Entry-level software engineers in San Francisco could soon face a new reality. Under a proposed Trump administration rule, companies would need to pay them at least $162,000 a year to sponsor an H-1B visa. The same role in Dallas would command $113,000. In New York, $132,000. These figures represent jumps of nearly 30% from current minimums.
The Department of Labor released the proposal in late March. It would rewrite how prevailing wages are calculated for the H-1B program and employment-based green cards. The changes shift percentile thresholds drawn from Bureau of Labor Statistics data. Wage Level I moves from the 17th percentile to the 34th. Level II goes from the 34th to the 52nd. Level III rises from the 50th to the 70th. Level IV climbs from the 67th to the 88th.
The Labor Department estimates the adjustments would boost required pay by an average of $14,000 per worker annually. For some senior roles in expensive markets, the increase exceeds $45,000. Software developers in Manhattan would see Level I wages climb 28%, or nearly $30,000, to $131,997 from $103,210. A financial manager in San Francisco at the entry level could jump 41%, from $133,619 to $188,427.
But the numbers tell only part of the story. This marks the latest move in a broader effort to tighten the H-1B program. Last year the administration imposed a $100,000 fee on certain new visa petitions. In December it finalized a rule replacing the random H-1B lottery with a weighted system favoring higher-paid and higher-skilled applicants. That change took effect in February for the fiscal 2027 season.
“The Trump Administration is committed to ensuring that American workers are not disadvantaged by unfair wage practices,” U.S. Secretary of Labor Lori Chavez-DeRemer said in the DOL announcement. “This proposed rule will help ensure that employers pay foreign workers wages that reflect the real market value of their labor, 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 administration argues current wage levels sit too low. They fall dramatically below what many U.S. workers, especially recent STEM graduates, receive. This gap, officials say, creates incentives for companies to displace Americans with cheaper foreign labor. The prevailing wage has long acted as a floor. Employers must pay the higher of that level or what they pay similar U.S. workers.
Critics push back hard. They contend the rule invents a wage gap that doesn’t hold up under scrutiny. Data from labor condition applications show H-1B workers often receive offers 10.6% to 12.7% above the listed prevailing wages. Studies find they earn comparable or even higher salaries than U.S. counterparts when experience is properly accounted for. One analyst called the DOL’s comparison flawed. H-1B holders tend to be early in their careers. The benchmark data mixes them with workers who have far more tenure.
“This is not a valid comparison,” Mark Regets, a former National Science Foundation economist, told Forbes. “The wage measures are not comparable, and the workers are not comparable.” He added that the department appeared to select percentiles specifically to close an average gap it had manufactured. The result, he said, sets required wages well above any reasonable definition of prevailing pay.
The proposal echoes a 2021 rule from Trump’s first term. Courts blocked that effort. The Biden administration later withdrew it. This version faces a 60-day comment period that ends May 26. Litigation seems likely. The U.S. Chamber of Commerce and others have already challenged the $100,000 fee in court.
Tech companies find themselves in a strange spot. The industry shed 78,000 jobs in the first four months of 2026 alone. Roughly half tied to artificial intelligence efficiencies. At the same time, demand for AI specialists remains strong. Entry-level generalist roles have cooled. Large sponsors such as Amazon, Microsoft, Meta, Google and Apple each bring in thousands of H-1B workers a year. Many of these firms say they will absorb the higher costs. The added expense becomes an accounting matter rather than a barrier.
Smaller employers, IT services firms and universities face steeper challenges. Academic salaries often lag the new BLS-derived floors. Research labs that rely on international postdocs could see sponsorships dry up. Hospitals and other sectors that use the visas also watch closely.
The changes arrive alongside a separate DHS rule. It weights H-1B selections toward higher salaries and skills. “The existing random selection process of H-1B registrations was exploited and abused by U.S. employers who were primarily seeking to import foreign workers at lower wages than they would pay American workers,” USCIS spokesman Matthew Tragesser said in a December statement. The weighted approach, he added, better serves congressional intent and strengthens U.S. competitiveness.
Combined, the fee, the wage floors and the selection shift raise the bar substantially. An entry-level hire in a high-cost city now carries tens of thousands in extra marginal cost. Some projections point to effective minimums approaching or exceeding $208,000 in select occupation and metro combinations. That figure appeared in earlier campaign discussions and continues to circulate in industry debates.
Yet the data on wage suppression remains mixed. Tech salaries have risen across five-year windows since 2000. H-1B workers account for a significant share of new hires in computer-related fields. India supplies about 70% of recipients. Opponents of the program argue this crowds out U.S. graduates struggling to land solid first jobs. Supporters counter that the visas bring essential talent that fills gaps and drives innovation. They warn that overly restrictive rules will push work offshore or accelerate automation.
The rule does not ban H-1B usage. Companies can still sponsor at all levels. They can pay above the new floors or use private wage surveys where available. But the practical effect could shrink overall volume. The DOL itself acknowledges as much in its analysis. Smaller players may simply stop participating. Larger ones might redirect resources toward domestic hiring or AI tools.
Public comments are pouring in. Higher-education groups have voiced particular concern. They worry about impacts on scholars and researchers whose pay scales don’t match private-sector benchmarks. Industry associations highlight risks to competitiveness. Some analysts predict the final version could be softened. Others expect the administration to push through aggressive changes.
One thing seems clear. The H-1B program that companies have relied on for decades is changing. The salary floor is rising. The selection process now rewards pay. Additional fees add friction. Whether these steps truly protect American workers or simply raise costs across the board remains the central debate. Employers are adjusting strategies now. So are foreign talent pipelines. The comment period closes soon. What comes after will shape tech workforces for years.
And the timing adds pressure. With layoffs continuing and AI reshaping roles, the new requirements hit at a moment of flux. Companies that once viewed H-1B as a flexible talent valve now face a stiffer price of admission. Some will pay it. Others won’t. The market will sort the rest.
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