DOL Proposes Major H-1B Wage Increases: What Employers and Workers Need to Know (2026)
On March 27, 2026, the Department of Labor published a Notice of Proposed Rulemaking that would raise the prevailing wage floors for H-1B, H-1B1, E-3, and PERM labor certification programs by 21 to 33 percent across all four wage levels. The public comment period closes May 26, 2026 — meaning employers, workers, and immigration attorneys are actively submitting feedback right now.
If finalized as written, the rule would represent the most significant increase to H-1B prevailing wage floors in the program's history. DOL estimates average certified wages would increase by approximately $14,000 per worker per year. The proposed effective date is expected to align with the next OEWS wage data release around June 30, 2026, though legal challenges could delay implementation.
Source: Federal Register, Docket No. ETA-2026-0001 (March 27, 2026). Percentages are proposed increases to wage floor percentile thresholds, not guaranteed salary increases — actual wage impacts vary by occupation and geography.
📋 Quick Summary
- What it is: A proposed DOL rule to raise prevailing wage floors for H-1B, H-1B1, E-3, and PERM programs
- Published: March 27, 2026 — Federal Register, Docket No. ETA-2026-0001
- Comment deadline: May 26, 2026 (submit at regulations.gov)
- Proposed increase: 21–33% higher wage floors across all four wage levels
- DOL estimate: Average +$14,000/year per certified H-1B/PERM worker
- Does NOT affect: Existing approved LCAs or PERM certifications
- Legal basis: Presidential Proclamation (Sept. 2025) + notice-and-comment rulemaking
- Effective date: TBD — expected ~June 30, 2026 if finalized; legal challenges likely
The Numbers: Current vs. Proposed Wage Levels
Prevailing wages for H-1B and PERM are derived from the Department of Labor's Occupational Employment and Wage Statistics (OEWS) survey. Each wage level is defined as a percentile of wages for that occupation in the relevant geographic area. The proposed rule raises all four percentile thresholds.
| Wage Level | Worker Type | Current Percentile | Proposed Percentile | Estimated Wage Increase |
|---|---|---|---|---|
| Level I | Entry-level — limited experience, routine tasks, close supervision | 17th percentile | 34th percentile | ~+33% |
| Level II | Qualified — some experience, exercises judgment, moderate supervision | 34th percentile | 52nd percentile | ~+24% |
| Level III | Experienced — specialized skills, supervisory authority, complex tasks | 50th percentile | 70th percentile | ~+21% |
| Level IV | Fully competent — highly specialized, broad authority, industry expert | 67th percentile | 88th percentile | ~+22% |
Source: DOL NPRM, Docket No. ETA-2026-0001. "Estimated wage increase" represents the approximate increase to the wage floor at the new percentile threshold relative to the current threshold, based on DOL's own OEWS data modeling. Individual occupation/geography combinations vary.
In dollar terms: a software engineer in San Francisco at Level I currently has a prevailing wage floor of roughly $115,000 (17th percentile for that occupation and area). Under the proposal, the same worker's floor would rise to approximately $153,000 (34th percentile) — an increase of ~$38,000. For less-expensive metros and occupations, the absolute dollar increases are smaller but the percentage impact is similar.
Context: The 2020 Rule That Was Blocked
This is not the first attempt to raise prevailing wages. In October 2020, the Trump administration issued an Interim Final Rule (IFR) that would have imposed even steeper increases — moving Level I to the 45th percentile and Level IV to the 95th percentile. That rule was blocked by federal courts in January 2021 on procedural grounds: it bypassed the Administrative Procedure Act's required notice-and-comment process.
❌ 2020 IFR (Blocked)
- Issued as Interim Final Rule — no public comment
- Level I → 45th percentile (much steeper)
- Level IV → 95th percentile
- Blocked by federal courts in Jan 2021
- Withdrawn by Biden administration
✅ 2026 NPRM (Proposed)
- Proper notice-and-comment rulemaking (APA-compliant)
- Level I → 34th percentile (more moderate)
- Level IV → 88th percentile
- Backed by Presidential Proclamation (Sept. 2025)
- Stronger legal footing — harder to block on procedure
Legal experts note the 2026 rule's use of proper notice-and-comment procedure significantly strengthens its legal position compared to the 2020 IFR. However, challenges on substantive grounds — whether DOL has authority to set these specific levels, and whether the rulemaking record adequately supports the specific percentile choices — are still expected.
Who Does This Affect?
The proposed rule applies broadly across work-based immigration programs that rely on DOL-issued prevailing wages:
- H-1B petitions — Any new Labor Condition Application (LCA) filed after the effective date must meet the new, higher wage floors
- H-1B extensions — Extensions requiring a new LCA must also comply
- H-1B1 (Chile/Singapore) — Same prevailing wage framework applies
- E-3 (Australia) — Covered under the same DOL wage determination system
- PERM labor certifications — EB-2 and EB-3 green card applications where an employer files PERM after the effective date
- Employers who rely heavily on Level I classifications — Staffing firms, consulting companies, and entry-level H-1B sponsorships face the largest relative cost impact
What It Means for Employers
Entry-Level Hiring Faces the Largest Shock
The Level I increase — from the 17th to the 34th percentile — hits entry-level H-1B sponsorship hardest. For occupations and geographies where companies currently pay at or near the Level I floor, the proposal would effectively require a wage increase of roughly one-third just to maintain compliance.
For a company sponsoring 50 H-1B workers at Level I, an average increase of $14,000 per worker translates to an additional $700,000 in annual payroll. Many companies will need to choose between: (a) absorbing the wage increase, (b) reclassifying some workers to higher levels if the job duties support it, (c) reducing H-1B filings and shifting to US worker hiring, or (d) waiting to see if the rule is finalized or modified.
PERM Timing: A Critical Decision
For employers with employees in the PERM green card process (EB-2 or EB-3), timing matters. A PERM application filed and approved under current wage levels will lock in today's prevailing wage determination for that filing. If the rule is finalized mid-year:
- File PERM now if feasible — Applications filed and approved before the effective date will not be subject to the new floors
- Audit your PERM pipeline — Prioritize cases for employees whose current wage would drop below the new floor if delayed
- Budget for refiled cases — If an application is denied and must be refiled after the effective date, the new wage floors apply
Interaction with the Wage-Weighted Lottery
Since February 27, 2026, the H-1B lottery prioritizes higher wage level registrations. If the prevailing wage rule is finalized, it raises the wage floors that define each level — creating a compounding effect. To hold a Level III or Level IV designation and enjoy its lottery advantages, employers would need to pay against a higher absolute wage floor.
For example: if a software engineer in Austin currently qualifies for Level III at $140,000, but the new Level III floor rises to $162,000, employers paying $140,000–$161,999 would drop to Level II under the new system — losing lottery priority and facing potential compliance issues with existing LCAs at renewal.
What It Means for Workers
Green Card Timing and PERM Salary Requirements
Workers in the EB-2 or EB-3 PERM process who have not yet had their PERM approved should discuss timing with their employer's immigration counsel. A PERM salary offer must equal or exceed the prevailing wage at the time of certification. If the rule is finalized and your PERM hasn't been approved yet, your employer may need to offer a higher salary to comply — or the application could be denied.
For workers whose PERM has already been approved but whose I-140 petition is pending or approved, the prevailing wage determination is already locked in from the PERM stage. The new rule would not affect you retroactively.
Salary Negotiation Leverage
If the rule is finalized, workers whose salaries are near the current Level I or Level II floor will have a legitimate negotiating basis for pay increases: their employer must pay the new higher floor to maintain LCA compliance. This represents a rare instance where a regulatory change directly and legally requires wage increases for H-1B workers below the new thresholds.
Workers at Risk of Non-Renewal
The flip side: employers who cannot or will not absorb the wage increase may choose not to renew H-1B sponsorship for Level I workers whose salary falls below the new floor. Workers in this category should:
- Discuss salary expectations with their employer proactively
- Understand their current prevailing wage level and how close they are to the new proposed threshold
- Explore whether their role could legitimately support a higher wage level designation
- Consider whether they have PERM applications in progress that should be prioritized
Timeline: What Happens Next
Presidential Proclamation directs Department of Labor to issue new prevailing wage rulemaking to protect US workers from wage suppression by H-1B program.
NPRM published in the Federal Register (Docket No. ETA-2026-0001). 60-day public comment period opens. This is the official publication of the proposal.
Public comment period closes at 11:59 PM ET. All comments must be submitted electronically via regulations.gov (Docket ETA-2026-0001). This is the last opportunity for employers, workers, and advocacy groups to formally influence the rule.
DOL reviews all comments and decides whether to issue a final rule, a modified rule, or withdraw the NPRM. High comment volume may extend the review period.
If DOL finalizes the rule, the effective date is expected to align with the next OEWS wage data release. All new LCAs and PERM applications filed on or after this date would use the new prevailing wage levels.
Employer groups, staffing associations, and potentially affected states are expected to file legal challenges in federal court seeking to stay or enjoin the rule. Courts could issue a preliminary injunction while litigation proceeds, which would delay enforcement even if the rule is finalized.
How to Submit Comments
The comment period is open to everyone — employers, workers, attorneys, advocacy organizations, and the general public. Comments that are specific, quantified, and documented carry more regulatory weight than general objections. DOL is required to consider and respond to all substantive comments in the final rule preamble.
What to Include in Your Comment
- Who you are — employer, worker, attorney, trade association, or individual
- Specific impact on your situation — how many workers are affected, what wage increases would be required, what business decisions would change
- Quantified costs — dollar amounts, number of employees, percentage of workforce affected
- Alternative proposals — if you support the goal of higher wages but object to the specific percentiles, propose alternatives with supporting data
- Legal or factual errors — if you believe the NPRM contains factual or legal errors, identify them specifically with citations
Comments that simply say "this is too expensive" or "I oppose this rule" are less likely to affect the final outcome than comments that document specific, quantified impacts and propose workable alternatives.
📨 Submit Your Comment Before the Deadline
The DOL is legally required to consider all substantive comments. Your input — especially if you can quantify the impact on your business or workforce — can influence the final rule.