The US Department of Labor has proposed a major change that could push up salaries for foreign workers in the country. The proposal focuses on increasing the “prevailing wage”, the minimum salary employers must offer for workers under H-1B, H-1B1, E-3, and PERM visa programs.
The notice, titled “Improving Wage Protections for the Temporary and Permanent Employment of Certain Foreign Nationals in the United States,” is set to be published tomorrow. Once it is out, the public will have 60 days to send in comments. The Department of Labor will review feedback before deciding on a final rule.
What the new rule is trying to change
Right now, companies hiring foreign workers through programs like H-1B, H-1B1, E-3, or even permanent labour certification follow a system to decide wages. But according to the Labour Department, that system has been outdated and often sets wages too low.
The proposed rule plans to update this method. It will use data from the Bureau of Labour Statistics’ Occupational Employment and Wage Statistics survey. In simple terms, wages will be tied more closely to what people actually earn in the market. This means foreign workers would be paid closer to what American workers with similar skills and experience are already earning.
Entry-level wages could see a big jump- Why freshers could lose out
Right now, Level I wages, which apply to entry-level jobs, are set at the 17th percentile of wages for that job and location. The proposal wants to raise this to the 34th percentile. That is a big jump, because 34th percentile is what Level II wages are today. So, entry-level foreign workers could soon be paid at the same minimum level as more experienced workers are now.
When the government raises the minimum salary that companies must pay, it also raises the cost of hiring. This creates a “pricing out” effect. In simple terms, hiring someone new, like a fresher or a recent graduate, suddenly becomes more expensive for companies. Not just expensive, but also more complicated from a legal and paperwork point of view. Because of this, companies may start avoiding entry-level foreign workers altogether. Instead, they are more likely to go for foreign professionals who already have years of experience or hire American workers.
There’s another challenge that makes things tougher. The H-1B visa system is slowly moving towards giving preference to higher-paying jobs. That means people with bigger salary offers have better chances of getting picked. So where does that leave entry-level applicants? At the very bottom.
Why the government says this is needed
Officials say the current wage levels have been far below real market rates for a long time. This has especially affected entry-level workers and recent graduates in fields like science, technology, engineering, and math. Because of these lower wage benchmarks, some companies have been able to hire foreign workers at cheaper rates. The government says this has led to misuse of visa programs, with some employers replacing American workers with lower-paid foreign hires.
How the current system works and what will change
Under existing law, employers hiring foreign workers through H-1B, H-1B1, or E-3 visas must pay either:
- the prevailing wage for that job in that area, or
- the actual wage they pay similar U.S. workers — whichever is higher
For permanent roles, companies must offer at least the prevailing wage. This wage acts like a minimum floor. Employers must confirm they are offering at least this amount when they file applications, during recruitment, and once the worker starts the job.
If this proposal goes through, the Labour Department wants to:
- Better match foreign worker wages with American workers
- reduce incentives to underpay foreign workers
- Stop practices that hurt the US workforce
- create fairer competition in the job market
‘Abuse will not be tolerated,’ says Labour Secretary
US Secretary of Labour Lori Chavez-DeRemer made the administration’s stance clear.
“The Trump Administration is committed to ensuring that American workers are not disadvantaged by unfair wage practices,” she said. “This proposed rule will help ensure that employers pay foreign workers wages that reflect the real market value of their labour, in addition to protecting the wages and job opportunities of American workers. The continued abuse of the H-1B program by certain bad actors will no longer be tolerated.”
The rule is still at the proposal stage. People can send in their comments within 60 days after it is officially published in the Federal Register on March 27, 2026.