The U.S. Department of Homeland Security (DHS) has received approval from the White House’s Office of Information and Regulatory Affairs for a transformative change to the H-1B visa program, according to a recent Economic Times report. The proposed rule, which may soon be published, will replace the current random lottery system with a wage-based selection process for allocating the 85,000 annual H-1B visas. This shift, reviving a policy from the first Trump administration, aims to prioritize highly skilled, well-compensated foreign workers, particularly in tech, engineering, and healthcare. However, it has sparked concerns about its impact on entry-level professionals and smaller businesses, especially for Indian workers who form a significant portion of H-1B recipients.
Understanding the H-1B Visa Program
The H-1B visa program enables U.S. employers to hire foreign professionals for specialty occupations requiring advanced skills. With an annual cap of 65,000 visas, plus 20,000 additional slots for U.S. master’s degree holders or higher, the program is critical for industries like technology, where demand far exceeds supply. In recent years, the oversubscribed program has relied on a random lottery each spring to select applicants, with nearly 400,000 registrations in FY 2024.
The New Wage-Based Selection System
The approved rule proposes ranking H-1B applications based on the wages offered, prioritizing higher-paid positions over lower-wage roles. This approach echoes a 2021 DHS proposal under the Trump administration’s “Buy American, Hire American” initiative, which sought to allocate visas across four wage tiers. While details of the new rule are yet to be released by U.S. Citizenship and Immigration Services (USCIS), it is expected to simplify the tiered system, potentially adjusting for regional cost-of-living differences to ensure fairness.
The shift aims to:
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Boost Economic Value: Prioritizing higher-paid workers could increase the program’s economic impact by up to 88%, according to the Institute for Progress.
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Reduce Misuse: The lottery system has been criticized for allowing outsourcing firms to secure visas for lower-wage workers, potentially undercutting U.S. workers.
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Attract Elite Talent: A wage-based system could strengthen the U.S.’s ability to compete globally for top professionals in fields like AI and technology.
Challenges and Criticisms
While the reform has supporters, it faces significant opposition. Critics argue that prioritizing higher wages could:
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Limit Opportunities for Entry-Level Workers: Recent graduates and international students on Optional Practical Training (OPT) may struggle to compete with senior professionals.
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Disadvantage Smaller Firms: Startups and small businesses, unable to match the salaries of tech giants like Amazon or Microsoft, may lose access to global talent.
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Impact Indian Professionals: Indian workers, who accounted for a significant share of H-1B registrations in FY 2024, may face challenges if lower-wage roles are deprioritized.
The Biden administration previously withdrew a similar proposal in 2021 after over 1,000 public comments highlighted its potential to reduce eligible workers. Federal courts also blocked related efforts to raise wage floors and narrow qualifying job categories, citing concerns about fairness and accessibility.
Broader Context: Visa Policy Changes
This H-1B overhaul comes alongside other immigration policy shifts, notably the tightening of the Visa Interview Waiver (Dropbox) program, effective September 2, 2025. The new rules eliminate Dropbox eligibility for H-1B, H-4, L-1, and F-1 visas, requiring in-person interviews for most applicants. This change is expected to increase wait times and logistical challenges, particularly for Indian professionals and students. For more details, read our analysis: U.S. Visa Interview Waiver Rules Tightened: What H-1B and Other Visa Holders Need to Know.
Implications for Employers and Applicants
For Employers
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Large Corporations Benefit: Tech giants offering competitive salaries are likely to secure more visas.
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Challenges for Outsourcing Firms: Companies like Tata and Infosys may face disruptions as lower-wage roles are deprioritized.
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Increased Compliance: Employers will need to provide detailed salary data and adhere to stricter regulations.
For Applicants
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High Earners Gain: Senior professionals and PhD holders with high salary offers will have better chances.
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Entry-Level Workers at Risk: Recent graduates may find it harder to secure visas.
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Indian Diaspora: High-earning Indian professionals may benefit, but entry-level workers could face barriers.
For a deeper dive into the debate surrounding this reform, see our article: H-1B Visa Reform: Shift to Wage-Based Selection Sparks Debate in 2025.
What’s Next?
The proposed rule is under final review, with no confirmed implementation date. Given the H-1B cap for FY 2026 was met by June 30, 2025, the wage-based system is unlikely to affect next year’s applicants but could shape FY 2027 and beyond. Applicants and employers should:
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Stay Informed: Monitor USCIS.gov and DHS.gov for updates on the rule’s progress.
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Prepare Documentation: Ensure compliance with Labor Condition Applications (LCAs) and prevailing wage requirements.
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Consult Experts: Work with immigration attorneys to navigate the evolving landscape.
Conclusion
The move to a wage-based H-1B selection process marks a significant shift in U.S. immigration policy, aiming to prioritize top talent while addressing concerns about program misuse. However, it raises questions about accessibility for entry-level workers and smaller businesses, particularly for the Indian diaspora. As these changes unfold, NRI News Club will keep you updated on their implications.
For the latest information, visit USCIS.gov or consult an immigration attorney. Stay connected with NRI News Club for ongoing updates on immigration, culture, and community news.
Disclaimer: This article is for informational purposes only and does not constitute legal advice. Consult an immigration attorney for personalized guidance.
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