Equal Pay Transparency Laws May Potentially Impact the PERM and H Visa Process

Equal Pay Transparency (EPT) laws have been passed in several states and localities, potentially impacting the permanent employment certification (PERM)/H-1B labor condition application (LCA) process for employers conducting labor market testing efforts within those states before hiring foreign workers. Generally, EPT laws require disclosure of pay scales viewing such disclosures as the next step towards achieving equal pay for equal work across genders, races, and nationalities. EPT rules are not uniform and differ by locality.

Newly passed EPT laws in California, Rhode Island, and Washington will go into effect on January 1, 2023. In addition, a handful of states and localities already have EPT laws that have gone into effect. Based on state and locality, some require that salary information be part of published job postings while others merely dictate that such information need only be provided upon request at the time an offer of employment is made.

For example, in California, the EPT law requires employers with 15 or more employees to post pay ranges in their written job postings. All employers in California will also be required to disclose the pay range for a given position to job applicants who request that information. In addition, all employers must maintain job title and pay history records for each employee for the duration of employment plus three years after the end of employment.

How do these laws impact an employer’s obligations under existing immigration law?

Federal LCA notice requirements for H-1B petitions under 20 CFR § 655.734 require a Notice of Posting to disclose, among other details, the “wages offered” for a position. Currently, federal PERM regulations at 20 CFR § 656.17 and 20 CFR § 656.18 do not require newspaper/journal advertisements or other labor market testing activities to contain a wage or wage range. Rather, an employer need only include a wage or wage range in their Notice of Filing. And the wage or lower end of the wage range must be at or above the prevailing wage determination issued. These rules, however, do not override relevant EPT requirements, which may now require disclosure of salary information not only in the Notice of Filing but job postings as well.

As such, new EPT requirements to publish pay in job postings may impact an employer’s PERM program, specifically labor market testing activities initiated prior to the issuance of prevailing wage determinations (PWDs). In addition, these rules may also require additional disclosure of employee benefits and other compensation offered to hired applicants for H-1B LCA Notice of Postings.

In the PERM context, for example, cases where testing efforts have begun prior to obtaining a PWD where EPT laws mandate that job postings include wages or wage ranges, efforts such as the Notice of Filing, which requires identifying offered salaries, may have to be redone if the PWD comes back higher than the posted/offered salary or the low end of a salary range.

While local EPT laws do not change federal PERM or LCA regulations, they also do not conflict. Accordingly, whether an employer must comply with both PERM/LCA regulations and local EPT laws is something an employer should carefully consider, in consultation with immigration counsel, to ensure adherence to PERM and EPT rules regarding PERM filings and labor market tests going forward. This especially applies to job opportunities in jurisdictions where newly passed EPT rules impose stricter disclosure requirements.

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.