DOL Targets Prevailing Wages: Sweeping Increases Proposed for H-1B, H-1B1, E-3 and PERM

The U.S. Department of Labor (DOL) has issued a Notice of Proposed Rulemaking (NPRM) that would significantly raise prevailing wage levels under the H‑1B, H‑1B1, E‑3 and Program Electronic Review Management (PERM) programs. If finalized, the proposal would increase minimum wage requirements for many foreign national workers and substantially raise sponsorship costs for employers. The DOL will accept public comments through May 26, 2026.

Background

By way of background, the DOL currently determines prevailing wages using the Bureau of Labor Statistics' Occupational Employment and Wage Statistics (OEWS) survey, which divides wages into four tiers reflecting increasing skill and experience. For more than 20 years, these wage levels have been set at approximately the 17th, 34th, 50th and 67th percentiles of OEWS data.

The NPRM follows a September 19, 2025, presidential proclamation directing the DOL to revise H‑1B wage levels amid concerns that the program has been used to undercut U.S. workers. The proposal closely mirrors a wage rule issued at the end of the first Trump Administration that was ultimately blocked by litigation and never implemented.

Proposed Wage Increases

The DOL proposes raising prevailing wage floors across all four levels, as outlined below. Notably, the proposed Level I minimum would equal today's Level II wage, effectively collapsing the current entry‑level wage distinction.

Programs Affected

Although the presidential proclamation referenced only H‑1B workers, the DOL proposes applying the revised methodology uniformly to the H‑1B, H‑1B1, E‑3 and PERM programs, all of which rely on the same four‑tier OEWS wage structure. The DOL emphasized the need for consistency, noting that more than half of fiscal year (FY) 2024 PERM applications involved workers already in H‑1B status.

Applicability

The proposed rule would apply prospectively only, covering prevailing wage requests 1) pending on the effective date and 2) new prevailing wage requests and labor condition applications (LCAs) filed on or after the effective date where OEWS data is used.

Previously approved prevailing wage determinations, LCAs and PERM applications would not be reopened. However, extensions of H‑1B, H‑1B1 and E‑3 status may be affected if based on LCAs filed after the rule's effective date. Employers would still be permitted to rely on private wage surveys.

Key Takeaways for Employers

If finalized, the rule would materially increase labor costs for employers sponsoring foreign national workers, particularly those relying on Level I and Level II wages. The DOL estimates that more than 75 percent of LCA positions certified between FY 2020 and FY 2024 would fall below the proposed new wage floors.

The proposal follows other recent policy initiatives favoring higher wages for H‑1B workers, including a new $100,000 fee for certain petitions and a weighted cap selection process favoring higher‑paid beneficiaries.

Holland & Knight Can Help

If you have questions about the NPRM or its potential impacts on visas, please contact the authors or a member of Holland & Knight's Immigration, Nationality and Consular Team.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.