I want to decrease the salary of my H-1B employee. Do I have to file a new LCA? Do I have to file an amended H-1B petition if the salary is higher than the actual or prevailing wage?

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Covid-19 has changed the rules for travel, engagement and employment.  Many companies have started to reduce wages and put staff on leave, and some companies have terminated employees.

For companies with H-1B employees that are taking the approach of decreasing employee salaries, it is possible to reduce the salaries of your H-1B employees if you meet certain requirements as described below.

If the change in the employee’s salary is substantial, it is always a good practice to file a new Labor Condition Application (“LCA”) and to file an amended H-B petition with USCIS. However, if the salary change is not substantial, it may be acceptable to decrease the H-1B employee’s salary without filing a new LCA and an amended H-1B petition with USCIS as long as the decreased wage is still the higher of either the actual wage or the prevailing wage.

What is the actual wage?

The actual wage is the wage rate paid by the employer to all other individuals with similar experience and qualifications for the specific employment. If there are no other employees with similar experience and qualifications for that specific employment, the actual wage is the wage paid to the H-1B employee.

What is the prevailing wage?

The prevailing wage is the wage set for the particular occupational classification in the geographic area of employment by:

  • Union contract, or
  • the weighted average of wages paid to similarly employed workers (i.e., workers having substantially comparable jobs in the occupational classification) in the geographic area of employment

What is the required wage?

The required wage to be paid to the H-1B employee is the higher of either the actual wage or the prevailing wage.

Do I have to file a new LCA? Do I have to file an amended H-1B petition if I decrease the H-1B employee’s salary?

If the wage you are planning to pay to the H-B employee is still higher than the higher of the actual or prevailing wage, you do not need to file a new LCA and you do not have to file an amended petition with USCIS.

Example 1:

The prevailing wage for a Level I accountant in NYC is $59,634. There are no other employees with similar experience and qualifications in your NYC office, and you are paying the H-1B employee $68,000 per year. In this case, you could decrease the H-1B employee’s salary, as long as the decreased wage is still the higher of the actual or the prevailing wage ($59,634). For example, if you decrease the employee’s salary to $60,000 per year and appropriately document the adjustments to the pay scale, $60,000 would be considered the new actual wage and the decrease would be permitted, as the H-1B employee is still being paid the higher of the prevailing or actual wage. In this scenario, the employer would not have to file a new LCA and would not need to file an amended H-1B petition.

Example 2:

The prevailing wage for a Level I accountant in NYC is $59,634. There is one other accountant (Accountant X) in your NYC office, and you are paying Accountant X and your H-1B employee $70,000 per year. You now want to decrease the H-1B employee’s salary to $60,000, but you decreased Accountant X’s salary to $65,000. This would not work. The H-1B employee would have to be paid the higher of the actual ($65,000) or prevailing wage ($59,634). Therefore, you would have to pay the H-1B employee at least $65,000 per year.

Is there anything else I have to do to comply with the Department of Labor/USCIS requirements?

Yes. You will have to disclose the wage change in the next H-1B petition filed for this employee with USCIS. It is also extremely important to document any wage change in your Public Access File.

Please click here if you want to read more how Covid-19 impacts your visa.

Please click here if you want to find out how Covid-19 impacts the obligations of an H-1B or E-3 employee.

You can find key immigration information related to the Corona Virus below.

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