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The Labor Condition Application (LCA) and compensation requirements

Before an employer may file an H-1B petition for a foreign worker, it must obtain a certified Labor Condition Application or LCA from the Department of Labor (DOL). The DOL must certify a properly prepared LCA within 7 days of filing. H-1B employees must be given a copy of the LCA for their position on their first work day.

The LCA is a series of statements by the employer, confirming that:

1.   The employee taking up the H-1B position will be paid the “required wage”;
2.   The foreign worker will be treated the same as other workers in terms of working conditions and benefits;
3.   There is no strike, lockout or work stoppage arising from a labor dispute in the foreign worker’s occupation at the place of employment;
4.   The appropriate workplace notices will be completed prior to filing the I-129 Petition for Nonimmigrant Worker; and
5.   Public access files will be maintained per regulations.

What is the “Required Wage”?
Each year, the DOL publishes tables of average earned income by occupation and geographic area. This information, referred to as the “prevailing wage”, is based on what “similarly employed” people are currently earning within each defined geographic area.

The immigration law requires that an H-1B worker be paid at least the prevailing wage for his services. However, the “required wage” may be higher than the prevailing wage. If the employer pays other workers in similar positions with similar credentials a salary higher than the prevailing wage, then the H-1B worker must also be paid the higher salary.

Employee Benefits and Working Conditions
An employer must provide hours, shifts, vacation time and benefits to H-1B employees that “will not adversely affect other workers similarly employed”. In practice, this means that H-1B workers are to receive the same benefits and working conditions given to other professionals in the company.

The employer and employee have other rights and duties:

  An employer may award a cash or non-cash bonus to a person joining a firm in H-1B status;
  H-1B holders are eligible for unpaid leave under the Family Medical Leave Act (FMLA) without falling out of status.
  An employer may not “bench” a full time or part time H-1B due to lack of work.
  An employer may not penalize an H-1B for leaving his employment earlier than planned.
  If the employer dismisses the worker before the end of the intended employment period, it must pay reasonable costs of transportation home.

“Dependent” Employers
The rules define a “dependent” employer as one who has employed an unusually large proportion of workers in H-1B status based on a formula included on the LCA. The DOL considers an employer to be dependent if:

  the employer has up to 25 employees, and employs more than 7 H-1Bs;
  the employer has 26-50 employees, and employs more than 12 H-1Bs; or
  the employer has 51 or more employees, and more than 15% of those employees are in H-1B status.

The DOL requires dependent employers to make two additional declarations when applying for an LCA:

(1)   The hiring of H-1Bs did not, within the past 90 days, and will not, within the next 90 days, cause existing workers to lose their jobs.
(2)   Before filing the LCA, the employer has taken good faith steps to recruit U.S. workers and has first offered any job to a qualified U.S. citizen or permanent resident.

These declarations must be made for new H-1B positions and for extension applications. If the employer places consultants in H-1B status at client sites, it must ensure that the client company has met the same requirements.

If a dependent employer is petitioning for a person who holds the equivalent of a U.S. master’s degree, or the salary for the position is at least $60,000 per year, the additional declarations do not apply.

The burden is on employers to know whether or not they are dependent and understand their additional duties under the law. Dependent employers are closely watched by the DOL, and must retain documents to prove that no employee in H-1B status replaced current or potential U.S. worker. An employer found to be in violation of the law may be fined and debarred from filing any LCAs for a year or more.

Employers and prospective H-1B workers should familiarize themselves with these regulations to ensure compliance with all Department of Labor requirements.


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