DOL Proposed Rule Would Increase Wage Levels for H-1B Visas, PERM Labor Certifications

Quick Hits

• The DOL issued an NPRM that would require significantly higher wages for foreign workers using H-1B, H-1B, and E-3 visas, as well as PERM labor certification sponsorships.
• The purpose of the proposed rule is to better align prevailing wage levels with wages paid to similarly employed U.S. workers, strengthen program integrity, and reduce the incentive for employers to use these visa programs to replace U.S. workers by employing lower-paid foreign workers.
• The proposal would permit employers to continue using private wage surveys and other alternative wage survey data as an alternative to the four-tier Occupational Employment and Wage Statistics (OESW) survey data, preserving employer flexibility for specialized labor markets.  

The proposed rule, titled “Improving Wage Protections for the Temporary and Permanent Employment of Certain Foreign Nationals in the United States,” invites written comments for a period of sixty days from the date of publication in the Federal Register. 

Background and Policy

Employers that wish to hire foreign workers in H-1B, H-1B1, or E-3 visa statuses, or seek to sponsor a foreign worker for an employment-based green card through PERM labor certification, are required to pay the foreign worker the prevailing wage for the specific occupation, level, and metropolitan statistical area in which the worker will be employed.

As part of the H-1B, H-1B1, and E-3 visa sponsorship processes, employers are required to obtain a certified labor condition application (LCA) from the DOL. The LCA must contain the employer’s attestation that it will pay the foreign worker the higher of either the actual wage level paid to all other similarly situated employees, “or the prevailing wage level for the occupational classification in the area of intended employment.” Similarly, an employer sponsoring a foreign worker in the second- or third-preference employment-based green card processes (EB-2 or EB-3) through a PERM labor certification application typically must obtain a prevailing wage determination (PWD) for the job opportunity from the DOL’s Office of Foreign Labor Certification’s (OFLC) National Prevailing Wage Center.

The DOL’s draft rule relies on data from the Occupational Employment and Wage Statistics (OEWS) wage survey to establish prevailing wage levels in both the LCA and PERM contexts. The OEWS program collects wage data nationwide and produces prevailing wage estimates annually for a variety of occupations and geographic areas. The OEWS survey employs a four-tiered wage structure that is intended to ensure that wages paid to foreign high-skilled workers meet given industry standards and do not depress wages of comparable U.S. workers.

The OEWS survey’s current four-tiered wage structure is based on calculations that approximate the following percentiles of the entire OES wage distribution.

OES wage level	Percentile of the OES wage distribution
Level I	17th percentile
Level II	34th percentile
Level III	50th percentile
Level IV	67th percentile

Key Revisions Under the Proposed Rule

The DOL proposes to revise the computation of wage levels under its four-tiered prevailing wage structure. The policy behind the draft rule is to:

• “aim to better align prevailing wage levels with the wages paid to U.S. workers who are similarly employed in the occupation and area of intended employment;
• “seek to strengthen program integrity by reducing the incentive for employers to use these programs to replace, rather than supplement, U.S. workers by employing lower-paid alien workers”; and
• “enable the [DOL] to more effectively ensure that the employment of immigrant and nonimmigrant workers admitted or otherwise provided one of the covered statuses does not adversely affect the wages and working conditions of U.S. workers.”

The proposed rulemaking was prompted, in part, by Presidential Proclamation 10973, issued on September 19, 2025, which directed the secretary of labor to initiate rulemaking to revise H-1B prevailing wage levels, citing concerns that the program “has been deliberately exploited to replace, rather than supplement, U.S. workers with lower-paid, lower-skilled labor.” 

Proposed Prevailing Wage Changes

The DOL proposal would see substantial upward adjustments of the OEWS percentile levels used to set the four prevailing wage levels. Specifically, Wage Level I would increase from the current 17th percentile level to the proposed 34th percentile; Wage Level II would increase from the 34th percentile to the 52nd percentile; Wage Level III would increase from the 50th percentile to the 70th percentile; and Wage Level IV would see increases from the 67th percentile to the 88th percentile.

The resulting change in distribution is illustrated in the table below:

OEWS wage level	Current percentile levels of the OEWS wage distribution	Proposed percentile levels of the OEWS wage distribution
Level I (Entry)	17th percentile	34th percentile
Level II (Qualified)	34th percentile	52nd percentile
Level III (Experienced)	50th percentile	70th percentile
Level IV (Fully Competent)	67th percentile	88th percentile

The DOL’s analysis found that the current methodology, in place since 2005, set prevailing wage tier levels too low by relying on the mean of the bottom third of the OEWS wage distribution for Level I (approximately 17th percentile), which includes many workers who would not qualify for specialty occupations under the Immigration and Nationality Act (INA).  The DOL’s statistical analysis of more than 3 million LCAs filed from FY2020–25 identified a gap of approximately $19,000 between the average OEWS mean wage for U.S. workers in the same occupations and locations as compared to the average prevailing wage assigned to LCA applicants. The proposed rule’s percentile adjustments are designed to eliminate this gap.

Estimated Impact on Employers

The proposed changes would result in significant wage increases across all four levels. These impacts would affect sponsorships for H-1B, H-1B1, and E-3 visas, as well as PERM labor certification cases in the EB-2 and EB-3 categories. Based on the DOL’s comparison of historical and proposed prevailing wages data from FY2020–24, the DOL estimates the proposed wage level adjustments would increase the average certified wage by approximately $14,000 per year per worker. 

The table below presents a comparison of historical and proposed prevailing wage levels:

Source: Proposed Rule

Use of Alternative Wage Survey Data and Private Wage Surveys

The DOL considered eliminating the ability for employers to use private wage surveys and other alternative wage survey data to establish the prevailing wage for H-1B, H-1B1, and E-3 LCAs or PERM labor certification cases. However, the draft rule proposes to retain—but monitor—the use of such private wage surveys and other alternative wage survey data in limited circumstances, preserving employer flexibility for specialized labor markets. 

According to the DOL, “[t]his approach preserves employer flexibility, mitigates potential adverse impacts on businesses operating in specialized labor markets, and balances reliance interests with the statutory mandate to protect U.S. workers. To ensure integrity, the DOL would monitor the use of private surveys to prevent abuse and ensure compliance, and it already reserves the right to reject any private survey that does not meet methodological standards or otherwise fails to satisfy regulatory requirements.” In discussing the elimination of private wage surveys as an alternative to revising the wage levels, the DOL acknowledged eliminating private wage surveys entirely could “disrupt longstanding compliance practices and impose disproportionate burdens on such employers.”

Timing and Impacts

The proposed rule would apply only to prevailing wage determination applications pending with the OFLC National Processing Center as of the effective date of the rule, as well as to new LCAs and PWD requests filed on or after that date. The rule would not be retroactively applied to previously approved PERM prevailing wage determinations, permanent labor certifications, or LCAs. 

The DOL invites written comments for a period of sixty days from the date of publication in the Federal Register, scheduled for March 27, 2026. The rule would not become effective until it has completed the formal notice-and-comment rule-making process, which typically takes several months, if not longer. Once the final rule is published, it would become effective a short period later, typically thirty to sixty days after publication. 

Ogletree Deakins’ Immigration Practice Group will continue to monitor developments and will post updates on the Immigration blog as additional information becomes available.

This article and more information on how the Trump administration’s actions impact employers can be found on Ogletree Deakins’ Administration Resource Hub.

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