DOL Drops Bombshell Wage Hike Proposal for H-1B, E-3, H-1B1 & PERM – Entry-Level Wages Could Jump Sharply Starting Late 2026

Washington, D.C., March 26, 2026 — The U.S. Department of Labor has officially launched a major new effort to raise wages for foreign workers in the H-1B, E-3, H-1B1, and PERM programs by restructuring the prevailing wage system.

A Notice of Proposed Rulemaking (NPRM) will be published in the Federal Register tomorrow, March 28, 2026. If finalized, the rule would significantly increase the minimum wages employers must pay when sponsoring foreign talent — particularly at the entry-level (Level I) and mid-level (Level II) positions that dominate H-1B usage.

Key Proposed Changes

According to the draft rule, the four-level prevailing wage structure would be adjusted upward as follows (example for H-1B and PERM cases):

• Level I (entry-level): Would rise from the current 17th percentile to the 34th percentile of wages for the occupation and location — effectively making today’s Level II wage the new minimum for entry-level roles.

• Level II: Expected to move from the 34th to roughly the 50th–53rd percentile.

• Level III and Level IV: Also face upward shifts, though exact new percentiles are still under review.

These changes would apply across H-1B, H-1B1, E-3 specialty occupation visas, and the PERM labor certification process used for green card sponsorship.

Why This Proposal Matters

This is the second attempt in recent years to raise H-1B and PERM wage floors. A similar rule was finalized during the first Trump administration in 2021 but was later withdrawn by the Biden administration after legal challenges. The current proposal revives and potentially strengthens that earlier effort.

The timing is particularly significant as it follows two other recent Trump-era measures aimed at increasing costs for H-1B employers:

• A new $100,000 fee for certain H-1B petitions

• A revised H-1B cap lottery that gives priority to higher-wage beneficiaries

Together, these changes signal a clear policy direction: making it more expensive and selective to hire foreign workers in specialty occupations.

Timeline and Next Steps

• Publication: March 28, 2026 in the Federal Register

• Public comment period: 60 days (until approximately late May 2026)

• Final rule: Could be issued several months after the comment period ends

• Effective date: Likely late 2026 or early 2027, subject to possible court challenges

Employers and immigration stakeholders are expected to submit strong feedback during the 60-day window, with business groups likely arguing the increases will harm competitiveness and labor groups supporting stronger wage protections.

Practical Impact on Companies and Workers

If implemented, the higher wage floors would:

• Raise sponsorship costs, especially for entry-level and mid-level H-1B roles

• Make it harder to justify hiring foreign workers for positions below the new thresholds

• Potentially reduce the number of H-1B approvals in lower-wage occupations

• Push companies to either raise offered salaries or shift recruitment toward U.S. workers

For the latest analysis of H-1B wage rules, PERM strategies, and compliance tips for 2026, read our detailed guide here: Usa

Frequently Asked Questions

When will the new wage levels take effect?

Not immediately. The rule must complete the full federal rulemaking process and survive any legal challenges. Earliest effective date is likely late 2026 or 2027.

Does this affect existing H-1B holders?

Current visa holders are generally protected until their next extension or change of employer. New petitions filed after the final rule takes effect would be subject to the new wages.

Can employers still use Level I wages after the change?

Yes, but the wage amount required for Level I will be significantly higher (moving to roughly today’s Level II level).

Will there be exemptions?

The proposal does not currently include broad exemptions, though specific shortage occupations or non-profit/research institutions may receive limited relief.

This latest DOL proposal represents one of the most consequential immigration policy shifts of 2026 so far. Employers who rely on H-1B and PERM pathways should closely monitor the 60-day comment period and begin preparing for potentially higher wage obligations.