Yes by law there is a prevailing wage rule, however in practice this is abused.

1) It is basically never enforced 2) The people rubber stamping the applications don't have a clue about the person, the job, or the title

What happens is employers pigeon hole developers into less experienced roles with lower pay grades according to the BLS (the source of data employers must use to justify the wage)

For instance you can take a person with 10 years experience and either say she is a 'Level 1 Web Developer' at 52k in SF, OR you can say she is a 'Level 4 Software Developers, Systems Software' at 134k in SF. Which would you chose as an employer? And these are extremes, you can play somewhere in the middle depending on your comfort.

http://www.flcdatacenter.com/OesWizardStep2.aspx?stateName=C... and then I selected the BLS region as SF and you can see all of the occupations they define which sound similar and are described similarly, but have wildly different pay scales.

EDIT: I'm reading the prevailing wage guidance document now[0] and employers can actually provide their own wage data surveys to determine prevailing wage. Wow!

[0] http://www.flcdatacenter.com/download/NPWHC_Guidance_Revised...

I wouldn't put too much stock in the "market wage" requirement. It's easily subverted. All it means is that the position advertised needs to pay market rate for that job title. You could hire an unusually talented senior engineer as an "analyst 1" and as long as you pay the analyst 1 market salary, you can get away with it. There's very little oversight.

Also, keep in mind that if it's difficult to hire at "market rate", that tends to be a signal that market rate is too low. Suppressing wage growth is, in the long term, not really all that different from lowering wages (suppose that there is no wage growth for 10 years - "market rate" remains the same - in an inflationary economy, this means wages are much lower in real terms). This is why some people are now proposing a wage requirement considerably higher than market rate for H1Bs, to ensure that the process doesn't suppress the wage growth needed to make the field attractive to talented people.

Last I checked, the metrics around prevailing wages to hire an H1B are not adjusted based on the local market. So you can get away with paying an H1B the same in the Bay Area as you would in suburban Iowa.

Would you share a link? My impression was that market wages actually need to reflect the local wages, not national, but I'm not sure of this.

well, one way to a self-fulfiling proheshy is to advertsie below market jobs in the market you are looking at.