H-1B Prevailing Wage Audit: Employer Step-by-Step Guide

Q: Why should employers audit H-1B wages now?

DOL's 2026 NPRM proposes raising prevailing wages 21–33% across all four wage levels. Employers who paid at the old Level I or II floors may now be below the new required minimum. Underpaying H-1B workers is one of the top reasons for LCA denials and I-797 RFE issuance. An audit before the rule takes effect lets you fix compensation issues proactively — rather than scrambling after a compliance problem surfaces.

Q: How do I find my employees' current LCA wage data?

LCA filings are public records accessible via DOL's FLAG (Foreign Labor Application Gateway) system and third-party databases. You can search by employer name or FEIN to pull all certified LCAs. Each LCA shows the prevailing wage rate, wage level, SOC code, and work location for every H-1B worker. Cross-reference these against current payroll records to identify gaps.

Q: What are the four H-1B wage levels?

DOL defines four levels based on percentile rankings for the occupation in the geographic area: Level I (entry, 0–34th percentile), Level II (qualified, 35–50th), Level III (experienced, 51–75th), Level IV (fully competent, 76th+). Employers must pay at least the prevailing wage for the level assigned — or the actual wage paid to similarly employed workers, whichever is higher. Under the 2026 NPRM, Level I floors could rise 21–33% depending on occupation and location.

Q: What happens if an H-1B employee is paid below the new prevailing wage?

If the new rule takes effect, paying below the required wage level is an LCA violation. DOL can require back-pay to the worker, debar the employer from future H-1B petitions for 1–5 years, and refer cases to USCIS for petition revocation. The safe path is to raise the employee's salary to meet or exceed the new floor before enforcement begins — or adjust the LCA filing if the position warrants a different level.

Q: Can H-1B employees transfer if they are underpaid?

H-1B portability rules let an employee begin work with a new employer as soon as that new employer files Form I-129 — no waiting for approval. The new employer must independently certify a new LCA at the correct prevailing wage. If an employee is underpaid at their current employer, that does not prevent them from transferring. The new employer absorbs no liability for prior wage violations by the old employer.

Q: What documents should I review in an H-1B wage audit?

Pull every certified LCA (Form ETA-9035) for the past 3 years. Cross-reference with current payroll records, HRIS data, recent promotions or title changes, and any market adjustment letters sent to workers. Also check whether your employer data in iCERT/FLAG matches your actual corporate structure — changed legal names, subsidiary reorganizations, or FEIN updates can cause mismatches that trigger red flags in audits.

Q: Should we hire outside counsel for the H-1B wage audit?

If you have more than 20 active H-1B employees or operate in multiple states with varying wage data, outside immigration counsel is strongly recommended. They can pull official wage determinations from OFLC, assess whether current wage levels match job duties, and prepare the documentation needed to file amended LCAs or respond to any DOL inquiry. Our $49 Attorney Prep Session gives you a dedicated immigration attorney review of exactly this kind of situation.

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What this guide covers This is an operational checklist for HR directors, in-house counsel, and immigration attorneys managing H-1B programs. It is not legal advice. For your specific workforce, consult qualified immigration counsel — especially before filing any amended LCA.

Why Conduct a Prevailing Wage Audit Now?

DOL's 2026 Notice of Proposed Rulemaking (NPRM) would raise prevailing wage floors across all four H-1B wage levels by 21–33%, depending on occupation classification and geographic location. If finalized, the new floors could affect every employer who certified LCAs at the old Level I or Level II minimums.

The risks of doing nothing are concrete:

LCA violations — paying below the required prevailing wage is a standalone ground for DOL to require back-pay and potentially debar the employer from future H-1B filings (1–5 years).
I-797 RFEs — USCIS routinely issues Requests for Evidence on wage level justifications when the rate looks low relative to the position's actual duties.
Back-pay liability — if an audit reveals underpayment, DOL can require retroactive compensation to the worker, dating back to the first underpaid pay period.
Reputational exposure — LCA data is public. Employers with enforcement actions show up in OFLC disclosure logs accessible to competitors and press.

21–33%

Proposed wage floor increase (NPRM 2026)

1–5 yr

Potential employer debarment for willful violations

~$2,400+

Avg. per-employee exposure at Level I under new floors

An audit done before the rule finalizes gives you the option to adjust compensation, file amended LCAs, or restructure job classifications proactively. An audit done after is a firefight.

Finding Your Employees' Current LCA Wage Data

Every certified LCA (Form ETA-9035) is a public record under the Department of Labor's regulations. You can retrieve your workforce's LCA data through two primary channels:

Method 1: DOL FLAG System (iCERT Portal)

Register at flag.dol.gov using your employer FEIN. The iCERT system lets you search all LCA filings by employer name or FEIN, filter by status (-certified), and export results to CSV. This is the most authoritative source — the data matches exactly what was filed with DOL.

For each LCA, pull and record:

Case number (ROW number)
Employee name and wage rate
Wage level (I / II / III / IV) and prevailing wage rate
SOC (Standard Occupational Classification) code
Work location (city, state, county)
Validity period and submission date

Method 2: Third-Party Aggregators

Services like MyVisaJobs.com and H1BInfo.org compile DOL LCA data into searchable databases with employer name filtering. These are useful for a quick overview but may not reflect the most recent amendments or corrected filings.

Check for subsidiaries and parent companies If your company has gone through reorganizations, changed its legal name, or uses multiple DBAs (Doing Business As), the FEIN on some LCAs may differ from your current corporate entity. Search all FEINs associated with your corporate group to avoid gaps.

Matching LCAs to Current Employees

After pulling all LCAs, cross-reference them against your current HRIS or payroll system. Flag any gaps:

Active employees with no LCA on file — the LCA may have been filed under a different entity name, or the position may have changed.
LCAs for employees no longer on payroll — confirm the LCA period ended and no ongoing obligation remains.
Title or role changes — a promotion or reclassification may require a new LCA with a higher wage level.

Comparing Current Wages to New DOL Levels

Once you have your current LCA wages mapped to employees, the next step is to compare them against the new DOL prevailing wage levels that would take effect under the NPRM.

How the Four Wage Levels Work

Wage Level	Percentile Range	Typical Experience	2024 Floor (example: Software Developer, SF)	Proposed 2026 Floor (est.)
Level I	0–34th percentile	Entry-level, limited relevant experience	~$94,000	~$114,000+
Level II	35–50th percentile	Qualified, 2–4 years of relevant experience	~$112,000	~$136,000+
Level III	51–75th percentile	Experienced, 5+ years, supervisory scope	~$134,000	~$162,000+
Level IV	76th+ percentile	Fully competent, expert-level, senior responsibility	~$158,000	~$191,000+

* Example: Software Developer, SOC 15-1252, San Francisco, CA. Actual rates vary by occupation, SOC code, and location. Use DOL's OFLC Prevailing Wage Lookup for your specific situation.

Use DOL's OFLC Wage Library — not third-party estimates DOL's official wage determination tool at flag.dol.gov/wagelevels is the authoritative source. It allows you to input the SOC code, job title, and work location to pull the exact prevailing wage for each level. Rerun these queries now using the 2026 proposed thresholds to identify gaps.

What to Look For

For each active H-1B employee, check two things:

Is the assigned wage level appropriate for their current role? — An employee promoted from junior engineer to senior engineer since the LCA was filed should likely be at Level III or IV now, not Level I.
Is the wage rate at or above the new floor for their assigned level? — If you're paying at the old Level I floor, check whether that falls below the new Level I proposed floor.

What to Do If an Employee Is Below the New Wage Level

If your audit identifies employees paid below what the new prevailing wage floors would require, you have three main options. The best path depends on how far the gap is and how quickly you can act.

Option 1: Raise Compensation to Meet the New Floor

The simplest fix is to increase the employee's salary to at least the new prevailing wage for their assigned level. Document this as a compensation adjustment, not a promotion — this makes it clear you're responding to a compliance need, not a performance change. Run this adjustment through payroll before the rule's effective date.

You'll need to file an amended LCA (Form ETA-9035 with reason code "Material Change") within 30 days of the compensation change. Work with immigration counsel to prepare the amendment.

Benefit of raising compensation proactively If you raise wages before a compliance issue is flagged, you can present the change as a routine market adjustment to a legal team reviewing your program — rather than as a response to an enforcement action. It also strengthens your defense if DOL does audit the LCA.

Option 2: Reclassify the Job to a Higher Wage Level

If the employee's actual duties have evolved (more responsibility, broader scope), you may be able to file an amended LCA at a higher wage level — one where their current salary already meets or exceeds the floor. This avoids a raise while resolving the compliance gap.

This requires a documented analysis of the job duties justifying the higher level. Immigration counsel should help build this record before filing.

Option 3: File a New LCA at the Correct Wage

In cases where the employee has changed roles significantly or the original LCA had material errors, a new LCA filing (rather than an amendment) may be cleaner. The new LCA supersedes the old one and establishes the correct wage level going forward.

Do not ignore the gap If an employee is paid below the prevailing wage and DOL or USCIS discovers it, you face back-pay liability, potential petition revocation, and debarment from the H-1B program. Proactive remediation is always cheaper than enforcement.

H-1B Transfer Considerations for Underpaid Employees

Employers sometimes worry that an underpaid H-1B employee's ability to transfer to a competitor creates leverage pressure to delay fixing compensation. This concern is valid but misses the legal framework.

H-1B portability rules (INA §214(n)) allow an H-1B worker to begin employment with a new employer as soon as that new employer files Form I-129 — no waiting for USCIS approval. The new employer independently certifies a new LCA at the correct prevailing wage. Prior wage deficiencies by the previous employer do not carry forward.

This means two things for your audit:

Fixing compensation retains talent. Workers paid at or above the new floor have no portability motivation driven by wage gaps. A timely raise to meet the new floor is a retention investment.
Transfer risk is real. If your audit shows significant underpayment relative to the new floors, competent workers will be aware — and competitors recruiting from your workforce will use this as a pitch. Address the compliance gap before it becomes a recruitment talking point.

Counteroffer considerations If an underpaid employee receives an outside offer, you can increase their salary to meet the new prevailing wage floor as part of a counteroffer. This is legally straightforward — simply document it as a compliance-driven adjustment and file the amended LCA within 30 days.

Templates and Compliance Checklist

Use this checklist to run a structured audit of your H-1B workforce. Assign each item to a specific owner with a target completion date.

Pull full LCA export from DOL FLAG/iCERT Search by employer name and all associated FEINs. Export certified LCAs from the past 3 years to CSV.
Match LCAs to current active employees Cross-reference LCA list against HRIS. Flag employees with no LCA on file or LCAs with expired validity periods.
Identify role changes since LCA filing Check for promotions, title changes, or significant duty changes that may require a higher wage level LCA.
Run prevailing wage lookups for all active positions Use DOL's OFLC Wage Level Lookup (flag.dol.gov/wagelevels) for each SOC code and location combination.
Compare current salaries against 2026 proposed floors Create a gap analysis table showing current pay vs. proposed floor for each employee. Prioritize Level I workers.
Identify employees below the new wage floor Group by gap size: minor (<5%), moderate (5–15%), significant (>15%). Escalate large gaps to legal counsel immediately.
Draft compensation adjustment plan for affected employees Model the cost of raises vs. the cost of enforcement. Get CFO sign-off on budget for raises.
Engage immigration counsel for amendment filings Each compensation change or wage level reclassification requires an amended LCA within 30 days of the change.
Document the audit process and findings Create an internal compliance record documenting what was reviewed, when, and what actions were taken. This is your evidence of good faith if DOL audits later.
Set a recurring review schedule (quarterly) DOL prevailing wages are updated annually. Build a reminder to rerun the wage comparison each January before the new fiscal year's LCA cycle.

Wage Gap Analysis — Sample Table

Employee	Position / SOC Code	Location	Current Wage	Current Level	2026 Proposed Floor	Gap	Action
J. Smith	Software Engineer / 15-1252	San Francisco, CA	$95,000	Level I	~$114,000	-$19,000	Raise + amend LCA
A. Patel	Data Analyst / 15-2051	Austin, TX	$82,000	Level I	~$94,000	-$12,000	Raise + amend LCA
M. Johnson	Senior Engineer / 15-1252	Seattle, WA	$145,000	Level III	~$162,000	-$17,000	Raise + amend LCA
R. Chen	Research Scientist / 19-1029	Boston, MA	$175,000	Level IV	~$198,000	-$23,000	Raise + amend LCA

* This is a sample table for illustration. Replace with your actual workforce data.

Document Checklist for Each Affected Employee

For every employee where a gap is identified, prepare a file containing:

Copy of the original certified LCA
Current job description (signed by HR manager)
Current payroll record
DOL prevailing wage determination printout for the position/location
Compensation adjustment memo (date, amount, justification)
Copy of amended LCA (once filed)
Attorney engagement letter (if outside counsel is engaged)