Good news for H-1B workers? New rule proposes a major hike to prevailing wages

The US Department of Labor proposed to significantly increase the prevailing wage levels for the H-1B, H-1B1, E-3 and Perm programs. The notice titled “Improving Wage Protections for the Temporary and Permanent Employment of Certain Foreign Nationals in the United States” will be published tomorrow and will be open to the public for comments for 60 days.

This is not a final rule and will not be effective immediately. DOL will go through the comments and will issue a final rule reviewing all the comments.

What are the new wage levels?

Murthy Law Firm explained that the DOL is proposing to revise the four-tier prevailing wage structure that employers must follow when sponsoring foreign national workers. Since 2005, the four wage levels have been set at approximately the 17th, 34th, 50th, and 67th percentiles of the Occupational Employment and Wage Statistics (OEWS) wage distribution for a given occupation and geographic area.

The department said it reached the proposed wage level through a statistical model that aligned the prevailing wage with the average actual wages paid to the US workers employed in occupations equivalent to the H-1Bs. The changes would increase the average certified wage by approximately $14,000 per year per position, the department calculated.

Who are to be impacted?

No more cheap labor

The department said that the new wage level for foreigners will protect American workers, as companies will not hire H-1Bs at a lower wage. The present wage level has been in place for over 20 years and it allows employers to hire foreign workers at a wage level way below what they would otherwise pay to the US workers. While the proposed revision of the wage levels sounds like a good news for H-1B visa holders, the DOL is motivated by America-First policy.