The H-1B visa program could be set to undergo another major transformation as the U.S. Department of Labor considers changes that would dramatically increase the prevailing wage benchmarks employers need to meet when hiring foreign professionals. The proposed changes could raise the wages by about 21 per cent to 33 per cent, depending on the experience and skill level of a worker.
For Indian professionals who have been the major contributors for years to H-1B recipients, the proposal could have implications that go well beyond salaries. Although successful H-1B employees could get paid higher wages, firms could also be more selective about hiring foreign employees, even if it is for entry-level jobs.
The proposed changes are therefore being closely watched by Indian technology professionals, students planning US careers and IT companies that depend on skilled foreign workers.
What Is the H-1B Visa?
The H-1B visa allows US employers to temporarily employ foreign nationals in specialised occupations. The programme is highly prevalent in information technology, engineering, finance, healthcare, research and other highly skilled fields.
The regular annual H-1B cap is 65,000 visas, and 20,000 visas are available to qualifying foreign nationals who hold advanced degrees from US institutions.
Indian professionals have long been among the largest groups using the programme, particularly in technology-related fields. Many Indian IT professionals utilize the H-1B pathway to enter the US workforce, gain specialized experience and, potentially, eventually find long-term employment opportunities.
However, US immigration policy requires employers to ensure that H-1B workers are not used to suppress the wages or working conditions of similarly employed US workers. This is where prevailing-wage requirements become important.
How Does the Current Wage System Work?
The Department of Labor currently uses occupational and geographic wage data to establish four prevailing-wage levels for H-1B positions.
Level I generally applies to entry-level workers, and Level II represents qualified workers. Level III covers more experienced employees and Level IV generally applies to highly experienced or fully competent workers.
These levels are in the 17th, 34th, 50th and 67th percentiles of wages for a particular occupation and geographical area based on the current methodology.
Companies that sponsor H-1B workers generally pay at least the higher of the applicable prevailing wage or the actual wage paid to similarly employed workers in the company.
The system is to establish a minimum compensation threshold for workers and prevent employers from using foreign workers as an artificially cheaper source of labour.
How Much Could H-1B Wages Increase?
The proposed Labor Department approach would raise the wage benchmarks for all four levels. The estimated increase is approximately 33.4 per cent for Level I, 24.5 per cent for Level II, 20.8 per cent for Level III and 21.7 per cent for Level IV.
As a result, the largest increase would affect entry-level positions.
But calling the proposal simply a “30 per cent H-1B salary hike” is misleading. It does not mean that every current H-1B employee would automatically receive a 30 per cent pay increase.
Instead, it would raise the wage benchmarks employers need to set when they decide the minimum salary they should pay for covered positions. The actual financial impact would vary depending on occupation, location, experience and the appropriate wage level.
Why Is the US Considering Higher Wage Floors?
The Labor Department has argued that the current method does not account for H-1B wages that are comparable to comparable US workers.
The proposed changes would enhance wages for workers who are foreign and reduce the incentives for employers to hire foreign workers for lower wages. The department also has pointed out wage disparities between H-1B workers and US workers.
The proposal said that H-1B workers earned about $10,000 less on average than the comparable US workers, though the difference varied significantly based on occupation.
With higher current wages, policy makers argue that companies would have less incentive to rely on lower-paid foreign labour and more incentive to hire workers based on genuine skill requirements.
What Could It Mean for Indian IT Professionals?
For Indian professionals already in highly paid H-1B jobs, higher wage demands could potentially translate into greater compensation if their employers need to meet the new thresholds.
However, the bigger concern might be for entry-level applicants.
If companies have to pay significantly more to sponsor an entry-level H-1B worker, some employers may reconsider whether sponsorship makes economic sense. They could instead recruit US-based graduates, restructure positions, automate certain tasks or shift some work to overseas locations.
This could make the first step into the US technology industry more challenging for young Indian professionals who are dependent on employer sponsorship.
Indian IT companies could also incur increased costs when they continue to use the H-1B programme extensively. Rising wages and other immigration costs coupled with higher wages would pressure companies to change their US hiring and staffing strategies such as staff and salaries.
H-1B Policy Is Changing Beyond Wages
The proposed wage changes are just one part of a major transformation of the H-1B programme.
The Trump administration has also taken steps to give higher-paid and higher-skilled positions greater weight. A weighted H-1B selection system introduced in 2026 gives positions that are high wage more chances to be selected, while still allowing for opportunities for all wage level positions.
The administration also proposed a $103,265 fee for certain cap-subject H-1B petitions. Such a fee is subject to the relevant regulatory process and public comment.
That combination of factors could make the H-1B system extremely expensive for employers as well as more incentives to sponsor workers with specialised skills and higher wages.
An Alternative Wage Methodology
The Labor Department’s workforce development center also is considering an alternative approach in which education and experience are taken into account when setting wage benchmarks.
Based on that approach, the four wage levels might correspond to the 50th, 62nd, 75th and 90th percentiles.
Such a system would also raise the bar for employers looking to sponsor foreign workers, particularly if positions currently classified at lower wages would have to be set to much higher standards.
What Indian Applicants Should Watch
For Indian professionals who are planning to go to the US and are also working on that, the proposed wage changes could make it even more important to develop specialized skills and create jobs that are more valuable and thus raise compensation.
Technology professionals with knowledge of artificial intelligence, cybersecurity, advanced software engineering, data science and other specialized fields could be better positioned in a system that increasingly favors higher-skilled and higher-paid workers.
In addition, applicants should not assume that the proposed wage changes automatically mean a 30 percent salary increase. The plan is about prevailing wages and employers' obligations and not universal pay for all H-1B workers.
The end result will depend on the rulemaking process and whether changes are made after public comments and employers respond when new requirements take effect. For Indian professionals the fundamental takeaway is clear: the H-1B pathway could become more expensive and competitive, particularly at the entry level, while workers with specialized skills and a higher earning potential could be better positioned in the changing US immigration landscape.
