NYC And California Pay Laws Complicate Employment-Based Immigration

New wage laws in California and New York City may compel employers to take steps when sponsoring employment-based immigrants that go beyond Department of Labor (DOL) regulations. The issue has received virtually no attention, but the October 2021 DOL-Department of Justice (DOJ) fine against Facebook shows complying with one government rule does not protect employers against other government enforcement actions.

Facebook Settlement

When companies sponsor employment-based immigrants, Department of Labor rules generally require an employer to show no available qualified U.S. workers are available for the position. The Department of Labor invented the regulatory requirement that employers must place advertisements, including print ads, to demonstrate the lack of available workers, even though the law does not mention advertising. “Although immigration law requires ‘labor certification’ for most employer-sponsored immigrants, the Department of Labor has created the current system out of whole cloth,” according to a National Foundation for American Policy (NFAP) report.

In December 2020, the Justice Department filed a lawsuit that alleged Facebook did not hire U.S. workers when it sponsored employment-based immigrants and posted advertisements to comply with Department of Labor regulations for PERM (permanent labor certification program). Among the claims: DOJ said Facebook deterred U.S. workers by requiring applications to be submitted via mail.

There is no requirement to hire U.S. workers via these ads, and the Justice Department did not claim Facebook violated Department of Labor rules that required advertising for PERM applications.

Despite this, on October 19, 2021, DOJ and DOL announced settlement agreements with Facebook. Under the settlement with the Department of Justice, Facebook paid a civil penalty of $4.75 million and agreed to pay up to $9.5 million to “eligible victims of Facebook’s alleged discrimination,” according to a joint DOJ-DOL press release.

The settlement sent a signal to employers—complying with a regulation did not create immunity from other government enforcement actions.

California and New York City Wage Laws

In light of new wage laws in California and New York City, employers should be aware of the Facebook settlement when filing permanent labor certification program applications for job opportunities in those jurisdictions.

Since November 1, 2022, employers seeking workers in New York City must post salary ranges when advertising positions. “It shall be an unlawful discriminatory practice for an employment agency, employer, or employee or agent thereof to advertise a job, promotion or transfer opportunity without stating the minimum and maximum annual salary or hourly wage for such position in such advertisement,” according to the law. “In stating the minimum and maximum annual salary or hourly wage for a position, the range may extend from the lowest to the highest annual salary or hourly wage the employer in good faith believes at the time of the posting it would pay for the advertised job, promotion or transfer opportunity.” (Emphasis in original.)

The law does not apply to job advertisements for “temporary employment at a temporary help firm” and for “Positions that cannot or will not be performed, at least in part, in the city of New York.”

Beginning January 1, 2023, California law adopts a similar requirement. The new law states: “An employer with 15 or more employees shall include the pay scale for a position in any job posting.” The law defines “pay scale” as “the salary or hourly wage range that the employer reasonably expects to pay for the position.”

What The Wage Laws Mean For Employers

When advertising for a position to comply with federal PERM rules and with the new wage laws in California or New York City, employers should now post the salary range or a specific salary even on advertisements posted for PERM purposes such as Sunday ads, the employer’s external website posting, local ads, and more, according to Lynn O’Brien, an attorney at Quarles & Brady. Previously it would not be necessary to post the salary in such advertisements.

“If the wage range for a job set by the company is $70,000 to $120,000, but the DOL prevailing wage comes back at $95,000, to comply with the NYC or California law, an employer in an advertisement as part of the green card application (i.e., a PERM ad) will have to show $95,000 as the low end of the range in the advertisement,” said O’Brien in an interview.

Similarly, if someone sponsored for a green card must be paid a prevailing wage of $200,000, but the employer’s typical range for the position only goes up to $175,000, the employer will now have to expand the range for PERM advertising for positions in NYC and California, said O’Brien. Timothy D’Arduini at Quarles & Brady notes that the PERM labor market test will likely remain an issue for employers as other jurisdictions consider pay transparency laws.

The issue should stay on the companies’ radar. “Employers are facing a range of unknowns, including if and how states and cities will enforce these laws in the PERM context and whether the U.S. Department of Justice will weigh in with their own views and enforcement mechanisms,” according to Steve Plastrik, a senior associate at Berry Appleman & Leiden. “The potential for conflict between federal and state laws is very real and poses a risk for employers, including those that are trying to do everything by the book.”

The new wage laws in California and New York City will likely affect compensation ranges for certain positions and increase compliance costs for employers. It’s a reminder, say analysts and attorneys, that it is almost always more difficult to hire and retain a foreign-born employee than a U.S. worker.