TLDR: On March 26, 2026, the U.S. Department of Labor (DOL) proposed the most sweeping changes to H-1B prevailing wages in over two decades. If finalized, the rule would raise required wage floors across all four wage tiers by 18% to 33%, and nearly double the percentile benchmark for entry-level (Level I) positions, from the 17th to the 34th percentile. Employers have until May 26, 2026 to submit public comments.
A Major Shift Is Coming for H-1B and PERM Wages
If you sponsor foreign workers through the H-1B, H-1B1, E-3, or PERM programs, the Department of Labor just put a significant item on your radar.
The DOL’s Notice of Proposed Rulemaking (NPRM), published on March 27, 2026, proposes to revise the prevailing wage percentile thresholds used across all four wage levels, the first formal overhaul of this system since 2005. That’s more than 20 years without a meaningful update to the underlying wage benchmarks. The DOL is now moving to close what it characterizes as a substantial gap between current prevailing wages and market wages for specialty occupation positions.
What Are “Prevailing Wages” and Why Do They Matter?
Under the H-1B program, employers must pay sponsored workers the higher of two figures: (1) the actual wage paid to comparable U.S. employees at the company, or (2) the DOL-set “prevailing wage” for that occupation and geographic area. The prevailing wage is determined using data from the Bureau of Labor Statistics’ Occupational Employment and Wage Statistics (OEWS) survey, organized into four tiers that reflect increasing levels of experience, complexity, and responsibility.
The same wage methodology applies to PERM labor certifications, the process used for EB-2 and EB-3 employment-based green cards. So this proposal doesn’t just affect temporary work visas; it affects permanent residency pathways too.
What the Proposed Rule Would Change
The New Wage Tier Percentiles
The proposed rule would shift every wage level upward, as follows:
| Wage Level | Current Percentile | Proposed Percentile | Estimated Increase |
| Level I (Entry) | 17th | 34th | ~21–33% |
| Level II | 34th | 52nd | ~23–25% |
| Level III | 50th | 70th | ~20–22% |
| Level IV (Senior) | 67th | 88th | ~18–20% |
To put those numbers in concrete terms: the DOL estimates these changes would raise the average certified wage by roughly $14,000 per year per worker. For Level II software developers in major metro areas, the projected increase ranges from $30,000 to $45,000 annually. Senior-level roles in markets like Silicon Valley could see mandatory wage increases exceeding $45,000 per year.
Which Programs Are Affected?
The proposed rule would apply to:
- H-1B (specialty occupation temporary workers; the largest affected category)
- H-1B1 (nationals of Chile and Singapore under free trade agreements)
- E-3 (nationals of Australia)
- PERM labor certifications for EB-2 and EB-3 green card categories
What Would NOT Be Affected
Good news on a few fronts: The rule would apply prospectively only, meaning existing approved LCAs, PERM labor certifications, and previously issued prevailing wage determinations (PWDs) would remain valid. Employers would not be required to renegotiate existing sponsorships retroactively.
Additionally, private wage surveys (an alternative to OEWS-based data that some employers rely on) would continue to be permitted. That said, the DOL has signaled it will increase scrutiny of private survey submissions and reserves the right to reject surveys that don’t meet its methodological standards. If your organization uses private survey data, now is the time to review it carefully.
Is This Rule Likely to Survive Legal Challenge?
It’s a fair question, especially since a nearly identical wage increase attempt in 2020 was struck down by a federal court. However, that 2020 rule was vacated on procedural grounds only: the Trump administration issued it as an interim final rule without going through the required notice-and-comment process.
This time, the DOL has done it right. The 2026 NPRM follows full Administrative Procedure Act (APA) notice-and-comment procedures, directly addressing the vulnerability that doomed the 2020 rule. The agency has also cited an analysis of more than 3 million Labor Condition Applications filed between FY 2020 and FY 2025 to build a stronger evidentiary record.
Legal challenges are still widely anticipated. Potential arguments include whether the specific percentile methodology exceeds the DOL’s statutory authority, and whether the economic impact analysis underestimates costs for small businesses. But employers should not count on litigation to delay implementation. Plan as if this rule will take effect as written.
How This Fits Into a Broader H-1B Overhaul
This NPRM doesn’t stand alone. It is the third major H-1B policy action since September 2025, and all three are designed to work together:
- September 2025: Presidential Proclamation 10973 imposed a $100,000 fee on certain H-1B petitions and directed DOL to begin prevailing wage rulemaking.
- December 2025: DHS finalized a wage-weighted H-1B lottery, giving candidates offered higher wages (Level IV) four times as many lottery entries as entry-level (Level I) candidates.
- March 2026: This NPRM proposes to raise the very wage floors on which that weighted lottery is based, compounding the financial pressure on employers at every level.
The compounding effect matters: employers who try to improve their lottery odds by offering higher wage designations will now face a higher mandatory floor under this proposed rule.
What Employers Should Do Right Now
The comment period closes May 26, 2026. Don’t wait until then to start preparing. Here’s what we recommend:
- Audit your H-1B workforce by wage level. Level I and Level II positions face the steepest increases and account for roughly 63% of all FY 2024 LCAs. Calculate the gap between current salaries and the proposed new minimums for each role.
- Accelerate pending PERM filings. If you have PERM cases already in process, explore whether to expedite prevailing wage determination requests to lock in current wage levels before a final rule takes effect.
- Review extension and transfer timelines. H-1B extensions, amendments, and transfers filed after the rule’s effective date will require new LCAs and new, higher wage minimums. Consider expediting filings where appropriate.
- Audit private wage surveys. If your organization relies on private survey data rather than OEWS, review those surveys now before the DOL’s heightened scrutiny kicks in.
- Model the financial impact. HR and finance teams should map expected wage increases across the affected workforce by occupation, geography, and wage level.
- Submit a public comment by May 26, 2026. See below for guidance on how to do this effectively.
How to Submit a Public Comment
Comments must be submitted electronically at www.regulations.gov under Docket No. ETA-2026-0001, no later than May 26, 2026, at 11:59 p.m. Eastern. The DOL is legally obligated to read and respond to every unique, substantive comment received, which means quality matters, but volume does too.
Effective comments should be specific and data-driven, identify your organization and how the rule affects your operations, and engage directly with the DOL’s stated rationale rather than expressing general opposition.
Prepare Ahead of the H-1B Wage Overhaul
The DOL’s proposed prevailing wage overhaul is significant, procedurally sound, and likely to move forward on an accelerated timeline. For employers who sponsor H-1B or PERM workers (especially at Level I and Level II) the financial and operational implications are real and require immediate attention.
The comment period closes May 26, 2026. That’s your window to be heard, and it’s closer than it looks.
The team at Berardi Immigration Law is actively monitoring this rulemaking. We can help you audit your workforce, model your financial exposure, accelerate pending filings, and draft data-driven public comments tailored to your specific workforce and industry. Contact us today to discuss how this proposed rule affects your business.
Frequently Asked Questions
Q: Will my existing H-1B workers be affected if this rule is finalized?
No, not immediately. The rule would apply prospectively only. Existing approved Labor Condition Applications (LCAs) and prevailing wage determinations would remain valid and unaffected. However, when those LCAs expire and new ones are filed for extensions, transfers, or amendments, the new higher wage minimums would apply.
Q: Will this affect the FY 2027 H-1B cap season?
Most likely not. H-1B cap petitions for FY 2027 must be filed by June 30, 2026, and the LCAs supporting those petitions would typically be filed before the rule’s anticipated effective date (estimated at earliest late summer 2026). However, any H-1B extensions, amendments, or transfers filed after the effective date will be subject to the new wage requirements.
Q: Can we still use private wage surveys instead of OEWS data?
Yes, the DOL considered eliminating private wage surveys but ultimately declined to do so. Employers may continue using properly documented private survey data. That said, the agency has made clear it will scrutinize private surveys more closely going forward, so it’s worth reviewing your surveys now to ensure they meet the DOL’s methodological standards.
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