DOL to Increase Prevailing Wage Levels

On March 27, 2026, the U.S. Department of Labor (DOL) proposed a new rule to increase prevailing wage levels. If finalized, the rule would increase prevailing wage requirements for employers sponsoring foreign nationals under the H‑1B, H‑1B1, E‑3, and PERM (EB‑2 and EB‑3) programs.

Current Prevailing Wage Structure

For more than two decades, DOL has relied on the Occupational Employment and Wage Statistics (OEWS) survey to assign four prevailing wage levels based on percentiles of the wage distribution:

• Level I (Entry Level): 17th percentile
• Level II (Qualified): 34th percentile
• Level III (Experienced): 50th percentile
• Level IV (Fully Competent): 67th percentile

These wage levels are used uniformly for temporary programs, like the H-1B and permanent programs, like EB-2 and EB-3 category Green Cards.

 

Proposed Wage Level Changes

Under the new rule, DOL would substantially raise each wage tier:

 

Wage Level	Current		Proposed
Level I	17th	→	34th
Level II	34th	→	52nd
Level III	50th	→	70th
Level IV	67th	→	88th

 

Notably, entry-level wages would double, moving to the current Level II floor.

 

DOL estimates these changes would increase average required wages by approximately $14,000 annually, depending on occupation and location.

 

When Would the New Wages Take Effect?

DOL will accept comments on the rule from the public until May 26, 2026.

 

If finalized, the new wage methodology would take effect no earlier than 60 days after the final rule is published. Until then, current wage levels remain in effect. 

IMPLEMENTATION OF DOL RULE INCREASING PREVAILING WAGES DELAYED

The US Department of Labor (DOL) has delayed the new rule which would change the method for calculating prevailing wages for 18 months. 

In October 2020, the DOL announced an Interim Rule which changed the computation of wage levels and dramatically increased prevailing wages.  The October 2020 Interim Rule was later struck down by the courts, but was later re-issued as a Final Rule in January 2021. 

On January 14, 2021 the DOL published its Final Rule regarding increases in prevailing wages for H-1B, H-1B1, E-3, and Green Card cases. You can find our blog post summarizing the Final Rule here.  

The Final Rule was initially set to take effect May 14, 2021 and wages issued after July 1, 2021 would be impacted. However, the DOL has postponed the effective date of the Final Rule by 18 months until November 14, 2022. The DOL delayed the start of the transition period to the new prevailing wage levels from July 1, 2021 to January 1, 2023. 

The DOL is implementing this delay to allow for more time to fully analyze the legal and policy issues raised by the rule, as well as to validate the prevailing wage data. This official delay is expected to be effective on March 22, 2021.

REMINDER: H-1B CAP: LOTTERY AND REGISTRATION UPDATES UPDATES

MU Law will be hosting a free webinar for our clients and friends on Tuesday, February 16, 2021 at 2PM Eastern (1PM Central). Interested clients and friends can register for our webinar by clicking on the link below.

REGISTER HERE

Join us for this FREE webinar to learn more about:

-      The H-1B CAP timeline for registration submissions

-      The H-1B Wage-Based Lottery Selection Rule now *canceled*

-      Recap of DOL Wage Rule and promo Alternative Wage Surveys

-      The H-1B Rule Requiring End-Clients to file LCAs or H-1Bs now *canceled*

 

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USCIS Delays Wage-Based H-1B Lottery until 2022

In January 2021, the USCIS issued a final rule that would replace the random H-1B cap lottery with a wage-based H-1B selection process. This January 2021 rule was set to go into effect on March 9, 2021 and would apply to the upcoming H-1B cap season (filed in April 2021 for Fiscal Year 2022). However, the USCIS has delayed implementing this rule until December 31, 2021. This means that for the H-1B cap lottery in April 2021, even if there are multiple lottery drawings, none of the drawings will be done under the wage-based selection process.  All lottery drawings in 2021 will be random.  

The new wage-based selection process would select the H-1Bs filed at the highest OES prevailing wage level, starting with Level IV, for the job classification and location of employment.  If there are more than 85,000 Level IV H-1B petitions filed, then the USCIS would hold a lottery just for the Level IV wage petitions.  If there are fewer than 85,000 level IV wage petitions, then the USCIS would run a lottery of the Level III wage petitions for the remaining H-1B spots available. The wage-based selection process then continues for Level II and I, until 85,000 petitions have been selected. 

The USCIS announced February 4, 2021 that the USCIS will delay implementing the wage-based selection process because the USCIS does not have adequate time to develop and test the new wage-based selection process for the 2021 H-1B lottery.  At present, the USCIS plans to have the rule implemented for the H-1B cap season in April 2022 (Fiscal Year 2023).

  

A LOOK BACK, AND A LOOK AHEAD

Join is for a review of some of the immigration changes that took place in 2020 and a look forward to the changes coming in 2021, specifically for the H-1B cap. Interested clients and friends can register for our webinar by clicking on the link below.

REGISTER HERE

MU Law will be hosting a free webinar for our clients and friends on Tuesday, January 26, 2021 at 2PM Eastern (1PM Central).

Join us for this FREE webinar to learn more about:

• H-1B Cap Basics, Registration Process, and Projections
• NEW RULE: H-1B lottery system, selection by wage
• NEW RULE: DOL Rule Regarding Calculation of Prevailing Wage
• H-1B Specialty Occupation
• H-1B Dependency
• H-1B issues for Staffing Companies and Third-Party Placement
• Third- Party Placement v. In-House work?
• Employer-Employee Relationships
• Cap-Gap for F-1s
• CPT / OPT Maintenance
• Top 10 things H-1B employers can do to stay compliant

PLEASE JOIN US! 

DOL DRAMATICALLY RAISES PREVAILING WAGES

On January 14, 2021 the US Department of Labor (DOL) published its Final Rule regarding the calculation of prevailing wages.  Readers of our blog will note that the DOL previously issued an Interim Rule about calculation of prevailing wages which was struck down by Federal Judges late last year.  The Final Rule published on January 14, 2021 is the updated version of the Interim Rule.

 

Summary of the Final Rule

The Final Rule will dramatically change the calculation of prevailing wage levels resulting in significantly higher prevailing wages.  While the new percentiles are lower than the October 2020 Interim Rule’s percentiles, the new percentiles are still considerably higher than the current percentiles. 

 

Wage Level	Current Percentile	October 2020 Interim Rule Percentile	January 2021 Final Rule Percentile
1	17	45	35
2	34	62	53
3	50	78	72
4	67	95	90

 

The Final Rule applies to prevailing wages applicable to applications for H-1Bs, H-1B1s, E-3s, and Green Cards.

 Transition Periods

The Final Rule attempts to provide employers and foreign nationals an opportunity to adapt to the change in calculations.  For those who did not have an I-140 approval in hand as of October 8, 2020, the transition will occur over an eighteen-month period:

• Stage One, Present to June 30, 2021: Current Percentiles remain in effect
• Stage Two, July 1, 2021 to June 30, 2022: 90% of the Final Rule percentile
• Stage Three, July 1, 2022 and Beyond: 100% of the Final Rule percentile

For those who did have an I-140 approval in hand as of October 8, 2020, and so are applying for a post-six year H-1B extension, the transition will occur over an three and a half year period:

• Stage One, Present to June 30, 2021: Current Percentiles remain in effect
• Stage Two, July 1, 2021 to June 30, 2022:85% of the Final Rule percentile
• Stage Three, July 1, 2022 and Beyond: 90% of the Final Rule percentile
• Stage Four, July 1, 2023 and Beyond: 95% of the Final Rule percentile
• Stage Five, July 1, 2024 and Beyond: 100% of the Final Rule percentile

The American Immigration Lawyers’ Association (AILA) reported that President-Elect Biden’s transition team will issue an immediate 60-day delay to the implementation of this and other last-minute regulations promulgated by the Trump presidency, but how the Biden Administration will move forward remains unknown.

 Alternative Wage Surveys

Alternative Wage Surveys may be accepted by the DOL if the survey meets specific requirements.  Employers concerned about the Final Rule and its implications for their employees may want to consider using an Alternative Wage Survey in place of the DOL’s wage survey.  For more information about which wage surveys may be accepted by the DOL, please contact your MU attorney. 

A LOOK BACK, AND A LOOK AHEAD

Join is for a review of some of the immigration changes that took place in 2020 and a look forward to the changes coming in 2021, specifically for the H-1B cap. Interested clients and friends can register for our webinar by clicking on the link below.

REGISTER HERE

MU Law will be hosting a free webinar for our clients and friends on Tuesday, January 26, 2021 at 2PM Eastern (1PM Central).

Join us for this FREE webinar to learn more about:

• H-1B Cap Basics, Registration Process, and Projections
• NEW RULE: H-1B lottery system, selection by wage
• NEW RULE: DOL Rule Regarding Calculation of Prevailing Wage
• H-1B Specialty Occupation
• H-1B Dependency
• H-1B issues for Staffing Companies and Third-Party Placement
• Third- Party Placement v. In-House work?
• Employer-Employee Relationships
• Cap-Gap for F-1s
• CPT / OPT Maintenance
• Top 10 things H-1B employers can do to stay compliant

PLEASE JOIN US! 

FEDERAL JUDGE BLOCKS TRUMP ADMINISTRATION’S ATTEMPT TO DISMANTLE LEGAL IMMIGRATION

In a striking rebuke of the Trump Administration’s attempts to dismantle legal immigration, the U.S. District Court for the Northern District of California has set aside both (i) the DHS interim final rule (IFR), Strengthening the H-1B Nonimmigrant Visa Classification Program, and (ii) the DOL IFR, Strengthening Wage Protections for the Temporary and Permanent Employment of Certain Aliens in the United States.

This twin-killing of Trump policy does several things:

• It reinstates the prior DOL OES wage survey back to the formula that has been in place for more than a decade.
• It resets H-1B law, allowing third-party placement, three year-approval notices and a fuller range of approvable H-1Bs. 

The Court’s decision, which was issued last night, said that, the Administration, "failed to show there was good cause to dispense with the rational and thoughtful discourse that is provided by the APA's notice and comment requirements.”  MU Law will provide updates as more information is available.

DHS Proposed Rule to Select only the Highest Wages in H-1B CAP

On November 2, 2020, DHS published in the Federal Register its proposed new rule for the 2021 CAP that would give priority to H-1B CAP candidates whose employer promises to pay the highest of the Occupational Employment Statistics (OES) wage levels. 

The OES categorizes wages from Levels I through IV for a particular position in a Metropolitan Statistical Area (MSA). In the H-1B context, the employer then chooses the appropriate wage level based on the experience and complexity of the position and can file a Labor Condition Application (LCA) using the OES wage assigned. 

According to the DHS’s proposed rule, only those H-1B CAP registrations offering the highest OES wage levels would be selected for filing in the 2021 CAP. This means that DHS would first accept Level IV wages, then Level III, etc. 

Keeping with the 2020 CAP changes, the USCIS’s current intent is to continue its electronic pre-registration system, requiring first a registration period of CAP petitions, and a later period of filing. DHS’s proposed rule intends to add a wage level question to its pre-registration form so that only the highest wage levels are selected for filing. 

The Master’s CAP, an allotment of 20,000 H-1Bs designated only for candidates possessing a master’s degree from an accredited U.S. university, is also in place for the 2021 CAP period. 

The proposed rule is currently accepting comments from the public until December 2, 2020, to which DHS will then respond and may alter some elements of the rule.

 

 

RECAP OF CHANGES FROM THE USCIS, DOL, AND DOS

MU Law will be hosting a free webinar for our clients and friends on Monday, November 16, 2020 at 2PM Eastern (1PM Central). Interested clients and friends can register for our webinar by clicking on the link below.

REGISTER HERE

Join us for this FREE webinar to learn more about:

• The new USCIS rule on qualifying for H-1B
• The new DOL rule on wage calculations and alternative wage surveys
• Pending law suits on the new H-1B and wage rules
• The new USCIS rule on the H-1B lottery system
• The Public Charge rule
• The Visa Bulletin
• The new USCIS rule on F-1 duration of status
• Post-Election debrief and a look forward

PLEASE JOIN US!