States, municipalities, and other local regulatory entities continue to impose additional pay transparency requirements upon employers hiring in various jurisdictions throughout the United States. In some locations, employers are required to provide a position’s pay ranges to job applicants upon request; in others, employers are required to post a position’s compensation range in advertisements and job postings. Sometimes, employers are required to share additional information, such as data regarding benefits or incentive compensation. Unfortunately, these requirements create challenges for employers seeking to sponsor permanent residents, as the federal government has imposed its own pay transparency requirements upon permanent residency postings, which do not coordinate with state and local regulations.
Employers seeking to sponsor a candidate for permanent residence in the United States are required to follow a multi-step process for most positions. This process, known as the Program Electronic Review Management (PERM) Process, is designed in part to protect the U.S. worker by ensuring that employers demonstrate that they are unable to find a qualified, willing, able, and available U.S. worker to fill the position before permanent residency is granted. In other words, the employer must conduct an extensive recruitment campaign. While the PERM regulations do not require employers to include salary information for the position in its recruitment, they do require employers to provide notice to current employees that includes compensation. And that compensation must be at or above the Department of Labor’s prevailing wage paid to similarly situated U.S. workers, unless the employer demonstrates to the DOL that an alternate prevailing wage is acceptable. Only after the DOL has issued a wage determination and after the employer has conducted the required recruitment and notified current employees of the position and wage offered may the employer proceed with the permanent residence process.
Unfortunately for employers, complying simultaneously with the PERM process and state and local pay transparency requirements can be difficult. Many employers have U.S. workers performing similar jobs. Because the DOL’s prevailing wage is often substantially higher than employer salary ranges, an employer may be faced with the unappetizing prospect of having PERM postings and advertisements that have a far higher salary range than non-PERM postings in similar positions. Notably, in the PERM process, the employer need not pay the employee the prevailing wage until that employee is approved for permanent residence (a process that can take anywhere from two to ten years, depending on the foreign worker’s native country); whereas state and local postings require an employer to post a wage rate that would be applicable immediately following a hire. Further, the PERM posting may force the employer to increase the compensation range on non-PERM postings if the employer plans to hire a worker and pay that worker above the prevailing wage. This could create challenges throughout the employer’s compensation structure.
Most states have yet to recognize the challenges of complying simultaneously with the PERM posting requirements and any transparency obligations. As a result, employers that sponsor workers for permanent residency should carefully consider the interaction between their pay transparency compliance and PERM postings and recruitment obligations.