The Department of Labor (DOL) has released a major Notice of Proposed Rulemaking (NPRM) that would revise how prevailing wages are calculated for employment‑based immigration programs, including H‑1B, H‑1B1, E‑3, and PERM (EB‑2 and EB‑3). The rule seeks to realign prevailing wages with labor market data and strengthen protections for US workers.
Overview
DOL proposes to adjust the four prevailing wage levels used in both temporary and permanent labor certification programs, shifting them upward across the wage distribution. The stated objective is to ensure employers pay foreign workers wages that reflect education, experience, and responsibility levels, preventing wage undercutting that could adversely affect similarly employed US workers.
Under the NPRM, prevailing wage levels would increase substantially:
| Wage Level | Current Percentile | Proposed Percentile |
|---|---|---|
| Level I | ~17th | 34th |
| Level II | ~34th | 52nd |
| Level III | ~50th | 70th |
| Level IV | ~67th | 88th |
DOL states that the existing wage levels do not adequately reflect labor market realities and allow wages to be set far below what comparable US workers earn.
Why DOL Is Proposing These Changes
The NPRM cites extensive analysis showing systemic issues in current prevailing wage determinations:
- Large wage gaps between H‑1B workers and comparable US workers (on average $10,191 lower than OEWS‑based US wages).
- Concentration of H‑1B positions in Level I and II, despite statutory requirements that H‑1B jobs require highly specialized knowledge.
- Market distortions where employers may prefer lower‑cost foreign labor, contrary to the Immigration and Nationality Act’s protections for US workers.
- Presidential Proclamation 10973 (Sept. 2025) directing DOL to reform wage levels to reduce program misuse.
DOL concluded that current wages are too low to prevent adverse effects on US worker wages — especially in high‑skilled STEM occupations with high concentrations of H‑1B workers.
Scope of Affected Programs
The proposed wage methodology would apply to:
- PERM (EB‑2 and EB‑3 positions)
- H‑1B specialty occupations
- H‑1B1 (Chile/Singapore)
- E‑3 (Australia)
The same wage methodology applies across programs because:
- Many H‑1B workers transition to PERM/EB‑2/EB‑3.
- Divergent wage systems could encourage “program shopping” based on lower wage thresholds.
Key Changes
1. Higher Prevailing Wages Across All Levels
Employers filing LCAs or PERM PWDs would see prevailing wages rise swiftly once the rule takes effect. The DOL’s analysis estimates these adjustments could increase average certified wages by approximately $14,000 per position.
2. Effective Only for New Applications
The new methodology would apply to:
- Prevailing Wage Determinations pending on the effective date
- LCAs filed on or after the effective date, unless an employer already obtained a PWD under the prior framework
Past certifications will not be reopened or reissued.
3. Updated Use of OEWS Data
DOL will continue using the OEWS survey as the primary wage source, but with revised percentile calculations aligned to INA requirements. Employers may still use qualifying alternative surveys, though DOL notes these surveys often produce materially higher wages.
4. Significant Economic Impact
DOL estimates:
- Annualized employer cost: $3.53 million (mostly compliance)
- Annualized wage transfers: up to $6.56 billion from employers to workers due to higher wages
These impacts support DOL’s conclusion that the current system suppresses wages and displaces US workers.
Policy Rationale
DOL asserts that raising wage levels will:
- Reduce incentives for employers to use visa programs for lower‑cost labor
- Improve fairness for US workers by aligning foreign worker wages with labor market norms
- Strengthen program integrity across H‑1B, H‑1B1, E‑3, and PERM
DOL also cites economic evidence that mismatched wage floors have contributed to wage depression and program misuse, including staffing‑firm underpayment and inflated “entry‑level” classifications.
Comment Period
Public comments will be accepted within 60 days of publication in the Federal Register. Comments may be submitted through regulations.gov under Docket No. ETA‑2026‑0001.
Erickson Insights & Analysis
Erickson Immigration Group will continue to monitor developments and share updates as more news is available. Please contact your employer or EIG attorney if you have questions about anything we’re reporting above or case-specific questions.