Maintaining an H-1b Public Access File
In 1990, the H-1B statutes and regulations were amended to address fears that U.S. employers were hiring foreign H-1B workers at lower salaries than they would have had to pay to U.S. workers, particularly in the IT field. The amendments obligate employers to pay an H-1B worker the “prevailing wage" for the position in the geographic area of employment. To do this, an employer must first determine the prevailing wage according to the regulatory standards of the U.S. Department of Labor (DOL). Then the employer must pay the H-1B employee the higher of the prevailing wage for the position or the actual wage that the employer pays other similarly-qualified workers. Along the way, the employer is also required to make disclosures and keep records on its determination and payment of the required wages. These go into a statutorily-mandated “public access file."
A. Background to the Public Access File
The amended H-1B rules require an employer to file, as the first step in the H-1B application process, a Labor Condition Application (Form ETA-9035E, simply referred to as the “LCA"). With this form, the U.S. employer attests that it has determined the prevailing wage for the position; that the salary offered to an H-1B employee is at or above that prevailing wage; and that the employer meets other requirements regarding lay-offs, employment of other H-1B workers, etc. The filed LCA is required to be posted in two locations at the employer’s premises in accordance with DOL rules.
The law requires that the employer maintain a “public access file" documenting the determination and payment of the prevailing wage. In the public access file, the H-1B employer places evidence establishing that the employer has complied with the LCA rules and that the H-1B worker is actually being paid the wage specified in the H-1B petition. The law also requires that the employer maintain other evidence of its wage structure outside of the public access file
The public access file must be created within one working day after the date on which the LCA is filed with the DOL and must be maintained for a period of one year beyond the last date on which any H-1B worker was employed under the specific LCA. (An LCA can apply to more than one worker.) The public access file is to be maintained either at the employer’s principal place of business or at the actual place of employment, and is available to the public upon request.
The DOL may audit the public access file, as well as payroll records, to make sure the foreign worker is/was being paid the wage stated in the H-1B petition.
B. Information Available to the Public
The public access file must include the following information which is available to the public upon request:
- A copy of the LCA
The public access file must be created within one day of the filing of the LCA, but the LCA itself takes at least seven days to be certified and returned. How does an employer deal with this? We recommend that employers initially place in the file the two copies of the LCA which the employer had posted at its location (see the next bullet). When the H-1B process is completed, we will send you for the public access file a copy of the certified LCA.
- Copies of LCAs posted at the place of employment of the H-1B worker
The employer must prove that it has provided notice of the LCA filing to its employees by posting the LCA in accordance with DOL rules in two locations at the H-1B worker’s place of employment. The documentation must show when each notice was posted and the location where each notice was placed.
A statement of the actual wage rate or salary to be paid the H-1B worker or workers hired under the LCA. The wage rate information must be current and updated if the wage changes.
An “Actual Wage" memorandum, describing how the employer arrived at the actual wage being paid to the H-1B worker, including any periodic increases which the system may provide
This is a statement of how the wage rate or salary system was applied to a particular worker to arrive at the actual salary paid, with reference to quantitative and qualitative considerations such as general and specific experience, education, market demand, competitive salary offers, the prevailing wage and other distinguishing factors.
- A copy of prevailing wage documentation the employer used to establish the prevailing wage for the position
This could be a copy of the prevailing wage determination from the state or federal agencies charged with making such determinations, or a copy of the relevant pages of a qualifying survey. Any such documentation must establish clearly that the source meets the DOL rules for such documentation: surveys must e.g., be geographically specific, be across industries, be the newest version of a survey and not older than two years, must be based on a weighted average of the salaries considered, etc.
We normally acquire this documentation for the employer, and provide it for the public access file. In some cases, the employer will rely on surveys in the employers’ possession. In those cases, the employer will provide copies to us and place copies of the relevant pages in the public access file.
Proof that the actual salary is being paid
The employer must be able to provide proof that the H-1B employee is being compensated in accordance with the LCA. The Department of Labor says that a wage or payroll stub would be sufficient proof. Since those quickly become outdated, we also recommend a copy of the W-2 at year’s end.
C. Other Required Non-Public Information
In addition to the documentation required to be maintained in the public access file described above, the employer must also maintain other documentation on the wage paid to the H-1B employee. This information is not required to be disclosed to the public but must be made available to the DOL in the event of an audit. This information includes:
Payroll records of all employees in the same occupation as the H-1B worker in the same place of employment;
The raw data backing up the prevailing wage determination included in the public access file;
Evidence that an H-1B nonimmigrant admitted pursuant to an LCA is provided with a copy of the certified LCA no later than the date he or she reports to work; and
Documentation regarding fringe benefits provided to workers.
D. Segregation of the Public Access File
We recommend that employers keep the public access file separate from all other employee and business files. Although this is not required by the DOL, if a DOL audit occurs then segregation will expedite the audit and possibly limit liability due to mingled or misplaced files. Segregation also ensures that individuals reviewing the public access file will only see documents related to the LCA and not other personnel documents.
H-1B audits are occurring more frequently, and it is extremely important to maintain an organized H-1B public access file. The DOL has the right to audit every employer which has filed an LCA and the number of audits conducted by DOL is increasing every year.