US proposes 30% H‑1B wage hike

The fight here is over salary floors — not the number of visas. That matters because H‑1B hiring already runs through a tight gate, and now the government wants the pay threshold inside that gate to move up too. On March 27, the Labor Department proposed rewriting how “prevailing wages” are calculated for H‑1B, H‑1B1, E‑3, and PERM cases, with public comments open through May 26. ### What is DOL actually changing? Employers using these visa programs have to pay at least the prevailing wage for the job and location, or the company’s actual wage for similar workers if that is higher. DOL wants to change the wage ladder itself by raising the percentile cutoffs used in its four-level system, which is built from the Bureau of Labor Statistics wage survey. (federalregister.gov) ### Why is Level I the flashpoint? Level I is the entry rung, and that is where the proposal bites hardest. Today’s system has long been criticized for setting entry pay too low. The new proposal would move Level I from roughly the 17th percentile to the 34th percentile — basically making yesterday’s entry wage look more like a discount tier that DOL no longer wants to bless. Secondary analyses also describe higher moves across the ladder, with upper levels pushed further into market-rate territory. (dol.gov) ### Why does that change matter so much? Because H‑1B economics are very sensitive to the floor. If the minimum legal salary jumps, employers cannot make the role work by promising upside later and keeping cash pay lean today. The proposal is aimed at exactly that gap — DOL says the old structure let some employers underpay foreign workers relative to similarly employed U.S. workers and use the program as a cheaper staffing channel. (fragomen.com) ### Is this only about H‑1B? No — and that is the catch. The proposal also covers H‑1B1 and E‑3 temporary visas and PERM cases for certain employment-based green cards. So this is not just a tweak to one tech hiring pipe. It reaches both temporary and permanent employer-sponsored hiring. (dol.gov) ### Why is the timing important? Because another rule already changed the selection game. DHS finalized a wage-weighted H‑1B cap system that took effect on February 27, 2026, replacing the pure random lottery with a process that gives higher-paid registrations better odds. Put simply — one agency is making higher wages more likely to win, while another is trying to raise the wage floor itself. (federalregister.gov) ### What does that mean for employers? It changes the math on junior hires first. A company that used to justify an H‑1B role with lower base pay, equity, and future growth may need to bring much more cash to the table upfront. That hits outsourcing-heavy models especially hard, but it also pressures startups and mid-sized firms that leaned on lower wage levels for early-career roles. This is still a proposal, not a final rule, so nothing changes until DOL finishes the rulemaking process. (boundless.com) ### Could this still change? Yes. The rule is in notice-and-comment now, and DOL has already received hundreds of comments on the Federal Register docket. A final version could be revised, delayed, or challenged in court — which would not be surprising, given how contested H‑1B wage policy has been before. (federalregister.gov) ### Bottom line? This is really a repricing move. The administration is not just saying “hire fewer foreign workers.” It is saying that if employers use these programs, the jobs should look a lot more like full-market U.S. jobs on cash pay from day one. (dol.gov) (federalregister.gov)