Washington DC: US President Donald Trump's administration has introduced a proposal to overhaul the H-1B visa programme, replacing the current lottery system with a wage-based selection model.
The plan, detailed in a Federal Register notice on Tuesday, September 23, would prioritise better-paid and higher-skilled foreign workers when applications exceed the annual cap of 85,000.
Key reforms proposed in the H-1B visa system
The Department of Homeland Security (DHS) outlined several reforms aimed at reshaping the visa process:
End of lottery system: Applications would no longer be chosen at random. Instead, employers offering higher wages would have a stronger chance of securing visas for their workers.
Wage-based tiers: Jobs would be grouped into wage levels, giving preference to higher-paid roles.
New visa fee: Employers would be required to pay a $100,000 annual fee for new H-1B visas, though existing visas would not be affected.
Implementation timeline: The regulation could be finalised in time for the 2026 lottery registration period in March.
Economic impact assessment: DHS projects wages paid to H-1B workers would rise by $502 million in fiscal year 2026 and reach $2 billion annually by 2029, though about 5,200 small businesses may face labour shortages.
Its economic and political impact
The H-1B programme, which grants 65,000 visas annually plus 20,000 for advanced degree holders, remains central to the operations of US technology and outsourcing firms. India accounted for 71% of visa beneficiaries last year, with China at nearly 12%.
While supporters say the system fills crucial skill gaps and boosts competitiveness, critics argue it depresses wages for American workers. The reforms are the latest step in President Trump’s immigration agenda, which has included mass deportation proposals and limits on birthright citizenship.
A previous attempt to introduce similar wage-based reforms during Trump’s first term was blocked by a federal judge and later withdrawn by then President Joe Biden. The current proposal will now enter a 30-day public comment period before moving forward.
If adopted, the new rules would mark the biggest restructuring of the H-1B system done in decades, directly linking visa allocation to salary levels rather than chance.
