What is the Prevailing Wage (PW)?



The first step to proceeding with an H-1B or Green card processing based on Employment is to obtain a Prevailing Wage Determination (PWD) from the U.S. Department of Labor (DOL) for the position. When you go through the employment-related immigration process, it is important to have an accurate understanding of the Prevailing Wage (PW).


The reason why the DOL applies PW to foreigners is to ensure that their wages are equal to or higher than those of American employees in similar occupations, so that American employees or job seekers are not at a disadvantage compared to foreigners. The DOL divides all jobs in the United States in categories of five Job Zones (1 through 5) according to the specific job descriptions and the time it takes to learn the knowledge and skills necessary to perform the job. For instance, occupational groups that fall under Job Zone 1 are able to acquire the knowledge or skills by taking related classes, training, or practical work experience during a time period up to 6 months. In contrast, most of the Job Zone 5 occupations are positions that require a master's or doctoral degree and many years of experience.


The amount of PWD, which is the first step in any employment-related immigration process, is important because it sets the overall framework for the immigration process. The PWD amount depends on the location of the employer and which Job Zone the foreign employee’s position is in. The PWD has four different levels from 1 to 4 depending on the difficulty of the task. For example, even for the same position in Job Zone 1, the PWD amount for Chicago and LA will be different. In addition, depending on whether the job duty of the position is an entry or management & supervisory position, which is the minimum knowledge and skills required by the employer to perform the job - not the degree or period of experience held by the foreign employee – the amount of PWD will be different according to the level.


For a H-1B nonimmigrant visa, the employer can determine the Job Zone and the level. It usually takes only seven to ten days to be notified of the decision from DOL. However, in the case of the permanent residency (immigration visa) process based on the employment, the employer first determines the Job Zone, specific work details, and qualification of the position. They then proceed to submit an application to the DOL to get their final decision regarding the PW amount. It takes at least 3 months to receive a decision from the DOL. Therefore, when filing an application for the PW, the employer must already determine the overall direction of the immigration process, and carefully adjust the job descriptions or minimum qualifications of the position, in order for the employer to receive a PWD at a reasonable level which they can pay. When the employer submits the I-140 petition, the annual salary provided by the employer to the foreign employee must meet the criteria for the amount of PWD required by DOL, and the employer's ability to pay for that annual salary must be proved by a tax return or financial statement.


The PWD decision process is a complex procedure with many factors to consider. If you make a mistake at this stage, in most cases you will have to start over from the beginning. So, we recommend that you seek professional help.

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