The United States has proposed to increase the minimum wages paid to hire an employee under the H-1B visa program by as much as 30 per cent or more over the previously fixed limits — a move the administration claims will help prevent foreigners from undercutting wages of US nationals.
The new rule, proposed by the US Department of Labour on March 27, 2026, seeks to increase the minimum wages for four categories — from entry-level to the most experienced — contending that the existing wage levels were fixed 20 years ago and fail to adequately protect American workers.
For Indian IT professionals and companies that rely heavily on H-1B visas to send skilled workers to the US, this proposal could have significant financial implications. The rule is now open for public comments until May 26, 2026, after which the Department of Labour will examine responses and notify the final rule.
The Numbers: How Much Wages Will Rise
According to the proposed rule titled ‘Improving Wage Protections for the Temporary and Permanent Employment of Certain Foreign Nationals in the United States’, the existing prevailing wage for entry-level foreign workers was set at 73,279perannum.ForLevelII,itwas98,987. For Level III, 121,979.AndforLevelIV(themostexperienced),144,202.
Under the new proposal, the prevailing wage for entry-level workers would increase to **97,746∗∗—ahikeof∗∗33.39percent∗∗overtheoldrate.LevelIIwageswouldriseto123,212, an increase of 24.47 per cent. Level III wages would go up to 147,333,ariseof20.79percent.AndLevelIVwageswouldclimbto175,464, an increase of 21.68 per cent.
It is important to note that these prevailing wages differ from city to city, as they are based on local labor market conditions.
Which Visa Programs Are Affected
The proposed changes will dramatically increase the prevailing wage levels used in several visa programs. These include the H-1B program (the most common visa for skilled foreign workers), the H-1B1 visa (for professionals from Singapore and Chile), the E-3 visa (for Australian professionals), and the PERM labor certification program (the first step for employer-sponsored green cards).
For Indian IT professionals, the H-1B and PERM programs are the most relevant, and any wage increase directly impacts both employers and employees.
Why the US Says This Is Necessary
According to the Department of Labour, the current methodology allows employers to hire foreigners at wage levels significantly below those paid to similarly employed American workers. The existing wage levels were set 20 years ago and have not kept pace with inflation or changes in the labor market.
The administration argues that higher prevailing wages will:
- Protect US workers from being undercut by cheaper foreign labor
- Ensure that foreign workers are paid fairly for their skills
- Discourage employers from using H-1B visas primarily to save on labor costs
Mixed Reactions: Support and Opposition
The proposed rules have received mixed responses from various stakeholders.
On one hand, some American worker advocacy groups have expressed overwhelming support. They argue that for too long, companies have exploited the H-1B system to bring in cheaper foreign workers, depressing wages for US nationals in tech and other skilled fields.
On the other hand, critics — particularly from the tech industry and business associations — contend that smaller companies may no longer be able to hire freshers for entry-level jobs, given the higher prevailing wages. They argue that start-ups and smaller firms often lack the financial resources to pay such high entry-level salaries, which could stifle innovation and force companies to either outsource work overseas or delay hiring altogether.
Indian IT companies, which are among the largest users of the H-1B visa program, are also watching the proposal closely. Higher wages would increase their operational costs in the US, potentially making them less competitive against American firms.
The Timeline: What Happens Next
The window for public comments closes on May 26, 2026. Following that, the Department of Labour will examine all the responses received from employers, industry associations, worker advocacy groups, and other stakeholders. After this review, the department will notify the final rule — which could take effect later in 2026 or in early 2027.
However, the rule may face legal challenges, similar to what happened during the first Trump administration.
History: A Similar Attempt Was Shelved
This is not the first time the US government has tried to raise prevailing wages for H-1B visas. The Trump administration, during its first term, had initiated changes to the prevailing wages in 2020 without prior notice or public comments. That move was challenged in court and had to be shelved after it ran into legal hurdles.
This time, the administration is following the proper rulemaking process — issuing a notice of proposed rulemaking, allowing a public comment period, and only then finalizing the rule. This makes it more likely to withstand legal scrutiny.
Other Recent Changes to H-1B Program
The proposed wage hike is not the only recent change to the H-1B program. Last year, the administration imposed a $100,000 fee for H-1B candidates from outside the US through a presidential order issued on September 19, 2025.
The same presidential order also directed the Secretary of Labour to initiate rulemaking to revise prevailing wage levels under the H-1B program — which is exactly what the Department of Labour has now done.
Impact on Indian Professionals and Companies
India is the largest source of H-1B visa recipients. Every year, tens of thousands of Indian IT professionals move to the US on H-1B visas to work for companies like Tata Consultancy Services, Infosys, Wipro, HCL Technologies, Tech Mahindra, as well as American tech giants like Google, Microsoft, Amazon, and Meta.
Higher prevailing wages would mean:
- Higher costs for Indian IT companies operating in the US
- Potentially fewer H-1B visas being filed, as smaller companies may be priced out
- Higher salaries for Indian professionals who do get visas — but possibly fewer job opportunities overall
- A shift in hiring strategies, with companies possibly hiring more locally in the US or moving work to Canada, Mexico, or India itself
For Indian professionals already in the US or planning to go, the wage hike is a double-edged sword. Higher minimum wages mean better pay — but only if employers are willing to pay that amount. If companies decide that the cost is too high, they may simply reduce the number of H-1B petitions they file.
What Indian IT Companies Are Saying
Indian IT industry bodies have not issued an official response yet, but sources indicate that they are closely studying the proposal. In the past, Indian IT companies have successfully lobbied against restrictive H-1B changes. However, the current proposal — which follows proper rulemaking procedures — may be harder to block.
Some industry observers suggest that Indian IT companies may need to accelerate their efforts to hire locally in the US and reduce their dependence on H-1B visas altogether.
The Political Context
The proposed wage hike comes as immigration remains a hot-button issue in US politics. The administration argues that it is protecting American workers by ensuring that foreign workers are not hired at unfairly low wages. Critics, however, say that the H-1B program is already heavily regulated and that raising wages will only hurt American businesses.
With presidential elections approaching (November 2026), immigration is expected to be a key campaign issue. The final rule, if implemented, could become another talking point in the debate over skilled immigration.
