The U.S. Department of Labor’s proposed increase in prevailing wages marks a significant shift that could affect many employers sponsoring foreign workers under L-1 and H-1B visa categories. Historically, prevailing wage levels have been a critical factor in both Labor Condition Applications (LCA) and L-1 visa petitions, serving as a benchmark to ensure foreign workers receive wages comparable to U.S. workers in similar roles. This proposal aligns with the Biden administration’s broader efforts to strengthen wage protections and reduce potential underpayment risks.

Attorney Insight
From our experience at The Peng Law Group, this wage increase primarily impacts Chinese enterprises sending executives or managers to the U.S. under L-1, as well as tech companies or startups hiring H-1B specialty occupation workers. For L-1 petitions, especially L-1A for executives and managers, the prevailing wage affects how USCIS evaluates the beneficiary’s salary in relation to U.S. market standards. Insufficient wage evidence has led to Requests for Evidence (RFE) or even denials in prior cases. Similarly, for H-1B filings, the Labor Condition Application (LCA) must reflect prevailing wages accurately to comply with Department of Labor regulations (20 CFR Part 655, Subpart H).

One recent case illustrates this risk: a fintech client’s L-1A extension was initially denied because the salary offered fell below the updated prevailing wage level per the Department of Labor’s Occupational Employment Statistics. After we assisted in submitting a supplemental wage survey and refiled with adjusted compensation documentation, the petition was approved without further delay. This underscores the importance of preparing robust wage evidence and aligning salary offers with current standards.

We advise clients to take two concrete steps immediately. First, review current wage determinations for the relevant SOC codes on the Foreign Labor Certification Data Center website and compare them to actual salaries offered. Second, for new LCA filings, ensure that the prevailing wage level selected matches the job duties and experience level precisely, as USCIS and DOL have increased scrutiny on mismatches. Timely filing of LCA well ahead of visa petition submission is critical, given that DOL processing times can extend beyond 7-10 business days.

Attorney Insight
For EB-1C multinational executives and managers, while prevailing wage is less a formal requirement, USCIS still examines the beneficiary’s compensation package as part of the overall evidence of executive/managerial capacity under 8 CFR 204.5(j)(2). A significant wage adjustment might affect petition strategy, especially when demonstrating the managerial role and the company’s ability to pay. We recommend updating compensation packages in line with prevailing wage data to avoid USCIS doubts.

Looking ahead, the proposed wage increase could slow down petition processing if employers do not adapt promptly. Given the complexity and the potential for increased RFEs, we suggest incorporating wage compliance reviews into your immigration timeline now. For clients considering L-1 or H-1B filings in Q4 2024 or early 2025, early wage assessment and budget adjustments are prudent.

In summary, the proposed prevailing wage hike is a manageable challenge with proper planning. Employers should: 1) immediately verify wage levels against official DOL data; 2) adjust compensation offers and documentation accordingly; and 3) file LCAs early to avoid delays. These steps help safeguard visa approvals and maintain compliance amid evolving regulations.

This development highlights the ongoing importance of integrating immigration strategy with HR and compensation planning. For Chinese enterprises and high-net-worth investors relying on L-1, EB-1C, or H-1B pathways, proactive wage management is now a key factor in successful U.S. immigration outcomes.