The US Department of Labor has published a new rule affecting the way wages in H-1B and permanent residency labor certification cases are calculated for researchers employed by universities and colleges as well as Federal research agencies. Institutions merely "affiliated" with colleges and universities are not included. The new rule allows prevailing wage determinations for researchers employed by these institutions to be based solely on the wages typically paid by such institutions instead of wages paid to similarly qualified workers in private industry. Employers in H-1B nonimmigrant worker cases and labor certification-based permanent residency cases must document that they are offering a wage at least 95% or higher of the prevailing wage in a local area for a particular position.

The new rule effectively reverses the decision of the Board of Alien Labor Certification Appeals in the 1994 case Hathaway Children's Services (91-INA-388). That decision held that prevailing wages should be calculated by using wage data obtained by surveying employers across industries in the occupation in the area of intended employment. The nature of the employer's business is irrelevant under Hathaway.

The Labor Department decided to establish regulations to create exceptions to the Hathaway rule for academics. Among the reasons are the following:

* Much higher prevailing wage determinations as a result of the post-Hathaway policy

* Higher wages have precluded many universities from using the permanent labor certification program and the H-1B labor condition application program and have disrupted important university-based research programs

* The need to increase the wage of the H-1B employee or terminate employment of the researcher

* Some granting agencies, such as the National Institutes of Health, specify the amount to be paid to each researcher; even without such restrictions, it is often not possible to find the additional money to increase the salary of a researcher to meet the prevailing wage.

* Alien researchers may be paid more than US citizens for performing similar duties and responsibilities.

* Requiring higher salaries to be paid to foreign researchers and foreign scholars who are in lower positions than, for example, Assistant Professors

* Permanent labor certification applications and H-1B labor condition applications have been withdrawn because of the higher prevailing wages required by the post-Hathaway policy.

The Labor Department also agreed that academic research should be given special treatment for other reasons. They include

* Academic research is for the public good and advancement of knowledge, as opposed to having a profit motive

* Researchers in academia, unlike researchers in for-profit organizations, are expected to publish promptly and widely in peer-reviewed journals; commercial scientists apply research results to product development within the company, often withholding publication of the research

* Academic research is independently initiated and sustained with the intention of transmitting bodies of knowledge to succeeding generations of researchers, public and private; commercial research priorities are set by company goals for developing marketable products.

A number of commentators suggested extending the rule to nonprofit research institutes, but the Department of Labor

The Labor Department has stated that it intends to study the impact of this new rule over the next five years and determine whether the bases for enacting the rule still hold.