Grothman Bill Updates H-1B Dependent Employer Exemption to National Average Wage Index

Rep. Glenn Grothman (R-Wis.) introduced a bill on October 13, 2026, that would raise the salary threshold some H-1B-dependent employers can use to avoid added worker-protection requirements. The proposal would replace a fixed figure with a wage-linked formula.

The Protecting American Workers Through H-1B Modernization Act has a Senate companion introduced by Sen. Jon Husted (R-Ohio). The measure is not law.

It would set the salary threshold at twice the Social Security Administration’s National Average Wage Index. Grothman’s office put that index at nearly $70,000, which would make the threshold nearly $140,000 at current levels. The formula would move as the index changes, rather than establish a permanent $140,000 cutoff.

The salary figure has stood since 1998. The bill’s supporters say employers should not be able to rely on an unchanged threshold to bypass safeguards.

The salary exemption sits alongside recruitment and displacement safeguards

The H-1B-dependent-employer exemption applies within a system that imposes added obligations on employers whose H-1B workers make up a specified substantial share of their workforce. Those employers generally must attest to efforts to recruit U.S. workers in good faith.

They must also attest that they have not displaced U.S. workers with H-1B employees. The rules cover certain placements at another employer’s worksite when displacement has occurred, as well as displacement of similarly employed workers.

Under current law, an employer can avoid some of those added requirements for a worker who meets either of two tests: the worker earns at least $60,000 annually or holds a master’s degree or higher in a field related to the job.

The bill targets only the salary-based route. The advanced-degree exemption would remain. That distinction leaves one existing way for qualifying workers to fall outside the additional requirements unchanged.

The sponsors say the old threshold lets employers bypass protections

The Wisconsin Republican framed the proposal around competition for jobs and the threshold’s long freeze.

“American workers should come first in their own country.”

He said employers should not be able to use the old figure to avoid protections for qualified Americans, adding: “There is no excuse for leaving this threshold unchanged when it should have been raised years ago.”

He also criticized Congress’s inaction, saying: “Washington’s failure to act shows how little the Establishment cares about unemployed Americans when employers want access to cheap foreign labor.” He said the bill aims to ensure “American workers have a fair opportunity to compete for these jobs.”

Husted argued that companies have used the salary cutoff to sidestep hiring U.S. workers. “For decades, companies have been able to sidestep hiring American workers because of a salary threshold that hasn’t budged since 1998,” he said.

“That’s not modernization, that’s a loophole.”

Husted said employers heavily reliant on H-1B visas should not be able to use outdated law to avoid offering jobs to qualified American workers when they seek additional H-1B employees.

Other 2026 H-1B actions address separate parts of the system

The proposal arrives amid other federal changes to H-1B selection and entry rules, but it addresses a different provision: the exemption for H-1B-dependent employers.

A White House fact sheet dated September 18, 2026, said the Department of Homeland Security finalized a rule in December 2025 replacing the random cap lottery with a wage-level-weighted system. The fact sheet described FY 2027 as the first cap year in which selection would be decided by wage rather than chance. It also said registrations fell by almost 40% under the new system.

A separate presidential proclamation signed September 18 restricted entry for certain H-1B workers unless their petitions included or were supplemented by a $100,000 payment, with stated exceptions. The restriction took effect at 12:01 a.m. Eastern Daylight Time on September 21, 2026, and was set to expire after 12 months unless extended.

Those measures concern visa selection and entry. The Grothman-Husted bill would instead change the salary test attached to employer recruitment and displacement obligations.

Congress must pass the bill before the exemption changes

The proposal would have to clear both chambers of Congress and receive the President’s signature before it could change H-1B requirements. Until then, employers continue to operate under the existing salary-or-degree exemption.

That means the current $60,000 threshold and qualifying master’s-degree route remain in place while lawmakers consider the measure. The proposed wage formula would take effect only if the bill becomes law.