Prevailing Wage Determinations Are Good for Us

Don’t worry that the foreign worker who works legally in the United States will displace you. If the sponsoring employer follows the law, imported talent is a lot more valuable than you are. The Prevailing Wage Determination rules typically require proof that a higher wage than normal will be paid to any non-citizen qualified for a job where local native viable alternative candidates do not exist.

Concern about foreigners being imported at cut-rate pay levels to displace citizens of the United States lies at the heart of the rules for PermanentH-1BH-2AH-2B, or D-1 visas. Politicians pass laws to discourage employment practices that harm voters. In fact, elected officials are swiftly voted out of office by their constituents if they do not guard and protect local jobs in their communities. Keeping American work for Americans is a foundation bedrock principle for every American politician, reflected in the Davis-Bacon Act, Fair Labor Standards Act, the Immigration and Nationality Act and other protective legislative regulations.

“The Immigration and Nationality Act (INA) requires that the hiring of a foreign worker will not adversely affect the wages and working conditions of U.S. workers comparably employed.”

Rather than going into long and boring details about how these government constraints on employers (both public and private) operate to choke a horseto enrich immigration attorneys .. I mean … to curtail unconscionable abuses of economic power, I will summarize. The Prevailing Wage Determination regulations are carefully crafted to tilt the playing field in favor of citizen voters. For example, I always felt it is quite difficult (and always expensive) to come up with good current competitive pay figures that can overrule the deliberately high government threshold hurtle figures that are skewed to the high side. My professional opinion on that was confirmed in a private conversation with a former INS Commissioner

Consciously forcing American employers to pay a premium rate to import foreign laborers actually seems to be a quite sensible punitive step in a deterrent policy. The more you pump up the hiring specifications to support your claim that local talent is absent, the higher the wage target for imported talent becomes.  Unless the employing organization pledges to pay at or above the prevailing wage set by the government’s interpretation of the duties specified in the justification documentation, no legal permission will be granted to permit someone not a USA citizen to work here. Those federal rate enforcement rules are adjudicated by a local State Workforce Agency (SWA) for many visa types. Such state employment departments are quick to offer candidates registered with them for unemployment insurance as alternatives to an expensive foreign hire. Thus, citizens seeking work in the community get first shot at a high-paying position before the SWA is forced by lack of available local talent (one of the usual INA requirements) to approve the employment visa application of any outsider. The number of foreign work visas are also strictly limited and get snapped up very swiftly, which is a related but different story similarly fraught with controversy. Conflicts are inevitable between protective government agencies charged with maximizing citizen employment and talent-hungry prospective employers indifferent to the nationality of their workers.

The bottom line is that many obstacles are placed in the way of enterprises that seek to give domestic work to foreigners. The United States is not as bad in this regard as many other nations, but our barriers are already strong enough to discomfit both public and private organizations desperately seeking competent candidates here, especially for certain STEM positions. American human resources, employment and compensation people still need to warn their management that a long, complex and expensive gauntlet of paperwork must be endured to successfully import human talent. That’s probably good for us, too.

E. James (Jim) Brennan is an independent compensation advisor with extensive total rewards experience in most industries.  After corporate HR posts and consulting CEO roles, he was Senior Associate of pay surveyor ERI before returning to consulting in 2015. A prolific writer (author of the Performance Management Workbook), speaker and frequent expert witness in reasonable executive compensation court cases, Jim also serves on the Advisory Board of the Compensation and Benefits Review. 

“Liberty” image by Russ Allison Loar, courtesy of Creative Commons

This post originally appeared on Compensation Cafe
Author: E. James (Jim) Brennan