In a significant move to protect American workers, the US Department of Labour has announced a proposed rule that seeks to increase wage standards for foreign workers under the H-1B, H-1B1, E-3, and permanent labour certification (PERM) visa programmes. This proposal, released on March 26, 2026, aims to revise how prevailing wage levels are calculated, utilizing updated data from the Bureau of Labour Statistics.

Secretary of Labour Lori Chavez-DeRemer stated that the changes are designed to prevent employers from replacing American workers with cheaper foreign labour. The current wage system has been criticized for setting prevailing wages below the actual earnings of many American workers, particularly in entry-level positions within the science, technology, engineering, and mathematics (STEM) sectors.

The proposed adjustments will anchor wage levels to statistically grounded percentile thresholds derived from the Bureau of Labour Statistics' Occupational Employment and Wage Statistics survey. This shift is expected to bring foreign workers' wages more in line with real market rates, thereby reducing the financial incentive for employers to hire foreign workers at suppressed wages.

Chavez-DeRemer emphasized the administration's commitment to ensuring that American workers are not disadvantaged by unfair wage practices. She remarked, "This proposed rule will help ensure that employers pay foreign workers wages that reflect the real market value of their labour, in addition to protecting the wages and job opportunities of American workers. The continued abuse of the H-1B program by certain bad actors will no longer be tolerated."

Under the existing regulations, employers utilizing the H-1B, H-1B1, or E-3 programmes must pay foreign workers either the prevailing wage for the relevant area or the actual wage paid to similarly qualified US workers in that location. For PERM applicants, employers are required to offer and pay at least the prevailing wage from the point of filing until the foreign worker begins employment.

The Department of Labour has indicated that the prevailing wage has often served as a wage floor that some employers exploit to undercut American workers, particularly recent graduates entering competitive job markets. The proposed changes aim to improve the correlation between wages paid to foreign and domestic workers with comparable skills, thereby fostering fairer competition within the American labour market.

In related developments, the US has recently expanded its visa screening process to encompass 13 categories of foreigners. Furthermore, the Department of Labour has barred four companies from sponsoring H-1B work visas due to violations, effectively freezing their ability to hire or retain foreign workers. This action underscores the administration's ongoing efforts to regulate the H-1B programme and protect local employment opportunities.