Trump Administration Proposes Major Overhaul of H-1B Visa System, Favoring Higher-Paid Workers

Trump Administration Proposes Major Overhaul of H-1B Visa System, Favoring Higher-Paid Workers

New weighted lottery would dramatically reduce chances for entry-level professionals while boosting odds for senior specialists

WASHINGTON — The Department of Homeland Security unveiled a sweeping proposal Tuesday to fundamentally restructure the H-1B skilled worker visa program, replacing the current random lottery system with a weighted selection process that heavily favors higher-paid professionals.

The proposed rule would assign multiple lottery entries to visa applicants based on their salary levels, with the highest-paid workers receiving four times the selection chances of entry-level candidates. The change represents one of the most significant alterations to the coveted visa program in decades and would reshape how America attracts and selects skilled foreign talent.

Under the new system, workers offered salaries at the highest wage level would receive four entries in the computerized lottery, while those at entry-level positions would get just one entry. The proposal estimates this would increase selection odds for top-tier professionals by 107% while reducing chances for entry-level workers by 48%.

"The core objective is to better align the H-1B program with its original congressional intent: to provide U.S. employers with access to highly skilled talent to fill labor shortages, rather than using it for lower-paid, entry-level positions," the department stated in the 105-page proposal.

The rule would create clear winners and losers across the American economy. Large technology companies and established corporations that typically hire senior engineers, data scientists, and specialized professionals at high salaries would gain significant advantages in securing visas for their preferred candidates. Meanwhile, small businesses, startups, and recent international graduates from U.S. universities would face dramatically reduced prospects.

Key Fact Sheet: Weighted Selection Process for H-1B Cap Petitions

Category	Details
Purpose	Align H-1B selection with congressional intent by prioritizing higher-paid, higher-skilled workers over entry-level positions.
Selection Mechanism	Weighted lottery based on highest qualifying OEWS wage level: - Level IV: 4 entries - Level III: 3 entries - Level II: 2 entries - Level I: 1 entry
New Registration Data Required	- SOC code - Intended area of employment - Highest OEWS wage level salary meets/exceeds
Integrity & Anti-Fraud Measures	- Multiple Locations: Use lowest wage level - Multiple Employers: Lowest wage level applies - Bona Fide Job Offer: Petition must match registration info; USCIS may deny/revoke for misrepresentation
Winners	- High-wage professionals (Level III/IV) - Large tech & finance firms - DHS/USCIS (fraud reduction, program integrity)
Losers	- Entry-level workers & recent graduates (Level I/II) - Small businesses, startups, non-profits - Industries reliant on Level I roles (e.g., architecture, civil engineering)
Estimated Selection Impact	- Level IV: +107% chance of selection - Level I: –48% chance of selection
Economic Impact	- Higher average H-1B wages - $500M+ increase in salaries first year; $2B+ annually in later years - Possible wage inflation in STEM/tech sectors
Labor Market Impact	- Advantage to senior professionals - Potential talent loss of international graduates to competitor countries (Canada, UK, Australia)
Administrative Burden	Employers must conduct wage-level analysis pre-registration; increased compliance cost and complexity.

Economic Realignment

The Department of Homeland Security projects the change would trigger a massive redistribution of wages within the H-1B workforce, with over $500 million in additional annual salaries flowing to higher-level positions in the first year alone. By the fourth year, that figure would grow to approximately $2 billion annually as the workforce composition shifts.

The proposal specifically targets what officials describe as abuse of the current system, where multiple employers register the same candidate to increase their lottery odds. Under the new rules, if multiple companies register the same worker, that person would be assigned to the lowest wage level among all registrations, eliminating the incentive for strategic multiple filings.

Campus Pipeline at Risk

The changes pose particular challenges for the traditional "study-to-work" pipeline that has long attracted international students to American universities. Recent graduates, who typically qualify for entry-level positions, would see their already-slim chances of obtaining work authorization become even more remote.

"This could disrupt the talent pipeline that has been crucial to American innovation," the analysis notes, warning that bright young professionals may increasingly choose to pursue opportunities in countries like Canada, Australia, and the United Kingdom, which offer more favorable immigration pathways for recent graduates.

The government's own economic analysis acknowledges the rule would have "significant economic impact on a substantial number of small entities." Small businesses and startups, which often operate on tighter budgets and hire at lower wage levels, would find themselves unable to compete with larger corporations for the limited visa slots.

Industry Transformation

The proposal is expected to trigger immediate behavioral changes as companies prepare for the new system. Employers will likely inflate salary offers to push candidates into higher wage tiers, potentially creating artificial wage inflation in certain high-demand fields.

The rule includes detailed provisions to prevent gaming, requiring that job offers remain consistent from the initial registration through the final petition filing. Companies that attempt "bait-and-switch" tactics—registering at high wage levels but later offering lower salaries—face petition denials or revocations.

Political and Legal Landscape

The proposal builds on the beneficiary-centric registration system implemented in recent years, which already reduced some forms of abuse by limiting multiple registrations per individual. However, it represents a more dramatic departure from the program's historical structure than previous attempted reforms.

A similar but more extreme version was proposed in 2021 that would have implemented strict ranking by wage levels, selecting all highest-paid workers first. That rule was ultimately vacated and withdrawn. The current proposal uses probabilistic weighting rather than strict ranking, which officials believe makes it more legally defensible while still achieving the policy objective.

The rule faces a 60-day public comment period and is likely to draw legal challenges from business groups and immigration advocates. If implemented as proposed, it would take effect for the fiscal year 2026 visa lottery, which typically occurs in spring 2025.

Global Competition

Immigration policy experts warn that the changes come as other developed nations are actively competing for the same pool of international talent. Canada's Post-Graduation Work Permit program and the United Kingdom's Graduate and Skilled Worker visa routes have become increasingly attractive alternatives for skilled professionals who might previously have prioritized the United States.

"While the rule aims to attract the 'best and the brightest,' it may inadvertently harm long-term U.S. competitiveness by making it difficult for bright, young talent to start their careers in the U.S.," the analysis warns.

The proposal reflects broader tensions in American immigration policy between protecting domestic workers and maintaining the country's competitive advantage in attracting global talent. For the estimated 500,000 foreign workers who register for roughly 85,000 available H-1B visas annually, the stakes could not be higher.

The Department of Homeland Security will accept public comments on the proposal until late November, with implementation potentially beginning for the spring 2025 lottery season.

---

House Opinions

Aspect	Summary of Key Information from the NPRM Analysis
Core Mechanism	Weighted lottery: Each unique beneficiary gets multiple entries based on the highest OEWS wage level their proffered salary meets for the job/location (L4=4 entries, L3=3, L2=2, L1=1). A computer-random draw is run on this weighted pool.
Key Anti-Gaming Rules	1. Multiple Locations/Positions: Must use the lowest corresponding wage level. 2. Multiple Employers: Beneficiary is assigned the lowest wage level from all registrations. 3. Bona Fide Job: Petition must align with registration (SOC, location, wage level); misalignment can lead to denial/revocation.
Projected Odds Shift	L1: ~15.29% (-48% vs. current)
Projected Wage Impact	Year 1: ~$502M higher total H-1B wages. Years 4+: ~$2B annually (as cohorts turn over).
Root Causes / Goals	1. Align with Congressional "high-skill" intent using wage as a proxy. 2. Curb abuse following the shift to beneficiary-centric registration. 3. Learn from 2021's vacated strict wage-ranking rule by using a legally softer probabilistic model.
Pros (Compelling Aspects)	- Aligns selection with economic value signals. - Clever anti-gaming rules target loopholes effectively. - Probabilistic approach is less harsh than a hard wage-ranking system.
Cons (Brittle Aspects)	- Wage is an imperfect proxy for skill; can lag market reality. - ~50% odds cut for L1 damages entry-level pipelines (new grads, small firms). - Increased complexity and error risk at the registration stage.
Winners	- Big Tech/Finance/Well-capitalized firms (pay at L3/L4). - Mid/senior specialists in high-demand fields. - Program integrity (due to anti-gaming rules).
Losers	- L1 juniors/new grads (including F-1s on OPT). - Small businesses, startups, nonprofits (often file at L1/L2). - Occupations/geographies with lower prevailing wages.
Macro Implications	- Wage Inflation: Employers will "bid up" offers to reach L3/L4. - Geography Shift: "Lowest-location" rule reduces location arbitrage. - Talent Pipeline Risk: Potential decline in international student yield; benefit to competitor countries (Canada, UK, Australia).
Legal Durability & Risk	- Smarter than 2021 rule (probabilistic vs. strict ranking), strengthening legal defense. - Still high litigation risk (arguments: ultra vires, arbitrary & capricious, procedural). - Prediction: Lawsuits likely, but no guaranteed injunction; expected to be effective for FY26 cap.
Practical Playbook (Employers)	- Large Firms: Audit and model wage tiers; budget to lift L2->L3; ensure registration-to-petition consistency. - Small Firms/S startups: Focus H-1B on critical senior roles; explore alternatives (J-1, O-1, global teams) for juniors; ensure precise SOC code selection.
Practical Playbook (Beneficiaries)	- Negotiate base salary to cross L2/L3 thresholds. - Have a Plan B (e.g., visas for Canada, UK, Australia) if likely to be at L1.
Predictions	1. Offer compression around OEWS wage cliffs ("L3 floor" in high-cost areas). 2. FY26 registrations will skew toward L2-L4; L1 registrations will fall. 3. Reduction in "forum shopping" for locations. 4. Graduate programs will emphasize STEM OPT and cross-border pathways.
Myth-Busting	- Not a pure lottery: It is a weighted, randomized system. - No location gaming: The "lowest-location" rule prevents anchoring to a high-wage area. - Multiple employers don't always help: The lowest wage level across all registrations is applied.
Bottom Line	Trades equity for entry-level roles for alignment with wage-signaled skill. Legally savvier than the 2021 rule. Outcome: higher average H-1B pay, better odds for seniors, tougher road for juniors/small firms, and strong incentives to pay at L3/L4. SOC, location, and wage level are now selection-critical inputs.