On March 26, the U.S. Department of Labor (DOL) announced a Notice of Proposed Rulemaking (NPRM) that would significantly raise government prevailing wage minimums for foreign professional workers under the H-1B, H-1B1, E-3, and Permanent Labor Certification (PERM) programs. The proposed rule, titled “Improving Wage Protections for the Temporary and Permanent Employment of Certain Foreign Nationals in the United States,” revises the computation of prevailing wages under the DOL’s four-tiered wage structure, which is based on the Occupational Employment and Wage Statistics (OEWS) survey administered by the Bureau of Labor Statistics.
The proposed rule will be officially published in the Federal Register March 27 and carries a 60-day public comment period.
Details of the Proposed Rule
The proposed rule changes the computation of prevailing wages for permanent labor certifications and Labor Condition Applications under the DOL’s four-tiered wage structure. Under the proposal, prevailing wage minimums would increase as follows:
- Level I (entry level): from the 17th percentile to the 34th percentile of the OEWS wage distribution
- Level II (qualified): from the 34th percentile to the 52nd percentile
- Level III (experienced): from the 50th percentile to the 70th percentile
- Level IV (fully competent): from the 67th percentile to the 88th percentile
Under the proposed regulatory text, the Level I wage would be computed as the 34th percentile and the Level IV wage as the 88th percentile of the OEWS wage distribution for the most specific occupation and geographic area available. Levels II and III would continue to be calculated using the formula Congress prescribed in the Immigration and Nationality Act (INA), which divides the difference between Levels I and IV by three to produce the two intermediate levels. For cases where the OEWS survey cannot produce a computable Level IV wage due to top-coding or data limitations, the office of foreign labor administrator would use the greater of: (1) the current hourly wage rate applicable to the highest OEWS wage interval for the specific occupation and area, or (2) the arithmetic mean of the wages of all workers for that occupation and area.
The DOL developed these levels using a statistical model that it says aligns prevailing wages more closely with the wages actually paid to U.S. workers in occupations and locations that mirror those of H-1B and PERM program participants. The department states that the current wage levels, which have been in place for over 20 years, are too low and do not accurately reflect the wages of similarly employed U.S. workers.
The proposed regulatory text does not change the standards for employer-provided private wage surveys. The existing framework under 20 CFR 656.40(b)(3) and (g) remains intact, and employers may continue to use acceptable surveys as an alternative to OEWS-based prevailing wages. However, the Department of Labor noted in the preamble that it considered eliminating the private survey option but ultimately chose not to do so, recognizing that private surveys provide important flexibility where government data does not fully capture niche labor markets or unique job requirements. The DOL indicated in the preamble that it would monitor the use of private surveys and reserves the right to reject surveys that do not meet its methodological standards.
CUPA-HR’s DataOnDemand tool can be used to determine prevailing wage for specific positions, as CUPA-HR’s data collection procedures follow all DOL requirements for reporting a prevailing wage.
Background
On October 8, 2020, the DOL issued an interim final rule (IFR) that dramatically raised prevailing wage levels without prior notice and comment, setting the Level I wage at approximately the 45th percentile and Level IV at approximately the 95th percentile. CUPA-HR and 18 other higher education associations filed extensive comments on November 9, 2020, expressing deep concern that the IFR was implemented without opportunity for public comment, that its methodology was fundamentally unsound, and that it did not provide colleges and universities adequate time to adjust. The IFR was subsequently challenged in four separate lawsuits — several led by institutions of higher education — and was set aside or enjoined by federal district courts on procedural grounds.
Despite those legal setbacks, the DOL issued a final rule during the last week of the first Trump administration on January 14, 2021. That rule set Level I at the 35th percentile, Level II at the 53rd percentile, Level III at the 72nd percentile, and Level IV at the 90th percentile. The Biden administration delayed the final rule’s effective date multiple times — ultimately by 18 months — citing the complexity of the regulation and the potential harm of immediate implementation. On June 23, 2021, the Northern District of California vacated and remanded the final rule, and on December 13, 2021, the DOL effectuated that vacatur through a final rule, returning to the pre-2020 wage methodology.
In April 2021, the DOL issued a Request for Information seeking public input on data sources and methodologies for determining prevailing wage levels. CUPA-HR, joined by several higher education associations, submitted detailed comments in response. That response drew on CUPA-HR’s extensive higher education salary survey data to demonstrate that the final rule’s wage levels did not accurately reflect the range of salaries actually paid in higher education. Among the key findings: CUPA-HR data showed that H-1B faculty were not underpaid compared to their non-H-1B counterparts, and that actual entry-level and fully competent salaries in higher education fell well below the percentiles set by the final rule.
Following the vacatur, the Biden-era DOL engaged in no further rulemaking on prevailing wages for these programs. The current NPRM represents the first formal prevailing wage rulemaking since the 2021 final rule was vacated.
What’s Next
CUPA-HR is reviewing the proposal, and plans to submit comments in coalition with other higher education associations. To inform those comments, CUPA-HR will soon be asking members to share specific examples of how the proposed changes would impact their institutions. We will not identify specific institutions in comments we submit, but it will be important to provide examples to highlight challenges and concerns. Members can expect this request in our eNews on April 1, 2026.