[Federal Register Volume 91, Number 59 (Friday, March 27, 2026)]
[Proposed Rules]
[Pages 15454-15501]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2026-06017]
[[Page 15453]]
Vol. 91
Friday,
No. 59
March 27, 2026
Part V
Department of Labor
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Employment and Training Administration
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20 CFR Parts 655 and 656
Improving Wage Protections for the Temporary and Permanent Employment
of Certain Foreign Nationals in the United States; Proposed Rule
Federal Register / Vol. 91, No. 59 / Friday, March 27, 2026 /
Proposed Rules
[[Page 15454]]
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DEPARTMENT OF LABOR
Employment and Training Administration
20 CFR Parts 655 and 656
[DOL Docket No. ETA-2026-0001]
RIN 1205-AC30
Improving Wage Protections for the Temporary and Permanent
Employment of Certain Foreign Nationals in the United States
AGENCY: Employment and Training Administration, Department of Labor.
ACTION: Notice of proposed rulemaking (NPRM).
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SUMMARY: The Department of Labor (DOL or the Department) is issuing
this Notice of Proposed Rulemaking (NPRM) to solicit comments and
public input regarding its proposal to revise Employment and Training
Administration (ETA) regulations governing the prevailing wages for
employment opportunities that United States (U.S.) employers seek to
fill with alien workers on a permanent or temporary basis through
certain EB-2 and EB-3 employment-based immigrant visas via the
Permanent Labor Certification (PERM) program or through H-1B, H-1B1, or
E-3 nonimmigrant visas. Specifically, DOL is proposing to amend its
regulations governing the PERM program and Labor Condition Applications
(LCAs) to incorporate changes to the computation of wage levels under
the Department's four-tiered prevailing wage structure based on the
Occupational Employment and Wage Statistics (OEWS) wage survey
administered by the Department's Bureau of Labor Statistics (BLS).
These proposed revisions aim to better align prevailing wage levels
with the wages paid to U.S. workers who are similarly employed in the
occupation and area of intended employment. The Department's proposed
revisions also seek to strengthen program integrity by reducing the
incentive for employers to use these programs to replace, rather than
supplement, U.S. workers by employing lower-paid alien workers. In
addition, the revision would enable the Department to more effectively
ensure that the employment of immigrant and nonimmigrant workers
admitted or otherwise provided one of the covered statuses does not
adversely affect the wages and working conditions of U.S. workers.
DATES: Interested persons are invited to submit written comments on
this proposed rule on or before May 26, 2026.
ADDRESSES: You may submit comments electronically by the following
method:
Federal eRulemaking Portal: https://www.regulations.gov. Follow the
instructions on the website for submitting comments. A plain language
summary of the proposed rule is also available on that website.
Instructions: Comments should be confined to issues pertinent to
the NPRM, identify the agency's name and public docket number ETA-2026-
0001, explain the reasons for any recommended changes, and reference
the specific section and wording being addressed, where possible.
Please be advised that the Department will post comments that
relate to this NPRM to https://www.regulations.gov, including any
personal information provided. The https://www.regulations.gov website
is the Federal e-Rulemaking Portal and all comments posted there are
available and accessible to the public. Please do not submit comments
containing trade secrets, confidential or proprietary commercial or
financial information, personal health information, sensitive
personally identifiable information (for example, social security
numbers, driver's license or state identification numbers, passport
numbers, or financial account numbers), or other information that you
do not want to be made available to the public. Should the agency
become aware of such information, the agency reserves the right to
redact or refrain from posting such personally sensitive or other
sensitive information, or comments that contain threatening language.
Please note that depending on how information is submitted, the agency
may not be able to redact the information and instead reserves the
right to refrain from posting the information or comment in such
situations.
FOR FURTHER INFORMATION CONTACT: For further information, contact Brian
Pasternak, Administrator, Office of Foreign Labor Certification,
Employment and Training Administration, Department of Labor, 200
Constitution Avenue NW, Room N-5311, Washington, DC 20210, email:
[email protected].
SUPPLEMENTARY INFORMATION:
I. Background
A. Legal Framework
The Immigration and Nationality Act (INA), as amended, assigns
responsibilities to the Secretary of Labor (Secretary) relating to the
entry and employment of certain categories of immigrants and
nonimmigrants.\1\ This NPRM concerns the calculation of the prevailing
wage levels for job opportunities in the PERM,\2\ E-3, H-1B, and H-1B1
programs for which employers seek labor certification from the
Secretary.\3\ The Department of Labor uses a unified four-tiered
prevailing wage methodology based on data obtained from employers under
the Occupational Employment and Wage Statistics (OEWS) survey
administered by the Department's Bureau of Labor Statistics (BLS) to
determine wage levels for certain temporary (H-1B, H-1B1, E-3) and
permanent (EB-2 and EB-3) labor certification processes.
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\1\ There are two general categories of U.S. visas: immigrant
and nonimmigrant. Immigrant visas are issued to foreign nationals
who intend to live permanently in the United States. Nonimmigrant
visas are for foreign nationals who enter the United States on a
temporary basis--for tourism, medical treatment, business, temporary
work, study, or other reasons.
\2\ PERM stands for Permanent Electronic Review Management.
\3\ 8 U.S.C. 1101(a)(15)(E)(iii), (H)(i)(b), (H)(i)(b1).
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1. Overview of Labor Certification and Labor Condition Applications
Labor certifications and labor condition applications are
requirements under the INA for certain alien workers seeking employment
in the United States. To issue a labor certification, the Secretary of
Labor must determine that there are not sufficient able, willing, and
qualified workers available at the time of application for a visa and
admission into the country and that the hiring of the alien worker will
not adversely affect the wages or working conditions of workers in the
United States similarly employed.\4\ The Department's statutory
obligations under the INA are specifically designed to ensure that the
introduction of alien labor into the United States supplements, rather
than displaces, U.S. workers and that the current prevailing wage
structure protects U.S. labor market conditions.\5\
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\4\ INA Sec. 212(a)(5)(A), 8 U.S.C. 1182(a)(5)(A)(i)-(ii)
(labor certification requirement).
\5\ See 8 U.S.C. 1182(a)(5)(A)(ii); 20 CFR 656.1(a) (purpose of
PERM regulations).
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The labor condition application (LCA) is a requirement for the H-
1B, H-1B1, and E-3 nonimmigrant visa classifications.\6\ To be able to
employ an alien as an H-1B, H-1B1, or E-3 nonimmigrant, the employer
must have filed with the Secretary of Labor an application that makes a
number of critical attestations surrounding wages and working
conditions, including that
[[Page 15455]]
the employer is offering and will offer wages that are at least the
actual wage paid by the employer to individuals with similar experience
and qualifications or the prevailing wage as determined by the
Department, whichever is greater, and will provide working conditions
that will not adversely affect the working conditions of U.S. workers
similarly employed.\7\
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\6\ 8 U.S.C. 1182(n), 1182(t). Two subsections titled ``(t)''
have been enacted. Here, the Department cites to the first, titled
``Nonimmigrant professionals; labor attestations.''
\7\ 8 U.S.C. 1182(n), 1182(t).
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The H-1B, H-1B1, and E-3 programs are temporary nonimmigrant
classifications that generally allow U.S. employers to hire alien
workers in ``specialty occupations,'' generally defined as those jobs
which require the theoretical and practical application of highly
specialized knowledge and at least a bachelor's degree or its
equivalent.\8\ By contrast, the EB-2 and EB-3 programs are permanent
immigrant visa categories that generally require labor certification
before an employer can sponsor an alien worker for lawful permanent
residence.\9\ These programs, however, are intimately connected. Many
alien workers initially enter the U.S. in a temporary H-1B status and
later adjust their status to permanent residency through the EB-2 or
EB-3 categories using the PERM process. In FY 2024, approximately 57.6
percent of PERM applications were filed on behalf of workers already
employed in H-1B status, underscoring the overlap between temporary and
permanent programs.
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\8\ INA Sec. 101(a)(15)(E)(iii), (H)(i)(b), (H)(i)(b1), 8
U.S.C. 1101(a)(15)(E)(iii), (H)(i)(b), (H)(i)(b1); INA Sec. 214(i),
8 U.S.C. 1184(i)(1)-(2) (definition of ``specialty occupation'' and
degree requirement).
\9\ INA Sec. 203(b)(2)-(3), 8 U.S.C. 1153(b)(2)-(3) (EB-2 and
EB-3 classifications); INA Sec. 212(a)(5)(A), 8 U.S.C.
1182(a)(5)(A) (labor certification requirement); 20 CFR part 656
(PERM regulations).
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To ensure consistency and prevent wage-setting disparities across
these interrelated programs, the Department applies a unified four-tier
prevailing wage structure across all the programs based on the BLS OEWS
survey. This structure, required by the INA, establishes wage levels
which are commensurate with experience, education, and level of
supervision and that are implemented through ETA regulations.\10\ In FY
2024, the Department certified 502,374 H-1B applications, accounting
for the vast majority of temporary labor certifications.\11\ By
comparison, H-1B1 applications totaled 3,368 and E-3 applications
totaled 9,154.\12\ For permanent employment, the Department certified
35,505 PERM applications during the same period.\13\ These figures
highlight the scale of the H-1B program relative to other visa
classifications and underscore the importance of consistent wage
protections across temporary and permanent programs.
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\10\ INA Sec. 212(p)(4), 8 U.S.C. 1182(p)(4) (requiring four
wage levels commensurate with experience, education, and
supervision); see also 20 CFR 656.40(b)(2) and 655.731(a)(2)(ii)
(prevailing wage methodology).
\11\ Office of Foreign Labor Certification, FY 2024 LCA data:
available at https://www.dol.gov/agencies/eta/foreign-labor/performance.
\12\ Id.
\13\ Office of Foreign Labor Certification, FY 2024 PERM data:
available at https://www.dol.gov/agencies/eta/foreign-labor/performance.
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Among all LCAs certified in FY 2024, 19 percent were assigned to
Wage Level I, 44 percent to Level II, 21 percent to Level III, and 16
percent to Level IV.\14\ These levels reflect the Department's four-
tier structure, which differentiates wages based on the education,
experience, and level of supervision required for the position: Level I
corresponds to entry-level roles, while Level IV represents the most
experienced and highly skilled positions.\15\
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\14\ Office of Foreign Labor Certification, FY 2024 LCA data:
available at https://www.dol.gov/agencies/eta/foreign-labor/performance.
\15\ See INA Sec. 212(p)(4), 8 U.S.C. 1182(p)(4) (requiring
four wage levels commensurate with experience, education, and
supervision); 20 CFR 655.731(a)(2)(ii) and 656.40(b)(2) (prevailing
wage methodology).
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2. Permanent Labor Certification
The INA prohibits the admission of certain employment-based
immigrants unless the Secretary of Labor has determined and certified
to the Secretary of State and the Secretary of Homeland Security that
(1) there are not sufficient workers who are able, willing, qualified,
and available at the time of application for a visa and admission to
the United States and at the place where the alien is to perform such
skilled or unskilled labor; and (2) the employment of such alien will
not adversely affect the wages and working conditions of workers in the
United States similarly employed.\16\
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\16\ 8 U.S.C. 1182(a)(5)(A). Although this provision references
the Attorney General, the authority to adjudicate immigrant visa
petitions was transferred to the Director of the Bureau of
Citizenship and Immigration Services (an agency within the
Department of Homeland Security)--now known as U.S. Citizenship and
Immigration Service (USCIS)--by the Homeland Security Act of 2002,
Public Law 107-296, 451(b) (codified at 6 U.S.C. 271(b)). Under 6
U.S.C. 557, references in federal law to any agency or officer whose
functions have been transferred to the Department of Homeland
Security shall be deemed to refer to the Secretary of Homeland
Security or other official or component to which the functions were
transferred.
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This ``labor certification'' requirement does not apply to all
employment-based immigrants. The INA provides for five ``preference''
categories, or immigrant visa classes, only two of which--the second
and third preference employment categories (commonly called the EB-2
and EB-3 immigrant visa classifications)--generally require a labor
certification.\17\ An employer seeking to sponsor an alien worker for
an immigrant visa under the EB-2 or EB-3 preference categories
generally must file a visa petition with the Department of Homeland
Security on the worker's behalf, and the petition must include a labor
certification from the Secretary of Labor.\18\ Further, the Department
of State (DOS) may not issue a visa unless the Secretary of Labor has
issued a labor certification in conformity with the relevant provisions
of the INA.\19\ If the Secretary determines both that there are not
sufficient able, willing, qualified, and available U.S. workers and
that employment of the alien worker will not adversely affect the wages
and working conditions of similarly employed U.S. workers, the
Secretary so certifies to DHS and DOS by issuing a permanent labor
certification. If the Secretary cannot make one or both of the above
findings, the application for permanent employment certification is
denied.
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\17\ See 8 U.S.C. 1153(b)(2)-(3), 1182(a)(5)(D). Section
1153(b)(2) governs the EB-2 classification of immigrant visas
granted to foreign workers who are either professionals holding
advanced degrees (master's degree or above or foreign equivalent
degree, or a bachelor degree or foreign equivalent degree plus five
years of progressive experience in the specialty) or persons of
``exceptional ability'' in the sciences, arts, or business. To gain
entry in this category, the foreign worker must have prearranged an
offer of employment with a U.S. employer that meets the requirements
of labor certification, unless the work he or she is seeking
admission to perform is in the ``national interest,'' such as to
qualify for a waiver of the job offer (and hence, the labor
certification) requirement under 8 U.S.C. 1153(b)(2)(B). Section
1153(b)(3) governs the EB-3 classification of immigrant work visas
granted to foreign workers who are either ``skilled workers,''
``professionals,'' or ``other'' (unskilled) workers, as defined by
the statute. To gain entry in this category, the foreign worker must
have a prearranged offer of employment with a U.S. employer that
meets the requirements of labor certification, without exception.
\18\ 8 U.S.C. 1154(a)(1)(F), 1182(a)(5)(A) and (D).
\19\ 8 U.S.C. 1153(b)(2), (b)(3)(C), 1201(g).
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Under the INA, the EB-2 classification applies to aliens who are
``members of the professions holding advanced degrees or their
equivalent or who because of their exceptional ability in the sciences,
arts, or business, will substantially benefit prospectively the
national economy, cultural or educational interests, or welfare of the
United States.'' \20\ DHS regulations, in turn, define an ``advanced
degree'' as any United States academic or professional degree, or a
foreign equivalent degree above that of a bachelor's degree. A United
States bachelor's degree or a foreign equivalent
[[Page 15456]]
degree followed by at least five years of progressive experience in the
specialty shall be considered the equivalent of a master's degree.\21\
If a doctoral degree customarily is required by the specialty, the
alien must have a United States doctorate or a foreign equivalent
degree.\22\ The regulations go on to define ``exceptional ability'' as
``a degree of expertise significantly above that ordinarily encountered
in the sciences, arts, or business.'' \23\
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\20\ 8 U.S.C. 1153(b)(2)(A).
\21\ 8 CFR 204.5(k)(2). Note that this equivalency is defined by
DHS regulations for the purposes of EB-2 classification. The
Department is not expressing a view on the substantive equivalence
of these qualifications outside of that regulatory framework.
\22\ Id.
\23\ Id.
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The EB-3 program consists of three discrete classifications:
``skilled worker,'' defined as aliens who are ``capable . . . of
performing skilled labor (requiring at least two years training or
experience), not of a temporary or seasonal nature, for which qualified
workers are not available in the United States;'' ``professional,''
defined as ``a qualified alien who holds at least a United States
baccalaureate degree or a foreign equivalent degree and who is a member
of the professions;'' and ``other worker,'' defined as aliens who are
``capable . . . of performing unskilled labor (requiring less than two
years training or experience), not of a temporary or seasonal nature,
for which qualified workers are not available in the United States.''
\24\
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\24\ 8 U.S.C. 1153(b)(3); 8 CFR 204.5(l)(2).
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3. Labor Condition Application
The Secretary must certify an LCA filed by a U.S. employer before
the employer may employ an alien worker under the E-3, H-1B, or H-1B1
programs.\25\ LCAs apply only to temporary nonimmigrant visa
classifications; permanent sponsorship is pursued through the PERM
labor certification process under INA Sec. 212(a)(5)(A). Because many
H-1B workers later adjust to permanent residence under the EB-2 or EB-3
classification, this NPRM maintains a unified wage framework across
temporary and permanent programs to ensure consistent protections, as
described below.
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\25\ See 8 U.S.C. 1101(a)(15)(E)(iii), (H)(i)(b), (H)(i)(b1); 8
CFR 214.2(h)(2)(i)(E); see also 8 U.S.C. 1182(n)(1)(A)(i)-(ii); 8
U.S.C. 1182(n), (t); 20 CFR part 655, subpart H.
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As noted above, the LCA is submitted by an employer to the
Secretary of Labor and states, among other things, that the employer is
offering and will offer wages that are at least the actual wage paid by
the employer to individuals with similar experience and qualifications
or the prevailing wage for the occupational classification in the area
of employment, whichever is greater, and will provide working
conditions that will not adversely affect the working conditions of
workers similarly employed.\26\
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\26\ 8 U.S.C. 1182(n), 1182(t).
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Unlike the PERM program, the H-1B, H-1B1, and E-3 programs allow
U.S. employers to employ alien workers temporarily in specialty
occupations. ``Specialty occupation'' is defined as an occupation that
requires the theoretical and practical application of a body of
``highly specialized knowledge'' and at least a bachelor's degree in
the specific specialty, or its foreign equivalent, as a minimum
requirement for entry into the U.S.-based occupation, meaning that the
position must require at least a bachelor's degree in a specific
specialty (or its equivalent) and the attainment of such a degree must
be a standard minimum requirement for entry into the occupation.\27\
The H-1B1 and E-3 nonimmigrant visa classifications also allow U.S.
employers to temporarily employ alien workers in specialty occupations,
except that these classifications specifically apply to the nationals
of certain countries: The H-1B1 classification applies to alien workers
in specialty occupations from Chile and Singapore,\28\ while the E-3
visa classification applies to alien workers in specialty occupations
from Australia.
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\27\ See 8 U.S.C. 1184(i)(1)(A)-(B).
\28\ 8 U.S.C. 1101(a)(15)(H)(i)(b1), 1184(g)(8)(A).
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B. Description of the Permanent Labor Certification Process
The Department's regulations at 20 CFR part 656 govern the PERM
labor certification process and set forth the responsibilities of
employers who desire to employ, on a permanent basis, alien workers
covered by the INA's labor certification requirement.\29\ The
Department processes labor certification applications for employers
seeking to sponsor alien workers for permanent employment under the EB-
2 and EB-3 immigrant visa preference categories. Aliens seeking
admission under, or adjustment of status to, the EB-2 or EB-3
preference categories are inadmissible ``unless the Secretary of Labor
has determined and certified . . . that--(I) there are not sufficient
workers who are able, willing, qualified . . . and available at the
time of application for a visa and admission to the United States and
at the place where the alien is to perform such skilled or unskilled
labor, and (II) the employment of such alien will not adversely affect
the wages and working conditions of workers in the United States
similarly employed.''\30\
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\29\ The current regulations were issued through a final rule
implementing the streamlined permanent labor certification program
through revisions to 20 CFR part 656. The final rule was published
on December 27, 2004, and took effect on March 28, 2005. See Labor
Certification for the Permanent Employment of Aliens in the United
States; Implementation of New System, 69 FR 77326-01 (Dec. 27,
2004). The Department published a final rule on May 17, 2007, to
enhance program integrity and reduce the incentives and
opportunities for fraud and abuse related to permanent labor
certification, commonly known as ``the fraud rule.'' Labor
Certification for the Permanent Employment of Aliens in the United
States; Reducing the Incentives and Opportunities for Fraud and
Abuse and Enhancing Program Integrity, 72 FR 27904-01 (May 17,
2007).
\30\ 8 U.S.C. 1182(a)(5)(A)(i).
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The Secretary makes this determination in the PERM programs by,
among other things, requiring the alien worker's sponsoring employer to
recruit U.S. workers by offering a wage that equals or exceeds the
prevailing wage and to further assure that the employer will pay the
alien worker a wage equal to or exceeding the prevailing wage.\31\
Prior to filing a labor certification application, the employer first
must obtain a Prevailing Wage Determination (PWD) for its job
opportunity from the Office of Foreign Labor Certification (OFLC).\32\
The standards and procedures governing the PWD process in connection
with the permanent labor certification program are set forth in the
Department's regulations at 20 CFR 656.40 and 656.41. If the job
opportunity is covered by a collective bargaining agreement (CBA) that
was negotiated at arm's length between a union and the employer, the
wage rate set forth in the CBA is considered the prevailing wage for
labor certification purposes.\33\ In the absence of a prevailing wage
rate derived from an applicable CBA, the employer may elect to use an
applicable wage determination under the Davis-Bacon Act (DBA) or
McNamara-O'Hara Service Contract Act (SCA), or provide a wage survey
that complies with the Department's regulations.\34\ In the absence of
any of the above sources, the OFLC will use the BLS OEWS survey to
determine the prevailing wage for the job opportunity based on the most
[[Page 15457]]
specific occupation and geographic area available.\35\ After reviewing
the employer's application, OFLC will determine the prevailing wage and
specify the validity period, which may be no less than 90 days and no
more than one year from the determination date.\36\
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\31\ 20 CFR 656.10(c)(1). In addition to the prevailing wage
requirement, employers must comply with other regulatory obligations
under 20 CFR 656.10, including attesting that the job opportunity
has been and is clearly open to U.S. workers, that all U.S. workers
who applied were rejected only for lawful, job-related reasons, and
that the employer has conducted the mandatory recruitment steps
required by the PERM regulations.
\32\ 20 CFR 656.15(b)(1), 656.40(a).
\33\ See 20 CFR 656.40(b)(1).
\34\ 20 CFR 656.40(b), (g).
\35\ 20 CFR 656.40(b)(2).
\36\ 20 CFR 656.40(c).
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Once the U.S. employer has received a PWD, the process for
obtaining a permanent labor certification generally begins with the
U.S. employer filing an Application for Permanent Employment
Certification, Form ETA-9089, with OFLC.\37\ As part of the standard
application process, the employer must include, among other things, the
labor or services to be performed and actual minimum job requirements
contained on the valid PWD, the wage it is offering to pay for such
labor or services the geographic location(s) where the work is expected
to be performed, and the efforts it made to recruit qualified and
available U.S. workers prior to filing the Form ETA-9089. Additionally,
the employer must attest to certain labor condition statements on the
Form ETA-9089, including that the ``offered wage equals or exceeds the
prevailing wage determined pursuant to 20 CFR 656.40 and 656.41, and
the wage the employer will pay to the alien worker will equal or exceed
the prevailing wage that is applicable at the time the alien begins
work or from the time the alien is admitted to take up the certified
employment.'' \38\
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\37\ Applications for Schedule A occupations are eligible to
receive pre-certification and bypass the standard applications
review process. In those cases, employers file the appropriate
documentation directly with DHS. 20 CFR 656.5, 656.15.
\38\ 20 CFR 656.10(c)(1).
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Through the requisite test of the labor market, the employer also
attests, at the time of filing the Form ETA-9089, that the job
opportunity has been, and is, clearly open to any U.S. worker, and that
all U.S. workers who applied for the job opportunity were rejected for
lawful, job-related reasons. OFLC performs a review of the Form ETA-
9089 and may either grant or deny a permanent labor certification. When
OFLC grants a permanent labor certification, the employer must submit
proof of the certified Form ETA-9089 along with an Immigrant Petition
for Alien Workers (Form I-140 petition) to DHS. A permanent labor
certification is valid only for the job opportunity, employer, alien
worker, and area of intended employment named on the Form ETA-9089 and
must be filed in support of a Form I-140 petition within 180 calendar
days of the date on which OFLC granted the certification.\39\
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\39\ 20 CFR 656.30(b)(1).
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C. Description of the Temporary Labor Condition Application Process
The Department's regulations at 20 CFR part 655, subpart H, govern
the process for obtaining a certified LCA and set forth the
responsibilities of employers who desire to temporarily employ alien
workers in H-1B, H-1B1, and E-3 nonimmigrant classifications.
For H-1B petitions subject to the annual numerical cap, employers
must first register with U.S. Citizenship and Immigration Services
(USCIS) during the designated registration period. This electronic
registration process does not require a certified Labor Condition
Application (LCA). When USCIS determines that there is more than a
sufficient number of unique beneficiaries on whose behalf registrations
were properly submitted to meet the H-1B cap, USCIS conducts a lottery
to select registrations eligible to file petitions. This lottery
process is administered independently of the Department of Labor.
Employers must obtain a certified LCA from the Department of Labor
before filing the H-1B petition (Form I-129, Petition for Nonimmigrant
Worker) with USCIS; however, employers can obtain an LCA prior to or
after the USCIS registration lottery process. In December 2025, DHS
finalized a rule establishing a weighted selection process based on
offered wage levels for cap-subject H-1B registrations to favor higher-
skilled, higher-paid aliens and strengthen program integrity.\40\
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\40\ See Department of Homeland Security, U.S. Citizenship &
Immigration Services, Weighted Selection Process for Registrants and
Petitioners Seeking to File Cap-Subject H-1B Petitions, 90 FR 60864
(Dec. 29, 2025).
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A prospective employer must attest on the LCA that (1) it is
offering to and will pay the nonimmigrant, during the period of
authorized employment, wages that are at least the actual wage level
paid by the employer to all other employees with similar experience and
qualifications for the specific employment in question, or the
prevailing wage level for the occupational classification in the area
of intended employment, whichever is greater (based on the best
information available at the time of filing the attestation); (2) it
will provide working conditions for the nonimmigrant worker that will
not adversely affect working conditions for similarly employed U.S.
workers; (3) there is no strike or lockout in the course of a labor
dispute in the occupational classification at the worksite; and (4) it
has provided notice of its filing of an LCA to its employees'
bargaining representative for the occupational classification affected
or, if there is no bargaining representative, it has provided notice to
its employees in the affected occupational classification by posting
the notice in a conspicuous location at the worksite or through other
means such as electronic notification.\41\
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\41\ 8 U.S.C. 1182(n)(1)(A)-(C), (t)(1)(A)-(C); 20 CFR
655.705(c)(1), 655.730(d).
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As relevant here, the prevailing wage must be determined as of the
time the LCA is filed.\42\ In contrast to the permanent labor
certification process, an employer is not required to obtain a PWD from
the OFLC.\43\ Rather, an employer may base the prevailing wage on one
of several sources: an applicable CBA that was negotiated at arm's
length between a union and the employer and contains a wage rate
applicable to the occupation; a PWD from the OFLC; a wage determination
under the Davis-Bacon Act or Service Contract Act; an independent
authoritative source--such as a private wage survey--that satisfies the
requirements in 20 CFR 655.731(b)(3)(iii)(B); or another legitimate
source of wage data--such as an industry compensation study--that
satisfies the requirements in 20 CFR 655.731(b)(3)(iii)(C).\44\
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\42\ 20 CFR 655.731(a)(2).
\43\ Id.
\44\ 20 CFR 655.731(a)(2)(ii)(A)-(C).
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An employer may not file an LCA more than six months prior to their
selected start date.\45\ Unless the Secretary finds the LCA is
incomplete or obviously inaccurate, the Secretary must certify it
within seven working days of its filing.\46\ Once an employer receives
a certified LCA, it must file the Form I-129, Petition for a
Nonimmigrant Worker, with USCIS if seeking classification of the alien
as an H-1B worker.\47\ During the course of adjudicating the
nonimmigrant petition, USCIS determines, among other things, whether
the petition is supported by a certified LCA that properly corresponds
to the petition, whether the employer's position qualifies as a
specialty occupation and, if so, whether the alien is qualified for the
position.
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\45\ 20 CFR 655.730.
\46\ 8 U.S.C. 1182(t)(2)(C); 20 CFR 655.740(a)(1).
\47\ For aliens seeking H-1B1 or E-3 classification, the alien
may apply directly to the State Department for a visa once the LCA
has been certified.
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[[Page 15458]]
D. Brief History on Use of the BLS OEWS and Current Prevailing Wage
Methodology
1. The Department's Methodology for Establishing Prevailing Wages From
1997 to 2020
The Department has always sought to use the best available
information on occupational wages representing workers in the United
States similarly employed. The BLS OEWS survey remains the largest
ongoing statistical survey program of the federal government, producing
employment and gross wage estimates for more than 830 SOC codes, and is
used as the primary wage source for establishing skill-based prevailing
wage determinations in the nonimmigrant and immigrant visa programs
administered by the Department. The BLS produces survey materials and
selects the employer establishments to be surveyed using the list of
establishments maintained by State Workforce Agencies (SWAs) for
unemployment insurance purposes. Wage information based on geographic
areas are available at the national and State levels and for certain
territories in which statistical validity can be ascertained, including
the District of Columbia, Guam, Puerto Rico, and the U.S. Virgin
Islands. Wage information is also made available at the metropolitan
and nonmetropolitan area levels within a State.
The OEWS survey primarily covers wage and salary workers in non-
farm establishments and does not include the self-employed, owners and
partners in unincorporated firms, household workers, or unpaid family
workers. The survey is conducted primarily by mail, with telephone
follow-ups to nonrespondents, or, if needed, to clarify written
responses. Each year, two semiannual panels of approximately 179,000 to
187,000 sampled establishments are contacted, one panel in May and the
other in November. Thus, the OEWS employment and gross wage estimates
are constructed from a sample of about 1.1 million establishments
collected over a 3-year period, which allows the production of data at
detailed levels of geography, industry, and occupation and accounts for
approximately 57 percent of employers in the United States. OEWS data
are published annually with a May reference date. Wages are defined as
straight-time, gross pay, including piece rates, but excludes other
forms of pay such as overtime, shift differentials, and non-production
or any year-end bonuses. Further, because it collects the gross wages
paid to each worker in each occupation during the reference period, the
OEWS can consistently report more precise wage estimates for any
occupation-specific wage distribution to approximate wage differentials
paid to U.S. workers similarly employed in a particular occupation and
state.
The OEWS survey consists of two components: employment estimates
and wage estimates. The employment component provides data on the
estimated number of full- and part-time jobs in an occupation and
geographic area, offering insight into workforce distribution and
occupational demand across industries and regions. This component
measures full- and part-time wage and salary employees in nonfarm
industries, but excludes self-employed workers, owners and partners in
unincorporated firms, employees of private households, and unpaid
family workers. The wage component provides estimates of straight-time,
gross pay for employees in an occupation, excluding premium pay such as
overtime. The Department incorporated the wage component of the OEWS
survey into its prevailing wage guidance in 1997.\48\ At the time, the
Department divided OEWS wage data into two skill levels: a Level I wage
for ``beginning level employees'' and a Level II wage for ``fully
competent employees.'' Because the OEWS survey does not provide data
about skill differentials within each Standard Occupational
Classification (SOC) code, the Department established the entry and
experienced skill levels mathematically.\49\
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\48\ Prevailing Wage Policy for Nonagricultural Immigration
Programs, General Administration Letter No. 2-98 (GAL 2-98) (Oct.
31, 1997), available at https://www.dol.gov/agencies/eta/advisories/general-administration-letter-no-2-98 and https://www.dol.gov/sites/dolgov/files/ETA/advisories/GAL/1997/GAL2-98_attach.pdf.
\49\ GAL 2-98 at 5.
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Specifically, under a Memorandum of Understanding (MOU), BLS
computed a Level I wage calculated as the mean of the lowest paid one-
third of workers in a given occupation (approximately the 17th
percentile of the OEWS wage distribution) \50\ and a Level II wage
calculated as the mean wage of the highest paid upper two-thirds of
workers (approximately the 67th percentile).\51\ This two-tier wage
structure was based on a practical, informal method of using the mean
wage of the lowest paid one-third of the workers surveyed in each
occupation to approximate the typical compensation for ``beginning
level employees,'' and the mean wage of the upper two-thirds of the
workers surveyed in the occupation to approximate the typical
compensation for ``fully competent employees.'' \52\
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\50\ To clarify, the Department notes that, because the old wage
methodology took the mean of a portion of the OEWS wage
distribution, the precise wage it produced will not always fall at
17th percentile. Rather, the 17th percentile is the midpoint or
median of the distribution for which a mean was produced, and is
therefore only an approximation for what the actual wage rates would
be. The same is true of the old wage methodology for calculating the
Level IV wage, which used the mean of the upper two thirds of the
OEWS distribution, the midpoint of which is the 67th percentile.
\51\ Intra-Agency Memorandum of Understanding executed by Mr.
John R. Beverly, III, Director, U.S. Employment Service, ETA, and
Ms. Katharine Newman, Chief, Division of Financial Planning and
Management, Office of Administration, BLS (Sept. 30, 1998).
\52\ GAL 2-98 at 5. See also Wage Methodology for the Temporary
Non-agricultural Employment H-2B Program, 76 FR 3452, 3453 (Jan. 19,
2011); Wage Methodology for the Temporary Non-Agricultural
Employment H-2B Program, Part 2, 78 FR 24047, 24051 (Apr. 24, 2013).
---------------------------------------------------------------------------
To implement the INA's four-tier prevailing wage provision, the
Department published comprehensive Prevailing Wage Determination Policy
Guidance for Nonagricultural Immigration Programs (2005 Guidance),
which expanded the two-tier OEWS wage level system to include four
``skill levels'': Level I ``entry,'' Level II ``qualified,'' Level III
``experienced,'' and Level IV ``fully competent.''\53\ The Department
applied the formula specified in the INA to its two existing wage
levels to set Levels I through IV, respectively, at approximately the
17th percentile, the 34th percentile, the 50th percentile, and the 67th
percentile.\54\ The Department's adoption of the four-tiered wage
structure is grounded in the INA's statutory mandate, which requires
that government surveys used to determine prevailing wages ``provide at
least four levels of wages commensurate with experience, education, and
the level of supervision,''\55\ and is consistent with the statutory
requirement that wage levels be commensurate with experience,
education, and the level of supervision, ensuring that wage
determinations meaningfully differentiate among workers based on these
factors. This differentiation is part of the statutory scheme wherein
the Department is
[[Page 15459]]
charged with certifying a lack of sufficient workers and that
employment of alien workers will not adversely affect the wages or
working conditions of U.S. workers.
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\53\ ETA Prevailing Wage Determination Policy Guidance,
Nonagricultural Immigration Programs 7 (May 9, 2005), available at
https://www.dol.gov/sites/dolgov/files/ETA/oflc/pdfs/policy_nonag_progs.pdf; see also 85 FR at 63874-76 for a discussion
of the development of the prevailing wage determination process. See
INA Sec. 212(p)(4), 8 U.S.C. 1182(p)(4) (requiring that any
government survey used to determine prevailing wages provide at
least four levels of wages commensurate with experience, education,
and level of supervision).
\54\ See, ETA Prevailing Wage Determination Policy Guidance,
Nonagricultural Immigration Programs 1 (May 9, 2005).
\55\ 8 U.S.C. 1182(p)(4).
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In 2010, the Department centralized the prevailing wage
determination process for nonagricultural labor certification programs
within OFLC's National Prevailing Wage Center (NPWC).\56\ In
preparation for this transition, the Department issued new Prevailing
Wage Determination Policy Guidance for Nonagricultural Immigration
Programs (2009 Guidance),\57\ which currently informs OFLC's PWD
process for the PERM, H-1B, H-1B1, and E-3 visa programs and will
continue to inform OFLC's PWD process for these programs. When
assigning a prevailing wage using OEWS data, the NPWC examines the
nature of the job offer, the area of intended employment, and job
duties for workers that are similarly employed.\58\ In particular, the
NPWC uses the SOC taxonomy to classify the employer's job opportunity
into an occupation by comparing the employer's job description, title,
and requirements to occupational information provided in sources like
the Department's Occupational Information Network (O*Net).\59\ Once the
NPWC identifies the applicable SOC code, it determines the appropriate
wage level for the job opportunity by comparing the employer's job
description, title, and requirements to those normally required for the
occupation, as reported in sources like O*Net. This determination
involves a step-by-step process in which each job opportunity begins at
Level I (entry level) and may progress to Level II (experienced), Level
III (qualified), or Level IV (fully competent) based on the NPWC's
comparison of the job opportunity to occupational requirements,
including the education, training, experience, skills, knowledge, and
tasks required in the occupation.\60\ After determining the prevailing
wage level, the NPWC issues a PWD to the employer using the OEWS wage
for that level in the occupation and area of intended employment.
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\56\ See Labor Certification Process and Enforcement for
Temporary Employment in Occupations Other Than Agriculture or
Registered Nursing in the United States (H-2B Workers), and Other
Technical Changes, 73 FR 78020 (Dec. 19, 2008); Prevailing Wage
Determinations for Use in the H-1B, H-1B1 (Chile/Singapore), H-1C,
H-2B, E-3 (Australia), and Permanent Labor Certification Programs;
Prevailing Wage Determinations for Use in the Commonwealth of the
Northern Mariana Islands, 74 FR 63796-01 (Dec. 4, 2009).
\57\ Employment and Training Administration; Prevailing Wage
Determination Policy Guidance, Nonagricultural Immigration Programs
(Revised Nov. 2009) (2009 Guidance), available at https://www.dol.gov/sites/dolgov/files/eta/oflc/pdfs/npwhc_guidance_revised_11_2009.pdf.
\58\ Id. at 3-4.
\59\ Id. at 1-7; see also Occupational Information Network,
available at https://www.onetonline.org/. O*Net provides information
on skills, abilities, knowledge, tasks, work activities, and
specific vocational preparation levels associated with occupations
and stratifies occupations based on shared skill, education, and
training indicators.
\60\ 2009 Guidance at 6.
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2. Regulatory Changes to the Prevailing Wage Methodology in 2020 and
Litigation
As discussed in Section I.D.1, the Department has long relied on
the BLS OEWS survey to determine prevailing wages for the H-1B, H-1B1,
E-3, and PERM programs. The prevailing wage determination process,
first implemented through guidance in 2005, was designed to reflect
four tiers of wages commensurate with the experience, education, and
level of supervision for the job opportunity and to be consistent with
the statutory requirements of 8 U.S.C. 1182(p)(4). However, as is
detailed further in this NPRM, the methodology adopted in 2005 did not
adequately protect U.S. workers from adverse wage effects and
deleterious job conditions.\61\ The Department also did not clearly
articulate a rationale for choosing levels as low as the 17th
percentile for Level I and did not similarly provide a reasoned
justification for selecting the 67th percentile for Level IV. In
addition to these substantive and procedural shortcomings, a growing
body of evidence, which is presented below under Section II.B.3,
indicates that the 2005 methodology was adversely affecting the wages
of U.S. workers.
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\61\ While the Department issued updated guidance in 2009 to
centralize processing and clarify procedures, that guidance retained
the methodology adopted in 2005. Because the NPRM proposes to revise
the percentile-based formula introduced in 2005, this section uses
the 2005 guidance as the basis of comparison.
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Therefore, on October 8, 2020, the Department published an Interim
Final Rule (IFR) in the Federal Register revising the methodology used
to determine prevailing wage levels for the H-1B, H-1B1, E-3, and PERM
programs.\62\ As explained in the IFR, the Department concluded that
the existing wage levels were not consistent with the relevant
statutory requirement that a government survey used to determine the
prevailing wage should provide four wage levels commensurate with
experience, education, and level of supervision.\63\ The Department
also determined that the existing wage levels were artificially low and
provided an opportunity for employers to hire and retain alien workers
at wages well below what their U.S. counterparts earn, creating an
adverse incentive to prefer the hiring of alien workers to U.S.
workers, an incentive that is at odds with the statutory scheme and
which causes downward pressure on the wages of the domestic workforce.
Therefore, the Department revised wage provisions at 20 CFR 655.731 and
656.40 to adjust the existing wage levels to ensure the wage levels
would reflect the wages paid to U.S. workers with similar experience,
education, and responsibility to those possessed by similarly employed
alien workers.
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\62\ 85 FR 63872.
\63\ See 8 U.S.C. 1182(p)(4).
---------------------------------------------------------------------------
In particular, the IFR amended paragraphs (a), (b)(2), and (b)(3)
of 20 CFR 656.40, codifying the four-tier wage practice and revising
the wage level computation methodology. A new Sec. 656.40(b)(2)(i)
specified the four new levels (Levels I through IV) to be applied.
Paragraph (b)(2)(i)(A) explained the Level I wage would be calculated
as the mean of the fifth decile of the wage distribution for the most
specific occupation and geographic area available, rather than
calculated as the mean of the bottom third of the OEWS wage
distribution, as was the case prior to the IFR. Paragraph (b)(2)(i)(D)
provided that the Level IV wage would be calculated as the mean of the
upper decile of the wage distribution for the most specific occupation
and geographic area available, rather than using the mean of the upper
two-thirds of the distribution. As a result of these changes, the wage
levels were increased, respectively, from approximately the 17th, 34th,
50th, and 67th percentiles to approximately the 45th, 62nd, 78th, and
95th percentiles. The IFR also made minor technical and clarifying
amendments to sections 656.40 and 655.731.
The Department promulgated the IFR pursuant to 5 U.S.C. 553(b)(B)
and 553(d)(3)64 65 due to exigent circumstances created by
the coronavirus public health emergency that threatened immediate harm
to the
[[Page 15460]]
wages and job prospects of U.S. workers, as well as the need to avoid
evasion by employers of the new wage rates. The Department requested
public input on all aspects of the IFR during a post-promulgation 30-
day public comment period.
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\64\ The Administrative Procedure Act (APA), 5 U.S.C. 551 et
seq., authorizes an agency to issue a rule without prior notice and
opportunity to comment when the agency for good cause finds that
those procedures are ``impracticable, unnecessary, or contrary to
the public interest.'' 5 U.S.C. 553(b)(B). The good cause exception
for forgoing notice and comment rulemaking ``excuses notice and
comment in emergency situations, or where delay could result in
serious harm.'' Jifry v. F.A.A., 370 F.3d 1174, 1179 (D.C. Cir.
2004) (internal citations omitted).
\65\ See Strengthening Wage Protections for the Temporary and
Permanent Employment of Certain Aliens in the United States, 5 FR
63872, 63898-63902 (Oct. 8, 2020).
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Four groups of plaintiffs separately challenged the Department's
IFR. The plaintiffs claimed the Department lacked good cause to issue
the IFR without undergoing notice and comment procedures under the APA
and that the IFR was arbitrary and capricious and in violation of the
INA. These plaintiffs further requested that the IFR be enjoined and
the Department prevented from implementing it. In three of the four
cases, the district court approved the parties' stipulation to convert
plaintiffs' motion for a preliminary injunction into a motion for
partial summary judgment on the notice and comment claim. In Chamber of
Commerce, the district court issued a decision on December 1, 2020,
granting plaintiffs' motion for partial summary judgment on their
notice and comment claim and setting aside the Department's IFR.\66\ In
Purdue University and Stellar IT (which were consolidated), the
district court issued a decision on December 14, 2020, granting partial
summary judgment to the plaintiffs on the basis that the Department
lacked good cause to issue the IFR, and ordered the Department to re-
issue prevailing wage determinations issued under the IFR on a mutually
agreeable schedule.\67\ In the fourth case, ITServe Alliance, the
district court issued a preliminary injunction on December 3, 2020,
prohibiting the Department from enforcing the IFR against the
plaintiffs in that case.\68\ In discussing plaintiffs' likelihood of
success on the merits in that case, the court limited its analysis to
plaintiffs' claim that the Department lacked good cause to forgo
advance notice and comment.\69\ Following the district court's
decisions in Chamber of Commerce and ITServe Alliance, OFLC took
immediate action to comply with the courts' directives, including
issuing a public announcement on its website on December 3, 2020,
outlining the steps it was taking in response to the courts' orders.
Notably, none of these rulings addressed the merits of the plaintiffs'
challenges to the substance of the IFR.
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\66\ Chamber of Com. of United States v. United States Dep't of
Homeland Sec., 504 F. Supp. 3d 1077 (N.D. Cal. 2020). The plaintiffs
in this case also challenged an interim final rule issued by DHS,
Strengthening the H-1B Nonimmigrant Visa Classification Program, 85
FR 63, 918 (Oct. 8, 2020).
\67\ Purdue University, et al. v. Scalia, et al., 20-cv-03006,
2020 WL 7340156 (D.D.C. Dec. 14, 2020).
\68\ ITServe All., Inc. v. Scalia, No. CV 20-14604 (SRC), 2020
WL 7074391 (D.N.J. Dec. 3, 2020).
\69\ Id. at 3-8.
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The Department issued a Final Rule on January 14, 2021, which
adopted the IFR's provisions with modifications that were responsive to
both public comments and issues raised during litigation.\70\ The Final
Rule adjusted the wage percentiles and incorporated changes based on
public feedback to the 35th and 90th percentiles for Level I and Level
IV wages, respectively. The Final Rule's effective date was set for
March 15, 2021. On February 1, 2021, the Department proposed to delay
the effective date of the final rule for a period of 60 days to May 14,
2021, in response to a Presidential directive.\71\ On March 12, 2021,
the Department issued a final rule confirming the delay, wherein it
cited the need to finish a ``comprehensive review of this rulemaking''
and the ``complexity of this issue'' as its rationale for proceeding
with the proposed delay.\72\ On March 22, 2021, the Department issued a
proposal to further delay the effective date of the rule by eighteen
months to November 14, 2022.\73\ The Department again cited the need to
have ``sufficient time to engage in its comprehensive review of the
[Jan. 14, 2021 Final Rule].''\74\ The Department acknowledged that
``delaying the implementation of the Final Rule is likely to have an
impact on the wages paid to workers.''\75\ Nonetheless, on May 13,
2021, the Department promulgated a final rule confirming the 18-month
delay of the effective date.\76\ While many commenters supported the
delay, ``[m]any individual commenters opposed the proposed delay and
supported implementing policies that favor and attract higher skilled
workers.'' \77\ The Department again ``acknowledge[ed] the potential
substantial economic impact of this delay not only on employers but
also on U.S. and alien workers.'' \78\ ``[M]any commenters expressed
general opposition to the proposed delay or opposed the proposed delay
and urged the Department to implement the higher wage levels as soon as
possible. . . .'' \79\
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\70\ Strengthening Wage Protections for the Temporary and
Permanent Employment of Certain Aliens in the United States, 86 FR
3608 (January 14, 2021).
\71\ Memorandum from Ronald A. Klain, Chief of Staff, White
House to Heads of Agencies Regarding Regulatory Freeze Pending
Review (Jan. 20, 2021), available at https://bidenwhitehouse.archives.gov/briefing-room/presidential-actions/2021/01/20/regulatory-freeze-pending-review/.
\72\ 86 FR 13995 (Mar. 12, 2021).
\73\ 86 FR 15154 (Mar. 22, 2021).
\74\ 86 FR 15155.
\75\ Id. at 15156.
\76\ 86 FR 26164 (May 13, 2021).
\77\ Id. at 26170-71.
\78\ Id. at 26171.
\79\ Id.
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On April 2, 2021, the Department also issued a Request for
Information (RFI) ``to provide information on the sources of data and
methodologies for determining prevailing wage levels covering
employment opportunities that United States (U.S.) employers seek to
fill with alien workers on a permanent or temporary basis through
certain employment-based immigrant visas or through H-1B, H-1B1, E-3
nonimmigrant visas.''\80\ While the comments received on the RFI
generally support the Department's assessment of the limitations of the
prior methodology and reinforced the need for a revised approach that
better aligns with statutory requirements and labor market realities,
the comments received did not inform the methodology proposed here.
---------------------------------------------------------------------------
\80\ 86 FR 17343 (Apr. 2, 2021).
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On June 23, 2021, the Northern District of California vacated and
remanded the January 14, 2021 Final Rule, pursuant to the Department's
unopposed voluntary request for vacatur and remand.\81\ On December 13,
2021, the Department promulgated a final rule ``effectuat[ing] a
Federal district court order vacating a January 14, 2021 Final Rule.''
86 FR 70729 (Dec. 13, 2021). Subsequently, the Department engaged in no
further rulemaking regarding the employment-based immigrant visa or the
H-1B, H-1B1, and E-3 nonimmigrant visas that are the subject of this
NPRM.
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\81\ See Chamber of Commerce, et al. v. Dep't of Homeland Sec.,
et al., No. 4:20-cv-07331 (N.D. Cal. June 23, 2021), ECF No. 139.
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II. Discussion of the Department's Proposed Amendments to the
Prevailing Wage Methodology
The Department is issuing this NPRM to solicit public comment on
proposed amendments to the prevailing wage computation methodology
relied upon in several labor certification programs, specifically the
H-1B, H-1B1, and E-3 nonimmigrant visa classifications, as well as the
PERM program for employment-based immigrant visas. The Department
proposes to increase the prevailing wage floors for Wage Level I from
the 17th percentile to the 34th percentile, for Wage Level II from the
34th to the 52nd, for Wage Level III from the 50th to the 70th, and for
Wage Level IV from the 67th to the 88th, relying upon wage data
provided by the OEWS survey. The Department believes that these
increases in the prevailing wage levels are needed because the previous
[[Page 15461]]
methodology set the prevailing wages too low by relying on a
methodology that did not take into account the experience, education,
and level of supervision, as required by the INA. As a result,
employers were permitted to hire alien workers at wage levels below
those that similarly employed U.S. workers were paid, resulting in
adverse effects to the wages and working conditions of U.S. workers.
A. Statutory Authority for Amending the Methodology for Computing the
Prevailing Wage Levels
The Department's authority to revise the prevailing wage
methodology is grounded in its longstanding role of administering the
labor certification process and in the discretion afforded to the
Department regarding the establishment of prevailing wage levels for
the H-1B, H-1B1, E-3, and PERM programs.
Section 1182(a)(5)(A)(i) of the INA provides that, ``[a]ny alien
who seeks to enter the United States for the purpose of performing
skilled or unskilled labor is inadmissible, unless the Secretary of
Labor has determined and certified to the Secretary of State and the
Attorney General that . . . there are not sufficient workers who are
able, willing, qualified (or equally qualified in the case of an alien
described in clause (ii)) and available at the time of application for
a visa and admission to the United States and at the place where the
alien is to perform such skilled or unskilled labor, and the employment
of such alien will not adversely affect the wages and working
conditions of workers in the United States similarly employed.''
Section 1182(n)(1) of the INA provides that ``[n]o alien may be
admitted or provided status as an H-1B nonimmigrant . . . unless the
employer has filed with the Secretary of Labor an application stating
the following . . . [that] the employer is offering and will offer
during the period of authorized employment to aliens admitted or
provided status as an H-1B nonimmigrant wages that are at least (I) the
actual wage level paid by the employer to all other individuals with
similar experience and qualifications for the specific employment in
question, or (II) the prevailing wage level for the occupational
classification in the area of employment, whichever is greater. . . .''
1182(n)(1); 1182(n)(1)(A); 1182(n)(1)(A)(i); 1182(n)(1)(A)(i)(II); see
also 1182(n)(2). Section 1182(t)(1) contains nearly-identical language
with respect to H-1B1 and E-3 and nonimmigrants. 8 U.S.C. 1182(t)(1);
1182(t)(1)(A); 1182(t)(1)(A)(i); 1182(t)(1)(A)(i)(II).
In turn, Section 1182(p)(4) of the INA provides that the Secretary
of Labor may ``use, or make available to employers, a governmental
survey to determine the prevailing wage.'' This section also provides
that the ``survey shall provide at least 4 levels of wages commensurate
with experience, education, and the level of supervision.'' Section
1182(p)(3) requires that the ``prevailing wage required to be paid
pursuant to subsections (a)(5)(A), (n)(1)(A)(i)(II), and
(t)(1)(A)(i)(II) shall be 100 percent of the wage determined pursuant
to those sections.'' These statutory requirements are discussed in
further detail in Section II.B.2 of this NPRM.
Congress ``often enact[s]'' statutes in which the agency is
authorized to exercise a degree of discretion.'' Loper Bright Enter. v.
Raimondo, 144 S. Ct. 2244, 2263 (2024). ``[S]ome statutes `expressly
delegate[ ]' to an agency the authority to give meaning to a particular
statutory term.'' Id. (citation omitted). ``Others empower an agency to
prescribe rules to `fill up the details' of a statutory scheme, or to
regulate subject to the limits imposed by a term or phrase that `leaves
agencies with flexibility.' '' Id. (citation omitted). The statutory
provisions listed above are of the type identified by the Supreme Court
in Loper Bright that ``delegate[ ] discretionary authority'' to the
Department on how best to determine prevailing wages such that the
employment of alien workers will not adversely affect U.S. workers. The
Department's authority to set wage levels is also necessary for it to
fulfill its statutory functions and duties under Sections
1182(a)(5)(A), 1182(n)(1), 1182(n)(2)(A),\82\ 1182(t)(1), and
1182(t)(2)(A), as well as its role in the overall statutory scheme.\83\
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\82\ Moreover, the Secretary's duty under 8 U.S.C. 1182(n)(2)(A)
to establish procedures for receiving, investigating, and resolving
LCA-related complaints includes the authority to promulgate
regulations to ensure employer compliance with LCAs. See, e.g.,
Aleutian Cap. Partners, LLC v. Scalia, 975 F.3d 220, 230 (2d Cir.
2020). The Department's authority to promulgate prevailing wage
rates is also part of its express enforcement authority.
\83\ C.f. e.g., N. Carolina Farm Bureau Fed'n v. U.S. Dep't of
Labor, 781 F. Supp. 3d. 455; 2025 WL 1296245, *12 (E.D.N.C. 2025)
(``NCFBF'') (the Department has broad authority to ```fill up the
details' of its statutory directive,''); Kansas v. U.S. Dep't of
Labor, 749 F. Supp. 3d 1363, 1374 (S.D. Ga. 2024) (reaffirming the
Department's authority to ``issue regulations to ensure that any
certifications it issues for H-2A visas do not `adversely affect'
American agricultural workers'').
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B. Reasons for Adjusting the Prevailing Wage Levels
1. Summary
On September 19, 2025, the President issued Proclamation 10973
(``Proclamation''), ``Restriction on Entry of Certain Nonimmigrant
Workers,'' which, among other provisions, directed the Secretary of
Labor to initiate rulemaking to revise prevailing wage levels under the
H-1B program.\84\ The Proclamation explained that the H-1B program
``has been deliberately exploited to replace, rather than supplement,
U.S. workers with lower-paid, lower-skilled labor.'' The Proclamation
cited longstanding concerns that the H-1B program, as currently
administered, may be used in ways that undermine U.S. labor standards,
create downward pressure on wages, and displace U.S. workers. The
Proclamation further noted that the current wage structure may
incentivize the hiring of alien workers at significantly lower wages
than their U.S. counterparts, thereby undermining the program's
original intent which was to allow employers to obtain temporary
specialized labor when equally skilled and qualified U.S. workers could
not be found.
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\84\ Proclamation No. 10973, 90 FR 46027 (Sept. 19, 2025).
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The Department is proposing this rule because the current
methodology for setting prevailing wages often allows employers to pay
alien workers significantly less than what similarly qualified U.S.
workers earn for the same jobs in the same area of intended employment.
This not only results in unfair competition for U.S. workers,
particularly in high-skill sectors like the STEM (science, technology,
engineering, and mathematics) fields, and adverse effects on the wages
of U.S. workers, but also undermines the integrity of the immigration
system by incentivizing the use of lower-paid and lower-skilled alien
workers over available domestic talent. This misuse of the H-1B program
undermines its original statutory purpose--which is to allow employers
to temporarily hire alien workers in specialty occupations requiring
the ``theoretical and practical application of a body of highly
specialized knowledge'' \85\--by transforming it into a mechanism for
importing lower-cost labor. The current methodology further undermines
the Department's statutory duties under Section 1182(a)(5)(A) of the
INA to ensure that the employment of alien workers does not impose
adverse effects onto the wages and working conditions of American
workers. By updating how wage levels
[[Page 15462]]
are calculated, the Department aims to ensure that alien workers are
paid fairly and that U.S. workers are not displaced or undercut--
helping to restore balance, fairness, and public confidence in the
labor certification process.
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\85\ 8 U.S.C. 1184(i)(1)(A). Additionally, the term ``specialty
occupation'' is also defined to require ``attainment of a bachelor's
or higher degree in the specific specialty (or its equivalent) as a
minimum for entry into the occupation in the United States.'' Id. at
(i)(1)(B).
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Similarly, as is described in more detail below in Section II.B.3,
the Department has determined that the current prevailing wage
methodology does not adequately reflect labor market realities and may
suppress wages and displace U.S. workers. As the Department has noted
previously, ``prevailing wage rates produced by the four-tier wage
structure should approximate actual market wages to the greatest extent
possible.'' 86 FR 3634.
In response to these concerns, the Department of Labor is proposing
to revise the methodology used to determine prevailing wage levels
under the H-1B, H-1B1, E-3, and PERM programs. The proposed changes are
intended to ensure that the employment of alien workers does not
adversely affect the wages and working conditions of U.S. workers,
consistent with the Department's statutory obligations in section
1182(a)(5)(A), 1182(n), and 1182(t) of the INA. When prevailing wage
rates are set below what comparable U.S. workers would typically earn,
it creates an incentive for employers to hire alien workers who cost
less, which in turn, reduces job opportunities for equally qualified
U.S. workers.\86\
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\86\ Ron Hira, Is There Really a STEM Workforce Shortage?,
Issues in Science and Technology, Vol. XXXVIII, No. 4, Summer 2022,
available at https://issues.org/stem-workforce-shortage-data-hira/.
---------------------------------------------------------------------------
While the Presidential Proclamation only identifies the H-1B
program for regulatory overhaul, any adjustment to prevailing wage
levels in this program will also implicate prevailing wage levels in
the H-1B1, E-3, and PERM programs because the Department of Labor uses
a unified four-tiered wage structure across all of these visa programs.
The same OEWS data and percentile-based methodology are used to
determine wage levels for both temporary (H-1B, H-1B1, E-3) and
permanent (PERM) labor certification processes. Given that over 58% of
FY 2024 PERM applications were filed on behalf of aliens already
employed in H-1B status, maintaining consistency in wage determinations
across these programs is essential to ensure that the statutory
requirement--that the employment of alien workers not adversely affect
the wages and working conditions of U.S. workers--is met uniformly.\87\
Divergent wage structures would create perverse incentives for
employers to exploit lower wage thresholds in one program to circumvent
higher prevailing wages being offered in the other, ultimately
undermining the integrity of all visa programs that utilize the current
prevailing wage methodology. The Department therefore believes that
revising the wage level for these other programs that are intertwined
with the H-1B program, therefore, is also necessary and appropriate.
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\87\ Department of Labor, Employment and Training
Administration, FY 2024 PERM Performance Data, available at https://www.dol.gov/agencies/eta/foreign-labor/performance.
---------------------------------------------------------------------------
2. The Relationship Between the Prevailing Wage Levels, OEWS Survey,
and the INA
The Department's prevailing wage determinations serve as a critical
safeguard in both the H-1B and PERM programs, ensuring that the
employment of alien workers does not adversely affect the wages and
working conditions of U.S. workers. These determinations rely heavily
on data from the Occupational Employment and Wage Statistics (OEWS)
survey, which provides wage estimates across occupations and geographic
areas. However, because the OEWS survey was not originally designed to
reflect the statutory requirements of the Immigration and Nationality
Act (INA), the Department must carefully evaluate how to align OEWS-
based wage levels with the INA's mandate to protect U.S. workers.
As noted, the INA requires employers to pay H-1B workers the
greater of ``the actual wage level paid by the employer to all other
individuals with similar experience and qualifications for the specific
employment in question,'' or ``the prevailing wage level for the
occupational classification in the area of employment.'' The statute
further provides that, when a government survey is used to establish
the wage levels, ``such survey shall provide at least 4 levels of wages
commensurate with experience, education, and the level of
supervision.'' If an existing government survey produces only two
levels, the statute provides a formula to calculate two intermediate
levels. Thus, similar to the statute's actual wage clause, the
prevailing wage requirement, when calculated based on a government
survey, makes the qualifications possessed by workers in the
occupation, namely education, experience, and responsibility, an
important part of the wage calculation. Put slightly differently, both
clauses yield wage requirements that are meant to align with the wages
that similarly employed U.S. workers are being compensated with a
requirement that employers pay the higher available wage. In this way,
the statutory scheme is meant to ``protect U.S. workers' wages and
eliminate any economic incentive or advantage in hiring temporary alien
workers.'' If employers are required to pay H-1B workers approximately
the same wage paid to U.S. workers who perform the same type of work in
the same geographic area and with similar levels of education,
experience, and responsibility as the H-1B workers, employers will have
significantly diminished incentives to prefer H-1B workers over U.S.
workers. By reducing the perverse incentive to favor alien H-1B workers
over the domestic workforce, U.S. workers' wages will not be suppressed
by the presence of alien workers in the relevant labor market.
To set appropriate prevailing wage levels consistent with the
purpose of the relevant statutory provisions and statutory mandate on
the Department, as discussed below, the Department has concluded that
it is appropriate to focus on the wages of those U.S. workers that are
most similarly employed to alien workers in the H-1B program, those
receiving an EB-2 visa, and higher skilled EB-3 visa recipients.
Based on the statutory qualifications to be eligible to receive H-
1B status, the Department thinks that while the OEWS survey is the best
source of wage data available for use in the Department's foreign labor
certification programs, the wage data for any particular occupation
does not perfectly align with the requirement that workers in the H-1B
program possess highly specialized knowledge. This fact necessarily
shapes how the Department integrates the OEWS survey into its foreign
labor programs and also demonstrates the existing wage levels'
inconsistency with the INA.
At the outset, the Department notes that much of its assessment of
how best to adjust the prevailing wage levels gives special attention
to the H-1B program. The H-1B program accounts, by order of magnitude,
for the largest share of alien workers covered by the Department's
four-tier wage structure. Upwards of 80 percent of all workers admitted
or otherwise authorized to work under the programs covered by the wage
structure are H-1B workers.\88\
[[Page 15463]]
This, in combination with the fact that, as explained below, the risk
of adverse effects to U.S. workers posed by the presence of alien
workers is most acute where there are high concentrations of such
workers, supports the Department's determination to focus on the H-1B
program. Because the wage structure governs, and, for reasons explained
below, will continue to govern wages for hundreds of thousands of
workers across five different foreign labor programs and hundreds of
different occupations, no wage methodology will be perfectly tailored
to the unique circumstances of every job opportunity.\89\ Accordingly,
the Department thinks that it is appropriate to focus its analysis on
the H-1B program and those occupations in which the vast majority of H-
1B workers are employed.
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\88\ See Department of Homeland Security, 2017 Yearbook of
Immigration Statistics, Table 7. Persons Obtaining Lawful Permanent
Resident Status by Type and Detailed Class of Admission: Fiscal Year
2017, available at https://ohss.dhs.gov/topics/immigration/yearbook/2017/table7; United States Citizenship and Immigration Services,
Characteristics of H-1B Specialty Occupation Workers: Fiscal Year
2017 Annual Report to Congress October 1, 2016-September 30, 2017
(Apr. 9, 2018), available at https://www.uscis.gov/sites/default/files/document/reports/Characteristics-of-Specialty-Occupation-Workers-H-1B-Fiscal-Year-2017.pdf.
\89\ Cf. Wage Methodology for the Temporary Non-agricultural
Employment H-2B Program, 76 FR 3452, 3461 (Jan. 19, 2011)
(justifying wage methodology designed for lower-skilled workers that
was adopted in the H-2B program on grounds that the program ``is
overwhelmingly used for work requiring lesser skilled workers,''
while also acknowledging that ``not all positions requested through
the H-2B program are for low-skilled labor.'').
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Relatedly, the Department notes that the H-1B program is closely
linked to the PERM programs that are also covered by the Department's
wage structure. A majority of workers covered by PERM labor
certification applications are already working in the U.S. as H-1B
nonimmigrants, and there is significant overlap in the types of
occupations in which H-1B and PERM workers are employed.\90\ It is also
clear that H-1B status often serves as a pathway to employment-based
lawful permanent resident status for many alien workers.\91\ The
programs have thus long been regulated in connection with one
another.\92\ For these reasons, giving particular attention to the H-1B
program and the determination of how wages for H-1B workers are
calculated is intimately connected with how the wages for alien workers
in the PERM program are calculated, given that many H-1B workers find
themselves eventually in the PERM program. It is therefore appropriate
that the Department's analysis applies with equal force to both
programs.
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\90\ In FY2024, 57.6 percent of all PERM labor certification
applications filed were for H-1B workers already working in the
United States. Department of Labor, Employment and Training
Administration, Performance Data, available at https://www.dol.gov/agencies/eta/foreign-labor/performance.
\91\ See Sadikshya Nepal, The Convoluted Pathway from H-1B to
Permanent Residency: A Primer, Bipartisan Policy Center (July 7,
2020), available at https://bipartisanpolicy.org/article/the-convoluted-path-from-h-1b-to-permanent-residency-a-primer/.
\92\ See 144 Cong. Rec. S12741, S12756 (explaining that 8 U.S.C.
1182(p) ``spells out how [the prevailing] wage is to be calculated
in the context of both the H-1B program and the permanent employment
program in two circumstances.''); Retention of EB-1, EB-2, and EB-3
Immigrant Workers and Program Improvements Affecting High-Skilled
Nonimmigrant Workers, 81 FR 82398-01 (November 18, 2016).
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Under the INA, H-1B, H-1B1, and E-3 classification can, in most
cases, only be granted to aliens entering the U.S. to perform services
``in a specialty occupation.'' \93\ The statute defines ``specialty
occupation'' as an occupation that requires theoretical and practical
application of a body of ``highly specialized knowledge'' and the
``attainment of a bachelor's or higher degree in the specific specialty
(or its equivalent) as a minimum for entry into the occupation in the
United States.'' \94\ An alien may be classified as an H-1B specialty
occupation worker if the alien possesses ``full state licensure to
practice in the occupation, if such licensure is required to practice
in the occupation,'' ``completion of [a bachelor's or higher degree in
the specific specialty (or its equivalent)],'' or ``(i) experience in
the specialty equivalent to the completion of such degree, and (ii)
recognition of expertise in the specialty through progressively
responsible positions relating to the specialty.'' \95\ DHS regulations
further clarify the requirements for establishing that the position is
a specialty occupation and that the beneficiary of an H-1B petition
must be qualified for a specialty occupation.\96\ The Department's
regulations restate the statute's definition of specialty occupation
essentially verbatim.\97\
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\93\ 8 U.S.C. 1101(a)(15)(H)(i)(b).
\94\ 8 U.S.C. 1184(i)(1)(i)-(ii).
\95\ 8 U.S.C. 1184(i)(2)(C)(i)-(ii).
\96\ 8 CFR 214.2(h)(4)(iii)(A), (C).
\97\ Compare 20 CFR 655.715 with 8 U.S.C. 1184(i)(1)(i)-(ii).
---------------------------------------------------------------------------
A few features of the definition bear emphasizing. First, the INA
sets the attainment of a bachelor's degree in a specific specialty, or
experience that would give an individual expertise equivalent to that
associated with a bachelor's degree in the specific specialty, as the
baseline, minimum requirement for an alien to qualify for the
classification. Of even greater importance, having ``any bachelor's
degree'' as a job requirement is not sufficient to qualify a job as a
specialty occupation position--the bachelor's degree or equivalent
required to perform the job must be ``in the specific specialty.'' In
other words, the bachelor's degree required, or equivalent, must be
specialized to the particular needs of the job, and impart a
particularized level of expertise tailored to a given field.\98\ These
aspects of the definition play an important role in how the Department
will use data from the BLS OEWS survey to set appropriate prevailing
wage levels.
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\98\ See Chung Song Ja Corp. v. U.S. Citizenship & Immigration
Servs., 96 F. Supp. 3d 1191, 1197-98 (W.D. Wash. 2015) (``Permitting
an occupation to qualify simply by requiring a generalized bachelor
degree would run contrary to congressional intent to provide a visa
program for specialized, as opposed to merely educated, workers.'');
Caremax Inc v. Holder, 40 F. Supp. 3d 1182, 1187-88 (N.D. Cal. 2014)
(``A position that requires applicants to have any bachelor's
degree, or a bachelor's degree in a large subset of fields, can
hardly be considered specialized.'') (citing Fred 26 Importers, Inc.
v. Dept. of Homeland Sec., 445 F.Supp.2d 1174, 1179-80 (C.D. Cal.
2006)).
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The Department has long relied on OEWS data to establish prevailing
wage levels. That is because it is a comprehensive, statistically valid
survey that, in many respects, is the best source of wage data
available for satisfying the Department's purposes in setting wages in
most immigrant and nonimmigrant visa programs. As the Department has
previously noted the OEWS wage survey is among the largest continuous
statistical survey programs administered by the federal government. BLS
produces the survey materials and selects the nonfarm establishments to
be surveyed using the list of establishments maintained by State
Workforce Agencies (SWAs) for unemployment insurance purposes. The OEWS
collects data from over 1 million establishments. Salary levels based
on geographic areas are available at the national and State levels and
for certain territories in which statistical validity can be
ascertained, including the District of Columbia, Guam, Puerto Rico, and
the U.S. Virgin Islands. Salary information is also made available at
the metropolitan and nonmetropolitan area levels within a State. Wages
for the OEWS survey are straight-time, gross pay, exclusive of premium
pay. Base rate, cost-of-living allowances, guaranteed pay, hazardous
duty pay, incentive pay including commissions and production bonuses,
tips, and on-call pay are included. The features described above are
unique to the OEWS survey, which is a comprehensive, statistically
valid, and useable wage reference.\99\
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\99\ Wage Methodology for the Temporary Non-agricultural
Employment H-2B Program, 76 FR 3452, 3463 (Jan. 19, 2011).
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Put simply, the OEWS survey's quality and characteristics have made
it, and continue to make it, a useful tool for
[[Page 15464]]
setting prevailing wage levels in the Department's foreign labor
programs. There are no alternative surveys or sources of wage data that
would provide DOL with wage information at the same level of
granularity needed to properly administer the H-1B and PERM programs.
In response to the Department's 2021 Request for Information, no
commenter identified a more suitable and comprehensive data source than
the OEWS for determining prevailing wages, further reinforcing the
Department's continued reliance on this dataset.
That said, the OEWS survey is not specifically designed to serve
these programs. For one thing, ``the OEWS survey captures no
information about differences within the [occupational] groupings based
on skills, training, experience or responsibility levels of the workers
whose wages are being reported'' \100\--the factors the INA requires
the Department to rely on in setting prevailing wage levels.\101\
Relatedly, ``there are factors in addition to skill level that can
account for OEWS wage variation for the same occupation and location.''
\102\ Further, the geographic areas used by BLS to calculate local
wages do not always match up exactly with the ``area of employment''
for which wage rates are set, as that term is defined by the INA for
purposes of the H-1B program.\103\ So while the OEWS survey is the best
available source of wage data for the Department's purposes, and the
Department is proposing to continue using it as the data source, the
Department's use of the OEWS data must be done in a way that aligns
with the requirements in the INA.
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\100\ Wage Methodology for the Temporary Non-Agricultural
Employment H-2B Program, 80 FR 24146, 24155 (Apr. 29, 2015).
\101\ 8 U.S.C. 1182(p)(4).
\102\ Wage Methodology for the Temporary Non-Agricultural
Employment H-2B Program, 80 FR at 24159.
\103\ 8 U.S.C. 1182(n)(4)(A).
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Because the wage methodology will, by statute, be used to establish
the prevailing wage for the H-1B program and highly skilled workers
that are the beneficiaries of PERM applications, as discussed above,
the INA's definition of ``specialty occupation'' is relevant to how the
wage levels are set using the OEWS wage survey. The survey categorizes
workers into occupational groups defined by the SOC system, a federal
statistical standard used by federal agencies to classify workers into
occupational categories for the purpose of collecting, calculating, or
disseminating data.\104\ An informative source on the duties and
educational requirements of a wide variety of occupations, including
those in the SOC system, is the Department's Occupational Outlook
Handbook (OOH), which, among other things, details for various
occupations the baseline qualifications needed to work in each
occupation. A review of the OOH shows that only a portion of the
workers covered by many of the occupational classifications used in the
OEWS survey likely have levels of education and experience similar to
those of H-1B workers in the same occupation.\105\ Some share of
workers in these classifications do not have the education or
experience qualifications necessary to be considered similarly employed
to specialty occupation workers. Because the INA requires the
prevailing wage levels for the H-1B, H-1B1, and E-3, and PERM programs
to be set based on the wages of U.S. workers based on the levels of
education, experience, and supervision in the relevant occupation, the
Department must take this into account when using OEWS data to
determine prevailing wages.
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\104\ U.S. Bureau of Labor Statistics, Standard Occupational
Classification, available at https://www.bls.gov/soc/.
\105\ The five most common SOC codes represented in LCAs in FY
2024 were Software Developers (15-1252), Computer Systems Engineers/
Architects (15-1299.08), Information Technology Project Managers
(15-1299.09), Electronics Engineers, Except Computer (17-2072.00)
and Software Quality Assurance Analysts and Testers (15-1253.00) FY
2024 LCA Performance data. These occupations accounted for
approximately 47 percent of all LCA's filed in FY 2024.
For each of these occupations, for which data was available, at
least some of the respondents to the BLS surveys underlying their
data reported educational requirements below the baccalaureate
threshold: Software Developers (5%--Associate's degree required);
Computer Systems Engineers/Architects (68%--either a Post-secondary
certificate or Associate's degree required); Information Technology
Project Managers (43%--either a Post-secondary certificate or
Associate's degree required); Electronics Engineers, Except Computer
(14%--Associate's degree required); and Software Quality Assurance
Analysts and Testers (35%--either a Post-secondary certificate or
Associate's degree required). See, https://www.onetonline.org/link/summary/15-1252.00; https://www.onetonline.org/link/summary/15-1299.08; https://www.onetonline.org/link/summary/15-1299.09; https://www.onetonline.org/link/summary/17-2072.00; and https://www.onetonline.org/link/summary/15-1253.00, respectively.
---------------------------------------------------------------------------
For example, a common occupational classification in which
employers seek to employ H-1B nonimmigrants is Software Developer.\106\
The OOH's entry for Software Developer notes that Software Developers
typically have a bachelor's degree.\107\ In other words, while typical,
a bachelor's degree-level education, or its equivalent, is not always a
prerequisite for working in this occupation. Because a person without a
specialized bachelor's degree can still be employed as a Software
Developer, some portion of Software Developers captured by the OEWS
survey are not similarly situated to H-1B workers because the baseline
qualifications to enter the occupation based on the OOH do not match
the statutory requirements for H-1B workers.
---------------------------------------------------------------------------
\106\ See Office of Foreign Labor Certification, LCA (H-1B, H-
1B1, and E-3) Temporary Specialty Occupations Labor Condition
Program--Selected Statistics, FY 2024, available at https://www.dol.gov/sites/dolgov/files/ETA/oflc/pdfs/LCA_Selected_Statistics_FY2024_Q4.pdf.
\107\ Bureau of Labor Statistics, Occupational Outlook Handbook,
Software Developers, Quality Assurance Analysts, and Testers,
available at https://www.bls.gov/ooh/computer-and-information-technology/software-developers.htm.
---------------------------------------------------------------------------
A similar analysis applies to the occupation of Registered Nurse
(RN). According to the OOH, entry into the RN occupation may be
achieved through a bachelor's degree in nursing (BSN), an associate's
degree in nursing (ADN), or a diploma from an approved nursing
program.\108\ For prevailing wage purposes, the Department's
methodology considers the broader population of RNs--including those
with associate's degrees and diplomas--when determining the wages of
U.S. workers who are similarly situated in terms of education,
experience, and job duties.\109\ In cases where an employer seeks a
prevailing wage determination for a nursing position that requires
higher qualifications, such as advanced practice or management roles,
the prevailing wage determination may reflect the higher educational or
experiential requirements, provided the employer demonstrates that such
requirements are normal for the occupation and the position.\110\ This
approach ensures that prevailing wage determinations for nursing
occupations are aligned with labor market realities and statutory
requirements.
---------------------------------------------------------------------------
\108\ Bureau of Labor Statistics, U.S. Department of Labor,
Occupational Outlook Handbook, Registered Nurses, available at
https://www.bls.gov/ooh/healthcare/registered-nurses.htm.
\109\ See 20 CFR 656.40(b)(2) (prevailing wage determinations
are based on the wages of workers ``similarly employed'' in the
occupation and area of intended employment, as reflected in the OEWS
survey).
\110\ See 20 CFR 656.40(b)(2); see also DOL Prevailing Wage
Determination Policy Guidance, Nonagricultural Immigration Programs
(2009), at 4-5 (explaining that the wage level may be adjusted based
on the requirements of the position and the normal requirements for
the occupation).
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A review of the OOH entries for the occupations in which H-1B
nonimmigrants most commonly work demonstrates that most H-1B workers
fall within SOC classifications that
[[Page 15465]]
include some number of workers who would not qualify for employment in
a specialty occupation. For instance, the OOH entries for Software
Developers--an occupation accounting for over 32 percent of all
certified LCAs\111\--provides that a bachelor's degree is the typical
level of education that most workers need'' to become one. Computer
Systems Analysts, which make up approximately 2.8 percent of all
certified LCAs,\112\ ''typically need a bachelor's degree. . .'' \113\
Moreover, O*Net does not differentiate between jobs that require
bachelor's degrees in specific specialties and those that accept a
general bachelor's degree. Because prevailing wages must reflect the
wages paid to U.S. workers who are similarly employed--that is, those
with comparable education, experience, and responsibility--the
Department's analysis focuses only on the subset of U.S. workers in
each occupation who would meet the statutory qualifications for H-1B
employment, rather than the broader population included in OEWS wage
data.\114\
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\111\ Office of Foreign Labor Certification, H-1B Temporary
Specialty Occupations Labor Condition Program--Selected Statistics,
FY 2024, available at https://www.dol.gov/sites/dolgov/files/ETA/oflc/pdfs/LCA_Selected_Statistics_FY2024_Q4.pdf.
\112\ Office of Foreign Labor Certification, H-1B Temporary
Specialty Occupations Labor Condition Program--Selected Statistics,
FY 2024, available at https://www.dol.gov/sites/dolgov/files/ETA/oflc/pdfs/LCA_Selected_Statistics_FY2024_Q4.pdf.
\113\ Bureau of Labor Statistics, Occupational Outlook Handbook,
Computer Systems Analysts, available at https://www.bls.gov/ooh/computer-and-information-technology/computer-systems-analysts.htm;
Office of Foreign Labor Certification, LCA (H-1B, H-1B1, and E-3)
Temporary Specialty Occupations Labor Condition Program--Selected
Statistics, FY 2024, available at https://www.dol.gov/sites/dolgov/files/ETA/oflc/pdfs/LCA_Selected_Statistics_FY2024_Q4.pdf.
\114\ The Occupational Information Network (ONET), developed by
the U.S. Department of Labor, provides detailed information on the
knowledge, skills, abilities, education, and work activities
associated with occupations classified under the Standard
Occupational Classification (SOC) system. In the context of
prevailing wage determinations, ONET is used by the Department to
help assess the complexity and requirements of job duties, which
informs the appropriate wage level assignment based on the
education, experience, and supervision required for the position.
---------------------------------------------------------------------------
Simply put, the universe of workers surveyed by the OEWS for some
of the most common occupational classifications in which H-1B workers
are employed is larger than the pool of workers who can be said to have
levels of education and experience comparable to those of even the
least skilled H-1B workers performing work within that occupational
classification. Because this methodology will substantially apply to H-
1B petitions and PERM applications for H-1B worker beneficiaries, to
allow for a more direct comparison and therefore set a more accurate
prevailing wage, it would be inappropriate to consider the wages of the
least educated and experienced workers in these occupational
classifications in setting the prevailing wage levels. To conclude
otherwise would place the Department at odds with one of the purposes
of the INA's core wage protections--to prevent employers from using
alien workers to depress wage levels, which in turn reduces pay and job
opportunities for U.S. workers.
This consideration also demonstrates the problems with the existing
wage levels. As noted above, the Department's first wage level is
currently set by calculating the mean of the bottom third of the OEWS
wage distribution. Because the majority of LCAs receive a Level I or II
wage, the wages for many H-1B workers are set based on a calculation
that takes into account wages paid to workers who almost certainly
would not qualify to work in a ``specialty occupation,'' as defined by
the INA.\115\ The Department has noted previously that ``workers in
occupations that require sophisticated skills and training receive
higher wages based on those skills.'' \116\ As a worker's education and
skills increase, his wages are expected to as well.\117\ For that
reason, it is likely that workers at the lowest end of an occupation's
wage distribution generally have the lowest levels of education,
experience, and responsibility in the occupation. In consequence, if
the occupation by definition includes workers who do not have the level
of specialized knowledge required of H-1B workers, because of the
prevalence of Level I and Level II wages assigned to LCAs the very
bottom of the wage distribution should be discounted in determining the
appropriate baseline along the OEWS wage distribution to establish the
entry-level wage under the four-tiered wage structure. Yet the existing
wage structure makes such workers a central component of the prevailing
wage calculation.\118\
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\115\ Indeed, even in the Department's original 2005 guidance
setting the current prevailing wage methodology, the Department
observed that ``[e]mployer requests for foreign workers are
frequently for fully qualified workers who possess special skills.
Wage Level I would not be assigned in those situations.'' See
Employment and Training Administration, Prevailing Wage
Determination Policy Guidance for Nonagricultural Immigration
Programs 6 (Mar. 1, 2005), available at https://www.aila.org/files/o-files/view-file/84809966-67A1-4645-95CB-CB8F826C1F3C.
\116\ Wage Methodology for the Temporary Non-Agricultural
Employment H-2B Program, Part 2, 78 FR 24047, 24051 (Apr. 24, 2013).
\117\ See Bureau of Labor Statistics, Learn more, earn more:
Education leads to higher wages, lower unemployment, available at
https://www.bls.gov/careeroutlook/2020/data-on-display/education-pays.htm.
\118\ For example, the occupation of Software Developers, which
accounts for a large number of H-1B workers, does not, as explained
above, require the same degree of specialized knowledge as a
baseline entry requirement as does the INA's definition of
``specialty occupation.'' Yet approximately 10 percent of all LCAs
filed with the Department for software developer positions classify
those positions as entry-level, meaning that under the current wage
levels the wages paid to such specialty occupation workers are
calculated based, at least in part, on the wages paid to some
workers who do not have comparable specialized knowledge and
expertise. This outcome directly contravenes the INA's requirement
that H-1B workers be paid wages commensurate with the wages paid to
U.S. workers with similar levels of education, experience, and
responsibility.
---------------------------------------------------------------------------
Similarly, the current Level IV wage is set by calculating the mean
of the upper two-thirds of the wage distribution. That means that the
wage level provided for the most experienced and highly educated H-1B
workers is determined, in part, by taking into account a sizeable
number of workers who do not even make more than the median wage of the
occupation. The Department is concerned that workers making less than
the median wage of the occupation are unlikely to possess commensurate
experience, education, and requirements for supervision as are the
alien workers who would be regarded as typical of Wage Level IV. The
Department's analysis of OEWS wage distributions confirms that the
current Level IV methodology includes a substantial share of workers
whose wages--and likely qualifications--fall below what would be
expected for the most advanced roles, thereby undermining the intended
purpose of the highest wage tier.
The same reasons for discounting a portion of the workers at the
bottom of the OEWS wage distribution in order to compute appropriate
entry-level wages, based on the fact that such workers are not
similarly employed to even the least skilled H-1B workers, also applies
to the wages for the EB-2 immigrant visa preference classification and
the E-3 and H-1B1 nonimmigrant programs, for which the Department also
uses the four-tier prevailing wage structure.
The E-3 and H-1B1 classifications, like the H-1B classification,
require that the alien work in a specialty occupation.\119\ Thus these
programs' relation to the OEWS wage data is essentially identical to
that of the H-1B program. Although E-3 and H-1B1 workers may not
necessarily be concentrated in the same occupational categories as H-1B
workers, the statutory requirement that they be employed in specialty
occupations
[[Page 15466]]
means they must possess comparable levels of skill, specialization, and
responsibility. As such, the level of skill, specialization, and
responsibility required for E-3 and H-1B1 positions is often comparable
to that required for H-1B positions. Applying the same prevailing wage
structure across these classifications ensures consistency in how the
Department protects U.S. workers and prevents employers from selecting
among visa categories based on wage-setting advantages rather than
legitimate labor needs.
---------------------------------------------------------------------------
\119\ See 8 U.S.C. 1184(i).
---------------------------------------------------------------------------
As for the EB-2 classification, the reasons for discounting the
lower end of the OEWS wage distribution for setting the baseline to
establish an entry-level wage for the classification are even more
apparent than they are for the specialty occupation programs. Under the
INA, the EB-2 classification applies to individuals who are ``members
of the professions holding advanced degrees or their equivalent or who
because of their exceptional ability in the sciences, arts, or
business, will substantially benefit prospectively the national
economy, cultural or educational interests, or welfare of the United
States.''\120\ DHS regulations, in turn, define an ``advanced degree''
as any United States academic or professional degree or a foreign
equivalent degree above that of a bachelor`s degree. A United States
bachelor's degree or a foreign equivalent degree followed by at least
five years of progressive experience in the specialty shall be
considered the equivalent of a master's degree. If a doctoral degree is
customarily required by the specialty, the alien must have a United
States doctorate or a foreign equivalent degree.\121\
---------------------------------------------------------------------------
\120\ 8 U.S.C. 1153(b)(2)(A).
\121\ 8 CFR 204.5(k)(2).
---------------------------------------------------------------------------
The regulation goes on to define ``exceptional ability'' to mean
``a degree of expertise significantly above that ordinarily encountered
in the sciences, arts, or business.'' \122\
---------------------------------------------------------------------------
\122\ Id.
---------------------------------------------------------------------------
As is the case for H-1B nonimmigrants, the baseline, minimum
qualifications that an EB-2 immigrant must possess exceed the
educational and experiential requirements the OOH describes as
generally necessary to enter some of the most common SOC occupational
classifications in which EB-2 immigrants work. For example, the most
common occupation in which PERM labor certifications--of which
applications for EB-2 immigrants represent a substantial share--are
sought is Software Developers, which accounts for nearly 21 percent of
all approved PERM applications.\123\ As already noted, according to the
OOH, a bachelor's degree is the ``[t]ypical level of education'' for
Software Developers.\124\ A master's degree, generally a requirement
for obtaining EB-2 immigrant status, is therefore substantially above
the typical, baseline qualifications needed to work as a Software
Developer. Similarly, a Software Developer who satisfies the regulatory
definition of ``exceptional ability'' would be, ipso facto, more highly
skilled than the typical entry-level-worker in that occupation. This
pattern holds for most of the top occupations into which PERM
applications fall.\125\
---------------------------------------------------------------------------
\123\ Employment and Training Administration, Office of Foreign
Labor Certification, Permanent Employment Program--Selected
Statistics, Fiscal Year (FY) 2024, available at https://www.dol.gov/sites/dolgov/files/ETA/oflc/pdfs/PERM_Selected_Statistics_FY2024_Q4.pdf.
\124\ Bureau of Labor Statistics, Occupational Outlook Handbook,
Software Developers, available at https://www.bls.gov/ooh/computer-and-information-technology/software-developers.htm.
\125\ See Office of Foreign Labor Certification, Permanent Labor
Certification Program--Selected Statistics, FY 24, available at
https://www.dol.gov/sites/dolgov/files/ETA/oflc/pdfs/PERM_Selected_Statistics_FY2024_Q4.pdf.
---------------------------------------------------------------------------
By contrast, EB-3 immigrants--who may qualify as ``skilled
workers'' (requiring at least two years of training or experience) or
``professionals'' (holding a bachelor's degree)--do not necessarily
exceed the baseline qualifications for many of these occupations to the
same degree as EB-2 workers. For example, in occupations where a
bachelor's degree is the typical requirement, EB-3 professionals align
more closely with the median qualifications described in the OOH, while
EB-3 skilled workers may fall below that threshold in some cases.
Accordingly, while the Department's methodology accounts for
differences in education and experience across visa categories,
prevailing wage levels for EB-3 workers should reflect that these
workers are not uniformly as specialized as EB-2 workers, even though
they must still meet statutory requirements and should not be paid
wages that undercut similarly employed U.S. workers.
Accordingly, because EB-2 workers are required to possess
qualifications that exceed those of the average worker in these
occupations, it is appropriate to set their prevailing wage levels
higher on the wage distribution to reflect their advanced education,
experience, and skill.
In sum, the eligibility criteria established by the INA for most of
the immigrant and nonimmigrant programs to which the Department's
prevailing wage levels apply set a higher baseline for the minimum
qualifications an alien must possess than the minimum qualification
requirements that exist for U.S. workers generally in most of the
occupations in which these aliens most commonly work. The H-1B, H-1B1,
E-3, and EB-2 classifications are for workers with specialized
knowledge and skills and/or advanced degrees.\126\ Because the
prevailing wage levels should take into account the experience,
education, and level of supervision of occupational classifications, to
ensure that those prevailing wage rates are an appropriate wage floor
for positions that require specialized knowledge and skills and/or
advanced degrees, the prevailing wage rates should be formulated based
on the wages paid to workers who similarly possess specialized
knowledge and skills in their occupations. Given that not every worker
in a given OEWS occupation is likely to meet that standard, and that
workers at the lower end of the wage distribution are also likely to be
the workers with the lowest levels of education and experience, the
Department has determined it is appropriate to discount the lower
portion of the OEWS distribution in setting the wage levels. The
Department should instead identify where within the distribution
workers are to be found who possess the same kinds of specialized
education and experience possessed by aliens working in the H-1B, H-
1B1, E-3, and EB-2 classifications. The wages paid to those U.S.
workers can serve as the basis for appropriately adjusting the
prevailing wage levels to ensure the employment of alien workers does
not adversely affect the wages and job opportunities of U.S. workers.
Although the EB-3 category is not included in this analysis because its
minimum qualifications for skilled workers or professionals with a
bachelors' degrees do not uniformly exceed the baseline requirements
for many occupations, the Department notes that some EB-3 workers may
also qualify for H-1B, H-1B1, or E-3 status, and vice versa. For this
reason, and because EB-3 accounts for a small share of PERM
applications, the Department applies the same prevailing wage structure
to EB-3 to avoid creating incentives for employers to select visa
categories based on lower wage
[[Page 15467]]
thresholds rather than legitimate business needs.
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\126\ The Department notes that its assessment of the
appropriateness of adjusting the prevailing wage levels in the
manner described by this rule with respect to the EB-3
classification is governed by distinct considerations, which are
described more fully below.
---------------------------------------------------------------------------
The Department recognizes that applying a unified prevailing wage
structure may result in higher wage requirements for some EB-3
positions that do not require the same level of education or
specialization as H-1B or EB-2 roles; however, particularly given the
prevalence of higher skilled workers in H-1B and PERM, maintaining a
consistent wage framework across programs is necessary to prevent
program shopping and to uphold the statutory requirement that alien
workers be paid at least the prevailing wage for similarly employed
U.S. workers, particularly in occupations where job duties and
responsibilities may overlap despite differing formal entry
requirements.
3. Adverse Effects of Current Prevailing Wage Levels
This section evaluates the comprehensive analysis that the
Department has undertaken to understand, assess, and evince the
deleterious effects that the current prevailing wage methodology has
had on U.S. workers' wages and working conditions. This analysis
includes an extensive review of the economic and programmatic data,
qualitative evidence consisting of reports and investigations into the
H-1B program, and litigation. Based on the evidence, the Department
believes that the current prevailing wage methodology sets prevailing
wages at levels that may not adequately reflect the Department's
statutory requirements.
a. Economic Analysis of Adverse Effects on the Wages of U.S. Workers
As one research organization noted in a recent study of the H-1B
program, ``[t]he evidence strongly suggests that the H-1B program is
not working as intended.'' \127\ The study pointed out that ``in
certain occupations, H-1B holders earn significantly less than their
American counterparts.'' The Department's data also indicates that the
majority of H-1B positions are concentrated in the lower wage tiers.
Sixty-three percent of certified LCAs in FY 2024 were for positions
classified at wage levels I and II--levels typically associated with
entry-level roles.\128\ This wage distribution raises concerns that the
program is being used to fill mostly lower-paid positions and not
serving its intended purpose of protecting U.S. workers from adverse
effects by preventing employers from using alien workers to undercut
wages and job opportunities for American workers.\129\
---------------------------------------------------------------------------
\127\ Frei, Alexander P., Rethinking the H-1B Visa Program: A
Data-Driven Look at Structural Failures and the High-Skill Illusion,
Heritage Foundation (Aug. 8, 2025), available at https://www.heritage.org/border-security/report/rethinking-the-h-1b-visa-program-data-driven-look-structural-failures-and#.
\128\ Office of Foreign Labor Certification, H-1B Temporary
Specialty Occupations Labor Condition Program--Selected Statistics
in FY 2024, available at https://www.dol.gov/agencies/eta/foreign-labor/performance.
\129\ See 8 U.S.C. 1101(a)(15)(H)(i)(b); 8 U.S.C.1184(i)(1)(A)
(describing the term ``specialty occupation'' as requiring
``theoretical and practical application of a body of highly
specialized knowledge'' among other educational requirements.
---------------------------------------------------------------------------
The Department conducted a comprehensive analysis comparing
certified LCA wages \130\ to OEWS data,\131\ matched by SOC code,
state, and year. This analysis is documented below, in Section II.C.1.
This comparison revealed that the average wage offered to H-1B workers
was approximately $10,191 lower than the OEWS average wage for workers
for similarly classified occupations. This differential may reflect a
range of factors, including experience levels, geographic variation,
and employer-specific compensation practices. The disparity is even
more pronounced in computer-related occupations, where the average wage
gap was $10,972. These findings suggest that employers are leveraging
the H-1B program to access a lower-cost labor pool, even in occupations
that nominally require high levels of skill and education. This
underpayment further supports the Department's conclusion that the
current prevailing wage structure does not adequately reflect market
wages and is in urgent need of reform. These same labor market dynamics
are relevant to the PERM program, where underpayment of alien workers
can similarly distort hiring incentives and erode labor standards.
Using the same wage levels in both programs ensures that employers
cannot use the permanent labor certification process to
institutionalize wage disparities that originated in the temporary visa
context.
---------------------------------------------------------------------------
\130\ See generally Office of Foreign Labor Certification, H-1B
Temporary Specialty Occupations Labor Condition Program--Selected
Statistics, available at https://www.dol.gov/agencies/eta/foreign-labor/performance.
\131\ See generally U.S. Bureau of Labor Statistics,
Occupational employment and wage statistics (BLS Occupational
Employment Statistics), available at https://www.bls.gov/oes/.
---------------------------------------------------------------------------
Additionally, the Department's current prevailing wage methodology
permits employers to classify a substantial share of H-1B positions,
particularly in high-demand occupations such as software development,
as ``entry-level.'' Because the current methodology places Level I
wages near the bottom of the OEWS distribution, which includes workers
who do not possess the specialized education and experience required
for H-1B eligibility, Level I wages are often set far below what
specialized H-1B workers and comparably qualified workers would earn.
Compounding this issue is the existence of a large pool of alien
workers willing to accept lower wages because the cost of living in
their home countries is substantially lower and other factors that make
U.S. wages attractive even at discounted rates. This dynamic exerts
downward pressure on wages for U.S. workers, as employers can classify
H-1B roles as entry-level and thus pay wages that do not reflect the
qualifications of the alien worker. Moreover, if the same employer
hires all similarly qualified workers at the entry-level prevailing
wage, then the ``actual wage paid'' by the employer would be the same
as the prevailing wage. This structural flaw creates a systemic cost
advantage for hiring H-1B workers over domestic talent, effectively
enabling employers to substitute lower-paid alien workers for U.S.
workers and institutionalizing wage arbitrage under the guise of legal
compliance.
The adjustment to Level IV, in turn, was based on statistical
modeling of OEWS wage distributions and is intended to correct for the
current methodology's mismatch of mid-level and high-level earners with
prevailing wage levels that did not properly compare them to U.S.
earners of the same experience, education and level of supervision.
This caused dilution of the wage standard for top-tier talent and
failed to reflect the wages of workers with the greatest levels of
education, experience, and responsibility. By revising the Level IV
wages to better reflect the actual compensation of U.S. workers with
equivalent qualifications, the Department aims to restore labor market
fairness and ensure that the employment of alien workers does not
suppress wages or displace U.S. workers.
b. Other Relevant Evidence, Reports, Investigations, and Litigation
Demonstrating Adverse Effects of Current Prevailing Wages
The Department's analysis is grounded in its own administrative
data and statutory responsibilities. However, other evidence, including
investigative reporting and academic research, has supported many of
the Department's conclusions.
Academic research indicates that the influx of low-cost alien
workers into a labor market suppresses wages, and this
[[Page 15468]]
effect increases significantly as the number of alien workers
increases. In particular, some empirical research, when inputted into a
rough simulation, suggests that a substantial increase (more
specifically, a 10 percent increase) in the labor supply due to the
presence of alien workers could reduce the wages of the average U.S.
worker by 3.2 percent, a rate that grew to 4.9 percent for college
graduates.\132\ The current prevailing wage structure distorts hiring
incentives and compensation by setting entry-level wages far below
market rates for positions requiring specialized skills, which
incentivizes employers to classify jobs at the lowest permissible
level. This NPRM proposes to recalibrate wage levels to better reflect
the education, experience, and responsibility required for H-1B
positions, thereby reducing the opportunity for wage arbitrage.
---------------------------------------------------------------------------
\132\ Borjas, George J. (2003). ``The Labor Demand Curve Is
Downward Sloping: Reexamining the Impact of Immigration on the Labor
Market.'' The Quarterly Journal of Economics, 118(4), 1335-1374.
---------------------------------------------------------------------------
The Department has also reviewed evidence indicating that the
intent of the H-1B ``actual wage'' requirement can be undermined when
end-clients obtain labor through outsourcing or staffing firms
(sometimes called ``job shops''). In such arrangements, the H-1B
employer of record is the outsourcing firm, not the end-client;
consequently, the ``actual wage'' analysis compares the H-1B worker's
pay only to other workers at the outsourcing firm--who may be
predominantly workers with H-1B visas and paid at or near prevailing-
wage floors--rather than to the higher-paid, similarly employed U.S.
workers at the end-client company. Government reports and public
reporting have documented this dynamic and show it can facilitate large
pay gaps between outsourced H-1B workers and client-site employees
performing substantially similar functions.\133\ Although this
rulemaking would not directly change how ``actual wage'' determinations
are applied in third-party placement scenarios, by raising prevailing
wage levels it would increase the wage floor and, in turn, reduce the
magnitude of these gaps in cases where outsourcing companies pay at or
near the prevailing wage. Another report revealed that certain
outsourcing firms exploited the H-1B registration system by submitting
multiple registrations for the same beneficiaries, thereby gaining an
unfair advantage in the selection process.\134\ This report
demonstrated how some companies would manipulate the lottery by
flooding the system with duplicate or coordinated entries for
individual workers, often through affiliated entities or shell
companies. This practice significantly increased their odds of
selection while disadvantaging employers who followed the rules and
submitted a single registration per candidate. The result was a
distorted allocation process that undermined the integrity of the H-1B
program and enabled a small group of companies to cannibalize access to
scarce visa slots. Although registrations do not represent actual
employment and do not capture wages, evidence that the system can be
gamed--even outside the Department's direct purview--despite the
availability of ample entry-level U.S. workers suggests that some
employers view H-1B workers as a lower-cost alternative. This
underscores the importance of ensuring that prevailing wage levels are
set appropriately to eliminate incentives for wage arbitrage and
protect U.S. workers from being undercut.
---------------------------------------------------------------------------
\133\ See U.S. Gov't Accountability Office, H-1B Visa Program:
Reforms Are Needed to Minimize the Risks and Costs of Current
Program 20 (2011), https://www.gao.gov/assets/320/314501.pdf, at 52-
56 (raising concerns that the H-1B program lacks an explicit
mechanism for holding employers accountable when they obtain H-1B
workers through a staffing company); Ron Hira and Daniel Costa,
Economic Policy Inst., The H-1B Visa Program Remains the
``Outsourcing Visa'' (Mar. 31, 2021), https://www.epi.org/blog/the-h-1b-visa-program-remains-the-outsourcing-visa-more-than-half-of-the-top-30-h-1b-employers-were-outsourcing-firms/ (noting that ``H-
1B outsourcing companies . . . replace incumbent U.S. workers with
H-1B workers and typically pay their H-1B workers the lowest wages
permitted by law, far below market wage rates'') and that large
companies have ``[laid] off hundreds of their well-paid employees
and contract[ed] with major outsourcing firms . . . to replace those
employees with H-1B workers who were paid salaries that were tens of
thousands of dollars less'').
\134\ Bloomberg News, Outsourcing Firms Monopolize H-1B Visa
Program, BLOOMBERG (Aug. 13, 2024), available at https://unity-connect.com/our-resources/news/bloomberg-reveals-outsourcing-firms-monopolize-h-1b-visa-program/.
---------------------------------------------------------------------------
Between 2019 and 2025, a significant share of LCAs were filed in
technology-related occupations, particularly software engineering
roles. During this same period, major technology firms and outsourcing
companies that are among the largest users of the H-1B program also
conducted large-scale layoffs of U.S. workers. A 2023 study by the
Economic Policy Institute found that the top 30 H-1B employers laid off
at least 85,000 workers in 2022 and early 2023 while simultaneously
hiring 34,000 H-1B workers.\135\ And recently, in a lawsuit brought by
a class of current and former employees of a significant employer of H-
1B workers, a federal jury found that the employer's reliance on
employees with H-1B status unlawfully discriminated against non-Indian
and non-South Indian employees.\136\
---------------------------------------------------------------------------
\135\ Daniel Costa and Ron Hira (2023), Tech and outsourcing
companies continue to exploit the H-1B visa program at a time of
mass layoffs, Economic Policy Institute (Apr. 11, 2023), available
at https://www.epi.org/blog/tech-and-outsourcing-companies-continue-to-exploit-the-h-1b-visa-program-at-a-time-of-mass-layoffs-the-top-30-h-1b-employers-hired-34000-new-h-1b-workers-in-2022-and-laid-off-at-least-85000-workers/.
\136\ See Palmer v. Cognizant Tech. Sols. Company, No. 17-cv-
6848, 2025 WL 3154720 (C.D. Cal. Oct. 6, 2025). The jury found that
the employer had ``engaged in a pattern or practice of intentional
discrimination against'' both ``non-South Asian employees on the
basis of race who were terminated from the bench,'' and ``non-Indian
employees on the basis of national origin who were terminated from
the bench.'' Id. In a subsequent ruling, the court found, based on
expert evidence, that ``non-South Asians were approximately seven
times more likely to be subject to an involuntary termination.''
Palmer v. Cognizant Tech. Sols. Company, No. 17-cv-6848, 2025 WL
3496682, 24 (C.D. Cal. Dec. 5, 2025). The analysis also showed that
``non-South Asian and non-Indian employees were 8.4 more likely to
be terminated from the bench than South Asian and Indian
employees.'' Id. at 27. The court also found that Cognizant replaced
U.S. employees with visa-holding, South Asian employees ``with a
lower grade and experience.'' Id. at 31.
---------------------------------------------------------------------------
And while the data indicate that H-1B workers are rapidly replacing
U.S. workers, especially in STEM-related fields, recent U.S. graduates
in computer science and engineering are facing elevated unemployment
and underemployment rates. Unemployment rates for recent graduates in
these fields were 7.5% and 6.1%, respectively, with underemployment
rates exceeding 17%.\137\ For example, employment for domestic software
developers aged 22-25 declined by nearly 20% compared to its peak in
late 2022, suggesting that qualified U.S. workers are struggling to
access opportunities in sectors heavily reliant on H-1B labor.\138\
---------------------------------------------------------------------------
\137\ Federal Reserve Bank of New York, The Labor Market for
Recent College Graduates, available at https://www.newyorkfed.org/research/college-labor-market. Latest release: February 20, 2025,
based on data from 2023. https://www.newyorkfed.org/research/college-labor-market#--:explore:unemployment.
\138\ Erik Brynjolfsson, Bharat Chandar, and Ruyu Chen, Canaries
in the Coal Mine? Six Facts about the Recent Employment Effects of
Artificial Intelligence, Stanford University (Aug. 26, 2025) at 9,
available at https://digitaleconomy.stanford.edu/wp-content/uploads/2025/08/Canaries_BrynjolfssonChandarChen.pdf.
---------------------------------------------------------------------------
This trend is particularly pronounced in the technology sector,
where alien workers plays an outsized role in shaping labor market
dynamics.\139\ A 2025 report found that two-thirds of Silicon Valley
tech workers are foreign-born, underscoring the extent to which the
region's workforce is shaped by
[[Page 15469]]
immigration and the potential for wage-setting distortions in
occupations with high concentrations of H-1B workers.\140\ The pool of
U.S. workers with relevant credentials has grown rapidly. Bachelor's
attainment is higher among younger cohorts, and Computer and
Information Sciences (CIS) degree completions more than doubled over
the past decade--from about 55,000 in 2013-2014 to roughly 108,500 in
2021-2022.\141\ Including Master's (24,514 to 51,338 in the same
period) and Doctoral (1,982 to 2,790 in the same period) degrees, the
number of degrees conferred in the U.S. increased from 81,767 to
162,658, nearly doubling during that time. Another factor, related to
some of the layoff activity of larger technology firms in recent years,
has been the impact of generative AI, which a number of early studies
indicates is decreasing demand for lower-level technology workers.\142\
So, while the potential supply of workers in occupations that are
central to the programs affected by prevailing wages have increased,
almost doubling since 2014, dramatic improvements in technology have
and will continue to decrease demand, especially at the entry-level,
for workers in these fields. Indeed, ADP, a leading source of payroll
data, reported that employment of software developers, the single
largest occupational category in the H-1B system, was lower in 2024
than it was in 2018.\143\ ADP data show that employment of software
developers peaked in 2022 but declined sharply thereafter, falling
below 2018 levels by 2024.\144\
---------------------------------------------------------------------------
\139\ Based on the LCA Performance Data, which is cited
throughout this NPRM, over 50% of the LCA's certified by the
Department in FY 2024 were for Computer and Information Technology
occupations.
\140\ Joint Venture Silicon Valley, ``2025 Silicon Valley
Index,'' https://jointventure.org/publications/silicon-valley-index?mc_cid=fbf9996b7f&mc_eid=4049bbd06a; Ethan Baron, ``Two-thirds
of Silicon Valley tech workers are foreign-born, new report says,''
SiliconValley.com, March 11, 2025. https://www.siliconvalley.com/2025/03/11/two-thirds-of-silicon-valley-tech-workers-foreign-new-report.
\141\ National Center for Education Statistics, Digest of
Education Statistics, Table 325.35: Bachelor's Degrees Conferred by
Postsecondary Institutions, by Field of Study: 1970-71 through 2021-
22, https://nces.ed.gov/programs/digest/d23/tables_1.asp?current=yes
(last visited Jan. 2, 2026). Data include all graduates, including
international students who may later enter the H-1B program. Thus, a
portion of the observed growth reflects international STEM
graduates, whose numbers have increased significantly over the past
decade.
\142\ See e.g., Tomlison, Kiran, Jaffe, Sonia, Wang, Will,
Counts, Scott, and Siddharth, Suri, Working with AI: Measuring the
Occupational Implications of Generative AI (finding that Computer
and Mathematical occupations had the highest ``AI applicability
score,'' a measure which describes ``if there is non-trivial AI
usage that successfully completes activities corresponding to
significant portions of an occupation's tasks.'') https://www.microsoft.com/en-us/research/publication/working-with-ai-measuring-the-occupational-implications-of-generative-ai/;
Brynjolfsson, Erik, Chandar, Bharat, Chen, Ruyu, Canaries in the
Coal Mine? Six Facts about the Recent Employment Effects of
Artificial Intelligence (finding ``substantial declines in
employment for early-career occupations most exposed to AI, such as
software development and customer support'' among other conclusions)
https://digitaleconomy.stanford.edu/wp-content/uploads/2025/08/Canaries_BrynjolfssonChandarChen.pdf.
\143\ Nezaj, Jeff ``The rise--and fall--of the software
developer'' https://www.adpresearch.com/the-rise-and-fall-of-the-software-developer/.
\144\ Ibid.
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Another factor that shapes the nature of the labor market for
workers who are subject to the prevailing wages at issue in this NPRM
is their proclivity, due to being concentrated in technology or
management occupations, to have more opportunities for remote work.
According to BLS data as of September 2025, while 22.5% of workers
reported working some or all hours remotely, Management, professional
and related occupations reported 36.5%, while Computer and mathematical
occupations reported 65.7%.\145\ By contrast, Farming, fishing and
forestry occupations reported a telework rate of 5.7%, far lower than
average. With respect to other Specialty Occupations, the likelihood of
teleworking strongly correlates with educational attainment, indicating
in general that workers with higher levels of education--such as those
in management, professional, and technical fields--are more likely to
work in jobs that permit telework.\146\ Teleworking increases the
geographical scope of a particular workplace in which a worker can
work, which the Department believes contributes not only to guest
workers in these programs being able to seek employment at a broader
array of employers, but also contributes to labor market mobility on
the part of U.S. workers, which makes for more liquid and efficient
labor market than in workplaces with fewer telework opportunities.\147\
---------------------------------------------------------------------------
\145\ Labor Force Statistics from the Current Population Survey,
BLS, https://www.bls.gov/web/empsit/cpseea42.htm.
\146\ Telework Trends, BLS. https://www.bls.gov/opub/btn/volume-14/telework-trends.htm.
\147\ See e.g., Ravalet, Emmanuel, Rerat, Patrick, Teleworking:
Decreasing Mobility or Increasing Tolerance of Commuting Distances?,
https://www.jstor.org/stable/45237778.
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The data are not an exhaustive analysis of all of the impacts of
guest worker programs on the U.S. workforce.\148\ They do demonstrate
the prevalence of guest workers, and indicia of how this prevalence may
be resulting in adverse impacts on the U.S. workforce, in addition to
the extensive analysis that the Department has conducted. In turn, this
suggests that U.S. workers are vulnerable to a prevailing wage
methodology that is set too low, or set without being aligned with
labor market data, as the Department contends the current methodology
is.\149\ Without regulatory intervention, similar instances will
continue to erode the integrity of the labor certification process and
undermine public confidence in the Department's stewardship of the H-1B
and PERM programs.
---------------------------------------------------------------------------
\148\ See also, Macks USA, Inc. v. United States Dep't of Lab.,
No. 23-CV-7476 (JGK), 2024 WL 4728902, at *12 (S.D.N.Y. Nov. 8,
2024) (affirming award of over $100,000 of back wages to an employee
who was improperly denied wages due to being ``benched'').
\149\ Employers seeking to employ H-1B workers must attest on
the Labor Condition Application (Form ETA-9035) that the employment
of the foreign worker ``will not adversely affect the wages and
working conditions of workers in the United States similarly
employed.'' 8 U.S.C. 1182(n)(1)(A)(ii); see also 20 CFR
655.731(a)(1).
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In short, contrary to the H-1B program's goals, prevailing wage
levels that, in many cases, do not accurately reflect the wages of
comparable U.S. workers have permitted some firms to displace, rather
than supplement, U.S. workers with H-1B workers. While allowing firms
to access high-skilled workers to fill specialized positions can help
U.S. workers' job opportunities in some instances, particularly when
there are actual labor shortages in a certain industry or occupation,
the benefits of this policy diminish significantly when the prevailing
wage levels do not accurately reflect the wages of similarly employed
workers in the U.S. labor market. The resulting distortions from a
prevailing wage methodology untethered from rigorous mathematical
analysis allow some firms to replace qualified U.S. workers with lower-
cost alien workers, defeating the purpose of the INA's wage protections
and suppressing the wages for U.S. workers who remain employed in
occupations saturated by H-1B workers.
These concerns are not new. Congress has long recognized the need
to protect U.S. workers from adverse effects associated with the
employment of alien workers, as reflected in the statutory language of
the Immigration and Nationality Act (INA). See 8 U.S.C. 1182(a)(5)
(labor certification and qualifications for certain immigrants),
1182(n) (labor condition application), 1182(p)(2) (professional
athletes), 1182(t) (nonimmigrant professionals). The Department has a
statutory obligation to ensure that prevailing wage determinations are
consistent with this mandate, and therefore this rulemaking is a
necessary step toward restoring balance in the labor market and
ensuring that alien workers are used to supplement--not displace--the
domestic workforce.
[[Page 15470]]
The NPRM is based on a substantial body of economic and
administrative data, including labor market trends, wage survey data,
and evidence of program outcomes that the Department believes evince
adverse outcomes towards U.S. workers. It reflects a reasoned policy
judgment that the current wage structure does not adequately reflect
the wages paid to U.S. workers similarly employed in comparison to the
wages paid to H-1B workers, and concludes that reform is necessary to
fulfill the Department's statutory mandate. After careful consideration
of these data, and the potential economic impacts of the proposed
changes, the Department has developed and now proposes a methodology
that would better protect U.S. workers from unfair competition created
by the importation of alien workers, as required by law. Indeed, the H-
1B crisis has prompted the Equal Employment Opportunity Commission to
issue guidance warning employers that discriminating in favor of H-1B
applicants or against American-born workers is illegal.\150\
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\150\ Equal Employment Opportunity Commission, Discrimination
Against American Workers Is Against The Law, available at https://www.eeoc.gov/discrimination-against-american-workers-against-law.
This guidance notes that discrimination in favor of visa guest
workers (and against U.S. workers) is illegal, and can include
discriminatory job advertisements (such as ``H-1B preferred'' job
openings), disparate treatment (such as subjecting American-born
workers to higher rates of termination for staying on ``bench''
status than visa guest workers), while observing that common
businesses reasons such as customer or client preference, lower cost
of labor, and beliefs regarding ``work ethic'' do not excuse an
employer's decision to hire foreign workers over U.S. workers.
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This rulemaking is designed to ensure that the H-1B and related
programs operate in a manner that is fair, transparent, and protective
of U.S. workers, while still allowing employers to access alien workers
where appropriate wages are paid.
C. Identifying the Appropriate Prevailing Wage Levels
1. Revisions to the Existing Methodology
The Department proposes to revise the existing methodology used to
determine prevailing wage levels in the H-1B, H-1B1, E-3, and PERM
programs. Specifically, the Department proposes adjusting the wage
percentiles used to define Levels I and IV and refining the use of BLS
data to ensure that prevailing wages more accurately reflect the wages
paid to U.S. workers similarly employed to ensure that the employment
of alien workers does not adversely affect the wages and working
conditions of U.S. workers.
In order to determine the prevailing wage percentiles that most
closely satisfy the statutory requirements, the Department conducted an
extensive statistical labor market analysis using historical data
involving the immigrant and non-immigrant guest worker programs that
are the subject of this NPRM. At a high level, the Department developed
the proposed prevailing wage levels to align workers in the relevant
programs with comparable labor market outcomes for the U.S. workforce
as a whole. As part of its analysis, the Department finds a wide (over
$19,000 per worker on average) discrepancy between the wages earned by
U.S. workers in the same occupations and locations and the prevailing
wage levels assigned to corresponding LCA applicants. The Department's
proposed adjustments would eliminate this gap using statistically
grounded recalibration of wage percentiles.
The Department proceeded in three steps: (1) to analyze aggregate
LCA data to understand the prevailing wages, actual wages, and
occupational composition of H-1B workers over the last five years; (2)
to compare LCA data with OEWS data, the most reliable and comprehensive
publicly available data that reflects overall labor market compensation
on an occupational basis, to determine the going wage of occupations
for U.S. workers adjusted for region; and (3) to use this quantitative
analysis to determine wage levels that would re-align the H-1B wage
levels with corresponding U.S. workers. At this final step, the
Department also relied on qualitative evidence and its long-standing
expertise administering these programs, particularly in setting Wage
Levels I and IV.
a. Step 1--The Department's Analysis of LCA Data
As has been described above, the first step for the H-1B petition
process (and for other guest worker programs, although this statistical
analysis focused exclusively on H-1B petitions, the most numerous of
all programs that use LCAs in terms of both number of LCAs filed and
number of individuals employed) is for the employer to submit an LCA to
the Department. These LCAs are the best data of labor market
information for what prevailing wage applies to any particular H-1B
employee, what wage they are offered by their employer, and the SOC
code that describes their occupation. In the aggregate, they are the
best data source for labor market information regarding H-1B
occupations. These LCAs are made under penalty of perjury\151\ by the
hiring entity, who must attest that ``to the best of my knowledge, the
information contained therein is true and accurate.'' For purposes of
this analysis, the Department used all LCA data for FY2020-2025.\152\
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\151\ LCA Section J. Additionally, the employer must ``develop
sufficient documentation to meet its burden of proof with respect to
the validity of the statements made in its LCA and the accuracy of
information provided.'' LCA Section J(B).
\152\ For FY 2025, the Department used all available data, which
at the time of this NPRM included but ended with Q3.
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The Department took extensive measures to ensure that the LCA data
was useable and reliable. These measures included various steps to
clean the data, such as removing trailing annotations and any decimal
artifacts introduced during earlier processing, trimming whitespace,
and dropping entries that clearly did not match the SOC 6-digit code
structure. For example, in one instance, a SOC code was entered as
``151252''; this was corrected to ``15-1252.'' The Department discarded
a handful of data points that had clear errors.
The LCAs contain several data points that the Department used in
its analysis. These include: (1) the SOC (O*NET/OEWS Code);\153\ (2)
Number of Workers;\154\ (3) State/District/Territory;\155\ (4) Wage
Rate Paid to Nonimmigrant Workers;156 157 (5) the Prevailing
Wage Rate;\158\ (6) Wage Level.\159\ As is standard practice in any
statistical analysis, the Department eliminated a small number of
outliers,\160\ and observations that had missing data.
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\153\ LCA Box B(2).
\154\ LCA Box F(a)(1). Note that, as explained above, an LCA
applicant can file an LCA on behalf of multiple putative H-1BH-1B
employees.
\155\ LCA Box F(a)(8).
\156\ LCA Boxes F(a)(10) and 10a. The field on the LCA for the
wage rate offered to the nonimmigrant worker has a field labeled
``From'' and ``To'' with ``From'' being the lower range and ``To''
the upper range. Since filling out the upper range is optional, only
approximately 50% of LCAs have data in that field. Therefore, the
Department used the number indicated in the ``From'' field as the
sole datapoint from F(a)(10).
\157\ To create a single comparable wage variable, the
Department converted all forms of payment into annual pay using
standard period multipliers. The Department performed this
adjustment as needed for both the offered wage and the prevailing
wage.
\158\ LCA Boxes F(a)(11) and 11a.
\159\ LCA Box F(13)(a).
\160\ The Department removed observations that reported wages
smaller than $20,000 and larger than $500,000.
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To illustrate the Department's process, consider an example Labor
Condition Application (LCA) for a Data Scientist. From each LCA, the
Department extracted key data elements,
[[Page 15471]]
including the standard occupational code (SOC), number of workers,
state of employment, offered wage, prevailing wage, and wage level. All
wage values were standardized to annual amounts for consistency. The
Department applied this process across more than 3 million LCAs filed
between FY 2020 and FY 2025, cleaning the data to remove errors and
outliers (e.g., wages below $20,000 or above $500,000) and ensuring
accurate SOC coding. This standardized dataset formed the basis for the
statistical analysis described below.
In this instance, the State/District/Territory would have been
coded as Florida, based on Box 8; the Wage Rate Paid would have been
coded as $119,028 from Box 10; and the Prevailing Wage Rate would have
been coded as $75,691 from Box 11.\161\ This was done for over 3
million LCA's filed during the time period of FY2020-2025.
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\161\ The Wage Level, II, is not visible in this image due to
size limitations.
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Using these data, the Department calculated that the average
prevailing wage, for all LCAs from FY2020-2025, was $111,717. The
Department also calculated that the average wage rate paid to the
beneficiaries of the same LCAs was $121,908.\162\ In other words, the
average LCA-program employee was paid an actual wage, and thus
commanding, a $10,191 premium over the prevailing wage level offered--a
gap that indicates that the prevailing wage is set below the market
value of comparable U.S. workers.
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\162\ The Department acknowledges that LCA applicants must go
through further processing, notably, in many cases the H-1B lottery,
before they receive a visa, and that many LCA's ultimately do not
receive work visas. However, the Department does not believe that
this distinction matters for purposes of the analysis that it
conducted. Many LCAs are for H-1B applicants who are cap-exempt,
which means that the observation should be largely consistent with
the ultimate visa grants. Regarding non-cap-exempt H-1B applicants,
the Department has no reason to assume that the distribution of cap-
exempt employees is different from the distribution of non-cap-
exempt LCAs, but welcomes comment if any member of the public has
data that indicate a significant discrepancy between these numbers.
---------------------------------------------------------------------------
b. Step 2--Comparing the LCA Data to General Labor Market Data
The Department next compared the compensation paid to the
beneficiaries of H-1B applications with the compensation paid to
equivalent U.S. workers. To do this, the Department conducted a
statistical analysis comparing the above LCA data with data for the
U.S. workforce in general, narrowed down to the same occupation and
geographical region.
The best available data source for benchmarking the U.S. workforce
is the OEWS,\163\ which as explained above, is the most comprehensive
and consistently administered analysis of labor market data that is
indexed to occupational codes. The OEWS data reflects labor market
conditions for the U.S. workforce as a whole, and not just non-
immigrant programs. For each occupation--classified using the same SOC
codes that appear in LCAs--the OEWS reports mean wages, which can be
adjusted for geographic region, including state.
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\163\ The nature and relevant history of the OEWS is explained
in greater detail in Section I.D.
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For example, for Software Developers (SOC Code 15-1252), which is
the most common SOC code for which an LCA was sought between FY2020-
2025, the average wage in California is $170,910; for Alabama, it is
$113,020, and for Wisconsin, it is $103,360.\164\ As was explained
above, the LCAs also report SOC Code and state--the same data that any
user can input into the OEWS system to receive an average wage for
workers in that occupational classification and location.
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\164\ These data are publicly accessible at https://data.bls.gov/oesprofile/ and reflect data for May 2024, the most
recently available data as of the time of this NPRM. For purposes of
conducting its analysis comparing these data to the FY2020-2025 LCA
data, the Department obtained historical BLS data and compared the
BLS data of a specific year to the corresponding year wherein the
LCA was received. This has led to an overall underestimate of the
gap between compensation received by immigrants and non-immigrants
bound by the prevailing wages, and U.S. workers, because it
effectively does not account for inflation, as many of these workers
do not commence work until the next fiscal year.
---------------------------------------------------------------------------
To compare LCA data and the OEWS data, the Department coded each
LCA with the corresponding mean wage reported by the OEWS, for the same
occupation and state, to create an ``apples-to-apples'' comparison. So,
for example, if a given LCA was for a Software Developer in the state
of Alabama for FY2024, they would have been coded with $113,020-the
average annualized salary for the same occupation in the same place.
This coding was done, in this exact same way, to millions of LCAs.
To return to the previous LCA example, the LCA was coded as a Data
Scientist (SOC Code 15-2051), and was located in Florida, FY 2024. In
the Department's analysis, this would have been coded using the
corresponding OEWS wage rate for the same SOC Code, state, and year,
for an average wage of $105,820.\165\
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\165\ https://www.onetonline.org/link/localwages/15-2051.00?st=FL.
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While some LCA applicants' employees earned more and others less
than the OEWS mean, the Department initially assumed these differences
would offset across Wage Levels I-IV. In theory, if LCAs reflected a
balanced distribution of job levels, the average offered wage should
approximate the OEWS average for the occupation. However, LCAs are
disproportionately concentrated at Level I and Level II--the lowest
wage tiers--which are both set significantly below the median or
average wage. This concentration is not unexpected, as employers often
classify positions at these levels, and H-1B workers tend to be placed
in roles designated as entry-level or lower-tier positions. In fact, 63
percent of LCAs certified in FY 2024 were at Level I or Level II,
according to the Department's LCA performance data.\166\ Because these
levels are far below the OEWS mean, the aggregate wages of H-1B workers
skew lower than the overall occupational average. While this rule does
not alter how employers classify job levels, raising prevailing wage
thresholds will help ensure that wage levels better reflect the
qualifications required for specialty occupations and reduce incentives
to select the lowest permissible wage level.
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\166\ See U.S. Department of Labor, Office of Foreign Labor
Certification, Labor Condition Application Performance Data, FY
2024, available at https://www.dol.gov/agencies/eta/foreign-labor/performance.
---------------------------------------------------------------------------
However, the average of the mean OEWS occupational salaries, across
the LCAs, was $130,219, which is slightly over $9,000 higher than the
wage rate paid, and over $19,000 higher than the prevailing wage rate
based on the current wage levels. This $130,219 represents the average
of all salaries by occupation, state, and fiscal year, that match with
the millions of LCAs in the Department's data set. As is shown later,
it was used as the Department's Benchmark Value \167\ for setting the
prevailing wage levels in Step 3 of the analysis.
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\167\ This value is referred to as the Benchmark Value in the
next subsection.
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c. Step 3--Using the Labor Market Analysis To Revise the Prevailing
Wage System
[[Page 15472]]
Given the existence of a variety of skill levels, occupations, and
regions, the significant gap between the Benchmark Value and the
average prevailing wage and wage paid data should not exist unless the
LCA-program itself were causing a discrepancy. In other words, the
average U.S. worker in the same occupation and region is commanding a
nearly $19,000 wage premium above what the similarly situated non-U.S.
worker is required to be paid using the prevailing wage system, which,
in many of the non-immigrant programs, such as the H-1B program, are
restricted to individuals seeking to work in specialty occupations that
should perhaps be commanding higher, not lower wages.
The Department believes that these significant discrepancies
between labor market outcomes of U.S. workers, represented by the
Benchmark Value, and the labor market outcomes of LCA-program employees
specifically, as represented by the actual wages paid, and the
prevailing wages that apply, indicates both the existence of a
problem--that the wage discrepancy will adversely impact the wages of
similarly employed U.S. workers--and the proposed solution--which is to
revise the prevailing wage structure to be more in line with the
average wages earned by equivalent U.S. workers.
In order to align LCA-program wage rates with the general U.S.
labor market, the Department seeks to set a prevailing wage level that
yields an average, using the same mathematical approach as described
above, that would be approximately the same as the average of the mean
salaries of the typical LCA-program occupations. Using the Department's
proposed revised prevailing wage methodology, which sets Wage Level I
from the 17th to the 34th percentile; Wage Level II from the 34th to
the 52nd percentile; Wage Level III from the 50th to the 70th
percentile; and Wage Level IV from the 67th to the 88th percentile, the
Department achieves this alignment, arriving at the Benchmark Value--
and thus, approximately the same as if the Department drew a random
sample of similarly-situated U.S. workers.
To identify these levels, the Department created a statistical
model, using the known composition of the LCA-programs in terms of the
same factors described above: wages, locations, and occupations, and
used well-known statistical methods to set prevailing wage levels that
would result in an average prevailing wage level that was equal to the
average of the mean salaries assuming the same composition as the LCA-
program. Put differently, the model answered the following question: if
the same employers with the same occupations, state locations, and wage
levels, were to apply for the LCA-programs in the next fiscal year, as
they did in the most recent fiscal year, what prevailing wage levels
are needed to ensure that the average prevailing wage is the same as
the Benchmark Value?
i. The Mathematics Behind Step 2 of the Department's Analysis
Numerical methods are computational techniques used to find
approximate solutions to complex mathematical problems that lack
closed-form solutions. For example, the equation (x + y = 1) cannot be
solved uniquely, as (x) and (y) can take infinitely many values that
satisfy the equation (e.g., (x = 0.5, y = 0.5) or (x = 1, y = 0),
etc.).\168\ Similarly, the loss function, which reflects the difference
between the predicted mean wage and the target mean wage
Wtarget, is defined as:
---------------------------------------------------------------------------
\168\ To approximate these levels, the department combined
Limited-memory Broyden-Fletcher-Goldfarb-Shanno, which is a quasi-
Newton optimization algorithm with linear interpolation to estimate
percentile wage levels (I-IV) that align with a target average wage
defined by the data. The algorithm seeks to minimize the difference
between the mean wage predicted by the assigned percentiles and the
Benchmark Value. The approach exploits the piecewise interpolation
of percentile values and the properties of linear optimization.
First, each row's wage is predicted based on its reported percentile
wage distribution. Using the known percentiles 10, 25, 50, 75 and 90
for each occupation (SOC code), and a given percentile (t) (e.g.,
35th percentile for Level I), the wage at (t) is estimated using
linear interpolation.
[GRAPHIC] [TIFF OMITTED] TP27MR26.173
Here, Wi(p1,p4) is the interpolated wage for
the (i)-th row based on the assigned percentiles, and (N) is the total
number of rows.
The optimization uses the Broyden-Fletcher-Goldfarb-Shanno
algorithm method, a gradient-based algorithm, to minimize the loss.
Constraints are applied to ensure that:
10 <= p1 < p4 <= 90 and p4 -
p1 >= 10.
The initial values for (p1) and (p4) are set
to 35 and 90,\169\ respectively. These were approximately the values
that the Department believed would achieve the policy goals for Wage
Levels I and IV, respectively, (as discussed below) and also
represented the same values that the Department set in a previous
rulemaking. However, 35 and 90 did not create the solution; the
solution they created was above the Benchmark Value. Then, the
Department applied the Broyden-Fletcher-Goldfarb-Shanno algorithm,
which takes an initial ``estimate'' and repeatedly attempts to match
that set of values to the desired solution, until eventually that is
reached. After this optimization, the solution yields the optimized
wage levels (p1, p2, p3,
p4), corresponding to Levels I-IV, which were 34, 52, 70 and
88, such that the solution approximately achieves the Benchmark Value.
The final difference between the predicted mean and the target mean is
reported as the result of the optimization.
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\169\ The Department also ran the same simulation with the
starting values and being set to 17 and 67, which correspond to
current Levels I and IV. However, picking these numbers would result
in Wage Levels at the 45th, 56th, 66th and 76th percentiles. The
Department believes these levels fail to sufficiently differentiate
from one another to be useful.
---------------------------------------------------------------------------
As discussed below, this solution is not the only set of values
that would allow the Department to match the Benchmark Value. The next
section discusses the Department's rationale for setting Levels I and
IV at the 34th and 88th percentile instead of sliding up or down the
wage scale to achieve the Benchmark Value.
ii. The Department's Setting of Wage Level I to the 34th Percentile
As explained above, Wage Levels II and III are set arithmetically
as required by the INA; Level II will be calculated by dividing by
three, the difference between Levels I and IV, and adding the quotient
to the computed value for Level I. Level III will be calculated by
dividing by three the difference between Levels I and IV, and
subtracting the quotient from the computed value for Level IV.
Therefore, the Department effectively has to choose two wage
[[Page 15473]]
levels: Wage Level I and Wage Level IV.\170\
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\170\ The Department notes that, although Wage Levels II and III
are arithmetically set by Wage Levels I and IV, that the Department
believes that the increases of Wage Levels II and III that this
methodology achieves are necessary and appropriate to carry out its
statutory requirements for all of the same reasons as are stated
below and throughout this NPRM.
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The Department is proposing to increase Wage Level I from the 17th
to the 34th percentile for a variety of reasons. To start, retaining
Level I at the 17th percentile would have produced, under the statutory
formula described above, a wage-level structure that was excessively
skewed to the right, which would have been less granular, distorted,
and less consistent with statutory requirements.\171\ More importantly,
as the Department has explained in detail in Section II.B, many of the
most common occupations in LCA programs, and especially in the H-1B
program, frequently report requiring education less than a Bachelor's
degree. For example, Computer Systems Engineers/Architects (SOC Code
15-1299.08), which is one of the most commonly applied-for jobs across
all LCA programs, is a Job Zone Three job, meaning that ``[m]ost
occupations in this zone require training in vocational schools,
related on-the-job experience, or an associate's degree'' and that 68%
of respondents reported that the occupation required sub-baccalaureate
requirements of either an Associate's degree or other post-secondary
education.\172\ By establishing Wage Level I at the 17th percentile,
the current methodology sets a prevailing wage that is directly
comparable to individuals who do not work in high-skill positions
within that occupational category that are the only ones eligible to
use most of the LCA programs.\173\
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\171\ If the Department sought to increase the prevailing wage
rates more than it proposes to do so here, which it believes is
justifiable to avoid adverse wage effects on U.S. workers, it would
simply opt for an increase in the Wage Level I prevailing wage to
preserve a sufficiently differentiated wage level system to permit
employers to obtain more granular wage levels that reflect all of
the statutory factors.
\172\ https://www.onetonline.org/link/summary/15-1299.08.
\173\ The Department acknowledges that other common occupations
among the LCA-programs, such as Software Developer, have much higher
educational requirements. However, the prevailing wages are set for
all occupations, and must reflect the qualifications needed for them
on an aggregate level. The Department finds that, for all of the
reasons stated throughout this rule, that on an aggregate level,
among the occupations that are the most significant LCA-program
occupations, a significant percentage of these jobs do not require a
bachelor's degree and perhaps do not even require the application of
a body of ``highly specialized knowledge.'' Thus, these jobs are
generally not the kind of positions that should be the basis for
comparison against LCA-program workers. The Department also
considered but rejected a more granular, occupation-specific
approach to setting prevailing wages, because such an approach would
be unworkable.
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In addition to these findings, the Department also notes indicia
that the relevant labor market is balanced, or perhaps even tilted
towards supply of labor rather than shortage. First, the Department
notes that the average wages paid versus prevailing wage premium for
Wage Level I is particularly high. As shown below in Exhibit 5, while
the average prevailing wage set for Wage Level I was $73,804, the
average offered wage was $83,055. This approximately $10,000 gap shows
that workers assigned to Wage Level I are commanding very large
premiums compared to the assigned prevailing wage--the largest
premiums, in fact, by percentage, among the four Wage Levels. Second,
the Department notes labor market data indicating unemployment among
U.S. recent college graduates and tech workers which is described above
in Section II.B. Third, the Department notes the mass layoffs of U.S.
workers by many of the same companies that are applying for LCA-program
visas, as is documented in Section II.B.
By contrast, when the Department originally set Wage Level I at the
17th percentile in 2005, it offered no findings, no data, and no
justification for this figure. But, at the same time, the Department
acknowledges that, although all jobs in the H-1B system in particular
require the theoretical and practical application of a body of ``highly
specialized knowledge,'' its historical position has been that Wage
Level I is for wage rates for ``beginning level employees.'' \174\
However, these entry-level occupations must nonetheless conform with
the other requirements of the LCA programs, including that they be
specialty occupations. At this time, the Department believes that the
34th percentile strikes the correct balance by aligning LCA-program
workers with proper comparators, while also retaining the entry-level
quality of the Wage Level. The Department welcomes evidence regarding
the supply of U.S. workers, or the impact of technologies including
artificial intelligence, that would indicate the need for Wage Level I
to be pushed higher to prevent adverse impacts.
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\174\ https://www.dol.gov/sites/dolgov/files/eta/oflc/pdfs/npwhc_guidance_revised_11_2009.pdf.
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Another reason why the Department is proposing to set Wage Level I
at the 34th percentile, and not lower (or higher), is because it also,
for reasons stated below, believes that Wage Level IV should be set at
the 88th percentile. Using the above mathematical formula that arranges
the prevailing wages to match the Benchmark Value, if the Department
set Wage Level I lower, it would require Level IV to be set higher.
This would pose a practical problem as in certain occupational and
geographic arrangements, OEWS data may not be sufficiently granular to
supply the needed information. Conversely, if Wage Level I were set
higher, it would force Wage Level IV to be lower. This would be
undesirable because it would water down the prevailing wage requirement
for Wage Level IV and force the other Wage Levels to be truncated.
iii. The Department's Setting of Wage Level IV to the 88th Percentile
While the Department's proposed change of Wage Level I from the
17th to the 34th percentile requires Wage Level IV to be set to the
88th percentile, it also believes that this change also enhances the
prevailing wage methodology's alignment with the INA. The Department
believes that Level IV should be increased from the 67th percentile to
the 88th percentile, because most LCAs that are assigned a Level IV
prevailing wage already offer actual wages significantly above the
Level IV prevailing wage, suggesting that the Level IV prevailing wage
does not align with the education and experience of the highest skilled
workers in specialty occupations. In Fiscal Year 2024, the Department
observed that employers filed Labor Condition Applications (LCAs) for
over 100,000 H-1B positions classified at Wage Level IV, representing
the highest skill tier under the current prevailing wage structure. The
average wage paid to these workers was $172,714, while the average
prevailing wage certified for these positions was $151,095--a
difference of $21,619, or approximately 14 percent.\175\ This also
indicates that this actual wage is more consistent with that which is
paid to similarly employed U.S. workers than is the prevailing wage
rate.
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\175\ Employment and Training Administration, Office of Foreign
Labor Certification, Performance Data, available at https://www.dol.gov/agencies/eta/foreign-labor/performance.
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The highest wage level should be commensurate with the wages paid
to the most highly compensated workers in any given occupation because
such workers are also generally the workers with the most advanced
skills, education, and competence in the occupation, whereas the
current methodology more likely includes in the
[[Page 15474]]
Level IV wage tier some workers who may not be described as
``specialty'' workers possessing the most specialized knowledge and the
highest degree of competence. It is generally the case that, as a
worker's education and experience increase, so too do his wages.
Further, while the INA places baseline, minimum skills-based
qualifications on who can obtain an H-1B or EB-2 classification, it
does not place any limit on how highly-skilled a worker can be within
these programs.\176\ Thus, while the Department necessarily discounted
the lower end of the OEWS wage distribution in determining the entry-
level wage, full consideration must be given to the uppermost portion
of the distribution in adjusting the Level IV wage.
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\176\ 8 U.S.C. 1184(i)(1) and 8 U.S.C. 1153(b)(2).
---------------------------------------------------------------------------
Indeed, H-1B workers can be, and at least in some cases already
are, among the most highly paid workers, and therefore likely fall
among the most highly skilled workers within their respective
occupations.\177\ This is demonstrated by a review of the highest
salaries paid to H-1B workers in the most common occupations in which
H-1B workers are employed. In FY 2024, for example, the most highly
compensated H-1B nonimmigrants employed as Computer Systems Analysts
earned annual wages over $500,000. The wages of workers at the 90th
percentile of the OEWS distribution for these occupations, by contrast,
are significantly lower. Computer Systems Analysts at the 90th
percentile in the OEWS distribution make approximately $166,030.\178\
In other words, H-1B workers in some instances make wages far in excess
of those earned by 90 percent of all U.S. workers in the same
occupation. This indicates that the 67th percentile is simply not
commensurate with the wages paid to similarly employed U.S. workers.
While OEWS data does not directly report the education and experience
levels of the highest-paid U.S. workers, the Department reasonably
infers that workers earning at or above the 90th percentile are likely
to possess advanced degrees, substantial experience, and significant
responsibility--characteristics that closely align with those of the
most highly compensated H-1B workers in the same occupational
categories.
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\177\ Data on the actual wages paid to H-1B workers shows that
in some cases such workers are paid at or near the very top of the
OEWS wage distribution.
\178\ O*NET, Computer Systems Analyst (last accessed on 12/5/
2025 at 12:52 p.m.), available at https://www.onetonline.org/link/localwages/15-1211.00?st=.
---------------------------------------------------------------------------
Further demonstrating that H-1B workers can be and sometimes are
among the most skilled and competent workers in their occupations, an
examination of the top end of the wage distribution within the H-1B
program shows that, for H-1B nonimmigrants with graduate and bachelor's
degrees, the association between education and income level begins to
break down to some extent. An analysis of the highest earners within
the H-1B program reveals that H-1B workers--particularly those with
bachelor's and graduate degrees--can be among the most skilled and
capable in their fields. Interestingly, at this top end of the wage
distribution, the typical link between education level and income
begins to weaken. Among the most highly compensated H-1B workers, the
higher the income level, the more likely the alien worker only has a
bachelor's degree.\179\ This strongly suggests that individuals at the
fourth wage level possess the most advanced skills and competence--the
only remaining parameters that can reasonably account for significant
wage differentials--within their occupations, as additional years of
education are largely irrelevant in explaining wages among top earners.
---------------------------------------------------------------------------
\179\ This analysis is based on data provided by 2024 OFLC
Disclosure Data.
---------------------------------------------------------------------------
Furthermore, because Levels II and III are set according to a
statutory formula, prescribed by the INA, the Department has selected
the 88th percentile for Level IV to ensure that Levels II and III are
set at a sufficiently high level. This approach improves alignment with
labor market conditions while preserving the Department's longstanding
reliance on OEWS data and its statutory obligations to ensure that the
employment of alien workers does not adversely affect the wages and
working conditions of U.S. workers.
In cases where the OEWS survey does not provide a computable Level
IV wage due to top-coding or data limitations, DOL proposes that the
OFLC Administrator would determine the Level IV wage using the greater
of: (1) the current hourly wage rate applicable to the highest OEWS
wage interval for the specific occupation and geographic area; or (2)
the arithmetic mean of the wages of all workers for the most specific
occupation and geographic area available. This approach ensures that
prevailing wage determinations remain consistent with the statutory
requirement to reflect wages commensurate with experience, education,
and level of supervision, while avoiding distortions caused by
incomplete data.
iv. Wage Levels II and III
The Department will continue to calculate the two intermediate wage
levels in accordance with 8 U.S.C. 1182(p)(4), which provides that, in
establishing a four-tier wage structure, ``[w]here an existing
government survey has only 2 levels, 2 intermediate levels may be
created by dividing by 3, the difference between the 2 levels offered,
adding the quotient thus obtained to the first level and subtracting
that quotient from the second level.'' \180\ The BLS OES survey is, as
provided in the statute, an existing survey that has long provided two
wage levels for the Department's use in setting the prevailing wage
rates.\181\
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\180\ 8 U.S.C. 1182(p)(4).
\181\ BLS also produces data for the public from the OES survey
that is divided into five different wage levels. However, the public
data BLS produces is not broken down with the level of granularity
by area of employment needed to administer the Department's
immigrant and nonimmigrant programs, which is why BLS has also long
produced a separate dataset with two wage levels for the
Department's use.
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The Department applies the statutory formula as follows: The
difference between the two levels provided by the OEWS survey data is
54 percentiles. Dividing this by three yields a quotient of 18. This
quotient, added to the value of the Level I wage at the 34th
percentile, yields a Level II wage at approximately the 52nd
percentile. When subtracted from the value of the Level IV wage at the
88th percentile, the quotient yields a Level III wage at approximately
the 70th percentile of the OEWS distribution.
The Department invites public comment on whether these levels
appropriately reflect the statutory requirements and labor market
realities, or whether alternative prevailing wage levels would more
comprehensively aid the Department in fulfilling its statutory and
regulatory requirements. The Department is particularly interested in
feedback on whether the proposed methodology appropriately accounts for
education, experience, and responsibility levels as required by the INA
in 8 U.S.C. 1182(p)(4).
2. The EB-3 Immigrant Classification
The Department emphasizes that both the H-1B and EB-2 programs are,
by statutory design and regulatory implementation, intended for highly
skilled workers. The INA defines a ``specialty occupation'' for H-1B
purposes as one that requires the theoretical and practical application
of a body of highly specialized knowledge
[[Page 15475]]
and the attainment of at least a bachelor's degree in a specific
specialty.\182\ Similarly, the EB-2 immigrant visa classification is
generally limited to individuals who possess advanced degrees or
equivalent or demonstrate exceptional ability in the sciences, arts, or
business.\183\ These statutory definitions are reinforced by Department
regulations, which require that qualifying positions demand education
and expertise beyond that of the general labor market. Consistent with
these requirements, OFLC data from FY 2024 show that over 89 percent of
H-1B positions and 68 percent of PERM applications were for occupations
in Job Zones 4 and 5--categories defined by the Department's O*NET
system as requiring considerable to extensive preparation, including
advanced education, training, and experience. This concentration in
high-preparation occupations underscores the programs' focus on high-
skill labor and supports the Department's approach to calibrating
prevailing wage levels accordingly.
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\182\ 8 U.S.C. 1184(i)(1).
\183\ 8 U.S.C. 1153(b)(2).
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As noted previously, the Department's four-tier wage structure is
used to set the prevailing wage in five different immigrant and
nonimmigrant programs. Having explained the Department's reasoning for
how the adjusted wage levels are appropriate for the programs that
consist of more highly skilled workers with advanced degrees and/or
specialized knowledge--namely the EB-2 immigrant classification and the
H-1B, E-3, and H-1B1 nonimmigrant programs--the Department now turns to
explaining the appropriateness of using those same wage levels for the
EB-3 classification, which consists of lower-skilled workers,
professionals with bachelor's degrees, and individuals capable of
performing unskilled labor. The Department concludes that the adjusted
wage levels under the four-tiered structure are appropriate for use in
occupations and with applications for work falling within the EB-3
classification.
At the outset, the Department notes that the close connections
between the EB-3 classification and the other programs covered by the
Department's wage structure make it inadvisable and impractical to
treat the EB-3 classification differently. As detailed above, many H-1B
workers adjust status to that of lawful permanent residents through the
EB-3 classification, and the manner in which the programs operate means
that, in many cases, alien workers can, in some sense, have one foot in
each program simultaneously for extended periods of time. Using
different wage methodologies in the programs would therefore result in
the undesirable possibility of a worker doing the same job for the same
employer suddenly receiving a different wage upon adjusting status.
Similarly, while having somewhat different eligibility criteria, the
EB-2 and EB-3 classifications are not mutually exclusive--many workers
that satisfy the eligibility criteria for one would also do so for the
other.\184\ Applying the same wage methodology in both classifications
is therefore important to ensure consistent treatment of similarly
situated workers and prevent the creation of incentives for employers
to prefer one classification over the other, to the detriment of U.S.
workers that may be interested in the relevant job opportunity, because
different wage methodologies yield different wages.\185\ These
considerations make it important to treat the EB-3 classification the
same as the EB-2 and H-1B programs. The question then becomes whether
the EB-3 classification is properly accounted for by the adjusted wage
levels. The Department believes it is.
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\184\ See Musunuru v. Lynch, 831 F.3d 880, 885 (7th Cir. 2016)
(describing a person applying for both EB-2 and EB-3 status).
\185\ See Comite' De Apoyo A Los Trabajadores Agricolas v.
Perez, 774 F.3d 173, 185-6 (3d Cir. 2014) (noting loopholes that can
be created if employers are able to use different methodologies to
calculate wages for the same types of workers, to the detriment of
U.S. workers).
---------------------------------------------------------------------------
The Department acknowledges that applying the four-tier wage
structure in five different immigrant and nonimmigrant programs with
varying populations, and across hundreds of different occupational
classifications, presents inherent challenges. The breadth of
occupations to which the wage levels apply means that the prevailing
wages established by the wage structure will not be perfectly tailored
to the circumstances of each individual job opportunity or each
occupation.\186\ The Department has sought to address this challenge by
adopting a methodology that is best tailored to the largest share of
the immigrant and nonimmigrant populations covered by the programs that
use the four-tier wage structure. Doing so is, in the Department's
judgment, the best approach to addressing variations across the
programs that is most consistent with the INA. The wage protections in
the H-1B and PERM programs are designed to guard against the
displacement of, or adverse effect on U.S. workers caused by the
employment of alien workers.\187\ As noted above, the risk that the
presence of lower-wage alien workers in a labor market would undercut
U.S. workers' wages and job opportunities is greatest when there are
larger concentrations of such workers.\188\ Adjusting the wage levels
with particular attention to those occupations and visa classifications
with the largest numbers of alien workers therefore puts the focus on
addressing the danger the statutory scheme is intended to guard
against--adverse effects on U.S. workers--where it is most acute.
---------------------------------------------------------------------------
\186\ Cf. Wage Methodology for the Temporary Non-agricultural
Employment H-2B Program, 76 FR 3452, 3461 (Jan. 19, 2011)
(explaining that ``particular industries, such as forestry, will
fare poorly based on a change to a mean-based OEWS wage rate.'').
\187\ See, e.g., Cyberworld Enter. Techs., Inc. v. Napolitano,
602 F.3d 189, 199 (3d Cir. 2010).
\188\ George J. Borjas, Immigration Economics (2014).
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Thus, as previously explained, in ascertaining the wages paid to
U.S. workers similarly employed to H-1B workers, the Department's
analysis focused, to the greatest extent possible, on those occupations
that account for 1 percent or more of the total H-1B population, and
which also account for a significant share of the PERM population.\189\
Similarly, the Department has given due weight in its analysis of where
to set the prevailing wage levels to the fact that the EB-3
classification represents an exceedingly small share of the overall
alien worker population covered by the wage structure. The H-1B program
is America's largest guest worker program.\190\ In FY2023, the
Department of Homeland Security approved 386,318 H-1B petitions.\191\
That same year, 27,760 workers were admitted for lawful permanent
residence in the EB-2 classification.\192\ A total of only 27,590 EB-3
immigrant workers were admitted that year.\193\ Thus, the EB-3 program
[[Page 15476]]
accounts for, at most, approximately 5 to 10 percent of the total
immigrant and nonimmigrant population governed by the four-tier wage
structure that is admitted or otherwise provided status in a given
year.\194\ That does not mean that the Department has not given full
consideration to the EB-3 classification in assessing how best to
adjust the wage levels. It only means that the Department has
appropriately weighed the size of the program, and therefore the risk
it poses to U.S. workers, in identifying a solution to the adverse
effects caused by the existing wage levels--an approach the Department
regards as the best way to take into account the variations across the
programs covered by the wage structure in effectuating the purpose of
the INA's wage protections. Moreover, because H-1B workers may later
pursue lawful permanent resident status based on an approved immigrant
visa petition in the EB-3 preference category, maintaining misaligned
wage levels across these categories could create a financial incentive
for employers to pursue the classification with the lower wage
requirement, thereby undermining the integrity of the wage structure
and the Department's efforts to ensure consistent labor market
protections across programs.
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\189\ In some instances, particularly when analyzing the NSF
data, the Department was constrained in its ability to analyze wages
for all top H-1B occupations because of discrepancies between how
the NSF and BLS surveys classify workers by occupation.
\190\ Nicole Torres, The H-1B Debate, Explained, Harvard
Business Review (May 4, 2017), available at https://hbr.org/2017/05/the-h-1b-visa-debate-explained.
\191\ U.S. Citizenship and Immigration Services, Characteristics
of H-1B Specialty Occupation Workers (Mar. 6, 2024), available at
https://ohss.dhs.gov/topics/immigration/yearbook/2023.
\192\ Department of Homeland Security, 2023 Yearbook of
Immigration Statistics, Table 7, Persons Obtaining Lawful Permanent
Resident Status by Type and Detailed Class of Admission: Fiscal Year
2023, available at https://ohss.dhs.gov/topics/immigration/yearbook-immigration-statistics/yearbook-2023.
\193\ Id.
\194\ The Department notes that the total number of approved H-
1B petitions ``exceeds the number of individual H-1B workers
sponsored because of the different types of petitions that can be
filed (e.g., requests for concurrent employment with another
employer, requests for extension of stay, amended petitions).'' U.S.
Citizenship and Immigration Services, Characteristics of H-1B
Specialty Occupation Workers Fiscal Year 2023 Annual Report to
Congress October 1, 2022-September 30, 2023, (2024), available at
https://www.uscis.gov/sites/default/files/document/reports/OLA_Signed_H-1B_Characteristics_Congressional_Report_FY2023.pdf. The
filing of these types of petitions means that some nonimmigrants are
counted multiple times in the total number of approved petitions.
The total number of petitions for initial employment in FY23 was
118,948. However, that number does not account for the petitions
filed on behalf of H-1B nonimmigrants to extend their status, and
thus undercounts the total number of actual H-1B workers who were
authorized to work in FY23.
---------------------------------------------------------------------------
After assessing the nature of the EB-3 immigrant population, the
Department has determined that the adjusted wage levels under the four-
tiered structure adequately take into account the experience,
education, and level of supervision of EB-3 workers, in light of the
purpose of the INA's wage safeguards. The EB-3 program consists of
three discrete classifications: ``skilled workers,'' defined as aliens
who are ``capable . . . of performing skilled labor (requiring at least
two years training or experience), not of a temporary or seasonal
nature, for which qualified workers are not available in the United
States;'' ``professionals,'' defined as aliens ``who hold baccalaureate
degrees and who are members of the professions;'' and ``other
workers,'' defined as aliens who are ``capable . . . of performing
unskilled labor, not of a temporary or seasonal nature, for which
qualified workers are not available in the United States.'' \195\ For
each of these classifications, the revised wage levels, set at
approximately the 34th, 52nd, 70th, and 88th percentiles, provide an
appropriate method for calculating the prevailing wage. While some EB-3
workers may not meet the statutory requirements for H-1B
classification, an H-1B worker would generally qualify for EB-3
classification. As such, and consistent with the Department's approach
to the H-1B1 and E-3 programs, the Department does not believe it is
appropriate to bifurcate the wage structure across programs.
Maintaining a unified four-tier wage methodology ensures consistency in
wage determinations, prevents program shopping, and promotes equitable
treatment of similarly employed alien workers across visa
classifications.
---------------------------------------------------------------------------
\195\ 8 U.S.C. 1153(b)(3)(iii); 8 CFR 204.5(l)(2).
---------------------------------------------------------------------------
As for the lower-skill classifications, the Department has
previously recognized that lower-skilled workers are less likely to
vary in the wages they are paid based on differences in skill
levels.\196\ This is because skill levels themselves are less likely to
vary in such occupations. A job that requires limited skills, such as
can be acquired through two years of training or less, can likely be
performed with similar proficiency by someone with lower levels of
education and experience as by someone with greater experience and
education.\197\ Meaningful differentiation between workers based on
skills in such occupations is therefore reduced. From this, the
Department has previously concluded that setting prevailing wages for
lower-skilled workers closer to the mean of the overall OEWS wage
distribution is a more appropriate way of guarding against adverse wage
effects.\198\ Since most workers in lower-skilled occupations have
similar levels of skill, a wage that approximates the average wage for
all workers in the occupation is more likely to ensure that similarly
employed workers make similar wages. For example, in FY 2024, the
Department certified PERM applications for occupations such as food
service managers, meat processing workers, and mushroom pickers--roles
that typically require limited formal education or training. In these
occupations, the range of skills and qualifications among workers is
relatively narrow, supporting the Department's conclusion that
prevailing wages for such roles should be set closer to the mean of the
OEWS wage distribution to reflect the limited variation in worker
qualifications.
---------------------------------------------------------------------------
\196\ See Wage Methodology for the Temporary Non-agricultural
Employment H-2B Program, 76 FR 3452, 3461 (January 19, 2011).
\197\ Id. at 3458.
\198\ Id. at 3459.
---------------------------------------------------------------------------
That reasoning holds true for the lower-skilled classifications in
the EB-3 immigrant visa preference category, which include workers
whose jobs are unskilled or require two years of experience or
training. These workers are far more likely to fall within the lower
two wage levels given their relative lack of education and
experience.\199\ Under the new wage levels, they would thus likely be
placed at either the 34th or the 52nd percentiles of the OEWS wage
distributions. Both levels, while not perfectly tailored to the lower-
skilled component of the EB-3 classification, fall near the middle part
of the wage distribution, and are therefore generally appropriate for
lower-skilled workers.
---------------------------------------------------------------------------
\199\ LCA Performance Data, available at https://www.dol.gov/agencies/eta/foreign-labor/performance.
---------------------------------------------------------------------------
For separate reasons, the Department concludes that the newly
adjusted wage levels also adequately satisfy the Department's
obligations in setting the wage levels under the INA with respect to
EB-3 professionals. Unlike lower-skilled EB-3 workers, professionals
with bachelor's degrees in the EB-3 classification do possess a level
of skill that allows for greater differentiation within the occupation.
It is also the case that such workers will likely have lower levels of
education and experience than EB-2 workers, who are required to possess
a master's degree or equivalent. An entry-level wage at the 34th
percentile, while more closely tailored to the education and experience
of an EB-2 or H-1B worker, may be on the higher end for an EB-3
professional in some cases.\200\ But other considerations demonstrate
the appropriateness of the 34th percentile of the OEWS wage
distribution as the entry-level wage for such workers.
---------------------------------------------------------------------------
\200\ The Department also notes that, in some cases, EB-3
workers may in fact have higher levels of formal education than H-1B
workers, given that H-1B workers can demonstrate specialized
knowledge through experience and training, whereas possession of a
bachelor's degree is required for all EB-3 immigrants. See
Employment-Based Immigrants, 56 FR 60897, 60900 (Nov. 29, 1991).
---------------------------------------------------------------------------
The Department emphasizes that the labor certification process in
the PERM
[[Page 15477]]
programs is designed to ensure that there are not available and willing
U.S. workers and that the wages and working conditions of U.S. workers
will not be adversely affected by the employment of the immigrant
worker(s). From the time that the INA was first enacted, its labor
certification provisions were designed ``to provide strong safeguards
for American labor and to provide American labor protection against an
influx of aliens entering the United States for the purpose of
performing skilled or unskilled labor where the economy of individual
localities is not capable of absorbing them at the time they desire to
enter this country.'' \201\ The availability of U.S. workers to fill
jobs for which alien workers are sought, being a guiding consideration
behind the INA's wage protections, the adequacy of the prevailing wage
levels for EB-3 professionals is an essential component of the
Department's certification.
---------------------------------------------------------------------------
\201\ Econo Inn Corp. v. Rosenberg, 145 F. Supp. 3d 708, 713
(E.D. Mich. 2015) (quoting H.R. Rep. No. 1365, 82nd Cong. 2nd
Session (1952)).
---------------------------------------------------------------------------
Within the U.S. workforce, the credentials associated with the EB-3
professional classification are significantly more common than the
credentials associated with the EB-2 classification. As of 2019, 36
percent of people age 25 and older in the United States possessed a
bachelor's degree or higher.\202\ That is compared to only 13.4 percent
of native-born Americans and 14.1 percent of the foreign born
population who possess an advanced degree, such as a master's degree or
doctorate.\203\ It follows that employers seeking to recruit
individuals with only a bachelor's degree should be more likely to find
qualified and available U.S. workers than if they are recruiting for a
position that requires a master's degree. The pool of available workers
in such cases is significantly larger.
---------------------------------------------------------------------------
\202\ United States Census Bureau, U.S. Census Bureau Releases
New Educational Attainment Data, available at https://www.census.gov/newsroom/press-releases/2020/educational-attainment.html.
\203\ Id.
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As noted above, the Department is required to determine and certify
that ``there are not sufficient workers who are able, willing,
qualified'' and available to fill the position for which an EB-3 worker
is sought.\204\ This requirement is critical to the INA's ``core
objective[ ] [of] balanc[ing] certain industries' temporary need for
alien workers against a policy interest in protecting U.S. workers'
jobs, salaries, and working conditions.'' \205\ In the case of EB-3
professionals, the adjusted wage levels, which may in some cases place
a slight premium on the wages paid to professionals with bachelor's
degrees, will better allow the Department to issue a certification that
no U.S. workers are available for the job opportunity.
---------------------------------------------------------------------------
\204\ 8 U.S.C. 1182(a)(5)(A)(i)(I).
\205\ Comite de Apoyo a los Trabajadores Agricolas v. Solis, 933
F. Supp. 2d 700, 712 (E.D. Pa. 2013).
---------------------------------------------------------------------------
Finally, the Department notes that continuing to employ the same
wage structure in this manner across both the H-1B and PERM programs
advances the Department's interest in administrative consistency and
efficiency. As noted already, there is significant overlap between the
H-1B and PERM programs. In FY2024, 57.6 percent of all PERM
applications were for aliens that at the time the applications were
filed were already working in the U.S. on H-1B visa
classification.\206\ Further, the top ten most common H-1B occupations
include six of the ten most common PERM occupations. In FY 2024, 68
percent of PERM cases were for jobs in Job Zones 4 and 5 \207\--the
most highly skilled job categories, which also account for over 89
percent of all H-1B cases.\208\ In sum, the close connection between
the types of jobs and aliens that are covered by the two programs
further supports using the same wage structure for both the PERM and H-
1B programs.
---------------------------------------------------------------------------
\206\ Office of Foreign Labor Certification, Permanent Labor
Certification Program--Selected Statistics, FY 24.
\207\ Under the O*Net system a job zone is a group of
occupations that are similar in the amount of education, experience,
and on the job training that is required for a worker to fill a
position in the occupation. Job Zone 4 includes occupations that
require considerable preparation; Job Zone 5 includes occupations
that require extensive preparation.
\208\ This information is based on data collected by the
Department's Office of Foreign Labor Certification on LCAs filed in
FY 2024.
---------------------------------------------------------------------------
For these reasons, the Department has concluded that using the
adjusted wage levels for the EB-3 preference category is in keeping
with the relevant statutory considerations that govern how the
Department sets prevailing wage levels.
D. Explanation of Proposed Amendments To Adjust the Prevailing Wage
Levels
1. Proposed Revisions to the Computation of the Wage Levels Based on
the OEWS in the Permanent Labor Certification Program (20 CFR 656.40)
The Department is proposing to revise paragraphs (a), (b)(2), and
(3) of 20 CFR 656.40. The most substantial changes are those made to
paragraphs (b)(2). First, the Department is proposing revisions to
Sec. [thinsp]656.40(b)(2) by adding new paragraphs (b)(2)(i) and (ii)
to codify the practice of using four wage levels and to specify the
manner in which the wage levels are calculated. Specifically, new
paragraph (b)(2)(i) stipulates that ``[t]he BLS shall provide the OFLC
Administrator with the OEWS wage data by occupational classification
and geographic area'' and goes on to specify the four new levels
(Levels I through IV) to be applied.
The proposed new paragraph (b)(2)(i)(A) describes the Level I Wage.
This first wage level--currently calculated as the mean of the bottom
third of the OEWS wage distribution--is proposed to be calculated as
the 34th percentile of the wage distribution for the most specific
occupation and geographic area available. Next, new paragraph
(b)(2)(i)(D) provides that the Level IV Wage--currently calculated as
the mean of the upper two-thirds of the OEWS wage distribution--is
proposed to be calculated as the 88th percentile of the wage
distribution for the most specific occupation and geographic area
available.
For the two intermediate levels, II and III, the Department
proposes to continue relying on the mathematical formula Congress
provided in the INA, as previously described in detail above. Thus,
proposed new paragraph (b)(2)(i)(B) states that the Level II Wage shall
be determined by first dividing the difference between Levels I and IV
by three and then adding the quotient to the computed value for Level
I. The Level III Wage is defined in proposed new paragraph (b)(2)(i)(C)
as a level determined by first dividing the difference between Levels I
and IV by three and then subtracting the quotient from the computed
value for Level IV. This yields second and third wage levels at
approximately the 52nd and 70th percentiles, respectively, as compared
to the current computation, which places Level II at approximately the
34th percentile and Level III at approximately the 50th percentile.
The proposed new paragraph (b)(2)(ii) states that the OFLC
Administrator would publish, at least once in each calendar year, on a
date to be determined by the OFLC Administrator, the prevailing wage
rates produced under the new paragraph (b)(2)(i) of section 656.40 as a
notice posted on the OFLC website. This continues the Department's
practice of having the OFLC Administrator announce, via a notice of
implementation, updates to OEWS wage data. Currently, OFLC publishes a
routine announcement each year implementing updated OEWS prevailing
wages for the new wage year and discussing any other significant
related updates, including changes to OEWS survey areas and relevant
updates to the SOC system. These announcements also serve as notice to
[[Page 15478]]
employers of changes they need to make to the wage information on
applications to reflect the changes to the OEWS.
The proposed revisions align with OFLC's current practice for
notifying employers directly, rather than through the Federal Register,
because publishing multiple prevailing wage rates in the Federal
Register would be administratively burdensome. Moreover, posting the
wage levels on the OFLC website is more user-friendly: it allows
employers and stakeholders to more easily locate and access the
relevant wage information. In practice, users are far more likely to
find the applicable wage data quickly and accurately on the OFLC
website than by navigating the Federal Register.
Further, the proposed revisions to paragraph (b)(2) would provide
greater precision in the language used by changing the term ``DOL'' to
``BLS'' when describing which entity administers the OEWS survey and
eliminate redundancy by deleting the language ``except as provided in
(b)(3) of this section.'' Because the Department is now specifying
within the regulation exactly how the prevailing wage levels are
calculated, the proposed revision would also remove the existing
reference to how the levels are calculated--namely the reference to the
``arithmetic mean''--and would instead provide that if the job
opportunity is not covered by a CBA, the prevailing wage for labor
certification purposes shall be based on the wages of workers similarly
employed using the wage component of the OEWS survey, in accordance
with paragraph (b)(2)(i), unless the employer provides an acceptable
survey under paragraphs (b)(3) and (g) of this section or elects to
utilize a wage permitted under paragraph (b)(4).
Finally, proposed revisions to paragraph (a) would remove an out-
of-date reference, explained further below, to a SWAs' role in the
prevailing wage determination process. The changes to paragraph (b)(3)
account for the elimination of the reference to the ``arithmetic mean''
in (b)(2).
2. Proposed Revisions to the Wage Requirement for LCAs in the H-1B, H-
1B1, and E-3 Visa Classifications (20 CFR 655.731)
The Department proposes amendments in section 655.731 to more
clearly explain that it would use BLS's OEWS survey to determine the
prevailing wages under this paragraph and proposes to add a sentence to
specify that these determinations would be made in a manner consistent
with the amended section 656.40(b)(2). In addition, the proposed
revisions in paragraphs (a)(2)(ii) introductory text, (a)(2)(ii)(A)
introductory text, and (a)(2)(ii)(A)(2) also include technical and
clarifying revisions regarding other permissible wage sources (i.e.,
applicable wage determinations under the Davis-Bacon Act or McNamara-
O'Hara Service Contract Act, as well as other independent authoritative
or legitimate sources of wage data in accordance with paragraph
(a)(2)(ii)(B) or (C)). The new language also proposes to remove the
reference to ``arithmetic mean'' in paragraph (a)(2)(ii) and now states
``. . . the prevailing wage shall be based on the wage component of the
Bureau of Labor Statistics (BLS) Occupational Employment and Wage
Statistics Survey (OEWS) in accordance with 20 CFR 656.40(b)(2)(i) . .
.''
The Department also proposes to amend section 655.731 by making
technical revisions to paragraph (a)(2)(ii)(A) to remove another out-
of-date reference to a SWA's role in the prevailing wage determination
process. Non-agricultural PWD requests are no longer processed by SWAs;
since 2010 they have solely been processed by the Department through an
OFLC National Processing Center (NPC). The proposed amendments reflect
this historical practice.
And finally, the proposed revisions provide technical corrections
to paragraph (a)(2)(ii)(A)(2). Specifically, the Department is
proposing to replace the incorrect reference to ``H-2B
nonimmigrant(s)'' with ``H-1B nonimmigrant(s).'' Additionally, in
situations where the employer relies on other legitimate sources of
wage information due to inability to wait for the NPC to produce the
requested prevailing wage for the occupation in question, or for the CO
and/or the BALCA to issue a decision, the Department is proposing to
add the word ``not'' in the last sentence to correctly describe the
situation where a wage violation would not be found where retroactive
compensation by the employer to the H-1B nonimmigrant(s) is timely
provided. Thus, the Department proposes that the sentence now state ``.
. . the employer was not paying the NPC-determined wage, no wage
violation will be found if the employer retroactively compensates the
H-1B nonimmigrant(s) for the difference between the wage paid and the
prevailing wage, within 30 days of the employer's receipt of the PWD.''
These proposed revisions further provide that an NPC would continue
to determine whether a job is covered by a collective bargaining
agreement that was negotiated at arm's length, but in the event the
position for which the employer is filing the LCA is not covered by
such agreement, an NPC would determine the wages of workers similarly
employed using the wage component of the BLS OEWS, unless the employer
provides an acceptable survey. The proposed revisions direct that an
NPC would determine the wage in accordance with secs. 212(n), 212(p),
and 212(t) of the INA and in a manner consistent with the newly revised
section 656.40(b)(2).
3. Implementation of the Proposed Rule
This proposed rule would only apply to Applications for Prevailing
Wage Determinations pending with the OFLC NPC as of the proposed
effective date of the regulation. Applications for Prevailing Wage
Determinations submitted to the OFLC NPC on or after the effective date
of the regulation as well as LCAs filed with the Department on or after
the effective date of the regulation where the OEWS survey data is the
prevailing wage source and where the employer did not obtain the PWD
from the NPWC prior to the effective date of the regulation, would be
subject to the new prevailing wage methodology. Conversely, the
Department does not propose to apply the new regulations to any
previously-approved prevailing wage determinations, permanent labor
certification applications, or LCAs, either through reopening or
through issuing supplemental prevailing wage determinations or through
notices of suspension, invalidation, or revocation.
E. Reliance Interests
The Department acknowledges that the existing wage levels--set at
approximately the 17th, 34th, 50th, and 67th percentiles--have been in
place for over 20 years, and that many employers likely have
longstanding practices of operating their businesses based on the
current wage rates. Adjusting the levels to the 34th, 52nd, 70th, and
88th percentiles represents a significant change, and may result in
some employers modifying their use of the H-1B and PERM programs. It
would also likely result in higher personnel costs for some employers,
as detailed below. However, to the extent employers have serious and
legitimate reliance interests in the existing levels, the Department
has determined that setting the wage levels in a manner that is
consistent with the text of the INA and that advances the statute's
purpose of protecting U.S. workers outweighs such interests and
justifies such increased costs. Additionally, by applying the new
prevailing wage methodology prospectively, it would afford
[[Page 15479]]
employers the necessary latitude they need to adjust their business
needs accordingly.
In effecting an adjustment to the wage levels previously used to
set the prevailing wage in the H-1B and PERM programs, the Department
is obligated to consider whether ``its prior policy has engendered
serious reliance interests.'' \209\
---------------------------------------------------------------------------
\209\ F.C.C. v. Fox Television Stations, Inc., 556 U.S. 502, 515
(2009).
---------------------------------------------------------------------------
As explained above, the Department continues to believe that the
old wage levels are the source, in many cases, of serious, adverse
effects on U.S. workers' wages and job opportunities. Adjusting the
levels to bring them in line with the wages paid to U.S. workers with
levels of education, experience, and responsibility comparable to H-1B
workers--and thereby reducing the danger posed to U.S. workers by the
employment of alien workers--remains the principal aim of this
rulemaking. Ensuring that the Department's wage structure is set in
accordance with the relevant statutory factors is also necessarily a
controlling objective in the Department's assessment of how best to
reform the prevailing wage levels. The old levels have never been
justified by economic analysis, and, as detailed above, are in tension
with the statutory scheme insofar as they are based, in many instances,
on data about the earnings of workers who cannot be regarded as
similarly employed to workers in specialty occupations.\210\
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\210\ See, 86 FR 3642.
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In considering how best to implement these changes, the Department
also evaluated whether to eliminate the option for employers to use
private wage surveys. This option has historically provided flexibility
where government data sources do not fully capture niche labor markets
or unique job requirements. Eliminating it entirely could disrupt
longstanding compliance practices and impose disproportionate burdens
on employers in specialized industries or geographic areas--
particularly start-ups and small businesses that often rely on highly
specialized roles or emerging occupations not well represented in OEWS
datasets. For these employers, private surveys may offer the most
accurate reflection of market wages. At the same time, the Department
considered that private surveys can be expensive for smaller businesses
to commission and administratively complex to validate, creating
compliance challenges. Additionally, historical data indicate that
private surveys typically produce wages approximately [20 percent
higher than OEWS-based prevailing wages,\211\] which could
significantly increase costs for employers relying on this option.
---------------------------------------------------------------------------
\211\ The 20% figure represents the average percentage
difference between Survey-based and OES (Occupational Employment
Statistics) prevailing wages across five key SOC codes (15-1121, 15-
1132, 15-1199, 15-1252, 15-1299) in FY 2024 H-1B LCA data. For each
SOC code, the department calculated the mean prevailing wage for
both Survey and OES sources, then computed the percentage difference
relative to the OES baseline. The overall 20% is the mean of these
five individual percentage differences, which ranged from 10.1% (15-
1199) to 29.2% (15-1252).
---------------------------------------------------------------------------
Ultimately, while the Department continues to believe that OEWS
should serve as the primary source for prevailing wage determinations,
it has chosen to retain the use of private surveys in limited
circumstances. This approach preserves employer flexibility, mitigates
potential adverse impacts on businesses operating in specialized labor
markets, and balances reliance interests with the statutory mandate to
protect U.S. workers. To ensure integrity, the Department would monitor
the use of private surveys to prevent abuse and ensure compliance, and
it already reserves the right to reject any private survey that does
not meet methodological standards or otherwise fails to satisfy
regulatory requirements.\212\
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\212\ See 20 CFR 656.40(b)(3) and 655.731(a)(2)(ii)(B)-(C),
which authorize the Department to review and reject private surveys
that do not meet established criteria.
---------------------------------------------------------------------------
The Department invites public comment as to interested parties'
legitimate and serious reliance interests in the previous wage
methodology.
F. The Department Requests Comments on All Aspects of Its Revised
Methodology for Establishing Prevailing Wage Levels and Regulatory
Alternatives
The Department invites comments on all aspects of the proposed
methodology changes. The Department is open to adopting any of the
regulatory alternatives discussed under Section III.A.6 in this NPRM
and therefore is particularly interested in comments on those
alternatives, especially the Experience Benchmarking alternative. The
Department is also interested in comments on the continued use of the
OEWS to support the computation of prevailing wage levels, identifying
other surveys conducted by the United States government or other data
sources and methods that can provide comparable information on the
wages of U.S. workers by occupation and geographic area, and
determining the prevailing wages at Levels I and IV to approximate the
level of education, experience, and supervision in the occupational
classification. Comments supported by reliable and objective data or
other quantifiable studies will be more helpful to the Department in
drafting a final rule than comments consisting of qualitative anecdotal
evidence.
III. Administrative Information
A. Executive Order 12866: Regulatory Planning and Review, Executive
Order 13563: Improving Regulation and Regulatory Review, and Executive
Order 14192: Unleashing Prosperity Through Deregulation
1. Introduction
Under E.O. 12866, the Office of Information and Regulatory Affairs
(OIRA) in the Office of Management and Budget (OMB) determines whether
a regulatory action is significant and, therefore, subject to the
requirements of the Executive Order and review by OMB. Regulatory
Planning and Review, 58 FR 51735 (Oct. 4, 1993). Section 3(f) of E.O.
12866 defines a ``significant regulatory action'' as an action that is
likely to result in a rule that may: (1) have an annual effect on the
economy of $100 million or more, or adversely affect in a material way
the economy, a sector of the economy, productivity, competition, jobs,
the environment, public health or safety, or state, local, or tribal
governments or communities; (2) create a serious inconsistency or
otherwise interfere with an action taken or planned by another agency;
(3) materially alter the budgetary impact of entitlement, grants, user
fees, or loan programs or the rights and obligations of recipients
thereof; or (4) raise novel legal or policy issues arising out of legal
mandates, the President's priorities, or the principles set forth in
the Executive Order. A regulatory impact analysis (RIA) must be
prepared for a regulatory action that is significant under section
3(f)(1). OIRA has reviewed this rule and designated it a significant
regulatory action under 3(f)(1) of E.O. 12866.
E.O. 13563 directs agencies to, among other things, propose or
adopt a regulation only upon a reasoned determination that its benefits
justify its costs; the regulation is tailored to impose the least
burden on society, consistent with achieving the regulatory objectives;
and in choosing among alternative regulatory approaches, the agency has
selected those approaches that maximize net benefits. Improving
Regulation and Regulatory Review, 76 FR 3821, 3821 (Jan. 21, 2011),
E.O. 13563 recognizes that some costs and benefits are difficult to
quantify and provides that, where appropriate and permitted by law,
agencies may
[[Page 15480]]
consider and discuss qualitative values that are difficult or
impossible to quantify, including equity, human dignity, fairness, and
distributive impacts. Id. This proposed rule, if finalized as proposed,
is expected to qualify for an exemption from E.O. 14192's otherwise-
applicable requirements, due to its immigration-related function.
a. Outline of the Analysis
Section III.A.3 describes the need for the NPRM, and section
III.A.4 describes the process used to estimate the costs of the rule
and the general inputs used to reach these estimates, such as wages and
number of affected entities. Section III.C.3 explains how the
provisions of the NPRM would result in costs and transfer payments, and
presents the calculations the Department used to reach the cost and
transfer payment estimates. In addition, this section describes the
non-quantified transfer payments and benefits of the changes contained
in this NPRM. Section III.B.5 summarizes the estimated first-year and
10-year total and annualized costs, and transfer payments of the NPRM.
Finally, section III.B.6 describes the regulatory alternatives that
were considered during the development of the NPRM.
2. Summary of the Analysis
The Department expects that the proposed rule, if finalized, would
result in costs and transfer payments. As shown in Exhibit 1, the
proposed rule would have an annualized cost of $3.53 million and a
total 10-year cost of $24.59 million at a discount rate of 7 percent in
2024 dollars.\213\ The NPRM would result in annualized transfer
payments (U.S. employers to other entities and individuals, including
alien workers) of up to $6.56 billion and total 10-year transfer
payments of up to $46.09 billion at a discount rate of 7 percent in
2024 dollars.\214\
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\213\ The proposed rule will have an annualized net cost of 3.33
million and a total 10-year cost of 28.38 million at a discount rate
of 3 percent in 2024 dollars.
\214\ The proposed rule will result in annualized transfer
payments of up to $6.85 billion and total 10-year transfer payments
of up to $58.46 billion at a discount rate of 3 percent in 2024
dollars.
[GRAPHIC] [TIFF OMITTED] TP27MR26.302
The total cost associated with the NPRM includes only rule
familiarization. The rule is not expected to result in any cost
savings. Transfer payments are the result of changes to the computation
of prevailing wage rates for employment opportunities that U.S.
employers seek to fill with alien workers on a temporary basis through
H-1B, H-1B1, and E-3 nonimmigrant programs.\215\ See the costs and
transfer payments subsections of section III.B (Subject-by-Subject
Analysis) below for a detailed explanation.
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\215\ As explained, infra, the Department did not quantify
transfer payments associated with new certifications under the
Permanent Labor Certification Program (e.g., EB-2 and EB-3
classifications) because they are expected to be de minimis due to
the comparatively low number of program participants.
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In addition to the rule familiarization cost, based on internal
simulation using FY2023--FY2025 LCA data, the Department estimates that
the proposed wage level adjustments would increase the average
certified wage by approximately $14,000 per year. This increase, when
applied across the volume of certified LCAs, suggests a material
economic effect that supports classification of this rule as
economically significant under Executive Order 12866.
The Department was unable to quantify some transfer payments and
benefits of the NPRM. The Department describes them qualitatively in
section III.B (Subject-by-Subject Analysis). The Department invites
comments regarding the assumptions, data sources, and methodologies
used to estimate the costs and transfer payments of the NPRM. The
Department invites public comments on any additional benefits or costs
that could result from the NPRM.
3. Need for Regulation
The Department determined that issuance of this NPRM was necessary
to address systemic deficiencies in the prevailing wage determination
methodology used in the H-1B, H-1B1, E-3, and PERM programs. These
deficiencies have contributed to wage suppression and displacement of
U.S. workers in sectors heavily reliant on alien workers. The NPRM was
prompted by a confluence of factors:
Statutory Misalignment: The Department concluded that the
existing wage levels were not adequately aligned with the statutory
requirement under 8 U.S.C. 1182(p)(4) to provide four wage
[[Page 15481]]
levels commensurate with experience, education, and level of
supervision. The prior methodology, which relied on outdated percentile
thresholds (approximately the 17th, 34th, 50th, and 67th percentiles),
failed to reflect actual labor market conditions and allowed employers
to pay alien workers significantly less than their U.S. counterparts.
Labor Market Disruption: Evidence showed that major users
of the H-1B program were simultaneously conducting large-scale layoffs
of U.S. workers while continuing to hire alien workers at lower wage
levels. This raised serious concerns about the program being used to
undercut domestic labor.
Wage Disparities and Program Abuse: Departmental analysis
of FY2020-FY2024 LCA data revealed that the average wage offered to H-
1B workers per year was approximately $10,191 lower than the average
wage for similarly classified U.S. workers. Investigative reports and
whistleblower complaints further documented widespread underpayment and
misuse of the program, including cases where U.S. workers were laid off
and required to train their lower-paid H-1B replacements.
Presidential Proclamation: On September 19, 2025, the
President issued a Proclamation directing the Secretary of Labor to
initiate rulemaking to revise prevailing wage levels under the H-1B
program. The Proclamation cited longstanding concerns that the current
wage structure incentivized the hiring of alien workers at below-market
wages, undermining the program's intent and adversely affecting U.S.
workers.
Given these factors, the Department concluded that immediate
regulatory action was necessary to prevent further harm to U.S. workers
and to restore integrity to the prevailing wage system.
4. Analysis
The Department estimated the costs and transfer payments of the
NPRM relative to the analytic baseline defined as the state of the
world reflecting current and recently finalized practices for
complying, at a minimum, with the regulations governing permanent labor
certifications at 20 CFR part 656 and labor condition applications at
20 CFR part 655, subpart H. The baseline should also incorporate the
effects of the recently published USCIS H-1B rule, including its
weighted lottery system and any associated changes to visa allocation,
wage levels, and employer behavior. Accordingly, the regulatory
analysis presented here discusses potential refinements toward the goal
of reflecting the incremental impacts of the Department's proposed
rule, above and beyond those attributable to the USCIS rule.
In accordance with the regulatory analysis guidance articulated in
OMB's Circular A-4 and consistent with the Department's practices in
previous rulemakings, this regulatory analysis focuses on the likely
consequences if this rulemaking is finalized as proposed (i.e., costs
and transfer payments experienced by entities affected). The analysis
covers 10 years (from 2026 through 2035) to ensure it captures major
costs and transfer payments that accrue over time. The Department
expresses all quantifiable impacts in 2024 dollars and uses discount
rates of 3 and 7 percent, pursuant to Circular A-4.
Unless otherwise noted, the same methods, inputs and assumptions
are used to analyze all transfers, benefits and costs associated with
the relevant work programs, regardless of visa status. The Department
requests comment on whether and how effects would differ as a function
of visa-based participation (including due to regulatory interaction
with statutory visa caps) versus program participation for which visa
issuance is unnecessary.
Exhibit 2 presents the number of entities affected by the NPRM. The
number of affected entities is calculated using OFLC performance data
from fiscal years (FYs) 2020-2025. The Department uses them throughout
this analysis to estimate the costs and transfer payments of the NPRM.
[GRAPHIC] [TIFF OMITTED] TP27MR26.303
a. Estimated Number of Workers and Change in Hours
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\216\ The total unique LCA employers in 2020, 2021,2022,2023
2024 and 2025 were 60,890, 58,358, 63558, 61,506, 65,830 and 71,971
respectively.
\217\ The total number of worker positions associated with LCA
certifications that use OEWS prevailing wages in 2020, 2021, 2022,
2023 2024 and 2025 were 829,752, 1,592,194, 1,010,848, 1,071,320,
1,156,595 and 886,520 respectively.
\218\ The unique employers in 2020, 2021, 2022, 2023, 2024 and
2025 were 23,934, 26,233, 23,502, 23,779, 22,195 and 37,372
respectively.
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The Department presents the estimated average number of applicants
and the change in burden hours required for rule familiarization in
section III.B (Subject-by-Subject Analysis).
b. Compensation Rates
In section III.B (Subject-by-Subject Analysis), the Department used
the hourly compensation rate presented in Exhibit 3 to estimate rule
familiarization costs. The Department used the BLS mean hourly wage
rate for private sector human resources specialists.\219\ We adjust the
wage rates to reflect total compensation, which includes non-
[[Page 15482]]
wage factors such as overhead and fringe benefits (e.g., health and
retirement benefits). We use an overhead rate of 17 percent \220\ and a
fringe benefits rate based on the ratio of average total compensation
to average wages and salaries in 2024. For the private sector
employees, we use a fringe benefits rate of 42 percent.\221\
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\219\ BLS, Occupational Employment and Wage Statistics, SOC Code
13-1071, May 2024, Occupational Employment and Wage Statistics (last
visited August 21, 2025).
\220\ Cody Rice, U.S. Environmental Protection Agency, ``Wage
Rates for Economic Analyses of the Toxics Release Inventory
Program,'' June 10, 2002, https://www.regulations.gov/document?D=EPA-HQ-OPPT-2014-;0650-0005.
\221\ BLS. (2024). ``2024 Employer Costs for Employee
Compensation.'' Retrieved from: https://www.bls.gov/bls/news-release/ecec.htm. Ratio of total compensation to wages and salaries
for all private industry workers.
---------------------------------------------------------------------------
The fringe wage rate is based on Employer Costs for Employee
Compensation data which includes paid leave; supplemental pay (i.e.,
overtime and premium, shift differentials, and nonproduction bonuses);
insurance (i.e., life, health, short-term disability, and long-term
disability); retirement and savings; and legally required benefits
(i.e., Social Security, Medicare, federal unemployment insurance, state
unemployment insurance, and workers' compensation). As wages increase
the costs associated with paid leave, retirement savings, and
supplemental pay will also increase.
BLS's OEWS data show that the mean hourly wage of Human Resources
Specialists is $38.33.\222\ The Department applied a 42-percent
benefits rate \223\ and a 17-percent overhead rate,\224\ resulting in a
fully loaded hourly wage of $60.94 [= $38.33 + ($38.33 x 42%) + ($38.33
x 17%)].
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\222\ BLS, Occupational Employment and Wage Statistics, SOC Code
13-1071, May 2024, Occupational Employment and Wage Statistics (last
visited August 21, 2025).
\223\ BLS, ``National Compensation Survey, Employer Costs for
Employee Compensation,'' https://www.bls.gov/ecec/factsheets/compensation-percentile-estimates.htm (last visited November 10,
2025). For private sector workers, wages averaged $31.10 per hour
worked in 2024, while benefit costs averaged $13.10, which is a
benefits rate of 42 percent.
\224\ Cody Rice, U.S. Environmental Protection Agency, ``Wage
Rates for Economic Analyses of the Toxics Release Inventory
Program,'' June 10, 2002, https://www.regulations.gov/document/EPA-HQ-OPPT-2014-0650-0005 (last visited May 8, 2025).
\225\ Numbers may slightly differ due to rounding.
[GRAPHIC] [TIFF OMITTED] TP27MR26.304
B. Subject-by-Subject Analysis
The Department's analysis below covers the estimated costs and
transfer payments of the NPRM. In accordance with Circular A-4, the
Department considers transfer payments as payments from one group to
another that do not affect total resources available to society (or, if
resources are affected, it is through incentive effects uncaptured
without more extensive analysis). The regulatory impact analysis
focuses on the costs and transfer payments that can be attributed
exclusively to the new requirements in the NPRM.
1. Costs
The following section describes the costs of the NPRM.
2. Rule Familiarization
When the changes proposed in a final rule take effect, existing
employers of alien workers with H-1B, H-1B1, E-3 visas, and those
employers sponsoring alien workers for permanent employment, will need
to familiarize themselves with the new regulations. Consequently, this
will impose a one-time cost for existing employers in the temporary and
permanent visa programs in the first year. Each year, there are new
employers that participate in the temporary and permanent visa
programs. Therefore, in each year subsequent to the first year, new
employers will need to familiarize themselves with the new regulations.
To estimate the first-year cost of rule familiarization, the
Department calculated the average number of unique employers requesting
H-1B certifications and PERM certifications. The average number of
unique H-1B and PERM employers 89,855 was multiplied by the estimated
amount of time required to review the rule (1 hour).\226\ This number
was then multiplied by the hourly, fully loaded compensation rate of
Human Resources Specialists ($60.94 per hour). This calculation results
in an initial cost of $5.17 million in the first year after the final
rule takes effect. Each year after the first year the same calculation
is done for the average number of new unique employers requesting H-1B
or PERM certifications in FY 2021-2025 and FY 2024 (42,896).\227\ This
calculation results in a continuing annual undiscounted cost of $2.98
million in years 2 to $3.32 in years 6-10 of the analysis. The one-time
and continuing cost yields a total average annual undiscounted cost of
$3.2million. The annualized cost over the 10-year period is $3.33
million and $3.53 million at discount rates of 3 and 7 percent,
respectively.
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\226\ This proposed rule amends parts of an existing regulation.
Therefore, the Department estimates 1-hour to review the rule
assuming a high number of readers familiar with the existing
regulation.
\227\ The total number of new employers in FY23 was 49,096
(33,059H1B + 16,037PERM), and in FY24 was 38,646 (29,027H1B +
9,619PERM).
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3. Transfer Payments
a. Quantifiable Transfer Payments
This section discusses the quantifiable transfer payments related
to changes to the computation of the prevailing wage levels.
As discussed in the preamble, the Department determined that
current prevailing wage rates for H-1B workers are often far below what
their U.S. counterparts are paid, which suppresses the wages of
similarly employed U.S. workers. While allowing employers to access
high-skilled workers to fill specialized positions can benefit U.S.
workers in some instances, these benefits diminish or disappear when
the prevailing wage levels do not accurately reflect the wages paid to
similarly situated workers in the U.S. labor market. When prevailing
wage levels are artificially low, firms can replace qualified U.S.
workers with lower-cost alien workers.
Therefore, the Department is amending Sec. 656.40(b) to codify
four prevailing wage levels and their calculations. New paragraph
(b)(2)(i)
[[Page 15483]]
provides that the OFLC Administrator will determine prevailing wages at
four levels (Levels I through IV). Level I--currently calculated as the
mean of the bottom third of the OEWS wage distribution--would be
adjusted from the 17th percentile to the 34th percentile. Level IV--
currently calculated as the mean of the upper two thirds of the OEWS
wage distribution--would increase approximately from the 67th
percentile to the 88th percentile.
Consistent with the formula provided in the INA, Level II would be
calculated by dividing by three, the difference between Levels I and
IV, and adding the quotient to the computed value for Level I. Level
III would be calculated by dividing by three the difference between
Levels I and IV, and subtracting the quotient from the computed value
for Level IV. This yields a Level II prevailing wage at approximately
the 52nd percentile and a Level III prevailing wage at approximately
the 70th percentile, as compared to the current computation, which
places Level II at approximately the 34th percentile and Level III at
approximately the 50th percentile.
Finally, the Department is revising Sec. 655.731 to explain that
it will use the BLS's OEWS survey wage data to establish the prevailing
wages in the H-1B, H-1B1, and E-3 visa classifications, and adding a
sentence to explain that these determinations will be made by the OFLC
NPC in a manner consistent with Sec. 656.40(b)(2).
The Department calculated the impact on wages that would occur from
implementation of the prevailing wage computation changes contained in
the NPRM. It is expected that the increase in prevailing wages under
the NPRM would induce some employers to employ U.S. workers instead of
alien workers from the H-1B program, but nonetheless the Department
still expects that the same number of H-1B visas would be granted under
the annual caps. For example, in FY2024 USCIS received approximately
781,000 registrations for 85,000 available slots--more than nine times
the supply--and the cap was reached within the first five business days
each year from FY2019 through FY2025. Higher prevailing wage levels do
not necessarily mean that demand for temporary alien workers would fall
below the available supply of visas.\228\ Under existing prevailing
wage levels, which the Department has shown are too low and do not
accurately reflect the wages paid to similarly situated U.S. workers,
demand for temporary alien workers far exceeds the statutory limits on
supply. Usually, prices rise in a market when demand exceeds supply.
However, given the statutory design of the H-1B system, along with the
lower wages for comparable work in many other countries and the non-
pecuniary benefits of participating in the H-1B program, prices for
temporary alien workers under the H-1B program have stayed too low to
depress overall employer demand.
---------------------------------------------------------------------------
\228\ Data on H-1B electronic registrations and selection
numbers for FY 2024 are published by U.S. Citizenship and
Immigration Services (USCIS). See FY 2024 H-1B Initial Registration
Period Updates, available at https://www.uscis.gov/sites/default/files/document/outreach-engagements/FY2024H1BInitialRegistrationPeriodUpdates.pdf.
---------------------------------------------------------------------------
For the purposes of this regulatory analysis, it is helpful to
distinguish between labor sub-markets characterized by differing levels
of worker productivity. Suppose an alien worker is highly productive
and therefore could be profitably hired at a wage at least as high as a
proposed wage threshold (for example, the Level IV proposal). In the
presence of the numerical cap on the H-1B program, that profit may be
forgone due to the worker not being able to acquire a visa; instead, in
some such cases, the visa would instead be allocated to the hiring of a
less-productive alien worker at a wage that is lower (but still above
an existing wage threshold relevant to the H-1B program). The proposed
rule, interacting with the H-1B visa cap, would generate transfers from
U.S employers that, in the baseline, would employ relatively low-
productivity guest workers; these transfers would flow to some
combination of: (a) relatively low-productivity workers, who may be
foreign or from the United States,\229\ and (b) U.S. employers newly
able to hire high-productivity alien workers.\230\ The quantification
presented below does not reflect the probable response by employers of
hiring higher-productivity guest workers; as such, it yields an upper
bound, and possibly an extreme upper bound, on the aggregate losses
experienced by U.S. employers. Similarly, a shift in H-1B visa
allocation from relatively low-productivity to high-productivity
workers is an anticipated effect of a recently published final rule
issued by DHS (RIN 1615-AD01; 90 FR 60864); that final rule and this
proposal's overlapping effects are combined in the quantification
presented below, thus generating an additional tendency toward
overestimation of the effects specifically attributable to this
proposed rule. The Department notes that the number of H-1B visas that
could be affected by DHS's final rule represents a fraction of the
total number of certified H-1B visas each year.\231\ The Department
welcomes public comment on how DHS's final rule could affect the cost-
benefit analysis of this proposal.
---------------------------------------------------------------------------
\229\ The NPRM is still inducing a wage transfer under these
cases where U.S. workers are employed instead of H-1B workers and
therefore no adjustments to the wage estimates are necessary due to
this effect. However, it is possible that prevailing wage increases
will induce some employers to train and provide more working hours
for incumbent workers, resulting in no increase in employment but an
increase in earnings (with other accompanying effects, such as the
cost of the newly-provided training).
\230\ Related transfers (in the former of worker surplus--the
difference between wage received and reservation wage) would flow
from lower- to higher-productivity foreign workers and possibly from
higher- to lower-productivity U.S. workers.
\231\ Preliminary calculations suggest that a shift toward
Levels III and IV and away from Level I, to the extent indicated in
the analysis of the DHS rule, might decrease overall estimates of
this proposed rule's effect by approximately 3 percent.
---------------------------------------------------------------------------
Given that participation in temporary labor certification programs
is voluntary and there exists an alternative labor market of U.S.
workers who are not being prevented from accepting work offered at
potentially lower market-based wages, there is some uncertainty around
the extent to which an increase in prevailing wages would lead to an
efficiency loss. Due to data limitations on the expected change in
labor demand and supply of U.S. workers, the Department cannot measure
accurately the efficiency losses to the U.S. labor market created by
the new prevailing wage system. While the Department discusses this
potential impact qualitatively, it welcomes comments on how to estimate
changes to efficiency from the new prevailing wage levels.
For each H-1B certification in FY 2023, FY 2024, and FY 2025, the
Department used the difference between the estimated prevailing wage
level under the NPRM and the wage offered under the current baseline to
establish an estimated bound on the wage impact of the prevailing wage
computation changes in each calendar year of the certification's
employment period. Under the H-1B classification, employment periods
for certifications can last up to three years and generally begin up to
six months after a certification is issued by the Department.
Therefore, a given fiscal year can have wage impacts that start in that
calendar year and last up to three years, or could start in the
following calendar year and have an end-date up to four calendar years
past the fiscal year. For example, if an application certified in FY
2023 is used for employment beginning in March 2024 and lasting three
years, the wage impacts would extend through March
[[Page 15484]]
2027. The NPRM does not retroactively impact certified wages, so there
would be new H-1B applications certified by the Department during FY
2025 that may extend well into the analysis period. Therefore, the rule
would only impact new certifications in its first year, new and
continuing certifications from one year prior in its second year, and
both new and continuing certifications from two years prior in its
third year.
To account for this pattern of wage impacts, we classify
certifications into three cohorts based on the length of their
employment period and calculate annual wage impacts for each cohort
using FY 2023-FY 2025 certification data. These cohorts are: (1)
certifications lasting less than one year, (2) certifications lasting
one to two years, and (3) certifications lasting two to three years.
While this three-cohort structure helps organize the analysis, it does
not imply that all impacts stabilize after three years. Because new
certifications continue to enter each year and some multi-year
certifications extend beyond the initial three-year horizon, a steady-
state impact is not reached until approximately Year 8 of
implementation. This clarification ensures that readers understand the
cohorts are a modeling tool, not a representation of when the rule's
effects fully level off.
H-1B, H-1B1, or E-3 applications certified by the Department do not
necessarily result in employment and employer wage obligations. After
obtaining a certification, employers must then submit a Form I-129,
Petition for a Nonimmigrant Worker, for approval by USCIS. DHS may
approve or deny the H-1B visa petition. DHS approval data represents
approvals of petitions based on both certifications issued by the
Department that used OEWS data for the prevailing wage or that were
based on other approved sources to determine the prevailing wage (e.g.,
Collective Bargaining Agreements, employer-provided surveys). In FY
2024, approximately 93.5% percent of workers associated with H-1B, H-
1B1, and E-3 certifications had prevailing wages based on the OEWS
survey. To estimate OEWS-based approvals, we multiplied total DHS
approvals by 93.5 percent and then computed the approval rates.\232\
2023 and FY 2024 data on H-1B, H-1B1, and E-3 certifications with their
prevailing wage based on the OEWS survey, adjusted DHS approvals, and
approval rate.
---------------------------------------------------------------------------
\232\ Form I-129 data for H-1B is obtained from the USCIS H-1B
data hub. Retrieved from: https://www.uscis.gov/tools/reports-and-studies/h-1b-employer-data-hub.
[GRAPHIC] [TIFF OMITTED] TP27MR26.305
To estimate the wage impacts of new percentiles contained in this
NPRM, the Department used publicly available BLS OEWS data that reports
the 10th, 25th, 50th, 75th, and 90th percentile wages by SOC code and
State.\233\ In order to estimate wages for the new NPRM levels of 34th,
52nd, 70th, and 88th percentiles, the Department linearly interpolated
between relevant percentiles for reported wages at each SOC code and
geographic area combination.\234\
---------------------------------------------------------------------------
\233\ BLS OEWS data for Metropolitan and Nonmetropolitan Areas
acquired for each year required for the analysis: [May 2020-May
2024]. Retrieved from https://www.bls.gov/oes/.
\234\ For example, if OEWS reports a wage of $30 per hour at the
25th percentile and $40 per hour at the 50th percentile then the
34th percentile is interpolated as $30 + ($40-$30) * ((34-25)/(50-
25)) = $33.60 per hour.
---------------------------------------------------------------------------
LCA and OEWS data from fiscal years 2020-2024 suggest that 22.5% of
LCA certified positions offered wages above the new proposed policy.
This suggests that when calculating transfers not every employer would
be affected. Furthermore, many employers offered wages relatively close
to the new proposed prevailing wage levels, suggesting that not every
employer would be affected in the same way. The department estimates
that for fiscal years 2020-2024, the average wage offered by LCA
position is around $121,908. This is significantly higher than the mean
of the prevailing wage for the same data set which was only $111,717 or
$10,191 less than the offered wage.
[[Page 15485]]
[GRAPHIC] [TIFF OMITTED] TP27MR26.306
Exhibit 5 presents a comparison of historical and proposed
prevailing wage levels alongside offered wages from LCA data spanning
2020 to 2024. The column labeled ``Pct Increase PW'' reflects the
percentage increase from the old to the new prevailing wage levels. For
example, at Wage Level I, this represents the shift from the 17th
percentile to the 34th percentile of the OEWS wage distribution--an
increase of approximately 33.39%. In contrast, ``Pct Increase Offered
Wage'' measures the percentage increase between the average offered
wage and the new prevailing wage level. This metric represents the
minimum theoretical wage adjustment required under the proposed rule.
While ``Pct Increase PW'' reflects the maximum potential impact--
assuming all workers, including those already earning above the new
prevailing wage, receive increases--``Pct Increase Offered Wage''
provides a more refined estimate. Because these figures are derived
from a merged OEWS-LCA dataset rather than the full LCA dataset used in
Exhibit 4, the calculated percentages serve as proxies to estimate wage
differentials across the broader dataset.
[GRAPHIC] [TIFF OMITTED] TP27MR26.307
To estimate the policy's impact, the Department assumes that wages
of workers whose wages are already above the new prevailing wage remain
unchanged, while those below the new prevailing wage are raised to
exactly the new prevailing wage. It is unlikely that the full wage
increase would apply to the majority of workers currently earning below
the new prevailing wage (approximately 80%). These inputs and
assumptions yield an estimated annual wage transfer of approximately
$14,000 per worker.
To model annual impacts, the Department grouped into cohorts based
on the year their certification was issued, recognizing that the
revised prevailing wage applies only to newly issued visas. While the
initial discussion referenced three cohorts for simplicity, the actual
transition involves overlapping cohorts across multiple years. In Year
1, only new certifications issued under the revised wage standard are
affected. In Year 2, impacts include both new certifications and
continuing approvals from Year 1. This pattern continues as additional
cohorts enter each year, with cumulative effects increasing until all
legacy visas under the previous wage standard have expired. Because H-
1B employment periods can last up to three years, steady state is not
reached until approximately Year 6, when all active visas reflect the
revised prevailing wage. Exhibit 7 and accompanying notes set forth
that the model accounts for these overlapping cohorts and the gradual
progression to steady state.
[[Page 15486]]
[GRAPHIC] [TIFF OMITTED] TP27MR26.308
From FY 2025, the Department's calculations reflect the total
number of DHS-approved H-1B petitions for that year. For FY 2025, DHS
approved 380,796 total petitions. Approximately 93.5% of new
certifications (106,325) were based on LCAs using OEWS data, reflecting
that about 6.5% rely on permitted alternative sources such as private
wage surveys. Performing the calculations listed in Exhibit 7 results
in an annual wage transfer of approximately $1.46 billion in Year 1,
$6.3 billion in Year 4, and rising to over $9.3 billion in Year 6 and
beyond.
Existing prevailing wage data from the Foreign Labor Certification
(FLC) Data Center, accessible at https://flag.dol.gov, contains wage
data for each SOC code and geographic area combination that are not
readily available in the public OEWS data used to estimate new
prevailing wage levels. For example, when a wage is not releasable for
a geographic area, the prevailing wage available through the FLC Data
Center may be computed by BLS for the geographic area plus its
contiguous areas. Additionally, in publicly available OEWS data, some
percentiles are missing for certain combinations of SOC codes and
geographic areas. These two factors result in a small number of
certifications that cannot be matched to a new prevailing wage
level.\235\ For these unmatched certifications, we estimate wage
impacts as follows: First, we calculate the average wage impact per
worker for the relevant cohort and fiscal year. Second, we apply this
average to all workers associated with unmatched certifications,
producing estimated annual wage impacts for each calendar year of
employment. Finally, we add these estimated impacts to the directly
calculated wage impacts from matched certifications to produce the
total wage impact for each cohort in each calendar year.
---------------------------------------------------------------------------
\235\ In FY 2022, 10.87 percent of certifications do not match,
in FY 2023 11.41 percent, and FY 2024 17.02 percent.
---------------------------------------------------------------------------
The Department determined the total impact of the NPRM prevailing
wage levels for each length cohort in each calendar year by summing the
wage impacts for all certifications in each year and averaging the
totals. The wage impacts for each cohort and calendar year are
presented in Exhibit 7. Some calendar years are excluded from the
inputs underlying the exhibit because the available data (FY 2023-2025
certifications) does not capture all certifications active during those
years. For example, calendar year 2025 includes workers from FY 2025
certifications but would also include workers from FY 2026
certifications, which are not yet available. Therefore, calendar year
2025 is excluded to avoid incomplete estimates.
With the increases in prevailing wage levels under this NPRM, some
employers may reduce their demand for labor--either by hiring fewer
alien workers or by adjusting staffing patterns--because higher wages
increase the cost of employment. These adjustments could include
substituting toward incumbent workers or reallocating hours, which may
partially offset the expected increase in new hires. While the precise
magnitude of these behavioral responses is uncertain, the Department
provides a discussion of these potential effects and their implications
in the following analysis.
The labor economics literature contains substantial research on how
wages affect demand for labor. In the context of the H-1B program, the
relevant measure is the long-run own-wage elasticity of labor demand,
which describes how firms adjust their labor demand in response to wage
changes. Estimates of labor demand elasticities vary considerably
depending on industry, skill-level, region, and other
[[Page 15487]]
factors. A commonly cited average long-run own-wage elasticity of labor
demand is -0.3 \236\ meaning a 10 percent increase in an employer's
total wage payments would be expected to result in a 3% decrease in the
quantity of labor demanded by the employer in the long run, on
average.\237\
---------------------------------------------------------------------------
\236\ For a full discussion of labor demand elasticity
heterogeneity see Lichter, A., Peichl, A., & Siegloch, S. (2015).
The own-wage elasticity of labor demand: A meta-regression analysis.
European Economic Review, 94-119: Retrieved from: https://www.econstor.eu/bitstream/10419/93299/1/dp7958.pdf.
\237\ This value is the best-guess in seminal work by Hamermesh,
D.H. (1993). Labor Demand. Princeton University Press.
---------------------------------------------------------------------------
The Department's baseline analysis projects an average annual
undiscounted wage transfer of $7.07 billion under the proposed rule
(see Exhibit 7 and accompanying text). The average annual increase in
wage transfers is a 6.1 percent increase in wage payments, which would
imply a potential reduction in labor demand of 1.83 percent (6.1 * .3).
U.S. employers would likely pay higher wages to H-1B workers or replace
them with U.S. workers where possible. However, if U.S. employers were
constrained in their ability to pay higher wages and reduced demand
accordingly, the wage transfer would decline by approximately 1.83
percent, from $7.07 billion to approximately $6.94 billion.
b. Non-Quantifiable Transfer Payments
This section discusses the non-quantifiable transfer payments
related to changes to the computation of the prevailing wage levels.
Specifically, the Department did not quantify transfer payments
associated with certifications under the Permanent Labor Certification
Program because they are expected to be de minimis.
The PERM programs have a large proportion of certifications issued
annually to alien workers that are working in the U.S. at the time of
certification and would have changes to wages under the NPRM prevailing
wage. Prior to the PERM certification, these beneficiaries are
typically working under H-1B, H-1B1, and E-3 temporary visas and wage
transfers for these PERM certifications are therefore already factored
into our wage transfer calculations for H-1B, H-1B1, and E-3 temporary
visas. Below, Exhibit 8 illustrates the percentage of PERM
certifications that are on H-1B, H-1B1, or E-3 temporary visas, the
percent that are not on a temporary visa and/or are not currently in
the U.S. and would therefore enter on an EB-2 or EB-3 visa, and all
other visa classes.
[GRAPHIC] [TIFF OMITTED] TP27MR26.309
About 10 percent of PERM certifications are issued annually by OFLC
to alien workers who do not currently reside in the U.S. and would
enter on immigrant visas in the EB-2 or EB-3 preference category.
Employment-based immigrant visa availability and corresponding wait
times change regularly for different preference categories and
countries. Alien workers from countries with significant visa demand
consistently experience delays, at times over a decade. Therefore,
employers would not have wage obligations until at the earliest, the
very end of the 10-year analysis period and the number of relevant
certifications is a relatively small percent of all PERM
certifications; the Department therefore has not included associated
wage transfers in the analysis.
4. Benefits Discussion
This section discusses the non-quantifiable benefits related to
changes to the computation of the prevailing wage levels.\238\
---------------------------------------------------------------------------
\238\ As noted elsewhere in this analysis, the proposed rule
would be expected to shift the allocation of H-1B visas from lower-
productivity to higher-productivity workers, and given the existing
cap on such visas, may have little or no effect on the number
granted. Thus, analysis of changes in societal surplus would not be
as straightforward here, where the result would be a negative
benefit, as it was for the Department's recent rulemaking related to
H-2A visas (RIN 1205-AC24; 90 FR 47914).
---------------------------------------------------------------------------
The Department's increase in the prevailing wages for the four wage
levels is expected to result in multiple benefits that the Department
is unable to quantify but discusses qualitatively. One benefit of the
NPRM's increase in
[[Page 15488]]
prevailing wages is the economic incentive to increase employee
retention, training, and productivity which would increase benefits to
both employers and U.S. workers. The increase in prevailing wages is
expected to induce employers--particularly those using the permanent
and temporary visa programs--to fill critical skill shortages, to
minimize labor costs by implementing retention initiatives to reduce
employee turnover, and/or to increase the number of work hours offered
to similarly employed U.S. workers. Furthermore, for employers in the
technology and health care sectors, this could mean using higher wages
to attract and hire the industry's most productive U.S. workers and to
provide them with the most advanced equipment and technologies to
perform their work in the most efficient manner.
Ensuring that skilled occupations are not performed at below-market
wage rates by alien workers would provide greater incentives for firms
to expand education and job training programs. These programs can
attract and develop the skills of a younger generation of U.S. workers
to enter occupations that currently rely on elevated levels of alien
workers. (The Department requests comment on not-yet-quantified costs--
for example, costs of training programs or equipment upgrades--that
would accompany any such benefits.) There is some evidence that the
existing prevailing wage levels offer opportunities to use lower-cost
alternatives to U.S. workers doing similar jobs by offering two wage
levels below the median wage. For example, in FY 2024, 62.6 percent of
H-1B workers filed LCAs at either the first or second wage level,
meaning a substantial majority of workers in the program could be paid
wages well below the median wage for their occupational classification.
While this analysis uses the existing distribution of wage levels as a
baseline, the Department acknowledges that the composition of H-1B wage
levels could shift under the proposed rule. Specifically, the DHS
weighted lottery and higher prevailing wage requirements may increase
the share of Level III and Level IV positions over time. This potential
change is discussed qualitatively in the analysis.
Glennon's (2024) literature review touches on relevant issues,
including the variety of productivity contributions associated with the
H-1B program--as illustrated by, for example, estimates of innovation-
related outcomes differing substantially depending on whether the
analyzed data set includes employers who submit applications promptly
(on a rolling basis) or focuses only on employers who wait until the
last potential application day.\239\ Because workers with greater
skills tend to be more productive, and therefore command higher wages,
raising the prevailing wage levels would lead to the limited number of
H-1B visas going to higher-skilled alien workers, which would likely
increase the spillover economic benefits associated with high-skilled
immigration. This reallocation is expected to increase not only direct
output per worker but also broader economic spillovers, such as higher
rates of patenting, technology diffusion, and firm-level productivity
growth documented in the literature. By concentrating visa allocations
among workers at the upper end of the skill distribution, the proposed
rule amplifies these benefits, which extend beyond the hiring firm to
the wider economy through innovation and knowledge transfer.\240\
---------------------------------------------------------------------------
\239\ Glennon, Britta (2024), ``Skilled Immigrants, Firms, and
the Global Geography of Innovation,'' Journal of Economic
Perspectives 38(1), pp. 3-26. See, especially, Glennon's footnote 3.
\240\ Barabuffi, G., Chabert, M., & Izzo, F. (2025). Knowledge
Spillovers through High-Skilled Migration Networks. Industry and
Innovation, 32(8), 884-914. https://doi.org/10.1080/13662716.2025.2451398.
---------------------------------------------------------------------------
5. Summary of the Analysis
Exhibit 9 below summarizes the costs and transfer payments of the
NPRM. The Department estimates the annualized cost of the NPRM at $3.53
million and the annualized transfer payments (from H-1B, H-1B1, and E-3
employers to some combination of other such employers and workers) at
an upper bound of $6.56 billion, at a discount rate of 7 percent. The
Department did not estimate any cost savings.
[[Page 15489]]
[GRAPHIC] [TIFF OMITTED] TP27MR26.310
6. Regulatory Alternatives
In developing this rule, the Department considered several
alternative approaches to revising the prevailing wage level
methodology. Each alternative was evaluated for its consistency with
the Department's statutory obligations under the Immigration and
Nationality Act (INA), its responsiveness to the policy direction set
forth in the September 19, 2025 Presidential Proclamation, and its
administrative feasibility and legal defensibility. The Department
ultimately selected the proposed percentile structure (34th, 52nd,
70th, and 88th percentiles) as the most balanced and effective
approach. However, the following alternatives were considered:
a. Alternative 1: Using Experience Benchmarking for Adjusting Wage
Levels
The Department also seeks public comment on an alternative approach
to revising prevailing wage levels using a methodology called
Experience Benchmarking. Under this alternative, prevailing wage levels
for the H-1B, H-1B1, E-3, and PERM programs would be adjusted using a
methodology that benchmarks wages to workers with comparable education
and experience in the same occupation and geographic area.
Experience Benchmarking seeks to adjust prevailing wage levels by
merging the occupational and geographic specificity of the BLS OEWS
with education- and experience-adjusted wage estimates derived from the
American Community Survey (ACS) of the Census Bureau.\241\ The
relationship between these data sources would be modeled using the
Mincer earnings equation, which is a natural logarithm of wages as a
function of education and experience.\242\
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\241\ The ACS is the largest ongoing household survey in the
United States, surveying approximately 3.5 million households each
year. It is administered by the U.S. Census Bureau in the Department
of Commerce, collects detailed information on earnings, educational
attainment, age, occupation, and geography, and widely used for
federal program administration. For more information on the ACS,
please see https://www.census.gov/programs-surveys/acs.html.
\242\ The Mincer logarithm of wages equation is the foundational
model in empirical labor economics for estimating the returns to
education and experience. See Thomas Lemieux, ``The `Mincer
Equation' Thirty Years After Schooling, Experience, and Earnings,''
in Shoshana Grossbard, ed., Jacob Mincer: A Pioneer of Modern Labor
Economics (New York: Springer, 2006), ch. 11 (calling the Mincer
equation ``one of the most widely used models in empirical
economics'' and concluding it ``remains an accurate benchmark for
estimating wage determination equations''). See also Solomon W.
Polachek, ``Earnings Over the Life Cycle: The Mincer Earnings
Function and Its Applications,'' Foundations and Trends in
Microeconomics 4, no. 3 (2008): 165-272. Also see George J. Borjas,
Labor Economics, 7th ed. (New York: McGraw-Hill, 2016), p. 244.
---------------------------------------------------------------------------
The Department is considering this alternative to potentially
improve the comparison of the wages of alien workers to those of
similarly qualified U.S. workers. As noted previously, today prevailing
wage levels are derived from the overall wage distribution within an
occupation and geographic area and are applied based on the employer's
description of the minimum job requirements for the position. Because
the underlying OEWS data do
[[Page 15490]]
not collect information on worker education or experience, the
methodology employed under the current rule may allow positions to be
classified at wage levels that are less comparable to the actual
education and experience of the alien worker. As a result, an alien
worker with significantly higher education or professional experience
could be paid a wage benchmarked to U.S. workers with comparably lower
levels of education and experience. Experience Benchmarking seeks to
address this limitation by comparing the sponsored alien worker's wage
to the wages earned by U.S. workers with comparable education and
experience in the same occupation and geographic area, thereby
producing prevailing wages that more closely reflect the wages paid to
similarly qualified workers in the U.S. labor market.
Because the ACS does not directly measure actual labor market
experience, the methodology would estimate ``potential experience''
using a commonly accepted definition as age minus years of schooling
minus age when schooling begins (often six).\243\ Using the OEWS 50th
(median), 62nd, 75th, and 90th percentiles for each occupation and
geographic area as the base wages, the Department would use public-use
microdata from the ACS to generate Mincer wage equations for each
occupation among native-born American workers only, modelling the
relationship between (log) earnings, educational attainment, and
potential experience (measured by age) within each occupation,
controlling for area of employment fixed effects. The output of these
models would be a matrix of ratios (or wage premia) comparing the
expected earnings of U.S. workers with each combination of education
and potential experience to the overall occupational median, as
measured in the ACS. The Department would then apply these ACS-derived
ratios to each of the OEWS percentiles to produce Experience
Benchmarked wage levels.
---------------------------------------------------------------------------
\243\ The concept of ``potential experience,'' defined as age
minus years of schooling minus age when schooling begins (often six)
was introduced by Mincer (1974) and has been the standard approach
in labor economics for over fifty years when direct experience data
are unavailable. See Lemieux (2006), supra (noting that ``potential
experience'' is the standard measure in the Mincer specification).
In addition, Zoghi (2010) directly compared labor composition
indexes calculated with imputed experience measures versus age
groups and found that the results were ``nearly identical,''
concluding ``it seems reasonable to use the simpler and more
transparent age group variable.'' See Cindy Zoghi, ``Measuring Labor
Composition: A Comparison of Alternate Methodologies,'' in Katharine
G. Abraham, James R. Spletzer, and Michael Harper, eds., Labor in
the New Economy (Chicago: University of Chicago Press for NBER,
2010), ch. 12, pp. 457-485.
---------------------------------------------------------------------------
Under this alternative, the four OEWS wage levels would reflect
variations attributable to characteristics of both the occupation and
of the alien worker that the Department will not measure directly such
as specialized skills, industry-specific premia, position-specific
duties, and the level of supervision received or provided. Each
combination of education and experience in each occupation and
geographic area would generate a set of four wage levels, one at each
level, as follows:
Level I: Typical (50th percentile among workers with same
occupation, area, education, and experience). Level I reflects the
median level of skills and typical duties for workers in the occupation
and location with comparable education and experience. This would be
the prevailing wage due an alien worker with a given credential
profile. For example, the prevailing wage for a software developer with
a master's degree and five years of experience would be the median wage
(that is, the new OEWS Level I wage) for software developers in the
same area who also have a master's degree and approximately five years
of experience--not the median for all software developers regardless of
credentials.
Level II: Specialized (62nd percentile among workers with
same occupation, area, education, and experience). Level II reflects a
position requiring specialized knowledge, duties, or other
characteristics that command a premium above the typical wage for
workers with comparable credentials.
Level III: Demanding (75th percentile among workers with
same occupation, area, education, and experience). Level III reflects a
position requiring a notably higher degree of proficiency, specialized
expertise, or responsibility than is typical, commanding more than what
three-quarters of similarly qualified workers earn in the same
occupation and area.
Level IV: Highly Demanding (90th percentile among workers
with same occupation, area, education, and experience). Level IV
reflects the highest-skilled positions among similarly qualified
workers, representing the upper tier of complexity, responsibility, and
autonomy within the occupation at the relevant education and experience
level. Such positions may involve substantially less supervision from a
manager than is typical, or may involve the incumbent providing active
supervision of a greater number of subordinates than is typical for
comparably qualified workers in that occupation.
Under experience benchmarking, the Level I requirement at the 50th
percentile guarantees that an alien worker is never paid less than the
median native-born worker with the same occupation, education, and
experience in the same location. The higher wage levels (Levels II-IV)
allow an employer to pay for exceptional talent to have more chances in
the lottery. The reason for these specific percentiles (50th, 62nd,
75th, and 90th) is that they are close to dividing the upper half of
the distribution equally. These levels differ from the levels as
proposed because the adjustments for experience and education are based
directly on real data.
To illustrate how the methodology would work, consider a
hypothetical example. If ACS data and Mincer wage equation estimated
that U.S. accountants with 10 years of experience and a master's degree
typically earn 20 percent more than the median accountant nationwide,
the Experienced Benchmarked ratio for that education-experience
combination in accounting would be expressed as a wage premia factor of
1.2. Then, to compute the Level I prevailing wage for an employer
seeking visa labor certification to employ an alien worker as an
accountant in Dayton, Ohio, with 10 years of experience and a master's
degree, the Department would take the OEWS 50th percentile for
accountants in the Dayton MSA (currently $78,710) and multiply it by
1.2, yielding an experience-benchmarked Level I prevailing wage of
$94,452. The Level II prevailing wage would apply the same 1.2 ratio to
the OEWS 62nd percentile; Level III to the 75th percentile; and Level
IV to the 90th percentile. This calculation would be repeated for every
education-experience combination, in every occupation, in every
geographic area covered by the OEWS, and separately for the American
Competitiveness and Workforce Investment Act (ACWIA) industries, as
required by statute Thus, under this alternative, experience and
education would be considered explicitly, with the wage levels
corresponding to the remainder of those factors that determine earnings
in the occupational classification: skills, level of supervision, and
any other factors that might determine the wage premium that an
individual worker can command compared to other workers in the same
occupation, area, and with the same level of experience and education.
If this approach were adopted for PERM,
[[Page 15491]]
the prevailing wage associated with the LCA would be the higher of: (1)
the Level I OEWS Level corresponding to the minimum education and
experience requirements of the position, and (2) if the alien worker is
an H-1B, H-1B1, or E-3 worker, the prevailing wage identified on the
Labor Condition Application certified by DOL and listed on the DHS/
USCIS I-129 Petition for Nonimmigrant Worker approved for that alien
worker.
For LCA under this alternative, the OFLC search would be updated to
reflect the prevailing wage levels of different education and
experience profiles, and the employer would reference this when
submitting the LCA. If the employer did not have an alien worker
identified, it would file the LCA for each education-experience profile
it would be considering for the role, and the eventual hire would be
paid under the relevant LCA matching that alien worker's education-
experience profile.
The Department invites public comment on all aspects of this
alternative, including any strengths and limitations (e.g., sample
size, occupational and geographic area coverage) of using the ACS;
effectiveness of using age as a proxy for experience; efficacy of
employing Mincer wage equations for Experience Benchmarking prevailing
wage levels; appropriateness of establishing the base OEWS wage levels
at the 50th, 62nd, 75th, and 90th percentiles for each occupation and
geographic area; and statistical validity of applying the resulting
ratios from the ACS to the corresponding OEWS wage levels.
The primary benefits are threefold. First, the proposal essentially
ends the practice of wage arbitrage which improves the standing of
American workers and the benefits that flow from strong middle-class
employment. Second, the proposal substantially improves the ability of
the visa programs to screen for exceptional talent and ability. Third,
the proposal reduces the ability of employers to under classify workers
using strategic job descriptions.
The Department also invites comment on whether there are other
readily accessible and appropriate sources of data and methods for
estimating education-experience wage premia, and on whether other
federal data sources--including but not limited to administrative
records that may enable direct tabulations rather than a model-based
approach--could provide more precise or more comprehensive estimates of
the returns to education and experience within occupations in relation
to the OEWS wage levels.
Finally, the Department acknowledges that determining prevailing
wages under this alternative will require employers to collect
information about the alien worker's actual education and experience
when the employer submits an application. For the H-1B, H-1B1, and E-3
visa classifications, this information could be collected on a revised
information collection for the ETA-9035, Labor Condition Application
for Nonimmigrant Workers (OMB Control No. 1205-0310). In the PERM
program, this information could be collected through revisions to the
ETA-9141 Application for Prevailing Wage Determination (OMB Control No.
1205-0508), which would also cover employers seeking a prevailing wage
determination from the Department under the H-1B, H-1B1, and E-3 visa
classifications, and, where relevant, through forms used in related
programs, in a manner similar to Appendix A (Foreign Worker
Information) of the Form ETA-9089, Application for Permanent Employment
Certification (OMB Control No. 1205-0451). Because this alternative
would base prevailing wage determinations on the alien worker's actual
education and experience rather than the employer's description of the
minimum job requirements for the position, the Department invites
public comment on whether this approach is more consistent with the
statutory requirements for both the H-1B and PERM programs, the
administrative feasibility and burden on employers and applicants to
provide information about the alien worker's qualifications on revised
Forms ETA-9035 and 9141 and in a manner similar to the current
authorized collection on the Form ETA-9089, Appendix A, and whether
this alternative better protects similarly employed U.S. works from
adverse effects. The primary burdens we anticipate are that employers
will need to learn a new system and no longer be able to commit wage
arbitrage.
b. Alternative 2: Eliminate the Ability To Use Private Wage Surveys
Under this alternative, the Department would remove the option for
employers to submit private wage surveys and instead require all
prevailing wage determinations to rely exclusively on the Bureau of
Labor Statistics' Occupational Employment and Wage Statistics (OEWS)
survey. This approach would create a single streamlined source for
prevailing wages, reducing administrative complexity and compliance
costs for employers--particularly small businesses--by eliminating the
need to commission, validate, and submit private surveys. Private
surveys often impose significant costs on employers, including fees for
survey data and legal expenses to ensure methodological compliance. By
standardizing wage determinations through OEWS, the Department would
minimize these burdens while maintaining consistency and transparency
in wage-setting practices. This alternative therefore represents a less
economically burdensome option for small entities compared to the
current system, which allows for multiple wage sources and associated
compliance obligations.
Private wage surveys have historically been permitted to provide
employers flexibility in cases where government data sources were
unavailable or insufficiently granular for certain occupations or
geographic areas. The rationale was that private surveys could capture
niche labor markets and specialized roles not fully reflected in OEWS
data. However, the Department's analysis indicates that OEWS now
provides comprehensive coverage across occupations and regions,
reducing the need for alternative sources.
Despite these benefits, the Department ultimately rejected this
alternative. As discussed earlier in this NPRM, retaining private wage
surveys in limited circumstances preserves employer flexibility,
mitigates potential adverse impacts on businesses operating in
specialized labor markets, and balances reliance interests with the
statutory mandate to protect U.S. workers. For some employers-
particularly start-ups, small businesses, or those operating in
emerging or highly specialized fields-private surveys may offer the
most accurate reflection of market wages when OEWS data is insufficient
or unavailable. Eliminating this option entirely could disrupt
longstanding compliance practices and impose disproportionate burdens
on such employers.
Additionally, while private surveys can be expensive and
administratively complex to validate, historical data indicate that
they typically produce wages approximately 20 percent higher than OEWS-
based prevailing wages, which could significantly increase costs for
employers relying on this option. The Department recognizes these
trade-offs and, therefore, has chosen to retain the use of private
surveys in limited circumstances. This approach preserves employer
flexibility, mitigates potential adverse impacts on businesses
operating in specialized labor markets, and balances reliance interests
with the statutory mandate to protect U.S. workers. To ensure
integrity, the
[[Page 15492]]
Department will monitor the use of private surveys to prevent abuse and
ensure compliance, reserving the right to reject any private survey
that does not meet methodological standards or otherwise fails to
satisfy regulatory requirements.
In summary, while the benefits of allowing private wage surveys
have diminished as OEWS coverage has improved, the Department
determined that a complete elimination of private surveys would not
adequately account for the needs of employers in specialized labor
markets or those with legitimate reliance interests. The Department
invites public comment on this approach and on whether further
limitations or safeguards on the use of private wage surveys would be
appropriate.
c. Alternative 3: National Wage Standard for Remote and Distributed
Work
In response to the structural shift toward remote work, the
Department considered replacing area-specific prevailing wages with a
national wage standard for each occupational classification. This
approach would simplify compliance and reflect the nationalization of
high-skill labor markets. However, the Department declined to adopt
this alternative due to:
Statutory language in the INA requiring prevailing wages
to be based on the ``area of intended employment.''
The need for further stakeholder engagement and legal
analysis to assess the feasibility of redefining geographic wage
standards.
The Department may revisit this alternative in future rulemakings
as remote work trends continue to evolve.
Under this alternative, the Department would replace area-specific
prevailing wages with a single national wage standard for each
occupational classification. This approach would simplify compliance
and reflect the increasing prevalence of remote work, which has reduced
the relevance of geographic wage differentials. However, this
alternative would likely result in significant cost increases for
employers in lower-wage regions, as they would be required to pay wages
aligned with national averages rather than local market rates.
Preliminary modeling suggests that adopting this alternative could
reduce employer labor costs by an incremental approximately $10,000
annually, which is substantially higher than the costs projected under
the proposed rule.\244\ While this approach could enhance equity and
reduce administrative complexity, the Department determined that the
statutory requirement to base prevailing wages on the ``area of
intended employment'' and the potential for disproportionate impacts on
employers in lower-cost regions outweighed the benefits at this time.
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\244\ Analysis based on FY 2020-2024 LCAs and uses current
prevailing wage levels to determine the difference.
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C. Regulatory Flexibility Act, Small Business Regulatory Enforcement
Fairness Act of 1996, and Executive Order 13272 (Proper Consideration
of Small Entities in Agency Rulemaking)
The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601 et seq.,
as amended by the Small Business Regulatory Enforcement Fairness Act of
1996 (SBREFA), Public Law 104-121 (Mar. 29, 1996), hereafter jointly
referred to as the RFA, requires agencies to prepare an initial
regulatory flexibility analysis (IRFA) when proposing, and a final
regulatory flexibility analysis (FRFA) when issuing, regulations that
will have a significant economic impact on a substantial number of
small entities. The Department conducted the analysis below of the
effect on small entities from the proposed rule and, based on that
analysis, expects that this rule will have a significant economic
impact on a substantial number of small entities that employ H-1B
workers.
1. Why the Department Is Considering Action
The Department is considering action to revise the prevailing wage
determination methodology because the current wage levels do not
adequately reflect the wages paid to U.S. workers similarly employed to
alien workers in the H-1B, H-1B1, E-3, and PERM programs. The
Department has determined that the existing methodology, which was
developed without formal rulemaking and lacks a robust economic
justification, may contribute to wage suppression and displacement of
U.S. workers, particularly in sectors with high concentrations of alien
workers. Evidence from academic research, government data, and
investigative reporting indicates that prevailing wages under the
current structure are often set below market rates. This creates
incentives for employers to prefer lower-paid alien workers over
comparably qualified U.S. workers, undermining the statutory intent of
the INA to protect the wages and working conditions of U.S. workers.
For example, studies have shown that H-1B workers are frequently paid
less than their U.S. counterparts, and that some employers use the
program to replace U.S. workers rather than to supplement the domestic
workforce.
Moreover, the Department has concluded that the current four-tier
wage structure, as implemented, does not sufficiently differentiate
among workers based on experience, education, and responsibility, as
required by 8 U.S.C. 1182(p)(4). The Department's analysis also found
that the methodology used to calculate wage levels--particularly the
use of the mean of the bottom third of the wage distribution for Level
I--does not align with labor market realities or the statutory
requirement to prevent adverse effects on U.S. workers.
Given these findings, and consistent with the Department's
statutory obligations and the President's directive to strengthen wage
protections for U.S. workers, the Department is proposing to revise the
prevailing wage methodology to better reflect actual market wages and
ensure that the employment of alien workers does not adversely affect
the wages and job opportunities of U.S. workers.
2. Objectives of and Legal Basis for the NPRM
The Department's objective in issuing this NPRM is to strengthen
wage protections for U.S. workers by revising the methodology used to
determine prevailing wage levels under the H-1B, H-1B1, E-3, and PERM
programs. The current wage structure, which has remained largely
unchanged since its inception, does not adequately reflect the wages
paid to U.S. workers similarly employed to alien workers in these
programs. As a result, it may contribute to wage suppression,
displacement of U.S. workers, and distortion of labor market conditions
in high-skill sectors. This NPRM seeks to ensure that the employment of
alien workers does not adversely affect the wages and working
conditions of U.S. workers, consistent with the Department's statutory
obligations under the INA. Specifically, section 212(a)(5)(A) of the
INA (8 U.S.C. 1182(a)(5)(A)) requires the Secretary of Labor to certify
that the employment of alien workers would not adversely affect the
wages and working conditions of similarly employed U.S. workers. In the
context of the H-1B, H-1B1, and E-3 programs, section 212(n)(1)(A) and
212(t)(1)(A) (8 U.S.C. 1182(n)(1)(A) and 1182(t)(1)(A)) further
requires that employers pay the greater of the actual wage or the
prevailing wage for the
[[Page 15493]]
occupational classification in the area of intended employment.
Additionally, section 212(p)(4) of the INA (8 U.S.C. 1182(p)(4))
mandates that any government survey used to determine prevailing wages
must provide at least four levels of wages commensurate with
experience, education, and level of supervision. The Department has
determined that the current implementation of this four-tier structure
does not sufficiently differentiate among workers based on these
statutory factors and may understate the true market wages for many
occupations.
The NPRM is also responsive to the President's directive in the
September 19, 2025, Proclamation titled ``Restriction on Entry of
Certain Nonimmigrant Workers,'' which instructed the Secretary of Labor
to initiate rulemaking to revise prevailing wage levels to better
protect U.S. workers. The Department's action is grounded in its
longstanding authority to administer the labor certification process
and to interpret and implement the INA's wage protections through
reasonable and evidence-based methodologies. In sum, the NPRM is
intended to align prevailing wage levels more closely with actual
market wages; reduce the incentive to prefer alien workers over U.S.
workers based on wage differentials; ensure compliance with statutory
requirements under 8 U.S.C. 1182(a)(5)(A), 1182(n)(1)(A),
1182(t)(1)(A), and 1182(p)(4); and promote the integrity and
effectiveness of the Department's foreign labor certification programs.
3. Estimating the Number of Small Entities Affected by the Rulemaking
The Department used the FY 2024 H-1B cap-subject petitions data
provided by the DHS.\245\ There were 13,602 unique small H-1B employers
with data on the number of employees and annual revenue that met the
Small Business Administration's size standards. These 13,602 unique
small H-1B employers represent petitions with start dates on or after
10/1/2024 and before 10/1/2025.
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\245\ For the RFA analysis, three datasets were combined: DOL's
LCA data for FY 2024; employer data from USCIS Form I-129 petitions
filed in FY 2024; and the SBA size standards. This dataset includes
Wage Levels I through IV.
---------------------------------------------------------------------------
To provide clarity on the types of industries impacted by this
regulation, Exhibit 10 shows the number of unique H-1B small entity
employers within the top 10 most prevalent industries at the 6-digit
and 4-digit NAICS code level.
[GRAPHIC] [TIFF OMITTED] TP27MR26.311
4. Compliance Requirements of the NPRM, Including Reporting and
Recordkeeping
The Department has considered the incremental costs for small
entities from the baseline (i.e., the current practices for complying,
at a minimum, with the regulations governing permanent labor
certifications at 20 CFR part 656 and labor condition applications at
20 CFR part 655, subpart H) to this NPRM. We estimated the cost of (a)
the time to read and review the NPRM and (b) wage costs. These
estimates are consistent with those presented in the E.O. 12866
section.
5. Calculating the Impact of the NPRM on Small Entities
The Department estimates that small entities using the H-1B program
would incur a one-time cost of $60.94 to familiarize themselves with
the rule.\246\
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\246\ $60.94 = 1 hour x $60.94, where $60.94 = $38.33 + ($38.33
x 42%) + ($38.33 x 17%).
---------------------------------------------------------------------------
In addition to the rule familiarization costs, each small entity
using the H-1B program may have an increase in the annual wage costs
due to the revisions to the wage structure if they currently offer a
wage lower than the NPRM prevailing wage levels. For each small entity,
we estimated the annual wage cost and added it to the rule
familiarization costs to measure the total impact of the NPRM on the
small entity. The average wage cost per small entities is estimated at
$20,298. Small entities with petitions filed in FY 2024 can have wage
obligations in calendar years 2024 and 2025, depending on when their
employment period starts and the length of the employment period.
[[Page 15494]]
The Department determined the proportion of each small entity's
total revenue affected by the costs of the NPRM to determine if the
NPRM would have a significant impact upon a substantial number of small
entities. The cost impacts included the rule familiarization costs and
the wage costs introduced by the NPRM. The Department used a total cost
estimate of 3 percent of revenue as the threshold for a significant
individual impact and assumed that 15 percent of impacted small
entities incurring an impact that exceeds the 3 percent,
``significant'' threshold as the threshold for a substantial number of
on small entities.
The Department has used a threshold of three percent of revenues in
prior rulemakings for the definition of significant economic
impact.\247\ This threshold is also consistent with that sometimes used
by other agencies.\248\ The Department also believes that its
assumption that 15 percent of small entities would be substantially
affected experiencing a significant impact to determine whether the
rule has a substantial impact on small entities is appropriate. The
Department has used the same threshold in prior rulemakings for the
definition of substantial number of small entities.\249\ Of the 13,538
unique small employers with revenue data, up to 18 percent of employers
would have more than 3 percent of their total revenue affected in 2025
(2,394/13,538). As such, the Department expects that this rule would
have a significant economic impact on a substantial number of small
entities affected. Exhibit 11 provides a breakdown of small employers
by the proportion of revenue affected by the costs of the NPRM.
Exhibits 12 through 22 provide breakdowns of small employers by the
proportion of revenue affected by the costs of the NPRM for the top ten
most prevalent industries at the six-digit NAICS code level.
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\247\ See, e.g., 79 FR 60634 (October 7, 2014, Establishing a
Minimum Wage for Contractors), 81 FR 39108 (June 15, 2016,
Discrimination on the Basis of Sex), and 84 FR 36178 (July 26, 2019,
Proposed Rule for Temporary Agricultural Employment of H-2A
Nonimmigrants in the United States).
\248\ See, e.g., 79 FR 27106 (May 12, 2014, Department of Health
and Human Services rule stating that under its agency guidelines for
conducting regulatory flexibility analyses, actions that do not
negatively affect costs or revenues.
\249\ See, e.g., 79 FR 60633 (October 7, 2014, Establishing a
Minimum Wage for Contractors) and 84 FR 36178 (July 26, 2019,
Proposed Rule for Temporary Agricultural Employment of H-2A
Nonimmigrants in the United States).
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BILLING CODE 4510-FP-P
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[[Page 15495]]
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[[Page 15496]]
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[[Page 15497]]
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[[Page 15498]]
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BILLING CODE 4510-FP-C
6. Relevant Federal Rules Duplicating, Overlapping, or Conflicting With
the NPRM
When creating the H-1B, H-1B1, and E-3 temporary nonimmigrant and
permanent immigrant visa classifications, Congress charged the
Department with, among other things, a unique responsibility to
regulate the employment of nonimmigrant and immigrant alien workers to
guard against adverse impact on the wages of workers in the United
States similarly employed. Thus, the applicable statutes delegate broad
discretion to the Department in determining the sources and methods
that best allows it to meet this unique statutory mandate, which this
NPRM proposes through revisions to the computation of prevailing wage
levels applicable only to employers seeking temporary labor condition
application under the H-1B, H-1B1, and E-3 visa classifications and
permanent labor certification for skilled and unskilled immigrant
employment in the United States. The Department recognizes that the
recently published DHS H-1B rule \250\ also governs alien workers
employed by small businesses, and that there is overlap between these
rules. However, there is no conflict between the standards proposed in
this NPRM and other Federal rules; rather, each rule addresses distinct
aspects of the foreign labor certification and visa process within its
respective statutory and regulatory authority.
---------------------------------------------------------------------------
\250\ Department of Homeland Security. (2025, December 29).
Weighted Selection Process for Registrants and Petitioners Seeking
To File Cap-Subject H-1B Petitions. 90 FR 60864. [CIS No. 2847-26;
DHS Docket No. USCIS-2025-0040].
---------------------------------------------------------------------------
7. Alternative to the Proposed Rule
In developing this NPRM, the Department considered several
alternative approaches to revising the prevailing wage level
methodology for the H-1B, H-1B1, E-3, and PERM programs. Each
alternative was evaluated for its consistency with the Department's
statutory obligations under the INA, its responsiveness to the policy
direction set forth in the Presidential Proclamation issued on
September 19, 2025, and its administrative feasibility and legal
defensibility. Ultimately, the Department determined that the approach
adopted in this NPRM--setting wage levels at the 34th, 52nd, 70th, and
88th percentiles--strikes the most appropriate balance between
strengthening wage protections and minimizing disruption. However, the
Department considered and declined to adopt the following two
alternatives.
First, the Department considered removing the option for employers
to use private wage surveys and requiring all prevailing wage
determinations to rely solely on the Bureau of Labor Statistics'
Occupational Employment and Wage Statistics (OEWS) survey. This
alternative would create a single streamlined source for prevailing
wages, reducing administrative complexity and compliance costs--
particularly for small businesses--by eliminating expenses associated
with commissioning, validating, and submitting private surveys. While
private surveys were originally permitted to provide flexibility where
government data lacked granularity, OEWS now offers comprehensive
coverage, making that justification less compelling. Continuing to
allow private surveys introduces unnecessary complexity and
disproportionate costs for small entities. By standardizing wage
determinations through OEWS, this alternative would minimize economic
burden compared to the NPRM, which retains multiple permissible wage
sources. Cost savings would primarily result from avoided survey
procurement and legal review fees, which can range from hundreds to
thousands of dollars per application. However, the Department
ultimately rejected this alternative because it would remove employer
flexibility in rare cases where OEWS data may not fully capture
specialized labor markets.
Second, the Department considered replacing area-specific
prevailing wages with a national wage standard for each occupational
classification. This alternative was prompted by the structural shift
toward remote and hybrid work arrangements, particularly in high-skill
sectors where geographic location is increasingly decoupled from labor
market dynamics. A national wage standard could simplify compliance,
reduce administrative burdens, and better reflect the realities of a
nationalized labor market. However, this approach relies on key
assumptions and introduces uncertainties that warrant discussion. For
example, it assumes that remote work will continue to expand at current
rates and that geographic wage differentials will diminish over time.
It also assumes that employers in lower-cost regions could absorb
higher wage requirements without significant reductions in hiring or
shifts in business models. These assumptions are subject to uncertainty
given potential changes in remote work trends, employer practices, and
statutory interpretations. The Department declined to adopt this
approach due to the statutory requirement that prevailing wages be
based on the ``area of intended
[[Page 15499]]
employment,'' as well as the need for further stakeholder engagement
and legal analysis. The Department may revisit this alternative in
future rulemakings as remote work trends continue to evolve.
Third, in response to concerns about the economic impact of the
proposed rule on small businesses and non-profits, the Department
considered an alternative that would delay implementation of the new
prevailing wage requirements for these entities by two years, allowing
them to spread the additional costs of recruiting and retaining H-1B
workers--including higher prevailing wage standards and increased USCIS
application fees--over a longer period. However, the Department chose
not to pursue this approach because the revised wage standards apply
only to new Labor Condition Applications (LCAs) and PERM applications,
not to renewals or existing certifications, thereby limiting the impact
to new hires going forward. Moreover, delaying implementation for small
entities would allow new hires at these organizations to persist under
a prevailing wage methodology that has been shown to set wage standards
too low, potentially resulting in some workers being underpaid simply
because they work for small businesses or non-profits. The Department
is committed to ensuring that all workers, regardless of employer size,
are paid wages that reflect statutory requirements and labor market
realities, and therefore determined that a delayed implementation for
small entities would not be consistent with its statutory mandate to
protect U.S. workers and ensure fair wage standards across all
employers.
The Department welcomes commenter feedback on these regulatory
alternatives and invites suggestions for any other regulatory
alternatives that commenters believe would be feasible and appropriate.
D. Review Under the Paperwork Reduction Act
The purpose of the Paperwork Reduction Act of 1995 (PRA), 44 U.S.C.
3501 et seq., includes minimizing the paperwork burden on affected
entities. The PRA requires certain actions before an agency can adopt
or revise a collection of information, including publishing for public
comment a summary of the collection of information and a brief
description of the need for and proposed use of the information.
As part of its continuing effort to reduce paperwork and respondent
burden, the Department conducts a preclearance consultation program to
provide the public and Federal agencies with an opportunity to comment
on proposed and continuing collections of information in accordance
with the PRA. See 44 U.S.C. 3506(c)(2)(A). This activity helps to
ensure that the public understands the Department's collection
instructions, respondents can provide the requested data in the desired
format, reporting burden (time and financial resources) is minimized,
collection instruments are clearly understood, and the Department can
properly assess the impact of collection requirements on respondents.
A Federal agency may not conduct or sponsor a collection of
information unless it is approved by the Office of Management and
Budget (OMB) under the PRA and it displays a currently valid OMB
control number. The public is also not required to respond to a
collection of information unless it displays a currently valid OMB
control number. In addition, notwithstanding any other provisions of
law, no person would be subject to penalty for failing to comply with a
collection of information if the collection of information does not
display a currently valid OMB control number (44 U.S.C. 3512).
The Department has determined that the changes proposed in this
NPRM to the computation of the prevailing wage levels, which are based
on existing data collected under the OEWS survey by the Bureau of Labor
Statistics, do not require a collection of information subject to
approval by OMB under the PRA, or affect any existing collections of
information. Thus, the Department is not seeking changes to the
information collections covered under the Application for Prevailing
Wage Determination, OMB Control Number 1205-0508, Labor Condition
Application for Nonimmigrant Workers, OMB Control Number 1205-0310, or
Application for Permanent Employment Certification, OMB Control Number
1205-0451, which would not require soliciting public comments in order
to seek OMB approval of any clarifying changes and de minimis
adjustment to the burden that the proposed changes might cause to
existing information collection tools covered under these control
numbers.
E. Review Under Executive Order 13132
E.O. 13132, Federalism, 64 FR 43255 (Aug. 10, 1999), imposes
certain requirements on Federal agencies formulating and implementing
policies or regulations that preempt State law or that have federalism
implications. The E.O. requires agencies to examine the constitutional
and statutory authority supporting any action that would limit the
policymaking discretion of the States and to carefully assess the
necessity for such actions. The E.O. also requires agencies to have an
accountable process to ensure meaningful and timely input by State and
local officials in the development of regulatory policies that have
federalism implications.
The Department has examined this NPRM and has determined that it
would not have a substantial direct effect on the States, on the
relationship between the national government and the States, or on the
distribution of power and responsibilities among the various levels of
government.
F. Executive Order 13175 (Consultation and Coordination With Indian
Tribal Governments)
The Department has reviewed this NPRM in accordance with E.O. 13175
and has determined that it does not have tribal implications. This
proposed rule does not have substantial direct effects on one or more
Indian tribes, on the relationship between the Federal Government and
Indian tribes, or on the distribution of power and responsibilities
between the Federal Government and tribal governments.
G. Review Under Executive Order 12988
With respect to the review of existing regulations and the
promulgation of new regulations, section 3(a) of E.O. 12988, ``Civil
Justice Reform,'' imposes on Federal agencies the general duty to
adhere to the following requirements: (1) eliminate drafting errors and
ambiguity, (2) write regulations to minimize litigation, (3) provide a
clear legal standard for affected conduct rather than a general
standard, and (4) promote simplification and burden reduction. 61 FR
4729 (Feb. 7, 1996). Regarding the review required by section 3(a),
section 3(b) of E.O. 12988 specifically requires that Executive
agencies make every reasonable effort to ensure that the regulation:
(1) clearly specifies the preemptive effect, if any, (2) clearly
specifies any effect on existing Federal law or regulation, (3)
provides a clear legal standard for affected conduct while promoting
simplification and burden reduction, (4) specifies the retroactive
effect, if any, (5) adequately defines key terms, and (6) addresses
other important issues affecting clarity and general draftsmanship
under any guidelines issued by the Attorney General.
[[Page 15500]]
Section 3(c) of E.O. 12988 requires Executive agencies to review
regulations in light of applicable standards in section 3(a) and
section 3(b) to determine whether they are met or it is unreasonable to
meet one or more of them. The Department has completed the required
review and determined that, to the extent permitted by law, this NPRM
meets the relevant standards of E.O. 12988.
H. Review Under the Unfunded Mandates Reform Act
The Unfunded Mandates Reform Act of 1995 (UMRA) (Pub. L. 104-4,
codified at 2 U.S.C. 1501 et seq.) is intended, among other things, to
curb the practice of imposing unfunded Federal mandates on state,
local, and tribal governments. UMRA requires Federal agencies to assess
a regulation's effects on state, local, and tribal governments, as well
as on the private sector, except to the extent the regulation
incorporates requirements specifically set forth in law. Title II of
the UMRA requires each Federal agency to prepare a written statement
assessing the effects of any regulation that includes any Federal
mandate in a proposed or final agency rule that may result in $100
million or more expenditure (adjusted annually for inflation) in any
one year by state, local, and tribal governments, in the aggregate, or
by the private sector. A Federal mandate is any provision in a
regulation that imposes an enforceable duty upon State, local, or
tribal governments, or upon the private sector, except as a condition
of Federal assistance or a duty arising from participation in a
voluntary Federal program.
The Department examined this proposed NPRM according to UMRA and
its statement of policy and determined that this rule does not contain
a Federal intergovernmental mandate, nor is it expected to require
expenditures of $100 million or more in any one year by state, local,
and tribal governments, in the aggregate. However, due to effects on
the (or by the) private sector, the analytical requirements of UMRA
apply; for relevant analysis, please see section III.A, above.
I. Review Under Executive Order 12630
Pursuant to E.O. 12630, Governmental Actions and Interference with
Constitutionally Protected Property Rights, 53 FR 8859 (Mar. 18, 1988),
the Department has determined that this NPRM would not result in any
takings that might require compensation under the Fifth Amendment to
the U.S. Constitution.
J. Review Under the Treasury and General Government Appropriations Act,
1999
Section 654 of the Treasury and General Government Appropriations
Act, 1999 (Pub. L. 105-277) requires Federal agencies to issue a Family
Policymaking Assessment for any rule that may affect family well-being.
This NPRM would not have any impact on the autonomy or integrity of the
family as an institution. Accordingly, the Department has concluded
that it is not necessary to prepare a Family Policymaking Assessment.
K. Review Under the Treasury and General Government Appropriations Act,
2001
Section 515 of the Treasury and General Government Appropriations
Act, 2001 (44 U.S.C. 3516, note) provides for Federal agencies to
review most disseminations of information to the public under
information quality guidelines established by each agency pursuant to
general guidelines issued by OMB. OMB's guidelines were published at 67
FR 8452 (Feb. 22, 2002). The Department has reviewed this NPRM under
the OMB guidelines and has concluded that it is consistent with
applicable policies in those guidelines.
List of Subjects
20 CFR Part 655
Administrative practice and procedure, Alien workers, Australia,
Chile, Employment, Employment and training, Enforcement, Immigration,
Singapore, Temporary labor, Unemployment, Wages, Working conditions.
20 CFR Part 656
Administrative practice and procedure, Alien workers, Employment,
Employment and training, Enforcement, Immigration, Permanent labor,
Unemployment, Wages, Working conditions.
Department of Labor
For the reasons stated in the preamble, the DOL proposes to amend
parts 655 and 656 of Chapter V, Title 20, Code of Federal Regulations,
as follows:
PART 655--TEMPORARY EMPLOYMENT OF FOREIGN WORKERS IN THE UNITED
STATES
0
1. The authority citation for part 655 will be revised to read as
follows:
Authority: Section 655.0 issued under 8 U.S.C.
1101(a)(15)(E)(iii), 1101(a)(15)(H)(i) and (ii), 8 U.S.C.
1103(a)(6), 1182(m), (n), (p), and (t), 1184(c), (g), and (j), 1188,
and 1288(c) and (d); sec. 3(c)(1), Pub. L. 101-238, 103 Stat. 2099,
2102 (8 U.S.C. 1182 note); sec. 221(a), Pub. L. 101-649, 104 Stat.
4978, 5027 (8 U.S.C. 1184 note); sec. 303(a)(8), Pub. L. 102-232,
105 Stat. 1733, 1748 (8 U.S.C. 1101 note); sec. 323(c), Pub. L. 103-
206, 107 Stat. 2428; sec. 412(e), Pub. L. 105-277, 112 Stat. 2681 (8
U.S.C. 1182 note); sec. 2(d), Pub. L. 106-95, 113 Stat. 1312, 1316
(8 U.S.C. 1182 note); 29 U.S.C. 49k; Pub. L. 107-296, 116 Stat.
2135, as amended; Pub. L. 109-423, 120 Stat. 2900; 8 CFR
214.2(h)(4)(i); 8 CFR 214.2(h)(6)(iii); and sec. 6, Pub. L. 115-218,
132 Stat. 1547 (48 U.S.C. 1806).
Subpart A issued under 8 CFR 214.2(h).
Subpart B issued under 8 U.S.C. 1101(a)(15)(H)(ii)(a), 1184(c),
and 1188; and 8 CFR 214.2(h).
Subpart E issued under 48 U.S.C. 1806.
Subparts F and G issued under 8 U.S.C. 1288(c) and (d); sec.
323(c), Pub. L. 103-206, 107 Stat. 2428; and 28 U.S.C. 2461 note,
Pub. L. 114-74 at section 701.
Subparts H and I issued under 8 U.S.C. 1101(a)(15)(H)(i)(b) and
(b)(1), 1182(n), (p), and (t), and 1184(g) and (j); sec. 303(a)(8),
Pub. L. 102-232, 105 Stat. 1733, 1748 (8 U.S.C. 1101 note); sec.
412(e), Pub. L. 105-277, 112 Stat. 2681; 8 CFR 214.2(h); and 28
U.S.C. 2461 note, Pub. L. 114-74 at section 701.
Subparts L and M issued under 8 U.S.C. 1101(a)(15)(H)(i)(c) and
1182(m); sec. 2(d), Pub. L. 106-95, 113 Stat. 1312, 1316 (8 U.S.C.
1182 note); Pub. L. 109-423, 120 Stat. 2900; and 8 CFR 214.2(h).
0
2. Amend Sec. 655.731 by proposing revisions to paragraphs (a)(2)(ii),
(a)(2)(ii)(A), and (a)(2)(ii)(A)(2) to read as follows:
Sec. 655.731 What is the first LCA requirement, regarding wages?
* * * * *
(a) * * *
(2) * * *
(ii) If the job opportunity is not covered by paragraph (a)(2)(i)
of this section, the prevailing wage shall be based on the wages of
workers similarly employed as determined by the wage component of the
Bureau of Labor Statistics (BLS) Occupational Employment and Wage
Statistics Survey (OEWS) in accordance with 20 CFR 656.40(b)(2)(i); a
current wage as determined in the area under the Davis-Bacon Act, as
amended, 40 U.S.C. 3141 et seq. (see 29 CFR part 1), or the McNamara-
O'Hara Service Contract Act of 1965, as amended, 41 U.S.C. 6701 et seq.
(see 29 CFR part 4); an independent authoritative source in accordance
with paragraph (a)(2)(ii)(B) of this section; or another legitimate
source of wage data in accordance with paragraph (a)(2)(ii)(C) of this
section. If an employer uses an independent authoritative source or
other legitimate source of wage data, the prevailing wage shall be the
arithmetic mean of the wages of workers similarly employed, except that
the prevailing wage shall be
[[Page 15501]]
the median when provided by paragraphs (a)(2)(ii)(A),
(b)(3)(iii)(B)(2), and (b)(3)(iii)(C)(2) of this section. The
prevailing wage rate shall be based on the best information available.
The following prevailing wage sources may be used:
(A) OFLC National Processing Center (NPC) determination. The NPC
shall receive and process prevailing wage determination requests in
accordance with these regulations and Department guidance. Upon receipt
of a written request for a PWD, the NPC will determine whether the
occupation is covered by a collective bargaining agreement which was
negotiated at arm's length, and, if not, determine the wages of workers
similarly employed using the wage component of the BLS OEWS and
selecting an appropriate wage level in accordance with 20 CFR
656.40(b)(2)(i), unless the employer provides an acceptable survey. The
NPC shall determine the wage in accordance with secs. 212(n), 212(p),
and 212(t) of the INA and in a manner consistent with 20 CFR
656.40(b)(2). If an acceptable employer-provided wage survey provides
an arithmetic mean then that wage shall be the prevailing wage; if an
acceptable employer-provided wage survey provides a median and does not
provide an arithmetic mean, the median shall be the prevailing wage
applicable to the employer's job opportunity. In making a PWD, the NPC
will follow 20 CFR 656.40 and other administrative guidelines or
regulations issued by ETA. The NPC shall specify the validity period of
the PWD, which in no event shall be for less than 90 days or more than
1 year from the date of the determination.
(1) * * *
(2) If the employer is unable to wait for the NPC to produce the
requested prevailing wage for the occupation in question, or for the CO
and/or the BALCA to issue a decision, the employer may rely on other
legitimate sources of available wage information as set forth in
paragraphs (a)(2)(ii)(B) and (C) of this section. If the employer later
discovers, upon receipt of the PWD from the NPC, that the information
relied upon produced a wage below the final PWD and the employer was
not paying the NPC-determined wage, no wage violation will be found if
the employer retroactively compensates the H-1B nonimmigrant(s) for the
difference between the wage paid and the prevailing wage, within 30
days of the employer's receipt of the PWD.
* * * * *
PART 656--LABOR CERTIFICATION PROCESS FOR PERMANENT EMPLOYMENT OF
ALIENS IN THE UNITED STATES
0
3. The authority citation for part 656 will be revised to read as
follows:
Authority: 8 U.S.C. 1182(a)(5)(A), 1182(p); sec.122, Pub. L.
101-649, 109 Stat. 4978; and Title IV, Pub. L. 105-277, 112 Stat.
2681.
0
4. Amend Sec. 656.40 by proposing revisions to paragraphs (a), (b)(2),
and (b)(3), and by adding paragraphs (b)(2)(i), (b)(2)(i)(A),
(b)(2)(i)(B), (b)(2)(i)(C), (b)(2)(i)(D), and (b)(2)(ii) to read as
follows:
Sec. 656.40 Determination of prevailing wage for labor certification
purposes.
* * * * *
(a) Application process. The employer must request a PWD from the
NPC, on a form or in a manner prescribed by OFLC. The NPC shall receive
and process prevailing wage determination requests in accordance with
these regulations and Department guidance. The NPC would provide the
employer with an appropriate prevailing wage rate. The NPC shall
determine the wage in accordance with sec. 212(p) of the INA. Unless
the employer chooses to appeal the center's PWD under Sec. 656.41(a)
of this part, it files the Application for Permanent Employment
Certification either electronically or by mail with the NPC and
maintains the PWD in its files. The determination shall be submitted to
the CO, if requested.
(b) * * *
(2) If the job opportunity is not covered by a CBA, the prevailing
wage for labor certification purposes shall be based on the wages of
workers similarly employed using the wage component of the Bureau of
Labor Statistics (BLS) Occupational Employment and Wage Statistics
Survey (OEWS) in accordance with subparagraph (b)(2)(i), unless the
employer provides an acceptable survey under paragraphs (b)(3) and (g)
of this section or elects to utilize a wage permitted under paragraph
(b)(4) of this section.
(i) The BLS shall provide the OFLC Administrator with the OEWS wage
data by occupational classification and geographic area, which is
computed and assigned at levels set commensurate with the education,
experience, and level of supervision of similarly employed workers, as
determined by the Department. Based on this requirement, the prevailing
wage shall be provided by the OFLC Administrator at four levels:
(A) The Level I Wage shall be computed as the thirty-fourth
percentile of the OEWS wage distribution and assigned for the most
specific occupation and geographic area available.
(B) The Level II Wage shall be determined by first dividing the
difference between Levels I and IV by three and then adding the
quotient to the computed value for Level I and assigned for the most
specific occupation and geographic area available.
(C) The Level III Wage shall be determined by first dividing the
difference between Levels I and IV by three and then subtracting the
quotient from the computed value for Level IV and assigned for the most
specific occupation and geographic area available.
(D) The Level IV Wage shall be computed as the eighty-eighth
percentile of the OEWS wage distribution and assigned for the most
specific occupation and geographic area available. Where the Level IV
Wage cannot be computed due to wage values exceeding the uppermost
interval of the OEWS wage interval methodology, the OFLC Administrator
shall determine the Level IV Wage using the current hourly wage rate
applicable to the highest OEWS wage interval for the specific
occupation and geographic area, or the arithmetic mean of the wages of
all workers for the most specific occupation and geographic area
available, whichever is highest.
(ii) The OFLC Administrator will publish, at least once in each
calendar year, on a date to be determined by the OFLC Administrator,
the prevailing wage levels under paragraph (b)(2)(i) of this section as
a notice posted on the OFLC website.
(3) If the employer provides a survey acceptable under paragraph
(g) of this section, the prevailing wage for labor certification
purposes shall be the arithmetic mean of the wages of workers similarly
employed in the area of intended employment. If an otherwise acceptable
survey provides a median and does not provide an arithmetic mean, the
prevailing wage applicable to the employer's job opportunity shall be
the median of the wages of workers similarly employed in the area of
intended employment.
* * * * *
Susan Frazier,
Principal Deputy Assistant Secretary for Employment and Training,
Labor.
[FR Doc. 2026-06017 Filed 3-26-26; 8:45 am]
BILLING CODE 4510-FP-P