Current DOL Policies and the Challenges of the Prevailing Wage
We have been seeing many of our clients struggle with the prevailing wage requirement which applies to both nonimmigrant categories and to the green card process. This is largely due to the U.S. Department of Labor’s (DOL) current policies surrounding this area.
H-1B, H-1B1 and E-3 Nonimmigrant Categories and the Labor Condition Application (LCA)
The employer is required to pay the foreign national employee a base salary which is at least the prevailing wage or the actual wage [i] (whichever is higher). In the nonimmigrant context, the wage the employer is required to pay the foreign national employee is certified by the DOL on the LCA.
The prevailing wage may be determined in a few ways. The most common is for the employer to use the DOL’s Occupational Employment Statistics (OES) salary survey or a private salary survey which meets DOL criteria (e.g., Radford). The employer selects the job category and wage level. The data must be for the area of intended employment (i.e., city/county of the worksite). While our firm can provide legal guidance on the issues surrounding the prevailing wage requirement, it is the employer’s responsibility to make the determination.
Each year on July 1st, the DOL releases a new OES salary survey. The trend we have seen is that regardless of economic conditions, the wages listed in this salary survey steadily increase each year. This year is no exception. Given that many employers use the OES salary survey as it is free and DOL compliant, it is challenging when the data represented in the salary survey does not seem to represent real industry conditions. An alternative to the OES salary survey is a private salary survey, such as Radford, but private salary surveys can be costly and only a few are readily accepted by the DOL.
Green Card and the Prevailing Wage Determination (PWD)
The prevailing wage requirement also pops up in the green card process; however in the green card context the DOL makes the prevailing wage determination. As part of the PERM Labor Certification process, an employer must request a PWD from the DOL. The employer can suggest an OES job category or submit a job category from a private salary survey, but the DOL makes the ultimate determination. The DOL reviews the job description and the minimum requirements for the job opportunity (e.g., degree, years of experience, special skills, travel, etc.) and determines the applicable job category and wage level that should apply to the role. The default salary survey for these determinations is the OES salary survey.
The DOL’s current policies surrounding PWDs often results in the DOL setting a prevailing wage requirement that exceeds an employer’s wage offer to the foreign national employee. This is challenging for the sponsoring employer. While the prevailing wage established by the DOL does not need to be paid until the green card is approved, which differs from the nonimmigrant categories, even prospectively raising the wage offered to the foreign national employee may be viewed as inequitable if it exceeds the salary of other employees in similar roles with similar qualifications within the employer’s organization.
As a result of the DOL’s current policies surrounding these determinations and the fact that the salary data within the OES salary survey tends to be on the high end, many employers are requesting the DOL to utilize private salary survey sources, such as Radford, to issue its prevailing wage determination. Generally, the private salary surveys tend to have more job categories and the leveling is more objective. While DOL may agree to utilize a private salary survey source, the DOL routinely takes issue with the survey data presented by the employer. The DOL will often challenge the job category chosen by the employer, the wage level determination made by the employer, the geographical area of the data, as well as whether or not the DOL views the data as being valid (i.e., is more recent data available). As a result, even when the employer offers its suggestion to the DOL through the use of a private salary survey, it is not uncommon for the DOL to determine that the private salary survey cannot be used and to issue its determination based the OES salary survey.
Unfortunately, in our practice, we have seen the DOL consistently issue prevailing wage determinations which are not in line with the industry wages. An employer can request the DOL to reconsider its determination. If that is unsuccessful, the employer may request review by the DOL National Wage Center Director. Generally, the DOL takes 60 days to issue an initial prevailing wage determination and each path of recourse also takes 60 days. Further, these challenges are often unsuccessful. Our goal is to guide our clients through this complicated process to achieve the best result possible given the current challenges in this area.
[i]The actual wage is the base salary that is paid by the employer to all other employees in similar roles with similar qualifications at the place of employment.