiduciaries should also consider whether and how the approach that is ultimately taken should be reflected in the plan’s investment policy statement. Plans that delegate full control over investments to an independent fiduciary (an ERISA 3(38) advisor) should engage with their advisor to determine whether and the extent to which ESG considerations will be part of that fiduciary’s process, and whether that is consistent with the desires of the plan fiduciaries and participants.

© 2023 Jones Walker LLP

Employment-Based Immigration Updates for 2023

As we move deeper into the new year, the U.S. government continues to try to resolve the challenges facing the immigration system due to the disruptions of the COVID-19 pandemic and the resulting processing backlogs. These challenges may still continue, but new changes and updates have already taken effect—and more will likely come in 2023, impacting employers and the decisions they make with regard to their foreign national employees. Below are several updates the U.S. government has already released that impact employment-based immigration processes.

USCIS Proposed Fee Increases

On January 4, 2023, U.S. Citizenship and Immigration Services (USCIS) proposed changes to its fees for certain types of cases. The changes to the fees are dramatic increases to some employment-based visa types and are in an effort to make up for funding shortages that have impacted USCIS. Proposed filing fee increases for the following employment-based visa types include:

  • H-1B: $460 to $780
  • H-1B registration fee: $10 to $215
  • L-1: $460 to $1,385
  • O-1: $460 to $1,055
  • Adjustment of Status Application (I-485): $1,225 to $2,820

As we previously reported, the proposed rule—which is in the public comment phase—also includes a change to the existing premium processing timeline. The timeline would increase from fifteen calendar days to fifteen business days.

Continued Expansion of Premium Processing

On May 24, 2022, USCIS implemented a phased approach to expanded premium processing service. In 2022, premium processing was expanded to I-140 petitions, and on January 30, 2023, premium processing will be available to all EB-1C multinational executive and manager and EB-2 National Interest Waiver petitions. The January 30 expansion will include new filings as well as upgrades on pending petitions.

USCIS’s next phase of premium processing expansion will apply to the following applications:

  • Form I-539, Application to Extend/Change Nonimmigrant Status
  • Form I-765, Application for Employment Authorization

Foreign National Employees and RIFs

With changes in the U.S. economy and world markets, employers may start conducting reductions in force (RIF) to adjust to new budget goals. RIFs have the potential to impact foreign national employees. As we discussed in a recent podcast, employers may want to consider the potential impact of restructurings on workers who are in nonimmigrant status, those who are in the permanent residency process, and students working in F-1 status.

Equal Pay Transparency Laws

An increasing number of states and local jurisdictions—such as CaliforniaColoradoConnecticutNew York StateNew York CityRhode Island, and Washington—have implemented equal pay transparency (EPT) laws that now require employers to make additional disclosures regarding offered salaries and/or benefits on job requisitions and postings. This will have a significant impact on the PERM process for green card applications in these jurisdictions by mandating employers list a salary or salary range on PERM and non-PERM recruitment materials. EPT laws vary across jurisdictions as to which types of postings or recruitment efforts will require additional information.

Nonimmigrant Visa Interview Waivers Extended Until December 31, 2023

In an effort to reduce visa wait times and processing backlogs at U.S. consulates, the U.S. Department of State has extended the authority of consular officers to waive in-person interviews for certain nonimmigrant categories through December 31, 2023.

Fiscal Year 2024 H-1B Cap Preparation

With the annual H-1B lottery just two months away, employers may want to consider the foreign national employees they plan to sponsor and enter into this year’s upcoming H-1B cap or quota process. The process will start with the initial registration period, which typically opens at the beginning of March and lasts for a minimum of fourteen calendar days each fiscal year (FY). USCIS will soon announce details about the FY 2024 H-1B registration period. If enough registrations are submitted, USCIS will conduct a random selection of the registration entries to determine who will be eligible to file H-1B petitions. If selected, the employers will have ninety days to file the H-1B petitions, starting April 1. So far, there have not been any changes in this process for this upcoming cycle.

© 2023, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., All Rights Reserved.

Mexico’s Minimum Wage Set to Increase on January 1, 2023

On December 1, 2022, Mexican President Andrés Manuel Lopez Obrador announced that, unanimously, the business and labor sectors, as well as the government, had agreed to increase the minimum wage by 20 percent for 2023, which will be applicable in the Free Zone of the Northern Border (Zona Libre de la Frontera Norte or ZLFN), as well as the wage applicable in the rest of the country. The increase will become official when it is published in the Official Gazette of the Federation (Diario Oficial de la Federación).

Before the increase was determined, the Mexican National Commission on Minimum Wages (Comisión Nacional de los Salarios Mínimos, or CONASAMI) applied an independent recovery amount (Monto Independiente de Recuperación or MIR) in accordance with the following:

  • MIR for the ZLFN: MXN $23.68
  • MIR for the rest of the country: MXN $15.72

On top of the MIR, the CONASAMI approved a 10 percent increase from the 2022 rate to the daily minimum wage applicable to the ZLFN and the rest of the country, resulting in MXN $312.41 (approximately USD $16.11) for the ZLFN and MXN $207.44 (approximately USD $10.69) for the rest of the country. The new rates would be effective as of January 1, 2023.

The MIR and the 10 percent increase—combined—would represent a 20 percent increase in the daily minimum wage rate which translates to more than MXN $30 per day.

Finally, Secretary of Labor Luisa Maria Alcalde stated that the above increases would directly benefit 6.4 million workers in Mexico.

© 2022, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., All Rights Reserved.

Five States Put Abortion Questions on the Ballot; Health Care and Other Employers Should Stay Tuned

In the wake of the landmark decision in Dobbs v. Jackson Women’s Health Organization, we have been closely monitoring legal developments across the country. In addition to well publicized “trigger laws” that were effectuated as a result of the U.S. Supreme Court’s order, states have taken up a variety of legislative actions in response to the ruling, which placed authority for the regulation of abortion with the states.

On Election Day, five states will have voters consider various proposals in light of Dobbs and its directive that abortion law belongs with the people. Here is a run-down of abortion-related ballot initiatives that will be put to a popular vote on November 8, 2022.

A Constitutional Amendment for California

On the ballot in California is Proposition 1: Constitutional Right to Reproductive Freedom, which would amend the state Constitution at Article I, Section 1.1, to provide that the state cannot “deny or interfere with an individual’s reproductive freedom in their most intimate decisions, which includes their fundamental right to choose to have an abortion and their fundamental right to choose or refuse contraceptives.” Any amendment to the California Constitution requires a simple majority of voters. If the amendment is passed, changes take effect the fifth day after the Secretary of State files the statement of the vote for the election.

Should Proposition 1 pass, it would add express protection for reproductive freedom, including decisions about abortion and contraception, to the state constitution, under its existing guaranteed right to privacy. If the proposition does not pass, it will not affect the status quo of reproductive rights in California: while current protections for abortion and other reproductive medical care would not be constitutionally guaranteed, they would remain in place under state law.

California currently has strong protections for the right to abortion, generally only prohibiting abortion at viability. Since the Dobbs decision earlier this year, California has promoted access to abortion, including launching abortion.ca.gov, a website dedicated towards providing information on reproductive health care services to people both inside and outside of California. Recently, in late September, Governor Gavin Newsom signed a package of 12 bills of abortion protections, aimed towards improving access to abortion and protecting patients and clinicians who undergo or provide them.

With the backdrop of an already-strong California legal reproductive health network, consistent polling indicates the ballot measure is expected to pass by a wide margin. Passage of the proposition will likely signal and establish the state as a refuge for individuals from more restrictive states seeking abortions.

Michigan May Modify its Constitution, Too

Michigan will also turn to its voters to decide whether its state constitution should be amended to include protections for abortion. The Michigan proposal, referred to as “Proposal 3 of 2022 – ‘Reproductive Freedom for All’ Petition,” seeks to protect the right to an abortion with a constitutional amendment that declares a right to reproductive freedom. The petition sets forth proposed language for a new section of the Michigan Constitution, stating, in part, that “[e]very individual has a fundamental right to reproductive freedom, which entails the right to make and effectuate decisions about all matters relating to pregnancy, including but not limited to prenatal care, childbirth, postpartum care, contraception, sterilization, abortion care, miscarriage management, and infertility care.”

Proposal 3 would take effect 45 days following the ballot initiative if approved by the majority of voters. It would (1) establish new individual rights to reproductive freedom, to broadly include the right to make and carry out all decisions relating to pregnancy; (2) permit state regulation of abortion in limited circumstances; (3) forbid discrimination in enforcement of reproductive rights; (4) prohibit adverse action by the state with respect to “potential, perceived, or alleged pregnancy outcomes;” and (5) invalidate state laws that conflict with the Constitution as amended by Proposal 3.

If Proposal 3 is not passed and the state constitution remains as is, the future of the right to an abortion in Michigan will be unclear. Michigan has a pre-Roe ban that, if enforced, would prohibit abortion in nearly all situations and make abortions in non-life saving circumstances potentially prosecuted as manslaughter. However, a Michigan Court of Claims judge granted a permanent injunction in Governor Gretchen Whitmer’s suit to block local prosecutors from enforcing the ban. The ban is subject to an ongoing lawsuit.

Given the uncertainty of the ballot initiative’s outcome, Michigan employers should closely monitor the results of the November 8, 2022 vote.

Vermont’s Vote

In Vermont, abortion remains legal after Dobbs under state law. However, on November 8, 2022, voters will have the opportunity to further protect abortion rights through a ballot initiative. This initiative, referred to as Proposal 5, asks registered Vermont voters whether they are in favor of amending the state’s constitution to add the following language: “That an individual’s right to personal reproductive autonomy is central to the liberty and dignity to determine one’s own life course and shall not be denied or infringed unless justified by a compelling State interest achieved by the least restrictive means.” Passage would guarantee the right to access and obtain an abortion as well as other reproductive care, and prohibit government infringement of reproductive rights absent a compelling state interest, which would need to be achieved through the least restrictive means.

Should Proposal 5 pass, the resulting constitutional amendment is not expected to significantly alter the legal landscape of abortion in Vermont, which currently has strong protection for the right to abortion. If approved, the amendment will become part of Vermont’s constitution on November 22, 2022.

In Contrast, Kentucky Seeks to Constitutionally Exclude Abortion Rights

Kentuckians will cast their votes deciding whether to amend the state’s constitution to explicitly provide that the state constitution offers no protection for a right to abortion. The proposal further clarifies that there is no constitutional right to use public funds for abortion. “Constitutional Amendment 2” poses the following question to voters: “Are you in favor of amending the Constitution of Kentucky by creating a new Section of the Constitution to be numbered Section 26A to state as follows: ‘To protect human life, nothing in this Constitution shall be construed to secure or protect a right to abortion or require the funding of abortion?’”

If the majority of votes are affirmative, a new section will be added to Kentucky’s constitution. This does not constitute an outright abortion ban, but rather prohibits courts from finding an implicit right to an abortion within the state’s constitution. Kentucky laws restricting abortion, including those triggered by Dobbs, are among the most restrictive in the nation. Approval of Constitutional Amendment 2 would not alter these laws or their existing narrow exceptions, which permit the procedure only when necessary to preserve the health or life of the mother.

An advisory from the Kentucky Attorney General provides further color on the ramifications of the amendment, noting that Amendment 2 does not ban abortion, but rather ensures that elected officials of Kentucky’s General Assembly, and not courts, would regulate abortion. The Advisory also explains that implementation of Amendment 2 would not amend other provisions in the state’s constitution.

Montana’s Ballot – NOT a Proposed Constitutional Amendment

Abortion is currently legal in Montana, as a 1999 Supreme Court ruling held that the state constitution protects abortion under its right-of-privacy provision. However, in 2021, a number of restrictive abortion laws were enacted, including a law that prohibits abortions after 20 weeks. These laws are under legal challenge by abortion providers and are temporarily enjoined pending litigation.

Meanwhile, on the ballot for November 8 is a referendum on LR-131, also known as the Born Alive Infant Protection Act. The Act proposes a new statute that would classify any infant born alive as “a legal person” and require the provision of “medically appropriate and reasonable care” to such person. This would include all infants born alive from an induced labor, C-section, or attempted abortion. The Act also includes a provision mandating providers, employees, and volunteers to report a failure to comply to law enforcement, and sets forth criminal penalties. Violation of this law would be a felony with a maximum sentence of 20 years in prison or a fine of up to $50,000. The proposed law is aimed at health care workers, and does not impose liability on parents or other parties.

Health care providers have raised concerns that the broad language of the bill could lead to unintended consequences, particularly for OB/GYN practitioners. Health care providers would be required to take “medically appropriate and reasonable care” to keep any infant alive, but these terms are not defined in the bill. Health care workers that could be held liable include doctors, nurses, and “any individual who may be asked to participate in any way in a health care service of procedure.”

If approved by the Montana electorate, the law would take effect on January 1, 2023. Hospitals and other health care providers would need to reexamine their operating procedures to comply with the bill, should it pass, including compliance with the mandatory reporting requirement.

Keeping Up With The Changes

We continue to track litigation, legislative developments, and the entirety of the post-Dobbs legal landscape as it continues to shift. Our 50-state survey and other resources provide employers, health care providers, life sciences stakeholders, and others impacted by these rapidly changing circumstances with in-depth analysis and monthly updates. Election Day results will be another element of this evolving story.

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