Prevailing wage requirements ensure foreign workers are paid comparably to local workers in similar roles. This protects both foreign workers from exploitation and local workers from wage undercutting. Failure to pay prevailing wages can invalidate visas and result in penalties.
Wage Determination
Prevailing wages are typically determined by government wage data for the occupation in the geographic area. In the US, the Department of Labor provides prevailing wage determinations. Other countries use different data sources. Wages may be tiered by experience level.
Compliance
Employers must pay at least the prevailing wage for the occupation and location. This applies to base salary and may include benefits depending on the visa type. Paying less than prevailing wage, even unintentionally, creates serious compliance issues.
Documentation
Employers should document how they determined the prevailing wage and that actual compensation meets or exceeds it. Maintaining payroll records showing compliance protects against audits. Changes in role or location may require new wage determinations.