US Department of Labor proposes raising minimum wages for H-1B visa and PERM labor certification programs

Key Facts

• The United States Department of Labor issued a proposed rule on March 27, 2026, to raise minimum salary thresholds for H-1B visa workers and related programs.
• The proposal covers the H-1B, H-1B1 (for Chile and Singapore nationals), E-3 visa (for Australian nationals), and PERM permanent labor certification programs.
• Prevailing wage levels would increase substantially across four wage levels: Level I (entry level) rises from the 17th to the 34th percentile, while Level IV (fully competent/senior) rises from the 67th to the 88th percentile of Occupational Employment and Wage Statistics (OEWS) survey wage data.
• Minimum salary examples include an entry-level software engineer in San Francisco rising to approximately $162,000 per year, $113,000 in Dallas, and $132,000 in New York under the proposal.
• The rule aims to modernize wage protections to reflect current labor market realities, remedying wage floors that have been static for about two decades.
• The proposal aims to reduce the displacement of American workers by low-wage foreign workers and ensure wage parity.
• Public comments on the proposal are accepted until May 26, 2026, after which the Department of Labor will review feedback before issuing final regulations.
• Estimated cost impacts to employers are $18 billion in the first 12 months, potentially rising to $43 billion within three years if prevailing wage adjustments apply upon visa renewals.

Background & Context

The H-1B visa program permits US employers to hire foreign professionals in specialty occupations requiring theoretical or technical expertise, commonly in IT, engineering, and research. Employers must pay at least the prevailing wage for the job in the area of employment or the actual wages paid to similar US workers. The PERM labor certification is part of employment-based permanent residence processing and also relies on prevailing wage data.

For about 20 years, prevailing wage levels have remained largely unchanged, often significantly lower than actual market wages paid to American workers, especially entry-level workers. This gap has incentivized some employers to replace US workers with lower-paid foreign visa holders, undermining wage standards. The proposed rule updates wage percentile thresholds based on current data from the US Bureau of Labor Statistics’ Occupational Employment and Wage Statistics survey to provide wages that better reflect market conditions and protect US labor interests.

Why This Matters for Exams / Exam Relevance

This rulemaking is a significant development in US labor and immigration policy connected with the H-1B visa program. Competitive exams focused on current affairs, labor law, or immigration policy may test candidates on recent government initiatives to safeguard American workers, prevailing wage computations, or changes in visa program requirements. Understanding the percentile shifts in wage levels, affected visa categories (including the H-1B1 and E-3), and the rationale behind increasing wage floors are important for answering detailed questions.

Points to Remember

• The US Department of Labor proposed the wage changes on March 27, 2026.
• The prevailing wage levels for four experience tiers will increase, with entry-level moving from the 17th to the 34th percentile and senior-level from the 67th to the 88th percentile.
• The proposal covers H-1B, H-1B1 (Chile and Singapore), E-3 (Australia), and PERM labor certification programs.
• Estimated employer costs could rise by $18 billion in the first year, up to $43 billion within three years if renewals are included.
• Public comments are open until May 26, 2026.
• The move aims to eliminate wage undercutting and protect American workers from displacement with low-wage foreign labor.
• Example salary for entry-level software engineer in San Francisco is about $162,000 under the new wage floor.