Washington: The US Department of Labor has put forward a proposal to revise wage rules for foreign workers employed under H-1B and similar visa programmes.

The proposal is designed to bring salaries for foreign workers closer to prevailing US market levels. Officials stated that the move is intended to safeguard American workers and curb misuse of the visa system.

Labour Secretary Lori Chavez-DeRemer said the administration remains committed to ensuring that American workers are not placed at a disadvantage due to unfair wage practices.

How will ‘prevailing wages’ be calculated now?

The proposed rule introduces significant changes to how “prevailing wages” are determined. These wages represent the minimum salary employers must offer foreign workers.

Under the new framework, entry-level wages would increase substantially. The lowest wage tier would shift from roughly the 17th percentile to the 34th percentile. Similarly, the top wage level would move from the 67th percentile to the 88th percentile.

Why does the government want to raise wage levels?

Officials argue that the current wage benchmarks are too low, making it easier for employers to hire foreign workers at salaries below those paid to American employees in similar roles.

According to government data cited in the proposal, H-1B workers are often paid around $10,000 less on average compared to their US counterparts. Officials say this difference creates a financial incentive for companies to replace domestic workers with lower-paid foreign labour.

What is the issue with the existing system?

At present, employers are required to pay either the prevailing wage or the actual wage paid to US workers in similar positions, whichever is higher. However, the prevailing wage effectively sets the minimum threshold.

Critics have pointed out that this baseline is currently too low, which can distort the labour market. The proposed changes aim to raise this threshold so that it better reflects workers with comparable skills and experience.

Who will be affected by the proposed rule?

The revised rules would apply only to new visa applications and would not impact those that have already been approved.

The Department estimates that salaries could increase by approximately $14,000 per worker each year under the new system. This is expected to raise labour costs for employers hiring foreign professionals.

What is the objective behind the proposal?

Officials have said the primary aim is to ensure fairness within the labour market. They emphasised that foreign workers should not be used as a means to suppress wages for American employees.

Public feedback on the proposal will be accepted for 60 days following its publication in the Federal Register on March 27.

Why is the H-1B visa significant?

The H-1B visa remains the primary route for companies in the United States to recruit skilled foreign professionals. Many individuals who enter through this programme later transition to permanent residency through other visa categories.

The proposed wage revisions could have wide-ranging implications for both employers and foreign workers, particularly in sectors such as technology where reliance on the H-1B programme is high.

With agency inputs