What is “Prevailing Wage”?
The Immigration and Nationality Act (INA) requires that when an H-1B foreign national is hired, the wages of U.S. workers will not be adversely affected. Normally, that means that the H-1B employee must be paid about the same as other U.S. workers. The Department of Labor (DOL) regulations require that the wage paid to a foreign worker must be at least the “prevailing wage” for the occupational classification in the area of intended employment.
The prevailing wage is defined as the average wage paid to similarly employed U.S. workers. Employers can use the wage from the DOL’s National Prevailing Wage Center (NPWC). The wage determination from the NPWC is based on the Occupational Employment Statistics (OES) salary. Other acceptable prevailing wage sources (e.g. Salary Survey published by Radford, Wyatt, etc.), may be used, as well.
As a service to you, Litwin & Smith will assist you in identifying an appropriate occupation code and initial wage level through the NPWC on information you provide. However, we cannot guarantee that the wage will withstand a DOL audit. In the unlikely event there is an audit, the DOL may determine that either or both the occupational classification or the wage level are inaccurately determined. If so, the employer may be liable for back wages (the difference between what the DOL determines is the appropriate wage and what the employee is actually paid) and penalties. The only “safe harbor” for prevailing wages is to obtain a wage determination from the DOL. This often takes two months or more and most employers choose not to wait that long and, instead, use the OES wage data as best that they can.