What is Trump’s H-1B salary hike all about? Who pays the price?
Proposed rules state entry-level H-1B tech workers in Silicon Valley may need salaries of at least US$162,000. What does this mean, who will this move impact?
The Donald Trump administration is proposing a sharp increase in the base salary requirements for foreign professionals, hired through the H-1B visa programme, a move that could significantly alter how US companies recruit global talent.
The proposal, currently awaiting final approval from the US Labor Department, is aimed at ensuring that foreign workers are hired only for highly specialised roles and are not used as cheaper alternatives to American employees.
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But while the plan could mean higher salaries for H-1B workers, experts say it may also reduce opportunities for thousands of skilled immigrants.
What is Trump’s proposal?
Under the proposed rules, companies sponsoring H-1B visa holders would have to pay substantially higher wages based on location and job category.
According to an analysis by immigration data firms, an entry-level software engineer in Silicon Valley or San Francisco would need to earn at least US$ 162,000 annually to qualify for an H-1B visa. The threshold would rise to around US$ 132,000 for those in New York and US$ 113,000 in Dallas.
The changes stem from a Notice of Proposed Rulemaking (NPRM) issued by the US Labor Department earlier this year. The proposal revises “prevailing wage” calculations, which is the benchmark salaries employers must offer foreign workers under H-1B, H-1B1 and E-3 visa programmes.
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Employers must already certify that they are paying foreign workers either the same wage as compared to their American counterparts or the prevailing wage in that region. The Trump administration argues that the current system allows companies to underpay foreign workers and depress wages for US citizens.
Why Trump is pushing this?
The proposal aligns closely with Trump’s “Make America Great Again” (MAGA) agenda, which emphasises protecting American jobs and reducing dependence on immigration.
While Trump’s immigration crackdown has largely focused on illegal border crossings, his administration has also repeatedly criticised legal immigration programmes, including H-1B visas. Trump has argued that some firms misuse the programme to replace American workers with cheaper foreign labour.
Supporters of the proposal say raising salary thresholds would ensure H-1B visas are reserved for truly exceptional and specialised talent.
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“There has to be a way to ensure that you’re not distorting the labour market,” Howard University professor Ronil Hira said, adding that higher wages are the clearest signal that employers genuinely need specialised workers.
What does it mean for H-1B workers?
On paper, the proposal appears beneficial for foreign professionals because it could significantly raise salaries. However, immigration experts warn the reality may be more complicated.
Higher wage requirements, along with an existing visa-related cost burden reportedly touching US$ 100,000 per hire in some cases, could discourage companies from sponsoring overseas talent altogether.
That could especially hurt younger professionals and entry-level applicants, as firms may prioritise only highly experienced or niche-skilled workers who justify the increased expense.
Impact on US companies
The financial implications for employers could be massive.
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The immigration firm analysis estimates that the biggest US employers of foreign white-collar workers would collectively face at least US$ 18 billion in additional costs in the first year alone. Within three years, when most existing H-1B visas come up for renewal under the new wage rules, annual costs could rise to USD 43 billion.
The impact would extend beyond the technology sector to industries such as finance, medicine, civil engineering, research and higher education - all of which rely heavily on H-1B talent.
Critics say the proposal may ultimately slow hiring, worsen skill shortages and make it harder for US companies to compete globally for talent.