US nears stricter H-1B wage rules after federal review clearance

Representative image

• US advances proposal to tighten wage rules for H-1B visas
• New rules may raise salary thresholds for foreign workers
• Changes could impact Indian professionals and tech industries

Did our AI summary help?

The United States has taken a key step toward tightening wage norms for foreign workers, as a proposed regulation impacting the H-1B visa programme and employment-based green cards cleared review by the Office of Management and Budget (OMB), according to a report by The Times of India.

The draft, sent to the OMB about two months ago, is now expected to be released soon for public feedback before being finalized.

Prevailing wage rules -- used to determine the minimum salary employers must offer foreign hires depending on job role and location -- are central to the proposal. Any revision to this system could influence hiring decisions, sponsorship eligibility, and overall employment costs for companies.

Although the full regulatory details are yet to be made public, immigration specialists anticipate adjustments in wage calculation methods that may raise salary thresholds across various sectors. This could significantly affect industries reliant on skilled foreign workers, especially technology and healthcare.

The development is particularly important for Indian professionals. As per USCIS data, Indians accounted for 71% of all approved H-1B applications in fiscal 2024 -- around 2.8 lakh approvals, including extensions.

A similar attempt was made earlier. During Donald Trump’s presidency, the Department of Labor introduced a rule in October 2020 that increased wage levels for H-1B workers and green card applicants by 40% to 100%. That regulation, however, faced legal challenges and was eventually withdrawn.

The Biden administration had also explored revising wage norms but did not proceed at the time, leaving the issue unresolved until now.

Once published, the proposal will undergo a public comment phase, typically lasting between 30 and 60 days. However, experts suggest that authorities may limit this period to 30 days to speed up implementation.

If finalized on schedule, the updated wage framework could come into effect for H-1B applicants selected in the 2027 cycle. Meanwhile, registration for the upcoming H-1B cap season is set to begin next month.

There are already signs of hesitation among sponsoring companies. As previously reported, firms are not particularly enthusiastic about the upcoming H-1B cap season, and the possibility of higher wage requirements could further dampen interest -- potentially becoming “the final dent in the coffin.”