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H-1B Series: The Labor Condition Application - Part 1
by George N. Lester IV

George N. Lester IV A. Background and Purpose of the LCA

As a prerequisite to being permitted to hire H-1B foreign personnel, the employer must obtain and submit to INS a certified Labor Condition Application ("LCA") relating to the job from the United States Department of Labor ("DOL"). Filling out and submitting the LCA to the DOL can be procedurally straightforward, but it creates several important and potentially complex legal obligations that the employer should understand.

Congress added the LCA requirement to the H-1B program in the Immigration Act of 1990 ("IMMACT 90"). The basic purpose of the LCA is to protect U.S. workers by guaranteeing that there will be no adverse effect on wages or working conditions caused by the employer's use of H-1B temporary workers. In the LCA the employer makes several attestations relating to pay, working conditions, and notice to U.S. workers that it is hiring foreign personnel. The thrust of these attestations is that the employer may hire H-1B workers only under at least the same pay scale and under the same working conditions for its U.S. workers, or equal to prevailing standards in the area of employment. This prevents the employer from having any incentive to hire foreign workers at lower pay, with fewer benefits, or under other less favorable conditions than a U.S. worker performing the same job. Certain employers make additional attestations relating to nondisplacement and recruitment of U.S. workers.

By requiring that the employer treat H-1B workers no differently than U.S. workers, the LCA process also protects foreign workers from exploitation in this country. Employers will not be able to impose substandard wages or working conditions in an occupation on foreign nationals which are below those of U.S. workers or relevant prevailing standards.

Human resources officials or others who are responsible for an employer's H-1B program must remember that in all matters of salary structure, benefits, advancement opportunities, and other working conditions the employer should use nondiscriminatory "status blind" policies for both H-1B and regular U.S. workers.

B. Payment of "Required Wage Rate": LCA Attestation #1

In the first LCA statement, the employer affirms that it will pay H-1B nonimmigrants in the specialty occupation the higher of the "actual wage level paid by the employer to all other individuals with similar experience and qualifications for the specific employment in question" or the "prevailing wage level for the occupational level for the occupational classification in the area of employment" for the period of authorized employment. This is known as the "required wage rate." [1] The required wage also includes an obligation to offer H-1B nonimmigrants benefits and eligibility for benefits provided as compensation for services on the same basis and in accordance with the same criteria as the employer offers to U.S. workers.

Determining the "Actual Wage"

Under the DOL regulations, "[t]he actual wage 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 actual wage level, the employer may consider "experience, qualifications, education, job responsibility and function, specialized knowledge, and other legitimate business factors." "Legitimate business factors" are factors "that it is reasonable to conclude are necessary because they conform to recognized principles or can be demonstrated by accepted rules and standards." Where no other employees exist at the place of employment with substantially similar experience and qualifications in the employment, however, the "actual wage" shall simply be the wage paid to the H-1B nonimmigrant by the employer.

The actual wage obligation also requires the employer to provide regular salary reviews or increases to H-1B workers commensurate with the employer's pay system or scale, based on cost-of-living increases, change in market conditions, advancement in the occupation, or other factors. This is consistent with the overall purpose of the LCA to require the employer to treat H-1B workers no differently than U.S. workers in matters of pay and advancement. The required "actual wage" will probably change over time as the H-1B worker builds experience and seniority with the employer. As a result, the employer should review the salaries of H-1B workers at the same time as any annual salary review performed for other employees and make any adjustments necessary to maintain compliance with its "actual wage" attestation.

The employer is also required to retain documentation specifying the basis it used to establish the actual wage. The documentation must show how the wage set for the H-1B employee relates to the wages paid by the employer to all other individuals with similar experience and qualifications for the specific employment at the place of employment. Where adjustments are made in the employer's pay system or scale during the validity period of the LCA, the employer must retain documentation explaining the changes and clearly showing that, after such adjustments, the wages paid to the H-1B employee continue to be at least the greater of the adjusted actual wage or the prevailing wage for the occupation and area of intended employment.

Under this rule, the employer should ensure that it maintains a fair, objective policy for overall salary structure in the company, with provision for regular raises within set ranges based on levels of skills, experience, qualification, and overall comparative achievement. The employer should maintain a written salary structure policy and be prepared to demonstrate that it has at all times fairly and consistently maintained the foreign national's salary within the policy's guidelines.

Next: Determining the "Prevailing Wage"

This concludes discussion of the Beneficiary's required qualifications. The next several articles in this series will focus on the Labor Condition Application.

[1] The actual statement the employer must sign on the form reads, "H-1B nonimmigrants will be paid at least the actual wage level paid by the employer to all other individuals with similar experience and qualifications for the specific employment in question or the prevailing wage level for the occupation in the area of employment, whichever is higher." (emphasis by DOL on LCA form).

About The Author

George N. Lester IV is of the Immigration Practice Group (the "Group") of the law firm of Foley, Hoag & Eliot LLP. Foley, Hoag & Eliot LLP is a full-service law firm of 200 lawyers in Boston and Washington, D.C. It was the first large law firm in Boston to develop an expertise in business immigration law, and for over thirty years its Group has represented employers in a full range of procedures to obtain temporary or permanent authorization to employ foreign professionals. Mr. Lester has practiced immigration law for ten years, and regularly speaks to business, academic, and professional groups on immigration topics. As part of his regular AILA activities, Mr. Lester meets with officials of the INS Vermont Service Center to discuss H-1B and other liaison topics. He also serves as Treasurer and a Board Member of the Political Asylum/Immigration Representation Project (PAIR) in Boston, and received that organization's Pro Bono Attorney Award for Dedication and Commitment to Human Rights in May 1996. Mr. Lester is a 1989 graduate of Northeastern University School of Law.

This article is the thirteenth in a series by George N. Lester of the Foley Hoag LLP Immigration Practice Group based on a chapter he authored titled "Specialty Occupation Professionals," in the treatise Business Immigration Law: Strategies for Employing Foreign Nationals, edited by Rodney A. Malpert and Amanda Petersen, and appears here with the permission of the publisher. Published by Law Journal Press. Copyrighted by NLP IP Company. All rights reserved. Copies of the complete work may be ordered from Law Journal Press, Book Fulfillment Department, 105 Madison Avenue, New York, New York 10016 or at or by calling 800-537-2128, ext. 9300.

For the latest updates from the Foley Hoag Immigration Practice Group, particularly including weekly Process Time Updates from the Vermont Service Center, click here.

The opinions expressed in this article do not necessarily reflect the opinion of ILW.COM.