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 released in March.
The same role in Dallas would increase to about $113,000; in New York, $132,000. The increases are almost 30% higher than the current minimums in each city.
The mechanism is technical and the consequences are not. The Department of Labor’s proposed rule, released March 27 and open to public comment until May 26, rewrites the way prevailing wages are calculated for the H-1B and PERM visa programs.
Today, the lowest of the four wage levels (Tier I, the entry level) is anchored at the seventeenth percentile of Bureau of Labor Statistics earnings for a given occupation in a given metropolitan area.
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The proposal would raise that anchor to the thirty-fourth percentile. Level IV, the highest level, would go from the sixty-seventh percentile to the eighty-eighth. The reset occurs in cascade through all intermediate levels.
The overall figure systemwide is about $14,000 per affected position per year, according to the Labor Department’s own estimates, and high-level positions in expensive metropolitan areas absorb much more.
A Tier IV data scientist in Silicon Valley could see the floor rise by more than $45,000. Some legal commentaries have projected occupancy per meter combinations where the new floor would be near or above $208,000.
The administration framework is simple. The current bands, established in the 1990s, fall well below the market rate distributions facing American workers, particularly for early-career engineers and recent STEM graduates.
By moving the bands up the percentile distribution, the proposal aims to eliminate the cost incentive to fill entry-level technical positions abroad. It’s debatable whether that’s the actual binding effect or whether employers respond by hiring fewer people overall.
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 tariff in December over objections from the U.S. Chamber of Commerce and a coalition of nineteen state attorneys general.
Amazon, the largest H-1B sponsor, employs more than 10,000 visa holders; Microsoft, Meta, Apple and Google each sponsor several thousand more.
Adding the new salary rule to the application fee will increase the marginal cost of an entry-level H-1B engineer at a top-tier metro by tens of thousands of dollars before the contract begins.
The salary rule lands on An industry that is already reshaping its labor costs around AI.. Meta and Microsoft turn payroll into AI capital investment is the dominant story in technology hiring; Atlassian’s restructuring of 1,600 jobs in March followed the same pattern.
More than 78,000 tech workers were laid off in the first four months of 2026, and about half of those cuts were attributed to AI taking over tasks previously assigned to humans. Hiring managers surveyed by Resume.org expect more cuts to come.
Within that contraction, demand for AI specialist positions has remained strong; generalist and entry-level software work does not. Analysts have begun to call that The paradox of AI and employment.
The H-1B wage rule raises the floor for exactly the most rapidly shrinking entry-level segment. The natural prediction is that fewer entry-level visas will be applied for and that more work will continue to be offshored or absorbed into AI tools rather than relocated to American hires.
There is a counterprediction. 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 minimum wage primarily affects how the cost of an H-1B hire is reported on the income statement, not whether the hire is made.
The pressure falls hardest on smaller employers, on IT services companies that have historically used the H-1B visa to fill mid-level outsourced engineering jobs, and on the tens of thousands of researchers, scientists and engineers in the visa pipeline who are not at the top of the skills curve.
Universities and research laboratories are the next most affected category. The H-1B is the standard conversion route for foreign-born postdocs and graduate researchers moving to jobs in the US.
Raising the salary floor against academic pay scales, which lag behind both private sector salaries and BLS percentiles, creates a structural conflict that the Department of Labor text does not yet address. Higher education industry groups have marked it on the agenda and are expected to make noise during the comment window.
Whether the rule survives unaltered is an open question. The Chamber of Commerce litigation against the fee provides a model, and immigration law firms on the employer side have anticipated several constitutional and APA challenges to the salary methodology.
The most likely outcome is a modified rule that maintains the general direction (increase wages) while compressing percentile increases at the most affected base levels.
The Department’s own impact estimate, published alongside the rule, acknowledges that the proposal would reduce overall H-1B visa volumes; The political question is how much.
The comment window closes on May 26. A final rule, in whatever form survives that process, would take effect later in 2026. The administration has made clear that this is a final state, not a stepping stone.
