What Are the LCA Wage Requirements for H-1B Employers?

An H-1B employer must pay the sponsored worker at least the higher of two figures on the certified Labor Condition Application: the actual wage the employer pays its own similarly employed workers, or the prevailing wage for that occupation in the area of intended employment. Those two numbers, and the rules around when they must be paid, how they can be documented, and when the obligation ends, are the heart of the LCA wage requirements for H-1B employers. Getting the comparison wrong, or letting the payment lapse, exposes the employer to back-pay orders, fines that can reach $67,367 per violation, and disqualification from future visa petitions.

The Two Wages You Must Compare

The actual wage is what the employer already pays other employees who hold the same or substantially similar positions at the worksite. The comparison accounts for experience, education, job duties, supervisory responsibilities, specialized knowledge, and other legitimate business factors. If three software engineers at a given seniority level earn $110,000, a fourth engineer hired on an H-1B cannot be offered less than that internal rate.

The prevailing wage is the external benchmark. It reflects what workers in the same occupation earn in the same geographic area, calculated by the Department of Labor’s National Prevailing Wage Center (NPWC) from Bureau of Labor Statistics Occupational Employment and Wage Statistics data.¹ The employer must commit on the LCA to paying whichever of the two figures is higher for the entire period of authorized employment.²

Setting the Prevailing Wage

The Four Wage Levels

Prevailing wages come in a four-tier structure that reflects the complexity, independence, and experience a job demands. Level 1 (Entry) covers routine tasks under close supervision, roughly the 17th percentile of the wage distribution for that occupation and area. Level 2 (Qualified) covers moderately complex duties with limited independent judgment, around the 34th percentile. Level 3 (Experienced) reflects solid occupational understanding with some supervisory duties, near the 50th percentile. Level 4 (Fully Competent) covers independent judgment, complex technical functions, and high-level expertise, roughly the 67th percentile.³

The assigned level must be defensible based on the minimum education, training, and experience stated in the job description. Classifying a mid-career role as Level 1 to lower the wage floor invites a Department of Labor investigation for wage suppression, and inflating the level to justify an unusually high salary creates its own problems.

Requesting a Determination or Using a Private Survey

Requesting a prevailing wage determination from the NPWC before filing the LCA gives the employer “safe-harbor” status. The Wage and Hour Division will not challenge the validity of that wage during an investigation, provided the employer used the correct occupation, skill level, and geographic area.⁴

A private or independent wage survey can substitute for the NPWC determination, but it must meet specific criteria. It must reflect the weighted average wage (or median, if no weighted average is available) for similarly employed workers in the area of intended employment, the underlying data must have been collected within the 24 months before the survey’s publication date, and it must be the most recent finding from that source for the occupation and area.⁵ Choosing this route trades the NPWC safe harbor for flexibility; the Department of Labor can challenge the survey’s validity during any audit, so documentation showing how the survey meets every regulatory criterion should sit in the file.

When the Wage Must Start, and Why You Can’t Bench the Worker

The wage obligation begins when the H-1B worker first becomes available for work. That includes orientation, studying for a required license, or any activity the employer normally expects of employees. For a worker arriving from abroad, this date cannot be later than 30 days after admission to the United States. For someone already in the country who changes status, payment must begin within 60 days of becoming eligible to work for the employer in H-1B classification.²

The anti-benching rule is where employers most often stumble. If the worker is nonproductive because the employer has no work to assign, the employer still owes full wages. Salaried employees receive their full pro-rata amount; hourly employees must be paid for a full-time week at the required wage rate. The employer cannot reduce hours, defer pay, or place the worker on unpaid leave because a project ended or a client contract fell through.⁵

The narrow exception is a voluntary absence for personal reasons unrelated to employment, such as personal travel or a family medical situation. Even then, the employer must still pay if the absence would be covered under its own benefit plan, the Family and Medical Leave Act, or similar statutes. The regulation also bars employers from deducting costs they are required to bear (training expenses, visa filing fees, employer-provided equipment) in ways that push compensation below the required rate.

Benefits Parity

Wage compliance is not limited to cash. H-1B workers must be offered benefits on the same basis and criteria as similarly employed U.S. workers, including health insurance, life and disability coverage, retirement and savings plans, cash bonuses, and non-cash compensation such as stock options.⁶

Multinational companies placing H-1B workers in the United States for 90 or fewer continuous days get a narrow exception. During that window, the employer does not need to offer U.S. benefits if the worker stays on the home-country payroll and continues receiving home-country benefits without interruption. For placements longer than 90 days, the worker must receive home-country benefits equivalent to those the company offers similarly employed U.S. workers.⁶

Worksite Notice and the Public Access File

Before or at the same time as filing the LCA, the employer must notify workers at each location where the H-1B employee will work. Notice goes in at least two conspicuous locations at the worksite, near existing wage-and-hour or safety postings for example, and stays visible for at least 10 days. Posting must happen on or within 30 days before the LCA filing date.⁷ Electronic notice (such as email) to employees in the same occupational classification is an alternative, and individual direct notices need only be sent once during the required period.

Within one working day of filing the LCA, the employer must create a public access file at the principal U.S. place of business or the place of employment.⁸ Anyone can request to inspect it during normal business hours. The file must contain a signed copy of the certified LCA, documentation of the wage rate being paid, a clear explanation of the system used to set the actual wage, a copy of the documentation used to establish the prevailing wage, proof that the notice-of-filing requirements were met, and a summary of benefits offered to U.S. workers in the same occupational classification. Payroll records themselves stay out of the public file, but they must be available to the Department of Labor during any enforcement action. Records must be kept for at least one year beyond the last date of employment under that LCA.

A Different Worksite Usually Means a New LCA

An LCA is tied to a specific geographic area of employment. Sending an H-1B worker to a location outside that area generally requires a new LCA. A short-term placement exception allows up to 30 workdays at a site outside the approved area within a one-year period without a new filing.⁹ That limit can stretch to 60 workdays if the worker still maintains a workstation at the permanent site, spends substantial time there over the year, and lives in the permanent worksite’s area rather than the short-term location. Once the limit is hit, the employer must either certify a new LCA for the new area or pull the worker back. Because the prevailing wage at the new location may differ significantly, a new LCA often means a wage adjustment.

Ending the Wage Obligation the Right Way

The obligation to pay the required wage continues until there is a bona fide termination of the employment relationship. Telling the worker to stop coming in does not end it. A valid termination has three steps: clearly notifying the worker that employment is ending, offering to pay the reasonable cost of return transportation to the worker’s last foreign residence, and notifying USCIS so the H-1B petition can be canceled.²

Return transportation is statutory. It applies whenever the employer dismisses the worker before the end of the authorized employment period, regardless of reason, including termination for cause.¹⁰ If the worker resigns voluntarily, the employer does not owe it.

The USCIS notification is the step employers most often skip, and it is the most expensive to miss. Without formal petition withdrawal, the employer can remain liable for wages covering the entire remaining term of the approved H-1B petition, not just the period the worker actually performed work. An employer that lays off an H-1B worker in month three of a three-year petition but never notifies USCIS could owe back pay for the full remaining period.

Extra Obligations for H-1B Dependent Employers

Employers that rely heavily on H-1B workers face additional LCA obligations. Dependency is measured by the ratio of H-1B workers to total employees; a company with 26 to 50 employees, for instance, qualifies once it employs more than 12 H-1B workers. Dependent employers must make two additional attestations on every LCA filed during the dependency period: that they have not displaced and will not displace any similarly employed U.S. worker within 90 days before or after filing the H-1B petition, and that they have taken good-faith steps to recruit U.S. workers for the position before turning to H-1B hiring.¹¹

Penalties for Getting It Wrong

The Department of Labor enforces LCA wage requirements through a three-tier penalty structure. Standard violations, such as failing to properly post the LCA notice or misrepresenting a material fact on the application, can carry fines up to $2,364 per violation.¹² Willful violations, including knowingly underpaying wages, intentionally misrepresenting facts, or retaliating against a worker who reports a violation, can reach $9,624 per violation. Displacing a U.S. worker in connection with a willful wage or recruitment violation can trigger fines up to $67,367 per violation.

Beyond fines, the Department of Labor can order full back-pay equal to the difference between what was actually paid and what should have been paid. It can also disqualify the employer from having any visa petitions approved: at least one year for standard violations, at least two years for willful violations, and at least three years for displacement violations.¹² For a company that depends on foreign talent, debarment often costs more than the fines.

1
U.S. Department of Labor. Prevailing Wage Information and Resources
2
eCFR. 20 CFR 655.731 – What Is the First LCA Requirement, Regarding Wages?
3
Congressional Research Service. Prevailing Wage Requirements for H-1B, H-1B1, and E-3 Workers in Specialty Occupations
4
Flag.dol.gov. Prevailing Wages
5
eCFR. 20 CFR 655.731 – What Is the First LCA Requirement, Regarding Wages?
6
U.S. Department of Labor. What Benefits Must Be Offered to H-1B Workers?
7
eCFR. 20 CFR 655.734 – What Is the Fourth LCA Requirement, Regarding Notice?
8
eCFR. 20 CFR 655.760 – What Records Are to Be Made Available to the Public, and What Records Are to Be Retained?
9
eCFR. 20 CFR 655.735 – What Are the Special Provisions for Short-Term Placement or Assignment at a New Worksite?
10
Office of the Law Revision Counsel. 8 USC 1184 – Admission of Nonimmigrants
11
eCFR. 20 CFR 655.736 – What Are H-1B-Dependent Employers and Willful Violators?
12
eCFR. 20 CFR 655.810 – What Remedies May Be Ordered if Violations Are Found?