Summary

State and local pay transparency laws require employers to disclose pay ranges to applicants in their job advertisements and may require steps beyond the Department of Labor (DOL) regulations when sponsoring foreign national workers for permanent resident (green card) status. Employers filing Permanent Labor Certification (PERM) applications should prepare for changes in the PERM recruitment process because of the increasing number of pay transparency laws in state and local jurisdictions.

PERM Application Process

One of the most common forms of employment-based green card sponsorship is through the DOL’s PERM process, which includes a heavily regulated labor market test. The purpose of PERM is to determine whether there is a shortage of fully qualified U.S. workers interested in the position before a green card is issued to a foreign national. With limited exceptions, an employer must post a Notice of Filing at the employer’s worksite to inform employees of the PERM application and must advertise the position in several types of media. DOL regulations do not require employers to include a wage or wage range in the required PERM recruitment advertisements but do require employers to specify a wage or wage range equal to at least the prevailing wage in the Notice of Filing posted at the employer’s worksite.

Pay Transparency Laws

Many state and local jurisdictions have passed laws on pay transparency, which require certain employers to disclose pay information in job postings, during the application process, to current employees and/or to state Equal Employment Opportunity (EEO) agencies. Specifically, pay transparency laws requiring wage disclosures in job postings are already in effect in Colorado; New York City; Jersey City; Ithaca, NY; and in New York’s Albany and Westchester counties, and will take effect in California and Washington starting in 2023. Additional jurisdictions are expected to pass similar legislations in the near future. The nuances of each jurisdiction’s laws vary, and some require the employer to also disclose any other forms of compensation, if applicable, as well as to disclose employment benefits.

Complying with Pay Transparency Laws in PERM Advertisements

Pay transparency laws do not change PERM regulations and PERM regulations also do not preempt applicable pay transparency laws. Employers must therefore ensure their PERM recruitment methods consider the changing landscape of state and local pay transparency laws. While the lower end of a wage range specified in a job ad may comply with a state’s salary transparency law, it may not comply with DOL regulations. For example, under DOL regulations if this lower end is below the prevailing wage determined by the DOL for the role, the DOL will deny the PERM. Some transparency laws require employers to disclose wage ranges in more recruitment methods than specified by PERM regulations, and to redo recruitment would involve significant expense in the event the DOL’s prevailing wage comes back higher than expected. Significant additional expense would also result from a broad approach to compliance in all jurisdictions by posting more detailed, and thus more expensive, PERM advertisements that include disclosure of pay and benefits.

At this time there is no exemption or court ruling that state and local pay transparency laws are preempted by the DOL’s federal PERM regulations. However, at least one state has recognized the difficulty to reconcile both. The increase in hybrid and remote work creates additional challenges as employers may be required to coordinate obligations across several jurisdictions’ pay transparency laws with obligations under PERM regulations. Employers may wish to consult with employment and immigration counsel on how to incorporate the increasing reach of pay transparency laws into their existing PERM recruitment practices.