In a proposal publishing in the Federal Register Friday, the Trump administration is seeking to further restrict employer-sponsored immigration.
The proposed rule would require U.S. employers hiring foreign workers through H-1B visas and some green cards to pay them significantly higher wages. As part of the H-1B visa application, employers agree to pay the “designated prevailing wage level” for an occupation, which will now be elevated for H-1B applicants going forward.
The DOL bases H-1B wage levels on data from the Occupational Employment and Wage Statistics. Currently, Wage 1 hires are required to earn at the 17th percentile—which would jump to the 34th percentile, under the proposal. Wage Level 2 would increase from the 34th percentile to the 52nd, Wage Level 3 from the 50th to 70th percentile and Wage Level 4 from the 67th to 88th percentile. The DOL projects the rule will increase wage requirements by about $14,000 per worker, on average.
According to a statement from DOL on the wage hike proposal, current prevailing wage levels have “been set dramatically below the market rates which many American workers receive,” particularly entry-level and college graduates in STEM fields. “Because of this,” the department says, “the H-1B program has been distorted by hiring practices that abuse the program to replace their existing American workforce with cheap foreign labor.”
The Trump administration tried to hike prevailing wages for visas during the president’s first term, leading to lengthy litigation and reversal by the Biden administration, notes Justin Coffey of Constangy, Brooks, Smith & Prophete, LLP.
“We expect litigation on the new rule,” he adds. “A similar rule was vacated by the courts; however, it is possible that the litigation outcome will be different this time around.”
The news comes on the heels of moves like last year’s $100,000 fee for companies that sponsor H-1B visas, which have traditionally been a “vital channel to recruit specialized talent that is scarce in the domestic market,” Thrive HR’s Jason Walker and Rey Ramirez recently wrote for HR Executive. They argue that discouraging visa sponsorship through such heavy fees—while intended to promote American job growth—may actually harm the domestic market, with employers choosing instead to move operations overseas or reduce U.S. expansion.
The changing visa policies accompany other efforts, like extended waiting periods for Employment Authorization Documents, scaled-back Temporary Protected Status coverage and increased scrutiny from the Fraud Detection unit of potential “reverse discrimination” practices.
Such shifts, according to recent research from employment law firm Littler, are having a marked impact on employers: Nearly two-thirds of organizations the firm recently surveyed say they are facing new talent challenges because of the Trump administration’s immigration policies—a figure that stands at almost three-quarters for large organizations.
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