Prevailing Wage Validity Period Debated by BALCA

From: USADNEWS Volume VIII, Issue 3 April/May 2014

Occasionally USADWEB is asked about the regulations surrounding the prevailing wage validity period. Determining the correct time frame for your recruitment period can be a delicate task. The recruitment period and the application filing date must be coordinated around the validity period of the prevailing wage determination (PWD).

The regulation at 20 CFR § 656.40(c) states:

(c) Validity period. The National Processing Center must specify the validity period of the prevailing wage, which in no event may be less than 90 days or more than 1 year from the determination date. To use a prevailing wage rate provided by the NPC, employers must file their applications or begin the recruitment period required by §§ 656.17(e) or 656.21 of this part within the validity period specified by the NPC.

This regulation provides that the employer must either begin the recruitment process OR file their application while the prevailing wage is valid. This means that if the recruitment advertising is started before the prevailing wage is obtained, the application must be filed before the wage expires. Alternatively, the application may be filed after the prevailing wage has expired as long as the recruitment was initiated during the PWD validity period.

The language in this regulation has been contested over recent years, eventually leading to an en banc review by the Board of Alien Labor Certification Appeals (BALCA) in the Matter of Karl Storz Endoscopy-America (December 2011). The review addressed the discrepancy in BALCA decisions in three previous cases: Quadrille Wallpapers & Fabrics, Inc. (December 2010), Manhattan Jewish Experience (December 2010), and Horizon Computer Systems (May 2011). In the first two cases, BALCA upheld the Certifying Officer’s (CO) denial of the labor certification applications because both the initial recruitment and the application filing date occurred outside the scope of the prevailing wage validity period.

However in Horizon Computer Systems BALCA interpreted the language differently. Taking into consideration the regulatory history and discussion, BALCA determined that the phrase “begin the recruitment” did not refer only to the earliest form of recruitment but rather to any step in the recruitment process. The Employment and Training Administration’s (ETA) Notice of Proposed Rule Making (NPRM) from May 2002 states, “Since employers filing applications for permanent labor certification can begin the required recruitment steps required under the regulations 180 days before filing their applications, they must initiate at least one of the recruitment steps required for a professional or nonprofessional occupation within the validity period of the PWD to rely on the determination issued by the SWA.”

An FAQ from the Office of Foreign Labor Certification in March 2005 also stated that the employer “does not need to wait until it receives a prevailing wage determination before beginning recruitment” as long as none of the advertisements contain a wage that is lower than the determination that is eventually received. BALCA interpreted this to mean that as long as any of the recruitment is conducted during the validity period, the employer may file its application after the prevailing wage has expired even if the employer had already initiated recruitment before the prevailing wage was received.

In the en banc review, BALCA rejected this interpretation, noting that neither the NPRM nor the FAQ obviate the employer’s responsibility to abide by the regulation at 20 CFR § 656.40(c). The regulatory history merely emphasizes the option that the employer has to begin recruitment prior to receiving the determination. The language of the regulation still holds them accountable to file the application before the PWD expires if they choose to begin the recruitment outside of the validity period. In other words, the “either/or” stipulation still applies.

Furthermore, BALCA analyzed the phrase “begin the recruitment” and found that in order to make it fit the interpretation in Horizon Computer Systems, the recruitment would have to be viewed as “beginning” with every individual step. The en banc panel decided that “the use of the definite article ‘the,’ combined with the reference to ‘recruitment’ in the singular, precludes this interpretation.” The phrase “begin the recruitment” refers to the recruitment process as a whole, not in part, and any first step therefore initiates the recruitment process as a whole.

BALCA also addressed the additional arguments that were made by the Employer as well as in an amicus brief by the American Immigration Lawyers Association (AILA). Responding to the criticism that changes to the language of the regulation in 2009 affected the intent, BALCA affirmed that the changes overall were technical in nature to clarify or correct typographical errors in the original wording. “Begin the recruitment” was changed to “begin the recruitment period,” which BALCA held to have the same substantive effect. The reference to the State Workforce Agency (SWA) issuing the PWDs was updated to reflect the procedural change to the National Processing Center (NPC). Lastly, the cross-reference to Section 656.17(d), which relates to re-filing applications, was corrected to appropriately reference Section 656.17(e), which governs pre-filing recruitment.

As a result of the en banc decision, employers must be careful to ensure that either their initial recruitment step or their application filing occurs during the validity period. If both occur outside of PWD validity period, the case risks a denial.