DOL Proposes Changes to Prevailing Wage Calculations for PERM and H‑1B Programs

Key Point

• The Department of Labor has issued a Notice of Proposed Rulemaking (NPRM) that would revise how prevailing wage levels are calculated for PERM, H‑1B, H‑1B1 and E‑3 programs to better align wages with those paid to U.S. workers and strengthen program integrity.

Proposed Rule Would Change OEWS‑Based Wage Level Calculations 

The Department of Labor (DOL) is proposing updates to the prevailing wage methodology used across both temporary and permanent employment‑based immigration programs. The NPRM would change how DOL computes wage levels under the four‑tier structure for:

• PERM (EB‑2 and EB‑3)
• H‑1B
• H‑1B1
• E‑3

According to the NPRM, DOL is proposing 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) survey administered by the Bureau of Labor Statistics.

The Department states that the revisions aim to better align prevailing wage levels with wages paid to similarly employed U.S. workers and reduce employers’ incentives to use lower‑paid foreign labor.

Why DOL Proposes These Changes

1. Protecting U.S. Worker Wages

The NPRM states that prevailing wage rules ensure employers do not hire foreign workers at rates that would adversely affect the wages and working conditions of U.S. workers.

2. Ensuring Consistency Across Temporary and Permanent Programs

DOL notes that 57.6% of FY 2024 PERM applications involved workers already in H‑1B status, highlighting the need to apply consistent wage protections across both systems.

3. Updating the Unified Four‑Tier Wage Structure

Because the INA requires four wage levels tied to experience, education and supervision, DOL proposes revising how each level is calculated using OEWS data.

How Prevailing Wage Rules Function Today

The NPRM reiterates the role of prevailing wages in:

• PERM: Employers must offer at least the prevailing wage when recruiting U.S. workers and sponsoring a foreign national for permanent residence.
• H‑1B/H‑1B1/E‑3: Employers must pay the higher of the actual wage or the prevailing wage when filing a Labor Condition Application (LCA).

The proposed changes would affect both processes.

Attorney Perspective on the Proposed Wage Rule

Background: Connection to the 2020/2021 Rule 

The percentage increases being discussed today are similar to those included in the prevailing wage rule issued in 2020 and finalized by DOL in early 2021 during the first Trump Administration. That rule was released as an Interim Final Rule, which allowed it to bypass the full notice‑and‑comment process, but it was challenged in court and ultimately abandoned once the Biden Administration took office.  

Current Rulemaking Process 

In contrast, the current proposal is moving through the standard Notice of Proposed Rulemaking (“NPRM”) process, which requires full public notice and comment before any changes can take effect.  

Proposed Percentile Increases (as Reflected in the NPRM) 

The NPRM appears to include proposed increases to each prevailing wage level, indicating that DOL is considering raising the OEWS percentile floors for all four tiers. According to the draft text on page 24, the Department proposes the following changes 

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

These would represent major upward moves, and the proposed rule could substantially raise prevailing wage requirements across all four tiers.

Private Wage Surveys 

Peter Bade, Managing Attorney, notes the following: 

In addition, while the NPRM discusses whether to limit or eliminate the use of private wage survey data for LCAs and PERM prevailing wage determinations, the proposal indicates that DOL will continue accepting private wage surveys.

However, if the rule is finalized, employers should anticipate increased scrutiny of private survey submissions. This could include more Requests for Information/Evidence (RFI/RFEs) when private wage survey data is used in an LCA or prevailing wage determination request.

What Employers Should Expect Next 

While the current proposal is not yet final and must go through the full review and comment process, employers should be aware that the methodology under consideration could meaningfully raise required wages across many occupations.