The U.S. Department of Labor (DOL) has released a proposed rule that could significantly reshape wage requirements for employers hiring foreign professionals. If implemented, the rule would directly affect H-1B, H-1B1, E-3 nonimmigrant programs, as well as the PERM labor certification process.
At its core, the proposal moves all four prevailing wage levels higher within the existing wage distribution framework based on Occupational Employment and Wage Statistics (OEWS) data. The DOL’s position is that current wage levels are set too low and do not accurately reflect what similarly employed U.S. workers are earning.
Under the proposal:
• Level I (Entry Level): will increase from the 17th percentile to the 34th percentile
• Level II (Qualified): will increase from the 34th percentile to the 52nd percentile
• Level III (Experienced):will increase from the 50th percentile to the 70th percentile
• Level IV (Fully Competent): will increase from the 67th percentile to the 88th percentile
The DOL estimates that the average certified wage could increase by roughly $14,000 per worker per year.
For employers, the financial impact could be substantial. An average increase of $14,000 per employee may not seem dramatic in isolation, but it adds up quickly. A mid-sized company employing dozens of H-1B workers could be looking at millions of dollars in additional annual payroll costs that were likely not anticipated in current budgets.
The effect may be even more pronounced for startups and smaller businesses, many of which rely on Level I and Level II wages to recruit early-career talent. Those entry points could become significantly more expensive, potentially limiting access to international hiring.
The timing of the rule also raises concerns for employers already in the PERM process. Given that PERM applications often take 18 months or longer, many pending cases could be impacted if the new wage levels take effect before Prevailing Wage Determinations (PWD) is completed. In those situations, employers may face a difficult choice: either increase the offered salary mid-process, or discontinue the green card sponsorship altogether. PWDs issued prior to the effective date of the new rule will likely be grandfathered for the remainder of their validity period.
Although the rule would apply nationwide, its impact is unlikely to be uniform. High-cost labor markets – such as Silicon Valley and New York – are expected to feel the sharpest effects. At the upper end, the proposed 88th percentile for Level IV wages could approach or even exceed compensation levels typically associated with senior or executive roles in some organizations.
Certain industries that rely heavily on specialized foreign talent, including technology and healthcare, may also experience disproportionate pressure.
The proposed rule is scheduled for publication in the Federal Register on March 27, 2026, after which a 60-day public comment period will begin.
Given the potential scope of the changes, employers that rely on foreign talent may want to review the proposal closely. Submitting comments or reassessing workforce planning strategies now could help avoid more difficult adjustments later.