On March 27, 2026, the Department of Labor published a proposed rule titled, “Improving Wage Protections for the Temporary and Permanent Employment of Certain Foreign Nationals in the United States.” The rule would change the prevailing wage calculations utilized in labor certification processes.
In the public comment below, Niskanen’s Senior Policy Analyst Cecilia Esterline discusses the shortcomings of the proposed changes and offers alternative recommendations to address the issues raised in the proposal.
Brian Pasternak
Administrator
Office of Foreign Labor Certification
Employment and Training Administration
Department of Labor
RE: DOL Docket No. ETA-2026-0001, Improving Wage Protections for the Temporary and Permanent Employment of Certain Foreign Nationals in the United States
Dear Mr. Pasternak:
I write on behalf of the Niskanen Center to provide comments on the Department of Labor (“DOL”) notice of proposed rulemaking, Improving Wage Protections for the Temporary and Permanent Employment of Certain Foreign Nationals in the United States, 20 CFR Parts 655 and 656 (March 27, 2026) (“Proposed Rule”).
The Niskanen Center is a nonprofit public policy organization that advances a vision of American governance informed by ideas from across the ideological spectrum. We advocate for a government that provides social insurance and essential public goods, fosters market competition and innovation, invests in state capacity, and does not impede productive enterprise. We are committed to the principles of liberal democracy and an open society.
We also recognize that immigration is central to the United States’ economic, civic, and cultural strength. Immigration has helped the country attract hardworking and talented individuals from around the world, driven unprecedented American innovation and dynamism, and filled critical gaps in the domestic workforce.
Our legal immigration system, however, is in need of reform. While we continue to encourage bipartisan legislation to modernize the entire American immigration system, we welcome this opportunity to comment on the proposed changes to the prevailing wage calculations.
I. Shortcomings of the Proposed Reform
The Proposed Rule intends to change the methodology for calculating prevailing wage levels I through IV. It proposes moving the benchmark for wage level I from the 17th percentile to the 34th percentile, for wage level II from the 34th percentile to the 52nd percentile, for wage level III from the 50th percentile to the 70th percentile, and for wage level IV from the 67th percentile to the 88th percentile. Though prevailing wages are utilized in several different immigration programs and labor certification processes, the rule’s explanatory statements and justifications focus primarily on the H-1B as the largest source of temporary labor certifications and a key funnel program to permanent labor certifications. Therefore, the analysis in this comment will largely focus on the H-1B as well.
DOL believes the Proposed Rule is necessary based on their assertion that the current prevailing wage structure allows unscrupulous employers to undercut American workers and their wages by using the H-1B program and its current wage methodology. It is true that the H-1B program, as it exists today, is imperfect, and though it provides immense value to the United States, DOL is not wrong to highlight that bad actors have, in some cases, taken advantage of the system’s imperfections. However, the proposed changes are unlikely to address the H-1B’s problems and are instead likely to create undesirable consequences for one of the most critical talent pipelines in the U.S.
The proposal acknowledges that the Immigration and Nationality Act, which established the H-1B, focused on wage requirements based on comparisons with other employees with “similar experience and qualifications.” It also acknowledges, however, the many shortcomings of the survey that drives the current and proposed prevailing wage calculations. The Proposed Rule states that:
“the 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’ —the factors the INA requires the Department to rely on in setting prevailing wage levels. Relatedly, ‘there are factors in addition to skill level that can account for OEWS wage variation for the same occupation and location.’ 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.”
The proposal argues that some Standard Occupational Classification (SOC) occupations include a share of lower-skill workers who may not have a bachelor’s degree or meet the H-1B’s “specialty occupation” threshold. Therefore, the wage-level benchmarks must be raised to preserve their role as proxies for filtering out lower-skilled individuals from the comparison group. While this is true for some occupations, a blanket proposal overlooks the fact that several other occupations are not like this.
For instance, in FY2025, the Department of Labor certified over 12,000 H-1B Labor Condition Applications on behalf of physicians or surgeons.1 Even the most junior physician must have a doctorate degree in the U.S., and his employment would easily surpass the definition of a specialty occupation. In this case, introducing an artificially high wage level I benchmark would primarily disadvantage early-career physicians, regardless of their specialization or their compensation in comparison to other early-career physicians.
While it may seem strategic to build a system that prefers more experienced professionals over early-career ones, this approach does not actually protect our national interests. The biggest benefit of the H-1B is its ability to serve as a bridge between top U.S. universities and our domestic labor market. Therefore, its primary goal should be to preserve that bridge for high-achieving foreign graduates whose talent we want to retain.
Not only is this critical for industries in which we are not producing enough American graduates, but it is also essential to preserving our ability to compete internationally with China and other adversaries. If we train high-achieving international students in emerging technologies or critical industries at our top institutions, sending them to their home countries or to our competitors with that knowledge and expertise becomes increasingly detrimental to our continued economic and innovative competitiveness.
As evident in the case of physicians, the proposal would make it more difficult to retain recent graduates by raising wage benchmarks across the board, without consideration of a graduate’s specialization, the rarity of their credentials, or our need for their skills. The proposal’s justification for the change focuses on a few SOC codes that are prohibitively broad and then extends those implications to the full spectrum of H-1B occupations. Even in cases where all employees within a certain occupation hold the minimum qualifications for a specialty occupation, the proposal would mandate that the salaries of early-career professionals meet those of experienced American professionals, rather than those who are more closely situated in terms of experience and education.
Ultimately, the Proposed Rule relies solely on a survey that the rule itself acknowledges is ill-suited for the task assigned. Even setting aside those acknowledged shortcomings, the proposed changes to the wage level benchmarks fail to account for the wide variability amongst occupations. As a result, the rule would do little to prevent bad-faith actors from undercutting the American labor force, while creating new barriers for the high-skilled talent the United States should be most committed to attracting and retaining.
II. Alternative Recommendations
The rule itself offers one alternative, the experience benchmarking alternative, that would attempt to account for the variations in employee education and experience. This alternative is better than the initial proposal, but it could introduce new administrative burdens or rapid-implementation constraints due to the data deficiencies outlined previously. A more sustainable approach would be for Congress to implement durable improvements to the H-1B program that could better protect American workers.
For example, not all H-1B employers are required to attempt to recruit American workers before petitioning for an H-1B. Only H-1B dependent or previous willful violators are required to conduct U.S. recruitment. While existing U.S. recruitment requirements for other programs are admittedly outdated, expanding this requirement to other H-1B employers could help assuage concerns that H-1B workers are replacing Americans.
Congress could also direct the Bureau of Labor Statistics, or another appropriate agency, to develop and administer a survey specifically designed to support the prevailing wage system. The data limitations identified in the Proposed Rule could be addressed by collecting information that better accounts for workers’ skills, experience, responsibilities, and specialization levels. While developing such a survey would take time and resources, a more reliable dataset tailored to the needs of the labor certification program would allow DOL to better protect American workers without unnecessarily restricting talent pipelines that are vital to the nation’s economic success.
Barring those larger changes, Congress or the DOL could, at a minimum, adjust the methodologies and requirements to reflect differences across occupations. Physicians were used as an example earlier in this comment for good reason. Foreign-born physicians are already viewed as special cases in many immigration programs given their immense contributions to our economy and national well-being. The Conrad 30 Waiver program exempts certain physicians from J-1 home residency requirements and from the H-1B cap. Many university hospitals who employ foreign-born physicians are also considered exempt employers when it comes to the H-1B lottery. Even procedurally, the Trump administration has recognized the importance of immigrant physicians and exempted employer-sponsored physician cases from the ongoing processing pause at U.S. Citizenship and Immigration Services.
While physicians are not the only H-1B occupation making important contributions to the U.S. economy, they are a prime example of the variability amongst occupations that must be taken into consideration when defining who we want to allow to enter and remain in the United States, and an example of why broad policies can sometimes do more harm than good.
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In conclusion, the Proposed Rule is well-intentioned, aimed at protecting American workers and their wages and ensuring that our immigration programs maintain the highest standards of integrity. However, the proposed solutions ultimately fall flat and will not meaningfully benefit the U.S. To the contrary, they are likely to harm the U.S. by threatening the critical talent pipelines emerging from our top universities.
Rather than making broad adjustments to the wage-level percentiles without regard for occupational variation, the Department of Labor should defer to Congress and encourage the implementation of more structural fixes to the H-1B program.
Thank you for your consideration and the opportunity to provide feedback on the Proposed Rule. If you have any questions or need additional information, please do not hesitate to contact me at cesterline@niskanencenter.org.
Sincerely,
Cecilia Esterline
Senior Immigration Policy Analyst
- U.S. Department of Labor, “LCA Disclosure Data”, FY 2025 Q1-Q4. ↩︎
