On March 26, 2026, the U.S. Department of Labor (DOL) issued a Notice of Proposed Rulemaking (NPRM) that would significantly increase prevailing wage requirements across key employment‑based immigration programs, including H‑1B, H‑1B1, E‑3, and the PERM labor certification process for EB‑2 and EB‑3 green card sponsorships. If finalized as proposed, the rule would meaningfully raise minimum wage obligations for employers sponsoring foreign national workers and could materially impact workforce planning and immigration budgets. [dol.gov], [public-ins…gister.gov]
What Is Changing Under the Proposed Rule?
DOL is proposing to revise how it calculates the four‑tier prevailing wage structure derived from the Bureau of Labor Statistics’ Occupational Employment and Wage Statistics (OEWS) data. While the four wage levels would remain, each level would shift upward across the wage distribution:
- Level I (Entry Level): from approximately the 17th percentile to the 34th percentile
- Level II: from approximately the 34th percentile to the 52nd percentile
- Level III: from approximately the 50th percentile to the 70th percentile
- Level IV: from approximately the 67th percentile to the 88th percentile
The “percentiles” referenced in the Department of Labor’s proposed rule describe where a required wage falls within the wage distribution for a specific occupation and geographic area, based on data from the Bureau of Labor Statistics’ Occupational Employment and Wage Statistics (OEWS) survey. Put simply, a percentile tells you what portion of workers earn less than that wage—and what portion earn more.
A Simple Example:
Imagine lining up 100 workers in the same occupation, in the same labor market, from the lowest‑paid to the highest‑paid:
- A wage at the 34th percentile means the worker earns more than 34 out of 100 workers, and less than 66.
- A wage at the 52nd percentile means the worker earns more than about half of similarly employed workers in the same occupation and geographic area, and less than about half – placing the wage slightly above the median for that role.
DOL’s stated goal is to better align prevailing wage determinations with wages actually paid to similarly employed U.S. workers and to deter the use of lower‑paid foreign labor in place of the domestic workforce.
Programs Affected
The proposed wage methodology would apply uniformly across:
- H‑1B specialty occupation petitions
- H‑1B1 (Chile and Singapore)
- E‑3 (Australia)
- PERM labor certifications for EB‑2 and EB‑3 green card sponsorship
Importantly, the mean wage itself is not changing under the proposed rule. Each year, the Bureau of Labor Statistics (BLS) provides the Office of Foreign Labor Certification (OFLC) with the mean wage for each occupation and geographic area, typically in May. OFLC then uses that mean wage to establish the four prevailing wage levels by applying set percentile formulas and releases the updated prevailing wage levels effective July 1 of each year.
What DOL is proposing to change is not the underlying data, but how that mean wage is segmented into the four wage levels. Specifically, OFLC intends to revise the percentile thresholds used to determine Levels I through IV, which would result in higher required wages at each level.
These proposed changes do not affect H‑2B prevailing wage determinations, because H‑2B wages are based directly on the mean wage, rather than the four‑level prevailing wage structure used for H‑1B and PERM cases.
DOL emphasized that a unified approach across temporary and permanent programs is necessary to prevent “program shopping” and to ensure consistency for workers who often transition from H‑1B status to permanent residence.
Potential Impact on Employers
If implemented, the proposal would result in significant wage increases, particularly for positions traditionally classified at Level I and Level II. DOL estimates that average certified wages could increase by approximately $14,000 per worker per year, though the actual impact will vary widely by occupation, location, and wage level.
Employers in highly regulated and mission‑critical sectors—such as utilities, healthcare systems, universities, research institutions, and public employers—may feel the effects of these proposed changes most acutely, as many rely on early‑career professionals and specialized talent pipelines supported through H‑1B and PERM sponsorship. However, positions that are covered by a Collective Bargaining Agreement (CBA) would generally not be impacted, as the CBA wage continues to serve as the required prevailing wage for those roles.
What This Means for Workforce Planning and Compliance
Although the rule is not yet final, employers should begin assessing how the proposed changes could affect:
- Future H‑1B filings, including cap and cap‑exempt cases
- Ongoing and planned PERM sponsorships, particularly where recruitment budgets and offered wages were calibrated under current wage levels
- Internal pay equity and compliance audits, as higher prevailing wages may expose previously compliant positions to wage gaps
- Budget forecasting and long‑term retention strategies, especially where immigration sponsorship is tied to workforce stability
Importantly, DOL has indicated that employers may continue to use alternative wage surveys, which may provide some mitigation in specialized labor markets. However, such surveys must continue to meet stringent regulatory requirements.
Timing and Next Steps
The NPRM will be formally published in the Federal Register on March 27, 2026, triggering a 60‑day public comment period. Following that period, DOL will review comments and determine whether to finalize, modify, or withdraw the proposal. Any final rule would likely face implementation delays and potential legal challenges, similar to prior prevailing wage rules issued during earlier administrations.
How Harris Beach Murtha Can Help
Harris Beach Murtha’s Immigration Practice Group is actively reviewing the proposed rule and advising employers on risk mitigation, compliance readiness, and strategic workforce planning in light of these potential changes. We assist clients in modeling wage impacts, evaluating alternative wage data, and developing sponsorship strategies that balance regulatory compliance with operational needs.
If you have questions or concerns about how this policy may impact your business, please contact attorney L.J. D’Arrigo at (518) 701-2770 and ldarrigo@harrisbeachmurtha.com or the Harris Beach Murtha attorney with whom you most frequently work.
This alert is not a substitute for advice of counsel on specific legal issues.
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