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For the thousands of Indian IT professionals who form the largest block of H-1B beneficiaries, the next two weeks will be crucial
The Department of Labour has justified the move by arguing that existing wage levels, which were largely fixed twenty years ago, no longer reflect current market realities. Representational image
In a move that signals a major overhaul of the American skilled migration framework, the US administration has proposed a significant hike in the minimum wages required to hire foreign workers under the H-1B visa programme. The proposal, spearheaded by the Department of Labour (DOL), seeks to increase prevailing wage floors by an average of 30 per cent across various experience levels. The administration contends that the adjustment is essential to prevent foreign labour from undercutting the salaries of US nationals and to ensure that the programme is used to supplement, rather than displace, the domestic workforce.
The 30 Per Cent Shift: Breaking Down the Numbers
The proposed rule, titled “Improving Wage Protections for the Temporary and Permanent Employment of Certain Foreign Nationals in the United States”, targets the four-tiered wage structure that has governed H-1B hiring for two decades. The most dramatic shift is aimed at entry-level positions (Level I), where the minimum salary requirement is set to jump from the 17th percentile of local wage data to the 34th percentile—a hike of approximately 33.39 per cent.
Under the new calculations, an entry-level worker previously eligible for a salary of approximately $73,279 would now require a minimum of $97,746. The increases cascade through higher experience brackets as well: Level II wages would rise from the 34th to the 52nd percentile ($123,212), Level III from the 50th to the 70th ($147,333), and Level IV—covering the most experienced professionals—from the 67th to the 88th percentile ($175,464).
Closing the ‘Wage Arbitrage’ Gap
The Department of Labour has justified the move by arguing that existing wage levels, which were largely fixed twenty years ago, no longer reflect current market realities. By allowing employers to hire foreign nationals at rates significantly below the median wage for similarly employed Americans, the government argues that the current system incentivises “wage arbitrage”.
Officials stated that the new methodology will “dramatically increase” the prevailing wage levels used not just for H-1B holders, but also for H-1B1 (Chile and Singapore), E-3 (Australia), and the PERM labour certification programmes used for green cards. The administration’s stated goal is to ensure that if a company chooses to hire a foreign professional, it is doing so because of a genuine skill shortage rather than a desire to save on labour costs.
The May 26 Deadline and Industry Pushback
The proposal is currently in a 60-day public comment period, which is set to expire on May 26, 2026. Following this window, the DOL will review the feedback before notifying the final rule. The reaction from the private sector has been starkly divided. While labour advocacy groups have hailed the move as a long-overdue protection for American tech workers, industry giants and academic institutions have expressed deep concern.
Critics argue that a sudden 30 per cent spike in labour costs could cripple smaller firms and start-ups that rely on early-career international talent. There are also fears that the rule could disproportionately affect international graduates of US universities, effectively closing the “bridge” from education to employment. If the cost of an entry-level hire becomes prohibitive, companies may pivot towards outsourcing or offshore operations, potentially weakening the very talent pipeline the US has spent decades building.
A Return to First-Term Priorities
This proposal closely mirrors a similar attempt made during the first Trump administration in 2021, which was ultimately blocked by the courts and withdrawn by the subsequent Biden administration. However, the 2026 version is rooted in a September 2025 Presidential Proclamation (Proclamation 10973), suggesting a more robust legal and administrative grounding this time around.
For the thousands of Indian IT professionals who form the largest block of H-1B beneficiaries, the next two weeks will be crucial. If finalised, the rule will not be retroactive but will apply to all new Labor Condition Applications (LCAs) and renewals submitted after the effective date, fundamentally altering the “math” of the American dream.
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