Another Hit Against the H-1B Program: DOL Proposes A 33% H-1B Wage Increase, Entry-Level Professions Are Affected The Most

On March 27, 2026, the Department of Labor published a proposed rule that would raise the minimum wages employers must pay H-1B workers, in some cases by more than a third (+33%). Entry-level positions, which make up the majority of H-1B filings, would see their wage floor jump from the 17th percentile of market wages to the 34th. In dollar terms, that is an increase from roughly $73,000 to nearly $98,000 for a typical Level I role.

This is not a minor compliance adjustment. If finalized, it would be the most significant overhaul of H-1B wage rules in decades and it lands on top of a $100,000 hiring fee (for non-visa holders), a revamped lottery that already favors higher-paid workers, and an immigration environment that has been tightening steadily since last fall. For foreign nationals building a career in the United States, the message embedded in this proposal is worth reading clearly.

What the Proposed Rule Actually Does

The H-1B system classifies positions into four wage levels, ranging from entry-level to fully competent. Each level is pegged to a percentile of Bureau of Labor Statistics wage data for a given occupation and geography. Employers must agree to pay at least the prevailing wage for their level before the DOL will certify their labor application.

The proposal moves all four levels significantly upward

• Level I (entry-level) rises from the 17th to the 34th percentile, a 33% increase in dollar terms.

• Level II moves from the 34th to the 52nd percentile.

• Level III from the 50th to the 70th.

• Level IV from the 67th to the 88th.

To put that in concrete terms: a software developer at Level I in Manhattan would see the minimum required wage jump from approximately $103,000 to $132,000. A financial manager at Level I in San Francisco would see the wage rise from $133,000 to $188,427.

The rule also applies to PERM labor certifications, the process employers use when sponsoring workers for EB-2 and EB-3 green cards. That is significant because more than 57% of PERM applications in FY2024 were filed on behalf of workers already on H-1B status. These two programs are deeply interconnected, and a wage floor increase in one effectively flows through to the other.

The public has 60 days to submit comments after the March 27 Federal Register publication. No final rule has been issued, and the proposal could be modified or challenged before it takes effect.

Why the Administration Says This Is Needed

DOL's justification rests on data showing a consistent gap between what H-1B employers are required to pay and what comparable U.S. workers actually earn. The agency analyzed more than three million labor condition applications from FY2020 through FY2025 and found that the average wage offered to H-1B workers was approximately $10,000 below the market average for equivalent roles. It also found that 63% of certified applications in FY2024 were filed at Level I or II, the two lowest wage tiers.

The administration's position is that the current system has allowed some employers to use the H-1B program to hire foreign talent at wages that undercut American workers in the same occupations. Whether or not you agree with that framing, the data underpinning the proposal is more detailed than most rule-making efforts, and it is structured to withstand legal challenges.

What This Means for Foreign Nationals on H-1B

For professionals already in H-1B status, this proposal is most immediately relevant if your employer sponsors you at Level I or II, the categories where the proposed increases are steepest. Higher wage floors mean higher sponsorship costs, on top of a $100,000 hiring fee and a lottery that already favors higher-paid positions.

For those earlier in their career like recent graduates, OPT workers, and early-stage professionals, the risk is more structural. Entry-level H-1B sponsorship is where the proposed increases are largest, and employers who were already hesitant about sponsoring junior international hires now face an even higher cost threshold. That does not mean sponsorship disappears, but it continues to narrow.

This is now the fourth major policy action targeting the H-1B program in less than a year, following the lottery restructuring, the $100,000 fee, and now this wage proposal. Each one individually is manageable for large, well-capitalized employers. Together, they represent a sustained narrowing of the path for anyone who depends on employer-sponsored immigration as their primary strategy.

Why This Points Back to EB-5

Every development in this space reinforces the same underlying reality: the H-1B pathway is becoming harder to access, more expensive for employers to maintain, and more dependent on conditions that are outside any individual applicant's control.

EB-5 does not change with each new DOL proposal. It is not affected by prevailing wage floors, lottery restructuring, or employer cost calculations. It is a pathway to permanent residence that you initiate, fund, and control, independent of what any employer decides about their international hiring budget.

For professionals watching these developments accumulate, EB-5 is worth understanding not as a backup plan but as a parallel one. The H-1B and EB-5 can be pursued simultaneously. A pending EB-5 petition does not affect your H-1B status or your employer's ability to renew it. What it does is give you a path forward that does not depend on your employer absorbing yet another cost increase on top of everything else they are already navigating.

Questions Worth Asking Now

Does this proposed rule affect my current H-1B status?

No.

The rule applies only to new labor condition applications and prevailing wage determination requests filed after the effective date. Existing approvals are not affected. But if your employer plans to file a new LCA for a renewal, an amendment, or a new position, the new wage floor would apply.

Does this affect EB-2 and EB-3 green card sponsorship?

Yes.

The proposed rule extends the same wage level changes to PERM labor certifications, which are the foundation of most EB-2 and EB-3 employer-sponsored green card applications. For Indian nationals already facing decade-long backlogs in those categories, higher PERM wage requirements add another layer of complexity to an already difficult path.

The Pressure on H-1B Is Rising. Act Now While EB-5 Is Still Available

The proposed wage rule is not final. But it is the fourth major restriction on H-1B in under a year, and the pattern speaks for itself.

Meanwhile, the EB-5 window is also narrowing, just from a different direction. Investment minimums are projected to rise in January 2027. Also, the September 2026 grandfathering deadline under the EB-5 Reform and Integrity Act means investors who act before that date can lock in current program terms before any future legislative changes take effect. For investors seriously considering EB-5, the time to evaluate is now while the options are still fully open.

Because your Green Card Shouldn't Take a Lifetime.