An entry-level software engineer in San Francisco would need to be paid at least $162,000 a year to qualify for an H-1B visa under a Trump-administration proposal published in March,
The same role in Dallas would jump to about $113,000; in New York, $132,000. The increases run nearly 30% above the current minimums in each city.
The mechanism is technical, and the consequences are not. The Department of Labor’s proposed rule, released on 27 March and open for public comment until 26 May, rewrites the way prevailing wages are calculated for the H-1B and PERM visa programmes.
Today, the lowest of four wage levels (Level I, the entry tier) is anchored 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 lift that anchor to the thirty-fourth percentile. Level IV, the senior tier, would move from the sixty-seventh percentile to the eighty-eighth. The reset cascades through every level in between.
The headline number across the system is roughly $14,000 per affected role per year, the Department of Labor’s own estimate, with senior positions in expensive metros absorbing far more.
A Level IV data scientist in Silicon Valley could see the floor rise by more than $45,000. Some legal commentary has projected occupation-by-metro combinations where the new floor would land near or above $208,000.
The administration’s framing is straightforward. The current bands, set in the 1990s, sit well below the market-rate distributions American workers face, particularly for early-career engineers and recent STEM graduates.
By moving the bands up the percentile distribution, the proposal aims to remove the cost incentive to fill entry-level technical roles abroad. Whether that is the actual binding effect, or whether employers respond by hiring fewer people overall, is contested.
This is not the only H-1B intervention in flight. In September 2025, the administration imposed a $100,000 fee on new H-1B petitions, replacing a fee structure that had previously cost employers between $2,000 and $5,000. A federal judge upheld the fee in December over objections from the US 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 application fee, and the marginal cost of an entry-level H-1B engineer in a tier-one metro rises by tens of thousands of dollars before the contract starts.
The wage rule lands on an industry already reshaping its labour costs around AI. Meta and Microsoft converting payroll into AI capex is the dominant story in technology hiring; Atlassian’s 1,600-job restructure in March followed the same pattern.
More than 78,000 tech workers were laid off in the first four months of 2026, and roughly half of those cuts were attributed to AI taking on tasks formerly assigned to humans. Hiring managers polled by Resume.org expect more cuts ahead.
Within that contraction, demand for AI-specialist roles has stayed firm; entry-level and generalist software work has not. Analysts have started calling that the AI-employment paradox.
The H-1B wage rule lifts the floor for exactly the entry-level segment that is shrinking the fastest. The natural prediction is that fewer entry-level visas will be filed at all and that more of the work will continue to be either offshored or absorbed into AI tooling rather than re-shored to American hires.
There is a counter-prediction. Some of the largest sponsors have explicitly said they will absorb the costs. When the $100,000 fee was announced, Nvidia’s Jensen Huang shrugged it off and said the company would continue to sponsor the workers it needed to sponsor.
Anthropic, OpenAI, Microsoft and Google have made similar commitments. For those companies, the higher wage floor mostly affects how the cost of an H-1B hire is reported on the income statement, not whether the hire happens.
The squeeze falls hardest on smaller employers, on the IT-services firms that have historically used H-1B to fill mid-level outsourced engineering work, and on the tens of thousands of researchers, scientists and engineers in the visa pipeline who are not at the top of the skill curve.
Universities and research labs are the next-most-affected category. The H-1B is the standard conversion path for foreign-born postdocs and graduate researchers moving into US-based jobs.
Raising the wage floor against academic salary scales, which lag both private-sector wages and BLS percentiles, creates a structural conflict the Department of Labor’s text does not yet address. Higher-education industry groups have flagged it in the docket and are expected to be loud during the comment window.
Whether the rule survives unaltered is an open question. The Chamber of Commerce’s litigation against the fee provides a template, and several constitutional and APA challenges to the wage methodology have been previewed by employer-side immigration law firms.
The most likely outcome is a modified rule that holds the broad direction (push wages up) while compressing the percentile increases at the entry-level tiers most affected.
The Department’s own impact estimate, released alongside the rule, acknowledges the proposal would reduce total H-1B volumes; the political question is by how much.
The comment window closes on 26 May. A final rule, in whatever form survives that process, would take effect later in 2026. The administration has been clear that this is an end-state, not a stepping stone.
