A recent Trump-administration proposal would dramatically increase the minimum salary requirements for H-1B visa holders in tech, pushing entry-level pay floors to as high as $162,000 annually in San Francisco. The adjustments redefine how prevailing wages are calculated to better reflect market rates but pose challenges for smaller employers amid an evolving tech job landscape.
- Entry-level H-1B wages may rise 30%, reaching $162,000 in San Francisco
- New rules raise wage percentiles used to calculate visa salary floors
- Large tech companies likely to absorb costs; smaller firms face hurdles
What happened
In March, the Trump-era Department of Labor published a proposal to overhaul how prevailing wages for H-1B visa holders are calculated. The rule would increase the minimum salary thresholds across all wage levels, with the entry-level band rising from the 17th to the 34th percentile of market wages in each metro area. For example, an entry-level software engineer in San Francisco must earn at least $162,000 annually under the proposal, compared to the current minimum of roughly $125,000.
This revision represents a roughly 30% increase in the entry-level wage floor and scales upward for more senior roles, with senior tech positions potentially seeing salary floors jump by tens of thousands of dollars. The proposal is currently under public review and open for comment until late May, marking a significant shift in visa labor cost structures.
Why it matters
The rule aims to align H-1B wages more closely with actual U.S. market rates, addressing criticisms that existing wage floors are outdated and artificially suppress immigrant tech worker pay. By raising the wage bar, the government hopes to reduce reliance on low-cost foreign labor for early-career tech roles, possibly encouraging more domestic hiring.
However, the increased salary requirements come at a time when major tech employers are already restructuring to incorporate AI efficiencies that reduce demand for generalist engineering roles. The cost hikes, combined with a new $100,000 H-1B filing fee introduced in 2025, may deter some employers from sponsoring entry-level visas, potentially shrinking this segment of the tech workforce.
What to watch next
Industry reactions will be critical in shaping the rule’s ultimate impact. Large tech corporations like Amazon, Microsoft, Google, and Nvidia have indicated they will absorb the additional costs, suggesting hiring plans may not shift drastically at major firms. In contrast, smaller IT service providers and outsourcing firms might scale back H-1B sponsorships given the increased financial burden.
The broader implication lies in how these changes interact with ongoing AI-driven workforce transformations. As demand for entry-level conventional tech roles contracts and AI-specialist positions grow, the increased wage floors could accelerate offshoring or automation trends. Observers should monitor visa application volumes and hiring patterns closely over the coming months.