The H-1B visa program, a cornerstone for bringing skilled foreign workers to the United States, is undergoing a significant transformation in 2025. The U.S. Department of Homeland Security (DHS) has proposed replacing the random lottery system with a wage-based selection process for the 85,000 annual H-1B visas. This change aims to prioritize higher-paid, highly skilled professionals, but it’s stirring discussions among employers, workers, and immigration advocates. Here’s a deep dive into what this means, why it’s happening, and how it could impact the global workforce, particularly Indian professionals who make up a significant portion of H-1B recipients.
What Is the H-1B Visa Program?
The H-1B visa allows U.S. employers to hire foreign professionals for specialty occupations requiring advanced skills, such as those in technology, engineering, and healthcare. With an annual cap of 65,000 visas, plus an additional 20,000 for those with U.S. master’s degrees or higher, the program has long been oversubscribed, leading to a random lottery to select applicants. In 2024, nearly 400,000 applications were approved, with 65% being renewals, highlighting the program’s critical role in retaining global talent.
The Shift to Wage-Based Selection
On July 18, 2025, DHS sent a proposed rule to the White House Office of Information and Regulatory Affairs to overhaul the H-1B selection process. Instead of a random lottery, the new system would prioritize applications based on wage levels, favoring higher-paid positions. This proposal revives a similar effort from the first Trump administration, which was shelved by the Biden administration in 2021 after receiving over 1,000 public comments expressing concerns about its impact on entry-level workers and smaller companies.
Why the Change?
The wage-based system aims to ensure that H-1B visas go to the highest-skilled, highest-paid professionals, aligning with the “Buy American, Hire American” initiative from Trump’s first term. Proponents argue it will:
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Increase Economic Value: A study by the Institute for Progress suggests the H-1B program’s economic value could rise by up to 88% by prioritizing higher salaries and seniority.
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Reduce Exploitation: The current lottery system has been criticized for enabling outsourcing firms to secure visas for lower-wage workers, undercutting U.S. workers and creating a “second-class workforce” with fewer protections.
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Attract Top Talent: Prioritizing higher earners could help the U.S. compete globally for specialized talent, particularly in tech and AI.
However, critics warn that this shift could:
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Hurt Entry-Level Workers: Young professionals and recent graduates, including international students on Optional Practical Training (OPT), may struggle to compete with higher-paid applicants.
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Disadvantage Small Businesses: Smaller firms and startups, unable to offer top-tier salaries, may lose access to global talent.
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Impact Indian Workers: Indian professionals, who accounted for a significant share of the 780,884 H-1B registrations in FY 2024, could face challenges if lower-wage roles are deprioritized.
How Will the Wage-Based System Work?
While specific details of the rule are still under review, the proposed system would likely rank H-1B applications by wage levels, prioritizing those offering salaries above the Department of Labor’s prevailing wage for similar roles. Unlike the previous proposal, which used four wage tiers, the new rule may adopt a simpler salary-ranking approach, potentially adjusted for regional cost-of-living differences and younger workers.
For FY 2026, the H-1B cap was already met by June 30, 2025, with no second lottery needed, indicating that the wage-based system may not affect next year’s applicants but could shape FY 2027 and beyond. Employers must continue to submit Labor Condition Applications (LCAs) to ensure H-1B workers are paid at least the prevailing wage, protecting U.S. workers from wage suppression.
Impact on Employers and Workers
For Employers
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Tech Giants Benefit: Large companies like Amazon, Meta, and Microsoft, which can offer higher salaries, are likely to secure more visas.
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Challenges for Outsourcing Firms: Companies like Tata, Infosys, and Wipro, which rely on lower-wage H-1B workers, may see their business models disrupted.
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Increased Compliance: Employers must provide detailed salary data and ensure compliance with stricter regulations, adding administrative burdens.
For Workers
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Highly Skilled Professionals Gain: PhD holders and senior professionals with high salary offers will have better odds of securing visas.
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Entry-Level Workers at Risk: Recent graduates and those in lower-wage roles may find it harder to obtain H-1B visas.
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Indian Professionals: As the largest group of H-1B recipients, Indian workers may face mixed outcomes. High earners could benefit, while others may struggle.
Public and Expert Reactions
The proposal has sparked lively debate. Connor O’Brien, a researcher at the Economic Innovation Group, supports the change, stating on X: “The H-1B is the primary way through which we bring in skilled immigrants… Giving away these visas randomly is an enormous, missed opportunity to attract truly scarce talent.” However, some X users, like @Cloudwatch199, argue that a purely salary-based system could favor large corporations and exclude smaller firms or complex roles not tied to high wages.
Critics like Bernie Sanders have long argued that the H-1B program replaces American jobs with “low-wage indentured servants,” a sentiment echoed in some X posts. Meanwhile, immigration advocates highlight the program’s role in filling skill gaps, with 60% of top AI startups in 2025 founded or co-founded by immigrants, including nine from India.
What’s Next for H-1B Applicants?
The proposed rule is under review, and no deadline has been set for implementation. Given the tight timeline, significant changes are unlikely to affect the FY 2026 lottery, which begins registration in March 2026. However, employers and applicants should prepare for potential reforms by:
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Monitoring Updates: Check USCIS and DHS websites for the latest on the rule’s progress.
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Consulting Experts: Work with immigration attorneys to ensure compliance with evolving regulations.
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Exploring Alternatives: If not selected, options like O-1 visas or employment in cap-exempt sectors (e.g., universities) may be viable.
Conclusion
The shift to a wage-based H-1B visa selection process marks a pivotal change in U.S. immigration policy. While it aims to prioritize top talent and boost economic value, it raises concerns about fairness for entry-level workers and smaller businesses. As the rule moves through review, stakeholders worldwide, especially in India, will be watching closely. Stay informed, plan ahead, and consult professionals to navigate this evolving landscape.
For the latest updates, visit USCIS.gov or contact an immigration attorney. Join the NRI News Club for the latest and detailed information.
