PERM Recruitment Impacted by “Pay Transparency” Laws
Employers may already be aware of existing state and city laws regarding “pay transparency,” which require certain employers to publish “pay scales” in job advertisements. These pay transparency laws generally require that a wage range be posted that is not open-ended and that provides a reasonable, “good faith” expectation of the wage for the position. Posting an exact salary or hourly rate may also be viable where there is no expected variance in potential pay for successful applicants. Pay transparency laws requiring job advertisement disclosures are already in effect in Colorado and New York City and will be in effect in California and Washington come 2023.
For more details, please see our Pay Transparency Alert from our Employment, Labor and Benefits (ELB) group, which provides an overview of pay transparency laws.
PERM Recruitment Process
For employers that sponsor foreign national employees for permanent resident (“green card”) status, the most common form of sponsorship is through the Department of Labor’s (DOL’s) PERM process. PERM requires a labor market test that is heavily regulated by DOL. With limited exceptions, employers must post a Notice of Filing at the worksite to inform employees of the PERM sponsorship and must advertise the position in five different types of media.
DOL regulations require that if a wage is listed in recruitment, it cannot be lower than the Prevailing Wage rate as determined by DOL and cannot be lower than the wage offered to the foreign national employee. DOL regulations only require that the wage be listed on the Notice of Filing; other forms of recruitment do not require that a salary be listed. However, pay transparency laws may mandate that a salary be listed in all forms of recruitment.
Impact of Pay Transparency Laws
In locations where pay transparency laws are in effect, affected employers must list a reasonable salary range in most job advertisements or postings, with minor variations in content from jurisdiction to jurisdiction. When employers place advertisements for a PERM application, the advertisements will need to comply with pay transparency rules where applicable.
Because pay transparency laws are likely to be implemented in additional states and municipalities, Mintz recommends that employers consider listing a salary range in all forms of PERM recruitment. The salary range must comply both with DOL PERM regulations and with the state / local pay transparency requirements for salary listings, where applicable. Based on existing pay transparency laws, this means:
the low end of the wage range must be at or above the prevailing wage issued by DOL;
the wage range must include the foreign national PERM applicant’s salary; and
the wage range must be reasonable and must reflect the employer’s pay scale (except when the prevailing wage is higher than the low end of the employer’s pay scale).
To comply with DOL regulations and state and local pay transparency requirements, employers conducting PERM recruitment must pay attention to any pay transparency rules covering their PERM job locations. For remote-eligible positions, this may include jurisdictions where an employee could work. Given the increasing reach of these rules, we recommend that employers list a wage range in all PERM recruitment, always ensuring that the bottom end of the range is at or above the prevailing wage.