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DOL Proposes Increasing Wage Minimums for H-1B and PERM Programs
The U.S. Department of Labor (DOL) has announced a proposed rule that could significantly impact employers utilizing H-1B visas and the PERM labor certification process. The proposal focuses on increasing prevailing wage requirements, an important shift that may affect hiring strategies, workforce planning, and overall labor costs.
What’s Changing?
At the core of the proposal is an adjustment to how prevailing wages are calculated. The DOL is seeking to raise wage minimums across all skill levels to better reflect current labor market conditions and ensure that foreign workers are not undercutting U.S. wages.
While specific wage level adjustments will vary by occupation and geographic area, the overall intent is clear:
To put the Immigration and Nationality Act’s (INA) four-level wage system into place, the Department created guidance in 2005 for setting wages in non-agricultural immigration programs: Level I (entry) at the 17th percentile, Level II (qualified) at the 34th percentile, Level III (experienced) at the 50th percentile, and Level IV (fully competent) at the 67th percentile.
This four-level system follows the law, which requires wage surveys to include at least four wage levels based on a worker’s experience, education, and level of supervision. It also helps make sure wages are set fairly by clearly showing differences between workers with different skills and experience.
The proposed changes include changes to the percentiles for the four levels in the wage system:
The proposed rule allows employers to continue using alternative wage sources instead of Occupational Employment and Wage Statistics (OEWS) data. However, the rule primarily focuses on increasing OEWS-based wage percentiles and does not clearly introduce new monitoring requirements specific to alternative wage sources.
Why This Matters for Employers
If implemented, these changes could have a substantial impact on employers who rely on foreign talent:
Broader Implications
The proposed rule reflects a broader policy trend toward protecting domestic wages while maintaining access to global talent. Critics argue that significant wage increases could limit employers’ ability to fill critical skill gaps particularly in industries like healthcare, technology, and engineering.
For organizations already facing talent shortages, this could intensify competition for qualified workers and increase reliance on alternative workforce solutions.
What Employers Should Do Now
Although the rule is still in the proposal stage, employers should begin preparing:
Looking Ahead
The DOL is currently accepting comments on the proposed rule, and changes may occur before final implementation. Employers should stay informed and work closely with immigration counsel to navigate potential changes effectively.
Washington Enacts Noncompete Ban – 2027
On March 23, 2026, Washington enacted a law banning virtually all noncompete agreements for employees and independent contractors. The new law takes effect on June 30, 2027.
Overview of Noncompete Ban
The new law makes all noncompete agreements void and unenforceable as of June 30, 2027, regardless of when the agreements were entered into. Previously, Washington permitted reasonable noncompete agreements for certain highly compensated employees.
“Noncompetition covenant” is defined as a written or oral covenant, agreement or contract that prohibits or restrains an individual from engaging in a lawful profession, trade or business; restrains a performer from engaging in a lawful performance; prevents the acceptance or transaction of business with a customer; or requires individuals to repay, forfeit or lose any right, benefit or compensation for engaging in a lawful profession, trade or business.
Exceptions
The new law permits the following:
Notice Requirements
By Oct. 1, 2027, employers must make reasonable efforts to provide written notice to current and former employees and independent contractors with whom the employer has an active noncompete agreement that such agreement is void and unenforceable.
Penalties
The attorney general and individuals aggrieved by a violation of the law may file a cause of action. Employers found in violation of the law may be liable for the greater of actual damages or $5,000, plus reasonable attorney fees and costs.
Employer Takeaways
Employers may consider reviewing existing employee agreements or template agreements to determine whether any contain noncompete provisions that would be invalidated under the new law. Employers may also begin preparing revisions to such agreements and consider whether to use alternative provisions (e.g., nondisclosure provisions) to protect competitive business information. Finally, employers may begin reviewing existing noncompete agreements and drafting a template notice to be sent to such individuals with whom the employer has entered into a noncompete agreement.
EEO-1 Reporting of Self-identified Nonbinary Employees
As workplace demographics evolve, employers are increasingly navigating how to accurately and respectfully report employee data, especially when it comes to gender identity. One common area of confusion is how to handle self-identified nonbinary employees on the EEO-1 Component 1 report.
Current EEO-1 Reporting Framework
The Equal Employment Opportunity Commission (EEOC) currently requires employers to report employee data using a binary gender classification system:
At this time, there is no designated category for nonbinary employees within the EEO-1 reporting structure.
How to Report Nonbinary Employees
When an employee self-identifies as nonbinary, employers should follow EEOC guidance:
Importantly, employers should not force employees to self-identify within the binary. Instead, reporting decisions should be made using existing HR records or consistent internal processes.
Best Practices for Employers
While federal reporting requirements remain limited, employers can still take inclusive and compliant approaches:
Compliance Considerations
Employers should be mindful that:
Looking Ahead
There has been ongoing discussion about modernizing EEO-1 data collection to better reflect gender diversity, but no formal changes have been implemented to date. Employers should continue to monitor EEOC updates for any future revisions.
Midyear Compliance: Key Disclosure Deadlines for Group Health Plans
As the calendar year progresses, employers that sponsor group health plans should take steps to stay ahead of key mid-year compliance obligations. Federal reporting and disclosure requirements under laws such as the Employee Retirement Income Security Act (ERISA), the Consolidated Omnibus Budget Reconciliation Act (COBRA) and the No Surprises Act must be addressed during the spring and summer months to avoid potential penalties and ensure participants receive required information. This is not an all-inclusive list.
REQUIREMENT
DESCRIPTION
DEADLINE
Summary Plan Description (SPD)(Newly enrolled participants)
ERISA-covered group health plans must provide April 1, 2026an SPD to new participants within 90 days of when an employee first becomes covered under the plan. For calendar-year plans, this means that employees who first enrolled effective Jan. 1 must receive their SPDs by April 1. (Note that the SPD must include certain required federal notices if applicable, such as the Newborns’ and Mothers’ Health Protection Act notice and the Notice of Patient Protections.)
April 1, 2026
COBRA General Notice (Newly enrolled participants)
Group health plans subject to COBRA must provide a General Notice of COBRA rights to each covered employee (and to each covered spouse, if applicable) within90 days of coverage beginning (April 1 for calendar-year plans).
April 1, 2026
Prescription Drug Data Collection (RxDC)Reporting
Group health plans and issuers must annually submit prescription drug and healthcare spending data to the Centers for Medicare and Medicaid Services. This reporting process is referred to as the RxDC report. Most employers will rely on third parties, such as issuers, third-party administrators or pharmacy benefit managers, to prepare and submit the RxDC report for their health plans.
June 1, 2026
Form 5500 Annual Return/Report
Most ERISA-covered retirement plans, including 401(k) and pension plans, must file Form 5500 annually with the Department of Labor (DOL). The filing includes information on plan operations, participants, financial condition and investments.
July 31 (calendar-year plans)
Small Plan Filing (Form 5500-SF)
Plans with fewer than 100 participants may qualify to file the simplified Form 5500-SF, provided they meet certain eligibility requirements. These plans are generally exempt from the independent audit requirement.
July 31
Large Plan Filing + Audit Requirement
Plans with 100 or more participants must file the full Form 5500 and include audited financial statements prepared by an independent qualified public accountant (IQPA). Participant counts include all eligible employees, not just those enrolled.
July 31
Form 5500-EZ (One-Participant Plans)
Solo 401(k) plans and other one-participant plans are not subject to ERISA Title I but must file Form 5500-EZ with the IRS once plan assets exceed $250,000.
July 31
Extension Filing (Form 5558)
Employers may request a one-time extension of 2.5 months by filing IRS Form 5558 on or before the original due date. This extends the deadline to October 15 for calendar-year plans.
July 31 (extension request due)
Delinquent Filings (DFVCP)
Employers that miss the filing deadline may use the DOL’s Delinquent Filer Voluntary Compliance Program (DFVCP) to correct late filings and significantly reduce penalties.
As soon as possible after missed deadline
PCORI Fees (Self-insured plans only, including HRAs)
Employers with self-insured health plans must pay a fee to fund the Patient Centered Outcomes Research Institute (PCORI). Self-insured health plans that are subject to PCORI fees include self-funded medical plans, as well as health reimbursement arrangements (HRAs) that are offered in conjunction with fully insured group medical plans. HRAs that are offered with self-insured group medical plans are not subject to separate PCORI fees if both the HRA and the self-insured medical plan have the same plan sponsor and the same plan year. Employers must file IRS Form 720 to report and pay PCORI fees each year, no later than July 31 of the year following the last day of the plan year.
July 31, 2026
State Compliance Update
Colorado Creates AI Obligations for Employers - Reminder
Beginning June 30, 2026, the Colorado Artificial Intelligence Act (CAIA) will require employers to take certain steps to protect applicants and employees in the state from algorithmic discrimination, that is, discrimination by artificial intelligence (AI) systems they use to make employment-related decisions. Below are the highlights.
The CAIA will apply to employers of all sizes that do business in Colorado and use AI systems that make, or help make, significant employment-related decisions. An example would be an employer that uses an AI applicant tracking software that automatically screens out applicants prior to human review.
As the law is currently written, covered employers will have significant duties, including, but not limited to:
The law contains certain exceptions, most notably one for employers with 49 or fewer full-time equivalent employees that don’t use their own data to train or improve their AI system (if you don’t know whether you do this, we recommend checking with the provider of your AI system). These employers don’t have to implement a risk management program, conduct impact assessments, or post public disclosures.
However, they’re still obligated to exercise reasonable care to protect against risks of algorithmic discrimination. The governor has urged lawmakers to further improve and fine-tune the law before its effective date, so these requirements may change. We’ll continue to track any changes to the law that affect employers and will post another alert if there are significant
updates.
SB 24-205 was signed by the governor on May 17, 2024.
SB 25B-004 was signed by governor on August 28, 2025.
Compliance Calendar
April
4/30 – Removal of OSHA Form 300At
May
Nothing for May
June
Nothing for June so far…
Disclaimer:
Lighthouse HR Support (LHRS) provides practical human resource information and guidance based upon our knowledge and experience in the industry and with our clients. LHRS services are not intended to be a substitute for legal advice. LHRS services are designed to provide general information to human resources and/or business professionals regarding human resource concerns commonly encountered. Given the changing nature of federal, state, and local legislation and the changing nature of court decisions, LHRS cannot and will not guarantee that the information is completely current or accurate. LHRS services do not include or constitute legal, business, international, regulatory, insurance, tax, or financial advice. Use of our services, whether by phone, email or in person shall indicate your acceptance of this knowledge. Information provided in part by Mineral and Zywave.
Lighthouse HR Support (LHRS) provides practical human resource information and guidance based upon our knowledge and experience in the industry and with our clients. LHRS services are not intended to be a substitute for legal advice. LHRS services are designed to provide general information to human resources and/or business professionals regarding human resource concerns commonly encountered. Given the changing nature of federal, state and local legislation and the changing nature of court decisions, LHRS cannot and will not guarantee that the information is completely current or accurate. LHRS services do not include or constitute legal, business, international, regulatory, insurance, tax or financial advice. Use of our services, whether by phone, email or in person shall indicate your acceptance of this knowledge.
