The proposal, aimed at increasing wage protections for U.S. workers, is expected to drive up salary requirements—adding what some are calling “sticker shock” for employers.
What the Proposed Rule Does
The DOL’s proposal focuses on revising how prevailing wages are calculated across H-1B, H-1B1, E-3, and PERM programs. Instead of relying on lower wage percentiles, the rule would shift wage levels upward to better reflect actual market compensation.
Under the current system, wages are divided into four levels based on experience. The proposal would significantly raise each level—for example, entry-level wages would move from the 17th percentile to the 34th percentile, with similar increases across all tiers.
The DOL’s stated goal is to ensure foreign workers are paid comparably to similarly situated U.S. workers and to eliminate incentives for employers to hire lower-cost foreign labor.
Proposed Prevailing Wage Changes
| OEWS wage level | Current percentile levels of the OEWS wage distribution | Proposed percentile levels of the OEWS wage distribution |
| Level I (Entry) | 17th percentile | 34th percentile |
| Level II (Qualified) | 34th percentile | 52nd percentile |
| Level III (Experienced) | 50th percentile | 70th percentile |
| Level IV (Fully Competent) | 67th percentile | 88th percentile |
Impact on Employers
The financial implications could be substantial. Salaries for certain roles could rise dramatically, with some positions seeing increases of tens of thousands of dollars annually.
Overall, the rule is expected to:
- Increase average wages by thousands per worker annually
- Raise entry-level salaries significantly
- Apply to new and pending applications, but not retroactively
For employers, this means higher labor costs, more complex workforce planning, and potential reconsideration of reliance on the H-1B program.
Broader Policy Goals
The proposal reflects a broader policy shift toward protecting U.S. workers. The DOL has emphasized that the current wage system may undercut domestic wages and create unfair competition.
By aligning H-1B wages more closely with market rates, the government aims to:
- Reduce wage suppression
- Prevent displacement of U.S. workers
- Reinforce the original purpose of the H-1B program as a supplement—not a substitute—for domestic talent
What This Means Going Forward
If finalized, this rule would present new obstacles for employment-based immigration. Employers may need to:
- Reevaluate hiring budgets and timelines
- Explore alternative visa options
- Consider global workforce strategies, including offshoring
For foreign workers, higher wage thresholds could make sponsorship more competitive but may also limit opportunities, particularly for entry-level roles.
Conclusion
The DOL’s proposed wage overhaul raises significant concerns about access to global talent and the future of employer-sponsored immigration, as the cost of employing workers in the United States continues to rise.
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