Labor Condition Application (LCA)

The labor condition application (LCA) is a required process for the H1B visa petition (or the H1B1 visa for workers from Chile and Singapore) and the E3 visa petitions (for workers from Australia). An approved labor condition application (LCA) contains the minimum wage that must be paid to the foreign worker and other work-related employer attestations (promises) to the U.S. Department of Labor (DOL).

LCA ATTESTATIONS

There are certain employment-related attestations (promises) that the U.S. sponsoring employers are required to make to the U.S. government when hiring H1B visa workers (or H1B1 visa workers, E3 visa workers) evidenced in the labor condition application (LCA).

U.S. Sponsoring Employer Attestations (Promises) to the U.S. Government

The attestations (promises) that the U.S. sponsoring employer is required to make to the U.S. Department of Labor (DOL) in labor condition application (LCA) includes:

The U.S. sponsoring employer will pay a wage that is higher of the prevailing wage (determined by what is paid to similarly employed workers in the geographical area of the worksite) or the actual wage (determined by the actual amount the U.S. sponsoring employer pays to other similarly employed workers in that job position)
The working conditions for the foreign worker will not adversely affect the working conditions of similarly employed U.S. workers (e.g., the foreign worker must receive the same benefits given to U.S. workers)
There is no strike or lockouts in the occupational field at the worksite
The Notice of Filing of the labor condition application (LCA) has been given to the union representative (if there is one) or has been physically posted at the worksite at least 2 conspicuous locations (or through electronic posting on intranet/electronic bulletin boards or a direct one-time email to affected employees) for a period of 10 days within the 30-day period before filing the labor condition application (LCA) to the U.S. Department of Labor (DOL)

LCA NOTICE OF FILING

The U.S. sponsoring employer is required to notify its workers that it is filing a labor condition application (LCA) with the U.S. Department of Labor (DOL) by (1) physically posting the LCA Notice of Filing (e.g., typically the LCA document is used) in at least 2 locations at each worksite that the foreign worker will be working at for 10 days within the 30-day period prior to filing the labor condition application (LCA), (2) electronically notifying the workers by posting on the intranet/electronic bulletin boards for 10 days within the 30-day period prior to filing the labor condition application, or (3) through a one-time individual direct notice (e.g., email) to affected workers.

LCA Notice of Filing Requirements

The Notice of Filing of the labor condition application (LCA) must include:

H1B VISA DEPENDENT EMPLOYER OR WILLFUL VIOLATOR

Under H1B visa petitions (does not include H1B1 visas and E3 visas), there are additional requirements placed on U.S. sponsoring employers that are determined an H1B visa dependent employer or a willful violator.

H1B Visa Dependent Employer

The U.S. sponsoring employer is seen as an H1B visa dependent employer if:

There are more than 7 H1B visa workers in a company that has 25 or fewer full-time employees
There are more than 12 H1B visa workers in a company that has 26 to 50 full-time employees
There are at least 15% of H1B visa workers in a company that has 51 or more full-time employees

Calculation of Employees

Part-time employees can be counted as (1) half of a full-time employee or (2) the total amount of part-time hours can be divided by the full-time hours rounded up to the nearest whole number. Independent contractors or consultants are not included under the definition of employee under the H1B visa dependent employer calculations.

U.S. sponsoring employers that are one of the multiple entities within a controlled group of corporations treated as a single employer by the IRS must also use the single employer definition in the H1B visa dependency calculations.

Employer is Willful Violator

The employer is seen as a willful violator if the employer misrepresented or committed a willful failure in complying with the LCA certification within the previous 5-year period.

Benching Employees

The U.S. sponsoring employer cannot bench an H1B visa worker (or H1B1 visa worker, E3 visa worker) by taking the employee off active employment and not paying the visa worker (or paying less than their full wage). Benching can happen in situations such as when the U.S. sponsoring employer experiences slow business or when it is not able to obtain certain permits or licenses to do business, or when the foreign worker does not have a social security number (SSN).

Benching does not apply if the foreign worker is not in active employment because of non-work-related reasons that made them unable to work or voluntary requests to not work made by the foreign worker. For example, benching does not apply to situations such as when the foreign worker had surgery and is recovering, maternity leave, taking care of a sick relative, or touring the United States.

Additional Attestations (Promises) for H1B Visa Dependent Employers or Willful Violators

Under H1B visa petitions (does not include H1B1 visas and E3 visas), additional attestations (promises) are included for U.S. sponsoring employers that are determined as H1B visa dependent or a willful violator if the H1B visa worker is determined as a non-exempt H1B visa worker:

The U.S. sponsoring employer has not and will not displace a U.S. worker within the 90-day periods before and after filing the H1B visa petition
The H1B visa worker will not be placed at a third-party worksite where the H1B visa worker shows an employment relationship with that other employer (secondary employer) unless the U.S. sponsoring employer has inquired whether there was a displacement of U.S. workers within the 90-day periods before and after filing the H1B visa petitions for that employer (secondary employer)
The U.S. sponsoring employer has gone through good faith recruitments to find U.S. workers who are at least as qualified for the job position as the H1B visa worker

The 3 additional attestations (promises) are not required if the sponsored H1B visa worker is determined as an exempt H1B visa worker who is paid at least $60,000 per year or has at least a master’s degree.

LCA WAGE DETERMINATION

The U.S. sponsoring employer is required by the U.S. government to pay the H1B visa worker (or H1B1 visa worker or E3 visa worker) a wage that is the higher of the (1) prevailing wage, (2) the actual wage of the job position, or (3) the wage set forth in the collective bargaining agreement (CBA) with the union if there is one. In most cases, the wage required for the foreign worker would be the determined prevailing wage.

When Employment Starts

The wage paid to the foreign worker must be shown on the U.S. sponsoring employer’s payroll and in most cases should be in monthly payments starting from when:

The foreign worker first makes themselves available for work (e.g., meeting with clients, waiting to be assigned, studying for a licensing exam)
Within 30 days of the foreign worker arriving in the United States
Within 60 days of the foreign worker being eligible to work for the U.S. sponsoring employer (e.g., start date listed in the approved visa petition or the date of the foreign worker’s nonimmigrant visa status adjustment whichever is later) if the foreign worker is already in the United States

Prevailing Wage Determination

The prevailing wage under the labor condition application (LCA) is the competitive wage offered for the job position by other employers in the geographical area of the worksite that the foreign worker will be working at. In other words, the prevailing wage is the average rate of wages paid to workers employed in a similar job position in the geographical area of where the visa worker’s employment will be.

Factors that influence the amount of the prevailing wage can include but are not limited to the job title, job description, required education and work experience, location, and employer type (i.e. private corporations, government, academic). For example, the same exact job offered in San Francisco, California would likely have a higher prevailing wage than in Champaign, Illinois due to the cost of living in the respective locations.

Data Sources for Prevailing Wage Determinations

The amount of the prevailing wage can be based on information from (1) the U.S. government database (e.g., OFLC’s OES survey), (2) independent sources that are authoritative (which should be wage surveys published within 24 months), and (3) other legitimate sources of wage information (which can include private surveys).

U.S. Government Prevailing Wage Database (4 Levels)

For most labor condition applications (LCAs), the prevailing wage for the job position will be determined by using the OES survey (i.e., U.S. government database) that has a 4-wage level system based on factors such as education (based on levels set in Appendix D of the PERM regulation preamble), experience (based on the O*NET’s Specific Vocational Preparation (SVP) level), and the level of supervision of the job position.

The 4 levels of prevailing wage for the job position under the Standard Occupation Classification (SOC) in the OES survey are:

Level 1: Entry

The entry-level wages are for beginner-level employees who only have a basic understanding of the job position and perform routine tasks (usually for familiarization with the work) that only need limited (or no) exercise of their own judgment. The work of the beginner level employee will be closely supervised and they are given specific instructions on what tasks should be done and what results are to be expected. For example, a job position for a research fellow or internship is usually under level 1 wages.

Level 2: Qualified

The qualified level wages are for qualified employees who have a good understanding of the job position through education or experience and perform moderately complex tasks that require limited judgment. For example, a job position that requires years of education and/or experience is usually under level 2 wages.

Level 3: Experienced

The experience level wages are for experienced employees who have a sound understanding of the job position through education, experience, knowledge, or special skills and perform tasks that require exercising their own judgment. The experienced level employee may also need to supervise and coordinate the activities of other workers. For example, a job position with a job title that contains words such as lead, senior, head, chief, or journeyman is usually under level 3 wages.

Level 4: Fully Competent

The fully competent level wages are for competent employees who have sufficient experience in the job position and perform advanced unusual complex tasks that require exercising their own judgment, independent evaluations, modifications, selections and applications of techniques and procedures. The fully competent level employee only receives technical instructions on their work and they typically supervise and manage other workers.

LCA Wage Level Calculation

To determine which wage level the job position falls under, the job position will start at level 1 and points (which are differences between the job requirements requested by the U.S. sponsoring employer and what is determined as normal for the job position by the U.S. government) will be added to calculate the wage level (with the highest being level 4).

Collective Bargaining Agreement

If there is a collective bargaining agreement (CBA) with a union, then the wage paid to the foreign worker must be the wage set forth in the collective bargain agreement.

Actual Wage

The actual wage under the labor condition application (LCA) means the amount that the U.S. sponsoring employer pays to its other employees who have similar qualifications and experiences working in that job position (i.e., substantially same job duties) at the same worksite. When there are no similarly employed employees, the actual wage would be the amount actually paid to that foreign worker in the past (if the foreign worker has worked for the U.S. sponsoring employer in that job position before). If there are no similarly employed employees and the foreign worker has not been paid in that job position before, then the prevailing wage will have to be used for the foreign worker instead.

If the actual wage changes during the validity of the labor condition application (LCA), the foreign worker must still be paid an amount higher than the new actual wage.

Higher Education Institutions Wage (Special Procedure)

Wages for all employees of (1) higher education institutions (e.g., colleges and universities), (2) related or affiliated nonprofits of higher education institutions, or (3) nonprofit research organizations, or (4) governmental research organizations that are governed by the American Competitiveness and Workforce Improvement Act (ACWIA) are based on what other similar employers in the same geographical area are paying as opposed to the industry at large (which would include the private industry).

Higher Education Institutions (Schools)

The higher education institutions (e.g., college, university) must:

Related or Affiliated Nonprofit of the School

A related or affiliated nonprofit organization of the higher education institutions (e.g., college, university) can be qualified by:

Research Organizations

Nonprofit research organizations (i.e., IRS tax-exempt organization) or governmental research organizations must be primarily (i.e., must be primary mission and not just one mission of the organization) conducting basic or applied research. For example, a Veterans Affairs hospital that receives 2 to 5 percent of its funding to conduct research is determined to be primarily in medical care and not in research.

PUBLIC ACCESS FILE

LCA Public Access File

A public access file that includes certain documents related to the labor certification application (LCA) must be kept at the U.S. sponsoring employer’s headquarters or the worksite that the foreign worker was working at for at least 1 year from the last date that the foreign worker worked for the U.S. sponsoring employer (or from its expiration date or when it was withdrawn). The standard documents that should be included in the public access file for the LCA include:

Certified LCA that is signed by the U.S. sponsoring employer.
Documents that show the wage rate offered to the foreign worker. The specific wage offered to the foreign worker does not need to be provided in the LCA public access file but the wage range with a bottom range that meets the required wage must be shown.
Documents that include the general description of the source, system, and methodology used to determine the actual wage or prevailing wage must be included in the LCA public access file.
Documents that show the date and locations of posting the Notice of Filing of the labor certification application (LCA) or the notice that was provided to the union if there is one (which should include the name and address of the CBA representative).
Summary of benefits offered to U.S. workers (and explanations if there are a difference to what is given to the foreign workers).
List of organizations that are included under the single employer definition for the H1B visa dependent employer determination.

Additional Documents for H1B Visa Dependent Employers or Willful Violators

Additional documents are required to be placed in the public access file when the U.S. sponsoring employer is determined an H1B visa dependent employer or a willful violator:

If there are non-exempt H1B visa workers under the labor condition application (LCA), a summary of recruitment methods (which includes the time frames of the recruitment or related documents) must be provided.
If there are only exempt H1B visa workers under the labor condition application (LCA), a list of the individuals employed must be provided.

Additional Documents for H1B Visa Employers After Change in Corporate Structure

Additional documents are required to be placed in the public access file when there has been a change in the corporate structure of the U.S. sponsoring employer:

Sworn statement from a representative of the new organization that all responsibilities under the predecessor’s LCA are accepted
FEIN of new organization
List of affected LCA and its certification dates
Description of the new organization’s actual wage system

Private Documents Kept for DOL Requests

The U.S. sponsoring employer must also keep additional documents for DOL investigations (i.e., can be kept private and not in the public access file):

Documents related to the determination of the prevailing wage (e.g., the relevant parts of the union contract, wage survey used, SCA, Davis-Bacon, SWA determination)
Payroll records of the foreign workers and the workers who are similarly employed at the worksite (which must be kept at the headquarters or worksite for at least 3 years)
Documents that show how the wage paid to the foreign worker was determined compared to other similarly employed workers
Documents that show the foreign worker was still paid a wage higher than the prevailing wage or actual wage when the U.S. sponsoring employer’s wage system changed during the validity of the LCA
Documents that show the U.S. sponsoring employer paid the required wage to the foreign worker with the supplement of other non-discretionary payments for prior pay periods and for current and future pay periods
Documents that show the benefits offered to the foreign worker
Documents that show the calculation of the H1B visa dependent employer determination

LCA GENERAL PROCESS

There are 4 main steps in the general process to obtain an approved Labor Condition Application (LCA):

Step 1: Optional Filing for a Prevailing Wage Determination (Form ETA-9141) with the National Prevailing Wage Center (NPWC)

The U.S. sponsoring employer can choose to first file for a prevailing wage determination (ETA Form-9141) with the National Prevailing Wage Center (NPWC).

Step 2: Filing the Labor Condition Application (ETA-9035) with the U.S. Department of Labor (DOL)

The U.S. sponsoring employer must file a Labor Condition Application (ETA-9035) with the U.S. Department of Labor (DOL) to obtain the confirmation of the wage that is required to be paid to the H1B visa worker (or H1B1 visa worker, E3 visa worker) and to satisfy the employment-related attestation requirements to the U.S. government.

The Labor Condition Application (LCA) can be used for more than one foreign worker, however, if the foreign workers are specifically named then they cannot be replaced by another worker. The Labor Condition Application (LCA) usually takes 7 business days to process and cannot be filed earlier than 6 months before the employment start date listed. The validity of the Labor Condition Application (LCA) can be granted to a period of up to 3 years for H1B visas (or up to 2 years for E3 visas or H1B1 visa extensions).

Step 3: Posting the Notice of Filing the Labor Certification Application (LCA) for 10 days

The Notice of Filing of the Labor Condition Application (LCA) must be posted (physically or electronically) for 10 days at the worksite on within the 30-day period prior to the date filing the Labor Condition Application (LCA). The alternative is a one-time email notification to directly affected workers.

Step 4: Approved Labor Certification Application (LCA) Provided to Foreign Worker & Filing Visa Petition with USCIS

After obtaining an approved Labor Condition Application (LCA), the U.S. sponsoring can then file for an H1B visa petition (or H1B1 visa petition, E3 visa petition) with the USCIS. The U.S. sponsoring employer must also provide the foreign worker with the certified (approved) labor certification application (LCA) before they start to work. If the foreign worker moves to a different worksite that is within the same area of the original worksite, the LCA Notice of Filing must still be posted at the new worksite before the foreign worker starts to work there.

CONCLUSION

An approved Labor Condition Application (LCA) that contains the wage to be paid to the foreign worker and certain employment-related promises that the U.S. sponsoring employer is required to make to the U.S. government must be obtained before filing for an H1B visa petition (or H1B1 visa petition, E3 visa petition). The U.S. sponsoring employer also has documentation maintenance responsibilities such as keeping a public access file of the visa petition.

HAVE A LABOR CONDITION APPLICATION QUESTION? SCHEDULE AN APPOINTMENT WITH US

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How we can help?

Attorneys are typically retained in obtaining an approved labor condition application (LCA) under H1B visa petitions (or H1B1 visa petitions, E3 visa petitions) due to the complexity of the visa petition. We can help with the challenges of figuring out the correct occupation classification codes of the job position and the appropriate descriptions for the job duties, advise on the compliance requirements related to visa status, and keep in check the timelines for filing the visa petition.

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