The Department of Labor (DOL) rule raising the “prevailing wage” for foreign workers is one step away from publication. Once it takes effect, employers will have to certify higher wages whenever they register an H-1B employee for the lottery, file a transfer or extension, or sponsor a green card. Employees whose salaries sit at the lower wage levels may find that their employer cannot meet the new floor. The final rule is expected to take effect around next year’s lottery season, so there is still time to check whether your salary meets the new standard, talk with your employer about the budget, and decide whether you need a backup plan.
1. What Does the H1B Prevailing Wage Rule Change?
When an employer sponsors a foreign worker for H-1B, H-1B1 (for citizens of Singapore and Chile), or E-3 (for Australian citizens), or for an employment-based green card through PERM labor certification, it must agree to pay at least the “prevailing wage.” DOL sets the prevailing wage by occupation and work location at four levels, which roughly track experience from entry level to fully competent.
Since 2005, each level has corresponded roughly to a fixed percentile of local wages for the same occupation. The rule proposes raising every level significantly. The figures below are from the proposed rule, and the final rule may differ:
| Wage Level | Current (approx.) | Proposed | Increase |
|---|---|---|---|
| Level I (entry) | 17th percentile | 34th percentile | +17 percentile points |
| Level II | 34th percentile | 52nd percentile | +18 percentile points |
| Level III | 50th percentile | 70th percentile | +20 percentile points |
| Level IV (fully competent) | 67th percentile | 88th percentile | +21 percentile points |
The new Level I would land roughly where Level II sits today. These are percentile changes. The actual dollar increase depends on the wage distribution for your occupation and location. According to figures DOL cited, about 19% of certified H-1B labor condition applications (LCAs) are at Level I and 44% at Level II, so more than 60% of workers fall in the two levels most clearly affected.
2. What Stages Has the Rule Gone Through, and Where Is It Now?
- March 27, 2026: DOL published the proposed rule.
- May 26, 2026: The public comment period closed.
- November 6, 2026: DOL sent the final rule to the White House Office of Management and Budget (OMB) for review, where it is listed as economically significant.
Sending the rule to the White House means DOL has settled on the text it intends to enforce. This is the last stage of federal rulemaking. Once review is complete, the rule will be published in the Federal Register with an effective date.
This is not DOL’s first attempt. Nearly identical wage increases were issued in 2020 and 2021, but neither took effect. A federal court struck down the 2020 rule because it skipped public comment, and the 2021 rule was later vacated at the government’s own request. This time DOL went through full notice and comment, so the procedural defect that sank the earlier rule is gone. It would be unwise to count on a court blocking the new rule.
3. What Happens Next?
- The final text has not been released, and the final percentiles may differ from the proposal.
- White House review can take up to 90 days, though it often finishes sooner.
- The rule is widely expected to take effect 30 to 60 days after publication, which means it could be in force for the spring 2027 H-1B lottery season.
- The rule may be challenged in court after it takes effect, but the outcome and timing of any lawsuit are hard to predict.
4. Planning to Enter the H1B Lottery Next Year? How to Prepare
First, check whether your salary will meet the new wage floor. If the rule takes effect before your employer files your LCA, the wage must be certified under the new standard. If your salary is currently at Level I or Level II, talk with your employer early: has the company assessed the rule’s impact, and does it have budget for a raise? The lottery is already weighted by wage level, so the same salary may map to a lower level under the new standard, which could also affect your selection odds. How the two will interact remains to be confirmed once the final rule is published.
If your current employer cannot meet the new floor, consider moving to one that can. Larger companies usually have more salary flexibility and are better positioned to absorb the higher standard. Registration generally takes place in March each year, so if you plan to change jobs, it is best to do so before registration and have your new employer register you.
Work location directly affects the wage floor. Prevailing wages are set by location, and the standard for the same job in the San Francisco Bay Area or New York is usually far higher than in lower-wage areas. If your company has offices in other cities and your work can genuinely be done there, you can discuss changing your work location with your employer. Note that the work location must be real: the location on the LCA must match where you actually work. The wage level must also reflect the actual duties and requirements of the position, and it cannot be lowered artificially to reduce the floor.
5. What Are the Plan B Options Besides H1B?
O-1 extraordinary ability visa: No lottery, and no prevailing wage requirement. If you have built a record in areas such as publications, industry awards, media coverage, judging experience, or high salary, it is worth assessing your eligibility early.
L-1 intracompany transfer: Also no lottery and no LCA wage certification. However, you must have worked continuously for at least one year within the past three years for an overseas company related to the U.S. employer. If you have the opportunity to work for an overseas affiliate, this is a path you can plan for in advance.
Cap-exempt employers: Universities, nonprofits affiliated with universities, and nonprofit or government research organizations are not subject to the H-1B cap and can file year-round. Note that these employers must still pay the prevailing wage; they simply skip the lottery.
STEM OPT extension: Eligible STEM graduates can extend their OPT, giving them more lottery attempts and more time to prepare.
Filing directly for a green card: EB-2 NIW (National Interest Waiver) and EB-1A do not require employer sponsorship and do not go through PERM or a prevailing wage determination. However, filing for a green card does not by itself maintain lawful status, so if the wait is long, you will still need another status in the meantime.
6. Already on H1B? Will a Transfer or Extension Be Affected?
An H-1B transfer to a new employer or an extension generally requires a new certified LCA. If the rule is in effect by then, the new LCA must be certified under the new standard. As a result, employees who need to transfer or extend will run into the new wage floor sooner than those who stay in their current position and do not need a new LCA.
If you are thinking about changing jobs, factor the new standard into salary discussions when negotiating an offer, and confirm that the new employer is willing and able to pay it. If your extension or transfer timing falls close to the rule’s effective date, you can work with your attorney and employer to assess whether it makes sense to have the LCA certified early. That depends on when your status expires and on the final rule’s transition provisions.
7. What If Your PERM Green Card Case Is Underway?
The PERM process also requires the employer to agree to pay at least the prevailing wage, so the new rule applies to PERM too. How prevailing wage determinations (PWDs) already issued will be treated during their validity period, and whether pending cases will be affected, depends on the final rule’s transition provisions, which are not yet known.
If your PERM has not started or has only just begun, confirm the timeline and salary budget for your green card sponsorship with your employer. For employees who stay in their current position with no new filings coming up, the rule generally will not change the employer’s current wage obligation right away, but the new standard will apply at the next extension or when the green card process begins.
Conclusion
The direction of the prevailing wage rule is now clear, but the final percentiles, effective date, and transition provisions have yet to be published. Each employee’s occupation, work location, status expiration date, and green card stage are different, so the timing and degree of impact will differ too. Talking with your employer early and planning your filing timeline and backup options will leave you far less exposed when the rule takes effect.
The LYD Law immigration team can help you assess how the new rule affects your H-1B lottery registration, transfer, extension, and green card case, evaluate whether alternatives such as O-1, L-1, or NIW fit your situation, and plan the right filing timeline. If this change affects you, we welcome you to contact us so we can build a plan around your circumstances.
