Key Highlights
The H-1B wage rules change has cleared a key federal review, signaling major shifts ahead for skilled workers and US employers. On February 20, 2026, the Department of Labor's proposal passed the Office of Management and Budget scrutiny, moving it closer to reality. Indian professionals, who hold 71% of H-1B visas, may see higher minimum salaries in tech and other fields, but at the cost of tougher hiring for companies. This update ties into broader efforts to protect US wages under President Trump's administration. Employers and job seekers need to prepare now for potential 15-20% pay jumps in prevailing wage levels.
Proposal Details
The rule, titled "Improving Wage Protections for H-1B and PERM Employment in the United States," targets both H-1B visas for temporary skilled roles and PERM for green cards. It falls under DOL's Employment and Training Administration. No legal deadline ties it to security or pandemics.
Experts like Fragomen note it may adjust the prevailing wage system. This could mean higher floors for what employers pay H-1B holders and offer in PERM cases. The proposal counts as "economically significant," so it faces close scrutiny. OMB marked it "Consistent with Change," meaning tweaks happened during review. Publication in the Federal Register comes next, opening it for public input.
Also Read: Protecting Genuine Investors in the EB-5 Green Card Program
Current vs Proposed Wage Levels
Right now, prevailing wages use percentiles from DOL data like OES surveys. A 2021 rule set Level 1 at 17th percentile, but courts blocked parts. The new push mirrors revised 2021 ideas.
|
Wage Level |
Current Percentile |
Proposed Percentile |
Example Impact (Software Developer, CA) |
|
Level 1 |
~17th |
35th |
$110k and $130k |
|
Level 2 |
~34th |
53rd |
$140k and $160k |
|
Level 3 |
~50th |
72nd |
$170k and $190k |
|
Level 4 |
~67th |
90th |
$210k and $240k |
Impacts on Employers and Workers
US firms, especially in tech, rely on H-1B visas for talent. Higher wages hit small businesses and IT services hard. It may affect private sector operations, including startups. For workers, mainly Indians (71% of approvals), it ensures better pay but shrinks entry-level slots. Median Indian H-1B salary sits at $95,500, below non-Indians' $120,000. Paired with wage-based lotteries, low offers get edged out. Recent stats: FY2026 registrations dropped 27% to 343,981 from 470,342. Indian IT approvals fell to 4,573, down 70% from 2015.
|
Nationality |
% of FY2024 Approvals |
Median Salary (2024) |
|
India |
71% |
$95,500 |
|
China |
11.7% |
Higher than India |
|
Others |
11.3% |
$120,000 avg |
Why Now?
This H-1B wage rules change comes right after President Trump's reelection in November 2024. His administration pushes hard to protect US workers by matching foreign salaries to local levels. On September 19, 2025, executive order added a $100,000 one-time fee for new H-1B applicants abroad without prior visas, already squeezing employers. That fee, confirmed by White House spokespeople, skips extensions or those inside the US but hits fresh entries. Commerce Secretary Howard Lutnick called it fair: firms must prove value or hire Americans. Now, wage rules build on that to stop undercutting.
Also Read: Green Card Delay Puts H-1B Workers' Children at Risk of Deportation
What Happens Next?
Federal Register publication kicks off a 30-60 day comment period. DOL sifts feedback, drafts a final rule, and sets rollout dates. Phased changes could soften the blow for businesses. FY2027 H-1B cap registrations open March 4 to March 19, 2026, per USCIS. Wage-based lotteries already pick higher offers first, so align pay early. Indian professionals in Aurangabad, Mumbai, or elsewhere: compare your salary to DOL levels now. Software developers in California might need $130k+ for Level 1. IT services firms face the steepest climbs.
Employer Reactions
US companies voice mixed views on the H-1B wage rules change. Tech giants like Google favour skilled hires but push for flexibility; small firms fear costs. Groups like Compete America warn that higher wages (up $9k-50k average) could cut access to entry-level talent. Indian IT leaders like TCS and Infosys see margin hits filings down 46% in five years. Shares dipped on the news, but they plan local US hires and remote work. "This pressures our low-cost model," one exec noted. Startups hurt most: 30% cap filers rely on Level 1 roles. They may offshore more or experience slow growth. DHS projects $502 million in extra wages in FY 2026 alone.
Also Read: How to Migrate to Germany from India? Experts Guide
Ties to Green Cards
The proposal links H-1B to PERM, where prevailing wages must match offered jobs. Currently, H-1B pay can dip below PERM due to timing, but new rules enforce parity. For green cards, DOL audits if actual pay lags, and PERM wage fines follow. This change standardises levels across visas, easing audits but raising bars for sponsorships. Indian workers on H-1B eyeing green cards: expect Level 1 at 35th percentile (~$130k for devs). Future roles must prove the wage; remote from India risks denial.
Conclusion
The H-1B wage rules change cleared OMB review on February 20, 2026, and now awaits Federal Register publication to spark public debate. Employers face steeper costs with potential 15-20% wage hikes, while Indian tech workers gain better pay floors but fewer entry spots amid fees and lotteries. Track DOL updates closely; final rules could hit by mid-2026, reshaping hiring for years. Job seekers in Aurangabad or beyond should target roles above new Level 1 thresholds now. This move balances US worker protection with skilled immigration needs. Check DOL's Foreign Labour Certification site for H-1B prevailing wage data and updates. To know more about H-1B visa visit TerraTern now!
