U.S. Department of Labor Proposed Significant Increases to Existing Wage Levels for H-1B/H-1B1/E-3 Visas, and PERM Permanent Labor Certification Programs
On March 26, 2026, the U.S. Department of Labor (DOL) issued a proposed rule that would significantly adjust the methodology for determining prevailing wages under the H-1B, H-1B1, E-3, and the permanent labor certification PERM programs. If this proposed rule were to be finalized, then it would represent one of the most significant changes to the H-1B and PERM wage requirements in over two decades. The proposed rule by the DOL was published in the Federal Register on March 27, 2026, and is followed by a 60-day public comment period. After that, DOL will review the public comments, and it would be a few more months before the final rule formally takes effect. Please find a breakdown of the key changes of the proposal below and practice steps that employers should consider.
Key Changes of the Proposed Rule
Currently, the DOL uses a four-tiered prevailing wage structure that is based on data from the Bureau of Labor Statistics’ Occupational Employment and Wage Statistics (OEWS) survey. This proposed rule keeps the same four-tiered structure. However, it significantly raises the percentile thresholds that are used to determine each wage level. Under the current system, which has been in effect since 2005, the Level I (entry-level) wage is set at the 17th percentile of the OEWS wage distribution for a given occupation and geographic area. The DOL has stated that this threshold is too low and does not accurately reflect the wages of similarly employed U.S. workers
The proposed new wage levels are as follows:
- Wage Level I (Entry-level position):
- Current: 17th percentile
- Proposed: 34th percentile
- Wage Level II (Qualified positions; greater than entry-level):
- Current: 34th percentile
- Proposed: 52nd percentile
- Wage Level III (Experienced positions):
- Current: 50th percentile
- Proposed: 70th percentile
- Wage Level IV (Full competent positions; highest level):
- Current: 67th percentile
- Proposed: 88th percentile
Based on analysis by the DOL on prevailing wage data from fiscal years (FY) 2020 to 2024, the proposed adjustments would increase the average certified wage by approximately $14,000.00 per year per worker, as the DOL projects.
Parties Affected
This proposed rule would apply to employers who are sponsoring foreign talent under several visa categories. The visa category affected the most would be the H-1B visa program, but this proposed rule would also affect H-1B1 employers sponsoring nationals of Chile and Singapore, E-3 employers sponsoring Australian nationals, and employers who are pursuing PERM labor certification for EB-2 and EB-3 employment-based green cards.
It is important to note that this rule would not apply immediately. The new wage levels, if approved and finalized, would apply only to prevailing wage determination applications that are pending with the OFLC National Processing Center as of the effective date. It would also apply to any new labor certification applications (LCAs) and prevailing wage requests filed on or after that date. Existing applications, permanent labor certifications, approved LCAs and previously approved PERM prevailing wage determinations would not be affected by this proposed rule. H-1B cap petitions for upcoming FY2027 are also expected to be unaffected.
Wider Policy Framework
This proposed rule is part of a broader effort by the Trump administration to raise the costs and qualifications associated with securing and employing H-1B workers. The previous policy measures taken by the current administration to that effect include the weighted selection process for the annual H-1B lottery and the $100,000.00 fee imposed on certain H-1B petitions by way of the September 2025 presidential proclamation.
Important Steps Employers Should Consider
This proposed change could affect how employers retain foreign talent. Employers who rely on the H-1B, H-1B1, E-3 visa programs or the PERM permanent labor certification program should consider the following:
- Review current foreign nationals’ case and identify positions classified at Level I or Level II: Identifying foreign workers who fit into these first two categories would be of benefit as the proposed increases are expected to have the most impact within these wage levels. Understanding by how much current offered wages exceed the proposed new floors will help employers gauge financial exposure.
- Evaluate impact of the new rule on upcoming H-1B and PERM labor certification cases: This proposed rule could force employers who utilize the H-1B visa program to adjust their compensation structure upwards for all employees.
Implications for the International Community
Beyond the proposed increase in wage costs, this rule could potentially shape wider U.S. employer hiring practices in respect to foreign talent. Should the final rule follow through with the proposed increases, employers may become more selective in whom they chose to sponsor. This could potentially result in employers favoring candidates for high-level positions where market wages already align with or exceed the potential new thresholds. This shift has the possibility of creating a more competitive visa pathway for professionals who are seeking employer-sponsored legal status in the United States, including many Indian and Chinese nationals, who utilize the majority of H-1B visas, and who are just starting out in their careers.
While this rule is not yet finalized and is currently undergoing a public comment period, the DOL does in fact intend to raise the wage floor for foreign workers in the affected visa categories. Employers should be cognizant of these changes and treat the rule as a near planning issue rather than a distant possibility. We will continue to monitor all updates on this proposed rule. Should you have questions on this, or any matter related to immigration law, we recommend contacting the immigration department at Pasricha & Patel, LLC to schedule a consultation.