DOL Proposes Significant Increase to Prevailing Wage Levels—What Employers Need to Know
The U.S. Department of Labor (DOL) has issued a proposed rule that would significantly increase required wage levels for employers sponsoring foreign nationals under H-1B, H-1B1, E-3, and PERM programs.
Prevailing Wage Levels: What Is Changing (and What Is Not)
The proposal does not change the underlying wage data (OEWS/BLS), which reflects actual wages paid to U.S. workers. Instead, DOL proposes to redefine how wage levels are assigned within that data—a change that would raise required wages across all levels.
Current vs. Proposed Wage Levels:
| Wage Level | Current Percentile | Proposed Percentile |
|---|---|---|
| Level I (Entry) | ~17th | ~34th |
| Level II | ~34th | ~52nd |
| Level III | ~50th | ~70th |
| Level IV | ~67th | ~88th |
Why This Matters for Employers
In typical employer compensation structures:
- Entry-level roles are paid in the lower portion of the market;
- Mid-level roles cluster around the market median;
- Senior roles reach into the upper percentiles.
This progression reflects how wages increase with experience. As the U.S. Bureau of Labor Statistics notes: “Someone new to the field may expect wages near the 10th or 25th percentile, whereas those with more experience and education could expect wages near the 75th or 90th percentile.”
The proposed rule shifts all wage levels upward within the same dataset. As a result:
- Entry-level roles would be priced closer to experienced workers;
- Mid-level roles would be pushed to at or above median wages;
- Senior roles would be driven toward the top of the market.
This represents a policy-driven recalibration, not a change in underlying wage data—and may result in required wages that exceed how similarly experienced U.S. workers are typically compensated.
What This Means in Practice
If implemented, the rule would likely:
- Increase required wages across all levels, including for early-career roles;
- Limit flexibility in assigning positions to lower wage levels;
- Require employers to pay wages that may exceed those paid to similarly situated U.S. workers with comparable experience.
What This Means for Employers
If implemented, the rule would likely:
- Increase required wages across all levels, including for early-career roles;
- Limit flexibility to assign positions to lower wage levels;
- Require wages that may exceed what similarly situated U.S. workers with comparable experience are paid in the market.
This is not a correction of flawed wage data. The same government survey data remains in place. Instead, DOL is redefining where within that data each wage level sits, effectively raising the wage floor.
How DOL Justifies the Change
DOL indicates that current wage levels—particularly Level I—may be set too low relative to the skill level required for sponsored positions. By shifting wage levels upward, DOL aims to better align required wages with its interpretation of similarly employed U.S. workers.
From an employer perspective, however, this approach may redefine “market wages” upward, rather than reflect how entry-level workers are actually compensated.
Context: Similar Rule Previously Blocked
DOL attempted a similar restructuring in October 2020, significantly increasing wage level percentiles. That rule was blocked by federal courts and later withdrawn, primarily because it was issued without proper notice-and-comment rulemaking.
The current proposal revisits those same concepts through the formal regulatory process.
The proposed rule is currently in the public comment period, expected to close on or about May 26, 2026. The DOL must review all comments before issuing a final rule, which could occur as early as 30 days after the comment period ends. The timing suggests DOL may aim to implement the change alongside the release of the new prevailing wage survey on June 30, 2026.
What Employers Should Do Now
- Identify cases relying on Level I or Level II wages;
- Evaluate timing for PERM and H-1B filings;
- Assess potential increases in compensation requirements;
- Monitor developments closely—this remains a proposed rule and may change.
Bottom Line
The proposal does not change the wage data—it changes how that data is applied. The result is likely a significant upward shift in required wages, particularly for entry-level roles, with direct implications for hiring strategy and program viability.