News

21 Dec 2022

United States

Wage Transparency Laws Create New Obligations for PERM Process

Employers conducting recruitment in support of a PERM certification application should be mindful of certain recent local and state “wage transparency” laws that regulate the content of advertisements or postings placed in support of such recruitment.  The purpose of such laws is to require employers to be open about the compensation they pay and thus, combat pay inequities.

Notably, a New York City local law that became effective on November 1, 2022, makes it an unlawful discriminatory practice for an employer “to advertise a job, promotion, or transfer opportunity without stating the minimum and maximum annual salary or hourly wage for such a position in such an advertisement.”  A similar state law in California that will be effective on January 1, 2023, requires all employers with 15 employees or more to “include the pay scale for a position in any job posting.”  The pay scale is defined as “the salary or hourly wage range that the employer reasonably expects to pay for the position.”  Colorado also enacted a similar wage transparency law in January of 2021 and a comparable law will become effective in Washington on January 1, 2023.

In light of these changes, it is imperative that employers conducting PERM recruitment assess whether the jurisdiction in which the recruitment is being conducted is subject to a wage transparency law and, together with their legal teams, carefully prepare recruitment materials that comply with state and/or local requirements.

It is worth noting that the federal Department of Labor’s (DOL’s) PERM regulations do not require that a wage range (or, indeed, any wage at all) be included in any advertisements placed in support of a PERM application, although the Notice of Filing required of all PERM applications must contain the “rate of pay” for the position offered.  However, employers conducting PERM recruitment in locations that are subject to state or local wage transparency laws will have to ensure that all advertisements and postings placed in support of such applications contain the mandated wage or salary range.  Certain states, such as Washington and Colorado, also require job postings to describe benefits and other forms of compensation.  Such advertisements and postings include the mandatory SWA job order (which, in some states, already requires a wage range), the Sunday newspaper advertisements, and, if applicable, the professional journal advertisement.  The requirement would also apply to additional or optional recruitment, such as employer website postings, job search websites, advertisements in local or ethnic newspapers, and radio and television advertisements.  Many employers have traditionally not included compensation information in their PERM recruitment advertisements or postings, but now run the risk of violating state or local law if a salary or wage range is missing in their advertisements or postings.

What Employers Should Do

Employers conducting PERM recruitment should first determine if the jurisdiction in which the recruitment is being conducted is subject to a wage transparency law.  This location will most commonly be where the prospective employment will take place. However, for fully remote or “roving” positions, the recruitment may take place in the jurisdiction where the employer’s headquarters are located, per the Department of Labor’s 1994 Farmer Memorandum.  Employers should note that some wage transparency laws apply even if an employer has no physical location in the jurisdiction.  For instance, the New York City, Colorado, and Washington laws apply to situations where a worker “could” perform the job in those jurisdictions.

If the recruitment will take place in a jurisdiction subject to a wage transparency law, the employer should ensure that all advertisements and postings contain a salary or wage range for the position offered.  In certain jurisdictions, a general description of benefits and other forms of compensation is also required. The employer should make sure that both the mandatory and additional recruitment steps include this information, although it can arguably be omitted from steps such as the employee referral program, job fair attendance, on-campus recruitment, trade or professional organization, private employment firms, and the use of campus placement offices.  In the rare situation where a salary or wage range truly does not exist for a position because the position is a unique one, the employer could attempt to achieve formal compliance by indicating a wage range with the same compensation at both ends.  A review of Sunday newspaper advertisements placed recently in The New York Times indicates that this is a strategy pursued by some employers.

The employer should also ensure that the lower end of any salary or wage range provided be at least as high as the Prevailing Wage Determination (PWD) obtained from the DOL.  If the PERM application is audited and an advertisement or posting identified that includes a salary or wage range where the lower end is less than the PWD, a denial will follow.  If an employer is ready to offer a salary or wage lower than the applicable prevailing wage for a given position (and employers are free to do this outside the PERM context), the upwards adjustment of the salary or wage range to a level at or above the PWD might arguably be a violation of the relevant local or state law.  It remains to be seen how local or state agencies will react to such a situation.

How Will This Requirement Be Enforced?

It is unlikely that the DOL, which regulates the PERM program, will attempt to enforce state or local wage transparency laws, despite its insistence that PERM recruitment be “real world” recruitment.  The agency has no jurisdiction to do so and lacks the expertise to determine if such laws have indeed been violated.  It is theoretically possible, however, that the DOL could seize a non-compliant advertisement identified in an audit as violative of a number of regulatory provisions, including the requirement that the job opportunity’s terms, conditions, and occupational environment are not contrary to federal, state, or local law and the requirement that advertisements not contain wages or terms and conditions of employment that are less favorable than those offered to the sponsored foreign national.  It is also possible that the federal Department of Justice (DOJ), which has shown an interest in policing employers’ PERM recruitment activities and punishing such employers for activities that, while compliant with federal regulations, violate the DOJ’s own sense of the propriety of PERM recruitment, may intervene.  The most notable example of this intervention is the recent October 19, 2021 settlement with Facebook.  The greatest exposure to employers will, however, be civil penalties assessed by state and local employment agencies despite the fact that some of these agencies may be unwilling to become involved in enforcement actions for violations of wage transparency law in the PERM recruiting context.

Assisting Our Clients

At Tafapolsky & Smith LLP, we have developed and are continuously updating a database of all state and local wage transparency laws and are analyzing all guidance provided with respect to these laws.  We, in collaboration with employment counsel when appropriate, will continue to provide our clients with advice on how to conduct PERM recruitment campaigns that comply with all federal DOL rules and will pass muster under any state or local laws that govern the content of recruitment advertisements and postings.

© 2022 Tafapolsky & Smith LLP. All rights reserved.
The content above is provided for informational purposes only. It should not be construed as legal advice on any subject matter. Use of this information does not create an attorney-client relationship. 

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