Department of Labor’s Proposed Rule to Increase Wage Levels for Immigration Sponsorship

On March 27, 2026, the U.S. Deptartment of Labor (DOL) published its long-awaited proposed rule to increase prevailing wages (“OEWS”), available on its Office of Foreign Labor Certification (OFLC) website, advancing significant changes to how such prevailing wages are calculated.  This rule, if adopted, will significantly raise the wage requirement for key sponsorship programs, including for such high-demand non-immigrant workers as H-1B professionals (and related E-3/H-1B1 treaty-based professionals[1]), and for many employment-based immigrant workers (sponsored under the DOL’s Labor Certification, or PERM, process).

In line with the Administration’s immigration policy and DOL’s regulatory agenda, the rule seeks to protect U.S. workers in two ways:

• By “better align[ing] prevailing wage levels with the wages paid to U.S. workers who are similarly employed in the occupation and area of intended employment,” and
• By “strengthen[ing] program integrity by reducing the incentive for employers to use these programs to replace, rather than supplement, U.S. workers by employing lower-paid” foreign nationals.

Purpose of Prevailing Wages Requirements

U.S. employers seeking to sponsor non-immigrant professionals (H-1B, E-3 or H-1B1 workers) and many employment-based immigrant workers in the EB-2/EB-3 preferences may only do so if they offer such workers, at minimum, the Prevailing Wage (PW) for the position offered at the given work location, ranging from Entry Level (level I), to Qualified (Level II), Experienced (Level III) and, finally, Fully Competent (Level IV).  The appropriate Wage Level for a given position depends on the employer’s degree, experience and skills requirements, and employers must attest that they will comply with the applicable PW requirement at all times, on their Labor Condition Application (or LCA, for non-immigrant professionals) or their Alien Labor Certification (or PERM, for immigrant workers).

The PW requirement therefore serves to protect both U.S. workers and Foreign Nationals, by ensuring that foreign workers are not paid below their U.S. counterparts’ standard wages, which would in turn depress wages of and adversely affect U.S. workers.  While DOL’s OEWS survey is not the only acceptable source of Prevailing Wages, it is by far the most widely, as one of the most comprehensive (and free) surveys available.  OEWS PWs are calculated and published by DOL’s OFLC National Prevailing Center, and updated on an annual basis on July 01, based on wage data collected nationwide, and based on the below percentiles:

Level I	17th percentile
Level II	34th percentile
Level III	50th percentile
Level IV	67th percentile

In its estimation and based on its analysis of non-immigrant Labor Condition Applications (LCAs) filed in FY 2020-2025, DOL finds that the above PW levels, set in 2005, were set too low and “include some number of workers who would not qualify for the employment in a specialty occupation.” As a result, DOL argues, the proposed rule is necessary to exclude “the wages of the least educated and experienced workers” in these occupations, since the resulting PW levels have caused, in DOL’s estimate, “a wide (over $19,000 per worker on average) discrepancy between the wages earned by U.S. workers . . . and the prevailing wage levels assigned to corresponding LCA applicants.”

What the New Rule Would Change and Its Impact

The new rule seeks to redress this gap and to “align LCA-program wage rates with the general U.S. labor market,” in a way that is reminiscent of the Administration’s first attempts, in 2020/early 2021, to curtail sponsorship of, particularly, Entry Level or Early Career workers (later abandoned by the Biden Administration).[2]  While the OEWS survey will remain four-tiered, each tier’s PW calculation/wage percentile will be significantly increased:

		Expected Pct over current PW
Level I	34th percentile	~ 33%
Level II	52nd percentile	~ 24%
Level III	70th percentile	~ 21%
Level IV	88th percentile	~ 22%

(source: Improving Wage Protections for the Temporary and Permanent Employment of Certain Foreign Nationals in the United States proposed rule, Exhibit 5)

The immediate impact would be to shift those immigration programs toward higher-wage roles, making it more costly to sponsor entry-level or early career workers.[3]  The change would effectively eliminate current Level I (17^th percentile) PWs, and thus effectively prohibit current Level I sponsorship.

The change would also substantially impact the ability of small employers or start-ups to recruit the talent needed to grow their business,[4] particularly (but not only) in such sectors as technology and engineering that face continued labor shortages and talent gaps. As the new PW levels will directly raise the cost of hiring foreign talent, this could lead to more selective talent acquisition to key candidates with niche or high-demand skill set.

Note that the proposed rule does not prevent the continued use of acceptable wage surveys, such as Collective Bargaining Agreements (CBAs) or private surveys, for impacted non-immigrant and immigrant sponsorship. However, such use is expected to be closely monitored for strict compliance with PW requirements.

Finally, and from a compliance perspective, the proposed rule would update current LCA regulations when an employer filed an LCA without a DOL-issued Prevailing Wage Determination (“PWD”), but instead based “on other legitimate sources of available wage information.” In such a case, and when the employer later “discovers, upon receipt of the PWD from the NPC,” that it was not paying the NPC-determined wage, the employer will have 30 days, from receipt of the PWD, to “retroactively compensate the H-1B nonimmigrant(s) for the difference between the wage paid and the prevailing wage,” and by doing so will not be found to have violated wage regulations.

Timeline & FY27 H-1B Cap Processing

Written comments may be submitted to the Deptartment of Labor online here until May 26, 2026, and the rule will not be adopted until DOL has completed the required Notice & Comment process, which may take several months.  If adopted, the rule would come into effect 30 to 60 days after its publication, and would apply to all Prevailing Wage Determination requests pending as of the date the rule becomes effective, and to all LCAs and Prevailing Wage Determination requests filed on/after such effective date.

Although the timeline remains unclear as to when the rule could become effective, it is worth noting that it may first impact FY27 H-1B Cap petitions, whose lottery selections have now been published online by USCIS. This year, for the first time, USCIS has conducted a Weighted-Wage Lottery of H-1B entries, registering their H-1B candidates based on the current OEWS PW levels, which may later be impacted by the new proposed Wage Levels. It will therefore be important for employers whose registered H-1B candidates are being selected to timely process and file their H-1B LCAs early, to ensure full alignment with their H-1B Cap Registration Wage Level data.

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[1] While a PW Determination is also required for the sponsorship of H-2B Temporary Workers, the proposed rule makes no reference to the H-2B program. 

[2] See SHRM summary at https://www.shrm.org/topics-tools/news/talent-acquisition/dol-increases-h-1b-wage-minimums. 

[3] See also SHRM analysis at https://www.shrm.org/topics-tools/news/talent-acquisition/dol-proposed-rule-prevailing-wages-h1b-perm. 

[4] DOL estimates, in the proposed rule, that the “average wage cost per small entities is estimated at $20,298” per year “if they currently offer a wage lower than the NPRM prevailing wage levels.”