Immigration Q&A: What is the Prevailing Wage?
By Amber Davis, Principal Attorney at Waypoint Immigration USA, and Kate Luther
If you’re exploring employment-based visas, you’ll likely see the phrase “prevailing wage” in your search. And while it might sound like legal jargon, it’s actually an important component of several employment-based options.
Understanding what it means (and why it matters) can help you navigate the immigration process and make more informed decisions about your next step.
What It Is
According to the Department of Labor (DOL), a prevailing wage is defined as a specific percentile of the average wage paid to workers who are “similarly employed,” within a defined industry, job description, and geographic location.
In layman’s terms, you can think of it as the minimum wage an employer can legally pay an immigrant worker for a predetermined position, and it’s defined by the “going rate” for a specific job in a specific area, such as the average rate for “registered nurses in Boston” or “network administrators in the Seattle metro area.”
This wage determination is part of a larger wage compliance scheme. Companies are required to certify the prevailing wage before hiring immigrants through certain employer-sponsored visas (such as the H-1B and the EB-2) to ensure that employers aren’t undermining the American job market by employing lower-paid foreign workers. There is also a much more rigorous wage certification process if the employers want to retain the worker permanently and sponsor them for permanent residence through the PERM process.
How It Works for Temporary Nonimmigrant Processes
Certain high skilled work visas like H-1B, H-1B1, and E-3 require the employer to certify that it is paying the prevailing wage. This is a self-attestation process, where the employer chooses the occupational classification (SOC code) and assigns a wage level based on the employer’s requirements for the role.
The employer certifies the information to the Department of Labor by filing a Labor Condition Application (LCA). The Department of Labor usually reviews and certifies this document within 7-10 days. Work visa applications cannot be filed without it.
How It Works for PERM Immigrant Processes
In order to meet the requirements for PERM, employers must prove to the government that there are no U.S. workers with minimum qualifications willing and available to apply for the job in question. To do this, the employer works with the DOL to determine the appropriate wage and then uses the parameters set by the wage and job description to market the job to U.S. workers.
Using the experience and educational parameters, the DOL assigns one of four experience- and skill-based levels to further define the acceptable pay-range, with Level 1 representing those in an entry level position and Level IV representing workers with considerable seniority and competency.
The employer then runs mandatory job postings for the next 60 days, opening the door for U.S. workers to apply. Once the steps are complete, the employer has to wait an additional 30 days (often referred to as the “quiet period”) to ensure no last-minute applications come in. All of these steps must be completed within a 180-day window, or the employer must start the process over again. If there are no qualified applications received, the employer can then submit a formal request to the DOL for PERM certification.
Worth Noting: Potential Changes Going Forward
The Department of Labor (DOL) has proposed a new rule that would change the way prevailing wages are calculated for certain employment-based immigrant visas.
If passed, the new rule would significantly raise prevailing wage minimums across the board. According to the DOL, this change will help to protect the wages of U.S. workers, while raising the standard of living for foreign visa holders.
As you might imagine, there are pros and cons to this proposal, as well as the potential for legal challenges.
For example, the current prevailing wage (minimum) for a foreign Wage Level I worker starts at the 17th percentile of wages paid to local workers in a similar position. Under the new rule, that would increase to the 34th percentile (the current minimum for Level II workers), and the remaining three levels would adjust upward as well:
Level II workers would see an increase from the 34th percentile to the 52nd
Level III workers would see an increase from the 50th percentile to the 75th
Level IV workers would increase from 67th percentile to the 88th
In addition to updating percentiles, alternative approaches to the prevailing wage were proposed as well. Public comments closed on May 26th, but at this writing, there has been no update on when or if the proposed rule will be implemented (or if any of the alternative methods would be chosen instead). If adopted, the new framework would apply to both permanent and temporary workers through EB-2 and EB-3 employment-based immigrant visas, as well as those seeking employment through H-1B, H-1B1, and E-3 nonimmigrant visas.
But the impact could be far-reaching.
Contact Us Today
We will continue to monitor this proposal and keep you posted as updates become available. As always, if you need assistance with your employer-based visa application, we’re here to help.
Waypoint Immigration USA works exclusively with individuals (not institutions), and we’re committed to protecting your interests throughout the process. Contact our office for more information, or schedule a consultation with one of our experienced immigration attorneys.
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