New DOL Rule Would Raise H-1B Wages to 34th-88th Percentile: What Employers Should Do Now

TLDR: On March 26, 2026, the U.S. Department of Labor issued a notice of proposed rulemaking that would dramatically raise the prevailing wage thresholds employers must pay foreign workers in the H-1B, H-1B1, E-3, and PERM visa programs. The proposal keeps the familiar four-tier wage structure but pushes every level significantly higher on the wage distribution. Level I would jump from the 17th to the 34th percentile, and Level IV would climb from the 67th to the 88th percentile. If finalized, this would be the most consequential change to employment-based immigration wage rules in more than two decades. Comments are due 60 days after publication in the Federal Register, and the rule would apply prospectively to new filings once effective. Employers planning H-1B or PERM cases should start modeling the financial impact now.

What the DOL Is Actually Proposing

The U.S. Department of Labor’s Employment and Training Administration (ETA) released a proposed rule that would overhaul how prevailing wages are calculated for several of the most widely used employment-based visa programs. The agency’s stated goal is to bring foreign worker wages closer to what similarly employed American workers actually earn, and to reduce what the DOL describes as an incentive to underpay workers on certain visas.

The proposal applies to four programs we work with every day at Berardi Immigration Law:

• H-1B specialty occupation visas
• H-1B1 visas for nationals of Chile and Singapore
• E-3 visas for Australian professionals
• PERM labor certification (the first step of most employment-based green cards in the EB-2 and EB-3 categories)

The methodology itself isn’t being thrown out, the DOL is keeping the four-tier wage structure that has been in place since 2005, along with the option to use approved private wage surveys in specialized markets. What is changing is where each of those four tiers sits on the wage distribution curve.

The Current Four-Tier System

Under the current rules, the DOL uses Bureau of Labor Statistics Occupational Employment and Wage Statistics (OEWS) data to set four wage levels for each occupation in each geographic area. Those four levels correspond roughly to entry-level, qualified, experienced, and fully competent workers, and they currently sit at approximately the 17th, 34th, 50th, and 67th percentiles of the wage distribution.

The Proposed New Percentiles

The DOL is proposing to shift every tier upward:

• Level I would move from the 17th to the 34th percentile
• Level II would move from the 34th to the 52nd percentile
• Level III would move from the 50th to the 70th percentile
• Level IV would move from the 67th to the 88th percentile

In practical terms, entry-level salary obligations could increase by more than 30 percent in many occupations. Senior-level positions would see even sharper increases, because the 88th percentile sits much closer to the top of the wage distribution than the 67th.

Why the DOL Says This Matters

The agency’s reasoning, laid out in the proposed rule, is that the current Level I percentile captures a portion of the wage distribution occupied by workers who would not typically meet the specialty occupation standard under the Immigration and Nationality Act. By raising Level I to the 34th percentile, the DOL aims to exclude those lower-skilled positions from the comparison set and better reflect what employers actually pay degreed professionals in similar roles.

The Department also framed the rule as a response to concerns that some employers have used the H-1B program to substitute foreign workers for U.S. workers at below-market rates, particularly in entry-level STEM positions.

Who Will Feel This the Most

If finalized as proposed, the rule will land hardest on:

• Employers Filing New H-1B Cap Cases
  H-1B is the largest affected category by a wide margin, with hundreds of thousands of Labor Condition Applications certified each year. Companies that rely heavily on entry-level H-1B hiring (especially in technology, engineering, finance, and research) should expect meaningful budget impact.

• Companies in the Middle of PERM Sponsorship
  PERM cases use the same prevailing wage framework. Pending and future cases would need to meet the new, higher thresholds, which can affect both budgeting and recruitment testing requirements.

• Smaller Employers and Startups
  Larger employers often have more flexibility to absorb wage increases. Startups, small businesses, and nonprofits may need to rethink which roles they sponsor and at what level.

• Foreign Workers Themselves
  For workers, higher prevailing wages generally mean higher pay, but they can also narrow the range of positions an employer is willing to sponsor in the first place.

When This Could Take Effect

The proposed rule was published in the Federal Register on March 27, 2026, opening a 60-day public comment period. After that window closes, the DOL will review the comments and decide whether to issue a final rule, modify the proposal, or withdraw it. The new wage methodology would apply prospectively, meaning it would affect new Labor Condition Applications and prevailing wage determinations filed on or after the effective date, along with pending requests that haven’t yet been adjudicated.

Existing approvals and previously certified LCAs would not be retroactively repriced. H-1B cap petitions for fiscal year 2027, with LCAs filed before the effective date, are expected to remain on the current wage schedule.

What Employers Should Do Now

We’re encouraging our business clients to take a few practical steps while the rule is still in the proposal stage:

1. Model the financial impact. Pull a list of current and anticipated H-1B and PERM cases over the next 18 months, and re-run the prevailing wages at the proposed new percentiles.
2. Review your salary bands. If your current compensation structure was built around Level I or Level II wages, those bands may need to shift.
3. Time your filings carefully. Cases filed before the effective date would likely lock in current wage levels, which could create a meaningful incentive to move sooner rather than later on planned sponsorships.
4. Consider submitting a comment. The public comment period is the proper time for employers, industry groups, and individuals to weigh in on the proposal’s potential effects.

What This Means for Your Workforce Planning

Prevailing wage rules can sound like a niche corner of immigration law, but they sit at the center of nearly every employment-based case we handle. A change of this scale touches hiring plans, compensation strategy, and long-term workforce planning all at once. We’ve helped employers across the U.S. and Canada navigate every major shift in this area for more than three decades, and our team is already analyzing how this proposal could affect each of our clients individually.

If you sponsor foreign talent, or you’re hoping to, now is a good time to talk through what comes next. We’re here to help. Click here to book a consultation with Berardi Immigration Law today.

Frequently Asked Questions

Q: Is this rule final, and do I need to comply with it now?

No. As of this writing, the rule is a proposal. It must go through a 60-day public comment period and a final rulemaking step before it can take effect. Current prevailing wage rules remain in place until the DOL issues a final rule with an effective date.

Q: Will the new wage levels apply to my existing H-1B or pending PERM case?

The proposed rule is prospective. It would apply to new Labor Condition Applications, new prevailing wage determination requests, and requests that are still pending on the effective date. Cases already certified at the current wage levels would not be repriced.

Q: Can I still use a private wage survey instead of OEWS data?

Yes. The DOL has chosen to preserve the option to use acceptable private wage surveys as an alternative to OEWS-based prevailing wages, though the agency has signaled it will more closely monitor those surveys for compliance with its methodology standards.