Overview : H1B Visas (Part II) – Wage and Record Keeping Reqs
Posted Sep 15, 2003
In Part I of our H1B Overview, which appeared in the January 5, 2001 MurthyBulletin, we provided an outline of the process and discussed the basic requirements to qualify for an H1B "specialty occupation." In Part II, we provide further detail about the wage requirements and employer record keeping responsibilities under the law.
Wage Requirement
On the Labor Condition Application (LCA) the employer must attest that it will pay "no less than the greater of the following" :
(a) The actual wage level paid to all other individuals at the work site with similar experience and qualifications for the position in question; OR
(b) The prevailing wage for the occupational classification in the area of intended employment.
The above is only one of the attestations, or promises that the employer must agree to on the LCA. For further information about the attestations, with regard to wages, working conditions and other issues, on the LCA, kindly refer to our article entitled Update on the New LCA Form for H1Bs, in the January 5, 2001 MurthyBulletin.
Proving the Actual Wage Paid to Other Similar Workers
The actual wage can be proved by documenting the wages paid to other employees holding similar positions to the H1B worker/s and having similar qualifications. In determining such wage level, the following factors may be considered: experience, qualifications, education, job responsibility and function, specialized knowledge, and other legitimate business factors. If there is an official wage scale, either as a result of a collective bargaining agreement or based upon employer policy, that information is also considered. Actual wage documentation is not submitted to INS or the DOL when filing an LCA or petitioning for an H1B worker; however, DOL can request it from the employer if needed, such as in the context of an investigation of the employer's practices.
Determining the Prevailing Wage in the Locality
Determining the prevailing wage can be accomplished in one of several ways. One way is to contact the state department of labor / department of employment security (actual name of the agency varies from state to state) and ask them for the recommended wage. There is generally a form to request this information, and the state labor office will make the wage determination based upon data that the U.S. Department of Labor (DOL) has collected. This data is also available on the internet, but legally it is safest for the employer if an actual determination is made. If the employer or attorney makes an independent judgment based on viewing the data on the internet, it is possible that the different job category or experience level that is chosen would be different from the ones that the officials who do the wage determinations would choose for the position. If relying on the prevailing wage determined by DLLR, the employer must file the LCA within ninety (90) days from the date of DLLR's determination of the prevailing wage.
Alternative sources of wage information that can also be accepted under the law include:
(a) a wage survey from an independent authoritative source published in a book, newspaper, periodical, loose-leaf service, newsletter or other medium within 24 months prior to filing the application. There are other detailed requirements in the DOL regulations regarding these sources.
(b) another legitimate source of wage data, such as a custom survey commissioned by the employer, or perhaps a survey conducted by the employer itself. The employer may be called upon to prove the legitimacy of the source.
(c) a union contract which was negotiated at arms length between the union and the employer if it contains wage information applicable to the occupation in question.
In any of these wage determination situations, the company needs to keep on file for inspection the documentation upon which the company relied to determine the wage to be paid. The LCA can be filed no earlier than six months before the beginning date of the period of employment, as indicated on the LCA.
The LCA is valid for a maximum period of three years at one time. This means that the validity period of an LCA may not exceed the validity period of an H1B petition which is also three years for the first six years of the H1B stay in the U.S.
Notice Requirement
Notice of the filing of the labor condition application must be provided to the bargaining representative for the employees in the occupational class of the foreign national's proposed position. If there is no bargaining representative, i.e. the job is not unionized, then notice to the employees is required.
The notice must be posted in at least two conspicuous locations in the employer's establishment/s in the area of intended employment. The notice must be posted for 10 days but the first day of the posting must start BEFORE filing the LCA.
ACWIA states that electronic posting of the LCA is allowed as one of the two locations. The electronic notification needs to be sent to the employees who are employed in positions similar to that of the prospective H1B worker/s.
Record Keeping Requirements
Upon request by any person, the employer must make available for inspection certain documentation about the LCA. The specific documents that must be available for public examination are:
(a) a copy of each completed Labor Condition Application filed (Form ETA 9035); and
(b) the wage paid the H1(B) worker/s; and
(c) the system used to set the actual wage for the occupation; and
(d) a copy of the documents used to establish the prevailing wage of the H1(B) occupation/s; and
(e) documents showing compliance with the notice requirement.
This folder must be retained for one year beyond the end of the period of employment specified on the LCA.
In addition to the public access documentation, the employer must maintain certain payroll records for DOL to review. The DOL requires that the employer:
(a) Retain payroll records of all employees in the occupational classification of the H1(B) worker from the time the LCA is filed throughout the period of employment;
(b) The payroll records must contain:
i) full name and home address of employee/s;
ii) occupation, rate of pay, and hours worked each week by employee/s;
iii) overtime earnings each week of employee/s;
iv) total additions and deductions from each pay period and total wages paid for pay period, date of pay and period covered for employee/s;
c) Retain documentation regarding the basis the employer used to establish the actual wage.
The employer must maintain the payroll records for a period of three years from the date of the creation of the records. The prevailing wage is valid for three (3) years during the validity of the H1B Petition.
We will continue with the H1B Overview in a future issue of MurthyBulletin, discussing such items as H1B portability and extensions beyond six years under AC21, as well as other issues.
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