Wage transparency laws—quickly cropping up across more US state and local jurisdictions—govern employers’ requirements to disclose pay ranges to job applicants or potential applicants in job advertisements. Varying in scope, these laws will change the permanent labor certification (PERM) process required for certain employer-sponsored foreign nationals and will require employers to consider their job advertisement strategy.
Colorado became the first state to enact a wage transparency law that impacted PERM advertisements. As of January 1, 2021, employers with at least one employee in Colorado have been required to disclose the hourly rate or salary range, along with a general description of benefits, in any job posting for a position that could be performed in Colorado.
Since then, additional jurisdictions throughout the country, including New York City, California, and Washington, have passed similar laws. New York City’s wage transparency law took effect November 1, 2022, and amendments expanding existing laws in Washington and California will take effect January 1, 2023. Many localities have followed suit, and the State of New York is expected to enact similar statewide legislation in the near term. This trend will likely continue in 2023 as state and local legislative bodies return to session.
Labor certification, also known as PERM, refers to the labor market test and US Department of Labor (DOL) certification that there are no US workers willing and available to undertake a position that a US employer wishes to offer to a foreign national on a permanent basis. PERM is the basis for a large percentage of employment-sponsored US permanent residence applications. The PERM process is heavily regulated by the DOL, and PERM recruitment requirements are directly impacted by state and local wage transparency rules.
ANALYSIS
As a result of the changing landscape on wage transparency, US employers undertaking the PERM process must now consider a myriad of state and local requirements in conjunction with the federal regulations governing PERM as they draft and publish their job advertisements. For example, while the lower end of an advertised wage range may not present an issue under a state salary transparency law, placing a job advertisement with a wage range lower than the prevailing wage determined by the DOL for the PERM process will lead to a DOL denial of a PERM certification under DOL regulations.
Compliance and strategy are especially tricky in the age of remote and hybrid work arrangements. Employers advertising for positions that can be performed remotely from anywhere in the United States will need to comply with wage transparency laws across multiple jurisdictions. Large multistate employers will face similar challenges by virtue of employing one worker—or a handful of workers, depending on the jurisdiction—within a certain area of the country, or even just by advertising or doing business in that jurisdiction.
Employers may choose a broad approach to advertisement text that targets compliance across all jurisdictions. For example, a broad approach to compliance would require an employer to include not only a wage range, but also a general description of certain benefits to satisfy the heightened requirements under the Washington and Colorado laws. This would mean longer, more detailed, and more expensive PERM advertisements.
Another approach would be to consider the text of each job advertisement on a case-by-case basis.
In either instance, PERM employers must begin strategizing and consider factors such as the following when preparing job advertisements:
- Which laws apply to the company/employer as a whole?
- Which laws apply to the specific position being advertised?
- Does the law apply to this specific type of job advertisement?
- How will remote or hybrid work arrangements affect the requirements of the job advertisement?
- Does the posted wage range meet the DOL’s prevailing wage?
- How will posting a wage range that includes the DOL’s prevailing wage impact other ongoing recruitment?
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