Proposed US Wage Rule Could Reshape H-1B Salaries in 2026

The United States Department of Labor has introduced a new proposal that could significantly increase wage requirements for foreign workers in the United States. The proposed regulation, titled “Improving Wage Protections for the Temporary and Permanent Employment of Certain Foreign Nationals in the United States,” aims to revise how prevailing wages are calculated across several visa programs.

Although the rule is not yet final, it is expected to have a major impact on employers and foreign professionals alike. The proposal will be officially published and opened for a 60-day public comment period, after which the department will review feedback before issuing a final decision.

What the Proposal Aims to Change

At the core of the proposal is a restructuring of the prevailing wage system used for hiring foreign workers. Currently, employers sponsoring workers through visa programs must pay wages based on a four-tier system tied to percentiles within wage data from the Occupational Employment and Wage Statistics.

The Department of Labor is now proposing to raise these wage benchmarks significantly. The goal is to align foreign worker salaries more closely with what US workers earn in similar roles.

Under the new model, wages would be calculated using a revised statistical approach designed to reflect actual market conditions more accurately. According to government estimates, the changes could increase the average certified wage by approximately $14,000 annually per position.

Breakdown of the New Wage Levels

The proposal redefines the four wage levels as follows:

Level 1, typically for entry-level roles, would increase from the 17th percentile to the 34th percentile
Level 2, representing qualified workers, would move from the 34th percentile to the 52nd percentile
Level 3, for experienced professionals, would rise from the 50th percentile to the 70th percentile
Level 4, covering highly skilled or fully competent workers, would jump from the 67th percentile to the 88th percentile

These adjustments mark the most significant overhaul of the prevailing wage structure in nearly two decades.

Which Visa Categories Will Be Affected

The proposed rule applies to several key employment-based visa programs, including:

H-1B visas for specialty occupation workers
H-1B1 visas for professionals from Chile and Singapore
E-3 visas for Australian nationals
PERM-based green card categories, particularly EB-2 and EB-3

This broad coverage means that both temporary foreign workers and those pursuing permanent residency through employment could be impacted.

Why the US Government Is Pushing for Higher Wages

The Department of Labor has stated that the existing wage framework, in place since 2005, allows employers to hire foreign workers at lower salary levels compared to US workers in similar roles. This, according to officials, creates an uneven playing field in the labor market.

By raising wage thresholds, the government aims to ensure that hiring foreign talent does not undercut domestic wages. The proposal is aligned with broader policy efforts focused on protecting US workers and promoting fair compensation practices.

Officials argue that the revised wage levels will reduce the incentive for companies to rely on lower-cost foreign labor while encouraging more equitable hiring standards.

Is This Good News for H-1B Workers

For many foreign professionals, especially those already working in the US under H-1B status, the proposed changes could lead to higher salaries. Employers would be required to offer wages that are closer to or even above market averages, which could improve overall earnings and job security.

However, the situation is more complex. While existing workers may benefit from higher pay, new applicants could face increased barriers to entry. Employers may become more selective or reduce hiring due to higher labor costs.

In essence, the proposal could result in fewer but better-compensated opportunities for foreign workers.

Potential Impact on Employers and Hiring Trends

Employers, particularly in industries heavily reliant on H-1B talent such as technology and engineering, may need to adjust their hiring strategies. Increased wage requirements could lead to:

Higher operational costs
Reduced demand for foreign workers in certain roles
Greater emphasis on hiring domestic talent
More scrutiny in visa sponsorship decisions

Some companies may also explore alternative visa options or offshore hiring to manage costs.

Public Feedback and What Happens Next

As the proposal enters the public comment phase, stakeholders including employers, immigration attorneys, and advocacy groups will have an opportunity to provide input. This feedback will play a crucial role in shaping the final rule.

The Department of Labor will review all submissions before deciding whether to implement the rule as proposed, modify it, or withdraw certain elements.

Until a final version is issued, the current wage system remains in effect.

Conclusion

The proposed increase in prevailing wages for H-1B and other employment-based visa programs represents a significant shift in US immigration and labor policy. While the changes could bring higher salaries and better protections for foreign workers, they may also reduce hiring opportunities and increase costs for employers.

As the rule moves through the public consultation process in 2026, its final outcome will be closely watched by both businesses and international professionals. For now, stakeholders should prepare for potential changes while continuing to monitor updates from the Department of Labor.

FAQs

Is this wage increase rule already in effect

No, it is currently a proposal and has not been finalized. It will only take effect after the review process is complete.

How much could salaries increase under the new rule

The Department of Labor estimates an average increase of around $14,000 per year per position.

Which visa holders will be affected

H-1B, H-1B1, E-3 visa holders, and applicants under PERM-based green card categories could be impacted.

Will this reduce H-1B hiring

It may lead to fewer hires as employers adjust to higher wage requirements, although those hired may receive better pay.

When will the final rule be announced

There is no fixed timeline, but it will be decided after the 60-day public comment period and subsequent review.