An In-Depth Analysis of the Prevailing Wage Determination

Meredith W. Barnette, Esq., Partner
Meredith.Barnette@garfinkelimmigration.com

In many cases, the first step of the permanent residence process requires the sponsoring employer to obtain certification from the US Department of Labor (DOL). The process of obtaining that certification is known as the "PERM" process. It involves the employer performing a prescribed labor market test to determine if there are any able, willing, available and qualified U.S. workers. If no such U.S. workers are identified during the labor market test, then the employer can file the PERM application with DOL. One attestation made by the employer when filing the PERM is that the employer will pay at least the prevailing wage at the time that the foreign national employee becomes a Permanent Resident.

In order to attest to paying the prevailing wage, the employer must apply to and receive from DOL's Employment and Training Administration, National Prevailing Wage Center (NPWC) a prevailing wage determination (PWD). The employer must also perform certain recruitment steps before the employer files the PERM application with DOL. For many reasons, best practice is to obtain a PWD before starting the labor market test (LMT). However, circumstances exist when starting the LMT before receiving the PWD makes sense. The pros and cons should be reviewed with the attorney and carefully weighed by the employer before starting a LMT. One pro of starting the LMT before receiving a PWD is that it might shorten the time of the entire PERM process due to lengthy delays in issuing PWDs by DOL. In the past, when DOL issued PWDs more quickly, employers not satisfied with DOL's job classification or wage level could obtain a new PWD in several weeks. However, with current lengthy NPWC processing times for PWDs, employers frequently want to begin the LMT before receiving the PWD.

Employers are not prohibited from starting a LMT before receiving a PWD. However, there are logistical concerns, the scope of which is not addressed in this paper. Again, the concerns should be discussed with the attorney. One of those concerns, though, is that it is not always possible to predict what occupational classification and wage amount DOL will issue on the PWD. The wage might be much higher than an employer will post and pay - even in the future when the employee is a Permanent Resident. In that case, the employer will incur advertising expenses and spend time reviewing applications and interviewing potentially qualified applicants only to find that the employer is unable to file a PERM application due to an unexpectedly high wage on the PWD.

Employers often want to know why wages and classifications cannot always be predicted. First of all, the occupational classifications used by DOL to classify the employer's job are general in nature and may not match well the employer's specific job offer. Additionally, though estimations can be made prior to submitting the PWD application, the application is reviewed by a NPWC employee who uses both objective and subjective measures to determine the classification and wage amount. In fact, the Prevailing Wage Determination Guidance1 published by the Employment and Training Administration that describes the process states the following:

The process described above should not be implemented in an automated fashion. The NPWC must exercise judgment when making prevailing wage determinations. The wage level should be commensurate with the complexity of tasks, independent judgment required, and amount of close supervision received as described in the employer's job opportunity.

Furthermore, sometimes NPWC makes mistakes.2 Though mistakes are rare and some subjective discretion is utilized to determine wages, most of the process as described in the Prevailing Wage Determination Guidance publication is objective. First, the NPWC reviews the data on the application form (ETA Form 9141, Application for a Prevailing Wage Determination, hereinafter, "ETA 9141"). This form contains the employer's job title, job duties, and the minimum requirements for the position. NPWC then compares ETA 9141 data to occupational summaries found in its Occupational Information Network ("O*NET") database.3 When the closest match between the job listed on the ETA 9141 and the occupations in O*NET is determined by NPWC, then NPWC considers the occupation's "Job Zone" found in the O*Net summary. Each O*Net summary includes an assigned "Job Zone"4 that groups the occupation into to one of five zones describing the amount of education, training, and skill preparation typically needed for that occupation.

To determine the correct O*NET classification and its Job Zone, NPWC considers the nature of job offered (job title, education and experience/skill requirements, travel, licenses, supervising responsibilities, language requirements, etc.) and job duties for workers similarly employed. Using this data, NPWC determines the closest O*NET classification including its corresponding Job Zone. NPWC then utilizes the OES Online Wage Library found on the Foreign Labor Certification Data Center website (http://www.flcdatacenter.com). Occupations found in O*Net are also found in the OES Online Wage Library ("OES") along with four wage levels for each occupation in its geographical area. Using the information in O*NET and OES, NPWC completes a Check Sheet found at Appendix B and C of the Prevailing Wage Determination Policy Guidance to determine the prevailing wage level.

NPWC uses the Check Sheet contained in the Prevailing Wage Determination Guidance publication to calculate which of four wage levels are appropriate for the job listed on ETA 9141. As previously described, NPWC matches the duties and requirements to an ONET classification that contains a "Job Zone" which includes information on what the U.S. Department of Labor (DOL) considers normal vocational preparation for those occupations. For example, for occupations with a Job Zone 4 classification, DOL considers it normal to require over 2 years and up to and including 4 years of vocational preparation. For Job Zone 5 occupations, DOL considers it normal to require over 4 years up to and including 10 years. DOL also searches "Appendix D: Professional Occupations Education and Training Categories" of the Prevailing Wage Determination Policy Guidance to determine if the classification has an assigned Education and Training Code. That code determines if a degree and/or experience is normally required for this position. DOL then completes the Check Sheet accordingly.

Following is an example of the process for completing the Check Sheet using an Electronics Engineer position. The employer's job description follows:

Job Title: Senior Electronics Engineer

Location: May work at the Charlotte, NC worksite or telecommute from anywhere in the U.S. and report to the Charlotte, NC site.

Job Duties: Design and develop electronic circuits and components. Determine project material and equipment needs. Prepare engineering sketches or specifications for construction, relocation, or installation. Prepare product development schedules, product costs. Evaluate and report product performance weaknesses. Resolve complex electronics engineering problems. Analyze electronics system requirements, including cost and capacity. Supervise 2 subordinate Electronics Engineers.

Minimum Requirements: Requires a Bachelor's degree in electronics engineering or foreign equivalent and three (3) years of electronics engineering experience to include three (3) years with: design, development, and troubleshooting electronics systems; managing multiple simultaneous projects efficiently; utilizing computer aided design software like CATIA or AutoCAD; and C#, .NET or similar object or component oriented development software.

Travel: Requires US travel 5% to attend team or client meetings and international travel 1% to attend conferences.

Here's how the NPWC would likely review the Electronics Engineer example above to determine the prevailing wage:

  1. All jobs start with a level 1 wage ("1" under Wage Level Result column of the Check Sheet):

Indicator

Job Offer Requirements

O*NET - Usual Requirements

Instruction

Wage Level Result

Step 1.

Requirements

1

  1. Experience. Next, NPWC enters the years of experience required by the employer (in our example, 3 years). NPWC determines the appropriate corresponding O*Net job classification. In our example, NPWC will most likely determine the classification to be 17-2072, Electronics Engineers, Except Computer. That classification is listed as "Job Zone 4". NPWC enters 1, 2, or 3 based on whether the employer's years of required experience are greater than the low end of the O*Net requirements. Following is how this row of NPWC's Check Sheet would appear for our Electronics Engineer above:

Indicator

Job Offer Requirements

O*Net-Usual Requirements

Instruction

Wage Level Result

Step 2.

Experience

Enter years of experience required by employer:

Our example: 3

Job Zone (overall experience, training):

Our example: Job Zone 4 (Normal requirements for Job Zone 4: Over 2 years and up to and including 4 years. The employer is within the normal range, but one year above the low end of the range.)

If the years of experience are greater than the low end of the O*NET usual requirements, enter 1, 2, or 3

Our example: 3 years is above the low end of the O*NET by 1 year)

Our example:

1

(Because 2 years is the low end of Job Zone 4 and our employer requires 3 years, NPWC inserts 1 level. If the employer instead requires 4 years, then NPWC adds 2; if the employer requires 5 or more years, NPWC adds 3.)

  1. Next, DOL considers the education required by the employer.

Indicator

Job Offer Requirements

O*NET - Usual Requirements

Instruction

Wage Level Result

Step 3.

Education

Education required by the employer.

Our example: Bachelor's degree

Compare to Professional Occupations Appendix D list (Appendix D contains a list of what the DOL considers "professional occupations" and their corresponding education & training categories):

Our example:

The education and training code for 17-2072 is "5." For code 5 it is normal to require a Bachelor's degree for the position.

If years of required education exceed the professional code, OR the ONET usual requirements for non-professional occupations, enter 1 or 2.

Our example:

A bachelor's degree is normal to require for education and training code 5, so NPWC should enter "0." (If the employer instead requires a Masters, then NPWC would insert 1 in the next column.)


0

  1. Now comes the more subjective part of the process. NPWC must compare the duties and requirements to the O*NET's Tasks, Knowledge, and work activities and "note special requirements from the job description or other special requirements including licensure or certification." In this part, anything not included in the O*Net summary can result in an additional point. Examples may include such requirements as foreign language; working off-site; telecommuting; licenses or certifications; combining occupations; and travel (if not included in the O*Net summary). Small amounts of domestic travel rarely result in a wage level increase, but almost all international travel increases the wage level. The row on NPWC's sheet for our Electronic Engineer example may appear as follows:

Indicator

Job Offer Requirements

O*NET - Usual Requirements

Instruction

Wage Level Result

Step 4.

Special Skills (Y/N)

Note special requirements from the job description or other special requirements including licensure or certification.

O*NET Tasks, Knowledge and Work Activities. National or state licensing/certification requirements

Consider if skills, knowledge, work activities, tasks, licensure or certification requirements indicate a higher level of complexity or decision-making. Enter 1 or 2 as appropriate.

Our example:

The examiner might add a level for telecommuting option or even for having "Senior" in the job title, but for our example we'll say NPWC decides not to add a level for those reasons. However, NPWC will likely add 1 level for international travel.

1

  1. The last consideration made by NPWC is regarding whether or not supervisory duties are included. If the O*NET classification normally includes supervisory duties (i.e. Architectural and Engineering Managers), then no additional wage level should be added. However, if the tasks do not normally include supervising, managing, and/or mentoring duties, then DOL likely adds a wage level. Our example would likely result in the following:

Indicator

Job Offer Requirements

O*NET - Usual Requirements

Instruction

Wage Level Result

Step 5.

Supervisory duties (Y/N)

Note any supervisory duties indicated in the job duties or description.

If Yes, enter a 1 - UNLESS supervision is generally required by the O*NET occupation.

(Our example)

1

The completed Check Sheet for our example now looks like this:

Indicator

Job Offer Requirements

O*NET - Usual Requirements

Instruction

Wage Level Result

Step 1.

Requirements

1

Step 2.

Experience

Enter years of experience required by employer:


3

Job Zone (overall experience, training):


Job Zone 4

If the years of experience are greater than the low end of the O*NET usual requirements, enter 1, 2, or 3

1

Step 3.

Education

Education required by the employer.

Bachelor's degree

Professional Occupations Appendix D

Other occupations - Job Zone (overall experience, job training, education)

Bachelor's degree

If years of required education exceed the professional code, OR the ONET usual requirements for non-professional occupations, enter 1 or 2.

0

Step 4.

Special Skills (Y/N)

Note special requirements from the job description or other special requirements including licensure or certification.

O*NET Tasks, Knowledge and Work Activities.

National or state licensing/certification requirements

International Travel

Consider if skills, knowledge, work activities, tasks, licensure or certification requirements indicate a higher level of complexity or decision-making. Enter 1 or 2 as appropriate.

1

Step 5.

Supervisory duties (Y/N)

Note any supervisory duties indicated in the job duties or description.

If Yes, enter a 1 - UNLESS supervision is generally required by the O*NET occupation.

1

Sum:

4

In the example above, NPWC determines that the prevailing wage is a level 4 wage which is the highest wage level on OES listings. NPWC could have determined that 1% international travel should not increase the wage level, but usually NPWC adds a level for any international travel. To determine the level 4 wage amount, NPWC utilizes the OES Online Wage Library and issues the PWD with a level 4 wage for the geographical area of intended employment. In our example above the ETA 9141 would be issued with a level 4 wage for Electronics Engineers, Except Computer in Charlotte, NC (Mecklenburg County).

For the employer to continue with the PERM application process, the employer must agree to pay at least the prevailing wage to the foreign national employee when the employee is a Permanent Resident. Additionally, the wage posted in any of the advertisements, the Notices of Filing, and on the ETA Form 9089, Application for Permanent Labor Certification must be at least 100% of the prevailing wage issued by NPWC. If the employer started the LMT before receiving the PWD, then the PERM application (ETA Form 9089) must be filed with DOL before the PWD expires. Alternately, if the employer waits to start the LMT until after receiving the PWD, then the recruitment must begin before the PWD expires. With this in mind, the employer must also keep track of the expiration date of the recruitment methods. The PERM application must be filed with DOL within 180 days of starting the LMT. Therefore, if the employer starts recruitment before receiving the LMT, but then wants to dispute the wage or classification, it might not be possible to obtain a new determination and file the PERM before the recruitment expires. Again, it is advisable to carefully review the deadlines and weigh other risks and factors with the attorney before starting a labor market test.


1 Employment and Training Administration Prevailing Wage Determination Guidance, Nonagricultural Immigration Programs, Revised November 2009 is available at http://www.flcdatacenter.com/skill.aspx.

2 Mistakes made by DOL on ETA Form 9141, Application for a Prevailing Wage Determination can be addressed in several ways: by email when the mistake is typographical (such a correction is usually made in a few days); a request for a redetermination or Director review (a response to such a request usually takes at least as long as applying for a new PWD); or a request for review by the Board of Alien Labor Certification Applications (BALCA). BALCA review can take many months.

3 The Occupational Information Network (O*NET) and its occupation summaries are found at http://www.onetcenter.org and http://www.onetonline.org.

4 For the purposes of this discussion, we review only how DOL determines wages that are not covered by a collective bargaining agreement and the employer does not choose to provide a survey or request use of a current wage determination in the area under the Davis-Bacon or McNamara-O'Hara Service Contract Acts.

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