DOL Proposed Rule Seeks Higher Prevailing Wages Levels for Foreign Workers

The U.S. Department of Labor is scheduled to issue a proposed rule that would increase and re-adjust the “prevailing wage” levels for key employment-based immigration sponsorship programs. The prevailing wage rate refers to the average salary paid to workers in similar positions within a designated occupation in the area of intended employment. Employers must adhere to this prevailing wage as a minimum requirement for specific employment-based visa programs, including the H-1B, H-1B1, and E-3 programs. 

The proposed rule seeks to recalibrate the wage levels to ensure that foreign workers are compensated at levels comparable to similarly employed U.S. workers and to reduce incentives for employers to substitute domestic labor with lower-paid foreign workers. The proposal applies consistently across both employment visa programs (such as H-1B, H-1B1, and E-3) and permanent immigration pathways such as PERM labor certification for EB-2 and EB-3 visas. The proposal maintains a unified four-tier wage structure to prevent employers from selecting visa categories based on lower-wage requirements.

The main element of the proposal reflects a notable increase in wage-level percentiles derived from the Occupational Employment and Wage Statistics (OEWS) survey,¹ where entry-level wages would increase from approximately the 17th percentile to the 34th percentile, while the highest wage tier would rise from the 67th to the 88th percentile. The intermediate levels are adjusted accordingly based on statutory formulas. According to the DOL (as cited in the proposed rule), the current wage levels in the OEWS are too low, particularly for H-1B workers, whose average wages are significantly lower as compared to similarly situated U.S. workers. Aside from the wage levels, the rule also highlights other topics including wage suppression, the concentration of visa usage among outsourcing firms, etc. 

The implementation of the rule would be prospective, affecting only new or pending wage determinations and labor condition applications that are pending with the Department of Labor’s Office of Foreign Labor Certifications’ National Processing Centers as of the rule’s effective date and to new Labor Condition Applications and Prevailing wage Requests submitted on or after that date without retroactive adjustments to those previously approved. It is expected that it will increase labor cost for many U.S. employers. 

The DOL will accept public comments on this proposal for 60 days following publication in the Federal Register, which is scheduled for March 27, 2025. The comment submission deadline will therefore likely be late May. It is anticipated the effective date will be addressed in the final rule. 

Littler will keep track of the progress of this proposed rule and provide additional updates as they become available.