Dive Brief:
- Prevailing wage rates for H-1B visa holders and similar foreign worker classifications would increase under a proposed rule issued Thursday by the U.S. Department of Labor, reviving a previously abandoned effort initially put forth by the first Trump administration.
- The rule would raise each wage level of the four-tier system that is used by DOL to certify that an employer seeking to employ a foreign worker is offering pay that is at least equivalent to that paid to individuals with similar experience and qualifications, or the prevailing wage for the position, whichever is greater. Prevailing wage levels are represented as percentiles derived from the Occupational Employment and Wage Statistics survey.
- For example, the lowest prevailing wage level would increase from the 17th percentile of the OEWS wage distribution for a given role to the 34th percentile. The change is expected to cause disruption for employers, Brian Bumgardner, shareholder at Ogletree Deakins, said in an email.
Dive Insight:
Under President Donald Trump, federal regulators have consistently sought to make the process of hiring skilled workers via the H-1B visa program more costly. DOL last issued — and the Biden administration would later rescind — a rule to increase prevailing wage levels in 2021.
DOL’s second attempt bears some similarities to its first, though this time around, the agency chose OEWS percentiles that are lower than those selected in the 2021 rule. But the adjustments would still result in substantial increases for employers, Bumgardner said, with tens of thousands in additional dollars expected to be paid to candidates depending on experience.
The proposal follows Trump’s proclamation last year directing the U.S. Department of Homeland Security to impose a $100,000 fee on all new H-1B visa petitions. Multiple stakeholders have sued the administration seeking to block the fee, challenging its legality. But only one court has issued a ruling on the matter so far, and in that decision, a federal judge held that Trump did not exceed his constitutional authority in issuing the fee proclamation.
Elsewhere, DHS revived other efforts to incentivize higher pay for H-1B workers, proposing a rule last September that would adjust the agency’s lottery for selection of H-1B petitions to weight the process in favor of petitions that offer higher wages.
In a press release, DOL said the prevailing wage rule is a necessary step to modernize skilled worker visa programs. The agency claimed that prevailing wage levels have long been set too low below the market rates that American workers would receive, particularly early-career and entry-level workers.
“This proposed rule will help ensure that employers pay foreign workers wages that reflect the real market value of their labor, in addition to protecting the wages and job opportunities of American workers,” Secretary of Labor Lori Chavez-DeRemer said in the release. “The continued abuse of the H-1B program by certain bad actors will no longer be tolerated.”
The prevailing wage rule is “another brick in the wall” in terms of additional costs to employers sponsoring H-1B visas, Bumgardner said. But employers should note that the proposal would allow interested employers to use private survey wage data as an alternative to the OEWS data utilized by DOL.
“We find that data from common surveys is more precise than OEWS data, with more than four levels (often six to eight) and specific to industry,” Bumgardner said. “I am hopeful this option will remain on the table when the final rule is published.”
DOL has set a 60-day period for public comment on the proposal with a deadline of May 26, 2026.