Obligation to pay: wages
When it comes to paying your H1-B employee it is important to be aware of all the different rules regarding wages.
SKIP TO:
- How does an employer determine what to pay the H-1B worker?
- What is the prevailing wage?
- Where can I obtain prevailing wage information?
- What is the actual wage?
- How is an H-1B worker paid?
- What happens if an H-1B worker is paid less than the required wage rate?
- Are H-1B workers protected by other Federal wage requirements?
- Is there a minimum number of hours that must be paid to an H-1B employee?
- When must the employer start paying?
How does an employer determine what to pay the H-1B worker?
In order to comply with the Department of Labor, the employer must pay the required wage rate. The required wage rate is either the prevailing wage or the actual (in-house) wage. Whichever is found to be higher is the rate the employer MUST pay the H-1B worker. “The prevailing wage rate must be no less than the minimum wage required by Federal, State, or local law.”
What is the prevailing wage?
The prevailing wage is determined by one of two ways:
- If there is a union contract that fits the occupation of the H-1B worker, and it has a wage rate set on it, the employer will use that.
- The other way is taking the weighted average of pay for all workers in the H-1B worker’s occupation, within the geographic area of intended employment.
Where can I obtain prevailing wage information?
You can utilize the search wizard on the “Foreign Labor Certification Data Center”. (This gives very precise information that is broken down by state, data source, area (county, region etc.), keyword, and/or occupation).
What is the actual wage?
The actual wage is the wage rate paid to all employees who are similar in experience and qualifications to the H-1B worker. Unlike the prevailing wage which is determined by the weighted average for ALL workers in that field, the actual wage is based on the rate paid by the employer to their employees in a specific location. Because the actual wage is not established by a regulatory agency, the employer must document how pay for the H-1B worker was established, and any discrepancies (whether positive or negative) from the wages of the other employees. “If there are no similarly employed workers, the actual wage is the wage paid to the H-1B worker.”
How is an H1-B worker paid?
The H-1B worker must be paid cash in hand, and free and clear.
- Cash in hand means that the pay cannot be through stocks or cash equivalents.
- Free and clear is that no deductions are made from the wage in order to pay for things that the employer deems necessary.
What happens if an H1-B worker is paid less then the required wage rate?
If an employer is found to have not paid the H-1B employee the proper amount, a hearing will be set. If through that hearing, the employer is found guilty, the Wage and Hour Division of the Department of Labor has the authority to enforce said employer to pay the required wage rate and any back pay due. There may also be fines and/or possible debarment from the H-1B program if the DOL considers it necessary.
Are H1-B workers protected by other Federal wage requirements?
Yes, an H-1B worker is protected through the same Federal wage statutes that a U.S. worker is protected through.
Is there a minimum number of hours that must be paid to an H1-B employee?
Yes, there is. Whatever the employer has recorded on the Form I-129/129W, Part 5 is the minimum number of hours allowed.
When must an employer start paying?
The employer must start paying, even if the H-1B worker is nonproductive, from the time of the following events, whichever comes first.
- As soon as the H-1B worker “enters into employment”. This is defined as when the H-1B worker is available to work or beings training or orientation i.e. when the employee “comes under the control of the employer”.
- Within the first thirty days that the H-1B worker is admitted into the United States in direct correlation with their H-1B petition. If such is the case, the employer must pay whether or not the H-1B worker has “entered into employment”.
- If the worker is already in the United States, the employer must begin payment no later than sixty days after the H-1B worker is approved to work for the employer (as noted by the approval date on the USCIS Form I-797 which is issued when an application or petition is approved). In this case too, the employer must pay whether or not the H-1B worker has “entered into employment”.