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US Proposes H-1B Visa Wage Hike to Protect American Workers

The US Department of Labor has proposed new rules to substantially raise the minimum wages employers must pay to foreign workers on H-1B and other visas. The changes would shift wage calculations to higher percentiles, with entry-level pay potentially doubling from the 17th to the 34th percentile. Officials argue the current system creates a $10,000 average wage gap, incentivizing companies to replace American workers with cheaper foreign labor. The proposal, now open for public comment, could significantly increase labor costs for employers, particularly in the technology sector.

Key Points: US Moves to Raise H-1B Visa Wage Floors

  • Raises prevailing wage calculation percentiles
  • Aims to close $10k average pay gap
  • Could increase employer costs by ~$14k per worker
  • Targets misuse of visa programs
2 min read

US moves to raise H-1B wage floors

The US Department of Labor proposes new rules to significantly increase minimum wages for H-1B visa holders, aiming to protect American jobs.

"The Trump Administration is committed to ensuring that American workers are not disadvantaged by unfair wage practices. - Lori Chavez-DeRemer"

Washington, March 27

The US Department of Labor has proposed new rules to raise wages for foreign workers under H-1B and other visa programmes.

The move aims to align foreign worker pay with US market wages. Officials say it will protect American workers and reduce misuse of the system.

"The Trump Administration is committed to ensuring that American workers are not disadvantaged by unfair wage practices," Labour Secretary Lori Chavez-DeRemer said.

The proposal changes how "prevailing wages" are calculated. These wages set the minimum pay employers must offer foreign workers.

Under the new plan, entry-level wages would rise sharply. The lowest level would move from about the 17th percentile to the 34th percentile. The highest level would rise from the 67th to the 88th percentile.

Officials say current wage levels are too low. They argue this allows companies to hire foreign workers at cheaper rates than US workers.

Government data shows H-1B workers are often paid less than Americans in similar jobs. The gap is about $10,000 on average, the proposal says.

The Department said this creates an incentive to replace US workers with lower-paid foreign labour.

Under existing rules, employers must pay either the prevailing wage or the actual wage paid to US workers. The higher of the two applies. But the prevailing wage acts as a floor, and critics say it is set too low.

The new rule aims to raise that floor. It would better reflect workers with similar skills and experience.

The proposal would apply to new applications. It would not change existing approvals.

The Department estimates wages could rise by about $14,000 per worker each year. This could increase labour costs for employers.

Officials say the goal is to restore fairness in the labour market. They say foreign workers should not undercut US wages.

Public comments will be accepted for 60 days after publication in the Federal Register on March 27.

The H-1B visa is the main US programme for hiring foreign skilled workers. Many later move to permanent residency through other visa categories.

The proposed changes could have a major impact on employers and foreign professionals, especially in the technology sector.

- IANS

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Reader Comments

R
Rohit P
Honestly, this seems like a protectionist move disguised as fairness. The US tech industry thrives on global talent. If companies have to pay so much more, they'll just outsource the jobs completely or automate, which doesn't help American workers either.
A
Arjun K
As someone who went through the H-1B process, I understand both sides. The system was being misused by some consultancies to underpay. But raising the floor this high might stop genuine talent from smaller companies or startups from being hired. It needs a balanced approach.
S
Sarah B
From a policy perspective, it's a logical step if the data shows a consistent wage gap. Protecting the domestic workforce is a priority for any government. Indian professionals are highly skilled and should be paid at true market value, not as a cost-saving option.
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Vikram M
This will hit Indian IT services firms the hardest. Their business model often relies on a cost advantage. Maybe it's time for a major pivot? Focus on higher-value consulting and innovation rather than just staff augmentation. Jugaad won't work here.
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Kavya N
Feel for the students currently in US universities. They take huge education loans hoping for an H-1B job after OPT. This uncertainty is very stressful. Hope Indian companies and our own startups can create more opportunities back home. 🇮🇳

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