H-1B Labor Condition Application (LCA)

Employers are required to file Form ETA-9035, Labor Condition Application (LCA), prior to seeking new or extended H-1B status for a foreign national. The LCA may be filed electronically with the Department of Labor. If approved, a copy of the LCA is included in the H-1B petition that is filed with the United States Citizenship and Immigration Services (USCIS).

The LCA program was conceived as part of the process to protect U.S. workers from foreign workers willing to work for less money and under less favorable working conditions. Thus, the LCA has a number of attestations, public posting requirements and records maintenance obligations for employers. Employers who fail to comply with the LCA attestations or public access requirements may find themselves faced with a civil money penalty in the amounts from $1,000.00 per violation to as much as $35,000.00 per violation. These penalties may be accompanied by an order for back pay of salary and fringe benefits to the foreign worker, as well as debarment from participation in the H-1B program for one to three years. A brief discussion of the key elements surrounding LCA compliance follows below. For a more comprehensive reading, please see our LCA handbook.

The Attestations

An employer is required to pay H-1B visa holders a salary or wage equal to or higher than an actual or prevailing wage. Actual wage is the salary paid to employees who hold the same position at that location with experience and qualifications. Prevailing wage is established at the time of the filing of the LCA and is determined by independent authoritative salary surveys, prevailing wage data published by the National Processing Center of Office of Foreign Labor Certification, or a prevailing wage determination by a State Workforce Agency (SWA). It covers the employment offered at the location where the foreign national will be employed or is within a normal commute distance where the foreign national will be employed.

In general, employers must offer the same fringe benefits package to its H-1B foreign nationals as it offers to its U.S. workers (an exception exists for multinational corporations to provide home country benefits if they intend to utilize the foreign worker for less than ninety days provided that reciprocal benefits are afforded U.S. workers employed in the foreign country and the foreign national will remain on home country payroll). The benefits must be offered on the same eligibility basis to both groups of workers and the employer may not establish stricter eligibility requirements for its foreign worker than its U.S. workers. These benefits may include, but are not limited to, cash bonuses, stock options, paid vacations and holidays, health, life, disability and other insurance plans and retirement and savings plans.

The employer also must attest that the employment of the H-1B foreign national will not adversely affect the working conditions of U.S. employees. Therefore, the employer must offer the same working conditions to H-1B foreign nationals as it does to U.S. employees. Finally, the employer must attest that there is not a strike or lockout in the course of a labor dispute involving employees in the same position as the H-1B foreign national at the place of employment at the time of the filing of the LCA. If a strike or lockout occurs, the employer must notify the local Employment and Training Administration office and is precluded from using the LCA to support an H-1B petition until the strike or lockout has ended.

Employers who are H-1B-dependent or have been found to be willful violators by the Department of Labor are held to additional requirements and must make several additional attestations. H-1B dependency is determined as follows:

  1. If an employer has 25 or fewer full-time equivalent employees, the employer is considered H-1B dependent if 8 or more employees hold H-1B status;

  2. If an employer has between 26 and 50 full-time equivalent employees, the employer is considered H-1B dependent if 13 or more employees hold H-1B status;

  3. If any employer has over 50 full-time equivalent employees, the employer is considered H-1B dependent if 15% or more of the employees hold H-1B status.

The term “full-time equivalent employees” refers to the total number employees at the company, including an aggregate of part-time employees. Each part-time H-1B worker is considered as one H-1B worker for purposes of determining dependency.

If an employer is H-1B-dependent (or a willful violator according to the Department of Labor), the following additional requirements apply:

  • The employer must identify itself as an H-1B dependent employer or willful violator on the LCA form;

  • The employer must attest that it has not, and will not, displace a U.S. worker (in an equivalent job), either directly at the employer’s worksite or indirectly at the worksite of another employer where H-1B workers are assigned, for the period covering 90 days before the filing of the H-1B petition and ninety days after the filing of the petition;

  • The employer must also attest that it has recruited U.S. workers for the position in question at the same or higher salary and working conditions. Recruitment efforts must be documented and made available in the Public Access File.

Employers must retain records concerning the circumstances surrounding the departure of any U.S. worker in the same occupation during the 90-day before-and-after period. These records must be made available to the Department of Labor upon its request in an enforcement action. If an H-1B-dependent or willful violator employer plans to place its H-1B worker at the worksite of another employer, it should determine whether the other employer has displaced, or intends to displace, similarly-employed U.S. workers. Attempts to determine this information should be retained and made available to the Department of Labor for enforcement actions.


Notice Requirements

An employer must provide copies of the LCA to the H-1B worker no later than the first day the H-1B employee reports for work and to the union’s bargaining representative. In cases where there is no bargaining representative, notice of the filing may be made either by providing electronic notice to employees at the worksite or by posting the LCA or a notice that contains specified information in two conspicuous locations at the place(s) of employment for ten business days. Employers are advised to obtain signed acknowledgements of receipt from the H-1B worker and bargaining representative, or retain copies of the publicly posted notices.


Maintaining Public Access Files

Employers of H-1B workers must make available for public examination certain records related to the filing of the LCA. These records must be made available to any interested party and must be available within one day of the filing of the LCA. Therefore, it is best to create the public access file at the same time the LCA filing takes place. The documents in the file contain sensitive salary information, however, the identity of the individual to whom the LCA relates need not be shown anywhere in the file. The file may be identified by number or other confidential marking system with a cross-reference set up by the employer to identify the actual employee to whom the LCA relates.

Supporting documentation for the LCA must also be made available for inspection. Therefore, employers are advised to create public access files for each LCA filed, with each file containing the following:

  1. The certified LCA;

  2. An actual wage memorandum setting forth a full and clear explanation of the system used by the employer to set actual wages for workers in the same occupation;

  3. A copy of the salary survey or State Workforce Agency prevailing wage determination;

  4. A memorandum indicating that the LCA was posted for the requisite time period (or attested copies of the posted notice) or provided to the bargaining representative; and

  5. A summary of the benefits offered to U.S. workers in the same occupation with any explanation for differentiations between benefits received by U.S. workers and whether home country benefits were received by the H-1B worker.

In addition to the above, the public access files of H-1B dependent employers and willful violators should also contain the following:

  1. Evidence surrounding non-displacement of U.S. workers at the employer’s job site;

  2. Evidence surrounding non-displacement of U.S. workers at a secondary employer’s job site;

  3. Recruitment efforts for U.S. workers in the H-1B job classification;

  4. The H-1B non-dependency calculation; and

  5. List of exempt H-1B workers (master’s degree or higher or $60,000 or higher annual salary).

In the event of a corporate restructuring or merger/acquisition where the resulting company determined it would not re-file new H-1B petitions for assumed employees, the resulting company should include a sworn statement regarding the assumption of all obligations of the prior employer, with an accompanying list of affected LCAs, in the public access file.

​Each public access file must be maintained for at least one year beyond the end date of employment as specified on the LCA.