The U.S. Department of Labor (DOL) has proposed significant changes to the prevailing wage methodology used in the H-1B, H-1B1, E-3, and PERM labor certification programs. If finalized, the proposal would substantially increase prevailing wage requirements across many occupations and geographic areas, potentially requiring employers to offer significantly higher salaries to satisfy program requirements.
The proposal, published on March 27, 2026, is not yet in effect and remains subject to the federal rulemaking process. But a fee increase is imminent as DOL modifies its wage data every year in July. Hence, employers should evaluate the potential impact on immigration sponsorship programs, compensation planning, and workforce strategies. This is a good time to initiate LCAs (Labor Condition Applications) for extensions that are coming up within the next six months. You may lose a few months on the petition extension, but the wage savings would be worth the truncated period.
Proposed Changes to Wage Levels
The DOL proposes to retain the current four-level wage structure while increasing the percentile benchmarks used to determine prevailing wages:
- Level I (Entry-Level Positions): 17th percentile to 34th percentile
- Level II (Qualified Employees): 34th percentile to 52nd percentile
- Level III (Experienced Employees): 50th percentile to 70th percentile
- Level IV (Senior/Fully Competent Employees): 67th percentile to 88th percentile
If implemented, these changes could significantly increase prevailing wage requirements across a wide range of occupations and locations. Entry-level and lower-wage positions may experience some of the largest percentage increases.
Impact on H-1B and PERM Programs
The proposed changes would affect not only H-1B, H-1B1, and E-3 filings, but also the PERM labor certification process. Employers sponsoring foreign nationals for permanent residence under the EB-2 and EB-3 categories could face higher prevailing wage obligations and increased recruitment and compensation costs.
Employers should note that the U.S. Department of Labor (DOL) updates the Occupational Employment and Wage Statistics (OEWS) wage data every year, and the updated wage data generally takes effect on July 1. These annual updates may independently increase prevailing wage requirements regardless of whether the proposed rule is finalized.
Recommended Employer Actions
Employers may wish to:
- Review upcoming H-1B extensions, amendments, and new filings;
- Assess the potential impact on PERM cases currently under consideration;
- Evaluate compensation budgets for sponsored employees;
- Consider advancing filings to take advantage of the current wage framework; and
- Monitor further developments as the rulemaking process progresses.
At this time, employers should continue to comply with existing prevailing wage requirements. We will continue to monitor the proposal and provide updates regarding any final rule or implementation timeline.
For questions regarding the impact of these proposed changes on your workforce or immigration program, please contact the LawQuest team.
Disclaimer: This alert is for informational purposes only and does not constitute legal advice. For advice on your specific circumstances, contact your immigration advisor at LawQuest.
