Under a Trump administration proposal released in March, an entry-level software engineer in San Francisco would have to be paid at least $162,000 a year to qualify for an H-1B visa.
In Dallas, the same role would jump to about $113,000; In New York, $132,000. The increases are about 30% above the existing minimums in each city.
The mechanism is technical, but the results are not. The Labor Department’s proposed rule, released March 27 and open for public comment through May 26, rewrites the prevailing wage calculation rule for the H-1B and PERM visa programs.
Today, the lowest of four wage levels (tier I, the entry level) corresponds to the seventeenth percentile of Bureau of Labor Statistics earnings for a given occupation in a given metro area.
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The proposal would raise that anchor to thirty-four percent. Tier IV, the top tier, would go from the sixty-seventh percentile to the eighty-eighth percentile. The reset goes through every level in between.
According to the Labor Department’s own estimates, the systemwide headcount is about $14,000 a year for each affected role, with top jobs in expensive metros raking in more.
A level IV data scientist in Silicon Valley can see the floor increase by more than $45,000. Some legal interpretations predict a subway invasion where a new floor would cost close to $208,000 or more.
The structure of the administration is simple. Established in the 1990s, current cohorts are well below the market rate faced by American workers, particularly for early-career engineers and recent STEM graduates.
By moving groups up the percentile, the proposal aims to remove the cost incentive to fill entry-level technical roles overseas. It is debatable whether this is an actual forcing effect or whether employers simply respond by hiring fewer people overall.
This is not the only H-1B interception on the flight. In September 2025, the administration introduced a fee of $100,000 for new H-1B petitions, replacing the fee structure that previously cost employers between $2,000 and $5,000. A federal judge upheld the fee in December over objections from the U.S. Chamber of Commerce and a coalition of nineteen state attorneys general.
Amazon, the largest H-1B sponsor, employs more than 10,000 people on the visa; Microsoft, Meta, Apple and Google each sponsor several thousand more.
Stack the new wage rule on top of the filing fee, and the marginal cost of an H-1B engineer in a first-tier metro increases by tens of thousands of dollars before the contract even starts.
The wage rule comes into play one industry is already reshaping labor costs around AI. Meta and Microsoft turn wages into AI capital technology is the dominant narrative in recruitment; Atlassian’s restructuring of 1,600 jobs in March followed the same pattern.
More than 78,000 tech workers were laid off in the first four months of 2026, and nearly half of those layoffs were attributed to artificial intelligence taking over tasks previously assigned to humans. Hiring managers surveyed by Resume.org expect more layoffs to come.
Within this contraction, demand for AI-expert roles remained stable; entry level and no general software work. Analysts have begun to call it The AI-employment paradox.
The H-1B wage rule raises the bar for the fastest-decreasing entry-level segment. The natural prediction is that fewer entry-level visas will be issued in general, and that most jobs will either be offshored or continue to be absorbed by AI tools rather than returned to American hires.
There is a contrary prediction. Some of the biggest sponsors have made it clear that they will cover the costs. When the $100,000 payment was announced, Nvidia’s Jensen Huang denied it and said the company would continue to sponsor workers it was supposed to sponsor.
Anthropic, OpenAI, Microsoft and Google have made similar commitments. For these companies, the higher wage rate primarily affects how the cost of H-1B hires is reported on the income statement, not whether the hire will occur.
The squeeze falls most heavily on smaller employers, IT services firms that have historically used H-1Bs to fill mid-level foreign engineering jobs, and tens of thousands of researchers, scientists and engineers who are not at the top of the skills curve in the visa pipeline.
Universities and research laboratories are the next most affected category. The H-1B is the standard conversion route for foreign-born postdocs and graduate researchers moving to jobs in the United States.
Both private-sector wages and increasing pay scales versus academic pay scales, which lag behind BLS rates, create a structural conflict that the Labor Department’s text has yet to address. Higher education industry groups noted this in the document and are expected to be vocal during the comment window.
Whether the rule remains unchanged is an open question. The Chamber of Commerce lawsuit against the fee provides a template, and several constitutional and APA challenges to the wage methodology have been preempted by employer-side immigration law firms.
The most likely outcome is a modified rule that maintains the broad direction (pushing wages up) while suppressing interest rate increases at the most affected entry-level levels.
The Department’s own impact estimate, released alongside the rule, acknowledges that the proposal would reduce the overall volume of H-1B; how much is the political question.
The comment window closes on May 26. In whatever form it survives this process, the final rule will take effect after 2026. The administration has been clear that this is not a stepping stone, but an end-state.
