The U.S. labor market is losing steam. April payrolls added just 115,000 jobs, and total nonfarm employment growth in 2025 stands at 181,000—a steep drop from 1.46 million a year earlier. The tech sector is faring even worse. Indeed's Hiring Lab reports job postings remain roughly one-third below pre-pandemic levels, with software development roles down about 30 percent and other information sector categories falling 30 to 40 percent below 2020 levels.
Software developers are the top occupation for H-1B temporary foreign workers, according to the Department of Labor. Yet at this fragile moment, the department has proposed a rule that would sharply raise wage floors for these jobs.
The proposal would increase the “prevailing wages” employers must pay sponsored workers under the H-1B and employment-based green card programs. Currently, wages are set using four tiers tied to the Occupational Employment and Wage Statistics survey, corresponding to the 17th, 34th, 50th, and 67th percentiles. The new rule would upend that structure: entry-level positions would jump from the 17th to the 34th percentile—a 33 percent increase in Level I wages. Level II wages would rise about 25 percent, Level III roughly 20 percent, and Level IV would climb to the 88th percentile. In effect, what is now a mid-level salary would become the minimum for entry-level sponsored visa workers.
These changes won't only affect visa holders. When the government mandates higher pay for one group, employers face pressure to raise wages for similarly situated American workers—or risk claims of discrimination. Both the Equal Employment Opportunity Commission and the Justice Department's Immigrant and Employee Rights Section routinely scrutinize compensation differences. Recent settlements underscore the risk: the Justice Department secured $14.25 million from Facebook in 2021 and $25 million from Apple in 2023 over recruitment practices that allegedly disadvantaged U.S. workers. In February 2025, the EEOC's acting chair pledged increased enforcement against practices favoring visa holders.
Congress has seen this movie before—and rejected it. The Immigration Act of 1990 required employers to pay the prevailing wage to H-1B workers “and to other individuals employed in the occupational classification and in the area of employment.” That language effectively raised wages for all workers in an occupation. But Congress reversed course the next year with the 1991 Miscellaneous and Technical Immigration and Naturalization Amendments, limiting wage obligations to the H-1B worker alone. The current proposed rule risks recreating that outcome through regulatory design rather than statutory mandate.
The underlying data can't support the new structure. The Occupational Employment and Wage Statistics survey is an employer-reported, establishment-level survey covering roughly 800 occupational codes. It does not collect information on education, experience, supervisory responsibility, or job complexity. The four wage “levels” imposed on its data are statistical overlays, not measures of actual job differences. The Department of Labor once used a more precise framework—the Dictionary of Occupational Titles, last revised in 1991, classified more than 12,700 occupations with detailed skill and training measures. That system was abandoned due to cost, not conceptual flaw. As political dynamics shift, modern data tools could rebuild a more accurate framework.
Congress should step in. Lawmakers must scrutinize the proposed rule, demand clarity about its economic and legal consequences, and reject a one-size-fits-all wage escalation that risks pricing out jobs while exposing employers to avoidable liability. More importantly, Congress should direct the Labor Department to modernize its occupational framework so prevailing wages reflect real differences in work. The broader political context also matters: artificial wage inflation does not protect American workers. Sound policy, accurate data, and congressional oversight do.
Angelo Paparelli is an immigration lawyer practicing in Southern California. Stephen Yale-Loehr is a retired immigration law professor at Cornell.
