A new H-1B rule has been proposed by the Trump administration that will significantly increase the minimum salary limit required to be paid by US employers while hiring foreign workers. If the new proposals are approved, the increase in the H-1B salary is likely to be between 21% and 33%.
“Under a recent DOL proposed rule, annual wages would increase by $16,000 for an entry-level automotive engineer in Detroit on an H-1B visa. For a software engineer in Silicon Valley sponsored through the program, they would go up by $40,000, based on the agency’s wage survey data,” wrote Andrew Kreighbaum, Bloomberg Law, in his recent report.
This comes at a time when US employers are already required to pay a $100,000 H-1B petition fee for each foreign candidate that they hire.
But why is the US proposing to fix a higher wage limit for foreign workers, when it is taking other measures to discourage US firms from hiring them?
The reason is this: When prevailing wage rates are set below what comparable U.S. workers would typically earn, it creates an incentive for US employers to hire foreign workers who cost less, which in turn, reduces job opportunities for equally qualified U.S. workers
Therefore, the Department of Labor is proposing to revise the methodology used to determine prevailing wage levels under the H-1B, H-1B1, E-3, and PERM programs. The proposed changes are intended to ensure that the employment of foreign workers does not adversely affect the wages and working conditions of U.S. workers.
H-1B Workers Paid Low?
A study pointed out that in certain occupations, H-1B holders earn significantly less than their American counterparts. A comparison study conducted by the Department revealed that the average wage offered to H-1B workers was approximately $10,191 lower than the OEWS average wage for workers for similarly classified occupations. The disparity is even more pronounced in computer-related occupations, where the average wage gap was $10,972. These findings suggest that employers are leveraging the H-1B program to access a lower-cost labor pool, even in occupations that nominally require high levels of skill and education.
The proposed rule
Currently, there is a four-tier prevailing wage provision that includes four “skill levels”: Level I “entry,” Level II “qualified,” Level III “experienced,” and Level IV “fully competent,” set at approximately the 17th percentile, the 34th percentile, the 50th percentile, and the 67th percentile, respectively.
The proposed rule, introduced in March 2026, seeks to increase the prevailing wage floors for Wage Level I from the 17th percentile to the 34th percentile, for Wage Level II from the 34th to the 52nd, for Wage Level III from the 50th to the 70th, and for Wage Level IV from the 67th to the 88th
The Department asserts that the prevailing wage level increases are necessary due to previous methodologies that inadequately considered experience, education, and supervision levels. This shortfall allowed employers to pay foreign workers less than U.S. workers, negatively impacting wages and working conditions for American employees.
Trump’s Backing
The wage-hike proposal has Trump’s backing. On September 19, 2025, President Trump signed a proclamation titled “Restriction on Entry of Certain Nonimmigrant Workers.” Among other things, it directed the Secretary of Labor to begin the process of changing how wages are set under the H-1B program.
The proclamation stated that the H-1B program has been misused to replace American workers with foreign workers who are paid less and are less skilled.
The central issue is simple. In the eyes of the Trump administration, the H-1B program, as it currently works, is being used in ways that push wages down and push American workers out of jobs.
The current wage structure, the proclamation noted, gives employers a financial reason to hire foreign workers at significantly lower pay than what they would have to pay an American worker for the same role.
This goes against the original purpose of the H-1B visa, which was meant to allow US employers to hire foreign workers temporarily only when they could not find equally skilled American workers to fill the specialist role.
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