Key Takeaways for Employers
- DOL has issued a proposed rule that would substantially increase prevailing wage requirements for H-1B, H-1B1, E-3, and PERM programs.
- Entry-level (Level I) wages would rise from the 17th to the 34th percentile, with Level II increasing from 34th to 52nd, Level III from 50th to 70th, and Level IV from 67th to 88th, significantly raising wage floors across all experience levels.
- The proposal reflects a continued focus on aligning foreign worker wages with those of similarly employed U.S. workers.
- A 60-day public comment period will follow Federal Register publication (expected March 27, 2026).
- The rule is not yet effective and must complete the rulemaking process; legal challenges are likely if finalized.
Overview
The U.S. Department of Labor (DOL) has issued a Notice of Proposed Rulemaking (NPRM) that would significantly revise how prevailing wages are calculated across several employment-based immigration programs.
The proposal would increase wage thresholds under the Occupational Employment and Wage Statistics (OEWS) system, which is used to determine prevailing wages for both temporary visa programs (H-1B, H-1B1, E-3) and permanent labor certification (PERM for EB-2 and EB-3 cases).
DOL’s stated objective is to ensure that foreign workers are compensated at levels comparable to similarly employed U.S. workers and to reduce incentives for employers to rely on lower-cost foreign labor.
How the Wage System Would Change
The current four-level wage system would be recalibrated upward:
- Wage Level I
- Current: 17th percentile
- Proposed: 34th percentile
- Wage Level II
- Current: 34th percentile
- Proposed: 52nd percentile
- Wage Level III
- Current: 50th percentile
- Proposed: 70th percentile
- Wage Level IV
- Current: 67th percentile
- Proposed: 88th percentile
These changes would meaningfully increase required wages across all experience levels, with the most pronounced impact on entry-level and mid-level roles.
Policy Context
This proposal reflects a broader shift in federal policy toward favoring higher-wage employment in the foreign worker context. It follows several recent developments, including:
- A weighted H-1B selection system that prioritizes higher wage levels
- Increased scrutiny of wage practices in high-volume visa programs
- Ongoing policy efforts aimed at discouraging use of foreign labor as a lower-cost alternative
The NPRM also revisits a similar wage-level restructuring effort introduced in 2020, which was ultimately vacated following litigation.
Practical Impact for Employers
If implemented, the rule would have significant implications for employers that rely on employment-based visa programs:
Increased Wage Costs
Employers should anticipate higher required wages across most roles, particularly those historically classified at Level I or Level II.
Pressure on Early-Career Hiring Models
Entry-level and early-career positions will be disproportionately affected, potentially reshaping:
- Campus recruiting programs
- Training and rotational roles
- High-volume hiring models in IT and consulting sectors
PERM Strategy Implications
Higher wage requirements may:
- Affect recruitment outcomes in the labor market test
- Increase audit risk where wage levels and job requirements appear misaligned
- Require more careful structuring of job descriptions and minimum requirements
Impact on H-1B Extensions and Mobility
While the rule would apply prospectively, new LCAs filed after implementation would be subject to higher wage levels, affecting:
- Extensions
- Amendments
- Job changes
Alternative Wage Sources Remain Available
The proposal does not eliminate the use of alternative wage surveys, which may become more important for employers seeking flexibility in wage determinations.
Timing and Next Steps
- Publication: Expected March 27, 2026
- Comment period: 60 days
- Final rule (if issued): Likely several months after review of comments
- Effective date: Typically 30–60 days after final publication
The rule would apply prospectively to new filings and would not retroactively affect previously issued prevailing wage determinations or certified cases.
G&A Insight
This proposal is not simply a technical adjustment to wage calculations. It reflects a fundamental policy shift that could materially alter how employers structure their U.S. hiring and immigration programs.
Several considerations are worth noting:
- Disproportionate Impact on Common Use Cases:
The proposal targets wage levels that are heavily utilized in practice. With a majority of LCAs historically falling at Levels I and II, the rule effectively raises the baseline cost of participation in the H-1B program. - Tension with Labor Market Realities:
The NPRM assumes that lower wage levels reflect underpayment relative to U.S. workers. However, in many real-world scenarios, wage level assignments reflect legitimate distinctions in experience, role complexity, and business structure. This disconnect may become a focal point for stakeholder comments and potential litigation. - High Likelihood of Legal Challenge:
Given the history of the 2020 rule and the economic impact of these changes, a final rule is likely to face immediate court challenges. Employers should plan for uncertainty in both timing and ultimate implementation. - Strategic Planning Opportunity:
The comment period presents a meaningful opportunity for employers to provide input on operational impact, particularly around entry-level hiring, workforce planning, and global competitiveness.
How Goel & Anderson Can Help
Goel & Anderson is actively advising clients on:
- Assessing the potential impact of the proposed rule on workforce and immigration programs
- Developing strategic responses and contingency planning
- Preparing and submitting comments during the rulemaking process
Please contact your G&A attorney if your organization would like to evaluate the impact of this proposal or participate in the comment process.
