Proposed H-1B wage overhaul may raise pay by $14,000; applications fall

Proposed changes to H-1B wage norms could raise foreign worker pay by up to $14,000, even as applications fall sharply amid higher costs and tighter immigration rules

The Donald Trump administration has proposed a new wage structure for H-1B visa workers that, if implemented, would require employers to pay more to hire skilled overseas workers in the US. However, the number of H-1B applications has fallen sharply, lawyers said. 

The US Department of Labor’s Employment and Training Administration (ETA) plans to modernise the methodology used to determine prevailing wage levels under the permanent labour certification, H-1B, H-1B1, and E-3 visa programmes. As part of the proposal, annual pay for foreign workers could rise by $14,000 across the four wage levels. 

“The updated methodology would use statistically grounded percentile thresholds derived from the US Bureau of Labor Statistics’ Occupational Employment and Wage Statistics survey to bring wages paid to foreign workers in line with those paid to similarly employed American workers. This much-needed change aims to curb abuse of certain visa programmes by reducing the incentive to replace American workers with low-wage foreign visa holders and to establish parity between wages paid to US and foreign workers entering the country on employment-based visas,” the ETA said in a news release on Thursday. 

Under the proposed changes, workers at Level I may see their prevailing wage rise to $97,746 from an average offered wage of $82,607. Similarly, wages at Level IV could increase by 7.8 per cent to $175,464. 

The move comes alongside a proposal by the US Department of Homeland Security to introduce a weighted selection process that would favour higher-skilled workers over the decades-old lottery system when demand exceeds supply. 

“The department is proposing this rule because the current methodology for setting prevailing wages often allows employers to pay alien workers significantly less than similarly qualified US workers for the same jobs in the same area of intended employment. This not only results in unfair competition for US workers, particularly in high-skill sectors such as STEM (science, technology, engineering, and mathematics), but also affects domestic wages and undermines the integrity of the immigration system by incentivising the use of lower-paid and lower-skilled alien workers over available domestic talent,” the ETA said in its report. 

These changes have led to a drop in H-1B applications. The number of registrations has declined to 30–40 per cent of last year’s levels, said Poorvi Chothani, managing partner at immigration law firm LawQuest. 

“Our clients have so far seen selection rates of 20–30 per cent in the H-1B lottery. Other immigration attorneys appear to be reporting similar numbers,” she added. 

We expect more selections on or before March 31, 2026 before companies start filing petitions for those selected from April 1.

“This drop seems to be because not too many companies are ready to pay the additional $100,000 H-1B fee.  

Indian IT companies historically have filed most of their cases for wage levels I, II, and III positions. However, the major beneficiaries of this system will be the big technology companies,” Chothani added.