What Happens if the Prevailing Wage is Higher Than a Sponsored Worker’s Salary?

When a company sponsors a foreign worker for a green card, one of the key requirements is meeting the prevailing wage set by the Department of Labor. But what if that wage is higher than what the worker currently earns? Many employers worry about whether they must immediately increase the employee’s salary to match it.

The good news? You don’t have to pay that wage until the green card is granted. And, given current backlogs, that could take years. Let’s break down what that means for employers and employees.

Understanding Prevailing Wage in the Green Card Process

When an employer files a PERM labor certification for a foreign worker, they agree to pay at least the prevailing wage by the time the worker receives their green card—not right away. However, with significant visa backlogs, especially for workers born in India and China, that green card could take 10–15 years or more.

For context:

• The labor certification process establishes that no qualified U.S. workers are available for the job.
• The prevailing wage is determined by the Department of Labor based on job duties, location, and industry standards.
• The employer commits to paying this wage once permanent residency (the green card) is granted.

Given the substantial processing delays, most employees will naturally see their salaries increase over time due to merit raises, cost-of-living adjustments, and promotions—making it more likely that they’ll reach the prevailing wage organically.

What Should Companies Do If the Prevailing Wage Is Too High?

If the prevailing wage determination comes back significantly higher than what your foreign employee currently earns, don’t panic. Here’s what to consider:

1. Project Future Salary Increases

Instead of worrying about an immediate salary adjustment, calculate how annual raises might bridge the gap. For example:

• If an employee currently earns $80,000 but the prevailing wage is $100,000, that $20,000 difference could be covered over time with raises.
• A 3% annual salary increase could close the gap within six to seven years—long before they receive a green card under current processing times.

The prevailing wage is locked in at the time of filing and does not change with inflation or cost-of-living adjustments. That means today’s wage determination applies even if the worker gets their green card a decade later.

2. Consider the Long Wait Times

The current visa backlog, especially for Indian nationals in the EB-2 category, is enormous. Workers who started their process in 2012 are only now reaching the front of the line in 2024.

For someone beginning the process now, the backlog means that for an Indian starting now, receiving a green card in 12 years would be optimistic. More likely, the wait will be even longer unless per-country caps change or new immigration policies speed up processing.

3. Stay Strategic About the Green Card Process

Employers often initiate the green card process to keep key employees long-term—not just to secure permanent residency for them. If an H-1B worker maxes out their six-year stay, the only way to extend their status is to have their green card process underway. Without it, they’ll have to leave the U.S.

From an HR perspective, this means:

• Even if you’re neutral about an employee obtaining permanent residency, starting the green card process keeps them legally employable in H-1B status.
• Delaying too long may force the employee to leave mid-career, disrupting your organization’s workforce planning.

For employees, the long wait makes planning even more crucial—especially considering that H-1B status doesn’t allow for retirement in the U.S. Without a green card in hand by retirement, the worker will need another visa status or must leave the country.

Could Green Card Processing Get Faster?

There is hope that processing times could improve, but change has been slow:

• Congress has debated removing per-country green card caps for years, but no bill has passed both houses.
• The 140,000 green card annual limit for employment-based categories has remained unchanged despite increasing demand.
• Occasionally, visa bulletin movement provides some relief when visas from other categories go unused.

However, unless major legislative changes happen, the green card backlog will likely continue growing, making long waits the norm.

Final Thoughts: Should You Start the Green Card Process?

Despite challenges, starting a green card process remains crucial for both employees and their sponsoring employers. The prevailing wage doesn’t need to be paid immediately, and with long wait times, most salaries naturally rise to meet it.

Employers should file to keep employees work-authorized beyond their sixth H-1B year. Employees should begin early to ensure they can continue working and eventually retire in the U.S.