What Island Holdings Means for H-2B Employers

"Island Holdings is a very significant decision. Although precise estimates are difficult to come by, it is certain that BALCA’s decision saves employers millions of dollars in unforeseeable and unplanned for expenses. Many employers simply could not pay the new rates and would have had to curtail operations or close their doors. That will not happen now.

More important in the long run, Island Holdings prevents DOL from blindsiding employers with large, mid-season prevailing wage rate increases. Under Island Holdings and the current regulation, DOL’s pre-certification prevailing wage determination will be valid for the duration of the proposed employment. For as long as the current regulation remains unchanged, there will be no mid-season prevailing wage increases.

DOL is currently considering how it will implement the Island Holdings decision. But based on the ruling itself, we expect that following will happen for three main groups of employers:

• Employers who appealed. These employers are likely to receive a notice vacating/cancelling the supplemental prevailing wage determination that they received in spring. They have no obligation to pay the higher wage.

• Employers who did not appeal, but escrowed funds instead. DOL will contend that these employers are required to pay the higher wage because they did not appeal. Future litigation will determine whether this argument succeeds

• Employers who did not appeal, but paid the higher wages. Because these employers did not appeal, it will be very difficult to recover the funds." - CJ Lake, LLC, Dec. 9, 2013.