In a major development that could transform the global tech hiring ecosystem, the United States has proposed increasing minimum wages under the H-1B visa programme by nearly 30%. The proposal, introduced by the US Department of Labor, is aimed at preventing companies from hiring foreign workers at lower salaries than American employees.
The proposed rule affects H-1B, H-1B1, E-3, and PERM labour certification programmes and could dramatically increase hiring costs for companies dependent on foreign skilled workers.
Salary Thresholds May Rise Sharply
Under the proposed framework, wage levels across all four categories would increase substantially.
The biggest jump is for entry-level workers:
- Current minimum salary: $73,279
- Proposed salary: $97,746
- Increase: 33.39%
Other proposed hikes include:
- Level II: $123,212 (24.47% increase)
- Level III: $147,333 (20.79% increase)
- Level IV: $175,464 (21.68% increase)
In expensive tech hubs like San Francisco, an entry-level software engineer on an H-1B visa may need to earn nearly $162,000 annually to qualify. In Dallas, the threshold could rise to $113,000, while New York may see salaries touching $132,000.
Why The US Government Wants This Change
According to the US Department of Labor, the existing wage system was designed almost 20 years ago and no longer reflects current market realities. Officials argue that some employers have used lower wage bands to hire foreign workers more cheaply than comparable US employees.
The new proposal seeks to align foreign worker salaries more closely with prevailing US market wages and reduce allegations of “cheap labour substitution.”
Indian IT Firms Could Feel The Pressure
The H-1B visa programme is heavily dominated by Indian professionals. According to previous USCIS data, Indians account for nearly 70-75% of all H-1B visa approvals annually.
This means Indian IT giants such as Infosys, TCS, Wipro, and HCLTech could face significantly higher onsite staffing costs.
Smaller startups and outsourcing firms may also struggle to sponsor entry-level foreign workers due to the sharp rise in salary requirements. Analysts believe companies could increasingly shift toward remote hiring models from India instead of relocating employees to the US.
Not Final Yet
The proposal is currently open for public comments until May 26, 2026. After reviewing feedback, the Department of Labor will decide whether to implement the final rule.
If approved, this could become one of the biggest changes to the H-1B ecosystem in recent years — impacting thousands of Indian engineers, software developers, data scientists, and tech professionals dreaming of a career in America.
