What Employers Must Know About DOL’s Prevailing Wage Increases
The Department of Labor has proposed raising the minimum wage employers must pay foreign workers sponsored through the H-1B, H-1B1, E-3, and PERM programs by 20% to 33%.
That means if you have five software developers working on the H-1B visa in New York, the proposed rule could add nearly $100,000 to your annual payroll—potentially before the end of this year.
That’s not an edge case, either. 88% of companies filing software developer roles at Level II are currently paying below what the proposed rule would require.
For companies that depend on foreign talent to stay competitive, this is not a compliance update to hand off to HR. It’s a workforce cost event with real consequences for your current employees, your open roles, and the PERM cases that will retain the people keeping your business running.
Table of contents:
- The Department of Labor’s new proposed rule, explained
- Level II roles in tech, data, and engineering are likely to be most impacted
- 3 examples of how the prevailing wage rule could impact employer costs
- Key milestones to watch as the proposed rule moves forward
- Looking forward: what employers need to do right now
- Methodology
- Glossary of terms
The Department of Labor’s new proposed rule, explained
The Department of Labor (DOL) has proposed raising the minimum required pay for foreign workers by 20% to 33%. This would impact employees sponsored through the H-1B, H-1B1, E-3, and PERM programs.
If finalized, the rule would apply to any new or pending labor condition applications (LCAs) and prevailing wage determinations filed on or after the effective date. That means H-1B extensions, transfers, and PERM Green Card cases already in motion could all be affected.
By law, new rules like this have to move through a federal rulemaking process before they take effect. That can sound slow and bureaucratic, but it isn’t always. Another major policy change last year, the H-1B wage-weighted lottery rule, went from proposed to fully in effect in 156 days.
“Don’t count on this being a 2027 problem,” says former immigration judge Mimi Tsankov. “The rule could be finalized by late summer.”
➡️ Want to dive deeper? Get our employer playbook below, which goes in depth on the 3 actions HR teams and global mobility managers need to do now to prepare for prevailing wage increases.
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Level II roles in tech, data, and engineering are likely to be most impacted
To understand which employees’ wages may be the most impacted by the new rule, we worked with Manifest immigration attorneys Nicole Gunara, Nandini Nair, and Ana Gabriela Urizar to analyze DOL LCA disclosure data from FY2025. We mapped current offered wages against the proposed new floors for the 15 highest-volume H-1B occupations.
The “% below new floor” reflects actual LCA filings compared against location-specific proposed floors. The “% below new floor” reflects actual LCA filings compared against estimated proposed floors. A 90% figure means 90% of companies filing that role at Level II would need to raise wages to comply.
| Role | H-1B positions (Level II) | % below new floor | Estimated avg. gap |
| Computer Systems Analysts | 7,784 | 91.9% | $18,616 |
| Computer Systems Engineers / Architects | 18,854 | 90.9% | $17,403 |
| Network and Computer Systems Administrators | 3,883 | 89.8% | $17,020 |
| Software Developers | 107,788 | 88.2% | $19,382 |
| Computer Programmers | 11,477 | 87.4% | $16,986 |
| Computer and Information Systems Managers | 8,306 | 86.5% | $25,009 |
| Business Intelligence Analysts | 7,306 | 86.2% | $14,688 |
| Software QA Analysts and Testers | 12,935 | 85.3% | $15,837 |
| Mechanical Engineers | 3,396 | 85.2% | $14,596 |
| Data Scientists | 11,191 | 79.2% | $14,233 |
| Accountants and Auditors | 4,573 | 72.3% | $9,067 |
| Computer and Information Research Scientists | 3,227 | 68.7% | $19,221 |
| Operations Research Analysts | 3,927 | 63.0% | $7,835 |
| Database Administrators | 4,438 | 60.7% | $10,955 |
| Management Analysts | 5,174 | 46.3% | $12,685 |
Source: Analysis of DOL LCA Disclosure Data FY2025 and NPRM ETA-2026-0001 (91 FR 15454). Read our full methodology here.
4 examples of how the prevailing wage rule could impact employer costs
“The proposed rule doesn’t apply an across-the-board increase,” said Nair. “The DOL has proposed different percentage increases depending on where a role falls in the four-tier wage system. In general, lower levels face larger increases.”
To put real numbers behind the rule, we pulled current prevailing wage floors directly from the OFLC wage search tool for three common H-1B profiles. We then applied the DOL’s own proposed percentage increases by wage level to estimate where each floor would land.
| The OFLC wage search tool is a free, publicly available database run by the Department of Labor. It shows the current minimum wage an employer must pay for a specific job in a specific location. You can look up any role by SOC code and metro area. |
The result is a look at what the rule could mean for a mid-sized employer across three different industries, cities, and wage tiers:
A mid-market tech firm in New York employs a Computer Programmer at Level II.
- Current prevailing wage floor: $98,301
- Estimated floor under the proposed rule: $122,000
- Gap: ~$24,000 per worker per year
- Note: Across five workers in that role, the gap grows to $120,000 in annual payroll.
A healthcare company in Chicago employs a QA Analyst at Level III.
- Current prevailing wage floor: $104,728
- Estimated floor under the proposed rule: $127,000
- Gap: ~$22,000 per worker per year
- Note: 84% of Level III QA filings nationwide in fiscal year 2025 were below where the new floor would land.
An engineering firm in Houston employs a Mechanical Engineer at Level IV.
- Current prevailing wage floor: $155,210
- Estimated floor under the proposed rule: $189,000
- Gap: ~$34,000 per worker per year
- Note: Level IV is already the top of the wage scale. Yet for mechanical engineers, 82% of Level IV filings nationwide are below the new floor.
A fintech startup in Raleigh employs a Software Developer at Level I.
- Current prevailing wage floor: $91,707
- Estimated floor under the proposed rule: $122,000
- Gap: ~$30,000 per worker per year
- Note: Level I filings face the biggest gaps, with an average increase of 33%.
Note: Proposed floors are estimates based on the DOL’s analysis of average wage increases by level. Actual floors will vary by location and will be confirmed following finalization of the rule. Current floors sourced from OFLC Wage Search 7/2025 to 6/2026 data.
Key milestones to watch as the proposed rule moves forward
“Proposed rules in the immigration space have recently been finalized very close to the way they were proposed,” says Michael Valverde, a former USCIS official with 28 years of experience, including a decade of field operations leadership. “Employers who are expecting this rule to be significantly scaled back or dismissed entirely are making a risky assumption. The direction is set. The final rule may look different cosmetically, but the core of what’s being proposed likely will become the rule.”
As the rule moves forward, here are the milestones every employer should have on their radar.
Now to May 26: Public comment period
If your organization will be affected by the proposed wage increases, submitting a comment creates an official record of the economic impact, which industry groups and courts can later use to challenge the rule if it failed to adequately address the evidence. Anyone can submit comments at regulations.gov (Docket No. ETA-2026-0001).
Major industry groups—tech, healthcare, higher education—are expected to submit detailed comments before the deadline. Their arguments could influence what the final rule looks like; our team at Manifest Law will be closely reviewing the comments as they come in to see what they tell us about how the final rule could shake out.
June: Comment review period
After the comment period closes, the DOL review process is not public. The agency deliberates internally, considers the comments it received, and may revise the rule. But the public’s next view of it is the final version published in the Federal Register.
Late summer: Final rule published
The rule becomes official when published in the Federal Register. Rules like this one typically take effect 30 to 60 days after publication.
Fall 2026: If finalized, rule takes effect
Based on the timeline of comparable rules—the wage-weighted lottery rule moved from proposal to effective in about six months—the prevailing wage rule could take effect by fall 2026.
Once the rule takes effect, any LCA or prevailing wage determination filed on or after that date will be subject to the new, higher floors. Existing approved LCAs, prevailing wage determinations, and PERM labor certifications would not be affected by the rule.
Looking forward: what employers need to do right now
Historical data shows 83% of H-1B petitions concentrated in Levels I and II under the current rules. Those are the roles the proposed wage floors hit the hardest. A company that files mostly at Level I and II is now facing higher wages and lower odds of selection at the same time.
“I’m advising all of our clients to pull a full report of every expiring visa right now, looking at least 180 days out,” said Nandini Nair, a Manifest attorney with nearly 30 years of experience in business immigration. “Get those LCAs filed and certified before July 1. That’s a conservative buffer that gives you protection even if the rule moves faster than expected. Anything filed and approved before the rule takes effect is protected under today’s wage floors.”
The same logic applies to PERM Green Card cases. For employees already in the pipeline, or who you’re planning to file for soon, locking in a prevailing wage determination now is one of the most concrete cost-containment moves available to you. The rest of the Green Card process can take years, but this step doesn’t have to wait.
“The talent is still needed,” said Nicole Gunara, Principal Immigration Attorney at Manifest Law. “In the long run, the US is not producing enough workers with the right skillset in STEM and AI to meet demand. The semiconductor industry is a key example of this. Instead of seeing this proposed rule as an obstacle, companies with a strategic plan now have an opportunity to build a pipeline before other employers.”
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Methodology
Data source: DOL LCA Disclosure Data, full fiscal year 2025.
Role selection: We identified the 15 occupations with the highest number of H-1B Level II filings in FY2025. All figures in the table reflect Level II only, sorted by % below the proposed new floor, descending.
Proposed floor estimation: The NPRM does not publish new dollar-denominated wage floors directly. OFLC has not yet released updated wage tables under the proposed methodology. To estimate where the new floors would land, we applied the DOL’s own expected average percentage increases by wage level to the prevailing wage of each individual application as determined by the DOL in the LCA filing data:
- Level I: +33.4%
- Level II: +24.5%
- Level III: +20.8%
- Level IV: +21.7%
These figures come directly from Exhibit 5 of the NPRM (91 FR 15485, March 27, 2026), which presents a comparison of old and new prevailing wage levels by wage tier alongside percentage increases over the old prevailing wage.
% below new floor: The share of actual Level II LCA filings for each occupation where the offered wage falls below the estimated proposed floor for that role.
Avg gap: The average dollar difference between the offered wage and the estimated proposed floor, calculated only among filings that fall below the floor.
Glossary of terms
Federal Register — the official U.S. government journal where proposed and final rules are published
H-1B cap — the annual limit of 85,000 new H-1B visas available each year, subject to the lottery
Labor Condition Application (LCA) — the DOL filing an employer must submit before sponsoring an H-1B worker; certifies the employer will pay at least the prevailing wage
LCA disclosure data — public records the DOL releases showing all certified LCA filings, including offered wages, wage levels, SOC codes, and locations; the source of the analysis in this piece
NPWC (National Prevailing Wage Center) — the DOL office that issues prevailing wage determinations
NPRM (Notice of Proposed Rulemaking) — the formal document the government publishes when proposing a new rule; opens the public comment period
OEWS (Occupational Employment and Wage Statistics) — the federal wage survey, run by the Bureau of Labor Statistics, that the DOL uses to set prevailing wage floors
PERM (Permanent Labor Certification) — the DOL process required for most employment-based green cards; also subject to prevailing wage requirements
Prevailing wage — the minimum an employer must pay a foreign worker to sponsor them for a visa, set by the DOL using federal wage data
Prevailing wage determination (PWD) — a formal ruling from the DOL’s National Prevailing Wage Center on what the prevailing wage is for a specific role and location; provides “safe harbor” protection
Request for Evidence (RFE) — a USCIS notice asking an employer to provide additional documentation to support an H-1B petition; more likely when wage level and job description are misaligned
SOC code — the Standard Occupational Classification code assigned to a job; determines which wage floor applies on the LCA
Wage level (I–IV) — the four-tier system that ranks roles from entry-level (Level I) to fully competent (Level IV) based on experience, education, and supervision
Wage-weighted lottery — the H-1B selection system effective February 27, 2026, which gives higher-wage registrations more lottery entries
Frequently asked questions about the DOL’s prevailing wage increases
How much will the DOL’s prevailing rule raise H-1B sponsorship costs?
The proposed rule raises the minimum wage employers must pay H-1B, H-1B1, E-3, and PERM workers by 20% to 33%, depending on wage level. For the most common H-1B positions, that adds roughly $8,000 to $25,000 per worker per year.
Which H-1B wage level faces the biggest increase under the proposed rule?
Level I faces the largest jump: a 33.4% increase. Level II rises 24.5%, Level III rises 20.8%, and Level IV rises 21.7%. Because most H-1B petitions historically fall in Levels I and II, the lower tiers will absorb most of the cost.
When will the DOL prevailing wage rule take effect?
The rule could take effect as soon as fall 2026, following a public comment period that closes in early summer. While we don’t have an official timeline, a comparable rule—the H-1B wage-weighted lottery—moved from proposed to effect in 156 days.
What immigration filings should companies prioritize before the prevailing wage rule takes effect?
It depends on your workforce, but three groups warrant the closest look:
- H-1B extensions and amendments for employees expiring in the next 6 to 12 months
- Pending PERM cases
- Roles you plan to convert from another visa category soon
PERM filings need extra scrutiny. The wage you commit to is a legally binding promise, and your obligation to demonstrate ability to pay begins on the filing date, not when the Green Card is approved.
Does the proposed prevailing wage rule apply to H-1B extensions, transfers, and pending PERM cases?
Yes, it applies to any prevailing wage determination filed on or after the effective date. That includes H-1B extensions, H-1B transfers, and PERM cases. Cases with an approved PWD are not affected.
How does the DOL prevailing wage proposed rule affect EB-2 and EB-3 Green Card sponsorship?
Every employment-based Green Card filed through PERM requires a prevailing wage determination, so EB-2 and EB-3 cases are directly affected by the proposed rule unless they have a PWD issued before the effective date.
Can the proposed prevailing wage rule be blocked or delayed in court?
Legal challenges are likely, but employers shouldn’t assume they’ll succeed. A 2020 version of a similar wage rule was vacated on procedural grounds. It was rushed out at the end of an administration and never revived by the Biden administration.
What can employers do to reduce H-1B costs under the new prevailing wage rule?
The highest-leverage move is filing fresh LCAs before the rule takes effect. Each LCA locks in the prevailing wage on the date of filing for up to three years. The companies that audit their renewal pipeline now can control their wage standard for the next three years.
