US proposes wage increase for H-1B, H-1B1 and E-3 visas

The Trump administration is proposing a new rule that will make it more expensive to hire H-1B visa holders and sponsor employment-based immigrants by significantly increasing the required prevailing wages. According to the US Department of Labor (DOL), the proposed rule aims to raise the required minimum salaries by 21% to 33%, depending on a worker’s experience level. The rule has a 60-day comment period. “DOL is proposing to amend its regulations governing the PERM program and Labor Condition Applications (LCAs) to incorporate changes to the computation of wage levels under the Department’s four-tiered prevailing wage structure based on the Occupational Employment and Wage Statistics (OEWS) wage survey administered by the Department’s Bureau of Labor Statistics (BLS).

These proposed revisions aim to better align prevailing wage levels with the wages paid to U.S. workers who are similarly employed in the occupation and area of intended employment,” says DOL’s page seeking comments. “The H‑1B, H‑1B1, and E‑3 programs are temporary nonimmigrant classifications that generally allow U.S. employers to hire alien workers in “specialty occupations, generally defined as those jobs which require the theoretical and practical application of highly specialized knowledge and at least a bachelor’s degree or its equivalent,” says DOL while describing these visa programmes.

US Department of Labor’s statement on proposed rule

The U.S. Department of Labor’s Employment and Training Administration today issued a proposed rule designed to protect the wages and job opportunities of American workers by stripping away the ability of employers to pay substandard wages to foreign workers in certain visa programs. The rule is similar to a final rule published in January 2021 that did not take effect due to a change in presidential administrations. An October 2020 rule would have raised the required minimum salary higher, but it was blocked because judges found it was published as an “interim final” rule without adequate justification.The proposed rule would modernize the existing methodology for determining prevailing wage levels in the permanent labor certification, H-1B, H-1B1, and E-3 visa programs. The updated methodology would use statistically grounded percentile thresholds derived from the Bureau of Labor Statistics’ Occupational Employment and Wage Statistics survey to bring the wages paid to foreign workers in line with wages paid to similarly employed American workers. This much-needed change aims to curb abuse of certain visa programs by reducing the incentive to displace American workers with low-wage foreign visa holders and establishing parity between the wages paid to U.S. workers and foreign workers entering the country on certain employment-based visas.Existing prevailing wage levels have, for too long, been set dramatically below the market rates which many American workers receive, particularly entry-level Americans and recent college graduates in science, technology, engineering, and math fields. Because of this, the H-1B program has been distorted by hiring practices that abuse the program to replace their existing American workforce with cheap foreign labor. “The Trump Administration is committed to ensuring that American workers are not disadvantaged by unfair wage practices,” said U.S. Secretary of Labor Lori Chavez-DeRemer. “This proposed rule will help ensure that employers pay foreign workers wages that reflect the real market value of their labor, in addition to protecting the wages and job opportunities of American workers. The continued abuse of the H-1B program by certain bad actors will no longer be tolerated.”Under current law, U.S. employers seeking to hire temporary foreign workers through the H-1B, H-1B1, or E-3 visa programs must pay foreign workers the higher of the prevailing wage for the area of intended employment or the actual wage rate paid to similarly qualified U.S. workers in the area of intended employment. For employers seeking to hire foreign workers permanently through the permanent labor certification program, employers are required to offer and pay foreign workers at least the prevailing wage for the job opportunity in the area of intended employment. This prevailing wage serves effectively as a wage floor, and an employer must attest that they are offering at least the prevailing wage at the time of filing, that the wage offered during recruitment is at least the prevailing wage, and that the employer will actually pay at least the prevailing wage when a foreign worker begins their employment. By seeking to implement these proposed changes, the Department of Labor aspires to improve the correlation between wages paid to foreign workers and those paid to American workers with similar skills and qualifications, reduce the economic incentives to underpay foreign workers and undermine the American workforce, and promote fair competition in the American labor market.