Chamber Joins Lawsuit Challenging New H-2B Visa Regulations That Will Devastate Small Businesses

Apr 16, 2012

Today, the U.S. Chamber of Commerce joined forces with several employers in the landscaping and seafood processing industries to bring a legal challenge to a recent Department of Labor (DOL) regulation that radically alters the H-2B visa program that businesses use to fill temporary non-agricultural jobs. These visas are used almost exclusively by small businesses with small profit margins who, after recruiting for U.S. workers, can’t find enough local workers to meet their labor needs. Bloomberg recently described the H-2B program as “complicated and time-consuming” – and that was before the rule change. With the new rules, Bloomberg reports, “it’s even tougher.” The rule imposes myriad new requirements which have the cumulative effect of decreasing the availability of guest workers while simultaneously raising the cost of hiring guest employees.

If the rule – a remarkable 575 pages in the draft form released by DOL (but a mere 149 pages in the dense tricolumnar format of the Federal Register!) – is allowed to go into effect, many small businesses will be unable to find affordable workers. That means that construction projects will stall, parks and hotels will be understaffed, seafood won’t make it to restaurants, landscape companies will be unable to satisfy contracts – just to name a few small business sectors that will feel the pain. Stifling these small businesses will have a ripple effect on our national economic recovery, as well.

In addition to making it harder for small businesses to have access to the workers they need, the rule is also laden with curious provisions that appear intended to give organized labor leverage over non-unionized small businesses. For example, for occupations that are “customarily unionized,” 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.

The crux of the Chamber’s legal argument is straightforward: DOL quite simply does not have the legal authority to issue the rules. The statute creating H-2B visas gives the Secretary of Homeland Security (not DOL!) the authority to define the program. In fact, Congress gave DOL only a very limited role. What’s more, the DOL violated the Regulatory Flexibility Act (RFA) when it promulgated the regulation. The RFA requires agencies to consider the impact that a rule will have on small businesses – an obligation that the DOL failed to satisfy. Indeed, small businesses will undoubtedly be harmed by the new rule.

The Chamber’s lawsuit – filed in the U.S. District Court for the Northern District of Florida – asks the court to vacate the rule, and to block the DOL from enforcing the rule until the court can resolve the legal issues. You can access the legal documents and learn more about the litigation at the website for the National Chamber Litigation Center, the Chamber’s public policy law firm handling the litigation.

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