- The DOL proposed raising H-1B prevailing wages across all four levels to align with US worker pay.
- Entry-level Level I wages could increase by over 30%, totaling roughly $20,000 to $30,000 annually.
- The proposal affects H-1B, H-1B1, E-3, and PERM labor certifications for employment-based green cards.
The U.S. Department of Labor proposed on March 26, 2026, to raise H-1B prevailing wage floors across all four wage levels, a change that would lift minimum pay requirements by shifting to higher OEWS percentiles and could raise entry-level wages by more than 30%.
The proposal would apply to employers sponsoring H-1B workers and to filings involving H-1B1 for Chile and Singapore, E-3 specialty occupation workers from Australia, and PERM labor certifications for green cards. DOL said the change would better align wage requirements with U.S. worker pay.
Under the Notice of Proposed Rulemaking, titled "Improving Wage Protections for the Temporary and Permanent Employment of Certain Foreign Nationals in the United States," Level I wages would move from the 17th percentile to the 34th percentile, Level II from the 34th to the 52nd, Level III from the 50th to the 70th, and Level IV from the 67th to the 88th.
How the Current Wage Rules Work
Employers that hire H-1B workers already must offer and pay at least the prevailing wage for the occupation and the Geographic Area of Employment. DOL sets that wage through the Bureau of Labor Statistics’ Occupational Employment and Wage Statistics survey, or OEWS, based on the job requirements and location.
Those rules do not turn on market conditions, company budgets or a worker’s willingness to accept less pay. Employers must pay the higher of the prevailing wage or the actual wage paid to similarly qualified U.S. workers in the area.
That framework reaches beyond H-1B petitions. It also covers Labor Condition Applications for H-1B1 and E-3 workers and prevailing wage determinations in the PERM process for employment-based green cards.
What DOL Says the Data Show
DOL’s analysis of more than 3 million LCAs from FY2020-2025 found prevailing wages averaged $19,000 below OEWS means for matching occupations and locations. It said H-1B offers averaged $111,717, compared with $130,219 market averages.
The department said current wage levels have been unchanged since 2005 and include non-specialty workers, which it said understates H-1B wage floors. The proposal uses statistical modeling for what DOL called "parity."
Average certified wages would rise by about $14,000 per worker each year under the proposal. Entry-level jobs would see the largest increases, with Level I wages estimated to rise by about 33%, or roughly $20,000-$30,000.
Level II wages would increase by about 21%. Level III wages would rise by about 25%, and Level IV wages by about 20%.
Timing, Comments, and Effective-Date Impact
The comment period runs for 60 days and ends around May 26, 2026. DOL said the rule would apply to new and pending prevailing wage determinations and LCAs after the effective date, while existing approvals would be grandfathered.
For employers, the shift would tighten rules that already carry financial and regulatory risks. Offering less than the required prevailing wage can make an H-1B petition non-compliant and expose employers to USCIS denials, DOL audits, back-pay orders and civil penalties of up to $10,000 per violation.
Violations can also trigger debarment for 1-3 years and bans on using the H-1B program. DOL and ICE audits rose 25% in FY2025.
Why Location Matters So Much
The proposal would affect wage calculations that vary sharply by place and job classification. DOL uses hyper-local OEWS data for more than 800 occupations across more than 400 areas, meaning the same occupation can carry very different wage floors depending on where the worker performs the job.
A software developer in San Francisco’s high-cost metropolitan area can command a far higher prevailing wage than the same role in rural Ohio. Remote work follows the worker’s physical location, not the employer’s headquarters.
That rule also matters for consultants and workers assigned to client sites. When an H-1B worker travels to multiple locations, the highest-wage area governs.
How DOL Classifies Jobs
DOL classifies jobs using Standard Occupational Classification codes from the O*NET database. The agency matches the code to the duties, education, experience and skills required for the position, not to the credentials of the person hired.
A data scientist role that matches O*NET 15-2051.00, Data Scientists, receives that code when the duties involve advanced analytics and modeling. Entry-level duties warrant Level I even if the worker holds a PhD, while advanced supervisory tasks push the wage level to Level III or IV.
That job-first approach blocks employers from using an overqualified worker’s willingness to accept entry pay as a basis for a lower wage level. Employers must document how the duties align with the SOC code in LCA and Form I-129 filings.
Wage levels are meant to reflect job complexity, experience and autonomy. Level I covers entry-level work involving routine tasks and close supervision, while Level IV covers expert roles with supervisory or leadership duties.
Examples of Wage Differences
The effect of the new percentile structure would be broad. For software developers in the San Jose-Sunnyvale-Santa Clara, California MSA, a Level I wage can top about $120,000, compared with about $70,000 in a rural Midwest Balance of State area.
Civil engineers show the same pattern. A Level II wage can reach about $110,000 in a high-cost area and about $75,000 in a lower-cost one.
DOL’s rules leave little room for employers to argue that layoffs, a downturn or a startup budget should reduce pay. Industry slowdowns do not lower the prevailing wage floor, and worker agreements to accept less than that rate do not override the law.
The department grounds those rules in the Immigration and Nationality Act‘s requirement that hiring foreign workers must not adversely affect U.S. wages. The proposed higher wage floors would amplify the cost of getting the classification, location or wage level wrong.
Employers preparing filings now must also account for another deadline. A new Form I-129 takes effect on April 1, 2026 and requires wage-level consistency with the LCA and H-1B registration.
The wage issue has grown more important as the H-1B selection process changes. The FY2027 lottery is wage-weighted, with higher wage levels improving the odds of selection.
That creates three pressures for employers at once: higher DOL wage floors, a selection process that favors higher wages, and site audits that verify wages and job duties. Companies may face harder choices on entry-level hiring as those rules intersect.
DOL’s data already show how prevalent H-1B use is in later-stage immigration filings. In FY2024, 57% of PERM applications were H-1B extensions.
For PERM cases, employers use DOL’s FLAG system to seek prevailing wage determinations. In H-1B filings, they must list all worksites, attach OEWS printouts or prevailing wage determinations, and certify compliance.
Location errors can be costly. Employers must identify each MSA, Balance of State area or sub-state region where the work will occur, and client-site placements or relocations can trigger a fresh wage review.
Implications for Workers and Employers
For workers, the rule would raise minimum pay protections but could narrow entry-level openings. The proposal’s estimated increases would hit Level I jobs hardest, and those are often the starting point for recent graduates entering specialty occupations.
At the same time, higher floors would increase pay parity for approved hires. The proposal describes a system in which H-1B wages have lagged broader OEWS averages, a gap DOL wants to close.
The department cast the change as a protection for both foreign professionals and U.S. workers. By tying wage floors to occupation and location rather than to employer finances or worker consent, the system aims to prevent wage suppression in domestic labor markets.
The proposal also revives a fight that surfaced in 2020, when an earlier wage rule was blocked. DOL’s new effort signals that wage-setting has returned to the center of the administration’s immigration and labor agenda.
Public comments are due through the Federal Register by late May 2026. Employers deciding whether to file before the rule takes effect now face a narrowing window as they weigh budgets against wage levels that could soon move sharply higher.
For many, the numbers will drive the decision. DOL’s own estimates point to average wage increases of about $14,000 a year per worker and jumps of roughly $20,000-$30,000 for some entry-level roles, raising the cost of H-1B sponsorship well before any final rule arrives.
