H-1B Visa Rules Updated: Lottery System May Be Replaced by Wage-Based Selection

Trump Administration Proposes Stricter H-1B Visa Rules and Ending Lottery System to Favor Higher-Paid Skilled Workers

The Trump administration has announced proposed changes to the H-1B visa programme aimed at favoring higher-paid and more skilled workers while phasing out the current lottery system. These new measures come shortly after the White House introduced a one-time $100,000 fee for new H-1B visa applications, signaling a significant shift in US immigration policy.

The administration’s proposal intends to replace the random lottery system with a weighted selection process that gives preference to employers offering higher wages. According to the notice in the Federal Register, if the number of applications exceeds the annual cap of 85,000 visas, priority will be given to petitions from employers who pay better salaries. This system is designed to reward companies hiring highly skilled professionals while still allowing firms to hire workers at all wage levels.

Officials argue that the proposed changes will protect American workers by curbing wage suppression, which can occur when lower-paid foreign professionals are hired over domestic talent. By prioritizing higher-paying positions, the Trump administration aims to reshape the US labor market to ensure fair compensation for American employees and maintain competitive standards in critical industries.

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The H-1B visa programme is widely used by technology and outsourcing firms to recruit skilled foreign professionals, including software engineers, data analysts, and scientists. Historically, Indian nationals have comprised the majority of H-1B recipients, reflecting the high demand for technical expertise from overseas.

The announcement follows a period of uncertainty for the tech sector. Last week, US Commerce Secretary Howard Lutnick had stated that companies would need to pay $100,000 annually for each new H-1B visa. This statement caused confusion and concern among employers and current visa holders. In response, White House Press Secretary Karoline Leavitt clarified that the fee is a one-time charge, applicable only to new visa applications and not to renewals or existing holders. “This is NOT an annual fee. It’s a one-time fee that applies only to new visas, not renewals, and not current visa holders,” she emphasized.

Under the new rules, the one-time fee and wage-based selection process are set to take effect at 12:01 am Eastern Time on Sunday. Legal challenges are anticipated, as industry leaders and immigration advocates weigh in on the potential impact of these changes.

In 2024, the US approved approximately 400,000 H-1B visas, two-thirds of which were renewals. Despite this high number, demand for new visas continues to outstrip supply, necessitating the use of a lottery system to allocate approvals. The proposed changes signal a major shift from this random allocation toward a merit-based model, with an emphasis on wage levels and professional skills.

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Industry observers note that if implemented, the new H-1B visa rules could significantly alter hiring practices in the US tech sector. Companies may need to reassess salary structures and recruitment strategies to align with the weighted selection process. For foreign professionals, especially those from India who dominate H-1B visa applications, the changes may increase competition for fewer available slots and incentivize securing higher-paying roles.

Overall, the Trump administration’s proposed H-1B visa rules aim to strengthen protections for American workers, prioritize highly skilled professionals, and replace the traditional lottery system with a more strategic allocation process. The policy reflects broader immigration reforms intended to balance workforce needs with fair compensation standards, while legal debates and industry responses are expected in the coming months.

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