The U.S. Department of Labor recently announced changes that will make it harder for employers to meet the prevailing wage standard to bring in temporary professional workers under H-1B visas. The changes are also likely to lengthen the recruiting process for permanent workers using green cards – and raise the wages employers are required to pay them above industry averages.

H-1B Temporary Workers

A Department of Labor rule took effect on October 8 that may make it harder for employers to sponsor H-1B temporary professional workers. Specifically, DOL has reformulated how prevailing wages are determined, resulting in much higher prevailing  wages in its Foreign Labor Certification Data Center – some up to almost 50% higher than were in place the day the rule was announced on October 6.

Employers wishing to sponsor H-1B employees must agree to pay the prevailing wage for the job in the metro area, or its own actual wage (what is pays its own similar workers), whichever is higher. To file a labor condition application with DOL (a prerequisite for an H-1B petition filed with U.S. Citizenship and Immigration Services), employers must first establish a prevailing wage in one of the following ways: request a prevailing wage determination from DOL; use the Foreign Labor Certification Data Center by finding an appropriate job, location, and level;  use a published wage survey (such as a Towers Watson or Radford wage survey); or commission its own wage survey. If using a published survey, the survey must be the latest survey published within the past two years that is metro area specific, uses an average salary based on the numbers of employees (not number of employers), and makes clear its methodology. The survey cannot be an aggregate of other surveys such as salary.com.

The effect of these new published wages will make it harder for employers to meet the prevailing wage standard required to sponsor H-1B workers. As an alternative means to establish the prevailing wage, for now it appears employers may still obtain published surveys with acceptable wages to complete the required labor condition application form and attestations.

Green Card Applications

The steep wage increases in the Foreign Labor Certification Data Center will also negatively impact the ability of employers to sponsor employees for a green card through the permanent labor certification (PERM) process. The PERM process requires employers to test the labor market to determine whether there is a qualified U.S. worker ready, willing, and able to perform the job. The employer must also post a position-opening notice at a wage no lower than the prevailing wage and must not hold out a lower wage to any candidates who may respond to advertisements and recruitment for the position. The PERM process requires employers to agree to pay at least the prevailing wage once the application is approved and the employee obtains a green card.

Unlike the H-1B process, employers going through the PERM process must file a request for a prevailing wage determination with DOL. While an employer can include a published or private survey with the request,  DOL’s strict survey requirements – and often narrow reading of the similarity of jobs in the surveys – means it frequently rejects a published survey. The result is often a much higher wage than is usually found within the industry and/or lengthy delays in what is already a long PERM process. Not only does a very high prevailing wage make the recruitment process more difficult, but it also means the employer will be required to commit to a high salary when the employee obtains a green card.

Of Note

These changes are likely to be embroiled in litigation, which means their future is unclear. Currently there are immigrant and employer organizations looking for plaintiffs who will be harmed by these changes in order to file an injunction to stop their implementation. Whether the new rules and regulations will remain in effect while litigation is pending remains to be seen.

For more information, please contact us or your regular Parker Poe contact.