There are two steps required by the U.S. Department of Labor (DOL) in the H-1B process. The first is the actual wage rate. The wage offered to the H-1B cannot be less than that offered to other employees with the same job/duties and similar experience and qualifications. The second is the prevailing wage. The H1B cannot be paid less than the prevailing wage determination. The employer must pay the higher of these two.
Actual Wage Rate C.F.R. 665.731(a)(1) {Code of Federal Regulations}
The 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 such wage level, the following factors may be considered: experience, qualifications, education, job responsibility and function, specialized knowledge and other legitimate business factors. Where there are other employees with substantially similar experience and qualifications in the specific employment in question—i.e., they have substantially the same duties and responsibilities as the H-1B nonimmigrant—the actual wage shall be the amount paid to these other employees.
Prevailing Wage
The Office of Legal Affairs at The Ohio State University has determined that Ohio State nonimmigrant employees must have a “safe harbor” wage source for the prevailing wage. In a DOL audit, this guarantees acceptance of the prevailing wage determination as correct, without challenge. A prevailing wage determination by the Department of Labor National Processing Center meets the criteria for safe harbor.
Documentation C.F.R. 655.731(b)(1 and 2)
The department shall develop and maintain documentation sufficient to meet its burden of proving the validity of the wage… The documentation shall be made available to DOL upon request. Documentation shall also be made available for public examination… The employer shall also document that the wage rate paid to the H-1B nonimmigrant is no less than the required wage rate. The documentation shall include information about the employer’s wage rate for all other employees for the specific employment… at the place of employment.
In addition to payroll data required…, the employer shall retain documentation specifying the basis it used to establish the actual wage. The employer shall show how the wage set for the H-1B nonimmigrant relates to the wages paid by the employer to all other individuals with similar experience and qualifications for the specific employment in question…
This means the department must retain and be able to provide written documentation to DOL with a complete explanation of the system used to set the actual for all employees in the specific employment in question.
Part-Time Employment
For all H-1B part-time employees (less than 40 hours per week) submitted to DOL and certified on the LCA, regulations require employers to keep records of “hours worked each day and each week by the employee.” A copy of the system used to keep track of these hours must be submitted to the Office of International Affairs with the petition documents. Hourly employees must be paid at the hourly wage listed on the LCA for all hours worked.