A new policy paper challenges the federal government’s proposed overhaul of foreign-worker wage rules, arguing that it may fail to stop employers from underpaying visa holders.
A recent analysis from the Institute for Progress (IFP) raises concerns about a proposed rule from the U.S. Department of Labor (DOL) that would change how “prevailing wages” are calculated for H-1B visa holders and other employment-based immigrants.
The DOL proposal, currently open for public comment, would increase wage benchmarks across experience levels to better align foreign workers’ pay with that of U.S. workers. The rule could raise required wages by roughly 21% to 33%, with entry-level salaries potentially jumping by about one-third under the new formula, according to previous reporting by The Dallas Express.
However, the IFP paper argues the department’s primary approach, known as “Blind Benchmarking,” contains structural flaws that would allow underpayment to persist.
“Blind Benchmarking, DOL’s primary proposal, doesn’t deliver on its stated goals,” the authors wrote, adding that “30.8% of the time, it incorrectly identifies whether an H-1B worker earns a positive or negative wage premium.”
The analysis claims that more than half of H-1B cap-subject workers, typically those in the private sector, are already paid below comparable U.S. workers, stating: “Most H-1B workers (53.6%) earn less than the median wage paid to native-born workers with the same occupation, area of employment, experience, and education.”
According to the paper, the issue stems from how prevailing wages are calculated. The current system—and the proposed revision—relies heavily on employer-reported job requirements and broad wage survey percentiles rather than on workers’ actual qualifications.
Even with higher wage thresholds, the paper estimates that “17.2% of new capped H-1Bs would have gone to employers paying less than the median for comparable natives” if the rule had been in place between fiscal years 2022 and 2024.
The DOL has said the proposal is intended to prevent employers from underpaying foreign workers and disadvantaging Americans, stating in its rulemaking that its role is “to ensure that the introduction of foreign labor into the United States supplements, rather than displaces, U.S. workers.”
However, the IFP analysis argues the department’s alternative option, called “Experience Benchmarking,” would better achieve that goal by tying wages directly to workers’ actual education and experience.
“Experience Benchmarking, DOL’s alternative proposal, would eliminate any employer’s ability to sponsor foreign workers for less than the typical American with the same qualifications,” the paper states.
The authors estimate that under such a system, median H-1B wages would have been $17,000 to $22,000 higher annually in recent years.
The debate comes amid broader changes to the high-skilled immigration system. A separate report highlighted how some firms are increasingly promoting alternative visa pathways, including the O-1A category, as a workaround to H-1B restrictions and rising wage requirements, according to prior reporting by The Dallas Express.
At the same time, critics of the DOL rule have warned that raising wage floors too aggressively could create unintended consequences. Some analysts have argued the proposal could push wages “well above” market rates, potentially forcing employers to leave positions unfilled or scale back hiring, according to analysis cited by The Dallas Express.
The IFP paper, however, frames the issue as a question of enforcement rather than cost, arguing that Congress has long required wages to reflect workers’ actual qualifications.
“Blind Benchmarking is fundamentally unable to fulfill its goal of directly comparing the pay of foreign workers to the pay of American workers with the same qualifications,” the authors wrote.
The public comment period for the DOL proposal runs through late May, after which the agency is expected to review feedback and consider revisions before issuing a final rule.
