The US Department of Labor has introduced new regulations to boost salaries for foreign workers under programs like H-1B visas. The objective is to align the pay of foreign workers with US market rates, aiming to safeguard American workers and prevent system abuse. Labour Secretary Lori Chavez-DeRemer emphasized the Trump Administration’s commitment to ensuring fair wages for American workers.
The proposed changes focus on recalculating “prevailing wages” that determine the minimum pay that employers must provide to foreign workers. The plan includes a significant increase in entry-level wages, with the lowest level moving from the 17th percentile to the 34th percentile and the highest level from the 67th to the 88th percentile. Officials argue that current wage levels are inadequate, enabling companies to hire foreign workers at lower rates than American workers.
According to government data, H-1B workers often receive lower pay than their American counterparts in similar positions, with an average gap of around $10,000. This discrepancy creates an incentive for companies to substitute US workers with lower-paid foreign labor. The existing rule mandates that employers pay the higher of the prevailing wage or the actual wage paid to US workers, with the prevailing wage acting as a minimum threshold, which critics believe is set too low.
The proposed rule aims to elevate this threshold to better match the skills and experience of workers. The adjustments would apply to new applications and not impact existing approvals. The Department estimates that this move could raise wages by approximately $14,000 per worker annually, potentially increasing labor expenses for employers. The primary objective is to restore equity in the labor market and prevent foreign workers from undercutting US wages.
Public feedback on the proposal will be accepted for 60 days following its publication in the Federal Register on March 27. The H-1B visa program serves as the primary avenue for hiring skilled foreign workers in the US, with many transitioning to permanent residency through other visa categories. The proposed modifications could have significant implications for employers and foreign professionals, particularly in the technology sector.
