[World Labour Law News] US Proposes Ending Substandard Wages for Foreign Workers in Visa Programs

World Labour Law News provides a weekly snapshot of labour law developments from around the globe. Here’s a glimpse of the key labour law update this week.

1. Labour Law

1.1 US Dept. of Labour Proposes to Take Away Employers’ Right to Pay Substandard Wages to Foreign Workers in Certain Visa Programs

Under current law, U.S. employers seeking to hire temporary foreign workers through the H-1B, H-1B1, or E-3 visa programs must pay foreign workers the higher of (a) the prevailing wage for the area of intended employment or (b) the actual wage rate paid to similarly qualified U.S. workers in the area of intended employment.

For employers seeking to hire foreign workers permanently through the permanent labour certification program, they must offer and pay foreign workers at least the prevailing wage for the job opportunity in the area of intended employment.

The prevailing wage operates as a wage floor. Employers must certify that: (a) the wage offered at the time of filing meets or exceeds the prevailing wage; (b) the wage offered during recruitment meets or exceeds the prevailing wage; and (c) the foreign worker will be paid at least the prevailing wage upon commencement of employment.

1.2 Overview of H-1B, H-1B1 and E-3 Programs

The H-1B program allows employers to temporarily employ foreign workers in the U.S. on a non-immigrant basis in speciality occupations or as fashion models of distinguished merit and ability.

The H-1B1 program allows employers to temporarily employ foreign workers from Chile and Singapore in the U.S. on a non-immigrant basis in speciality occupations.

The E-3 program allows employers to temporarily employ foreign workers from Australia in the U.S. on a non-immigrant basis in speciality occupations.

1.3 Proposed Rule

On March 26, 2026, the U.S. Department of Labour’s Employment and Training Administration issued a proposed rule aimed at protecting the wages and job opportunities of American workers by eliminating employers’ ability to pay substandard wages to foreign workers under the H-1B, H-1B1 and E-3 visa programs.

The proposed rule seeks to modernise the existing methodology for determining prevailing wages across the permanent labour certification, H-1B, H-1B1 and E-3 visa programs. The updated methodology would use statistically grounded percentile thresholds derived from the Bureau of Labour Statistics’ Occupational Employment and Wage Statistics survey to align better wages paid to foreign workers with those paid to similarly employed American workers.

1.4 Official Statement

“The Trump Administration is committed to ensuring that American workers are not disadvantaged by unfair wage practices,”

said U.S. Secretary of Labour Lori Chavez-DeRemer.

“This proposed rule will help ensure that employers pay foreign workers wages that reflect the real market value of their labour, in addition to protecting the wages and job opportunities of American workers. The continued abuse of the H-1B program by certain bad actors will no longer be tolerated.”

The proposed change aims to curb abuse of certain visa programs by reducing incentives to displace American workers with lower-wage foreign visa holders and by establishing parity in wages between U.S. workers and foreign workers entering the country on certain employment-based visas.

The Department noted that existing prevailing wage levels have, for too long, been set significantly below market rates received by many American workers, particularly entry-level workers and recent college graduates in science, technology, engineering, and mathematics fields. As a result, the H-1B program has been distorted by hiring practices that abuse the program to replace their existing American workforce with cheap foreign labour.

By seeking to implement these proposed changes, the Department of Labour aspires to improve the correlation between wages paid to foreign workers and those paid to American workers with similar skills and qualifications, reduce the economic incentives to underpay foreign workers and undermine the American workforce, and promote fair competition in the American labour market.

Source – Official Announcement