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H2B Visa – Determining the Prevailing Wage Rate


There is a prevailing wage requirement for all H-1B, H-2B and Permanent Labor Certification cases. The law, in all the three cases requires that an employer pay the higher of their actual wage or the prevailing wage in the area for the offered position. Up until fairly recently the determination of the prevailing wage was a relatively simple task.


The implementation of the Visa Reform Act and publication of the US Department of Labor’s Labor Certification for the Permanent Employment of Aliens in the United States, or PERM, regulation changed that procedure requiring the direct involvement of the State Workforce Agencies (SWAs) in the determination of all prevailing wages. These changes brought about policy clarifications and procedural guidance for the SWAs and its users (us).


A. Background


The Department of Labor, Bureau of Labor Statistics (BLS) has provided the wage data for the Occupational Employment Statistics (OES) Program used in the Foreign Labor Certification process since 1998. Beginning in September 1999, the OES program started using the Standard Occupational Classification (SOC) information to classify occupational wage information. The SOC also serves as the framework for information being gathered through the Department of Labor's Occupational Information Network which supersedes the Dictionary of Occupational Titles (DOT) as the resource to be consulted for occupational information for the Foreign Labor Certification process.


The OES survey is a national survey managed by the BLS which provides a large enough sample to allow BLS to determine a prevailing wage for most occupations in every area of intended employment in the United States. The OES wage data is made available at the state and sub-state areas so a SWA can select the geographic area of intended employment. The On-Line Wage Library has been developed to account for these requirements. The SWA should select the state and sub-state area that represents the area for the employer’s job offer.


B. Prevailing Wage Factors


With the implementation of the PERM program, effective March 28, 2005, it became mandatory to follow the regulatory scheme at 20 CFR 656.40 in determining the prevailing wage. The US Citizenship and Immigration Services (USCIS) and DOL have decided that the same policies and procedures shall be followed for the H-2B temporary nonagricultural labor certification program, permanent labor certification program and the nonimmigrant program pertaining to H-1B or H-1B1 professionals in specialty occupations or as fashion models.


All job classifications now start with an entry level wage and progress to a wage that is commensurate with that of a qualified, experienced, or fully competent worker. These wage determinations are made only after considering the experience, education, and skill requirements of an employer’s job description (the job opportunity).


C. Prevailing Wage Determination


The rules require that State Workforce Agencies make prevailing wage determinations as follows:

  • If the SWA determines the job opportunity is covered by a collective bargaining agreement negotiated at arm’s length and a wage rate has been negotiated under the agreement as evidenced by information provided by the employer, that wage rate shall be controlling.
  • In the absence of a wage determined under a collective bargaining agreement, SWAs are to determine prevailing wage rates using wage surveys conducted under the wage component of the OES program.
  • The employer may, if there is no controlling collective bargaining agreement, provide the SWA with a survey, whether public or private. If that survey meets the requirements of the regulations, that rate shall be used by the SWA as the prevailing wage determination in response to that particular request. In addition, an employer can elect to use a current wage rate in the area of intended employment under the Davis-Bacon or the McNamara Service Contract Act


The regulations also require the SWA to specify the validity period of the prevailing wage determination for H-2B seasonal workers, which shall not be less than 90 days or more than 1 year from the determination date. Under no circumstances may the SWA charge a fee for making or reviewing a prevailing wage determination.


D. Applicability of New Prevailing Wages


As noted above, the new prevailing wage rules, and the guidance and clarifications that have been issued based on those rules, apply to all permanent labor certification (PERM), H1B, and H-2B cases. Other changes made by the Visa Reform Act, effective March 8, 2005, that apply to all prevailing wage determinations include:

  • 100% of Prevailing Wage Must Be Paid. As of the effective date of March 8, 2005, employers must pay the beneficiary at a rate equal to 100% of the prevailing wage determined by the SWA. This supersedes the old rule that allowed the payment of only 95% of the prevailing wage rate; and
  • Where the Secretary of Labor uses, or makes available to employers, a governmental survey to determine the prevailing wage (i.e., the OES system), such survey shall provide at least 4 levels of wages commensurate with experience, education, and the level of supervision. Where an existing governmental survey has only 2 levels, 2 intermediate levels may be created by dividing by 3 the difference between the 2 levels offered, adding the quotient thus obtained to the first level and subtracting that quotient from the second level.


E. Relevant Factors for Determining Prevailing Wage: Under § 656.40, the relevant factors used in determining a prevailing wage rate have not changed. These are:

  • the nature of the job offer,
  • the area of intended employment, and
  • jobs duties for workers that are similarly employed.


I. Nature of the Job Offer: In determining the nature of the job offer, the SWA will review the requirements of the employer’s job offer and determine the appropriate occupational classification. For example, if the employer’s job offer is for a landscape laborer, the SWA will use the skills and experience levels for the highest paying occupation when making the wage level determination.



The Occupational Employment Statistics (OES) conduct surveys and collects data on occupational employment and wages of employees in non-agricultural establishments. It produces estimates of occupational employment and occupational wages.


II. Area of Intended Employment: The definition of "area of intended employment," found in the regulations at 20 CFR 656.3, states: Area of intended employment means the area within normal commuting distance of the place (address) of intended employment. The On-Line Wage Library has been developed to account for these requirements.


III. Similarly Employed: The regulations, at 20 CFR 656.40, define "similarly employed" as having substantially comparable jobs in the occupational category in the area of intended employment. However, if no such workers are employed by employers in the area of intended employment, other than the employer seeking the prevailing wage determination, similarly employed will mean:

  • Jobs requiring a substantially similar level of skill within the area of intended employment; or
  • Substantially comparable jobs in the occupational category as employers outside of the area of intended employment if there are no substantially comparable jobs in the area of intended employment.


F. OES Wage Levels


When DOL made changes in the wage determination requirements they specified that determinations using a government survey shall be made available for each occupation at 4 levels of wages commensurate with experience, education, and the level of supervision. The SWA is to make the prevailing wage determination using one of the four wage levels for an occupation based on a comparison of the employer’s job requirements to the occupational requirements: tasks, knowledge, skills, and specific vocational preparation (education, training, and experience) generally required for acceptable performance in that occupation.


It is important to remember that the SWA will make a wage level determination only after selecting the most relevant O*NET-SOC occupational code classification. The selection of the O*NET-SOC code is made based on the employer’s description of the job duties of the position, not solely on the title of the employer’s job offer. The SWA will consider the particulars of the employer’s job offer and compare them to the full description of the tasks, knowledge, and work activities generally associated with an O*NET-SOC occupation. This insures that the most relevant occupational code has been selected. The four wage levels used by the OES are described below:


Level I (entry) wage rates are assigned to job offers for beginning level employees who have only a basic understanding of the occupation. These employees perform routine tasks that require limited, if any, exercise of judgment. The tasks provide experience and familiarization with the employer’s methods, practices, and programs. The employees may perform higher level work for training and developmental purposes. These employees work under close supervision and receive specific instructions on required tasks and results expected. Their work is closely monitored and reviewed for accuracy. Statements that the job offer is for a research fellow, a worker in training, or an internship are indicators that a Level I wage should be considered.


Level II (qualified) wage rates are assigned to job offers for qualified employees who have attained, either through education or experience, a good understanding of the occupation. They perform moderately complex tasks that require limited judgment. An indicator that the job request warrants a wage determination at Level II would be a requirement for years of education and/or experience that are generally required as described in the O*NET Job Zones.


Level III (experienced) wage rates are assigned to job offers for experienced employees who have a sound understanding of the occupation and have attained, either through education or experience, special skills or knowledge. They perform tasks that require exercising judgment and may coordinate the activities of other staff. They may have supervisory authority over those staff. A requirement for years of experience or educational degrees that are at the higher ranges indicated in the O*NET Job Zones would be indicators that a Level III wage should be considered. Frequently, key words in the job title can be used as indicators that an employer’s job offer is for an experienced worker. Words such as ‘lead’ (lead analyst), ‘senior’ (senior programmer), ‘head’ (head nurse), ‘chief’ (crew chief), or ‘journeyman’ (journeyman plumber) would be indicators that a Level III wage should be considered.


Level IV (fully competent) wage rates are assigned to job offers for competent employees who have sufficient experience in the occupation to plan and conduct work requiring judgment and the independent evaluation, selection, modification, and application of standard procedures and techniques. Such employees use advanced skills and diversified knowledge to solve unusual and complex problems. These employees receive only technical guidance and their work is reviewed only for application of sound judgment and effectiveness in meeting the establishment’s procedures and expectations. They generally have management and/or supervisory responsibilities.


G. Process for Determining Wage Level


A step-by-step process used by the SWAs for arriving at the appropriate wage level is described in the following chart. Points are awarded based on the comparison of an employer’s job offer requirements to the general requirements for similar occupations. The points are entered on a worksheet then added to arrive at the wage level. SWAs should follow the step-by-step process while completing the worksheet.


Indicator Job Offer Requirements O*NET-Usual Requirements Instruction Wage Level Result
Step 1. Requirements       1
Step 2. Experience Enter the years of Experience required by the employer. Job Zone (overall experience, job training) If the years of required experience in the job order are greater than the low end of the O*NET usual requirements, enter 1, 2, or 3.  
Step 3.

Enter the education or training required by  the employer.

Professional Occupations Appendix D Other Occupations Job Zone Overall experience, job training, education) If the years of required education in the job order are greater than the Categories for Professional Occupations OR O*NET usual requirements for non-professional occupations, enter 1 or 2.  
Step 4.
Special Skills (Y/N)
Note special Requirements from the job description or other special requirements including licensure or certification. O*NET Tasks, Knowledge, and Work Activities. National or state licensing/ certification requirements. Consider if skills, knowledge, work activities, tasks, licensure or
Certification requirements
indicate a higher level of complexity or decision-making. Enter 1 or 2 as appropriate.
Step 5. Supervisory duties (Y/N) Note any supervisory Duties indicated in the job duties or description.   If Yes, enter a 1 – UNLESS supervision is generally required by the O*NET occupation.  




H. Wage Determinations Using Employer-Provided Wage Surveys


An employer may, if the want to, submit their own wage survey for use by the SWA. This is only allowed if the job opportunity is not covered by a collective bargaining agreement. The wage data can be from a published wage survey, or can be wage data contained in a survey that has been conducted or funded by the employer. Additionally, the employer can choose to use a current wage determination in the area of intended employment under the Davis-Bacon or McNamara-O’Hara Service Contract Acts.


An employer survey can be submitted either with the initial request or after the SWA issues a prevailing wage determination. If the employer provides a wage survey after the SWA has made a determination, the new wage data from the employer-provided survey is considered a new prevailing wage request. Where an employer chooses to submits its own data it must prove, in writing, that the survey or other wage data meets the criteria outlined in the regulations (and discussed below). The employer must provide the SWA with enough information about the survey methodology (e.g., sample size and source, sample selection procedures, survey job descriptions) to allow the SWA to make a determination with regard to the adequacy of the data provided and the validity of the statistical methodology used in conducting the survey.


I. Criteria for Employer-Provided Surveys

  • The survey must be recent. If the employer submits a published survey, that survey must:

    • have been published within 24 months of the date of submission of the prevailing wage request;
    • be the most current edition of the survey; and
    • be based on data collected within 24 months of the date of the publication of the survey.


    If the employer submits a survey conducted by the employer, the survey must be based on data collected within 24 months of the date of submission of the prevailing wage request.


  • The wage data submitted by the employer must reflect the area of intended employment. As discussed above, the area of intended employment means the area within normal commuting distance of the place (address) of intended employment.

    • If the place of intended employment is within a Metropolitan Statistical Area (MSA) or Primary Metropolitan Statistical Area (PMSA), the BLS has determined that any place within the MSA or PMSA is deemed to be within the normal commuting distance of the place of intended employment.
    • However, all locations within a Consolidated Metropolitan Statistical Area (CMSA) are not automatically deemed to be within normal commuting distances for prevailing wage purposes.
    • Finally, the borders of PMSAs, MSAs, or CMSAs are not controlling in the identification of the normal commuting area; an employer location just outside of the PMSA, MSA, or CMSA boundary may still be considered within normal commuting distance.


    Please note that while the terminology CMSAs and PMSAs are being replaced by the Office of Management and Budget (OMB); the BLS and the DOL’s Employment and Training Administration (ETA) will continue to recognize the use of these area concepts, as well as their replacements.


  • The job description applicable to wage data submitted by the employer must be adequate to determine that the data represents workers who are similarly employed. Similarly employed means jobs requiring substantially similar levels of skills.

  • The wage data must have been collected across industries that employ workers in the occupation.

  • The prevailing wage determination should be based on the weighted average of wages for workers that are similarly employed in the area of intended employment. If the survey provides a median wage of workers similarly employed in the area of intended employment and does not provide an arithmetic mean, the median wage shall be used as the basis for making a prevailing wage determination.

  • In all cases where an employer provides the SWA with wage data the employer must include the methodology used for the survey to show that it is reasonable and consistent with recognized statistical standards and principles in producing a prevailing wage (e.g., contains a representative sample), including its adherence to these standards for the acceptability of employer-provided wage data. It is important to note that a prevailing wage determination based upon the acceptance of employer-provided wage data for the specific job opportunity at issue does not supersede the OES wage rate for subsequent requests for prevailing wage data in that occupation.


J. Validity Period of Prevailing Wage Determinations


The SWA must indicate how long the prevailing wage determination is valid. That period can be no fewer than 90 days and no longer than one year. The SWA must keep a dated copy of the prevailing wage determination for two years. This requirement is separate from the employer's requirement to keep all documentation related to a PERM filing, including the prevailing wage determination, for five years.


Conclusion: Obtaining a prevailing wage determination is no longer the easy process as it was in the past. Determining the prevailing wage would include identifying a wage survey that fits your job offered and noting the wage requirements. The re-engineering of the permanent labor certification process (the PERM regulation that became effective March 28, 2005) modified the prevailing wage determination process in three significant ways:

  • The use of Davis-Bacon or the McNamara-O’Hara Service Contract Act is no longer controlling for prevailing wage determinations, although an employer may request those sources be considered as an employer provided wage source;

  • If an employer-provided survey does not contain an arithmetic mean, and only provides the median, the median wage figure can be used for determining the prevailing wage. Employers may continue to submit published surveys from public or private sources or employer-conducted surveys as long as the survey complies with acceptable standards. Although the Occupational Employment Statistics (OES) prevailing wage data will be provided for four skill levels, employer-provided surveys are not required to contain multiple levels; and

  • Employers that disagree with their prevailing wage determination are afforded only one opportunity to provide supplemental information to the SWA. Employers may choose to file a new request for a wage determination or request review by the Certifying Officer and the Board of Alien Labor Certification Appeals.


While the new procedures remove the guesswork from the prevailing wage determinations they can certainly add time and stress to the process. Employers must take this into account when they begin the recruitment process for either a temporary labor certification to support an H-2B petition or a PERM application.



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