The U.S. Department of Labor has proposed a rule to overhaul how prevailing wages are determined for foreign workers, including those on H-1B and similar visa programs. that efforts to better align pay with U.S. labor market conditions.
Announced March 26 by the department’s Employment and Training Administration, the proposal seeks to modernize the methodology used to determine wage levels for workers in permanent labor certification and H-1B, H-1B1, and E-3 visa categories. The agency said the rule is intended to ensure that wages paid to foreign workers reflect those earned by similarly employed U.S. workers in the same occupation and geographic area.
The proposed framework would rely on statistically derived wage percentiles from the Bureau of Labor Statistics’ Occupational Employment and Wage Statistics survey. Under the plan, all four wage levels would shift upward, increasing minimum pay thresholds across experience levels and addressing what the department described as long-standing discrepancies between prevailing wages and actual market wages.
READ: New US bill proposes 3-year H-1B visa freeze (April 26, 2026)
‘This much-needed change aims to curb abuse of certain visa programs by reducing the incentive to displace American workers with low-wage foreign visa holders. It also aims to establish parity between the wages paid to U.S. workers and foreign workers entering the country on certain employment-based visas.’ The statement reflects broader concerns that lower wage benchmarks have encouraged some employers to rely on cheaper foreign labor. By raising wage floors, the department seeks to reduce incentives for such practices and promote fair competition. The proposal also aligns with policy discussions recently around tightening oversight of high-skilled visa programs, particularly amid scrutiny over outsourcing firms and wage arbitrage in technology sectors.
The department noted that existing prevailing wage levels have often been ‘set dramatically below the market rates,’ particularly affecting entry-level workers and recent graduates in science and engineering fields.
READ: Two Indian nationals plead guilty to H-1B visa fraud (April 20, 2026)
‘The Trump Administration is committed to ensuring that American workers are not disadvantaged by unfair wage practices,’ said U.S. Secretary of Labor Lori Chavez-DeRemer. ‘This proposed rule will help ensure that employers pay foreign workers wages that reflect the real market value of their labor, 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 remarks highlight a policy shift toward prioritizing wage parity and stricter enforcement. The proposal follows broader federal efforts to reform the H-1B program, including debates over wage-based selection and labor market protections.
If finalized, the rule could significantly increase employees’ costs while reshaping hiring strategies in industries that rely heavily on foreign talent.The department has opened a 60-day public comment period before finalizing the rule, indicating further review and stakeholder input will shape its final implementation.