Prevailing Wage Assessment Alternatives

This is a case study without a named employer, employee, or counsel, because all are protected by confidentiality laws as part of a U.S. Government submission.

Each year the United States allows a defined number of non-citizen, non-agricultural workers to work within the U.S. on a temporary, three-year basis via an H-1B visa. This work visa may be renewed one time only (for a second three-year period).

The process of hiring a non-citizen (“alien”) is most often a four-way effort involving the employer, the prospective employee, an attorney, and the U.S. and state governments. Paperwork requirements and complicated regulations often necessitate the involvement of an attorney who specializes solely in immigration law.

After making an offer to an alien, the H-1B visa process begins. An important part of that process is documentation that the employer will be paying at least the “prevailing wage” as defined by the U.S. Department of Labor for that position in that specific geographic area.

In late 1997, the U.S. Department of Labor redefined the definition of “alien prevailing wage” with the release of General Administrative Letter 2-98 and the redesign of the Occupational Employment Statistics (OES) program which was reconfigured to incorporate a survey of salaries. Since that time, most State Employment Security Agencies (SESAs) have used this survey to ascertain alien prevailing wages, and for employers, this survey s values are safe harbors.

The OES survey is a restatement of a “head count”/employment survey and not a traditional salary survey. All U.S. jobs are forced to fit within ~850 job classes, Level II rates (those most often used) are always set above the weighted average of all employees in the job class. In addition, supervisors and paraprofessionals are often combined within a profession s job description. (See erieri.com/doltrends for a more thorough discussion.) Most often, these factors weigh against an employer that might wish to pay the going market rate. Fortunately, the aforementioned GAL 2-98 allows the use of alternative salary surveys and/or “other wage data” in place of OES wage data.

Employers who don’t use the latter (employer provided surveys) request the State Employment Security Agencies make the prevailing wage determination. The influx of requests has created a backlog amounting to as much as six months in some states and always places the employer in a position of accepting the SESA’s wage rate, no matter how high it is above the market average.

An alternative exists for employers who might wish to use other survey data pay the market rate or shorten the application process. Baker, Thomsen Associates (BTA), a compensation consulting firm, provides outsourced research of all publicly available salary surveys (e-mail info@btabta.com or call 800/546-4015). These studies result in reports with values used today by many immigration attorneys in the preparation of their applications.

Employers and their attorneys have a choice:

Penalties, interest, and back-pay charges await those employers who ignore this process. Salary survey results are now critical in the immigration application process.