It is anticipated that the H-1B visa program will undergo substantial modifications under the Trump administration, particularly in relation to the prevailing wage requirements. Employers who recruit international talent should anticipate potential policy modifications that are comparable to those observed during Trump’s initial term.
Prevailing Wage Reform: Background and Future Implications:
The H-1B visa enables U.S. businesses to temporarily employ foreign workers in specialty occupations, thereby assisting in the filling of critical roles in the technology, healthcare, finance, and other sectors. The prevailing wage requirement is a critical component of the H-1B process, requiring employers to pay foreign workers at least the higher of the prevailing wage or the actual wages paid to analogous U.S. employees. The purpose of this regulation is to safeguard the domestic workforce and prevent wage suppression.
President Trump endeavored to align foreign worker compensation more closely with market wages for U.S. workers by substantially increasing prevailing wage thresholds during his first term through a Department of Labor (DOL) rule. Despite the fact that the Biden administration subsequently rescinded these 2020 reforms due to legal challenges, it is probable that Trump will reinstate comparable measures.
Data Examples Demonstrating Potential Wage Impacts (National Averages):
| Roles | Previous Level I Wage | Proposed Level I Under Trump | Percentage Change |
| Software Developers | $85,000 | $130,000 | 53% Increase |
| Computer Research Scientists | $85,000 | $122,000 | 43% Increase |
| Petroleum Engineers | $87,000 | $174,000 | 100% Increase |
Check Also: USCIS Form I-824 – Full Guidance
Likelihood of New Prevailing Wage Reforms:
Businesses should anticipate renewed efforts to significantly increase prevailing wages, given Trump’s historical emphasis on protecting American jobs and wages. Trump’s previous proposal significantly increased entry-level (Level I) wages, pushing the minimum salary to nearly the median wage level for specific occupations.
For instance, the annual salary of an entry-level mechanical engineer would increase by 30%, from $65,000 to $85,000. Employers can anticipate a renewed emphasis on prioritizing higher-paying positions as conservative policy organizations present comprehensive proposals, which include a wage-based allocation of H-1B visas.
Wage-Based H-1B Selection vs Lottery:
Currently, most H-1B petitions are selected through a lottery system when applications exceed the annual cap. The proposed changes aim to prioritise applicants based on offered salaries rather than random chance. In a wage-based H-1B selection vs lottery model, higher-paying job offers would move to the front of the line, rewarding employers willing to meet or exceed prevailing wage benchmarks.
Trump H-1B Visa Changes Explained:
The Trump H-1B visa changes during his presidency laid the groundwork for wage prioritisation. Although the lottery system remained, rules were introduced to increase scrutiny of job classifications and employer compliance. The 2025 proposals build on this foundation, potentially raising the threshold for entry-level positions and focusing on specialised, higher-paid roles.
Level IV Prevailing Wage H-1B Selection:
A key feature of the reform is the focus on Level IV prevailing wage H-1B selection. This would prioritise applicants whose salaries meet the highest wage level for their occupation and region, often reserved for senior or highly specialised roles. The intent is to favour “elite merit” candidates, aligning with the Project 2025 H-1B elite merit system vision.
Project 2025 H-1B Elite Merit System:
The Project 2025 H-1B elite merit system proposes rewarding skill, experience, and salary level over random selection. Proponents argue that this would better serve U.S. economic needs by ensuring only the most qualified foreign workers receive visas. Critics warn it could limit opportunities for entry-level talent and smaller employers who cannot compete with tech giants on salary.
Higher Salary H-1B Visa Rules and Their Impact:
The higher salary H-1B visa rules under consideration could dramatically change how companies recruit global talent. While large corporations might adapt easily, small-to-mid-sized businesses and research institutions could face challenges in attracting skilled workers if salary-based prioritisation becomes the norm.
Potential for Wage-Based Selection Process:
Another significant action that the Trump administration may pursue is the transition to a wage-based selection process. One of the primary objectives of his inaugural term was to elevate the minimum wage levels, which was intended to guarantee that foreign employees were compensated at a rate that was comparable to that of their American counterparts and to potentially discourage the recruitment of foreign workers for lower-paying positions.
Another mechanism to prioritize higher-skilled and higher-paid foreign workers seeking entry through the H-1B program could be the implementation of a wage-based selection process, which could be viewed as a further step in this direction.
Potential Impacts on H-1B Visa Allocation:
The potential implementation of a wage-based selection process for H-1B visas and the reinstatement of higher prevailing wages would redirect visa allocation toward positions that require a higher level of skill and pay. Companies that are seeking to recruit international talent at the entry-level or early-career level may encounter substantial financial obstacles.
In contrast, senior or specialized positions may become more competitive, with a focus on advanced skills, experience, and higher compensation packages.
Sector-Specific implications:
Industries heavily dependent on entry-level talent, such as technology startups, might encounter considerable challenges, potentially needing to rethink hiring strategies or pivot towards alternative visa pathways (e.g., L-1 or O-1 visas). Sectors with larger salary ranges could see increased concentration of visas at senior levels, affecting organizational structures and career progression strategies for international employees.
Key Considerations for Employers:
- Perform internal salary audits to ascertain the current wage structures in comparison to the potential for increased prevailing wages.
- Evaluate the positions that are most essential for international recruiting, with a focus on positions that are likely to be favored by new policies and pay a higher salary.
- Investigate alternative immigration routes and contemplate the expansion of domestic recruitment and training.
- In anticipation of increased scrutiny and enforcement, allocate additional resources to compliance and regulatory preparedness.
Broader Implications and Proactive Steps:
Particularly in industries that are innovation-driven and rely on international talent, the competitiveness of U.S. businesses could be impacted by increased prevailing wage requirements. Companies should actively participate in advocacy initiatives by:
- Engaging in direct communication with policymakers and providing formal feedback
- Taking an active role in the lobbying efforts of industry associations
- Increasing public awareness through the dissemination of data and publications
Promoting employee engagement in the process of contacting elected officials to underscore the economic advantages of balanced immigration policies.
Looking Ahead:
It is anticipated that the Trump administration will advocate for substantial H-1B prevailing wage reforms, which could potentially reshape immigration policy for specialized workers and prioritize higher-paying roles. In order to mitigate disruptions to their talent pipeline, employers should remain flexible, modify their hiring strategies, and remain informed.
Frequently Asked Questions:
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What are “prevailing wage” reforms under Trump’s H-1B policy?
Under Trump’s administration, rules were proposed to significantly raise prevailing wage levels for H-1B workers. Employers would be required to pay 100% of the prevailing wage or the actual wage for similar employees—whichever was higher. This replaced the earlier practice of allowing payment at 95% of the prevailing wage.
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Why were these changes implemented?
The stated goal was to prevent wage undercutting by employers, protect U.S. workers, and discourage the hiring of lower-paid foreign workers, particularly in outsourcing arrangements.
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How did the administration compute the prevailing wage?
The Department of Labor used Occupational Employment Statistics (OES) data but adjusted the wage levels so that entry-level (Level 1) wages became equivalent to the old Level 2, raising the minimum wage requirement for all levels.
