The U.S. Department of Labor’s regulations mandates that wages provided to a foreign worker must correspond to the prevailing wage rate for the occupational classification in the area of employment. Employers can obtain this wage rate by submitting a request to the National Prevailing Wage Center (NPWC).
The prevailing wage pertains to the Non-agricultural Immigration Programs (PERM, H-2B, H-1B, H-1B1, H-1C, and E-3).
What is Equal Pay Transparency?
Equal Pay Transparency (EPT) refers to the requirement for employers to provide information about their employees’ pay, including their salaries, bonuses, and other forms of compensation.
EPT laws, requiring the disclosure of pay scales, have been enacted in multiple states and municipalities, potentially affecting the Program Electronic Review Management (PERM)/H-1B labor condition application process for employers who conduct labor market testing prior to hiring foreign workers. These laws aim to achieve equal pay for equal work across all genders, races, and nationalities and are seen as a step towards that goal. The fact that EPT regulations vary among different locations could potentially lead to inconsistencies and loopholes in their implementation. This may result in inadequate protection for the environment and public health in certain areas.
States with Pay Transparency Laws
Equal Pay Transparency laws have been established in numerous states across the country. Most recently, the law became operative in New York City on November 1, 2022. EPT regulations are already in effect in New Jersey, Colorado, Ohio, Connecticut, Maryland, and Nevada.
To ensure pay transparency, California has introduced regulations that mandate employers with a workforce of 15 or more to publicly display their pay ranges. For smaller businesses with less than 15 employees, job applicants can request to see the pay range. Additionally, for at least 3 years following the end of an employee’s employment, all California companies will be required to maintain pay history data for each employee.
In Rhode Island, if an applicant requests wage information, an employer must provide it before discussing compensation. To ensure compliance, employers should research the EPT requirements in their state.
Equal Pay Transparency Rules and Prevailing Wage
As part of the Program Electronic Review Management (PERM) process, labor market testing is used to determine Prevailing Wage rates. Labor market testing will be impacted as more firms are compelled to make salary information available to the public. It is anticipated that the number of Prevailing Wage Determinations (PWD) will rise.
Practitioners are urged to conduct pay assessments in advance, in order to better understand the market’s condition at the time of testing. However, this process is not guaranteed to be accurate, and should only be used for estimations made prior to receiving the official test results.
Local EPT protocols require minimum and maximum salaries to be posted on job advertisements, unless an exception is adopted. For example, under PERM regulations, newspaper and journal advertisements do not need to have wage requirements posted. However, most EPT laws require salary ranges to be posted. In a situation like this, employers will be expected to post salary and wage information, as required by EPT.
The Potential Impact of EPT Laws on the PERM
More states and localities are enacting salary transparency laws requiring employers to list compensation and benefits online. New York City is now among the states requiring employers to disclose minimum and maximum salaries for advertised jobs, promotions, or transfer opportunities. The law applies to employers with four or more workers in the previous year. Failure to comply with these laws may result in civil fines. These laws impact employers’ PERM labor certification programs, specifically labor market testing activities initiated prior to the issuance of Prevailing Wage Determinations (PWD). Employers testing the labor market in California will have to incorporate the EPT law into their PERM practices.
6 Steps for Better Pay Transparency
Transparency in pay practices is essential for creating a fair and equal workplace. By adopting the following five steps, organizations can promote pay transparency and build trust with employees:
Understand your State Labor Laws and Equal Pay Transparency (EPT) laws
Get a clear understanding of where your company currently stands in terms of pay transparency through conducting surveys and gathering feedback from employees
Align your company’s compensation strategy with your talent goals and company culture. Determine what you value in your employees and the behaviours you wish to reward
Utilize market data to create a more objective pay structure by determining fair salary ranges and defining roles and responsibilities
Ensure pay equity by conducting a thorough payroll audit to identify and address any pay disparities
Empower managers with the knowledge and skills to approach salary discussions with employees in a transparent and equitable manner
Conclusion
Complying with EPT rules and laws is crucial for employers. Businesses should ensure their current job postings and records are in accordance with EPT standards, particularly for those with PERM applicants and recipients, unless an exception applies.
For assistance in ensuring compliance, case-specific questions, or general help with PERM or EPT requirements, please contact Kodem Law Firm
contact us at – 888-955-6634 or mail us at – info@kodemlaw.com
