The US government has proposed to reshape the H-1B visa programme by replacing its long-standing lottery system with a wage-based allocation model to attract highly specialised, high-paying talent while reducing dependence on mass recruitment. The change is likely to make it harder for entry-level professionals and volume-driven employers to secure the visas.
The Department of Homeland Security on Tuesday announced that it is amending regulations governing the H-1B work visa selection process to prioritise the allocation of visas to higher-skilled and higher-paid “aliens” to better protect the wages, working conditions, and job opportunities for American workers. The new rule replaces the random lottery for selecting visa recipients with a process that gives greater weight to those with higher skills.
“The existing random selection process of H-1B registrations was exploited and abused by US employers who were primarily seeking to import foreign workers at lower wages than they would pay American workers,” said US Citizenship and Immigration Services (USCIS) spokesman Matthew Tragesser.
“The new weighted selection will better serve Congress’ intent for the H-1B programme and strengthen America’s competitiveness by incentivising American employers to petition for higher-paid, higher-skilled foreign workers. With these regulatory changes and others in the future, we will continue to update the H-1B programme to help American businesses without allowing the abuse that was harming American workers,” he said.
All wage levels
According to USCIS, the number of H-1B visas issued annually is limited to 65,000, with an additional 20,000 for US’ advanced degree holders. To address concerns about deteriorating wages, the final rule will implement a weighted selection process that increases the probability that H-1B visas are allocated to higher-skilled and higher-paid individuals while maintaining the opportunity for employers to secure H-1B workers at all wage levels. This final rule is effective February 27, 2026, and will be in place for the FY 2027 H-1B cap registration season.
The rule is another crucial step to strengthen the integrity of the H-1B nonimmigrant visa programme. It is in line with other key changes the administration has made, like the Presidential Proclamation that requires employers to pay an additional $100,000 per visa as a condition of eligibility, it stated.
Nasscom, in a statement, shared that by assigning multiple selection entries based on Occupational and Employment Wage Statistics levels, the framework risks moving beyond the statutory focus on “specialty occupation” and toward wage ranking, potentially introducing regional and occupational distortions. It highlighted that wage levels vary by geography and role, and a weighted model could disadvantage small and mid-sized enterprises, startups, research institutions, and university-linked employers that operate with moderate but market-appropriate wage structures.
“H-1B petitions at Level I and Level II wage bands frequently represent entry-level roles for U.S. universities graduates in science, engineering, and computing disciplines. These positions form a vital part of the STEM talent pipeline, enabling early-career professionals to gain industry experience and progress into mid- and senior-level innovation roles. Under a wage-weighted system, restricting entry level opportunities could weaken the future talent base and discourage international students from pursuing advanced education in the U.S.,” the IT industry body explained.
A sudden shift to a wage-weighted model would introduce uncertainty, increase compliance complexity, and disrupt long-established workforce planning for smaller and mid-sized firms that align recruitment with academic calendars, client delivery schedules, and product release cycles.
Nasscom’s member companies collectively support over 1.6 million skilled jobs across the US, contributing $198 billion to the U.S. GDP. Over 264,500 employees directly in the U.S., with over two-thirds of these jobs located outside Silicon Valley and New York, and in regions like Texas, North Carolina, Ohio, and Illinois. India was the country of origin for 71 percent of H-1B holders last year.
The industry body recommended a phased implementation with sufficient lead time for the wage-weighted approach. It added that delaying implementation until the FY28 lottery cycle would provide employers the necessary runway to adapt processes and ensure compliance.
Ankit Mehra, CEO & Founder of GyanDhan, explained that by linking visa allocation to salaries, the U.S. government aims to attract highly specialised talent from sectors like AI, semiconductors, and advanced engineering, while reducing reliance on volume-driven hiring models.
Entry-level roles
Freshers, recent graduates, and professionals in lower-paid or generalist roles may face challenges since their compensation may not meet the higher thresholds under a wage-based system. Entry-level roles are particularly vulnerable and could emerge as the most disadvantaged segment.
This policy change can also disadvantage international graduates entering the workforce in non-elite or entry-level roles. Many US graduates begin their careers at salaries that may not qualify under the wage-prioritisation system. While top graduates from premium universities and specialised programmes may find pathways, the change could narrow options for those relying on smaller employers or regional firms.
Reassessing wages
“Over time, this policy could push employers to reassess compensation structures for critical roles, especially where H-1B talent is central to business operations. That said, not all companies will respond by raising wages. Some may reduce hiring volumes, offshore more roles, or shift work to other visa categories or geographies. So, the adjustment may be uneven,” Varun Singh, MD, XIPHIAS Immigration, said.
Indian IT firms and professionals are also among the most exposed to H-1B policy shifts, given their scale of reliance on the programme. A wage-based prioritisation could disadvantage firms that traditionally deploy large numbers of mid-level professionals onsite.
This policy shift may accelerate trends already underway — greater offshoring, near-shoring, and a stronger push toward specialised skill development rather than volume-based migration.
Mehra added that industries and organisations that rely heavily on volume hiring, including IT services companies and staffing-focused consultancies, are expected to be impacted, as their business models depend on large-scale, cost-efficient recruitment.
Specialist staffing firm Xpheno highlighted that H-1B visas are also leveraged by employers in other sectors like healthcare and financial services. The new wage-linked system will lead to fewer opportunities for foreign workers at the entry levels.
In 2025, the top 103 healthcare institutions in the US received approval for a total of 7,975 H-1B visas, according to Xpheno’s analysis. The US healthcare relies on foreign doctors & nurses who are on H-1B visas. Doctors are, however, well-paid and in the higher salary range.
Similarly, in the finance and Insurance space, in 2025, the top 100 Finance + Insurance institutions in the US got approval for a total of 23,935 H-1B visas.
With inputs from Sindhu Hariharan
Published on December 24, 2025