PERM Prevailing Wage: Who Decides How Much an Employer Must Pay?

For U.S. employers considering sponsoring a foreign worker for a green card, one of the first questions is often: How much will we be required to pay the employee?

The answer may surprise some employers. In the PERM labor certification process, the employer does not have complete discretion to determine the salary. Instead, the U.S. Department of Labor (DOL) establishes a minimum required wage for the position through a process known as a PERM prevailing wage determination.

Understanding how the prevailing wage is determined is an important first step in deciding whether employment-based green card sponsorship is financially feasible.

What Is the PERM Prevailing Wage?

The PERM prevailing wage is the minimum wage an employer must offer for a permanent position when sponsoring a foreign worker through the PERM labor certification process.

The purpose of this requirement is to help protect U.S. workers by ensuring that employers do not use foreign labor to undercut wages for similarly employed workers in the same geographic area.

The prevailing wage is generally based on the wages paid to workers performing similar jobs in the area where the sponsored employee will work.

For example, the prevailing wage for a livestock farm worker in North Carolina may differ from the wage for a comparable position in another state. The required wage may also vary depending on the specific job duties, minimum qualifications, and geographic location of the position.

The employer must offer at least the applicable prevailing wage, even if the employer ordinarily pays less for similar positions.

Who Determines the PERM Prevailing Wage?

The U.S. Department of Labor determines the prevailing wage through its National Prevailing Wage Center (NPWC).

The employer begins by submitting Form ETA-9141, Application for Prevailing Wage Determination, through the DOL's Foreign Labor Application Gateway (FLAG) system.

The application provides information about the proposed position, including:

• The job title and detailed job duties.

• The location where the employee will work.

• The minimum education required for the position.

• The amount and type of experience required.

• Any specialized skills, licenses, or certifications.

• Other relevant job requirements.

The NPWC reviews this information and issues a prevailing wage determination identifying the wage applicable to the position.

Importantly, the employer does not get to select the wage level simply because a lower wage would be more affordable. The Department of Labor evaluates the position and its requirements to determine the appropriate classification and wage.

How Does the Department of Labor Calculate the Prevailing Wage?

The Department of Labor generally relies on occupational wage data collected by the Bureau of Labor Statistics, along with the requirements of the particular position.

Several factors can influence the determination.

1. Job Duties and Occupational Classification

The actual duties of the position are important.

For example, an employee whose primary responsibilities involve feeding and caring for livestock may fall within a different occupational classification than someone responsible for operating and maintaining specialized agricultural machinery. The Department of Labor evaluates the actual duties of the position rather than relying solely on the job title.

A job title alone does not determine the classification. The Department of Labor examines the duties the employee will actually perform.

2. Geographic Location

Prevailing wages vary by geographic area because labor market wages differ across the country.

A position in Charlotte, North Carolina, may have a different prevailing wage than a comparable position in Hickory, North Carolina, or another metropolitan area.

Employers with multiple locations should carefully identify the intended worksite and any additional locations where the employee may be required to work.

3. Education and Experience Requirements

The minimum qualifications for the position may affect the assigned wage level.

For example, a position requiring several years of experience or advanced technical knowledge may receive a higher wage level than a comparable entry-level position.

However, employers should not artificially reduce the requirements of a position to obtain a lower prevailing wage. The job requirements must accurately reflect the employer's genuine business needs and comply with PERM regulations.

4. Wage Levels

For occupations covered by the standard four-level wage structure, the Department of Labor generally assigns one of four wage levels:

• Level I: Generally associated with entry-level positions.

• Level II: Generally associated with qualified employees performing moderately complex duties.

• Level III: Generally associated with experienced employees performing more complex duties.

• Level IV: Generally associated with highly experienced employees performing advanced or complex duties.

These descriptions are generalizations. The appropriate wage level depends on the position's specific requirements and the Department of Labor's applicable guidance.

Not every prevailing wage determination follows this four-level structure. Different rules may apply to certain positions, collective bargaining agreements, or acceptable alternative wage surveys.

Can an Employer Pay Less Than the PERM Prevailing Wage?

An employer cannot offer less than the applicable prevailing wage for the sponsored permanent position.

However, there is an important distinction between the wage the employee currently earns and the wage the employer promises to pay when the employee obtains permanent residence.

The PERM process generally does not require the employer to begin paying the PERM prevailing wage immediately upon receiving the wage determination.

Instead, the employer must make a bona fide offer to pay the required wage when the foreign worker becomes a permanent resident and begins the certified permanent employment.

For example, suppose an employer currently pays an employee $19 per hour, but the Department of Labor determines that the prevailing wage for the sponsored position is $25 per hour.

The employer may potentially continue the PERM process while the employee earns $19 per hour, provided the employer makes a genuine commitment to pay at least $25 per hour when the required permanent employment begins.

Other laws and immigration classifications may impose separate wage obligations. For example, an employee working in H-1B status may already be subject to applicable H-1B wage requirements.

Employers should not assume that the PERM wage rules override other federal, state, or local wage laws.

What Happens if the Prevailing Wage Is Higher Than the Employer Expected?

Receiving a prevailing wage determination that is significantly higher than anticipated can create a difficult decision for an employer.

For example, a small business may be willing to sponsor a valuable employee but discover that the required wage exceeds its planned compensation budget.

Depending on the circumstances, the employer may have several options.

Review the wage determination for accuracy. The employer should confirm that the job duties, minimum qualifications, worksite, and occupational classification were accurately reflected in the application.

Consider whether a review is appropriate. If the determination appears incorrect, there are procedures for requesting review or reconsideration. These procedures are subject to specific requirements and deadlines.

Evaluate the financial commitment. The employer should determine whether it can realistically offer and eventually pay the required wage.

Reassess the position if business needs have genuinely changed. A materially different position may require a new prevailing wage request. Any revised duties or requirements must accurately represent a legitimate job opportunity.

Employers should not manipulate job descriptions or qualifications simply to obtain a lower wage.

Does the Employer Have to Prove It Can Pay the Prevailing Wage?

Yes. Financial ability is an important part of the employment-based green card process.

For many PERM-based immigrant petitions, the employer must establish its ability to pay the offered wage beginning on the priority date and continuing until the employee becomes a lawful permanent resident.

This requirement is generally evaluated by U.S. Citizenship and Immigration Services (USCIS) when reviewing Form I-140, Immigrant Petition for Alien Workers.

USCIS may examine evidence such as federal tax returns, audited financial statements, or annual reports. Depending on the circumstances, additional evidence may also be relevant.

The prevailing wage determination itself does not establish that the employer can afford the salary.

This is one reason employers should consider the financial implications of sponsorship before beginning the PERM process.

How Long Is a PERM Prevailing Wage Determination Valid?

A prevailing wage determination has a limited validity period established by the Department of Labor.

Generally, the validity period must be at least 90 days and no more than one year.

To use the determination, the employer must either begin the required PERM recruitment or file the PERM labor certification application within the applicable validity period, in accordance with DOL rules.

Because prevailing wage determinations and recruitment are separate stages of the PERM process, careful timing is important.

An employer that allows a determination to expire without taking the required steps may need to obtain a new determination, potentially resulting in additional delays.

Can an Employer Begin Recruitment Before Receiving the Prevailing Wage?

Employers should generally plan to obtain the prevailing wage determination before beginning recruitment.

Although certain recruitment activities may be conducted while a prevailing wage request is pending, this approach requires careful coordination.

The employer must ultimately ensure that the offered wage satisfies the applicable prevailing wage requirement and that all recruitment complies with DOL regulations.

If the Department of Labor issues a higher wage than anticipated, the employer may need to reconsider the recruitment strategy or take additional steps.

For many employers, obtaining the prevailing wage determination first provides greater certainty and reduces the risk of unnecessary expenses or complications.

Frequently Asked Questions About the PERM Prevailing Wage

Does the employer choose the PERM wage level?

No. The Department of Labor determines the appropriate occupational classification and wage level based on the job duties, requirements, location, and applicable wage guidance.

Is the PERM prevailing wage the same as minimum wage?

No. The PERM prevailing wage is based on the applicable occupational wage requirements for the position and geographic area. It is often higher than the federal or state minimum wage.

Can an employer pay more than the prevailing wage?

Yes. The prevailing wage establishes a minimum for the sponsored position. Employers may offer a higher salary.

Does the employee have to earn the prevailing wage before PERM is filed?

Not necessarily. The PERM prevailing wage generally applies to the offered permanent position when the employee obtains permanent residence and begins the certified employment. Separate wage requirements may apply to the employee's current position or immigration status.

Can an employer challenge a prevailing wage determination?

Yes. The Department of Labor provides procedures for reviewing certain prevailing wage determinations. Employers should evaluate the basis for a challenge and applicable deadlines before proceeding.

Is the prevailing wage the same for every employer sponsoring the same occupation?

Not necessarily. Even within the same occupation and geographic area, differences in job duties, minimum qualifications, and other requirements can affect the determination.

Planning Ahead Can Help Employers Avoid PERM Problems

The prevailing wage determination is one of the earliest and most important steps in the PERM labor certification process.

For employers, the key is understanding the potential financial commitment before investing substantial time and resources in recruitment and the remaining green card process.

An accurately prepared prevailing wage application can help reduce avoidable delays, unexpected wage determinations, and complications later in the case.

At Powers Immigration Law, we assist U.S. employers with employment-based immigration matters, including PERM labor certification and employer-sponsored green card petitions.

If your business is considering sponsoring a foreign worker for permanent residence, our office can help you understand the process, evaluate the position's requirements, and prepare for the steps ahead.

Contact Powers Immigration Law to schedule a consultation about your company's employment-based immigration needs.

Disclaimer: This article provides general information about U.S. immigration law and is not legal advice. Immigration laws, regulations, agency policies, and processing procedures may change. Employers should obtain advice concerning their specific circumstances before making immigration or employment decisions.