The U.S. Department of Labor (DOL) has proposed one of the most significant changes to the H-1B and PERM programs in years: a substantial increase in prevailing wage requirements, which would roughly double the percentile threshold for entry-level positions, often translating into salary increases of tens of thousands of dollars depending on the occupation and location.

The rule has not yet been finalized, but the public comment period closed on May 26, 2026. Employers with H-1B employees whose status expires within the next six months should evaluate whether filing a Labor Condition Application (LCA) now could help preserve current wage requirements before any new rule takes effect.

Background: Why This Rule Exists

The proposal traces to Presidential Proclamation 10973, issued September 19, 2025, which directed the Secretary of Labor to revise H-1B prevailing wage levels, citing concerns that the program had been used to replace rather than supplement U.S. workers. DOL published its Notice of Proposed Rulemaking in the Federal Register on March 27, 2026.

The effort revives a similar initiative from the first Trump administration. A 2020–2021 rule that set comparable wage levels (Level I at the 35th percentile and Level IV at the 90th percentile) was challenged and ultimately vacated on procedural grounds. That history signals both precedent for the current rule and the possibility of litigation if it is finalized.

What Does the 2026 DOL Prevailing Wage Rule Propose?

DOL currently sets prevailing wages using a four-tier structure based on the Bureau of Labor Statistics’ Occupational Employment and Wage Statistics (OEWS) survey. The proposed rule keeps the four tiers but raises the percentile threshold for each:

• Level I: from the 17th percentile to the 34th percentile
• Level II: from the 34th percentile to the 52nd percentile
• Level III: from the 50th percentile to the 70th percentile
• Level IV: from the 67th percentile to the 88th percentile

These thresholds apply to H-1B, H-1B1, E-3, and PERM filings. For many occupations and geographic areas, the change could translate into salary increases of tens of thousands of dollars for sponsored employees.

For employers with multiple sponsored workers, these increases could significantly affect future workforce planning, immigration strategy, and labor costs.

A Wide Range of Filings Would Be Affected

The reach of this proposed rule is broad. Because the revised percentiles would govern the prevailing wage determination itself, the higher wage levels would apply to any filing requiring a new LCA after the rule becomes effective, including H-1B extensions, amendments, transfers, new cap petitions, and E-3 and H-1B1 cases.

In practical terms, an employee who has held the same role for years could still face a substantially higher salary requirement simply because a renewal or change requires a new LCA after implementation. Employers who currently sponsor workers at Level I or Level II wages may find that future sponsorship becomes considerably more expensive.

The PERM labor certification process would also be affected. Unlike the H-1B process, PERM does not require an LCA but instead relies on a prevailing wage determination (PWD) issued by the Department of Labor. If the proposed rule is finalized, future prevailing wage determinations based on OEWS data would reflect the higher wage levels, potentially resulting in significantly higher required salaries for many EB-2 and EB-3 sponsorship cases.

Should Employers File LCAs Now?

Possibly. Employers may file an H-1B extension petition up to six months before the employee’s current status expires. Because many practitioners expect a final rule could be issued later this year, employers with H-1B extensions due at any point during the remainder of 2026 may wish to consider beginning the process sooner rather than later.

If the position and work location are expected to remain the same, obtaining a certified LCA now should allow the employer to rely on the current prevailing wage structure.

When Could the Rule Take Effect?

There is no announced effective date. Before the changes become effective, DOL must review public comments, prepare a final regulation, complete federal regulatory review, and publish the final rule. This process typically takes several months, if not longer.

That said, employers should not assume a lengthy implementation period once a final rule is published. Because a rule of this significance would likely qualify as a “major rule” under the Congressional Review Act, it could become effective approximately 60 days after publication, leaving employers with a relatively short window to adjust their filing strategy.

Timing is further complicated by the OEWS data cycle. The prevailing wage figures used for these filings are updated annually, with new wage data published each July 1. As a result, the applicable wage for a given filing can shift based both on a new rule and on the ordinary annual data refresh, compounding the potential increase for employers who wait.

While the timing cannot be predicted with certainty, many practitioners anticipate that implementation could occur later in 2026. Employers that wait to begin the LCA process could find themselves subject to significantly higher wage requirements once the rule becomes effective.

The Bottom Line

The proposed prevailing wage rule has the potential to reshape employment-based immigration far more than many employers realize. Although the regulation is not yet final, employers with upcoming H-1B filings should evaluate whether obtaining certified LCAs now makes strategic sense while current prevailing wage levels remain available.

If your company has H-1B employees with upcoming extensions, now is a good time to review your filing strategy in light of the proposed wage changes. Careful planning today may help avoid unexpected costs if the rule is finalized later this year.

By: Adena Bowman

Adena Bowman is a Senior Associate Attorney at Reddy Neumann Brown PC with over 12 years of experience in U.S. immigration law. She helps clients ranging from small businesses to large multinational corporations bring workers to the U.S. and stay compliant with immigration regulations. She also guides individual clients through employment, investment, and family-based immigration matters. Clients rely on her for clear guidance, strategic planning, and personalized support in navigating complex immigration challenges.