Your H-1B Extension Could Get Much More Expensive Under New US Wage Laws

The U.S. Department of Labor (DOL) has officially proposed a transformative rule that would significantly raise the minimum salary requirements for H-1B, H-1B1, E-3, and PERM (employment-based green card) programs. 

Released on March 26, 2026, the rule—titled “Improving Wage Protections for the Temporary and Permanent Employment of Certain Foreign Nationals in the United States”—aims to align foreign worker pay with actual market rates and prevent the displacement of American workers by “lower-cost” labor.

Redefining the Four-Tier Wage System

At the heart of the proposal is a drastic upward shift in the four-level “prevailing wage” structure. 

Currently, entry-level (Level I) wages are set at the 17th percentile of the average salary for a specific occupation and geographic area. 

Under the new rule, this floor would jump to the 34th percentile, effectively making today’s mid-level wage the new entry-level minimum.

The proposed changes across all levels are:

• Level I (Entry): 17th → 34th percentile
• Level II: 34th → 52nd percentile
• Level III: 50th → 70th percentile
• Level IV (Highest): 67th → 88th percentile

The DOL estimates these adjustments will increase the average certified wage for a foreign professional by approximately $14,000 per year.

Read Also: Meta Layoffs 2026: 700 Jobs Cut as Zuckerberg Pivots Harder Toward AI

H-1B Visa Applicants: Strategic Impact on the 2026 Cap Season

This wage hike coincides with a new wage-weighted lottery system implemented for the FY 2027 cap season. 

Instead of a random draw, USCIS is now prioritizing registrations based on their offered wage level. 

Combined with a $100,000 supplemental fee for certain overseas petitions, the H-1B pathway is rapidly evolving from a “lottery of chance” into a “lottery of skill and salary.”

Industry analysts predict that these measures will sharply reduce the number of entry-level H-1B registrations, as companies shift their focus toward hiring more senior, high-revenue-generating talent. 

Indian IT firms historically rely on the H-1B program for cost-effective talent deployment.

The $6.6 billion in estimated annual “wage transfers” from employers to workers now presents a significant challenge to their traditional business models.

Next Steps and Implementation

The proposed rule is now open for a 60-day public comment period, ending on May 26, 2026. 

If finalized, the new wage floors will apply prospectively to all new Labor Condition Applications (LCAs) and Prevailing Wage Determinations (PWDs). 

Current visa holders will not be impacted until their next renewal or transfer filing.

Note: We are also on WhatsApp, LinkedIn, and YouTube to get the latest news updates. Subscribe to our Channels. WhatsApp– Click Here, YouTube – Click Here, and LinkedIn– Click Here.