Pay Transparency Laws May Impact PERM Recruitment

Impact PERM
November 18, 2022

Most employers have become aware of the growing number of city and state laws requiring pay transparency. As such, employers must provide reasonable pay scales in job advertisements that are not open-ended. Furthermore, the advertisements must represent the expected pay for the position. Colorado and New York City have already enacted similar laws, and others will soon follow suit.

Though these laws do not directly relate to employers’ ability to hire foreign national workers, they may have a significant effect nonetheless. For example, most employers must undergo the Permanent Labor Certification (PERM) process to sponsor a foreign national worker for permanent residence. In addition, employers must perform several steps before becoming a sponsor.

These steps include advertising the job opening for domestic workers through five media types and establishing that they will pay the prevailing wage. Under the Department of Labor’s (DOL) regulations, a mentioned salary cannot be less than the department’s prevailing wage or the offered wage to foreign national employees.

The DOL requires Notices of Filing to list the wage, but this does not apply to other recruitment forms. However, this may not prove the case with transparency laws.

In jurisdictions with pay transparency laws in effect, covered employers must list a reasonable wage range in most job advertisements and postings. This requirement means that employers must comply with applicable pay transparency laws when they place an ad for a PERM application.

Additional jurisdictions may soon introduce pay transparency laws, encouraging employers to include a reasonable wage range in their PERM recruitment. This wage range must comply with both the DOL and any requirements placed by existing pay transparency laws.

The low range should equal or exceed the prevailing wage and reflect the employer’s wage scale to comply with these regulations. Furthermore, it should include the salary of the foreign national PERM applicant. However, exceptions to this rule include cases of greater prevailing wages.

Given that the local and state government causes this issue, it is unlikely that the DOL will provide guidance on handling these issues. As a result, this is an additional step that employers must navigate on their own or with counsel.

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