The proposal
On March 27, 2026, the US Department of Labor published a notice of proposed rulemaking in the Federal Register that would rewrite how it calculates prevailing wages for the H-1B, H-1B1, E-3 and PERM programs. The docket, ETA-2026-0001, is open for public comment through May 26, 2026. For HR and talent acquisition teams that sponsor foreign workers under US federal immigration law, this is the wage floor that determines what a sponsored role must legally pay.
The rule keeps the existing four-tier wage structure but moves every tier up. Level I, the entry-level tier, moves from the 17th percentile of the relevant occupational wage survey to the 34th. Level IV, the most senior tier, moves from the 67th percentile to the 88th. Levels II and III are calculated from the statutory formula that splits the gap between Levels I and IV into thirds. DOL's own analysis, drawn from prevailing wage data covering fiscal years 2020 through 2024, estimates the changes would raise the average certified wage by roughly $14,000 per sponsored worker per year.
What it means in practice
The percentile shift is not a rounding adjustment. Under the current methodology, an employer filing a Level I labor condition application for a junior software engineer can point to a wage near the bottom third of the local occupational range. Under the proposed methodology, that same filing would need to clear the middle third. For senior roles, the effect is sharper still: the 88th percentile threshold at Level IV puts the requirement above what a large share of currently employed H-1B workers in senior roles are paid today.
An analysis using DOL's own labor condition application data from the first two quarters of fiscal year 2026, cited in commentary from the Cato Institute, found that more than 80 percent of current H-1B wage offers would fail to meet the proposed thresholds, including a majority of offers at the senior Level IV tier. If the rule takes effect as written, payroll and total compensation planning for any US employer with an active sponsorship pipeline would need to change well before the next hiring cycle, since the new levels would apply to prevailing wage requests and labor condition applications filed on or after the effective date. Existing approved PERM determinations and already-certified LCAs would not be reopened.
A quieter fight than 2020
The Trump administration issued a similar prevailing wage overhaul in 2020, and that rule drew a coordinated legal challenge from a coalition of universities and business groups within weeks, ultimately vacated in federal court on procedural grounds. This time, according to tracking from GreenCardClock, the docket closed on May 26, 2026 with 1,155 comments and opposition outnumbering support roughly two to one, but without the single large coordinated tech-industry coalition filing that characterized the earlier fight. The US Chamber of Commerce and the Software and Information Industry Association both filed in opposition, as did the Department for Professional Employees, AFL-CIO, though from the opposite policy direction. Employment immigration attorneys at Duane Morris and Holland & Knight, in client guidance published in late March, both described the proposal as one of the most significant changes to H-1B and PERM wage requirements in over two decades and advised employers to treat pending filings as a near-term planning issue rather than a distant risk.
Why HR and payroll teams should track this now
This is a US federal rule and applies to employers filing under federal immigration statute regardless of state. It does not touch state-level wage or pay transparency law. For companies running active sponsorship pipelines, the practical exposure sits in three places: budget forecasts for pending PERM cases that have not yet reached a final prevailing wage determination, offer letters extended to candidates who will need H-1B or E-3 status before an anticipated effective date, and headcount plans that assumed current wage floors. None of this is legal advice, and any employer with active filings should confirm exposure with immigration counsel rather than treat this summary as guidance.
What to watch next
DOL must now review the comments before deciding whether to finalize, revise or withdraw the rule. Given the volume of opposition and the procedural vulnerability that sank the 2020 version, a legal challenge is plausible if DOL finalizes the rule largely as proposed. The date to watch is whichever comes first: a final rule notice in the Federal Register, or a withdrawal notice. Either would set the actual effective date that determines which pending filings are affected.
Sources: US Department of Labor ETA news release · Federal Register: Improving Wage Protections for Foreign Nationals · Duane Morris: DOL Proposes Significant Increases to Prevailing Wage Levels · Holland & Knight: DOL Targets Prevailing Wages · GreenCardClock: DOL Prevailing Wage NPRM Comment Window Closed · Cato Institute: DOL Inflates H-1B Wages