On March 27, 2026, the U.S. Department of Labor (DOL) published a Notice of Proposed Rulemaking to revise how prevailing wages are computed for H-1B, H-1B1, E-3, and Permanent Labor Certification (PERM) cases.

The Department cites a need to align required wages with what similarly employed U.S. workers earn, strengthen program integrity, and reduce any incentive to substitute lower-paid foreign labor. The initiative follows Presidential Proclamation 10973 issued on September 19, 2025, which directed the DOL to update H-1B wage protections.

The proposal lifts each of the four wage levels to higher Occupational Employment and Wage Statistics percentiles and sets a 60-day public comment period ending May 26, 2026, under Docket ETA 2026 0001 on Regulations.gov.

What Employers Need to Do

• Identify roles commonly filed at Level I or Level II and model offers under the proposed 34^th/52^nd/70^th/88th structure.

• Inventory pending prevailing wage determinations and upcoming Labor Condition Applications (LCAs) to gauge which matters would be captured if a final rule takes effect.

• Review any reliance on private surveys and confirm methodological compliance given DOL’s stated oversight.

• Align registration wage levels and LCA data with DHS’s weighted selection framework for FY 2027.

Overview

• The DOL has proposed (not finalized yet) a rule to raise the four prevailing wage levels that employers must meet when they sponsor workers in H-1B, H-1B1, E-3, and PERM.

• The new method lifts each wage tier to a higher percentile of the Bureau of Labor Statistics’ Occupational Employment and Wage Statistics (BLS OEWS) survey so that required pay is closer to what similarly employed U.S. workers make in the same job and location.

• Employers may still use private wage surveys in limited, monitored circumstances, and the DOL may review or reject surveys that do not meet methodological standards.

• If Finalized, Prospective Only: It would apply to prevailing wage determinations (PWDs) that are still pending on the effective date and to new PWD requests and Labor Condition Application (LCA) filed after that date; it would not reopen already certified PERMs, approved LCAs, or previously approved PERM PWDs.

• This proposal sits alongside the Department of Homeland Security’s (DHS) final rule that weights the H-1B cap selection in favor of higher wage levels starting with FY 2027, meaning both wage floors and lottery odds are shifting upward at the same time.

• New wage level percentiles
  • Level I: from about the 17th to the 34th percentile.
  • Level II: from about the 34th to the 52nd percentile.
  • Level III: from the 50th to the 70th percentile.
  • Level IV: from the 67th to the 88th percentile.

• Note on Levels II and III: These two levels are still calculated arithmetically from Levels I and IV under INA section 212(p)(4) (the statutory formula divides the gap between I and IV into three equal steps to compute II and III).

• Entry-level and Early Career Roles: Sponsorship costs will rise because Level I moves to the 34th percentile, closer to today’s Level II territory.

• PERM Pipelines and H-1B Filings: Prospective application—PWDs pending on the final rule’s effective date, and all new LCAs or PWD requests after that date, would be priced at the new levels; already approved PERMs and LCAs remain unchanged.

• H-1B Lottery Odds and Pay: The DHS’s wage-weighted selection favors higher wage levels beginning with FY 2027, so compensation choices affect both eligibility strategy and selection probability.

Why This Matters

• Higher Wage Floors Across Programs: The proposal moves Level I through Level IV to the 34th, 52nd, 70th, and 88th percentiles, respectively, materially raising minimum pay obligations, especially for entry and early career roles.

• Interaction with Weighted H-1B Cap Selection: The DHS finalized a wage-weighted H-1B selection process effective for the FY 2027 season, reinforcing a shift toward higher-paid roles across sponsorship pipelines.

• Limited but Retained Flexibility: Private or alternative wage surveys remain available in monitored, limited circumstances for specialized markets.

• Near term Planning Window: The NPRM is prospective and would apply to prevailing wage determinations pending on the effective date and to new filings thereafter; it does not reopen certified PERMs or approved LCAs.

Key Risks for Employers

• Budget Shocks and Equity Pressure: Upward shifts at Levels I and II may necessitate compensation adjustments and internal equity reviews across similarly situated roles.

• Pipeline Timing: Pending PWDs and planned LCAs could fall under the new levels depending on the final rule’s effective date, affecting hiring start dates and offer validity.

• Survey Scrutiny: Greater monitoring of private wage surveys raises documentation and compliance risk if methodologies are weak or inconsistent.

• Lottery Competitiveness: With a wage-weighted H-1B selection in place, lower wage offers face diminished selection probabilities, especially at Level I.

Additional information

• Weighted H-1B Lottery: The DHS finalized a wage-weighted selection process that gives higher wage level registrations greater odds, effective February 27, 2026, for the FY 2027 cap season.

• Presidential Proclamation 10973 and Fee Mandate: The September 19, 2025, proclamation directed the DOL to revise H-1B wages and imposed a $100,000 payment requirement on new H-1B petitions, which federal agencies have implemented while related litigation proceeds.

• Prevailing Wage Background and Sources: The DOL’s Foreign Labor Certification page explains prevailing wage policy and OEWS data use; OEWS data and area delineations refresh annually on or about July 1st.

• Current Regulations: PERM prevailing wage rules at 20 CFR 656.40 and LCA wage requirements at 20 CFR 655.731 remain in force until a final rule takes effect.

Source Reference

• DOL Federal Register – Improving Wage Protections for the Temporary and Permanent Employment of Certain Foreign Nationals in the United States (March 27, 2026)
• DOL Press Release – proposed rule revising prevailing wage methodology for H-1B, PERM visa programs (March 26, 2026)

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