Do I really have to pay the H-1B worker more than the prevailing wage?

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Question:

I'm the hiring manager for a mid-sized technology company. We pay our workers amounts that we think are fair, and new employees accept our offers. Recently I’m getting applications from foreign students for a new position we advertised, which I guess could be the basis for hiring someone on an H-1B visa. But I’ve read that we'll need to pay the H-1B worker the "prevailing wage." Could this mean we have to pay this new person more than our current employees?

Answer:

It is indeed possible that you will need to pay an H-1B worker an amount that seems out of scale with your existing wage structure. To employ a foreign national in the H-1B visa category, you need to pay the higher of the "actual wage" or the "prevailing wage."

The actual wage is the wage you pay to your other employees in the same job. The prevailing wage is the statistical average paid to workers in a particular job in a geographic region, which typically is the normal commuting area. If do not have any current employees in the job you recently advertised, then the default minimum amount you would need to pay is the prevailing wage.

One of the common misconceptions about foreign national workers is that employers hire them and pay below-market wages. While this certainly may happen for undocumented workers, employers that lawfully hire H-1B workers must pay the higher of the actual or the prevailing wage. The policy behind this requirement is to prevent U.S. employers from taking advantage of foreign national workers by offering below-market wages. Part of the H-1B sponsorship process requires you to post a notice at the workplace with the job title, dates, and offered wages for the proposed employment. The low end of any wage range must start at the prevailing wage.

In your case, it appears that the prevailing wage may be above the amount you are paying your other workers. Your situation indeed presents one of the unusual consequences of the H-1B visa process. Although the purported policy is to protect foreign national workers, the wage and notice requirement actually could operate to increase the wages of U.S. workers. If, for example, your other employees see the posting and recognize that it's the same job or comparable, they may demand a wage that’s in line with what you are offering to the H-1B worker. You will want to give this situation some careful consideration and consult immigration counsel before proceeding.

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