The initial step for anyone seeking a green card through work is often having their employer acquire a PERM Foreign Labor Certification on their behalf. PERM prevailing wage determination is one of the crucial parts of this process. Now, what exactly is the prevailing wage, and how is it calculated? All these queries are covered in this article.
What is the Prevailing Wage?
The Department of Labor (DOL) employs the PERM labor certification to protect Americans’ employment and working conditions. It does this by requiring firms to go through a rigorous recruitment procedure to guarantee that no eligible American employees are available in the region. Another method PERM protects U.S. employees is through the prevailing wage determination.
According to the Department of labor, the prevailing wage is the average wage paid to the workers in an area of intended employment. It is the lowest compensation paid by the employer to the recipient for the work they plan to do. This is not similar to the minimum wage set by the state or the federal government.
The employer must not only agree to pay at least this wage to the foreign worker but also demonstrate that they are financially able to do so. Employers can do so by looking at income and bank statements, as well as proof of the pay of similar employees in the company.
One of the most common reasons for a PERM denial is the employer’s inability to pay the prevailing rate. The prevailing pay for the employment must be stated in full in the labor certification application. You can pay the foreign worker higher than the prevailing rate, but you can’t pay them less.
Importance of Prevailing Wage Determination
The Immigration and Nationality Act (INA) states that the presence of foreign employees in the United States should not be considered harmful to their American counterparts. Determination of an average wage makes sure that the similarly employed workers of the U.S. are not being deprived of their rights by foreign workers. This determination also saves the foreign workers from the lower wage scams planned by deceitful employers.
While employers may have the choice of using alternative sources, it is preferable to utilize the NPCW since it helps to avoid any future recruiting issues. Employers are accorded “safe-harbor status” when the NPWC issues the prevailing wage.
The prevailing wage will not be contested by the Department of Labor’s Wage and Hour Division if the firm is examined for wage compliance at any time. Keep in mind that other providers may not have the same assurance.
How is the prevailing wage determined?
National Prevailing Wage Center (NPWC) is designated with the task of prevailing wage determination. DOL also uses labor statistics from Occupational employment statistics in order to determine the prevailing wage for various occupations. When assessing the proper prevailing wages for job offers, the NPWC analyses a number of variables.
Nearly all of the prevailing wage determinations start with an entry-level salary for the workers, which later on progresses to a payment paid to a competent worker keeping in mind the experience and education as mentioned in the job’s description of the employer. The three key factors involved in PERM prevailing wage determination include:
Geographic location
The area of intended employment plays a role in estimating the average wage for an occupation. The wage should be according to the current salary rate for a specific occupation in a specific geographical location. For this, Online Wage Library is often used by NPWC to view the wage data.
Nature of Job
Reviewing the requirements of the employer’s offer will identify the nature of the job offer and the proper occupational classification for a designated position. A description given by The Occupational Information Network that relates to the job offer will be used by the NPWC to determine the appropriate occupational classification.
Other Comparable Jobs
NPWC uses the data of minimum salaries and wages from other comparable jobs in the same area to estimate the prevailing wage. If there are no such jobs in that specific area, then comparable occupations outside that area are used as a reference.
Visa Programs that call for prevailing wage determination
A PERM prevailing wage decision by the NPWC is required for almost all visa applications based on employment. Although it is allowed for an employer to calculate the prevailing rate on their own when filing a Labor Condition Application in some situations, it’s normally advisable to get it from the NPCW before commencing the hiring process for job duties. The E-3, H-1B, and H-1B1 are examples of these.
However, without a prevailing wage determination from the NPWC, you may not be able to file the H-2B Certification and Permanent Labor Certification forms. On the other hand, a prevailing salary is not issued by NPWC for H-2A visas. Employers have the authority to set their own salaries.
How to file for Prevailing Wage Determination (PWD)?
Form- ETA 9141 is filed to request for prevailing wage determination and is submitted to NPWC. The form requests information about the sponsoring firm, information about the job title, work responsibilities, minimal job criteria, and information about the site of employment. iCert Portal can also be used to submit requests.
Processing Time
The procedure of determining the prevailing wage by DOL can take up to a few weeks to two months. The employer is then required to post an advertisement for a minimum of 30 days. After that, the employer waits for another additional 30-day period for the possible applicant to approach him/her for the advertised job; this adds up to two more months.
Once the recruitment process is done, form ETA 9089 can be filed, whose processing takes up to six months. Receiving an audit, on the other hand, might cause your application to be delayed for up to nine months.
As a result, the entire processing time for prevailing wage rate determination might be quite variable. The bare minimum, though, will be around eight to nine months. If the DOL audits your case, it might take up to two years.
Validity period
Because the economy in the United States changes so often, the prevailing wage determined is only effective for a brief period. The prevailing salary under PERM is effective for a minimum of 90 days. The employer must submit the recruiting file within the specified validity period after receiving the prevailing rate determined by the center. Because the prevailing pay changes every year, existing employees may be disadvantaged by an outdated prevailing wage.
If the employer does not provide the documentation within the time frame specified, the employer must resubmit the paperwork and obtain a fresh prevailing wage finding. labor statistics
Prevailing Wage vs. Minimum Wage
Prevailing wage and minimum wage are distinct from one another and serve various reasons. Many visa applicants misunderstand the terminology above, which is regularly used in the U.S. labor market.
As a foreign worker utilizing the PERM labor application, you are entitled to the prevailing salary, which is the wage that other employees earn in a similar role.
The minimum wage is the lowest compensation that can be paid to an employee. The federal government has established a minimum wage. Aside from that, 45 states in the United States have their own rates of minimum wage. Employers in those states can select the larger of the two wage options for their employees, according to the DOL.
Why should PWD be obtained prior to the recruitment process?
Even if you have the alternative choice of processing prevailing wages during the recruitment process, it pays to get them beforehand for a variety of reasons. This is to assure process correctness, as it can be difficult to forecast how events would unfold down the line. For example, if a company employs a pay that is thought to be PWD and the real PWD turns out to be higher weeks or months later, the firm may have to redo the entire recruiting process.
Another reason for receiving the PWD prior to the recruiting process is that it is only valid for a certain amount of time. If the hiring process begins before the PWD is obtained, the PERM Labor Certification must be presented within the PWD’s validity term. If the employer is unable to finish the recruiting before the PWD expires, the procedure may have to be restarted from the beginning.
The conditions described above might result in a substantial setback in the PERM application process. Aside from the time spent processing applications and conducting applicant interviews, money spent on things like job advertising will be squandered.
Consequences of not following Prevailing Wage Determination rules
The DOL is likely to conduct a targeted audit of your case if the employer either fails to understand the prevailing wage decision or willfully decides to pay less than the determined PERM prevailing wage. This implies that all recruiting information, including the prevailing salary and how it is determined, must be presented to a certifying authority who will extensively assess the recruitment process. The PERM application will almost certainly be refused if it is discovered that a company sought to pay an immigrant employee less than the prevailing rate.
Denial in these situations may also have an influence on future PERMs filed by the employer. This might result in the DOL imposing monitored recruitment on all future applications, requiring the employer to provide all necessary papers for the recruitment while it is being conducted.
Why choose Herman Legal Group?
Need any help regarding the ever-complexing immigration services? We got you. Herman Legal Group, a U.S.-based immigration firm, has 26 years of experience assisting clients who are pursuing lawful permanent residency through the PERM procedure. We’ll walk you and your concerned employer through the procedure step by step to guarantee that you have the highest chance of approval and to avoid typical traps like targeted audits.
Call 1-216-696-6170 to schedule an appointment with one of Herman Legal Group’s experienced immigration lawyers or book online.
