Immigration

United States | US Dept. of Labor proposes new method for calculating prevailing wages for H-1B, H-1B1, E-3 and PERM

Summary

On March 27, 2026 the US Department of Labor (DOL) published in the Federal Register a Notice of Proposed Rulemaking (NPRM) titled, “Improving Wage Protections for the Temporary and Permanent Employment of Certain Foreign Nationals in the United States” to solicit comments and public input regarding its proposal to change the way prevailing wage levels are calculated.

The detail

The DOL’s Bureau of Labor Statistics administers Occupational Employment and Wage Statistics (OEWS) wage surveys on an annual basis to compute wage levels under a four-tiered prevailing wage structure. The four tiers include Level 1 (Entry); Level 2 (Qualified); Level 3 (Experienced); and, Level 4 (Fully Competent). Prevailing wages for any given occupation in a specific area of intended employment are then published at these four levels on July 1st of each year.

The DOL proposes to adjust this prevailing wage system and effectively adjust and raise the four prevailing wage levels for temporary and permanent visa-based programs.  The DOL proposal to adjust the prevailing wage level calculation will ultimately require employers to pay significantly higher wages to foreign workers in certain nonimmigrant visa categories.  These include

• H-1B (Specialty Occupation)
• H-1B1 (Chile/Singapore)
• E-3 (Australian) and
• Immigrant visa categories, such as EB-2 or EB-3 filed under the Permanent Labor Certification (PERM) program.

Under the DOL’s proposed methodology, wage percentiles used to calculate each of the four different prevailing wage levels will be increased as follows:

• Level 1 (Entry) will be raised from 17th percentile to 34th percentile;
• Level 2 (Qualified) will be raised from 34th percentile to 52nd percentile;
• Level 3 (Experienced) will be raised from 50th percentile to 70th percentile; and,
• Level 4 (Fully Competent) will be raised from 67th percentile to 88th percentile.

As noted by the DOL, the policy behind the NPRM is to:

• Better align prevailing wage levels with the wages paid to US workers who are similarly employed in the occupation and area of intended employment
• Strengthen program integrity by reducing the incentive for employers to use these programs to replace, rather than supplement, US workers by employing lower-paid alien workers
• Enable the Department to more effectively ensure that the employment of immigrant and nonimmigrant workers admitted or otherwise provided one of the covered statuses does not adversely affect the wages and working conditions of US workers.

Additionally, the NPRM would permit employers to continue using private wage surveys and other alternative wage survey data as an alternative to the four-tier OESW survey data in limited circumstances preserving employer flexibility while mitigating potential adverse impacts on businesses in specialized labor markets or having legitimate reliance interests.

What to expect

The DOL is currently seeking written comments for a 60 day period on this NPRM. Following the comment period, the DOL will be required to review and respond to public feedback prior to issuing and implementing a Final Rule. Vialto will continue to monitor the DOL’s NPRM and will provide further updates once they are available.

Contact us

For a deeper discussion on the above, please reach out to your Vialto Partners point of contact, or alternatively:

Manish Daftari
Partner

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