The Trump administration's newly proposed immigration rules could make hiring H-1B visa holders too costly for US employers. The proposal includes a $100,000 fee for many H-1B applicants and a directive for the Department of Labor to raise prevailing wage levels for skilled foreign workers.
The measure, announced in a presidential proclamation, follows previous Trump-era efforts to hike required salaries for employment-based immigrants—rules that courts blocked in 2020 and 2021 for procedural violations.
Also Read| US Department of Labor resumes processing of LCAs for H-1B and PERM applications
What might change
The Forbes report cited detailed calculations from the National Foundation for American Policy (NFAP) and the Department of Labor, showing how proposed changes would raise salary requirements for H-1B visa holders. According to Forbes, the NFAP found that the Trump-era Department of Labor rule would have increased required minimum salaries by 39% to 45% on average, depending on the wage level.
“By requiring H-1B visa holders and employment-based immigrants to be paid well above the market wage, the final rule makes it much more difficult for employers to sponsor high-skilled foreign nationals,” the National Foundation for American Policy said.
The impact of this increase would have varied by occupation and region. For instance, Forbes cited NFAP data showing that in San Jose, the required annual salary for software developers would have risen from a Level I prevailing wage of $115,585 to a median local wage of $199,097, a difference of $83,512, or about 72%. Similarly, electronics engineers (non-computer) in the same region would have seen required wages rise from $101,025 to $176,113, an increase of $75,088, or roughly 74%.
Under the Department of Labor’s system, “prevailing wage levels” are divided into four tiers—Level I through Level IV—based on experience, supervision, and responsibility. Forbes explained that the new formula would have pushed salaries closer to the median wage for each occupation and location, regardless of experience level. As a result, employers hiring entry-level professionals would have been required to pay wages comparable to experienced or senior positions.
Also Read| US visa no longer a passport to love for Indians after Trump H-1B squeeze
Analysts cited by Forbes said that these wage hikes would particularly affect Level I or entry-level roles, where younger or newly graduated professionals typically begin their US careers. Such sharp increases, they argued, would make it financially unviable for companies to hire or sponsor foreign professionals, forcing many firms to relocate work overseas or forgo expansion altogether.
The Forbes report noted that international students make up about 73% of full-time graduate students in electrical and computer engineering. Higher costs for H-1B hiring could discourage foreign students from studying or working in the US, impacting university enrollments and talent pipelines for technology and research.
The US Chamber of Commerce has filed a lawsuit challenging the $100,000 H-1B fee, calling it unlawful and economically harmful. Forbes reported that previous versions of the Department of Labor wage rule carried a projected cost of $165 billion over ten years, while the final version was expected to cost $105 billion. Business associations and academic institutions have also joined the legal challenge.
The new proposal revisits wage rules struck down during Trump’s first term for bypassing public comment requirements under the Administrative Procedure Act. Economists cited by Forbes expect the administration’s justification for wage inflation to face similar scrutiny.
The policy aligns with broader measures limiting employment-based immigration, such as restricting student visa durations and altering H-1B selection criteria to favor senior professionals over recent graduates.
Studies by the Government Accountability Office and universities found foreign professionals often earn the same or more than US-born employees. Economist Madeline Zavodny said, “Indeed, I believe this claim is not true,” referring to the assumption that H-1B holders are underpaid.
Economists told Forbes that increasing hiring costs could force companies to relocate jobs overseas. “When you raise the price of something, you get less of it,” one analysis noted, warning that the rule could reduce innovation and investment in the US.
The measure, announced in a presidential proclamation, follows previous Trump-era efforts to hike required salaries for employment-based immigrants—rules that courts blocked in 2020 and 2021 for procedural violations.
Also Read| US Department of Labor resumes processing of LCAs for H-1B and PERM applications
What might change
The Forbes report cited detailed calculations from the National Foundation for American Policy (NFAP) and the Department of Labor, showing how proposed changes would raise salary requirements for H-1B visa holders. According to Forbes, the NFAP found that the Trump-era Department of Labor rule would have increased required minimum salaries by 39% to 45% on average, depending on the wage level.
“By requiring H-1B visa holders and employment-based immigrants to be paid well above the market wage, the final rule makes it much more difficult for employers to sponsor high-skilled foreign nationals,” the National Foundation for American Policy said.
The impact of this increase would have varied by occupation and region. For instance, Forbes cited NFAP data showing that in San Jose, the required annual salary for software developers would have risen from a Level I prevailing wage of $115,585 to a median local wage of $199,097, a difference of $83,512, or about 72%. Similarly, electronics engineers (non-computer) in the same region would have seen required wages rise from $101,025 to $176,113, an increase of $75,088, or roughly 74%.
Under the Department of Labor’s system, “prevailing wage levels” are divided into four tiers—Level I through Level IV—based on experience, supervision, and responsibility. Forbes explained that the new formula would have pushed salaries closer to the median wage for each occupation and location, regardless of experience level. As a result, employers hiring entry-level professionals would have been required to pay wages comparable to experienced or senior positions.
Also Read| US visa no longer a passport to love for Indians after Trump H-1B squeeze
Analysts cited by Forbes said that these wage hikes would particularly affect Level I or entry-level roles, where younger or newly graduated professionals typically begin their US careers. Such sharp increases, they argued, would make it financially unviable for companies to hire or sponsor foreign professionals, forcing many firms to relocate work overseas or forgo expansion altogether.
The Forbes report noted that international students make up about 73% of full-time graduate students in electrical and computer engineering. Higher costs for H-1B hiring could discourage foreign students from studying or working in the US, impacting university enrollments and talent pipelines for technology and research.
The US Chamber of Commerce has filed a lawsuit challenging the $100,000 H-1B fee, calling it unlawful and economically harmful. Forbes reported that previous versions of the Department of Labor wage rule carried a projected cost of $165 billion over ten years, while the final version was expected to cost $105 billion. Business associations and academic institutions have also joined the legal challenge.
The new proposal revisits wage rules struck down during Trump’s first term for bypassing public comment requirements under the Administrative Procedure Act. Economists cited by Forbes expect the administration’s justification for wage inflation to face similar scrutiny.
The policy aligns with broader measures limiting employment-based immigration, such as restricting student visa durations and altering H-1B selection criteria to favor senior professionals over recent graduates.
Studies by the Government Accountability Office and universities found foreign professionals often earn the same or more than US-born employees. Economist Madeline Zavodny said, “Indeed, I believe this claim is not true,” referring to the assumption that H-1B holders are underpaid.
Economists told Forbes that increasing hiring costs could force companies to relocate jobs overseas. “When you raise the price of something, you get less of it,” one analysis noted, warning that the rule could reduce innovation and investment in the US.
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