# DOL Proposes Major H-1B Wage Overhaul: What the New Prevailing Wage Rule Means for Employers

The Department of Labor wants to raise the floor on wages paid to H-1B, H-1B1, E-3, and PERM workers. Here's what changed, why, and what you should do before the comment window closes.

## What Just Happened

The U.S. government is proposing a major increase in the wages employers must pay H-1B and other foreign workers, one that could raise entry-level salary requirements by more than 30%.

On March 27, 2026, the U.S. Department of Labor (DOL) published a proposed rule that would overhaul how prevailing wages are calculated for workers admitted under the H-1B, H-1B1, E-3, and PERM programs.

In plain terms: DOL wants to raise the minimum wages employers must pay foreign workers before the government will certify their labor applications, across all four wage tiers used in the H-1B system. It's one of the biggest changes to H-1B wage rules in decades.

This rulemaking was directed by a September 2025 Presidential Proclamation, which declared that the [H-1B](https://www.boundless.com/immigration-resources/the-h-1b-visa-explained) program "has been deliberately exploited to replace, rather than supplement, U.S. workers with lower-paid, lower-skilled labor" and instructed the Secretary of Labor to act.

## Key Takeaways

- Entry-level H-1B wage requirements could rise by ~33%  
- The rule would affect H-1B, H-1B1, E-3, and PERM filings  
- Employers have ~60 days to submit public comments

## The Numbers: Old vs. New Wage Levels

The current four-tier prevailing wage system has been in place, largely unchanged, since 2005. It uses the Bureau of Labor Statistics' Occupational Employment and Wage Statistics (OEWS) survey to set wages at approximately the 17th, 34th, 50th, and 67th percentiles of the wage distribution for a given occupation and geography. DOL now proposes to move those thresholds to the **34th, 52nd, 70th, and 88th percentiles**.

| Wage Level                 | Current Percentile | Proposed Percentile | Current PW | Proposed PW | Change   |
|---------------------------|--------------------|---------------------|------------|-------------|----------|
| Level I (Entry)          | ~17th              | 34th                | $73,279    | $97,746     | +33.4%   |
| Level II (Qualified)     | ~34th              | 52nd                | $98,987    | $123,212    | +24.5%   |
| Level III (Experienced)  | ~50th              | 70th                | $121,979   | $147,333    | +20.8%   |
| Level IV (Fully Competent)| ~67th              | 88th                | $144,202   | $175,464    | +21.7%   |

> _"The average wage offered to H-1B workers was approximately $10,191 lower than the OEWS average wage for similarly classified occupations."— DOL NPRM, March 2026_

## Why DOL Says This Is Necessary

DOL's case rests on three arguments.

### 1. The current wage system may not meet legal standards

The INA requires that a government survey used to set prevailing wages "provide at least four levels of wages commensurate with experience, education, and the level of supervision." DOL argues the 2005 methodology — which set Level I near the bottom of a wage distribution that includes workers without specialized degrees — doesn't meet that bar. Many occupational classifications in the OEWS include workers who wouldn't qualify for H-1B specialty occupation status, making the lower tail of the distribution a poor comparator for visa workers.

### 2. Data shows wages lag the broader market

DOL matched LCA data from FY 2020–2025 against OEWS data for the same occupations and states. Key findings:

- The average prevailing wage across all LCAs was **$111,717**, while the average wage actually offered was **$121,908**, a $10,191 premium suggesting employers are already paying above the prevailing floor.
- The OEWS mean for equivalent occupations and geographies was **$130,219**, about $19,000 above prevailing wage levels.
- 63% of certified LCAs in FY 2024 were at Level I or II—the two lowest wage tiers.
- DOL also points to labor market trends: recent college graduates in computer science and engineering face unemployment rates of 7.5% and 6.1% respectively, while employment of domestic software developers aged 22–25 declined nearly 20% since 2022.

### 3. DOL says some employers are undercutting U.S. workers

DOL cited evidence that some employers use the H-1B system to replace, not supplement, U.S. workers. A 2023 Economic Policy Institute study found that the top 30 H-1B employers laid off at least 85,000 workers in 2022 and early 2023 while simultaneously hiring 34,000 H-1B workers. DOL also points to outsourcing firms that place H-1B workers at client sites where the actual workforce earns significantly more, and where the outsourcing firm's own "actual wage" benchmark never has to reflect that higher market rate.

## How DOL Arrived at 34th and 88th

The choice of percentiles wasn't arbitrary. DOL used a three-step process:

**Step 1:** Analyzed all LCA data from FY 2020–2025 — over 3 million applications — to understand the composition of H-1B wages by occupation, state, and wage level.

**Step 2:** Matched that LCA data to OEWS mean wages for the same occupation and state, producing a target benchmark: the average OEWS mean salary across all LCA-covered occupations, weighted by actual filing patterns. That figure was $130,219, about $19,000 above what employers were required to pay under current prevailing wages.

**Step 3:** Used a numerical optimization method to find the combination of Level I and Level IV percentiles that brings the average prevailing wage in line with that benchmark. The solution: Level I at the **34th** percentile, Level IV at the **88th**.

## Who Is Affected

The proposed rule would apply to:

- **H-1B employers** — by far the largest affected group, with over 502,000 LCAs certified annually.
- **H-1B1 employers** — for nationals of Chile and Singapore in specialty occupations.
- **E-3 employers** — for Australian nationals in specialty occupations.
- **EB-2 and EB-3 PERM sponsors** — the same four-tier wage structure governs permanent labor certifications.

The rule applies only to _new_ LCAs and prevailing wage determination requests filed on or after the rule's effective date. Existing certifications, approved LCAs, and previously issued PERM applications are not affected.

## What Employers Should Do Now

With a 60-day comment window, now is the time to act. Here's how to prepare:

### Audit your current LCA portfolio

Review active and pending LCA certifications to understand which positions are at Level I or II and by how much your offered wages exceed (or fall short of) the proposed new floors. DOL's published data shows the average gap between offered wages and proposed prevailing wages is roughly $14,000, but that figure varies significantly by occupation and geography.

### Model your wage exposure

For each planned H-1B filing, estimate the difference between your intended offer and the new prevailing wage at the relevant SOC code, state, and level. Use BLS OEWS data (available at [data.bls.gov/oesprofile/](https://data.bls.gov/oesprofile/)) to interpolate the 34th, 52nd, 70th, and 88th percentiles for your occupations.

### Consider submitting public comments

DOL is specifically soliciting feedback on: (1) whether the proposed percentiles appropriately reflect statutory requirements; (2) the Experience Benchmarking alternative; (3) the continued use of private wage surveys; and (4) any data sources or methodologies that could improve wage-setting accuracy. Employer coalitions, industry associations, and individual companies all have standing to comment. Data-supported comments carry more weight.

### Consult your immigration attorney

While the rule won't affect existing approvals, upcoming H-1B filings may need to be repriced. If you expect to file this year, start reviewing compensation plans now, before the final rule lands and timelines compress.