What’s Happening
The Department of Labor (DOL) has issued a Notice of Proposed Rulemaking (NPRM) that would significantly increase prevailing wage requirements across the H-1B, H-1B1, E-3, and PERM programs. This NPRM is expected to be published in the Federal Register on March 27, 2026. The proposed rule, issued under the title “Improving Wage Protections for the Temporary and Permanent Employment of Certain Foreign Nationals in the United States,” will be subject to a 60-day public comment period following its publication in the Federal Register.
What You Need to Know
Proposed Changes to Prevailing Wage Levels
For context, when sponsoring employees for H-1B, E-3, and H-1B1 visas as well as PERM labor certification based green cards, employers typically rely upon official DOL data to show what people are normally paid for similar jobs in the same area in order to document that foreign workers are not paid less than U.S. workers doing comparable work. The DOL uses four wage levels to describe how experienced a worker is and what they should be paid for a specific job as follows:
Level 1 is for beginners who need close supervision
Level 2 is for workers with some experience
Level 3 is for experienced employees who work more independently
Level 4 is for experts who lead projects or make high-level decisions
As the level goes up, the expected skills, responsibility, and pay all increase.
The proposed rule would revise DOL’s four-tier prevailing wage system by increasing the percentile associated with each wage level. Specifically, wages would increase as follows:
Level I from the 17th to the 34th percentile
Level II from the 34th to the 52nd percentile
Level III from the 50th to the 70th percentile
Level IV from the 67th to the 88th percentile
In support of this significant increase, the DOL asserts that the existing framework, in place since approximately 2005, no longer reflects current wage distributions or labor market conditions.
In practical terms, this represents a structural upward shift across all wage levels. Entry-level wages would move to what is currently considered mid-level compensation, with corresponding increases at each higher tier. This effectively compresses the current wage structure upward by one level. For example, wages for Software Developers working in New York City would increase as follows:
| OEWS Wage Level | Current Wage | Estimated New Wage |
|---|---|---|
| Level I | $103,210 | ~$131,997 |
| Level II | $131,997 | ~$160,805 |
| Level III | $160,805 | ~$189,592 |
| Level IV | $189,592 | ~$218,000 |
While exact figures will depend on updated wage data and final rule implementation, employers should expect meaningful increases across all wage tiers.
When Would These Proposed Prevailing Wage Changes Take Effect
The rule is currently at the proposed stage and must proceed through the federal rulemaking process. This includes publication in the Federal Register, currently scheduled for March 27, 2026, followed by a public comment period expected to last approximately 60 days. After the comment period closes, DOL will review submissions and may revise the rule before issuing a final version. Once finalized, the rule would be published as a final rule in the Federal Register and would typically take effect 30 to 60 days after publication. In sum, the absolute earliest the rule could take effect would be summer of 2026 but this will largely depend on the volume of comments received during the notice and comment period which the agency has to review. Legal challenges to the rule are also possible.
Impact on H-1B, E-3, H-1B1, and PERM Filings
If finalized, the rule will directly affect how employers prepare and file employment-based nonimmigrant and immigrant cases.
For H-1B, E-3, and H-1B1 petitions, higher prevailing wages will increase minimum salary requirements for new LCAs. Any LCAs filed on or after the effective date must comply with the updated wage levels. This may also affect extension filings where a new LCA is required, meaning extensions could be subject to higher wage thresholds.
The potential practical impact of this is that, for example, a role that was appropriately classified as a Level II position and qualified at a Level II wage level may no longer meet that level under the new data. Employers, therefore, may need to raise salaries upon hiring an H-1B, E-3, or H-1B1 worker, or at the extension stage to maintain the same classification and wage level. At the same time, enhanced wage level data disclosure requirements for H-1B petitions starting April 1 will make it harder to adjust job classifications or select a lower wage level, leaving employers with limited options beyond additional compensation increases, amending the role the H-1B worker is filing to align with a lower-wage job classification, reducing their hours to meet new wage thresholds, or, where appropriate, relying on alternative wage surveys, which the proposed rule continues to permit in limited circumstances subject to DOL review and existing regulatory standards.
For PERM cases, Prevailing Wage Determinations (PWDs) issued after implementation will reflect higher wage thresholds. Given current prevailing wage processing times are around 4-5 months employers will need to start factoring in potentially increased wage levels for PWDs now when strategizing PERM cases.
How This Proposed Rule Fits Within Recent H-1B Developments
This proposal is part of a broader trend that is steadily increasing the cost of hiring foreign workers through the H-1B program. Between the $100,000 H-1B fee, stricter disclosure requirements around job classification and wage level selection for H-1B petitions, and the new wage-based H-1B lottery selection process, employers are facing higher costs and less flexibility in how they structure roles and salaries. The additional step of raising minimum pay levels for these work visas and green cards, continues to erode the ability of many employers, especially start-ups, non-profits, and small businesses, to sponsor foreign workers.
Annual Wage Updates and Timing Considerations
It’s also possible that the implementation of this proposed rule may occur around the same time that the DOL annually updates prevailing wage data (often around July), potentially creating increased variability in wage levels and should be factored into planning for upcoming filings.
What This Means for Employers
Even at the proposed stage, this rule has immediate and practical implications for workforce planning. These include:
For employees requiring H-1B, H-1B1, or E-3 extensions this year, filing their LCAs as soon as they are within the 6 month filing window before the new wage rules take effect
Filing Prevailing Wage Determination Requests as soon as possible to maximize the chances of them being issued before the proposed rule take effect
Employers should evaluate compensation structures, model potential increases across their workforce, and coordinate with internal stakeholders, including HR and finance teams, to align expectations and planning. Where higher wage requirements apply, employers may need to make more deliberate decisions about how to proceed with sponsorship, adjust role design or leveling, or consider alternative approaches. Early planning will be critical to maintaining flexibility as the rulemaking process progresses.
What Employers Can Do Now Before The Rule Takes Effect
The DOL’s proposed wage rule represents a significant shift in how prevailing wages are calculated across key employment-based visa programs. While the rule remains subject to further review and potential change, employers should monitor developments closely and begin preparing now for potential changes. D&S will continue to track the rulemaking process and provide updates and practical guidance as additional information becomes available.
Employers may want to consider submitting comments so the DOL understands how these changes could affect their ability to hire and compete for talent. A higher volume of comments can also extend the review process, which may delay when any final rule takes effect.
This publication is for informational purposes only and should not be construed as or relied upon as legal advice. Employers should consult with D&S immigration counsel to assess how these developments may impact specific cases and workforce planning decisions. Paulina Baginska, a Senior Associate at DiRaimondo & Schroeder LLP, assisted in the preparation of this alert.