The University must pay the H-1B employee the required wage, which the Department of Labor defies as the higher of two figures:
The “Prevailing Wage” rate or the “Actual Wage” rate.
Federal regulations require H-1B employers to document the actual and prevailing wage in advance of filing the H-1B petition with USCIS.
The prevailing wage is used as a measure of the minimum allowable wage to be paid by an employer seeking to employ an international worker in H-1B status. It is a calculation of the average wage rate paid by employers to similarly-employed workers in substantially comparable jobs in the geographic area of intended employment. If there are no substantially comparable jobs in the area of intended employment, the prevailing wage is the average wage paid by employers to similarly-employed workers outside of the area of intended employment.
Before the University can petition USCIS for an H-1B, IP requests a “prevailing wage determination” from the U.S. Department of Labor (DOL)’s National Prevailing Wage Center (NPWC) in Washington, D.C. using information (i.e. specific duties, responsibilities and worksite location) about the position. This information is based on a description of the position. It is important that the hiring unit accurately describe the position’s minimum and essential job requirements, as well as its duties, so that DOL can make a correct wage determination.
8-12 weeks after submission to DOL, a prevailing wage determination is returned to IP. Prevailing wage determinations (PWDs) are based on many factors (e.g. geographic location, discipline, job duties, title, required educational level, required work experience, supervisory responsibilities, etc.) including the fact that the employer is a university.
The Department of Labor collects national salary wage data annually; therefore, prevailing wage amounts fluctuate from year to year. Campus departments preparing to extend the stay of an H-1B should anticipate the possibility that the prevailing wage may have increased since the previous H-1B petition was filed with USCIS.
The actual wage is the wage rate paid by the hiring unit to all other individuals with qualifications and duties similar to those of the H-1B beneficiary for the specific employment in question. The “hiring unit” is typically the most meaningful unit for comparison. For example, if the department sponsoring the H-1B has no employees of remotely similar qualifications or duties to the H-1B beneficiary, then the most meaningful unit for comparison may be a broader look to comparable or similar departments.
In determining the actual wage, the hiring unit may take into consideration objective factors including experience, education, job responsibility and function, specialized knowledge, and other legitimate business factors.
When there are employees in the hiring unit with qualifications and duties similar to the H-1B beneficiary, the actual wage is the amount paid to these other employees; this can be expressed as a range.
When there are no other employees in the hiring unit with qualifications and duties similar to the H-1B beneficiary, and there is no other unit that offers a good comparison, the actual wage is the salary offered to the H-1B beneficiary.