The Trump administration is proposing a significant increase in the minimum wages employers must pay H-1B and other foreign professional workers, seeking to raise entry-level salary requirements by more than 30%.
The U.S. Department of Labor (DOL) published a proposed rule March 27 that would restructure how prevailing wages are calculated for workers admitted under the H-1B and PERM labor certification programs impacting professional workers.
H-1B employers would be the largest affected group by far, but the rule would also affect H-1B1 employers of foreign nationals from Chile and Singapore; E-3 employers of foreign nationals from Australia; and EB-2 and EB-3 PERM sponsors of employment-based green cards.
In effect, the DOL seeks to raise the minimum wages employers must pay foreign workers before the government certifies their labor applications, shifting the program toward higher-wage roles and making it more costly to sponsor entry-level or early career workers.
Under current law, U.S. employers seeking to hire temporary foreign workers through the H-1B, H-1B1, or E-3 visa programs must pay foreign workers the higher of the prevailing wage for the area of intended employment or the actual wage rate paid to similarly qualified U.S. workers in the area of intended employment. For employers seeking to hire foreign workers permanently through the PERM labor certification program, employers are required to offer and pay foreign workers at least the prevailing wage for the job opportunity in the area of intended employment.
The DOL argues that that the existing prevailing wage levels have, “for too long, been set dramatically below the market rates which many American workers receive, particularly entry-level Americans and recent college graduates in science, technology, engineering, and math fields.”
U.S. Secretary of Labor Lori Chavez-DeRemer said that “This proposed rule will help ensure that employers pay foreign workers wages that reflect the real market value of their labor, in addition to protecting the wages and job opportunities of American workers.”
The proposed rule revives a similar plan from the first Trump administration to increase prevailing wages, which was challenged in court and ultimately abandoned by the Biden administration.
Proposed Wage Levels
The DOL uses Occupational Employment and Wage Statistics (OEWS) data from the Bureau of Labor Statistics to determine prevailing wages. The OEWS prevailing wage is subdivided into four tiers or wage levels, representing the range of skills from entry level to very experienced.
“The OEWS program collects wage data nationwide and produces prevailing wage estimates annually for a variety of occupations and geographic areas,” said Brian Bumgardner, an attorney in the Raleigh, N.C., office of Ogletree Deakins. “The DOL proposal would see substantial upward adjustments of the OEWS percentile levels used to set the four prevailing wage levels.”
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 increase from the 67th percentile to the 88th percentile.
In other words, the entry-level wage minimum would increase to the current minimum salary for a Skill Level II role.
“The DOL’s analysis found that the current methodology, in place since 2005, set prevailing wage tier levels too low,” Bumgardner said. “Based on the DOL’s comparison of historical and proposed prevailing wages data from fiscal years 2020-2024, the DOL estimates the proposed wage level adjustments would increase the average certified wage by approximately $14,000 per year per worker.”
The proposed rule would continue to permit employers to use alternative wage sources outside the OEWS salary survey data, which are not subject to the DOL wage percentiles. The agency reportedly considered eliminating the employer option to use private wage surveys.
“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,” Bumgardner said.
The new required wage levels would apply only to applications for prevailing wage determinations that are pending on the date the regulation would take effect, and to new prevailing wage requests and labor condition applications filed on or after the rule’s effective date. Existing permanent labor certifications, approved labor condition applications, and previously approved PERM prevailing wage determinations are not affected.
The proposed rule follows a new weighted selection process for the annual H-1B cap lottery that favors beneficiaries with the highest wages according to the DOL’s four-level prevailing wage system.
Next Steps
The proposed rule will need to complete the formal rulemaking process, which will take at least a few months. “Employers have some time before this becomes effective, so they may want to connect with their counsel to review their current foreign national workforce holding H-1B visa status and determine what actions can be taken proactively, such as timely filing for extensions of the H-1B status or considering the employer’s access to alternative wage survey data,” Bumgardner said.
In addition to reviewing upcoming H-1B filings and compensation plans with your immigration attorney, employers should review active and pending certifications to understand which positions are at Level I or II and by how much your offered wages exceed the proposed new floors.
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