H-1B for Employers: Wage Levels, Fees, and the Cap

A founder I know called me on a Tuesday in February. He had found the engineer he wanted, the offer was accepted in principle, and he wanted to know what paperwork he needed. I gave him the answer nobody wants on a Tuesday in February: the paperwork was the easy part, the calendar had already half closed, and the wage he had in his head was not the wage he was going to pay.

That last point is the one that catches first-time sponsors. An H-1B is not a permission slip you buy. It is a wage commitment enforced by the Department of Labor, a public file that a stranger can walk in and ask to read, and a lottery whose odds now depend on how you wrote the job requirements months earlier.

I build the people and records tooling for companies that do this without an HR department at FirstHR, and this is the topic where I most often see a small team get the sequence wrong rather than the substance. What follows is the employer side: the wage levels, the fee stack, the file, and the cap. It is general information and not legal advice, and a first sponsorship is worth an immigration attorney from the first phone call.

What Sponsorship Actually Commits You To

Sponsoring an H-1B commits you to pay a defined wage on a defined schedule, whether or not there is work to do, and to keep a file any member of the public can ask to inspect. The petition is yours, not the worker's, and so are the obligations attached to it.

Two agencies are involved and they check different things. The Department of Labor certifies that you have attested to the wage, the working conditions, the absence of a strike or lockout, and the notice you gave your existing staff. USCIS decides whether the role is a specialty occupation and whether the person qualifies for it.

The wage attestation is the part that has teeth long after approval. You owe the higher of the actual wage you pay your own similarly qualified staff in that role, or the prevailing wage for the occupation in that area. Nonproductive time caused by your own decision, including a gap between projects or a wait for a license, is still paid time under the program.

None of this replaces the ordinary onboarding record. An H-1B worker still completes Form I-9 and the rest of the new hire paperwork on the same timeline as everyone else. The immigration file sits beside the employment file rather than instead of it.

The Four DOL Wage Levels, and What Sets Them

The Department of Labor prevailing wage structure has four levels, positioned at approximately the 17th, 34th, 50th and 67th percentiles of the wage distribution for one occupation code in one geographic area. The immigration statute at 8 U.S.C. 1182(p)(4) requires at least four levels commensurate with experience, education and the level of supervision, with the two middle levels created by dividing the gap between the outer two into thirds.

The level is a property of the job, not the candidate. It comes out of the requirements you wrote: years of experience demanded, education beyond the normal minimum for the occupation, whether the role supervises anyone, whether it is supervised closely, any license, and any special skill named in the posting. A generous job description written to attract applicants can move a role up two levels and add tens of thousands of dollars a year to the salary floor.

That has always been true. What changed is that the level now also decides your odds. Under the weighted selection that took effect for the fiscal year 2027 cap season, a registration assigned wage level IV goes into the pool four times, level III three times, level II twice and level I once, and each beneficiary is still counted only once against the numbers.

So the wage level is now doing two jobs at once. It sets the floor you must pay for the whole period of employment, and it sets the probability that you get to pay it at all. Deciding the level casually, or letting a template posting decide it for you, is the most expensive shortcut available in this process.

How the Prevailing Wage Is Actually Set

You have three ways to establish the prevailing wage for an H-1B: request a determination from the National Prevailing Wage Center, use a survey from an independent authoritative source, or use another legitimate source of wage information. Only the first one gives you safe harbor (DOL Office of Foreign Labor Certification, prevailing wages).

Safe harbor is worth understanding precisely, because it is not a guarantee against every problem. If you obtain the determination from the National Prevailing Wage Center and apply it properly, meaning the right geographic area, the right occupation and the right skill level, the Wage and Hour Division will not challenge the validity of the wage in an investigation. Apply it to the wrong occupation code and the protection goes away.

Most employers skip the request and read the figure from the online wage library, which is legitimate and much faster. The wage data comes from the Occupational Employment and Wage Statistics survey run by the Bureau of Labor Statistics, and the Office of Foreign Labor Certification refreshes it annually: the current file covers July 2026 through June 2027 and was posted on July 1, 2026. A determination taken from the previous file after that date is simply out of date.

Two practical cautions. The prevailing wage is a floor, not the answer: you owe the higher of it and your own actual wage for comparable staff, so a well-paid internal team raises the number. And the figure is metro-specific, which means a remote hire in a different city produces a different obligation and, in many cases, a second labor condition application.

There is also a change on the horizon that belongs in any budget conversation. The Department of Labor published a proposed rule in the Federal Register on March 27, 2026 that would move the four levels to the 34th, 52nd, 70th and 88th percentiles, with the comment period closing on May 26, 2026. It is a proposal rather than a rule, but a first sponsorship priced at today's Level I should be modeled against a much higher floor before you commit to a multi-year role. If you maintain salary bands, this is the moment to check whether the sponsored role fits inside them.

The Real Cost Stack for a First Sponsorship

Government fees for a first cap-subject H-1B run from roughly $2,200 to roughly $3,600 before immigration counsel, depending on which tier you fall into. The confusion comes from the fact that there is no single H-1B fee: there are five separate charges, three of which have their own eligibility test.

The two reduced tiers are defined by regulation rather than by feel. A small employer, for the purposes of the USCIS fee rules, is a firm or individual with 25 or fewer full-time equivalent employees in the United States, counting affiliates and subsidiaries. The ACWIA fee splits on the same threshold under 8 U.S.C. 1184(c)(9)(B), which sets the fee at $1,500 and halves it for an employer at or below that number.

Immigration counsel is the line most first-time sponsors underestimate, and it is not a government fee, so no fee schedule will tell you what it costs. Treat it the way you would treat any other professional service in your labor cost model: get a fixed quote for the labor condition application, the petition, and one response to a request for evidence, because the third item is where open-ended billing lives.

The Costs You Are Not Allowed to Shift

The ACWIA education and training fee can never be paid by the worker, and no other cost may be recovered in a way that drops pay below the required wage. Both rules are enforced as wage violations rather than as paperwork problems, which is why they produce back-pay assessments.

Department of Labor rules state that the employer may not receive, and the H-1B worker may not pay, any part of the additional filing fee under section 214(c) of the immigration statute, whether directly or indirectly, voluntarily or involuntarily. The rule closes the obvious workaround as well: if a third party pays and the worker reimburses that third party, the employer is in violation, because the employer was spared an expense the worker ended up carrying.

The second rule is broader and catches more people. Attorney fees and other costs connected to functions the employer is required to perform, such as preparing the labor condition application and filing the petition, are the employer business expenses. A deduction that recoups them is unauthorized whenever it takes the worker below the required wage, and an unauthorized deduction is treated as non-payment of that amount of wages in an investigation.

The same logic reaches repayment agreements. A clawback that functions as a penalty for leaving before an agreed date is prohibited outright, though genuine liquidated damages assessed under state law can survive if they meet the deduction standards and exclude any part of the training fee. Before you write one into an offer, read it next to your ordinary termination practice and ask whether it would look like a penalty to somebody reading it cold.

One cost runs the other way and surprises employers at the end rather than the beginning. If you dismiss the worker before the end of the authorized period, you are liable for the reasonable cost of return transportation abroad. A voluntary resignation is not a dismissal, so the obligation attaches to your decision, not theirs.

The Labor Condition Application and the Public File

The labor condition application is filed with the Department of Labor on Form ETA-9035E through the FLAG system, usually acted on within seven working days, and may not be submitted more than six months before the start of the employment period. Filing it creates a second obligation on the following day: the public access file.

The file itself has a defined contents list: a signed copy of the certified application and its cover pages, documentation of the wage rate to be paid, a full and clear explanation of the system you used to set the actual wage for that occupation including any periodic increases, a copy of the documentation establishing the prevailing wage, a copy of the notice you posted, and a summary of the benefits offered to US workers in the same occupational classification.

That benefits summary is the item small employers skip, and it is not optional. If some H-1B workers receive home country benefits, or if benefits differ across the workforce, the file has to explain how the differentiation is made. Proprietary detail such as the cost of the benefits to you stays out.

The public part of public access file is literal. Any member of the public may ask to examine it, and the regulation puts it at your principal place of business in the United States or at the place of employment. A file that exists as a folder on one person's laptop is not a file that survives that request, which is a reason to keep it wherever your other personnel records live.

The Cap, the Registration, and the Weighted Selection

Congress sets the regular annual cap at 65,000, with an additional 20,000 numbers for beneficiaries holding a master's degree or higher from a US institution of higher education. Cap-subject employers must register electronically first, pay $215 per beneficiary, and win selection before any petition can be filed (USCIS H-1B cap season).

The mechanism changed for the fiscal year 2027 season. Where random selection is needed, USCIS now runs a weighted selection based on the highest wage level that the offered wage equals or exceeds for the relevant occupation code in the intended area of employment. Level IV registrations enter the pool four times, level III three times, level II twice and level I once.

Some consequences follow that are easy to miss on a first read. Each unique beneficiary is counted once toward the numbers no matter how many entries they receive, so the weighting changes odds rather than consumption. Registering the same person through several related entities does not multiply anything. And the wage level you claim has to be evidenced as of the registration date, then matched by the petition, the labor condition application and the occupation code that follow.

Read that calendar backwards and the real deadline appears. To register in early March with a defensible wage level, you need the occupation code, the worksite and the wage analysis settled in January. To file in April you need the labor condition application certified, and the notice to your own staff has to go up on or within 30 days before you file it and stay up for ten days. February is not a starting point for this process; it is the middle of it.

Which Employers Are Cap-Exempt

Four employer categories sit outside the annual numbers entirely, and a commercial company is not one of them. The exemptions come from 8 U.S.C. 1184(g)(5) and cover higher education, affiliated nonprofits, and research organizations (8 U.S.C. 1184).

There is a fourth route, and it is the one that occasionally helps a private company. A worker not directly employed by a qualifying entity still qualifies for the exemption if they will spend at least half of their work time performing duties at that entity, and those duties directly further higher education, nonprofit research or government research. Work performed at the institution can include telework and other off-site work, because USCIS looks at the duties rather than the desk.

Three limits keep this from being a general workaround. The exemption does not travel with the person: when cap-exempt employment ends and no new exempt petition covers them, the worker becomes cap-subject unless they were already counted within that six-year period. Concurrent cap-subject employment alongside a cap-exempt job is possible, but its validity cannot run past the exempt petition. And if the exempt job ends first, the concurrent petition can be revoked.

The same statute carries the ACWIA exemptions, and they are not identical to the cap exemptions. Primary and secondary education institutions, institutions of higher education, related or affiliated nonprofits, nonprofits running established curriculum-related clinical training, nonprofit research organizations and governmental research organizations are all outside the training fee. A nonprofit that is cap-subject may still be ACWIA-exempt, which is worth checking before you write the check.

What You Still Owe After the Approval

An approved petition is a set of facts you have promised to keep true, so a material change to the role, the wage or the worksite generally requires an amended petition and often a new labor condition application. The wage obligation itself starts earlier than most employers expect.

The required wage begins when the worker enters into employment, which the rules define generously: making themselves available for work, waiting for an assignment, attending orientation, or studying for a licensing examination all count. Even if none of that has happened, an employer with a certified application and an approved petition owes the required wage beginning 30 days after the worker is first admitted to the United States, or 60 days after they become eligible to work if they were already here.

Ending that obligation requires a real termination rather than a quiet one. The accepted practice has three parts: tell USCIS and withdraw the petition, withdraw the labor condition application with the Department of Labor, and offer the reasonable cost of return transportation abroad. Skip any of the three and the wage clock can keep running against you.

The worker gets breathing room that you should know about, because managers ask. A person whose employment ends is not treated as having failed to maintain status solely because of that, for up to 60 consecutive days or until the end of the authorized validity period, whichever is shorter, once per validity period. They may not work during that time unless separately authorized.

Everything else is ordinary HR compliance with a higher audit risk attached. The Wage and Hour Division can investigate on a complaint, and the documents it asks for are the ones the program already told you to keep. If you are also weighing whether the role could be filled outside the United States instead, that is a different calculation covered in the guide to hiring remote employees in other countries.

Frequently Asked Questions