Introduction 

As anticipated in a prior blog, the U.S. Department of Labor has now introduced a proposed regulation that would dramatically increase the prevailing wage levels for employment-based immigration programs such as PERM and the H-1B, H-1B1 and E-3 nonimmigrant categories. While the Department’s stated goals are to  ensure wages are commensurate with the experience, education, and supervision required for the job, particularly in occupations with high concentrations of H-1B workers, the practical effect of the proposed rule is a radical increase in the cost of hiring key foreign talent that U.S. employers find critical to success in a global economy. 

Overview of Proposed Changes 

The proposed rulemaking seeks to update prevailing wage determination regulations for both temporary and permanent employment programs. Key highlights include: 

• Four-Tier Wage Structure: The Department will maintain a four-tier wage structure based on the Bureau of Labor Statistics (BLS) Occupational Employment and Wage Statistics (OEWS) survey. 

• Revised Percentiles: Wage levels will be recalibrated, with Level I increasing from the 17th to the 34th percentile and Level IV rising from the 67th to the 88th percentile. 

Comparison of Existing and Proposed Wage Levels 

Wage Level	Current Percentile	Proposed Percentile	Percentile   Increase
Level I	17th	34th	17
Level II	34th	52nd	18
Level III	50th	70th	20
Level IV	67th	88th	22

 

Analysis of Impact on Employer Sponsorship 

The proposed increases in prevailing wage levels are likely to have several implications for employer sponsorship of foreign workers: 

• Greater Reliance on Alternative Wage Survey Data: The proposal specifically retains the use of private sector surveys, although DOL indicates it will monitor the use of private surveys closely to ensure compliance with all regulatory requirements. Employers that subscribe to compliant wage surveys will need to work more closely with immigration counsel to provide access when the OEWS wages are impractical. 

• Increased Costs: If alternate survey data is unavailable, the higher wage levels will directly raise the business costs associated with sponsoring foreign workers, particularly in industries that rely heavily on H-1B and other visa categories requiring a prevailing wage determination. 

• Shift in Hiring Practices: If sufficient U.S. workers are unavailable, companies may shift their hiring practices to consider alternative visa categories that may not be subject to the same wage increases. Offshoring roles to less costly jurisdictions is also possible. 

• Competitive Recruiting Advantage for Larger Firms: Larger companies with more resources may adapt more readily to the increased wage requirements. Smaller firms, start-ups, and non-profits might struggle to meet the new standards, which could limit their opportunities to hire key foreign talent. 

Next Steps for the Proposed Regulation 

In accordance with the Administrative Procedure Act (APA), the regulation will follow several key steps: 

1. Public Comment Period: The proposed rule was published in the Federal Register on March 27, 2026, with a 60-day notice and comment period. Stakeholders can  submit comments and feedback until May 27, 2026. 

1. Review of Comments: After the comment period closes, the Department is required to review all feedback and consider it in refining the final rule. This step can often take several months. 

1. Final Rule Issuance: Following any revisions to the proposed rule based on public input, the Department will issue a final rule, typically effective 60 days after publication, containing an explanation of any changes to the proposed rule and detailing specific implementation procedures. 

1. Implementation: The new wage methodology will be applied prospectively to new applications submitted after the effective date, while existing approved wage determinations will remain unchanged. 

Because the proposed prevailing wage restructuring will not take effect for at least several months, employers may wish to consider options for mitigating its impact, including accelerating the filing of prevailing wage requests under the current wage structure and developing alternatives to the DOL’s prevailing wage system in the event the revised wage levels move forward. 

 

Organizations that significantly rely on foreign talent should also proactively assess their compensation structures and options well in advance of the rule’s effective date.  

 

About Meltzer Hellrung  

Meltzer Hellrung advises employers and individuals nationwide on complex employment-based immigration matters, including H-1B, PERM labor certification, and strategic workforce planning. Our team monitors regulatory developments closely to help clients anticipate change, manage risk, and maintain compliance in a rapidly evolving and increasingly challenging immigration environment.

If you have questions about how the proposed prevailing wage restructuring may affect your organization, please contact our office for further guidance.  

 

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