The Presidential Proclamation signed on September 19, 2025, restricting the entry of certain H-1B beneficiaries, contains a significant directive to the Department of Labor (DOL). It instructs the agency to begin a rulemaking process to raise prevailing wage levels for H-1B workers and for employment-based green card applicants. While the details will only emerge through formal regulations, the intent is unmistakable: to tie visa programs more closely to higher pay scales and to reduce the perception that foreign labor can be used as a lower-cost substitute for U.S. workers.
The 2020 Attempt to Raise Wages
The announcement has revived memories of October 2020, when the Trump administration attempted a sweeping overhaul of the prevailing wage system. On October 8 of that year, the DOL issued an Interim Final Rule that immediately raised the four wage levels by shifting them from roughly the 17th, 34th, 50th, and 67th percentiles to about the 45th, 62nd, 78th, and 95th percentiles. The change applied overnight to the government’s Online Wage Library and affected both H-1B Labor Condition Applications and PERM filings. Employers suddenly faced prevailing wage rates far above the salaries typically paid to entry-level professionals.
Many observers noted that the timing was no coincidence. The presidential election was only weeks away, and there was a strong possibility that the administration would not remain in office beyond January 2021. The prevailing wage overhaul was seen as part of a broader “midnight regulation” push to lock in immigration policy changes before a new administration could take power.
Employer Reactions and Private Wage Surveys
During the two months the rule remained active—from October 8 until December 4, 2020—employers scrambled to adjust. One strategy was to rely on private wage surveys. The H-1B regulations allow the use of “independent authoritative surveys” if they meet strict methodological standards. Large employers with resources turned to these surveys with some success, while smaller businesses often found them prohibitively expensive.
This option provided temporary relief but underscored the uneven impact of compliance strategies. Even then, the government made clear that it preferred its own wage data. More recently, in the new H-1B weighted lottery system announced for the FY2027 season, DHS has gone further, stating that even when private surveys are used, their levels will be treated as equivalent to the lowest government wage level for selection purposes. This signals that the administration may be preparing to reduce or neutralize the value of private surveys in future regulations.
Why the Courts Vacated the Rule
The courts never ruled on whether the October 2020 wage increases were reasonable. In Chamber of Commerce v. DHS/DOL, decided on December 1, 2020, a federal court vacated the Interim Final Rule solely on procedural grounds. The Administrative Procedure Act requires agencies to provide notice and invite public comment before enacting substantive changes. DOL had claimed “good cause” to bypass this requirement, citing the pandemic’s labor market disruption. The court rejected that argument, finding that unemployment was concentrated in low-wage industries like hospitality and retail, not in the high-skilled occupations covered by H-1B visas.
Because the agency had rushed the rule without giving the public an opportunity to comment, it was set aside in its entirety. By December 4, 2020, the Online Wage Library had been reverted to the earlier wage levels.
Key Lessons from 2020
The lesson from that episode is that process matters as much as substance. Skipping public input and relying on a shaky “good cause” argument doomed the rule. Employers adapted by using private surveys, but at considerable cost and with limited reach. And the durability of any policy change depends on its legality: rules rushed out in the closing months of an administration are particularly vulnerable to judicial review and reversal.
What to Expect from New Rulemaking
Looking ahead, the Department of Labor will have to move more carefully. A new rulemaking will require publication of a proposed rule in the Federal Register, a public comment period of at least 60 days, careful review and response to the comments, and interagency review before finalization. By law, a final rule cannot take effect until at least 30 days after publication, and if it is classified as a major rule, the Congressional Review Act imposes an additional 60-day review window. Even under an ambitious timeline, it would take a minimum of six months for new prevailing wage regulations to take effect, and more realistically closer to nine months to a year.
Because of this timing, employers will still have a window to file H-1B extensions using the current prevailing wage levels. Since extensions can be filed up to six months before the expiration of status, careful planning will allow employers to secure approvals under today’s wage structure before new rules raise the bar. At the same time, the potential wage increase will directly affect PERM applications. The prevailing wage determination is the first step in the PERM process, and any upward adjustment means petitioners must demonstrate a greater ability to pay when filing the I-140 immigrant petition. This could have wide-reaching implications for green card sponsorship strategies.
Broader Context of Court Pushback
The October 2020 episode was not an isolated case. During the Trump years, several other immigration initiatives were struck down in court for failing to follow the Administrative Procedure Act, including the attempted rescission of DACA, the expanded public charge rule, and changes to the Flores settlement on the detention of minors. The prevailing wage overhaul fell into the same pattern. The message from the courts has been consistent: immigration policy may change, but it must change through procedures that respect the law.
Conclusion
The new proclamation has set the stage for another round of wage reforms. Employers should prepare for higher required salaries in H-1B and PERM cases and should be cautious in relying on private wage surveys, given both their high cost and the government’s growing skepticism toward them. If DOL proceeds carefully this time—through notice-and-comment rulemaking, with a robust evidentiary record—the rule may survive judicial scrutiny.
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