Trump wage rule could shake up hospital hiring
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A Trump administration plan to overhaul wage levels for visa holders is jolting hospitals and long-term care facilities that are heavily reliant on foreign-born workers.
Why it matters: It's the latest immigration-related policy change to loom over the health care workforce, coming after President Trump's $100,000 H-1B visa fee and the suspension of certain immigrants' work authorization renewals.
- The latest move could further drive up costs for providers already struggling with staffing shortages, thin margins and growing patient demand, because many health jobs can't be outsourced or automated.
Driving the news: The Department of Labor wants to change the formula for calculating what it considers "fair minimum pay" for workers on certain visas, like H-1Bs, and green card sponsorship jobs.
- The administration says the change would make it harder for companies to use visa programs to obtain cheaper labor and undercut American workers.
- But the rule could have an outsized effect on health systems, testing labs, nursing homes and research institutions that sponsor foreign-trained workers.
- There's special concern about rural health providers that rely heavily on foreign-born clinicians to fill gaps in care in underserved areas.
Critics say the change won't adequately account for regional wage differences or experience levels.
- They also warn a higher wage requirement will force employers to raise pay for U.S. workers to comply with labor laws — and make it unsustainable to hire foreign-born talent.
The big picture: The U.S. health care system is heavily dependent on a foreign-born workforce. Immigrants make up about 16% of registered nurses nationwide, per a KFF analysis.
- They make up 28% of the U.S. long-term care workforce, KFF found.
- "This has the potential to significantly limit the sector's ability to provide timely and quality health care services to those in need, both now and in the future," Dana Ritchie, associate vice president of the American Health Care Association and National Center for Assisted Living, wrote in public comments on the proposal.
Zoom in: Lynn Bruder, the CEO of staffing firm Nucleus Healthcare, said wage rates for visa-holding nurses on the lower end of the pay scale could jump 25% to 35% in certain markets, or from about $40 an hour to more than $50 an hour.
- "The likely outcome is continued reliance on significantly more expensive agency staffing solutions and reduced ability for hospitals to build stable, long term workforce pipelines," Bruder wrote in comments about the rule.
The other side: The Department of Labor declined to comment. But visa programs have long been criticized for suppressing wages across many industries.
- The changes would force employers to pay an estimated $6.5 billion in additional wages and increase the average certified wage by approximately $14,000 per year, according to the proposed rule.
- "These proposed revisions aim to better align prevailing wage levels with the wages paid to U.S. workers," the Labor Department wrote.
- The window for public comments on the proposal closed this week.
The bottom line: Health care providers say the administration is treating hospitals and nursing homes like any other employer, even though the workforce is being squeezed by an aging population and rising demand for care.
- "Larger hospital systems may be able to absorb this increase, but you'll see employers who are much smaller or mid-sized won't," Ann-Rose Johnson-Lewis, director of legal services at WorldWide HealthStaff Solutions, told Axios.
- "You'll see rural heath care systems not be able to absorb that. We'll see a reduction in the workforce, fewer new hires and, ultimately, the broader economy will see the consequence of that."
