Improving Wage Protections for the Temporary and Permanent Employment of Certain Foreign Nationals in the United States

Federal RegisterMar 27, 2026

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DEPARTMENT OF LABOR

Employment and Training Administration

20 CFR Parts 655 and 656

[DOL Docket No. ETA-2026-0001]

RIN 1205-AC30

Improving Wage Protections for the Temporary and Permanent Employment of Certain Foreign Nationals in the United States

AGENCY:

Employment and Training Administration, Department of Labor.

ACTION:

Notice of proposed rulemaking (NPRM).

SUMMARY:

The Department of Labor (DOL or the Department) is issuing this Notice of Proposed Rulemaking (NPRM) to solicit comments and public input regarding its proposal to revise Employment and Training Administration (ETA) regulations governing the prevailing wages for employment opportunities that United States (U.S.) employers seek to fill with alien workers on a permanent or temporary basis through certain EB-2 and EB-3 employment-based immigrant visas via the Permanent Labor Certification (PERM) program or through H-1B, H-1B1, or E-3 nonimmigrant visas. Specifically, DOL is proposing to amend its regulations governing the PERM program and Labor Condition Applications (LCAs) to incorporate changes to the computation of wage levels under the Department's four-tiered prevailing wage structure based on the Occupational Employment and Wage Statistics (OEWS) wage survey administered by the Department's Bureau of Labor Statistics (BLS). These proposed revisions aim to better align prevailing wage levels with the wages paid to U.S. workers who are similarly employed in the occupation and area of intended employment. The Department's proposed revisions also seek to strengthen program integrity by reducing the incentive for employers to use these programs to replace, rather than supplement, U.S. workers by employing lower-paid alien workers. In addition, the revision would enable the Department to more effectively ensure that the employment of immigrant and nonimmigrant workers admitted or otherwise provided one of the covered statuses does not adversely affect the wages and working conditions of U.S. workers.

DATES:

Interested persons are invited to submit written comments on this proposed rule on or before May 26, 2026.

ADDRESSES:

You may submit comments electronically by the following method:

Federal eRulemaking Portal: https://www.regulations.gov.

Follow the instructions on the website for submitting comments. A plain language summary of the proposed rule is also available on that website.

Instructions:

Comments should be confined to issues pertinent to the NPRM, identify the agency's name and public docket number ETA-2026-0001, explain the reasons for any recommended changes, and reference the specific section and wording being addressed, where possible.

Please be advised that the Department will post comments that relate to this NPRM to

https://www.regulations.gov,

including any personal information provided. The

https://www.regulations.gov

website is the Federal e-Rulemaking Portal and all comments posted there are available and accessible to the public. Please do not submit comments containing trade secrets, confidential or proprietary commercial or financial information, personal health information, sensitive personally identifiable information (for example, social security numbers, driver's license or state identification numbers, passport numbers, or financial account numbers), or other information that you do not want to be made available to the public. Should the agency become aware of such information, the agency reserves the right to redact or refrain from posting such personally sensitive or other sensitive information, or comments that contain threatening language. Please note that depending on how information is submitted, the agency may not be able to redact the information and instead reserves the right to refrain from posting the information or comment in such situations.

FOR FURTHER INFORMATION CONTACT:

For further information, contact Brian Pasternak, Administrator, Office of Foreign Labor Certification, Employment and Training Administration, Department of Labor, 200 Constitution Avenue NW, Room N-5311, Washington, DC 20210, email:

OFLC.Regulations@dol.gov.

SUPPLEMENTARY INFORMATION:

I. Background

A. Legal Framework

The Immigration and Nationality Act (INA), as amended, assigns responsibilities to the Secretary of Labor (Secretary) relating to the entry and employment of certain categories of immigrants and nonimmigrants.

This NPRM concerns the calculation of the prevailing wage levels for job opportunities in the PERM,

E-3, H-1B, and H-1B1 programs for which employers seek labor certification from the Secretary.

The Department of Labor uses a unified four-tiered prevailing wage methodology based on data obtained from employers under the Occupational Employment and Wage Statistics (OEWS) survey administered by the Department's Bureau of Labor Statistics (BLS) to determine wage levels for certain temporary (H-1B, H-1B1, E-3) and permanent (EB-2 and EB-3) labor certification processes.

There are two general categories of U.S. visas: immigrant and nonimmigrant. Immigrant visas are issued to foreign nationals who intend to live permanently in the United States. Nonimmigrant visas are for foreign nationals who enter the United States on a temporary basis—for tourism, medical treatment, business, temporary work, study, or other reasons.

PERM stands for Permanent Electronic Review Management.

8 U.S.C. 1101(a)(15)(E)(iii), (H)(i)(b), (H)(i)(b1).

1. Overview of Labor Certification and Labor Condition Applications

Labor certifications and labor condition applications are requirements under the INA for certain alien workers seeking employment in the United States. To issue a labor certification, the Secretary of Labor must determine that there are not sufficient able, willing, and qualified workers available at the time of application for a visa and admission into the country and that the hiring of the alien worker will not adversely affect the wages or working conditions of workers in the United States similarly employed.

The Department's statutory obligations under the INA are specifically designed to ensure that the introduction of alien labor into the United States supplements, rather than displaces, U.S. workers and that the current prevailing wage structure protects U.S. labor market conditions.

INA § 212(a)(5)(A), 8 U.S.C. 1182(a)(5)(A)(i)-(ii) (labor certification requirement).

See 8 U.S.C. 1182(a)(5)(A)(ii); 20 CFR 656.1(a) (purpose of PERM regulations).

The labor condition application (LCA) is a requirement for the H-1B, H-1B1, and E-3 nonimmigrant visa classifications.

To be able to employ an alien as an H-1B, H-1B1, or E-3 nonimmigrant, the employer must have filed with the Secretary of Labor an application that makes a number of critical attestations surrounding wages and working conditions, including that

the employer is offering and will offer wages that are at least the actual wage paid by the employer to individuals with similar experience and qualifications or the prevailing wage as determined by the Department, whichever is greater, and will provide working conditions that will not adversely affect the working conditions of U.S. workers similarly employed.

8 U.S.C. 1182(n), 1182(t). Two subsections titled “(t)” have been enacted. Here, the Department cites to the first, titled “Nonimmigrant professionals; labor attestations.”

8 U.S.C. 1182(n), 1182(t).

The H-1B, H-1B1, and E-3 programs are temporary nonimmigrant classifications that generally allow U.S. employers to hire alien workers in “specialty occupations,” generally defined as those jobs which require the theoretical and practical application of highly specialized knowledge and at least a bachelor's degree or its equivalent.

By contrast, the EB-2 and EB-3 programs are permanent immigrant visa categories that generally require labor certification before an employer can sponsor an alien worker for lawful permanent residence.

These programs, however, are intimately connected. Many alien workers initially enter the U.S. in a temporary H-1B status and later adjust their status to permanent residency through the EB-2 or EB-3 categories using the PERM process. In FY 2024, approximately 57.6 percent of PERM applications were filed on behalf of workers already employed in H-1B status, underscoring the overlap between temporary and permanent programs.

INA § 101(a)(15)(E)(iii), (H)(i)(b), (H)(i)(b1), 8 U.S.C. 1101(a)(15)(E)(iii), (H)(i)(b), (H)(i)(b1); INA § 214(i), 8 U.S.C. 1184(i)(1)-(2) (definition of “specialty occupation” and degree requirement).

INA § 203(b)(2)-(3), 8 U.S.C. 1153(b)(2)-(3) (EB-2 and EB-3 classifications); INA § 212(a)(5)(A), 8 U.S.C. 1182(a)(5)(A) (labor certification requirement); 20 CFR part 656 (PERM regulations).

To ensure consistency and prevent wage-setting disparities across these interrelated programs, the Department applies a unified four-tier prevailing wage structure across all the programs based on the BLS OEWS survey. This structure, required by the INA, establishes wage levels which are commensurate with experience, education, and level of supervision and that are implemented through ETA regulations.

In FY 2024, the Department certified 502,374 H-1B applications, accounting for the vast majority of temporary labor certifications.

By comparison, H-1B1 applications totaled 3,368 and E-3 applications totaled 9,154.

For permanent employment, the Department certified 35,505 PERM applications during the same period.

These figures highlight the scale of the H-1B program relative to other visa classifications and underscore the importance of consistent wage protections across temporary and permanent programs.

INA § 212(p)(4), 8 U.S.C. 1182(p)(4) (requiring four wage levels commensurate with experience, education, and supervision);

see also

20 CFR 656.40(b)(2) and 655.731(a)(2)(ii) (prevailing wage methodology).

Office of Foreign Labor Certification, FY 2024 LCA data: available at

https://www.dol.gov/agencies/eta/foreign-labor/performance.

Id.

Office of Foreign Labor Certification, FY 2024 PERM data: available at

https://www.dol.gov/agencies/eta/foreign-labor/performance.

Among all LCAs certified in FY 2024, 19 percent were assigned to Wage Level I, 44 percent to Level II, 21 percent to Level III, and 16 percent to Level IV.

These levels reflect the Department's four-tier structure, which differentiates wages based on the education, experience, and level of supervision required for the position: Level I corresponds to entry-level roles, while Level IV represents the most experienced and highly skilled positions.

Office of Foreign Labor Certification, FY 2024 LCA data: available at

https://www.dol.gov/agencies/eta/foreign-labor/performance

See INA § 212(p)(4), 8 U.S.C. 1182(p)(4) (requiring four wage levels commensurate with experience, education, and supervision); 20 CFR 655.731(a)(2)(ii) and 656.40(b)(2) (prevailing wage methodology).

2. Permanent Labor Certification

The INA prohibits the admission of certain employment-based immigrants unless the Secretary of Labor has determined and certified to the Secretary of State and the Secretary of Homeland Security that (1) there are not sufficient workers who are able, willing, qualified, and available at the time of application for a visa and admission to the United States and at the place where the alien is to perform such skilled or unskilled labor; and (2) the employment of such alien will not adversely affect the wages and working conditions of workers in the United States similarly employed.

8 U.S.C. 1182(a)(5)(A). Although this provision references the Attorney General, the authority to adjudicate immigrant visa petitions was transferred to the Director of the Bureau of Citizenship and Immigration Services (an agency within the Department of Homeland Security)—now known as U.S. Citizenship and Immigration Service (USCIS)—by the Homeland Security Act of 2002, Public Law 107-296, 451(b) (codified at 6 U.S.C. 271(b)). Under 6 U.S.C. 557, references in federal law to any agency or officer whose functions have been transferred to the Department of Homeland Security shall be deemed to refer to the Secretary of Homeland Security or other official or component to which the functions were transferred.

This “labor certification” requirement does not apply to all employment-based immigrants. The INA provides for five “preference” categories, or immigrant visa classes, only two of which—the second and third preference employment categories (commonly called the EB-2 and EB-3 immigrant visa classifications)—generally require a labor certification.

An employer seeking to sponsor an alien worker for an immigrant visa under the EB-2 or EB-3 preference categories generally must file a visa petition with the Department of Homeland Security on the worker's behalf, and the petition must include a labor certification from the Secretary of Labor.

Further, the Department of State (DOS) may not issue a visa unless the Secretary of Labor has issued a labor certification in conformity with the relevant provisions of the INA.

If the Secretary determines both that there are not sufficient able, willing, qualified, and available U.S. workers and that employment of the alien worker will not adversely affect the wages and working conditions of similarly employed U.S. workers, the Secretary so certifies to DHS and DOS by issuing a permanent labor certification. If the Secretary cannot make one or both of the above findings, the application for permanent employment certification is denied.

See

8 U.S.C. 1153(b)(2)-(3), 1182(a)(5)(D). Section 1153(b)(2) governs the EB-2 classification of immigrant visas granted to foreign workers who are either professionals holding advanced degrees (master's degree or above or foreign equivalent degree, or a bachelor degree or foreign equivalent degree plus five years of progressive experience in the specialty) or persons of “exceptional ability” in the sciences, arts, or business. To gain entry in this category, the foreign worker must have prearranged an offer of employment with a U.S. employer that meets the requirements of labor certification, unless the work he or she is seeking admission to perform is in the “national interest,” such as to qualify for a waiver of the job offer (and hence, the labor certification) requirement under 8 U.S.C. 1153(b)(2)(B). Section 1153(b)(3) governs the EB-3 classification of immigrant work visas granted to foreign workers who are either “skilled workers,” “professionals,” or “other” (unskilled) workers, as defined by the statute. To gain entry in this category, the foreign worker must have a prearranged offer of employment with a U.S. employer that meets the requirements of labor certification, without exception.

8 U.S.C. 1154(a)(1)(F), 1182(a)(5)(A) and (D).

8 U.S.C. 1153(b)(2), (b)(3)(C), 1201(g).

Under the INA, the EB-2 classification applies to aliens who are “members of the professions holding advanced degrees or their equivalent or who because of their exceptional ability in the sciences, arts, or business, will substantially benefit prospectively the national economy, cultural or educational interests, or welfare of the United States.”

DHS regulations, in turn, define an “advanced degree” as any United States academic or professional degree, or a foreign equivalent degree above that of a bachelor's degree. A United States bachelor's degree or a foreign equivalent

degree followed by at least five years of progressive experience in the specialty shall be considered the equivalent of a master's degree.

If a doctoral degree customarily is required by the specialty, the alien must have a United States doctorate or a foreign equivalent degree.

The regulations go on to define “exceptional ability” as “a degree of expertise significantly above that ordinarily encountered in the sciences, arts, or business.”

8 U.S.C. 1153(b)(2)(A).

8 CFR 204.5(k)(2). Note that this equivalency is defined by DHS regulations for the purposes of EB-2 classification. The Department is not expressing a view on the substantive equivalence of these qualifications outside of that regulatory framework.

Id.

The EB-3 program consists of three discrete classifications: “skilled worker,” defined as aliens who are “capable . . . of performing skilled labor (requiring at least two years training or experience), not of a temporary or seasonal nature, for which qualified workers are not available in the United States;” “professional,” defined as “a qualified alien who holds at least a United States baccalaureate degree or a foreign equivalent degree and who is a member of the professions;” and “other worker,” defined as aliens who are “capable . . . of performing unskilled labor (requiring less than two years training or experience), not of a temporary or seasonal nature, for which qualified workers are not available in the United States.”

8 U.S.C. 1153(b)(3); 8 CFR 204.5(l)(2).

3. Labor Condition Application

The Secretary must certify an LCA filed by a U.S. employer before the employer may employ an alien worker under the E-3, H-1B, or H-1B1 programs.

LCAs apply only to temporary nonimmigrant visa classifications; permanent sponsorship is pursued through the PERM labor certification process under INA § 212(a)(5)(A). Because many H-1B workers later adjust to permanent residence under the EB-2 or EB-3 classification, this NPRM maintains a unified wage framework across temporary and permanent programs to ensure consistent protections, as described below.

See 8 U.S.C. 1101(a)(15)(E)(iii), (H)(i)(b), (H)(i)(b1); 8 CFR 214.2(h)(2)(i)(E); see also 8 U.S.C. 1182(n)(1)(A)(i)-(ii); 8 U.S.C. 1182(n), (t); 20 CFR part 655, subpart H.

As noted above, the LCA is submitted by an employer to the Secretary of Labor and states, among other things, that the employer is offering and will offer wages that are at least the actual wage paid by the employer to individuals with similar experience and qualifications or the prevailing wage for the occupational classification in the area of employment, whichever is greater, and will provide working conditions that will not adversely affect the working conditions of workers similarly employed.

8 U.S.C. 1182(n), 1182(t).

Unlike the PERM program, the H-1B, H-1B1, and E-3 programs allow U.S. employers to employ alien workers temporarily in specialty occupations. “Specialty occupation” is defined as an occupation that requires the theoretical and practical application of a body of “highly specialized knowledge” and at least a bachelor's degree in the specific specialty, or its foreign equivalent, as a minimum requirement for entry into the U.S.-based occupation, meaning that the position must require at least a bachelor's degree in a specific specialty (or its equivalent) and the attainment of such a degree must be a standard minimum requirement for entry into the occupation.

The H-1B1 and E-3 nonimmigrant visa classifications also allow U.S. employers to temporarily employ alien workers in specialty occupations, except that these classifications specifically apply to the nationals of certain countries: The H-1B1 classification applies to alien workers in specialty occupations from Chile and Singapore,

while the E-3 visa classification applies to alien workers in specialty occupations from Australia.

See

8 U.S.C. 1184(i)(1)(A)-(B).

8 U.S.C. 1101(a)(15)(H)(i)(b1), 1184(g)(8)(A).

B. Description of the Permanent Labor Certification Process

The Department's regulations at 20 CFR part 656 govern the PERM labor certification process and set forth the responsibilities of employers who desire to employ, on a permanent basis, alien workers covered by the INA's labor certification requirement.

The Department processes labor certification applications for employers seeking to sponsor alien workers for permanent employment under the EB-2 and EB-3 immigrant visa preference categories. Aliens seeking admission under, or adjustment of status to, the EB-2 or EB-3 preference categories are inadmissible “unless the Secretary of Labor has determined and certified . . . that—(I) there are not sufficient workers who are able, willing, qualified . . . and available at the time of application for a visa and admission to the United States and at the place where the alien is to perform such skilled or unskilled labor, and (II) the employment of such alien will not adversely affect the wages and working conditions of workers in the United States similarly employed.”

The current regulations were issued through a final rule implementing the streamlined permanent labor certification program through revisions to 20 CFR part 656. The final rule was published on December 27, 2004, and took effect on March 28, 2005.

See

Labor Certification for the Permanent Employment of Aliens in the United States; Implementation of New System, 69 FR 77326-01 (Dec. 27, 2004). The Department published a final rule on May 17, 2007, to enhance program integrity and reduce the incentives and opportunities for fraud and abuse related to permanent labor certification, commonly known as “the fraud rule.”

Labor Certification for the Permanent Employment of Aliens in the United States; Reducing the Incentives and Opportunities for Fraud and Abuse and Enhancing Program Integrity,

72 FR 27904-01 (May 17, 2007).

8 U.S.C. 1182(a)(5)(A)(i).

The Secretary makes this determination in the PERM programs by, among other things, requiring the alien worker's sponsoring employer to recruit U.S. workers by offering a wage that equals or exceeds the prevailing wage and to further assure that the employer will pay the alien worker a wage equal to or exceeding the prevailing wage.

Prior to filing a labor certification application, the employer first must obtain a Prevailing Wage Determination (PWD) for its job opportunity from the Office of Foreign Labor Certification (OFLC).

The standards and procedures governing the PWD process in connection with the permanent labor certification program are set forth in the Department's regulations at 20 CFR 656.40 and 656.41. If the job opportunity is covered by a collective bargaining agreement (CBA) that was negotiated at arm's length between a union and the employer, the wage rate set forth in the CBA is considered the prevailing wage for labor certification purposes.

In the absence of a prevailing wage rate derived from an applicable CBA, the employer may elect to use an applicable wage determination under the Davis-Bacon Act (DBA) or McNamara-O'Hara Service Contract Act (SCA), or provide a wage survey that complies with the Department's regulations.

In the absence of any of the above sources, the OFLC will use the BLS OEWS survey to determine the prevailing wage for the job opportunity based on the most

specific occupation and geographic area available.

After reviewing the employer's application, OFLC will determine the prevailing wage and specify the validity period, which may be no less than 90 days and no more than one year from the determination date.

20 CFR 656.10(c)(1). In addition to the prevailing wage requirement, employers must comply with other regulatory obligations under 20 CFR 656.10, including attesting that the job opportunity has been and is clearly open to U.S. workers, that all U.S. workers who applied were rejected only for lawful, job-related reasons, and that the employer has conducted the mandatory recruitment steps required by the PERM regulations.

20 CFR 656.15(b)(1), 656.40(a).

See

20 CFR 656.40(b)(1).

20 CFR 656.40(b), (g).

20 CFR 656.40(b)(2).

20 CFR 656.40(c).

Once the U.S. employer has received a PWD, the process for obtaining a permanent labor certification generally begins with the U.S. employer filing an

Application for Permanent Employment Certification,

Form ETA-9089, with OFLC.

As part of the standard application process, the employer must include, among other things, the labor or services to be performed and actual minimum job requirements contained on the valid PWD, the wage it is offering to pay for such labor or services the geographic location(s) where the work is expected to be performed, and the efforts it made to recruit qualified and available U.S. workers prior to filing the Form ETA-9089. Additionally, the employer must attest to certain labor condition statements on the Form ETA-9089, including that the “offered wage equals or exceeds the prevailing wage determined pursuant to 20 CFR 656.40 and 656.41, and the wage the employer will pay to the alien worker will equal or exceed the prevailing wage that is applicable at the time the alien begins work or from the time the alien is admitted to take up the certified employment.”

Applications for Schedule A occupations are eligible to receive pre-certification and bypass the standard applications review process. In those cases, employers file the appropriate documentation directly with DHS. 20 CFR 656.5, 656.15.

20 CFR 656.10(c)(1).

Through the requisite test of the labor market, the employer also attests, at the time of filing the Form ETA-9089, that the job opportunity has been, and is, clearly open to any U.S. worker, and that all U.S. workers who applied for the job opportunity were rejected for lawful, job-related reasons. OFLC performs a review of the Form ETA-9089 and may either grant or deny a permanent labor certification. When OFLC grants a permanent labor certification, the employer must submit proof of the certified Form ETA-9089 along with an

Immigrant Petition for Alien Workers

(Form I-140 petition) to DHS. A permanent labor certification is valid only for the job opportunity, employer, alien worker, and area of intended employment named on the Form ETA-9089 and must be filed in support of a Form I-140 petition within 180 calendar days of the date on which OFLC granted the certification.

20 CFR 656.30(b)(1).

C. Description of the Temporary Labor Condition Application Process

The Department's regulations at 20 CFR part 655, subpart H, govern the process for obtaining a certified LCA and set forth the responsibilities of employers who desire to temporarily employ alien workers in H-1B, H-1B1, and E-3 nonimmigrant classifications.

For H-1B petitions subject to the annual numerical cap, employers must first register with U.S. Citizenship and Immigration Services (USCIS) during the designated registration period. This electronic registration process does not require a certified Labor Condition Application (LCA). When USCIS determines that there is more than a sufficient number of unique beneficiaries on whose behalf registrations were properly submitted to meet the H-1B cap, USCIS conducts a lottery to select registrations eligible to file petitions. This lottery process is administered independently of the Department of Labor. Employers must obtain a certified LCA from the Department of Labor before filing the H-1B petition (Form I-129,

Petition for Nonimmigrant Worker

) with USCIS; however, employers can obtain an LCA prior to or after the USCIS registration lottery process. In December 2025, DHS finalized a rule establishing a weighted selection process based on offered wage levels for cap-subject H-1B registrations to favor higher-skilled, higher-paid aliens and strengthen program integrity.

See

Department of Homeland Security, U.S. Citizenship & Immigration Services, Weighted Selection Process for Registrants and Petitioners Seeking to File Cap-Subject H-1B Petitions, 90 FR 60864 (Dec. 29, 2025).

A prospective employer must attest on the LCA that (1) it is offering to and will pay the nonimmigrant, during the period of authorized employment, wages that are at least the actual wage level paid by the employer to all other employees with similar experience and qualifications for the specific employment in question, or the prevailing wage level for the occupational classification in the area of intended employment, whichever is greater (based on the best information available at the time of filing the attestation); (2) it will provide working conditions for the nonimmigrant worker that will not adversely affect working conditions for similarly employed U.S. workers; (3) there is no strike or lockout in the course of a labor dispute in the occupational classification at the worksite; and (4) it has provided notice of its filing of an LCA to its employees' bargaining representative for the occupational classification affected or, if there is no bargaining representative, it has provided notice to its employees in the affected occupational classification by posting the notice in a conspicuous location at the worksite or through other means such as electronic notification.

8 U.S.C. 1182(n)(1)(A)-(C), (t)(1)(A)-(C); 20 CFR 655.705(c)(1), 655.730(d).

As relevant here, the prevailing wage must be determined as of the time the LCA is filed.

In contrast to the permanent labor certification process, an employer is not required to obtain a PWD from the OFLC.

Rather, an employer may base the prevailing wage on one of several sources: an applicable CBA that was negotiated at arm's length between a union and the employer and contains a wage rate applicable to the occupation; a PWD from the OFLC; a wage determination under the Davis-Bacon Act or Service Contract Act; an independent authoritative source—such as a private wage survey—that satisfies the requirements in 20 CFR 655.731(b)(3)(iii)(B); or another legitimate source of wage data—such as an industry compensation study—that satisfies the requirements in 20 CFR 655.731(b)(3)(iii)(C).

20 CFR 655.731(a)(2).

Id.

20 CFR 655.731(a)(2)(ii)(A)-(C).

An employer may not file an LCA more than six months prior to their selected start date.

Unless the Secretary finds the LCA is incomplete or obviously inaccurate, the Secretary must certify it within seven working days of its filing.

Once an employer receives a certified LCA, it must file the Form I-129,

Petition for a Nonimmigrant Worker,

with USCIS if seeking classification of the alien as an H-1B worker.

During the course of adjudicating the nonimmigrant petition, USCIS determines, among other things, whether the petition is supported by a certified LCA that properly corresponds to the petition, whether the employer's position qualifies as a specialty occupation and, if so, whether the alien is qualified for the position.

20 CFR 655.730.

8 U.S.C. 1182(t)(2)(C); 20 CFR 655.740(a)(1).

For aliens seeking H-1B1 or E-3 classification, the alien may apply directly to the State Department for a visa once the LCA has been certified.

D. Brief History on Use of the BLS OEWS and Current Prevailing Wage Methodology

1. The Department's Methodology for Establishing Prevailing Wages From 1997 to 2020

The Department has always sought to use the best available information on occupational wages representing workers in the United States similarly employed. The BLS OEWS survey remains the largest ongoing statistical survey program of the federal government, producing employment and gross wage estimates for more than 830 SOC codes, and is used as the primary wage source for establishing skill-based prevailing wage determinations in the nonimmigrant and immigrant visa programs administered by the Department. The BLS produces survey materials and selects the employer establishments to be surveyed using the list of establishments maintained by State Workforce Agencies (SWAs) for unemployment insurance purposes. Wage information based on geographic areas are available at the national and State levels and for certain territories in which statistical validity can be ascertained, including the District of Columbia, Guam, Puerto Rico, and the U.S. Virgin Islands. Wage information is also made available at the metropolitan and nonmetropolitan area levels within a State.

The OEWS survey primarily covers wage and salary workers in non-farm establishments and does not include the self-employed, owners and partners in unincorporated firms, household workers, or unpaid family workers. The survey is conducted primarily by mail, with telephone follow-ups to nonrespondents, or, if needed, to clarify written responses. Each year, two semiannual panels of approximately 179,000 to 187,000 sampled establishments are contacted, one panel in May and the other in November. Thus, the OEWS employment and gross wage estimates are constructed from a sample of about 1.1 million establishments collected over a 3-year period, which allows the production of data at detailed levels of geography, industry, and occupation and accounts for approximately 57 percent of employers in the United States. OEWS data are published annually with a May reference date. Wages are defined as straight-time, gross pay, including piece rates, but excludes other forms of pay such as overtime, shift differentials, and non-production or any year-end bonuses. Further, because it collects the gross wages paid to each worker in each occupation during the reference period, the OEWS can consistently report more precise wage estimates for any occupation-specific wage distribution to approximate wage differentials paid to U.S. workers similarly employed in a particular occupation and state.

The OEWS survey consists of two components: employment estimates and wage estimates. The employment component provides data on the estimated number of full- and part-time jobs in an occupation and geographic area, offering insight into workforce distribution and occupational demand across industries and regions. This component measures full- and part-time wage and salary employees in nonfarm industries, but excludes self-employed workers, owners and partners in unincorporated firms, employees of private households, and unpaid family workers. The wage component provides estimates of straight-time, gross pay for employees in an occupation, excluding premium pay such as overtime. The Department incorporated the wage component of the OEWS survey into its prevailing wage guidance in 1997.

At the time, the Department divided OEWS wage data into two skill levels: a Level I wage for “beginning level employees” and a Level II wage for “fully competent employees.” Because the OEWS survey does not provide data about skill differentials within each Standard Occupational Classification (SOC) code, the Department established the entry and experienced skill levels mathematically.

Prevailing Wage Policy for Nonagricultural Immigration Programs,

General Administration Letter No. 2-98 (GAL 2-98) (Oct. 31, 1997), available at

https://www.dol.gov/agencies/eta/advisories/general-administration-letter-no-2-98

and

https://www.dol.gov/sites/dolgov/files/ETA/advisories/GAL/1997/GAL2-98_attach.pdf

GAL 2-98 at 5.

Specifically, under a Memorandum of Understanding (MOU), BLS computed a Level I wage calculated as the mean of the lowest paid one-third of workers in a given occupation (approximately the 17th percentile of the OEWS wage distribution)

and a Level II wage calculated as the mean wage of the highest paid upper two-thirds of workers (approximately the 67th percentile).

This two-tier wage structure was based on a practical, informal method of using the mean wage of the lowest paid one-third of the workers surveyed in each occupation to approximate the typical compensation for “beginning level employees,” and the mean wage of the upper two-thirds of the workers surveyed in the occupation to approximate the typical compensation for “fully competent employees.”

To clarify, the Department notes that, because the old wage methodology took the mean of a portion of the OEWS wage distribution, the precise wage it produced will not always fall at 17th percentile. Rather, the 17th percentile is the midpoint or median of the distribution for which a mean was produced, and is therefore only an approximation for what the actual wage rates would be. The same is true of the old wage methodology for calculating the Level IV wage, which used the mean of the upper two thirds of the OEWS distribution, the midpoint of which is the 67th percentile.

Intra-Agency Memorandum of Understanding executed by Mr. John R. Beverly, III, Director, U.S. Employment Service, ETA, and Ms. Katharine Newman, Chief, Division of Financial Planning and Management, Office of Administration, BLS (Sept. 30, 1998).

GAL 2-98 at 5.

See also Wage Methodology for the Temporary Non-agricultural Employment H-2B Program,

76 FR 3452, 3453 (Jan. 19, 2011);

Wage Methodology for the Temporary Non-Agricultural Employment H-2B Program, Part 2,

78 FR 24047, 24051 (Apr. 24, 2013).

To implement the INA's four-tier prevailing wage provision, the Department published comprehensive Prevailing Wage Determination Policy Guidance for Nonagricultural Immigration Programs (2005 Guidance), which expanded the two-tier OEWS wage level system to include four “skill levels”: Level I “entry,” Level II “qualified,” Level III “experienced,” and Level IV “fully competent.”

The Department applied the formula specified in the INA to its two existing wage levels to set Levels I through IV, respectively, at approximately the 17th percentile, the 34th percentile, the 50th percentile, and the 67th percentile.

The Department's adoption of the four-tiered wage structure is grounded in the INA's statutory mandate, which requires that government surveys used to determine prevailing wages “provide at least four levels of wages commensurate with experience, education, and the level of supervision,”

and is consistent with the statutory requirement that wage levels be commensurate with experience, education, and the level of supervision, ensuring that wage determinations meaningfully differentiate among workers based on these factors. This differentiation is part of the statutory scheme wherein the Department is

charged with certifying a lack of sufficient workers and that employment of alien workers will not adversely affect the wages or working conditions of U.S. workers.

ETA Prevailing Wage Determination Policy Guidance, Nonagricultural Immigration Programs 7 (May 9, 2005), available at

https://www.dol.gov/sites/dolgov/files/ETA/oflc/pdfs/policy_nonag_progs.pdf

; s

ee also

85 FR at 63874-76 for a discussion of the development of the prevailing wage determination process.

See

INA § 212(p)(4), 8 U.S.C. 1182(p)(4) (requiring that any government survey used to determine prevailing wages provide at least four levels of wages commensurate with experience, education, and level of supervision).

See,

ETA Prevailing Wage Determination Policy Guidance, Nonagricultural Immigration Programs 1 (May 9, 2005).

8 U.S.C. 1182(p)(4).

In 2010, the Department centralized the prevailing wage determination process for nonagricultural labor certification programs within OFLC's National Prevailing Wage Center (NPWC).

In preparation for this transition, the Department issued new Prevailing Wage Determination Policy Guidance for Nonagricultural Immigration Programs (2009 Guidance),

which currently informs OFLC's PWD process for the PERM, H-1B, H-1B1, and E-3 visa programs and will continue to inform OFLC's PWD process for these programs. When assigning a prevailing wage using OEWS data, the NPWC examines the nature of the job offer, the area of intended employment, and job duties for workers that are similarly employed.

In particular, the NPWC uses the SOC taxonomy to classify the employer's job opportunity into an occupation by comparing the employer's job description, title, and requirements to occupational information provided in sources like the Department's Occupational Information Network (O*Net).

Once the NPWC identifies the applicable SOC code, it determines the appropriate wage level for the job opportunity by comparing the employer's job description, title, and requirements to those normally required for the occupation, as reported in sources like O*Net. This determination involves a step-by-step process in which each job opportunity begins at Level I (entry level) and may progress to Level II (experienced), Level III (qualified), or Level IV (fully competent) based on the NPWC's comparison of the job opportunity to occupational requirements, including the education, training, experience, skills, knowledge, and tasks required in the occupation.

After determining the prevailing wage level, the NPWC issues a PWD to the employer using the OEWS wage for that level in the occupation and area of intended employment.

See

Labor Certification Process and Enforcement for Temporary Employment in Occupations Other Than Agriculture or Registered Nursing in the United States (H-2B Workers), and Other Technical Changes, 73 FR 78020 (Dec. 19, 2008); Prevailing Wage Determinations for Use in the H-1B, H-1B1 (Chile/Singapore), H-1C, H-2B, E-3 (Australia), and Permanent Labor Certification Programs; Prevailing Wage Determinations for Use in the Commonwealth of the Northern Mariana Islands, 74 FR 63796-01 (Dec. 4, 2009).

Employment and Training Administration; Prevailing Wage Determination Policy Guidance, Nonagricultural Immigration Programs (Revised Nov. 2009) (2009 Guidance), available at

https://www.dol.gov/sites/dolgov/files/eta/oflc/pdfs/npwhc_guidance_revised_11_2009.pdf.

Id.

at 3-4.

Id.

at 1-7;

see also

Occupational Information Network, available at

https://www.onetonline.org/

. O*Net provides information on skills, abilities, knowledge, tasks, work activities, and specific vocational preparation levels associated with occupations and stratifies occupations based on shared skill, education, and training indicators.

2009 Guidance at 6.

2. Regulatory Changes to the Prevailing Wage Methodology in 2020 and Litigation

As discussed in Section I.D.1, the Department has long relied on the BLS OEWS survey to determine prevailing wages for the H-1B, H-1B1, E-3, and PERM programs. The prevailing wage determination process, first implemented through guidance in 2005, was designed to reflect four tiers of wages commensurate with the experience, education, and level of supervision for the job opportunity and to be consistent with the statutory requirements of 8 U.S.C. 1182(p)(4). However, as is detailed further in this NPRM, the methodology adopted in 2005 did not adequately protect U.S. workers from adverse wage effects and deleterious job conditions.

The Department also did not clearly articulate a rationale for choosing levels as low as the 17th percentile for Level I and did not similarly provide a reasoned justification for selecting the 67th percentile for Level IV. In addition to these substantive and procedural shortcomings, a growing body of evidence, which is presented below under Section II.B.3, indicates that the 2005 methodology was adversely affecting the wages of U.S. workers.

While the Department issued updated guidance in 2009 to centralize processing and clarify procedures, that guidance retained the methodology adopted in 2005. Because the NPRM proposes to revise the percentile-based formula introduced in 2005, this section uses the 2005 guidance as the basis of comparison.

Therefore, on October 8, 2020, the Department published an Interim Final Rule (IFR) in the

Federal Register

revising the methodology used to determine prevailing wage levels for the H-1B, H-1B1, E-3, and PERM programs.

As explained in the IFR, the Department concluded that the existing wage levels were not consistent with the relevant statutory requirement that a government survey used to determine the prevailing wage should provide four wage levels commensurate with experience, education, and level of supervision.

The Department also determined that the existing wage levels were artificially low and provided an opportunity for employers to hire and retain alien workers at wages well below what their U.S. counterparts earn, creating an adverse incentive to prefer the hiring of alien workers to U.S. workers, an incentive that is at odds with the statutory scheme and which causes downward pressure on the wages of the domestic workforce. Therefore, the Department revised wage provisions at 20 CFR 655.731 and 656.40 to adjust the existing wage levels to ensure the wage levels would reflect the wages paid to U.S. workers with similar experience, education, and responsibility to those possessed by similarly employed alien workers.

85 FR 63872.

See

8 U.S.C. 1182(p)(4).

In particular, the IFR amended paragraphs (a), (b)(2), and (b)(3) of 20 CFR 656.40, codifying the four-tier wage practice and revising the wage level computation methodology. A new § 656.40(b)(2)(i) specified the four new levels (Levels I through IV) to be applied. Paragraph (b)(2)(i)(A) explained the Level I wage would be calculated as the mean of the fifth decile of the wage distribution for the most specific occupation and geographic area available, rather than calculated as the mean of the bottom third of the OEWS wage distribution, as was the case prior to the IFR. Paragraph (b)(2)(i)(D) provided that the Level IV wage would be calculated as the mean of the upper decile of the wage distribution for the most specific occupation and geographic area available, rather than using the mean of the upper two-thirds of the distribution. As a result of these changes, the wage levels were increased, respectively, from approximately the 17th, 34th, 50th, and 67th percentiles to approximately the 45th, 62nd, 78th, and 95th percentiles. The IFR also made minor technical and clarifying amendments to sections 656.40 and 655.731.

The Department promulgated the IFR pursuant to 5 U.S.C. 553(b)(B) and 553(d)(3)

64 65

due to exigent circumstances created by the coronavirus public health emergency that threatened immediate harm to the

wages and job prospects of U.S. workers, as well as the need to avoid evasion by employers of the new wage rates. The Department requested public input on all aspects of the IFR during a post-promulgation 30-day public comment period.

The Administrative Procedure Act (APA), 5 U.S.C. 551

et seq.,

authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” 5 U.S.C. 553(b)(B). The good cause exception for forgoing notice and comment rulemaking “excuses notice and comment in emergency situations, or where delay could result in serious harm.”

Jifry

F.A.A.,

370 F.3d 1174, 1179 (D.C. Cir. 2004) (internal citations omitted).

See

Strengthening Wage Protections for the Temporary and Permanent Employment of Certain Aliens in the United States, 5 FR 63872, 63898-63902 (Oct. 8, 2020).

Four groups of plaintiffs separately challenged the Department's IFR. The plaintiffs claimed the Department lacked good cause to issue the IFR without undergoing notice and comment procedures under the APA and that the IFR was arbitrary and capricious and in violation of the INA. These plaintiffs further requested that the IFR be enjoined and the Department prevented from implementing it. In three of the four cases, the district court approved the parties' stipulation to convert plaintiffs' motion for a preliminary injunction into a motion for partial summary judgment on the notice and comment claim. In

Chamber of Commerce,

the district court issued a decision on December 1, 2020, granting plaintiffs' motion for partial summary judgment on their notice and comment claim and setting aside the Department's IFR.

Purdue University

and

Stellar IT

(which were consolidated), the district court issued a decision on December 14, 2020, granting partial summary judgment to the plaintiffs on the basis that the Department lacked good cause to issue the IFR, and ordered the Department to re-issue prevailing wage determinations issued under the IFR on a mutually agreeable schedule.

In the fourth case,

ITServe Alliance,

the district court issued a preliminary injunction on December 3, 2020, prohibiting the Department from enforcing the IFR against the plaintiffs in that case.

In discussing plaintiffs' likelihood of success on the merits in that case, the court limited its analysis to plaintiffs' claim that the Department lacked good cause to forgo advance notice and comment.

Following the district court's decisions in

Chamber of Commerce

and

ITServe Alliance,

OFLC took immediate action to comply with the courts' directives, including issuing a public announcement on its website on December 3, 2020, outlining the steps it was taking in response to the courts' orders. Notably, none of these rulings addressed the merits of the plaintiffs' challenges to the substance of the IFR.

Chamber of Com. of United States

United States Dep't of Homeland Sec.,

504 F. Supp. 3d 1077 (N.D. Cal. 2020). The plaintiffs in this case also challenged an interim final rule issued by DHS, Strengthening the H-1B Nonimmigrant Visa Classification Program, 85 FR 63, 918 (Oct. 8, 2020).

Purdue University, et al.

Scalia, et al.,

20-cv-03006, 2020 WL 7340156 (D.D.C. Dec. 14, 2020).

ITServe All., Inc.

Scalia,

No. CV 20-14604 (SRC), 2020 WL 7074391 (D.N.J. Dec. 3, 2020).

Id.

at 3-8.

The Department issued a Final Rule on January 14, 2021, which adopted the IFR's provisions with modifications that were responsive to both public comments and issues raised during litigation.

The Final Rule adjusted the wage percentiles and incorporated changes based on public feedback to the 35th and 90th percentiles for Level I and Level IV wages, respectively. The Final Rule's effective date was set for March 15, 2021. On February 1, 2021, the Department proposed to delay the effective date of the final rule for a period of 60 days to May 14, 2021, in response to a Presidential directive.

On March 12, 2021, the Department issued a final rule confirming the delay, wherein it cited the need to finish a “comprehensive review of this rulemaking” and the “complexity of this issue” as its rationale for proceeding with the proposed delay.

On March 22, 2021, the Department issued a proposal to further delay the effective date of the rule by eighteen months to November 14, 2022.

The Department again cited the need to have “sufficient time to engage in its comprehensive review of the [Jan. 14, 2021 Final Rule].”

The Department acknowledged that “delaying the implementation of the Final Rule is likely to have an impact on the wages paid to workers.”

Nonetheless, on May 13, 2021, the Department promulgated a final rule confirming the 18-month delay of the effective date.

While many commenters supported the delay, “[m]any individual commenters opposed the proposed delay and supported implementing policies that favor and attract higher skilled workers.”

The Department again “acknowledge[ed] the potential substantial economic impact of this delay not only on employers but also on U.S. and alien workers.”

“[M]any commenters expressed general opposition to the proposed delay or opposed the proposed delay and urged the Department to implement the higher wage levels as soon as possible. . . .”

Strengthening Wage Protections for the Temporary and Permanent Employment of Certain Aliens in the United States, 86 FR 3608 (January 14, 2021).

Memorandum from Ronald A. Klain, Chief of Staff, White House to Heads of Agencies Regarding Regulatory Freeze Pending Review (Jan. 20, 2021), available at

https://bidenwhitehouse.archives.gov/briefing-room/presidential-actions/2021/01/20/regulatory-freeze-pending-review/.

86 FR 13995 (Mar. 12, 2021).

86 FR 15154 (Mar. 22, 2021).

86 FR 15155.

Id.

at 15156.

86 FR 26164 (May 13, 2021).

Id.

at 26170-71.

Id.

at 26171.

Id.

On April 2, 2021, the Department also issued a Request for Information (RFI) “to provide information on the sources of data and methodologies for determining prevailing wage levels covering employment opportunities that United States (U.S.) employers seek to fill with alien workers on a permanent or temporary basis through certain employment-based immigrant visas or through H-1B, H-1B1, E-3 nonimmigrant visas.”

While the comments received on the RFI generally support the Department's assessment of the limitations of the prior methodology and reinforced the need for a revised approach that better aligns with statutory requirements and labor market realities, the comments received did not inform the methodology proposed here.

86 FR 17343 (Apr. 2, 2021).

On June 23, 2021, the Northern District of California vacated and remanded the January 14, 2021 Final Rule, pursuant to the Department's unopposed voluntary request for vacatur and remand.

On December 13, 2021, the Department promulgated a final rule “effectuat[ing] a Federal district court order vacating a January 14, 2021 Final Rule.” 86 FR 70729 (Dec. 13, 2021). Subsequently, the Department engaged in no further rulemaking regarding the employment-based immigrant visa or the H-1B, H-1B1, and E-3 nonimmigrant visas that are the subject of this NPRM.

See Chamber of Commerce, et al.

Dep't of Homeland Sec., et al.,

No. 4:20-cv-07331 (N.D. Cal. June 23, 2021), ECF No. 139.

II. Discussion of the Department's Proposed Amendments to the Prevailing Wage Methodology

The Department is issuing this NPRM to solicit public comment on proposed amendments to the prevailing wage computation methodology relied upon in several labor certification programs, specifically the H-1B, H-1B1, and E-3 nonimmigrant visa classifications, as well as the PERM program for employment-based immigrant visas. The Department proposes to increase the prevailing wage floors for Wage Level I from the 17th percentile to the 34th percentile, for Wage Level II from the 34th to the 52nd, for Wage Level III from the 50th to the 70th, and for Wage Level IV from the 67th to the 88th, relying upon wage data provided by the OEWS survey. The Department believes that these increases in the prevailing wage levels are needed because the previous

methodology set the prevailing wages too low by relying on a methodology that did not take into account the experience, education, and level of supervision, as required by the INA. As a result, employers were permitted to hire alien workers at wage levels below those that similarly employed U.S. workers were paid, resulting in adverse effects to the wages and working conditions of U.S. workers.

A. Statutory Authority for Amending the Methodology for Computing the Prevailing Wage Levels

The Department's authority to revise the prevailing wage methodology is grounded in its longstanding role of administering the labor certification process and in the discretion afforded to the Department regarding the establishment of prevailing wage levels for the H-1B, H-1B1, E-3, and PERM programs.

Section 1182(a)(5)(A)(i) of the INA provides that, “[a]ny alien who seeks to enter the United States for the purpose of performing skilled or unskilled labor is inadmissible, unless the Secretary of Labor has determined and certified to the Secretary of State and the Attorney General that . . . there are not sufficient workers who are able, willing, qualified (or equally qualified in the case of an alien described in clause (ii)) and available at the time of application for a visa and admission to the United States and at the place where the alien is to perform such skilled or unskilled labor, and the employment of such alien will not adversely affect the wages and working conditions of workers in the United States similarly employed.”

Section 1182(n)(1) of the INA provides that “[n]o alien may be admitted or provided status as an H-1B nonimmigrant . . . unless the employer has filed with the Secretary of Labor an application stating the following . . . [that] the employer is offering and will offer during the period of authorized employment to aliens admitted or provided status as an H-1B nonimmigrant wages that are at least (I) the actual wage level paid by the employer to all other individuals with similar experience and qualifications for the specific employment in question, or (II) the prevailing wage level for the occupational classification in the area of employment, whichever is greater. . . .” 1182(n)(1); 1182(n)(1)(A); 1182(n)(1)(A)(i); 1182(n)(1)(A)(i)(II);

see also

1182(n)(2). Section 1182(t)(1) contains nearly-identical language with respect to H-1B1 and E-3 and nonimmigrants. 8 U.S.C. 1182(t)(1); 1182(t)(1)(A); 1182(t)(1)(A)(i); 1182(t)(1)(A)(i)(II).

In turn, Section 1182(p)(4) of the INA provides that the Secretary of Labor may “use, or make available to employers, a governmental survey to determine the prevailing wage.” This section also provides that the “survey shall provide at least 4 levels of wages commensurate with experience, education, and the level of supervision.” Section 1182(p)(3) requires that the “prevailing wage required to be paid pursuant to subsections (a)(5)(A), (n)(1)(A)(i)(II), and (t)(1)(A)(i)(II) shall be 100 percent of the wage determined pursuant to those sections.” These statutory requirements are discussed in further detail in Section II.B.2 of this NPRM.

Congress “often enact[s]” statutes in which the agency is authorized to exercise a degree of discretion.”

Loper Bright Enter.

Raimondo,

144 S. Ct. 2244, 2263 (2024). “[S]ome statutes `expressly delegate[ ]' to an agency the authority to give meaning to a particular statutory term.”

Id.

(citation omitted). “Others empower an agency to prescribe rules to `fill up the details' of a statutory scheme, or to regulate subject to the limits imposed by a term or phrase that `leaves agencies with flexibility.' ”

Id.

(citation omitted). The statutory provisions listed above are of the type identified by the Supreme Court in

Loper Bright

that “delegate[ ] discretionary authority” to the Department on how best to determine prevailing wages such that the employment of alien workers will not adversely affect U.S. workers. The Department's authority to set wage levels is also necessary for it to fulfill its statutory functions and duties under Sections 1182(a)(5)(A), 1182(n)(1), 1182(n)(2)(A),

1182(t)(1), and 1182(t)(2)(A), as well as its role in the overall statutory scheme.

Moreover, the Secretary's duty under 8 U.S.C. 1182(n)(2)(A) to establish procedures for receiving, investigating, and resolving LCA-related complaints includes the authority to promulgate regulations to ensure employer compliance with LCAs.

See, e.g., Aleutian Cap. Partners, LLC

Scalia,

975 F.3d 220, 230 (2d Cir. 2020). The Department's authority to promulgate prevailing wage rates is also part of its express enforcement authority.

C.f. e.g., N. Carolina Farm Bureau Fed'n

U.S. Dep't of Labor,

781 F. Supp. 3d. 455; 2025 WL 1296245, *12 (E.D.N.C. 2025) (“NCFBF”) (the Department has broad authority to “`fill up the details' of its statutory directive,”);

Kansas

U.S. Dep't of Labor,

749 F. Supp. 3d 1363, 1374 (S.D. Ga. 2024) (reaffirming the Department's authority to “issue regulations to ensure that any certifications it issues for H-2A visas do not `adversely affect' American agricultural workers”).

B. Reasons for Adjusting the Prevailing Wage Levels

1. Summary

On September 19, 2025, the President issued Proclamation 10973 (“Proclamation”), “Restriction on Entry of Certain Nonimmigrant Workers,” which, among other provisions, directed the Secretary of Labor to initiate rulemaking to revise prevailing wage levels under the H-1B program.

The Proclamation explained that the H-1B program “has been deliberately exploited to replace, rather than supplement, U.S. workers with lower-paid, lower-skilled labor.” The Proclamation cited longstanding concerns that the H-1B program, as currently administered, may be used in ways that undermine U.S. labor standards, create downward pressure on wages, and displace U.S. workers. The Proclamation further noted that the current wage structure may incentivize the hiring of alien workers at significantly lower wages than their U.S. counterparts, thereby undermining the program's original intent which was to allow employers to obtain temporary specialized labor when equally skilled and qualified U.S. workers could not be found.

Proclamation No. 10973, 90 FR 46027 (Sept. 19, 2025).

The Department is proposing this rule because the current methodology for setting prevailing wages often allows employers to pay alien workers significantly less than what similarly qualified U.S. workers earn for the same jobs in the same area of intended employment. This not only results in unfair competition for U.S. workers, particularly in high-skill sectors like the STEM (science, technology, engineering, and mathematics) fields, and adverse effects on the wages of U.S. workers, but also undermines the integrity of the immigration system by incentivizing the use of lower-paid and lower-skilled alien workers over available domestic talent. This misuse of the H-1B program undermines its original statutory purpose—which is to allow employers to temporarily hire alien workers in specialty occupations requiring the “theoretical and practical application of a body of highly specialized knowledge”

—by transforming it into a mechanism for importing lower-cost labor. The current methodology further undermines the Department's statutory duties under Section 1182(a)(5)(A) of the INA to ensure that the employment of alien workers does not impose adverse effects onto the wages and working conditions of American workers. By updating how wage levels

are calculated, the Department aims to ensure that alien workers are paid fairly and that U.S. workers are not displaced or undercut—helping to restore balance, fairness, and public confidence in the labor certification process.

8 U.S.C. 1184(i)(1)(A). Additionally, the term “specialty occupation” is also defined to require “attainment of a bachelor's or higher degree in the specific specialty (or its equivalent) as a minimum for entry into the occupation in the United States.”

Id.

at (i)(1)(B).

Similarly, as is described in more detail below in Section II.B.3, the Department has determined that the current prevailing wage methodology does not adequately reflect labor market realities and may suppress wages and displace U.S. workers. As the Department has noted previously, “prevailing wage rates produced by the four-tier wage structure should approximate actual market wages to the greatest extent possible.” 86 FR 3634.

In response to these concerns, the Department of Labor is proposing to revise the methodology used to determine prevailing wage levels under the H-1B, H-1B1, E-3, and PERM programs. The proposed changes are intended to ensure that the employment of alien workers does not adversely affect the wages and working conditions of U.S. workers, consistent with the Department's statutory obligations in section 1182(a)(5)(A), 1182(n), and 1182(t) of the INA. When prevailing wage rates are set below what comparable U.S. workers would typically earn, it creates an incentive for employers to hire alien workers who cost less, which in turn, reduces job opportunities for equally qualified U.S. workers.

Ron Hira, Is There Really a STEM Workforce Shortage?, Issues in Science and Technology, Vol. XXXVIII, No. 4, Summer 2022, available at

https://issues.org/stem-workforce-shortage-data-hira/

While the Presidential Proclamation only identifies the H-1B program for regulatory overhaul, any adjustment to prevailing wage levels in this program will also implicate prevailing wage levels in the H-1B1, E-3, and PERM programs because the Department of Labor uses a unified four-tiered wage structure across all of these visa programs. The same OEWS data and percentile-based methodology are used to determine wage levels for both temporary (H-1B, H-1B1, E-3) and permanent (PERM) labor certification processes. Given that over 58% of FY 2024 PERM applications were filed on behalf of aliens already employed in H-1B status, maintaining consistency in wage determinations across these programs is essential to ensure that the statutory requirement—that the employment of alien workers not adversely affect the wages and working conditions of U.S. workers—is met uniformly.

Divergent wage structures would create perverse incentives for employers to exploit lower wage thresholds in one program to circumvent higher prevailing wages being offered in the other, ultimately undermining the integrity of all visa programs that utilize the current prevailing wage methodology. The Department therefore believes that revising the wage level for these other programs that are intertwined with the H-1B program, therefore, is also necessary and appropriate.

Department of Labor, Employment and Training Administration, FY 2024 PERM Performance Data, available at

https://www.dol.gov/agencies/eta/foreign-labor/performance

2. The Relationship Between the Prevailing Wage Levels, OEWS Survey, and the INA

The Department's prevailing wage determinations serve as a critical safeguard in both the H-1B and PERM programs, ensuring that the employment of alien workers does not adversely affect the wages and working conditions of U.S. workers. These determinations rely heavily on data from the Occupational Employment and Wage Statistics (OEWS) survey, which provides wage estimates across occupations and geographic areas. However, because the OEWS survey was not originally designed to reflect the statutory requirements of the Immigration and Nationality Act (INA), the Department must carefully evaluate how to align OEWS-based wage levels with the INA's mandate to protect U.S. workers.

As noted, the INA requires employers to pay H-1B workers the greater of “the actual wage level paid by the employer to all other individuals with similar experience and qualifications for the specific employment in question,” or “the prevailing wage level for the occupational classification in the area of employment.” The statute further provides that, when a government survey is used to establish the wage levels, “such survey shall provide at least 4 levels of wages commensurate with experience, education, and the level of supervision.” If an existing government survey produces only two levels, the statute provides a formula to calculate two intermediate levels. Thus, similar to the statute's actual wage clause, the prevailing wage requirement, when calculated based on a government survey, makes the qualifications possessed by workers in the occupation, namely education, experience, and responsibility, an important part of the wage calculation. Put slightly differently, both clauses yield wage requirements that are meant to align with the wages that similarly employed U.S. workers are being compensated with a requirement that employers pay the higher available wage. In this way, the statutory scheme is meant to “protect U.S. workers' wages and eliminate any economic incentive or advantage in hiring temporary alien workers.” If employers are required to pay H-1B workers approximately the same wage paid to U.S. workers who perform the same type of work in the same geographic area and with similar levels of education, experience, and responsibility as the H-1B workers, employers will have significantly diminished incentives to prefer H-1B workers over U.S. workers. By reducing the perverse incentive to favor alien H-1B workers over the domestic workforce, U.S. workers' wages will not be suppressed by the presence of alien workers in the relevant labor market.

To set appropriate prevailing wage levels consistent with the purpose of the relevant statutory provisions and statutory mandate on the Department, as discussed below, the Department has concluded that it is appropriate to focus on the wages of those U.S. workers that are most similarly employed to alien workers in the H-1B program, those receiving an EB-2 visa, and higher skilled EB-3 visa recipients.

Based on the statutory qualifications to be eligible to receive H-1B status, the Department thinks that while the OEWS survey is the best source of wage data available for use in the Department's foreign labor certification programs, the wage data for any particular occupation does not perfectly align with the requirement that workers in the H-1B program possess highly specialized knowledge. This fact necessarily shapes how the Department integrates the OEWS survey into its foreign labor programs and also demonstrates the existing wage levels' inconsistency with the INA.

At the outset, the Department notes that much of its assessment of how best to adjust the prevailing wage levels gives special attention to the H-1B program. The H-1B program accounts, by order of magnitude, for the largest share of alien workers covered by the Department's four-tier wage structure. Upwards of 80 percent of all workers admitted or otherwise authorized to work under the programs covered by the wage structure are H-1B workers.

This, in combination with the fact that, as explained below, the risk of adverse effects to U.S. workers posed by the presence of alien workers is most acute where there are high concentrations of such workers, supports the Department's determination to focus on the H-1B program. Because the wage structure governs, and, for reasons explained below, will continue to govern wages for hundreds of thousands of workers across five different foreign labor programs and hundreds of different occupations, no wage methodology will be perfectly tailored to the unique circumstances of every job opportunity.

Accordingly, the Department thinks that it is appropriate to focus its analysis on the H-1B program and those occupations in which the vast majority of H-1B workers are employed.

See

Department of Homeland Security, 2017 Yearbook of Immigration Statistics, Table 7. Persons Obtaining Lawful Permanent Resident Status by Type and Detailed Class of Admission: Fiscal Year 2017, available at

https://ohss.dhs.gov/topics/immigration/yearbook/2017/table7

; United States Citizenship and Immigration Services, Characteristics of H-1B Specialty Occupation

Workers: Fiscal Year 2017 Annual Report to Congress October 1, 2016-September 30, 2017 (Apr. 9, 2018), available at

https://www.uscis.gov/sites/default/files/document/reports/Characteristics-of-Specialty-Occupation-Workers-H-1B-Fiscal-Year-2017.pdf.

Cf.

Wage Methodology for the Temporary Non-agricultural Employment H-2B Program, 76 FR 3452, 3461 (Jan. 19, 2011) (justifying wage methodology designed for lower-skilled workers that was adopted in the H-2B program on grounds that the program “is overwhelmingly used for work requiring lesser skilled workers,” while also acknowledging that “not all positions requested through the H-2B program are for low-skilled labor.”).

Relatedly, the Department notes that the H-1B program is closely linked to the PERM programs that are also covered by the Department's wage structure. A majority of workers covered by PERM labor certification applications are already working in the U.S. as H-1B nonimmigrants, and there is significant overlap in the types of occupations in which H-1B and PERM workers are employed.

It is also clear that H-1B status often serves as a pathway to employment-based lawful permanent resident status for many alien workers.

The programs have thus long been regulated in connection with one another.

For these reasons, giving particular attention to the H-1B program and the determination of how wages for H-1B workers are calculated is intimately connected with how the wages for alien workers in the PERM program are calculated, given that many H-1B workers find themselves eventually in the PERM program. It is therefore appropriate that the Department's analysis applies with equal force to both programs.

In FY2024, 57.6 percent of all PERM labor certification applications filed were for H-1B workers already working in the United States. Department of Labor, Employment and Training Administration,

Performance Data,

available at

https://www.dol.gov/agencies/eta/foreign-labor/performance

See

Sadikshya Nepal,

The Convoluted Pathway from H-1B to Permanent Residency: A Primer,

Bipartisan Policy Center (July 7, 2020), available at

https://bipartisanpolicy.org/article/the-convoluted-path-from-h-1b-to-permanent-residency-a-primer/

See

144 Cong. Rec. S12741, S12756 (explaining that 8 U.S.C. 1182(p) “spells out how [the prevailing] wage is to be calculated in the context of both the H-1B program and the permanent employment program in two circumstances.”); Retention of EB-1, EB-2, and EB-3 Immigrant Workers and Program Improvements Affecting High-Skilled Nonimmigrant Workers, 81 FR 82398-01 (November 18, 2016).

Under the INA, H-1B, H-1B1, and E-3 classification can, in most cases, only be granted to aliens entering the U.S. to perform services “in a specialty occupation.”

The statute defines “specialty occupation” as an occupation that requires theoretical and practical application of a body of “highly specialized knowledge” and the “attainment of a bachelor's or higher degree in the specific specialty (or its equivalent) as a minimum for entry into the occupation in the United States.”

An alien may be classified as an H-1B specialty occupation worker if the alien possesses “full state licensure to practice in the occupation, if such licensure is required to practice in the occupation,” “completion of [a bachelor's or higher degree in the specific specialty (or its equivalent)],” or “(i) experience in the specialty equivalent to the completion of such degree, and (ii) recognition of expertise in the specialty through progressively responsible positions relating to the specialty.”

DHS regulations further clarify the requirements for establishing that the position is a specialty occupation and that the beneficiary of an H-1B petition must be qualified for a specialty occupation.

The Department's regulations restate the statute's definition of specialty occupation essentially verbatim.

8 U.S.C. 1101(a)(15)(H)(i)(b).

8 U.S.C. 1184(i)(1)(i)-(ii).

8 U.S.C. 1184(i)(2)(C)(i)-(ii).

8 CFR 214.2(h)(4)(iii)(A), (C).

Compare

20 CFR 655.715

with

8 U.S.C. 1184(i)(1)(i)-(ii).

A few features of the definition bear emphasizing. First, the INA sets the attainment of a bachelor's degree in a specific specialty, or experience that would give an individual expertise equivalent to that associated with a bachelor's degree in the specific specialty, as the baseline, minimum requirement for an alien to qualify for the classification. Of even greater importance, having “any bachelor's degree” as a job requirement is not sufficient to qualify a job as a specialty occupation position—the bachelor's degree or equivalent required to perform the job must be “in the specific specialty.” In other words, the bachelor's degree required, or equivalent, must be specialized to the particular needs of the job, and impart a particularized level of expertise tailored to a given field.

These aspects of the definition play an important role in how the Department will use data from the BLS OEWS survey to set appropriate prevailing wage levels.

See Chung Song Ja Corp.

U.S. Citizenship & Immigration Servs.,

96 F. Supp. 3d 1191, 1197-98 (W.D. Wash. 2015) (“Permitting an occupation to qualify simply by requiring a generalized bachelor degree would run contrary to congressional intent to provide a visa program for specialized, as opposed to merely educated, workers.”);

Caremax Inc

Holder,

40 F. Supp. 3d 1182, 1187-88 (N.D. Cal. 2014) (“A position that requires applicants to have any bachelor's degree, or a bachelor's degree in a large subset of fields, can hardly be considered specialized.”) (citing

Fred 26 Importers, Inc.

Dept. of Homeland Sec.,

445 F.Supp.2d 1174, 1179-80 (C.D. Cal. 2006)).

The Department has long relied on OEWS data to establish prevailing wage levels. That is because it is a comprehensive, statistically valid survey that, in many respects, is the best source of wage data available for satisfying the Department's purposes in setting wages in most immigrant and nonimmigrant visa programs. As the Department has previously noted the OEWS wage survey is among the largest continuous statistical survey programs administered by the federal government. BLS produces the survey materials and selects the nonfarm establishments to be surveyed using the list of establishments maintained by State Workforce Agencies (SWAs) for unemployment insurance purposes. The OEWS collects data from over 1 million establishments. Salary levels based on geographic areas are available at the national and State levels and for certain territories in which statistical validity can be ascertained, including the District of Columbia, Guam, Puerto Rico, and the U.S. Virgin Islands. Salary information is also made available at the metropolitan and nonmetropolitan area levels within a State. Wages for the OEWS survey are straight-time, gross pay, exclusive of premium pay. Base rate, cost-of-living allowances, guaranteed pay, hazardous duty pay, incentive pay including commissions and production bonuses, tips, and on-call pay are included. The features described above are unique to the OEWS survey, which is a comprehensive, statistically valid, and useable wage reference.

Wage Methodology for the Temporary Non-agricultural Employment H-2B Program, 76 FR 3452, 3463 (Jan. 19, 2011).

Put simply, the OEWS survey's quality and characteristics have made it, and continue to make it, a useful tool for

setting prevailing wage levels in the Department's foreign labor programs. There are no alternative surveys or sources of wage data that would provide DOL with wage information at the same level of granularity needed to properly administer the H-1B and PERM programs. In response to the Department's 2021 Request for Information, no commenter identified a more suitable and comprehensive data source than the OEWS for determining prevailing wages, further reinforcing the Department's continued reliance on this dataset.

That said, the OEWS survey is not specifically designed to serve these programs. For one thing, “the OEWS survey captures no information about differences within the [occupational] groupings based on skills, training, experience or responsibility levels of the workers whose wages are being reported”

100

—the factors the INA requires the Department to rely on in setting prevailing wage levels.

101

Relatedly, “there are factors in addition to skill level that can account for OEWS wage variation for the same occupation and location.”

102

Further, the geographic areas used by BLS to calculate local wages do not always match up exactly with the “area of employment” for which wage rates are set, as that term is defined by the INA for purposes of the H-1B program.

103

So while the OEWS survey is the best available source of wage data for the Department's purposes, and the Department is proposing to continue using it as the data source, the Department's use of the OEWS data must be done in a way that aligns with the requirements in the INA.

100

Wage Methodology for the Temporary Non-Agricultural Employment H-2B Program, 80 FR 24146, 24155 (Apr. 29, 2015).

101

8 U.S.C. 1182(p)(4).

102

Wage Methodology for the Temporary Non-Agricultural Employment H-2B Program, 80 FR at 24159.

103

8 U.S.C. 1182(n)(4)(A).

Because the wage methodology will, by statute, be used to establish the prevailing wage for the H-1B program and highly skilled workers that are the beneficiaries of PERM applications, as discussed above, the INA's definition of “specialty occupation” is relevant to how the wage levels are set using the OEWS wage survey. The survey categorizes workers into occupational groups defined by the SOC system, a federal statistical standard used by federal agencies to classify workers into occupational categories for the purpose of collecting, calculating, or disseminating data.

104

An informative source on the duties and educational requirements of a wide variety of occupations, including those in the SOC system, is the Department's Occupational Outlook Handbook (OOH), which, among other things, details for various occupations the baseline qualifications needed to work in each occupation. A review of the OOH shows that only a portion of the workers covered by many of the occupational classifications used in the OEWS survey likely have levels of education and experience similar to those of H-1B workers in the same occupation.

105

Some share of workers in these classifications do not have the education or experience qualifications necessary to be considered similarly employed to specialty occupation workers. Because the INA requires the prevailing wage levels for the H-1B, H-1B1, and E-3, and PERM programs to be set based on the wages of U.S. workers based on the levels of education, experience, and supervision in the relevant occupation, the Department must take this into account when using OEWS data to determine prevailing wages.

104

U.S. Bureau of Labor Statistics, Standard Occupational Classification, available at

https://www.bls.gov/soc/

105

The five most common SOC codes represented in LCAs in FY 2024 were Software Developers (15-1252), Computer Systems Engineers/Architects (15-1299.08), Information Technology Project Managers (15-1299.09), Electronics Engineers, Except Computer (17-2072.00) and Software Quality Assurance Analysts and Testers (15-1253.00) FY 2024 LCA Performance data. These occupations accounted for approximately 47 percent of all LCA's filed in FY 2024.

For each of these occupations, for which data was available, at least some of the respondents to the BLS surveys underlying their data reported educational requirements below the baccalaureate threshold: Software Developers (5%—Associate's degree required); Computer Systems Engineers/Architects (68%—either a Post-secondary certificate or Associate's degree required); Information Technology Project Managers (43%—either a Post-secondary certificate or Associate's degree required); Electronics Engineers, Except Computer (14%—Associate's degree required); and Software Quality Assurance Analysts and Testers (35%—either a Post-secondary certificate or Associate's degree required).

See,

https://www.onetonline.org/link/summary/15-1252.00

;

https://www.onetonline.org/link/summary/15-1299.08

;

https://www.onetonline.org/link/summary/15-1299.09

;

https://www.onetonline.org/link/summary/17-2072.00

; and

https://www.onetonline.org/link/summary/15-1253.00

, respectively.

For example, a common occupational classification in which employers seek to employ H-1B nonimmigrants is Software Developer.

106

The OOH's entry for Software Developer notes that Software Developers

typically

have a bachelor's degree.

107

In other words, while typical, a bachelor's degree-level education, or its equivalent, is not always a prerequisite for working in this occupation. Because a person without a specialized bachelor's degree can still be employed as a Software Developer, some portion of Software Developers captured by the OEWS survey are not similarly situated to H-1B workers because the baseline qualifications to enter the occupation based on the OOH do not match the statutory requirements for H-1B workers.

106

See

Office of Foreign Labor Certification, LCA (H-1B, H-1B1, and E-3) Temporary Specialty Occupations Labor Condition Program—Selected Statistics, FY 2024, available at

https://www.dol.gov/sites/dolgov/files/ETA/oflc/pdfs/LCA_Selected_Statistics_FY2024_Q4.pdf

107

Bureau of Labor Statistics, Occupational Outlook Handbook, Software Developers, Quality Assurance Analysts, and Testers, available at

https://www.bls.gov/ooh/computer-and-information-technology/software-developers.htm

A similar analysis applies to the occupation of Registered Nurse (RN). According to the OOH, entry into the RN occupation may be achieved through a bachelor's degree in nursing (BSN), an associate's degree in nursing (ADN), or a diploma from an approved nursing program.

108

For prevailing wage purposes, the Department's methodology considers the broader population of RNs—including those with associate's degrees and diplomas—when determining the wages of U.S. workers who are similarly situated in terms of education, experience, and job duties.

109

In cases where an employer seeks a prevailing wage determination for a nursing position that requires higher qualifications, such as advanced practice or management roles, the prevailing wage determination may reflect the higher educational or experiential requirements, provided the employer demonstrates that such requirements are normal for the occupation and the position.

110

This approach ensures that prevailing wage determinations for nursing occupations are aligned with labor market realities and statutory requirements.

108

Bureau of Labor Statistics, U.S. Department of Labor, Occupational Outlook Handbook, Registered Nurses, available at

https://www.bls.gov/ooh/healthcare/registered-nurses.htm

109

See 20 CFR 656.40(b)(2) (prevailing wage determinations are based on the wages of workers “similarly employed” in the occupation and area of intended employment, as reflected in the OEWS survey).

110

See 20 CFR 656.40(b)(2); see also DOL Prevailing Wage Determination Policy Guidance, Nonagricultural Immigration Programs (2009), at 4-5 (explaining that the wage level may be adjusted based on the requirements of the position and the normal requirements for the occupation).

A review of the OOH entries for the occupations in which H-1B nonimmigrants most commonly work demonstrates that most H-1B workers fall within SOC classifications that

include some number of workers who would not qualify for employment in a specialty occupation. For instance, the OOH entries for Software Developers—an occupation accounting for over 32 percent of all certified LCAs

111

—provides that a bachelor's degree is the

typical

level of education that most workers need” to become one. Computer Systems Analysts, which make up approximately 2.8 percent of all certified LCAs,

112

”typically need a bachelor's degree. . .”

113

Moreover, O*Net does not differentiate between jobs that require bachelor's degrees in specific specialties and those that accept a general bachelor's degree. Because prevailing wages must reflect the wages paid to U.S. workers who are similarly employed—that is, those with comparable education, experience, and responsibility—the Department's analysis focuses only on the subset of U.S. workers in each occupation who would meet the statutory qualifications for H-1B employment, rather than the broader population included in OEWS wage data.

114

111

Office of Foreign Labor Certification, H-1B Temporary Specialty Occupations Labor Condition Program—Selected Statistics, FY 2024, available at

https://www.dol.gov/sites/dolgov/files/ETA/oflc/pdfs/LCA_Selected_Statistics_FY2024_Q4.pdf

112

Office of Foreign Labor Certification, H-1B Temporary Specialty Occupations Labor Condition Program—Selected Statistics, FY 2024, available at

https://www.dol.gov/sites/dolgov/files/ETA/oflc/pdfs/LCA_Selected_Statistics_FY2024_Q4.pdf

113

Bureau of Labor Statistics, Occupational Outlook Handbook, Computer Systems Analysts, available at

https://www.bls.gov/ooh/computer-and-information-technology/computer-systems-analysts.htm

;

Office of Foreign Labor Certification, LCA (H-1B, H-1B1, and E-3) Temporary Specialty Occupations Labor Condition Program—Selected Statistics, FY 2024, available at

https://www.dol.gov/sites/dolgov/files/ETA/oflc/pdfs/LCA_Selected_Statistics_FY2024_Q4.pdf

114

The Occupational Information Network (ONET), developed by the U.S. Department of Labor, provides detailed information on the knowledge, skills, abilities, education, and work activities associated with occupations classified under the Standard Occupational Classification (SOC) system. In the context of prevailing wage determinations, ONET is used by the Department to help assess the complexity and requirements of job duties, which informs the appropriate wage level assignment based on the education, experience, and supervision required for the position.

Simply put, the universe of workers surveyed by the OEWS for some of the most common occupational classifications in which H-1B workers are employed is larger than the pool of workers who can be said to have levels of education and experience comparable to those of even the least skilled H-1B workers performing work within that occupational classification. Because this methodology will substantially apply to H-1B petitions and PERM applications for H-1B worker beneficiaries, to allow for a more direct comparison and therefore set a more accurate prevailing wage, it would be inappropriate to consider the wages of the least educated and experienced workers in these occupational classifications in setting the prevailing wage levels. To conclude otherwise would place the Department at odds with one of the purposes of the INA's core wage protections—to prevent employers from using alien workers to depress wage levels, which in turn reduces pay and job opportunities for U.S. workers.

This consideration also demonstrates the problems with the existing wage levels. As noted above, the Department's first wage level is currently set by calculating the mean of the bottom third of the OEWS wage distribution. Because the majority of LCAs receive a Level I or II wage, the wages for many H-1B workers are set based on a calculation that takes into account wages paid to workers who almost certainly would not qualify to work in a “specialty occupation,” as defined by the INA.

115

The Department has noted previously that “workers in occupations that require sophisticated skills and training receive higher wages based on those skills.”

116

As a worker's education and skills increase, his wages are expected to as well.

117

For that reason, it is likely that workers at the lowest end of an occupation's wage distribution generally have the lowest levels of education, experience, and responsibility in the occupation. In consequence, if the occupation by definition includes workers who do not have the level of specialized knowledge required of H-1B workers, because of the prevalence of Level I and Level II wages assigned to LCAs the very bottom of the wage distribution should be discounted in determining the appropriate baseline along the OEWS wage distribution to establish the entry-level wage under the four-tiered wage structure. Yet the existing wage structure makes such workers a central component of the prevailing wage calculation.

118

115

Indeed, even in the Department's original 2005 guidance setting the current prevailing wage methodology, the Department observed that “[e]mployer requests for foreign workers are frequently for fully qualified workers who possess special skills. Wage Level I would not be assigned in those situations.”

See

Employment and Training Administration, Prevailing Wage Determination Policy Guidance for Nonagricultural Immigration Programs 6 (Mar. 1, 2005), available at

https://www.aila.org/files/o-files/view-file/84809966-67A1-4645-95CB-CB8F826C1F3C

116

Wage Methodology for the Temporary Non-Agricultural Employment H-2B Program, Part 2, 78 FR 24047, 24051 (Apr. 24, 2013).

117

See

Bureau of Labor Statistics, Learn more, earn more: Education leads to higher wages, lower unemployment, available at

https://www.bls.gov/careeroutlook/2020/data-on-display/education-pays.htm

118

For example, the occupation of Software Developers, which accounts for a large number of H-1B workers, does not, as explained above, require the same degree of specialized knowledge as a baseline entry requirement as does the INA's definition of “specialty occupation.” Yet approximately 10 percent of all LCAs filed with the Department for software developer positions classify those positions as entry-level, meaning that under the current wage levels the wages paid to such specialty occupation workers are calculated based, at least in part, on the wages paid to some workers who do not have comparable specialized knowledge and expertise. This outcome directly contravenes the INA's requirement that H-1B workers be paid wages commensurate with the wages paid to U.S. workers with similar levels of education, experience, and responsibility.

Similarly, the current Level IV wage is set by calculating the mean of the upper two-thirds of the wage distribution. That means that the wage level provided for the most experienced and highly educated H-1B workers is determined, in part, by taking into account a sizeable number of workers who do not even make more than the median wage of the occupation. The Department is concerned that workers making less than the median wage of the occupation are unlikely to possess commensurate experience, education, and requirements for supervision as are the alien workers who would be regarded as typical of Wage Level IV. The Department's analysis of OEWS wage distributions confirms that the current Level IV methodology includes a substantial share of workers whose wages—and likely qualifications—fall below what would be expected for the most advanced roles, thereby undermining the intended purpose of the highest wage tier.

The same reasons for discounting a portion of the workers at the bottom of the OEWS wage distribution in order to compute appropriate entry-level wages, based on the fact that such workers are not similarly employed to even the least skilled H-1B workers, also applies to the wages for the EB-2 immigrant visa preference classification and the E-3 and H-1B1 nonimmigrant programs, for which the Department also uses the four-tier prevailing wage structure.

The E-3 and H-1B1 classifications, like the H-1B classification, require that the alien work in a specialty occupation.

119

Thus these programs' relation to the OEWS wage data is essentially identical to that of the H-1B program. Although E-3 and H-1B1 workers may not necessarily be concentrated in the same occupational categories as H-1B workers, the statutory requirement that they be employed in specialty occupations

means they must possess comparable levels of skill, specialization, and responsibility. As such, the level of skill, specialization, and responsibility required for E-3 and H-1B1 positions is often comparable to that required for H-1B positions. Applying the same prevailing wage structure across these classifications ensures consistency in how the Department protects U.S. workers and prevents employers from selecting among visa categories based on wage-setting advantages rather than legitimate labor needs.

119

See

8 U.S.C. 1184(i).

As for the EB-2 classification, the reasons for discounting the lower end of the OEWS wage distribution for setting the baseline to establish an entry-level wage for the classification are even more apparent than they are for the specialty occupation programs. Under the INA, the EB-2 classification applies to individuals who are “members of the professions holding advanced degrees or their equivalent or who because of their exceptional ability in the sciences, arts, or business, will substantially benefit prospectively the national economy, cultural or educational interests, or welfare of the United States.”

120

DHS regulations, in turn, define an “advanced degree” as any United States academic or professional degree or a foreign equivalent degree above that of a bachelor`s degree. A United States bachelor's degree or a foreign equivalent degree followed by at least five years of progressive experience in the specialty shall be considered the equivalent of a master's degree. If a doctoral degree is customarily required by the specialty, the alien must have a United States doctorate or a foreign equivalent degree.

121

120

8 U.S.C. 1153(b)(2)(A).

121

8 CFR 204.5(k)(2).

The regulation goes on to define “exceptional ability” to mean “a degree of expertise significantly above that ordinarily encountered in the sciences, arts, or business.”

122

Id.

As is the case for H-1B nonimmigrants, the baseline, minimum qualifications that an EB-2 immigrant must possess exceed the educational and experiential requirements the OOH describes as generally necessary to enter some of the most common SOC occupational classifications in which EB-2 immigrants work. For example, the most common occupation in which PERM labor certifications—of which applications for EB-2 immigrants represent a substantial share—are sought is Software Developers, which accounts for nearly 21 percent of all approved PERM applications.

123

As already noted, according to the OOH, a bachelor's degree is the “[t]ypical level of education” for Software Developers.

124

A master's degree, generally a requirement for obtaining EB-2 immigrant status, is therefore substantially above the typical, baseline qualifications needed to work as a Software Developer. Similarly, a Software Developer who satisfies the regulatory definition of “exceptional ability” would be, ipso facto, more highly skilled than the typical entry-level-worker in that occupation. This pattern holds for most of the top occupations into which PERM applications fall.

125

123

Employment and Training Administration, Office of Foreign Labor Certification, Permanent Employment Program—Selected Statistics, Fiscal Year (FY) 2024, available at

https://www.dol.gov/sites/dolgov/files/ETA/oflc/pdfs/PERM_Selected_Statistics_FY2024_Q4.pdf

124

Bureau of Labor Statistics, Occupational Outlook Handbook, Software Developers, available at

https://www.bls.gov/ooh/computer-and-information-technology/software-developers.htm

125

See Office of Foreign Labor Certification, Permanent Labor Certification Program—Selected Statistics, FY 24, available at

https://www.dol.gov/sites/dolgov/files/ETA/oflc/pdfs/PERM_Selected_Statistics_FY2024_Q4.pdf

By contrast, EB-3 immigrants—who may qualify as “skilled workers” (requiring at least two years of training or experience) or “professionals” (holding a bachelor's degree)—do not necessarily exceed the baseline qualifications for many of these occupations to the same degree as EB-2 workers. For example, in occupations where a bachelor's degree is the typical requirement, EB-3 professionals align more closely with the median qualifications described in the OOH, while EB-3 skilled workers may fall below that threshold in some cases. Accordingly, while the Department's methodology accounts for differences in education and experience across visa categories, prevailing wage levels for EB-3 workers should reflect that these workers are not uniformly as specialized as EB-2 workers, even though they must still meet statutory requirements and should not be paid wages that undercut similarly employed U.S. workers.

Accordingly, because EB-2 workers are required to possess qualifications that exceed those of the average worker in these occupations, it is appropriate to set their prevailing wage levels higher on the wage distribution to reflect their advanced education, experience, and skill.

In sum, the eligibility criteria established by the INA for most of the immigrant and nonimmigrant programs to which the Department's prevailing wage levels apply set a higher baseline for the minimum qualifications an alien must possess than the minimum qualification requirements that exist for U.S. workers generally in most of the occupations in which these aliens most commonly work. The H-1B, H-1B1, E-3, and EB-2 classifications are for workers with specialized knowledge and skills and/or advanced degrees.

126

Because the prevailing wage levels should take into account the experience, education, and level of supervision of occupational classifications, to ensure that those prevailing wage rates are an appropriate wage floor for positions that require specialized knowledge and skills and/or advanced degrees, the prevailing wage rates should be formulated based on the wages paid to workers who similarly possess specialized knowledge and skills in their occupations. Given that not every worker in a given OEWS occupation is likely to meet that standard, and that workers at the lower end of the wage distribution are also likely to be the workers with the lowest levels of education and experience, the Department has determined it is appropriate to discount the lower portion of the OEWS distribution in setting the wage levels. The Department should instead identify where within the distribution workers are to be found who possess the same kinds of specialized education and experience possessed by aliens working in the H-1B, H-1B1, E-3, and EB-2 classifications. The wages paid to those U.S. workers can serve as the basis for appropriately adjusting the prevailing wage levels to ensure the employment of alien workers does not adversely affect the wages and job opportunities of U.S. workers. Although the EB-3 category is not included in this analysis because its minimum qualifications for skilled workers or professionals with a bachelors' degrees do not uniformly exceed the baseline requirements for many occupations, the Department notes that some EB-3 workers may also qualify for H-1B, H-1B1, or E-3 status, and vice versa. For this reason, and because EB-3 accounts for a small share of PERM applications, the Department applies the same prevailing wage structure to EB-3 to avoid creating incentives for employers to select visa categories based on lower wage

thresholds rather than legitimate business needs.

126

The Department notes that its assessment of the appropriateness of adjusting the prevailing wage levels in the manner described by this rule with respect to the EB-3 classification is governed by distinct considerations, which are described more fully below.

The Department recognizes that applying a unified prevailing wage structure may result in higher wage requirements for some EB-3 positions that do not require the same level of education or specialization as H-1B or EB-2 roles; however, particularly given the prevalence of higher skilled workers in H-1B and PERM, maintaining a consistent wage framework across programs is necessary to prevent program shopping and to uphold the statutory requirement that alien workers be paid at least the prevailing wage for similarly employed U.S. workers, particularly in occupations where job duties and responsibilities may overlap despite differing formal entry requirements.

3. Adverse Effects of Current Prevailing Wage Levels

This section evaluates the comprehensive analysis that the Department has undertaken to understand, assess, and evince the deleterious effects that the current prevailing wage methodology has had on U.S. workers' wages and working conditions. This analysis includes an extensive review of the economic and programmatic data, qualitative evidence consisting of reports and investigations into the H-1B program, and litigation. Based on the evidence, the Department believes that the current prevailing wage methodology sets prevailing wages at levels that may not adequately reflect the Department's statutory requirements.

a. Economic Analysis of Adverse Effects on the Wages of U.S. Workers

As one research organization noted in a recent study of the H-1B program, “[t]he evidence strongly suggests that the H-1B program is not working as intended.”

127

The study pointed out that “in certain occupations, H-1B holders earn significantly less than their American counterparts.” The Department's data also indicates that the majority of H-1B positions are concentrated in the lower wage tiers. Sixty-three percent of certified LCAs in FY 2024 were for positions classified at wage levels I and II—levels typically associated with entry-level roles.

128

This wage distribution raises concerns that the program is being used to fill mostly lower-paid positions and not serving its intended purpose of protecting U.S. workers from adverse effects by preventing employers from using alien workers to undercut wages and job opportunities for American workers.

129

127

Frei, Alexander P.,

Rethinking the H-1B Visa Program: A Data-Driven Look at Structural Failures and the High-Skill Illusion,

Heritage Foundation (Aug. 8, 2025), available at

https://www.heritage.org/border-security/report/rethinking-the-h-1b-visa-program-data-driven-look-structural-failures-and#

128

Office of Foreign Labor Certification, H-1B Temporary Specialty Occupations Labor Condition Program—Selected Statistics in FY 2024, available at

https://www.dol.gov/agencies/eta/foreign-labor/performance

129

See

8 U.S.C. 1101(a)(15)(H)(i)(b); 8 U.S.C.1184(i)(1)(A) (describing the term “specialty occupation” as requiring “theoretical and practical application of a body of highly specialized knowledge” among other educational requirements.

The Department conducted a comprehensive analysis comparing certified LCA wages

130

to OEWS data,

131

matched by SOC code, state, and year. This analysis is documented below, in Section II.C.1. This comparison revealed that the average wage offered to H-1B workers was approximately $10,191 lower than the OEWS average wage for workers for similarly classified occupations. This differential may reflect a range of factors, including experience levels, geographic variation, and employer-specific compensation practices. The disparity is even more pronounced in computer-related occupations, where the average wage gap was $10,972. These findings suggest that employers are leveraging the H-1B program to access a lower-cost labor pool, even in occupations that nominally require high levels of skill and education. This underpayment further supports the Department's conclusion that the current prevailing wage structure does not adequately reflect market wages and is in urgent need of reform. These same labor market dynamics are relevant to the PERM program, where underpayment of alien workers can similarly distort hiring incentives and erode labor standards. Using the same wage levels in both programs ensures that employers cannot use the permanent labor certification process to institutionalize wage disparities that originated in the temporary visa context.

130

See generally

Office of Foreign Labor Certification, H-1B Temporary Specialty Occupations Labor Condition Program—Selected Statistics, available at

https://www.dol.gov/agencies/eta/foreign-labor/performance

131

See generally

U.S. Bureau of Labor Statistics,

Occupational employment and wage statistics

(BLS Occupational Employment Statistics), available at

https://www.bls.gov/oes/

Additionally, the Department's current prevailing wage methodology permits employers to classify a substantial share of H-1B positions, particularly in high-demand occupations such as software development, as “entry-level.” Because the current methodology places Level I wages near the bottom of the OEWS distribution, which includes workers who do not possess the specialized education and experience required for H-1B eligibility, Level I wages are often set far below what specialized H-1B workers and comparably qualified workers would earn. Compounding this issue is the existence of a large pool of alien workers willing to accept lower wages because the cost of living in their home countries is substantially lower and other factors that make U.S. wages attractive even at discounted rates. This dynamic exerts downward pressure on wages for U.S. workers, as employers can classify H-1B roles as entry-level and thus pay wages that do not reflect the qualifications of the alien worker. Moreover, if the same employer hires all similarly qualified workers at the entry-level prevailing wage, then the “actual wage paid” by the employer would be the same as the prevailing wage. This structural flaw creates a systemic cost advantage for hiring H-1B workers over domestic talent, effectively enabling employers to substitute lower-paid alien workers for U.S. workers and institutionalizing wage arbitrage under the guise of legal compliance.

The adjustment to Level IV, in turn, was based on statistical modeling of OEWS wage distributions and is intended to correct for the current methodology's mismatch of mid-level and high-level earners with prevailing wage levels that did not properly compare them to U.S. earners of the same experience, education and level of supervision. This caused dilution of the wage standard for top-tier talent and failed to reflect the wages of workers with the greatest levels of education, experience, and responsibility. By revising the Level IV wages to better reflect the actual compensation of U.S. workers with equivalent qualifications, the Department aims to restore labor market fairness and ensure that the employment of alien workers does not suppress wages or displace U.S. workers.

b. Other Relevant Evidence, Reports, Investigations, and Litigation Demonstrating Adverse Effects of Current Prevailing Wages

The Department's analysis is grounded in its own administrative data and statutory responsibilities. However, other evidence, including investigative reporting and academic research, has supported many of the Department's conclusions.

Academic research indicates that the influx of low-cost alien workers into a labor market suppresses wages, and this

effect increases significantly as the number of alien workers increases. In particular, some empirical research, when inputted into a rough simulation, suggests that a substantial increase (more specifically, a 10 percent increase) in the labor supply due to the presence of alien workers could reduce the wages of the average U.S. worker by 3.2 percent, a rate that grew to 4.9 percent for college graduates.

132

The current prevailing wage structure distorts hiring incentives and compensation by setting entry-level wages far below market rates for positions requiring specialized skills, which incentivizes employers to classify jobs at the lowest permissible level. This NPRM proposes to recalibrate wage levels to better reflect the education, experience, and responsibility required for H-1B positions, thereby reducing the opportunity for wage arbitrage.

132

Borjas, George J. (2003). “The Labor Demand Curve Is Downward Sloping: Reexamining the Impact of Immigration on the Labor Market.” The Quarterly Journal of Economics, 118(4), 1335-1374.

The Department has also reviewed evidence indicating that the intent of the H-1B “actual wage” requirement can be undermined when end-clients obtain labor through outsourcing or staffing firms (sometimes called “job shops”). In such arrangements, the H-1B employer of record is the outsourcing firm, not the end-client; consequently, the “actual wage” analysis compares the H-1B worker's pay only to other workers at the outsourcing firm—who may be predominantly workers with H-1B visas and paid at or near prevailing-wage floors—rather than to the higher-paid, similarly employed U.S. workers at the end-client company. Government reports and public reporting have documented this dynamic and show it can facilitate large pay gaps between outsourced H-1B workers and client-site employees performing substantially similar functions.

133

Although this rulemaking would not directly change how “actual wage” determinations are applied in third-party placement scenarios, by raising prevailing wage levels it would increase the wage floor and, in turn, reduce the magnitude of these gaps in cases where outsourcing companies pay at or near the prevailing wage. Another report revealed that certain outsourcing firms exploited the H-1B registration system by submitting multiple registrations for the same beneficiaries, thereby gaining an unfair advantage in the selection process.

134

This report demonstrated how some companies would manipulate the lottery by flooding the system with duplicate or coordinated entries for individual workers, often through affiliated entities or shell companies. This practice significantly increased their odds of selection while disadvantaging employers who followed the rules and submitted a single registration per candidate. The result was a distorted allocation process that undermined the integrity of the H-1B program and enabled a small group of companies to cannibalize access to scarce visa slots. Although registrations do not represent actual employment and do not capture wages, evidence that the system can be gamed—even outside the Department's direct purview—despite the availability of ample entry-level U.S. workers suggests that some employers view H-1B workers as a lower-cost alternative. This underscores the importance of ensuring that prevailing wage levels are set appropriately to eliminate incentives for wage arbitrage and protect U.S. workers from being undercut.

133

See

U.S. Gov't Accountability Office,

H-1B Visa Program: Reforms Are Needed to Minimize the Risks and Costs of Current Program

20 (2011),

https://www.gao.gov/assets/320/314501.pdf

, at 52-56 (raising concerns that the H-1B program lacks an explicit mechanism for holding employers accountable when they obtain H-1B workers through a staffing company); Ron Hira and Daniel Costa, Economic Policy Inst., The H-1B Visa Program Remains the “Outsourcing Visa” (Mar. 31, 2021),

https://www.epi.org/blog/the-h-1b-visa-program-remains-the-outsourcing-visa-more-than-half-of-the-top-30-h-1b-employers-were-outsourcing-firms/

(noting that “H-1B outsourcing companies . . . replace incumbent U.S. workers with H-1B workers and typically pay their H-1B workers the lowest wages permitted by law, far below market wage rates”) and that large companies have “[laid] off hundreds of their well-paid employees and contract[ed] with major outsourcing firms . . . to replace those employees with H-1B workers who were paid salaries that were tens of thousands of dollars less”).

134

Bloomberg News, Outsourcing Firms Monopolize H-1B Visa Program, BLOOMBERG (Aug. 13, 2024), available at

https://unity-connect.com/our-resources/news/bloomberg-reveals-outsourcing-firms-monopolize-h-1b-visa-program/

Between 2019 and 2025, a significant share of LCAs were filed in technology-related occupations, particularly software engineering roles. During this same period, major technology firms and outsourcing companies that are among the largest users of the H-1B program also conducted large-scale layoffs of U.S. workers. A 2023 study by the Economic Policy Institute found that the top 30 H-1B employers laid off at least 85,000 workers in 2022 and early 2023 while simultaneously hiring 34,000 H-1B workers.

135

And recently, in a lawsuit brought by a class of current and former employees of a significant employer of H-1B workers, a federal jury found that the employer's reliance on employees with H-1B status unlawfully discriminated against non-Indian and non-South Indian employees.

136

135

Daniel Costa and Ron Hira (2023),

Tech and outsourcing companies continue to exploit the H-1B visa program at a time of mass layoffs,

Economic Policy Institute (Apr. 11, 2023), available at

https://www.epi.org/blog/tech-and-outsourcing-companies-continue-to-exploit-the-h-1b-visa-program-at-a-time-of-mass-layoffs-the-top-30-h-1b-employers-hired-34000-new-h-1b-workers-in-2022-and-laid-off-at-least-85000-workers/

136

See Palmer

Cognizant Tech. Sols. Company,

No. 17-cv-6848, 2025 WL 3154720 (C.D. Cal. Oct. 6, 2025). The jury found that the employer had “engaged in a pattern or practice of intentional discrimination against” both “non-South Asian employees on the basis of race who were terminated from the bench,” and “non-Indian employees on the basis of national origin who were terminated from the bench.”

Id.

In a subsequent ruling, the court found, based on expert evidence, that “non-South Asians were approximately seven times more likely to be subject to an involuntary termination.”

Palmer

Cognizant Tech. Sols. Company,

No. 17-cv-6848, 2025 WL 3496682, 24 (C.D. Cal. Dec. 5, 2025). The analysis also showed that “non-South Asian and non-Indian employees were 8.4 more likely to be terminated from the bench than South Asian and Indian employees.”

Id.

at 27. The court also found that Cognizant replaced U.S. employees with visa-holding, South Asian employees “with a lower grade and experience.”

Id.

at 31.

And while the data indicate that H-1B workers are rapidly replacing U.S. workers, especially in STEM-related fields, recent U.S. graduates in computer science and engineering are facing elevated unemployment and underemployment rates. Unemployment rates for recent graduates in these fields were 7.5% and 6.1%, respectively, with underemployment rates exceeding 17%.

137

For example, employment for domestic software developers aged 22-25 declined by nearly 20% compared to its peak in late 2022, suggesting that qualified U.S. workers are struggling to access opportunities in sectors heavily reliant on H-1B labor.

138

137

Federal Reserve Bank of New York, The Labor Market for Recent College Graduates, available at

https://www.newyorkfed.org/research/college-labor-market

. Latest release: February 20, 2025, based on data from 2023.

https://www.newyorkfed.org/research/college-labor-market#--:explore:unemployment

138

Erik Brynjolfsson, Bharat Chandar, and Ruyu Chen,

Canaries in the Coal Mine? Six Facts about the Recent Employment Effects of Artificial Intelligence,

Stanford University (Aug. 26, 2025) at 9, available at

https://digitaleconomy.stanford.edu/wp-content/uploads/2025/08/Canaries_BrynjolfssonChandarChen.pdf

This trend is particularly pronounced in the technology sector, where alien workers plays an outsized role in shaping labor market dynamics.

139

A 2025 report found that two-thirds of Silicon Valley tech workers are foreign-born, underscoring the extent to which the region's workforce is shaped by

immigration and the potential for wage-setting distortions in occupations with high concentrations of H-1B workers.

140

The pool of U.S. workers with relevant credentials has grown rapidly. Bachelor's attainment is higher among younger cohorts, and Computer and Information Sciences (CIS) degree completions more than doubled over the past decade—from about 55,000 in 2013-2014 to roughly 108,500 in 2021-2022.

141

Including Master's (24,514 to 51,338 in the same period) and Doctoral (1,982 to 2,790 in the same period) degrees, the number of degrees conferred in the U.S. increased from 81,767 to 162,658, nearly doubling during that time. Another factor, related to some of the layoff activity of larger technology firms in recent years, has been the impact of generative AI, which a number of early studies indicates is decreasing demand for lower-level technology workers.

142

So, while the potential supply of workers in occupations that are central to the programs affected by prevailing wages have increased, almost doubling since 2014, dramatic improvements in technology have and will continue to decrease demand, especially at the entry-level, for workers in these fields. Indeed, ADP, a leading source of payroll data, reported that employment of software developers, the single largest occupational category in the H-1B system, was lower in 2024 than it was in 2018.

143

ADP data show that employment of software developers peaked in 2022 but declined sharply thereafter, falling below 2018 levels by 2024.

144

139

Based on the LCA Performance Data, which is cited throughout this NPRM, over 50% of the LCA's certified by the Department in FY 2024 were for Computer and Information Technology occupations.

140

Joint Venture Silicon Valley, “2025 Silicon Valley Index,”

https://jointventure.org/publications/silicon-valley-index?mc_cid=fbf9996b7f&mc_eid=4049bbd06a

; Ethan Baron, “Two-thirds of Silicon Valley tech workers are foreign-born, new report says,”

SiliconValley.com,

March 11, 2025.

https://www.siliconvalley.com/2025/03/11/two-thirds-of-silicon-valley-tech-workers-foreign-new-report

141

National Center for Education Statistics, Digest of Education Statistics, Table 325.35: Bachelor's Degrees Conferred by Postsecondary Institutions, by Field of Study: 1970-71 through 2021-22,

https://nces.ed.gov/programs/digest/d23/tables_1.asp?current=yes

(last visited Jan. 2, 2026). Data include all graduates, including international students who may later enter the H-1B program. Thus, a portion of the observed growth reflects international STEM graduates, whose numbers have increased significantly over the past decade.

142

See e.g.,

Tomlison, Kiran, Jaffe, Sonia, Wang, Will, Counts, Scott, and Siddharth, Suri,

Working with AI: Measuring the Occupational Implications of Generative AI

(finding that Computer and Mathematical occupations had the highest “AI applicability score,” a measure which describes “if there is non-trivial AI usage that successfully completes activities corresponding to significant portions of an occupation's tasks.”)

https://www.microsoft.com/en-us/research/publication/working-with-ai-measuring-the-occupational-implications-of-generative-ai/

; Brynjolfsson, Erik, Chandar, Bharat, Chen, Ruyu,

Canaries in the Coal Mine? Six Facts about the Recent Employment Effects of Artificial Intelligence

(finding “substantial declines in employment for early-career occupations most exposed to AI, such as software development and customer support” among other conclusions)

https://digitaleconomy.stanford.edu/wp-content/uploads/2025/08/Canaries_BrynjolfssonChandarChen.pdf

143

Nezaj, Jeff “The rise—and fall—of the software developer”

https://www.adpresearch.com/the-rise-and-fall-of-the-software-developer/

144

Ibid.

Another factor that shapes the nature of the labor market for workers who are subject to the prevailing wages at issue in this NPRM is their proclivity, due to being concentrated in technology or management occupations, to have more opportunities for remote work. According to BLS data as of September 2025, while 22.5% of workers reported working some or all hours remotely, Management, professional and related occupations reported 36.5%, while Computer and mathematical occupations reported 65.7%.

145

By contrast, Farming, fishing and forestry occupations reported a telework rate of 5.7%, far lower than average. With respect to other Specialty Occupations, the likelihood of teleworking strongly correlates with educational attainment, indicating in general that workers with higher levels of education—such as those in management, professional, and technical fields—are more likely to work in jobs that permit telework.

146

Teleworking increases the geographical scope of a particular workplace in which a worker can work, which the Department believes contributes not only to guest workers in these programs being able to seek employment at a broader array of employers, but also contributes to labor market mobility on the part of U.S. workers, which makes for more liquid and efficient labor market than in workplaces with fewer telework opportunities.

147

145

Labor Force Statistics from the Current Population Survey, BLS,

https://www.bls.gov/web/empsit/cpseea42.htm

146

Telework Trends, BLS.

https://www.bls.gov/opub/btn/volume-14/telework-trends.htm

147

See e.g.,

Ravalet, Emmanuel, Rerat, Patrick,

Teleworking: Decreasing Mobility or Increasing Tolerance of Commuting Distances?,

https://www.jstor.org/stable/45237778

The data are not an exhaustive analysis of all of the impacts of guest worker programs on the U.S. workforce.

148

They do demonstrate the prevalence of guest workers, and indicia of how this prevalence may be resulting in adverse impacts on the U.S. workforce, in addition to the extensive analysis that the Department has conducted. In turn, this suggests that U.S. workers are vulnerable to a prevailing wage methodology that is set too low, or set without being aligned with labor market data, as the Department contends the current methodology is.

149

Without regulatory intervention, similar instances will continue to erode the integrity of the labor certification process and undermine public confidence in the Department's stewardship of the H-1B and PERM programs.

148

see also

20 CFR 655.731(a)(1).

In short, contrary to the H-1B program's goals, prevailing wage levels that, in many cases, do not accurately reflect the wages of comparable U.S. workers have permitted some firms to displace, rather than supplement, U.S. workers with H-1B workers. While allowing firms to access high-skilled workers to fill specialized positions can help U.S. workers' job opportunities in some instances, particularly when there are actual labor shortages in a certain industry or occupation, the benefits of this policy diminish significantly when the prevailing wage levels do not accurately reflect the wages of similarly employed workers in the U.S. labor market. The resulting distortions from a prevailing wage methodology untethered from rigorous mathematical analysis allow some firms to replace qualified U.S. workers with lower-cost alien workers, defeating the purpose of the INA's wage protections and suppressing the wages for U.S. workers who remain employed in occupations saturated by H-1B workers.

These concerns are not new. Congress has long recognized the need to protect U.S. workers from adverse effects associated with the employment of alien workers, as reflected in the statutory language of the Immigration and Nationality Act (INA).

See

8 U.S.C. 1182(a)(5) (labor certification and qualifications for certain immigrants), 1182(n) (labor condition application), 1182(p)(2) (professional athletes), 1182(t) (nonimmigrant professionals). The Department has a statutory obligation to ensure that prevailing wage determinations are consistent with this mandate, and therefore this rulemaking is a necessary step toward restoring balance in the labor market and ensuring that alien workers are used to supplement—not displace—the domestic workforce.

The NPRM is based on a substantial body of economic and administrative data, including labor market trends, wage survey data, and evidence of program outcomes that the Department believes evince adverse outcomes towards U.S. workers. It reflects a reasoned policy judgment that the current wage structure does not adequately reflect the wages paid to U.S. workers similarly employed in comparison to the wages paid to H-1B workers, and concludes that reform is necessary to fulfill the Department's statutory mandate. After careful consideration of these data, and the potential economic impacts of the proposed changes, the Department has developed and now proposes a methodology that would better protect U.S. workers from unfair competition created by the importation of alien workers, as required by law. Indeed, the H-1B crisis has prompted the Equal Employment Opportunity Commission to issue guidance warning employers that discriminating

in favor of

H-1B applicants or against American-born workers is illegal.

150

Equal Employment Opportunity Commission, Discrimination Against American Workers Is Against The Law, available at

https://www.eeoc.gov/discrimination-against-american-workers-against-law

. This guidance notes that discrimination in favor of visa guest workers (and against U.S. workers) is illegal, and can include discriminatory job advertisements (such as “H-1B preferred” job openings), disparate treatment (such as subjecting American-born workers to higher rates of termination for staying on “bench” status than visa guest workers), while observing that common businesses reasons such as customer or client preference, lower cost of labor, and beliefs regarding “work ethic” do not excuse an employer's decision to hire foreign workers over U.S. workers.

This rulemaking is designed to ensure that the H-1B and related programs operate in a manner that is fair, transparent, and protective of U.S. workers, while still allowing employers to access alien workers where appropriate wages are paid.

C. Identifying the Appropriate Prevailing Wage Levels

1. Revisions to the Existing Methodology

The Department proposes to revise the existing methodology used to determine prevailing wage levels in the H-1B, H-1B1, E-3, and PERM programs. Specifically, the Department proposes adjusting the wage percentiles used to define Levels I and IV and refining the use of BLS data to ensure that prevailing wages more accurately reflect the wages paid to U.S. workers similarly employed to ensure that the employment of alien workers does not adversely affect the wages and working conditions of U.S. workers.

In order to determine the prevailing wage percentiles that most closely satisfy the statutory requirements, the Department conducted an extensive statistical labor market analysis using historical data involving the immigrant and non-immigrant guest worker programs that are the subject of this NPRM. At a high level, the Department developed the proposed prevailing wage levels to align workers in the relevant programs with comparable labor market outcomes for the U.S. workforce as a whole. As part of its analysis, the Department finds a wide (over $19,000 per worker on average) discrepancy between the wages earned by U.S. workers in the same occupations and locations and the prevailing wage levels assigned to corresponding LCA applicants. The Department's proposed adjustments would eliminate this gap using statistically grounded recalibration of wage percentiles.

The Department proceeded in three steps: (1) to analyze aggregate LCA data to understand the prevailing wages, actual wages, and occupational composition of H-1B workers over the last five years; (2) to compare LCA data with OEWS data, the most reliable and comprehensive publicly available data that reflects overall labor market compensation on an occupational basis, to determine the going wage of occupations for U.S. workers adjusted for region; and (3) to use this quantitative analysis to determine wage levels that would re-align the H-1B wage levels with corresponding U.S. workers. At this final step, the Department also relied on qualitative evidence and its long-standing expertise administering these programs, particularly in setting Wage Levels I and IV.

a. Step 1—The Department's Analysis of LCA Data

As has been described above, the first step for the H-1B petition process (and for other guest worker programs, although this statistical analysis focused exclusively on H-1B petitions, the most numerous of all programs that use LCAs in terms of both number of LCAs filed and number of individuals employed) is for the employer to submit an LCA to the Department. These LCAs are the best data of labor market information for what prevailing wage applies to any particular H-1B employee, what wage they are offered by their employer, and the SOC code that describes their occupation. In the aggregate, they are the best data source for labor market information regarding H-1B occupations. These LCAs are made under penalty of perjury

151

by the hiring entity, who must attest that “to the best of my knowledge, the information contained therein is true and accurate.” For purposes of this analysis, the Department used all LCA data for FY2020-2025.

152

151

LCA Section J. Additionally, the employer must “develop sufficient documentation to meet its burden of proof with respect to the validity of the statements made in its LCA and the accuracy of information provided.” LCA Section J(B).

152

For FY 2025, the Department used all available data, which at the time of this NPRM included but ended with Q3.

The Department took extensive measures to ensure that the LCA data was useable and reliable. These measures included various steps to clean the data, such as removing trailing annotations and any decimal artifacts introduced during earlier processing, trimming whitespace, and dropping entries that clearly did not match the SOC 6-digit code structure. For example, in one instance, a SOC code was entered as “151252”; this was corrected to “15-1252.” The Department discarded a handful of data points that had clear errors.

The LCAs contain several data points that the Department used in its analysis. These include: (1) the SOC (O*NET/OEWS Code);

153

(2) Number of Workers;

154

(3) State/District/Territory;

155

(4) Wage Rate Paid to Nonimmigrant Workers;

156 157

(5) the Prevailing Wage Rate;

158

(6) Wage Level.

159

As is standard practice in any statistical analysis, the Department eliminated a small number of outliers,

160

and observations that had missing data.

153

LCA Box B(2).

154

LCA Box F(a)(1). Note that, as explained above, an LCA applicant can file an LCA on behalf of multiple putative H-1BH-1B employees.

155

LCA Box F(a)(8).

156

LCA Boxes F(a)(10) and 10a. The field on the LCA for the wage rate offered to the nonimmigrant worker has a field labeled “From” and “To” with “From” being the lower range and “To” the upper range. Since filling out the upper range is optional, only approximately 50% of LCAs have data in that field. Therefore, the Department used the number indicated in the “From” field as the sole datapoint from F(a)(10).

157

To create a single comparable wage variable, the Department converted all forms of payment into annual pay using standard period multipliers. The Department performed this adjustment as needed for both the offered wage and the prevailing wage.

158

LCA Boxes F(a)(11) and 11a.

159

LCA Box F(13)(a).

160

The Department removed observations that reported wages smaller than $20,000 and larger than $500,000.

To illustrate the Department's process, consider an example Labor Condition Application (LCA) for a Data Scientist. From each LCA, the Department extracted key data elements,

including the standard occupational code (SOC), number of workers, state of employment, offered wage, prevailing wage, and wage level. All wage values were standardized to annual amounts for consistency. The Department applied this process across more than 3 million LCAs filed between FY 2020 and FY 2025, cleaning the data to remove errors and outliers (

e.g.,

wages below $20,000 or above $500,000) and ensuring accurate SOC coding. This standardized dataset formed the basis for the statistical analysis described below.

In this instance, the State/District/Territory would have been coded as Florida, based on Box 8; the Wage Rate Paid would have been coded as $119,028 from Box 10; and the Prevailing Wage Rate would have been coded as $75,691 from Box 11.

161

This was done for over 3 million LCA's filed during the time period of FY2020-2025.

161

The Wage Level, II, is not visible in this image due to size limitations.

Using these data, the Department calculated that the average prevailing wage, for all LCAs from FY2020-2025, was $111,717. The Department also calculated that the average wage rate paid to the beneficiaries of the same LCAs was $121,908.

162

In other words, the average LCA-program employee was paid an actual wage, and thus commanding, a $10,191 premium over the prevailing wage level offered—a gap that indicates that the prevailing wage is set below the market value of comparable U.S. workers.

162

The Department acknowledges that LCA applicants must go through further processing, notably, in many cases the H-1B lottery, before they receive a visa, and that many LCA's ultimately do not receive work visas. However, the Department does not believe that this distinction matters for purposes of the analysis that it conducted. Many LCAs are for H-1B applicants who are cap-exempt, which means that the observation should be largely consistent with the ultimate visa grants. Regarding non-cap-exempt H-1B applicants, the Department has no reason to assume that the distribution of cap-exempt employees is different from the distribution of non-cap-exempt LCAs, but welcomes comment if any member of the public has data that indicate a significant discrepancy between these numbers.

b. Step 2—Comparing the LCA Data to General Labor Market Data

The Department next compared the compensation paid to the beneficiaries of H-1B applications with the compensation paid to equivalent U.S. workers. To do this, the Department conducted a statistical analysis comparing the above LCA data with data for the U.S. workforce in general, narrowed down to the same occupation and geographical region.

The best available data source for benchmarking the U.S. workforce is the OEWS,

163

which as explained above, is the most comprehensive and consistently administered analysis of labor market data that is indexed to occupational codes. The OEWS data reflects labor market conditions for the U.S. workforce as a whole, and not just non-immigrant programs. For each occupation—classified using the same SOC codes that appear in LCAs—the OEWS reports mean wages, which can be adjusted for geographic region, including state.

163

The nature and relevant history of the OEWS is explained in greater detail in Section I.D.

For example, for Software Developers (SOC Code 15-1252), which is the most common SOC code for which an LCA was sought between FY2020-2025, the average wage in California is $170,910; for Alabama, it is $113,020, and for Wisconsin, it is $103,360.

164

As was explained above, the LCAs also report SOC Code and state—the same data that any user can input into the OEWS system to receive an average wage for workers in that occupational classification and location.

164

These data are publicly accessible at

https://data.bls.gov/oesprofile/

and reflect data for May 2024, the most recently available data as of the time of this NPRM. For purposes of conducting its analysis comparing these data to the FY2020-2025 LCA data, the Department obtained historical BLS data and compared the BLS data of a specific year to the corresponding year wherein the LCA was received. This has led to an overall underestimate of the gap between compensation received by immigrants and non-immigrants bound by the prevailing wages, and U.S. workers, because it effectively does not account for inflation, as many of these workers do not commence work until the next fiscal year.

To compare LCA data and the OEWS data, the Department coded each LCA with the corresponding mean wage reported by the OEWS, for the same occupation and state, to create an “apples-to-apples” comparison. So, for example, if a given LCA was for a Software Developer in the state of Alabama for FY2024, they would have been coded with $113,020-the average annualized salary for the same occupation in the same place. This coding was done, in this exact same way, to millions of LCAs.

To return to the previous LCA example, the LCA was coded as a Data Scientist (SOC Code 15-2051), and was located in Florida, FY 2024. In the Department's analysis, this would have been coded using the corresponding OEWS wage rate for the same SOC Code, state, and year, for an average wage of $105,820.

165

https://www.onetonline.org/link/localwages/15-2051.00?st=FL

While some LCA applicants' employees earned more and others less than the OEWS mean, the Department initially assumed these differences would offset across Wage Levels I-IV. In theory, if LCAs reflected a balanced distribution of job levels, the average offered wage should approximate the OEWS average for the occupation. However, LCAs are disproportionately concentrated at Level I and Level II—the lowest wage tiers—which are both set significantly below the median or average wage. This concentration is not unexpected, as employers often classify positions at these levels, and H-1B workers tend to be placed in roles designated as entry-level or lower-tier positions. In fact, 63 percent of LCAs certified in FY 2024 were at Level I or Level II, according to the Department's LCA performance data.

166

Because these levels are far below the OEWS mean, the aggregate wages of H-1B workers skew lower than the overall occupational average. While this rule does not alter how employers classify job levels, raising prevailing wage thresholds will help ensure that wage levels better reflect the qualifications required for specialty occupations and reduce incentives to select the lowest permissible wage level.

166

See U.S. Department of Labor, Office of Foreign Labor Certification, Labor Condition Application Performance Data, FY 2024, available at

https://www.dol.gov/agencies/eta/foreign-labor/performance

However, the average of the mean OEWS occupational salaries, across the LCAs, was $130,219, which is slightly over $9,000 higher than the wage rate paid, and over $19,000 higher than the prevailing wage rate based on the current wage levels. This $130,219 represents the average of all salaries by occupation, state, and fiscal year, that match with the millions of LCAs in the Department's data set. As is shown later, it was used as the Department's Benchmark Value

167

for setting the prevailing wage levels in Step 3 of the analysis.

167

This value is referred to as the Benchmark Value in the next subsection.

c. Step 3—Using the Labor Market Analysis To Revise the Prevailing Wage System

Given the existence of a variety of skill levels, occupations, and regions, the significant gap between the Benchmark Value and the average prevailing wage and wage paid data should not exist unless the LCA-program itself were causing a discrepancy. In other words, the average U.S. worker in the same occupation and region is commanding a nearly $19,000 wage premium above what the similarly situated non-U.S. worker is required to be paid using the prevailing wage system, which, in many of the non-immigrant programs, such as the H-1B program, are restricted to individuals seeking to work in specialty occupations that should perhaps be commanding

higher,

not

lower

wages.

The Department believes that these significant discrepancies between labor market outcomes of U.S. workers, represented by the Benchmark Value, and the labor market outcomes of LCA-program employees specifically, as represented by the actual wages paid, and the prevailing wages that apply, indicates both the existence of a problem—that the wage discrepancy will adversely impact the wages of similarly employed U.S. workers—and the proposed solution—which is to revise the prevailing wage structure to be more in line with the average wages earned by equivalent U.S. workers.

In order to align LCA-program wage rates with the general U.S. labor market, the Department seeks to set a prevailing wage level that yields an average, using the same mathematical approach as described above, that would be approximately the same as the average of the mean salaries of the typical LCA-program occupations. Using the Department's proposed revised prevailing wage methodology, which sets Wage Level I from the 17th to the 34th percentile; Wage Level II from the 34th to the 52nd percentile; Wage Level III from the 50th to the 70th percentile; and Wage Level IV from the 67th to the 88th percentile, the Department achieves this alignment, arriving at the Benchmark Value—and thus, approximately the same as if the Department drew a random sample of similarly-situated U.S. workers.

To identify these levels, the Department created a statistical model, using the known composition of the LCA-programs in terms of the same factors described above: wages, locations, and occupations, and used well-known statistical methods to set prevailing wage levels that would result in an average prevailing wage level that was equal to the average of the mean salaries assuming the same composition as the LCA-program. Put differently, the model answered the following question: if the same employers with the same occupations, state locations, and wage levels, were to apply for the LCA-programs in the next fiscal year, as they did in the most recent fiscal year, what prevailing wage levels are needed to ensure that the average prevailing wage is the same as the Benchmark Value?

i. The Mathematics Behind Step 2 of the Department's Analysis

Numerical methods are computational techniques used to find approximate solutions to complex mathematical problems that lack closed-form solutions. For example, the equation (x + y = 1) cannot be solved uniquely, as (x) and (y) can take infinitely many values that satisfy the equation (

e.g.,

(x = 0.5, y = 0.5) or (x = 1, y = 0), etc.).

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Similarly, the loss function, which reflects the difference between the predicted mean wage and the target mean wage

target

, is defined as:

168

To approximate these levels, the department combined Limited-memory Broyden-Fletcher-Goldfarb-Shanno, which is a quasi-Newton optimization algorithm with linear interpolation to estimate percentile wage levels (I-IV) that align with a target average wage defined by the data. The algorithm seeks to minimize the difference between the mean wage predicted by the assigned percentiles and the Benchmark Value. The approach exploits the piecewise interpolation of percentile values and the properties of linear optimization. First, each row's wage is predicted based on its reported percentile wage distribution. Using the known percentiles 10, 25, 50, 75 and 90 for each occupation (SOC code), and a given percentile (t) (

e.g.,

35th percentile for Level I), the wage at (t) is estimated using linear interpolation.

EP27MR26.173

Here,

(

) is the interpolated wage for the (i)-th row based on the assigned percentiles, and (N) is the total number of rows.

The optimization uses the Broyden-Fletcher-Goldfarb-Shanno algorithm method, a gradient-based algorithm, to minimize the loss. Constraints are applied to ensure that:

10 ≤

≤ 90 and

−

≥ 10.

The initial values for (

) and (

) are set to 35 and 90,

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respectively. These were approximately the values that the Department believed would achieve the policy goals for Wage Levels I and IV, respectively, (as discussed below) and also represented the same values that the Department set in a previous rulemaking. However, 35 and 90 did not create the solution; the solution they created was above the Benchmark Value. Then, the Department applied the Broyden-Fletcher-Goldfarb-Shanno algorithm, which takes an initial “estimate” and repeatedly attempts to match that set of values to the desired solution, until eventually that is reached. After this optimization, the solution yields the optimized wage levels (

), corresponding to Levels I-IV, which were 34, 52, 70 and 88, such that the solution approximately achieves the Benchmark Value. The final difference between the predicted mean and the target mean is reported as the result of the optimization.

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The Department also ran the same simulation with the starting values and being set to 17 and 67, which correspond to current Levels I and IV. However, picking these numbers would result in Wage Levels at the 45th, 56th, 66th and 76th percentiles. The Department believes these levels fail to sufficiently differentiate from one another to be useful.

As discussed below, this solution is not the only set of values that would allow the Department to match the Benchmark Value. The next section discusses the Department's rationale for setting Levels I and IV at the 34th and 88th percentile instead of sliding up or down the wage scale to achieve the Benchmark Value.

ii. The Department's Setting of Wage Level I to the 34th Percentile

As explained above, Wage Levels II and III are set arithmetically as required by the INA; Level II will be calculated by dividing by three, the difference between Levels I and IV, and adding the quotient to the computed value for Level I. Level III will be calculated by dividing by three the difference between Levels I and IV, and subtracting the quotient from the computed value for Level IV. Therefore, the Department effectively has to choose two wage

levels: Wage Level I and Wage Level IV.

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The Department notes that, although Wage Levels II and III are arithmetically set by Wage Levels I and IV, that the Department believes that the increases of Wage Levels II and III that this methodology achieves are necessary and appropriate to carry out its statutory requirements for all of the same reasons as are stated below and throughout this NPRM.

The Department is proposing to increase Wage Level I from the 17th to the 34th percentile for a variety of reasons. To start, retaining Level I at the 17th percentile would have produced, under the statutory formula described above, a wage-level structure that was excessively skewed to the right, which would have been less granular, distorted, and less consistent with statutory requirements.

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More importantly, as the Department has explained in detail in Section II.B, many of the most common occupations in LCA programs, and especially in the H-1B program, frequently report requiring education less than a Bachelor's degree. For example, Computer Systems Engineers/Architects (SOC Code 15-1299.08), which is one of the most commonly applied-for jobs across all LCA programs, is a Job Zone Three job, meaning that “[m]ost occupations in this zone require training in vocational schools, related on-the-job experience, or an associate's degree” and that 68% of respondents reported that the occupation required sub-baccalaureate requirements of either an Associate's degree or other post-secondary education.

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By establishing Wage Level I at the 17th percentile, the current methodology sets a prevailing wage that is directly comparable to individuals who do not work in high-skill positions within that occupational category that are the only ones eligible to use most of the LCA programs.

173

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If the Department sought to increase the prevailing wage rates more than it proposes to do so here, which it believes is justifiable to avoid adverse wage effects on U.S. workers, it would simply opt for an increase in the Wage Level I prevailing wage to preserve a sufficiently differentiated wage level system to permit employers to obtain more granular wage levels that reflect all of the statutory factors.

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https://www.onetonline.org/link/summary/15-1299.08

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The Department acknowledges that other common occupations among the LCA-programs, such as Software Developer, have much higher educational requirements. However, the prevailing wages are set for all occupations, and must reflect the qualifications needed for them on an aggregate level. The Department finds that, for all of the reasons stated throughout this rule, that on an aggregate level, among the occupations that are the most significant LCA-program occupations, a significant percentage of these jobs do not require a bachelor's degree and perhaps do not even require the application of a body of “highly specialized knowledge.” Thus, these jobs are generally not the kind of positions that should be the basis for comparison against LCA-program workers. The Department also considered but rejected a more granular, occupation-specific approach to setting prevailing wages, because such an approach would be unworkable.

In addition to these findings, the Department also notes indicia that the relevant labor market is balanced, or perhaps even tilted towards supply of labor rather than shortage. First, the Department notes that the average wages paid versus prevailing wage premium for Wage Level I is particularly high. As shown below in Exhibit 5, while the average prevailing wage set for Wage Level I was $73,804, the average offered wage was $83,055. This approximately $10,000 gap shows that workers assigned to Wage Level I are commanding very large premiums compared to the assigned prevailing wage—the largest premiums, in fact, by percentage, among the four Wage Levels. Second, the Department notes labor market data indicating unemployment among U.S. recent college graduates and tech workers which is described above in Section II.B. Third, the Department notes the mass layoffs of U.S. workers by many of the same companies that are applying for LCA-program visas, as is documented in Section II.B.

By contrast, when the Department originally set Wage Level I at the 17th percentile in 2005, it offered no findings, no data, and no justification for this figure. But, at the same time, the Department acknowledges that, although all jobs in the H-1B system in particular require the theoretical and practical application of a body of “highly specialized knowledge,” its historical position has been that Wage Level I is for wage rates for “beginning level employees.”

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However, these entry-level occupations must nonetheless conform with the other requirements of the LCA programs, including that they be specialty occupations. At this time, the Department believes that the 34th percentile strikes the correct balance by aligning LCA-program workers with proper comparators, while also retaining the entry-level quality of the Wage Level. The Department welcomes evidence regarding the supply of U.S. workers, or the impact of technologies including artificial intelligence, that would indicate the need for Wage Level I to be pushed higher to prevent adverse impacts.

174

https://www.dol.gov/sites/dolgov/files/eta/oflc/pdfs/npwhc_guidance_revised_11_2009.pdf

Another reason why the Department is proposing to set Wage Level I at the 34th percentile, and not lower (or higher), is because it also, for reasons stated below, believes that Wage Level IV should be set at the 88th percentile. Using the above mathematical formula that arranges the prevailing wages to match the Benchmark Value, if the Department set Wage Level I lower, it would require Level IV to be set higher. This would pose a practical problem as in certain occupational and geographic arrangements, OEWS data may not be sufficiently granular to supply the needed information. Conversely, if Wage Level I were set higher, it would force Wage Level IV to be lower. This would be undesirable because it would water down the prevailing wage requirement for Wage Level IV and force the other Wage Levels to be truncated.

iii. The Department's Setting of Wage Level IV to the 88th Percentile

While the Department's proposed change of Wage Level I from the 17th to the 34th percentile requires Wage Level IV to be set to the 88th percentile, it also believes that this change also enhances the prevailing wage methodology's alignment with the INA. The Department believes that Level IV should be increased from the 67th percentile to the 88th percentile, because most LCAs that are assigned a Level IV prevailing wage already offer actual wages significantly above the Level IV prevailing wage, suggesting that the Level IV prevailing wage does not align with the education and experience of the highest skilled workers in specialty occupations. In Fiscal Year 2024, the Department observed that employers filed Labor Condition Applications (LCAs) for over 100,000 H-1B positions classified at Wage Level IV, representing the highest skill tier under the current prevailing wage structure. The average wage paid

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