US DOL Final Rule Raising H-1B and PERM Prevailing Wages Enters OMB Review, Setting Stage for Possible 2027 Cap Season Impact
Updated: 1 hour ago
WASHINGTON, D.C., 9 November 2026 – A Department of Labor (DOL) final rule that would significantly raise the prevailing wage floors used in the H-1B, H-1B1, and E-3 nonimmigrant programs and in the PERM labor certification process has been submitted to the Office of Management and Budget (OMB) for review, initiating the final stage of federal rulemaking before publication. The submission means that an advance copy of the final rule could appear in the Federal Register within days or weeks, with an implementation date of 30 or 60 days after publication—a timeline that could place the rule in effect for the next H-1B cap season beginning in late winter or early spring 2027. The development was first reported by US immigration alert on 9 November 2026, and it follows the DOL’s proposed rule released in the Federal Register on 27 March 2026 titled “Improving Wage Protections for the Temporary and Permanent Employment of Certain Foreign Nationals in the United States.”
What the Final Rule Would Change
The rule functions through the DOL’s four-level prevailing wage system, which relies on Occupational Employment and Wage Statistics (OEWS) data from the Bureau of Labor Statistics to determine minimum wages for employers hiring foreign workers. According to the current guidelines, Skill Level I (entry-level) is set at the 17th percentile of the average wage for the occupation, Level II at the 34th percentile, Level III at the 50th percentile, and Level IV at the 67th percentile. The proposal for March 2026 aimed to increase these thresholds to the 34th, 52nd, 70th, and 88th percentiles, respectively, effectively elevating each level and establishing the current Level II minimum as the new entry-level baseline.
The following table summarises the change as proposed in March 2026:
Skill Level | Current Percentile | Proposed Percentile |
Level I (Entry) | 17th | 34th |
Level II (Qualified) | 34th | 52nd |
Level III (Experienced) | 50th | 70th |
Level IV (Fully Competent) | 67th | 88th |
The DOL’s March 2026 news release framed the proposal as a measure to “protect the wages and job opportunities of American workers by stripping away the ability of employers to pay substandard wages to foreign workers in certain visa programs,” with the updated methodology using “statistically grounded percentile thresholds” to bring foreign-worker wages into line with those paid to similarly employed US workers. The proposal drew a direct link to the H-1B program’s reliance on entry-level hiring: the DOL noted that in Fiscal Year 2024, 19% of certified LCAs were assigned to Wage Level I and 44% to Level II, meaning that 63% of certified LCAs fell into the two lowest tiers that would be most affected by the increase.
The final rule’s contents remain confidential until publication, but if finalised as proposed, it would represent one of the most consequential changes to the H-1B and PERM wage framework in years. The proposed percentiles are also nearly identical to those in a final wage rule issued at the end of the first Trump administration, which was challenged in court and ultimately never took effect—a history that makes further litigation a realistic prospect for the current rule.
Why OMB Review Matters and What Comes Next
OMB review is the final checkpoint before a rule is cleared for publication. Once the rule clears OMB, it will be published in the Federal Register with an implementation date. The reginfo.gov regulatory entry for RIN 1205-AC30 describes the rulemaking as “Economically Significant” and links it to the 19 September 2025 Presidential Proclamation on restriction of entry of certain nonimmigrant workers, confirming that the wage revision is part of a broader policy push rather than an isolated technical adjustment.
The practical timeline is tight. If the rule clears OMB in the coming weeks and is published with a 30-day implementation period, it could be operative before the FY 2028 H-1B cap filing window opens in March 2027. If a 60-day implementation period applies, the rule would likely take effect during or shortly after the cap season, creating uncertainty for employers preparing registrations and LCAs. The Fragomen alert notes that the rule “could be in effect for the next H-1B cap season, which starts in late winter/early spring 2027,” and that court challenges to the final rule are possible.
Who Is Affected
The rule would directly affect employers sponsoring workers in four categories: H-1B specialty occupation workers, H-1B1 professionals from Chile and Singapore, E-3 Australian professionals, and PERM labor certification cases that initiate the employment-based green card process for many foreign nationals. For employers, the change is not merely a salary adjustment; it alters which wage level a given salary satisfies, and therefore whether a position can be sponsored at all under the applicable prevailing wage determination. A salary that currently qualifies as Level II could fall to Level I under the new percentiles, and a salary that currently meets Level I could fall below the new floor entirely.
The impact is likely to be most acute in occupations and geographic areas where OEWS wages cluster near the lower percentiles—including many entry-level science, technology, engineering, and mathematics roles, as well as positions in smaller metropolitan areas or lower-cost regions where the 34th percentile wage may be materially higher than the current 17th percentile floor. Employers with large H-1B or PERM volumes, and those relying on recent graduates or early-career professionals, should model the effect on their sponsorship pipelines before the rule takes effect.
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What Employers and Applicants Should Do Now
Employers should model the revised percentile thresholds against their current and planned H-1B and PERM filings using the latest OEWS data for the relevant occupation and geographic area. Where a proposed salary would no longer meet the applicable level under the new percentiles, employers should consider whether to adjust the offered wage, restructure the position’s duties and requirements, or accelerate filings before the implementation date. The Manifest Law analysis of the March proposal recommends seeking PERMs or LCAs before the policy goes into effect where feasible, and adjusting hiring budgets to reflect the higher OEWS thresholds.
For applicants and beneficiaries, the rule reinforces the importance of salary level as a selection and eligibility factor, particularly if the H-1B selection process continues to weight registrations by wage level. A salary that falls from Level II to Level I under the new percentiles could affect both sponsorship eligibility and, where applicable, selection odds.
The DOL’s Office of Foreign Labor Certification and the Federal Register are the authoritative sources for the final rule’s text and implementation date. Employers should monitor OMB’s reginfo.gov dashboard for the rule’s clearance status and prepare contingency plans for both a 30-day and a 60-day implementation window.
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