Jun 14 2012

Shelby: Delay DOL Rules that Crush Seasonal Employers, Jobs

U.S. Senator Richard Shelby (R-Ala.), Ranking Member of the Appropriations Subcommittee on Labor, Health and Human Services, Education, and Related Agencies (Labor/HHS), today during full committee consideration of the FY 2013 Labor/HHS appropriations bill offered an amendment to prohibit funding for two Department of Labor (DOL) rules that, if implemented, would crush U.S. businesses that rely heavily on temporary, seasonal immigrant workers.  The amendment passed by a vote of 19-11.

Below are excerpts from Shelby’s statement on the amendment, the full text of which is attached.  Also attached is the full text of Shelby’s amendment as well as his broader statement on the full Labor/HHS bill and several letters of support for the amendment.

“Many industries, including those in seafood, timber, and landscaping, depend on the Department of Labor’s H-2B visa program to find temporary, seasonal workers.  The seasonal nature of these industries means that these businesses routinely face shortages of local workers during their peak season.  The H-2B program not only keeps these businesses open, but also contributes to the creation of additional, year-round jobs for local workers by ensuring a successful operation.

“However, under the new rules proposed by the Department of Labor, many small businesses that use the H-2B program will not be able to afford these regulations and will ultimately close.  This will result in more American job losses, at a time when our economy cannot afford it.

“This is another case of out-of-touch Washington bureaucrats sitting behind a desk implementing regulations that are prohibitively expensive and logistically impossible.”

Background:

 

H-2B Wage Methodology Final Rule Background

 

  • DOL issued a final rule on January 19, 2011, that will artificially increase H-2B hourly wages by as much as 77%  For many seasonal employers who operate on thin profit margins, such a dramatic increase in labor costs will drive them out of business or into bankruptcy. This rule was slated to go into effect last year, but DOL moved the implementation date to October 1, 2012, after Congress prohibited DOL from spending any appropriations funding to implement the rule during fiscal year 2012 (PL 112-74).

According to DOL’s own estimates, the rule will produce the following H-2B wages increases:

 

    • Landscaping services, $3.66 (40% increase);

 

    • Food services/cook, $2.70 (26% increase);

 

    • Swimming Pool Servicer, $6.87 (77% increase);

 

    • Amusement, gambling, and recreation, $2.73 (33% increase); and

 

    • Construction, $3.33 (34% increase).

 

  • The actual cost of H-2B users is far greater than DOL’s estimates because the Department does not account for labor increases for similarly employed American workers or more experienced American workers whose pay should reflect the greater skill/experience level and be proportional to the hourly wage earned by lesser skilled workers.  DOL estimates also do not include additional payroll costs, workers compensation insurance, overtime costs, and other associated increases.

H-2B Comprehensive Rule Background

 

  • DOL issued a final rule on February 21, 2012, that would make the H-2B program more complicated for small, seasonal employers.  The rule was slated to go into effect on April 23, 2012, but was enjoined by a federal district court.  The combination of the H-2B wage rule and the H-2B comprehensive rule will make the H-2B program virtually unworkable for many seasonal businesses.

 

  • Issues with H-2B comprehensive rule:

 

  • Requires that workers receive a minimum of three-fourths of their wages for each 12 week period they are employed, even if they do not work three-fourths of the time due to weather or other unforeseen circumstances. 

 

  • Requires employers to pay transportation and subsistence costs to and from the workplace for those workers hired under the program. 

 

  • Requires employers to advertise for U.S. workers up to 21 days prior to the job start-date, despite the fact that many seasonal businesses, such as the seafood industry, begin their recruitment process months in advance.  Waiting until the last minute to ascertain whether any U.S. workers are available prior to applying for H-2B workers will be untenable for most.