US Proposes Higher Wages for Foreign Workers

Hyderabad: The United States government has proposed new rules to increase minimum wage levels for foreign workers under visa programmes such as H-1B and green card categories EB-2 and EB-3, which can negatively impact the hiring prospects of Indian professionals looking to work in the United States.

The proposal, issued by the US labour department, focuses on changing how “prevailing wages” are calculated. These wages decide the minimum salary that employers must pay foreign workers.

At present, jobs are divided into four levels based on experience and skill. Each level is linked to a percentile, which shows how a salary compares with others in the same job and location. For example, a 50th percentile salary means a worker earns more than half of those in that role.

Under the current system, entry-level H-1B workers can be paid at the 17th percentile, meaning they earn more than only 17 per cent of workers and less than the remaining 83 per cent. Even the highest level is set at the 67th percentile, which is not considered top-tier pay.

The US government now wants to raise these levels. The proposed changes would move wages to higher percentiles: 34th for Level I, 52nd for Level II, 70th for Level III and 88th for Level IV. In simple terms, this means foreign workers would need to be paid closer to the average or even above-average salaries in their field.

The department argues that the current system allows companies to hire foreign workers at lower wages than their American counterparts. They said that it creates unfair competition and may push down salaries for local workers.

“The department also determined that the existing wage levels were artificially low and provided an opportunity for employers to hire and retain alien workers at wages well below what their US counterparts earn, creating an adverse incentive to prefer the hiring of alien workers to US workers, an incentive that is at odds with the statutory scheme and which causes downward pressure on the wages of the domestic workforce”, the proposal read.

The new rules aim to ensure that foreign employees are paid fairly and that US workers are not undercut.

For Indian professionals, the impact could be mixed. While the professionals who secure jobs may benefit from higher pay, companies may become more cautious about hiring employees from abroad due to increased costs, especially for entry-level roles.

The changes could also affect those applying for permanent residency through the Permanent Labour Certification (PERM) process under EB-2 and EB-3 categories. A large number of such applicants are already working in the US on H-1B visas, meaning the new wage rules would apply to both temporary and permanent stages.

The proposal is currently open for public comment. If implemented, it could reshape hiring practices in sectors like information technology, where Indian workers have a strong presence.