Is Your H-1B Employer Treating You Fairly And In Accordance With U.S. Immigration Laws? (Part I)
If you are in or plan to apply for H-1B status, you may wonder what your employer’s obligations are towards you. The following is a brief explanation of the H-1B employer obligations regarding wages, which serve the dual function of protecting U.S. workers from wage devaluation and H-1B workers from exploitation.
Every H-1B petition must be filed with a Labor Condition Application (“LCA”) that has been certified by the U.S. Department of Labor. The LCA contains several statements that the employer must agree to, including that the employer will pay nonimmigrants at least the local prevailing wage or the employer’s actual wage, whichever is higher.
The prevailing wage refers to the average wage paid to similarly employed workers in a specific occupation in an area of intended employment as determined by a legitimate source of wage data. Various legitimate sources of wage data exist, but the most common source used in connection with H-1B petitions is the Foreign Labor Certification Data Center Online Wage Library (“FLC Data Center”), which reflects data collected by the U.S. Department of Labor.
The actual wage rate is the wage rate paid by the employer to all other individuals with similar experience and qualifications for the specific employment in question. In determining the wage rate, employers may consider experience, education, job responsibility and function, specialized knowledge, and other legitimate business factors. Where there are other employees with substantially similar duties and responsibilities as the H-1B nonimmigrant, the actual wage rate shall be the amount paid to these other employees. Where there are no other employees with substantially similar duties and responsibilities as the H-1B nonimmigrant, the actual wage shall be the wage paid to the H-1B nonimmigrant.
For example, suppose an information technology company located in Chicago, IL has offered a foreign national a position as a Software Developer. Suppose further that this company has four other employees working as Software Developers and is paying each of them $25.00 per hour. The FLC Data Center indicates that the level 1 prevailing wage in the Chicago area for a Software Developer is $29.55 per hour. Given that the prevailing wage is higher than the employer’s actual wage rate, to satisfy the LCA wage requirement, the employer must pay the foreign national a wage rate of $29.55 per hour for the entire period of authorized employment. Now suppose that the company is paying its four existing Software Developers $35.00 per hour. If these employees all have similar experience and qualifications as the foreign national, then to satisfy the LCA wage requirement, the employer must pay the foreign national a wage rate of $35.00 per hour for the entire period of authorized employment.
The required wage must be paid to the H-1B employee, cash in hand, free and clear, when due, except that authorized deductions may reduce the cash wage below the required wage level. Authorized deductions include (1) a deduction that is required by law (e.g. income tax), (2) a deduction that is reasonable and customary in the occupation and/or area of employment (e.g. contribution to premium for health insurance policy covering all employees), or (3) a deduction that is made in accordance with a voluntary, written authorization by the employee, is for a matter principally for the benefit of the employee, is not a recoupment of the employer’s business expense, is an amount that does not exceed the fair market value or actual cost of the matter covered, and is an amount that does not exceed the limits set for garnishment of wages.
Unauthorized deductions or reductions in payment include a rebate of the ACWIA fee paid to the government when filing the H-1B petition as well as a penalty paid by the H-1B nonimmigrant for ceasing employment with the employer prior to a specific date.
For example, suppose the information technology company has asked the foreign national to pay all of the fees in connection with the H-1B petition. First, by doing so, the employer has violated the H-1B Regulations, which specifically prohibit the H-1B nonimmigrant from paying the ACWIA fee. Second, given that costs related to the H-1B petition are deemed employer’s business expenses, the company must in fact pay the foreign national more than the required wage rate by adding these costs on a 3-year pro-rated basis to the required wage rate.