US plans to raise wages for H-1B visa holders, increasing hiring costs by up to 33%; what it means for Indian workers

According to the Labor Department, the proposed rule would increase minimum wage requirements by 21% to 33%, depending on the worker’s experience level. The rule includes a 60-day comment period and may face legal challenges after the final rule is released.

Also read: H-1B visa registrations drop in FY 2027: Here are the beneficiaries

The proposed rule is consistent with other steps the Trump administration has taken to restrict high-skilled immigration, such as imposing a $100,000 fee on entry for new H-1B visa holders. Trump administration officials, including White House The architect of the administration’s immigration policy, Deputy Chief of Staff Stephen Miller, aimed to make it economically unfeasible for many highly skilled foreigners to enter the U.S. labor market.

The rule is similar to the final rule issued in January 2021 but did not take effect due to the presidential transition. An October 2020 rule aimed at further raising minimum wage requirements was halted after a judge determined it was issued as an “interim final” rule without sufficient justification.

H-1B Temporary visas are often the only means for highly skilled foreigners to obtain permanent employment in the United States. Employers must pay actual or prevailing wages to U.S. professionals with similar experience and qualifications. Companies recruiting at U.S. universities have observed that international students account for approximately 75% to 80% of full-time graduate students in AI-related disciplines such as computer and information science.

“These proposed revisions are intended to better align prevailing wage levels with wages paid to U.S. workers in similar occupations and intended fields of employment.”

The proposal also addresses the issue of employers using the visa program to lower wages.

“The department’s proposed revisions are also intended to strengthen the integrity of programs by reducing the incentives for employers to use these programs to replace, rather than supplement, U.S. workers by hiring low-wage foreign workers.”

The proposed changes aim to lift that number to the 34th percentile, bringing entry-level salaries closer to what mid-level workers earn today.

The change will increase the minimum wage employers must offer, particularly affecting recent graduates and those in the early stages of their careers.

also, H-1B The system is evolving to favor higher-paying positions, which may further limit employment opportunities for entry-level job seekers.

Officials say the existing wage structure has become outdated over the years, allowing some employers to recruit foreign workers at below-market rates.

If passed, the proposal could lead to an increase in wages for skilled professionals in India, especially those with experience. Conversely, increased salary requirements may create challenges for recent graduates and entry-level candidates in securing positions.

At the same time, adjusting wages to match market standards can alleviate the problem of underpayment and improve fairness for U.S. workers, ultimately benefiting experienced Indian professionals in the long run.