On March 26, 2026, the U.S. Department of Labor (DOL) released a proposed rule that would significantly alter how prevailing wages are determined for the H-1B, H-1B1, E-3, and PERM programs. If implemented, these changes could mark one of the most consequential overhauls of wage requirements for H-1B and PERM filings, with entry-level wage thresholds potentially rising by upwards of 30%. The proposal was formally published in the Federal Register on March 27, 2026, initiating a 60-day period for public comments.
While the proposed rule preserves the four-level prevailing wage tiered structure, it materially increases the percentile benchmarks assigned to each wage level. Under the current framework, which is in place since 2005, the Level I (entry-level) wage is set at the 17th percentile of the Occupational Employment and Wage Statistics (OEWS) distribution for a given occupation and geographic area. The DOL indicates that this benchmark is set too low and fails to represent the compensation earned by a similarly employed U.S. worker.
The proposed rule will have wide-reaching implications for employers sponsoring foreign nationals across multiple visa categories. While H-1B employers would be the most significantly impacted, the changes would also extend to H-1B1 petitions for Chilean and Singaporean nationals, E-3 petitions for Australian nationals, and employers seeking PERM labor certification for EB-2 and EB-3 green card applications.
The proposed rule would not apply to past filings. If finalized, the new wage levels would only affect cases that are pending with the OFLC National Processing Center on the effective date, as well as any new LCAs and prevailing wage requests filed on or after that date. Existing approved LCAs, PERM applications, and prior prevailing wage determinations would not be impacted.
The DOL announcement states that the new wages if the rule is finalized will go into effect when the OFLC publishes new wage data on July 1, 2026. Hence, H-1B cap petitions for fiscal year 2027, which must be filed by June 30, 2026, are expected to remain unaffected.
This proposed rule should be viewed in the context of the current administration’s broader policy to increase both the cost and eligibility standards for hiring H-1B workers. Other recent measures reflect a similar approach, including the revised H-1B cap lottery system, which gives preference to candidates with higher wages, and the $100,000 fee introduced for certain H-1B petitions under the September 2025 presidential proclamation. Notably, the current proposed rule is a result of that same proclamation, which directed the Department of Labor to revisit and revise prevailing wage levels.
Employers relying on H-1B, H-1B1, E-3, or PERM programs should take proactive steps in response to the proposed rule:
Assess the impact: Look at your current foreign employees, especially those at Level I and Level II, since their wages are likely to increase the most. Compare what you’re paying now vs. what you may have to pay under the new rule.
Plan and Prepare to Pay Higher Wages: For upcoming H-1B and PERM cases, you may need to increase salaries and adjust budgets. Also, you can’t just raise pay for foreign workers as this could trigger discrimination issues. In practice, employers will need to raise wages across similar roles for all employees. If you operate in locations with pay transparency laws, higher prevailing wages could push up your entire salary range.
Finally, if you have non-immigrant visa extensions that can be filed before July 1, 2026. It would be prudent to file them as soon as possible to at least avoid the increased fee for some of your cases.
