US Announces Proposed Higher Wage Changes for H-1B Foreign Workers
- The US Department of Labour released a proposed rule on March 26, 2026, targeting wage standards for foreign workers in H-1B and PERM visa programmes
- The proposed rule would revise how prevailing wage levels are calculated, using updated Bureau of Labour Statistics data as its benchmark
- Secretary of Labour Lori Chavez-DeRemer said the change aims to stop employers from replacing American workers with cheaper foreign labour
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The US Department of Labour proposed a rule on March 26, 2026, that would raise the wage floor for foreign workers hired through the H-1B, H-1B1, E-3, and permanent labour certification (PERM) visa programmes.
The proposal, issued by the Department's Employment and Training Administration, would overhaul the method used to calculate prevailing wage levels — the minimum wage employers must offer foreign workers before hiring them over American candidates.
Source: Getty Images
US: What the proposed rule would change
Under the current system, prevailing wages have been set well below what many American workers actually earn, particularly in entry-level science, technology, engineering, and mathematics (STEM) roles.
The new methodology would anchor wage levels to statistically grounded percentile thresholds drawn from the Bureau of Labour Statistics' Occupational Employment and Wage Statistics survey, bringing them closer to real market rates.
The Department said this adjustment is intended to reduce the financial advantage employers currently gain by hiring foreign workers at suppressed wages, and to close the gap between what US workers and visa holders are paid for the same work.
US Secretary of Labour Lori Chavez-DeRemer said in a statement:
"The Trump Administration is committed to ensuring that American workers are not disadvantaged by unfair wage practices. 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."
US: How the current system works
Under existing law, employers using the H-1B, H-1B1, or E-3 programmes must pay foreign workers whichever is higher — the prevailing wage for the relevant area or the actual wage paid to similarly qualified US workers in that location. For PERM applicants, employers must offer and pay at least the prevailing wage from the point of filing through to when the foreign worker begins employment.
The Department said the prevailing wage has effectively functioned as a wage floor that some employers have exploited to undercut American workers, particularly recent graduates entering competitive fields.
The proposed changes are designed to improve the correlation between wages paid to foreign and domestic workers with comparable skills, reduce the economic incentive to underpay visa holders, and encourage fairer competition across the American labour market.
In a related story, Legit.ng reported that the US had expanded its visa screening to 13 categories of foreigners.
US bars 4 companies from sponsoring H-1B work visas
Meanwhile, Legit.ng previously reported that the US had barred four companies from sponsoring H-1B work visas for foreign workers.
The DOL's Wage and Hour Division took action by placing the companies on its federal debarment list, stripping them of the ability to file Labour Condition Applications (LCAs).
An LCA is a compulsory step for any employer looking to hire foreign professionals under the H-1B programme, meaning the ban effectively freezes their ability to bring in or retain foreign workers.
Source: Legit.ng
