No More H-1B Lottery: US Notifies New Process For Awarding Work Visas

Major Overhaul Replaces Random Selection with Wage-Based System to Prioritize Higher-Skilled Workers

Overview

The United States has announced a sweeping transformation of its H-1B visa program, marking one of the most significant structural changes in decades. The Trump Administration has officially replaced the traditional random lottery system with a wage-weighted selection process that prioritizes higher-skilled and higher-paid foreign workers. This landmark reform aims to better protect American workers while strengthening the nation's competitiveness in attracting top global talent.

Key Changes at a Glance

1. End of Random Lottery System

• Old System: For over 20 years, H-1B visas were awarded through a purely random draw, treating all registrations equally
• New System: Registrations are now ranked and selected through a weighted process based on wage levels and skills
• Effective Date: February 27, 2026 (for FY 2027 H-1B cap registration season)

2. Wage-Weighted Selection Process

The new system doesn't eliminate the lottery entirely but fundamentally changes how it works:

• Multiple Entries Based on Wage Levels: Registrations tied to higher wage levels receive multiple "entries" into the selection pool
• Increased Probability: Higher-paid positions have significantly better chances of being selected
• Maintained Flexibility: Employers can still petition for workers at all wage levels, though lower-wage positions face reduced odds

3. $100,000 Additional Fee

• Effective Date: September 21, 2025
• Requirement: All new H-1B petitions filed after this date must include an additional $100,000 payment
• Scope: Applies to new petitions for beneficiaries outside the US and those requesting consular notification
• Exemptions: Does not apply to previously issued H-1B visas or petitions submitted before September 21, 2025

4. Visa Cap Remains Unchanged

• Regular Cap: 65,000 H-1B visas annually
• Advanced Degree Cap: 20,000 additional visas for workers with US master's degrees or higher
• Total: 85,000 H-1B visas available per fiscal year

What This Means for Different Stakeholders

For Employers

• Strategic Shift Required: Companies must now offer competitive wages to improve selection odds
• Higher Costs: The $100,000 fee significantly increases the cost of H-1B sponsorship
• Compliance Burden: Employers must ensure wage levels align with Department of Labor (DOL) prevailing wage standards
• Opportunity: Still possible to hire workers at all wage levels, though higher-wage positions are prioritized

For Foreign Workers

• Skill Premium: Workers with specialized skills and higher qualifications have better chances
• Wage Advantage: Those offered higher salaries are more likely to be selected
• Entry-Level Challenge: Recent graduates and early-career professionals face significantly reduced odds
• Emerging Fields: Even workers in critical or emerging fields may struggle if offered lower wages

For American Workers

• Wage Protection: The system aims to prevent wage suppression by prioritizing higher-paid positions
• Job Opportunity: Employers must demonstrate genuine need for foreign workers before sponsoring them
• Project Firewall: The Department of Labor launched this enforcement initiative to ensure employers prioritize qualified Americans

The Rationale Behind the Changes

Government Perspective

The Department of Homeland Security (DHS) and the Trump Administration justify these changes as:

1. Aligning with Congressional Intent: The H-1B program was designed to address gaps in the US workforce for highly skilled positions, not to replace American workers with cheaper labor
2. Protecting American Workers: By prioritizing higher-wage positions, the system discourages employers from using H-1B visas to undercut American worker wages
3. Enhancing Competitiveness: Attracting the "best and the brightest" from around the world strengthens America's competitive edge in the global economy
4. Preventing Program Abuse: The changes aim to eliminate widespread misuse of the program for lower-skilled, lower-paid positions

Official Statement

According to USCIS: "The new weighted selection will better serve Congress' intent for the H-1B program and strengthen America's competitiveness by incentivizing American employers to petition for higher-paid, higher-skilled foreign workers."

Legislative Support: H-1B and L-1 Visa Reform Act of 2025

Complementing the executive changes, the H-1B and L-1 Visa Reform Act of 2025 (S.2928) was introduced on September 29, 2025, by:

• Senate Judiciary Committee Chairman: Charles Grassley (R-Iowa)
• Ranking Member: Dick Durbin (D-Illinois)
• Co-sponsors: Tommy Tuberville (R-Alabama) and Bernie Sanders (I-Vermont)

Key Provisions of the Reform Act

• Worker Displacement Protections: Stricter requirements to prevent American worker displacement
• Enhanced Petition Requirements: More rigorous vetting of H-1B petitions
• Employer Accountability: Investigation and enforcement against employers who abuse the program
• Integrity Measures: Strengthened verification and compliance mechanisms

Timeline of H-1B Reforms

How the Weighted Selection Works

Example Scenario

Scenario: Two H-1B registrations in the same selection pool

Registration A:

• Position: Software Engineer
• Offered Wage: $150,000 (Level 4 - Highest)
• Entries in Pool: 4

Registration B:

• Position: Software Engineer
• Offered Wage: $80,000 (Level 1 - Lowest)
• Entries in Pool: 1

Result: Registration A has 4 times the probability of being selected compared to Registration B

Potential Impact and Concerns

Positive Impacts

✅ Better Wage Protection: Reduces incentive for employers to use H-1B for cost-cutting
✅ Attracts Top Talent: Focuses on bringing the most skilled workers to the US
✅ Program Integrity: Reduces abuse and misuse of the visa program
✅ American Worker Protection: Prioritizes positions that genuinely need foreign expertise

Concerns and Criticisms

⚠️ Reduced Accessibility: Recent graduates and early-career professionals face significant barriers
⚠️ Emerging Fields Challenge: Workers in critical but lower-paid fields (research, academia) may struggle
⚠️ Cost Barrier: The $100,000 fee may deter smaller companies from sponsoring workers
⚠️ Diversity Impact: May disproportionately affect workers from certain countries or backgrounds
⚠️ Economic Slowdown: Could reduce the number of H-1B visas actually awarded

Expert Perspective

According to Cecilia Esterline, Senior Immigration Policy Analyst at the Niskanen Center:
"These rules could make the H-1B largely inaccessible to recent graduates and early career professionals – even if they work in emerging or critical fields."

What Employers Need to Know

Immediate Actions (Effective September 21, 2025)

1. Budget for $100,000 Fee: Include this cost in H-1B sponsorship decisions
2. Review Wage Levels: Ensure offered wages are competitive and aligned with DOL prevailing wage standards
3. Assess ROI: Evaluate whether H-1B sponsorship remains cost-effective for your organization
4. Plan Ahead: Begin preparing for the new weighted selection system

Strategic Considerations

• Wage Competitiveness: Offer higher wages to improve selection odds
• Skill Requirements: Focus on genuinely specialized positions that justify H-1B sponsorship
• Alternative Options: Consider other visa categories (L-1, O-1, EB-3) if H-1B becomes less viable
• Compliance: Ensure all H-1B petitions comply with new requirements and documentation standards

What Workers Need to Know

For Current H-1B Visa Holders

✓ No Impact: Existing H-1B visas are not affected by these changes
✓ Travel Rights: Current visa holders can continue to travel in and out of the US
✓ Renewals: Renewal fees remain unchanged; the $100,000 fee only applies to new petitions

For Future Applicants

• Wage Matters: Higher offered wages significantly improve selection chances
• Skill Development: Specialized skills and advanced degrees increase competitiveness
• Timing: Consider applying when employers are willing to offer competitive wages
• Alternative Paths: Explore other visa categories if H-1B becomes inaccessible

Implications for the Immigration Landscape

Broader Context

These H-1B reforms are part of a larger Trump Administration initiative to:

• Prioritize American Workers: Ensure immigration policies protect and benefit US citizens
• Reduce Visa Abuse: Crack down on programs that have been misused
• Attract Quality Talent: Focus on bringing the most skilled and valuable workers
• Strengthen Enforcement: Launch initiatives like Project Firewall to ensure compliance

Project Firewall Initiative

The Department of Labor announced Project Firewall, an H-1B enforcement initiative that:

• Safeguards the rights, wages, and job opportunities of highly skilled American workers
• Ensures employers prioritize qualified Americans when hiring
• Holds employers accountable for H-1B visa program abuse

Frequently Asked Questions

Q: Will the H-1B lottery be completely eliminated?
A: No. The lottery mechanism remains, but the odds are now weighted based on wage levels rather than being purely random.

Q: Does the $100,000 fee apply to all H-1B petitions?
A: No. It only applies to new H-1B petitions filed after September 21, 2025. Existing visas and renewals are not affected.

Q: Can employers still hire lower-wage H-1B workers?
A: Yes, but they have significantly reduced odds of being selected. The system still allows hiring at all wage levels.

Q: When does the new system take effect?
A: The final rule becomes effective on February 27, 2026, and applies to the FY 2027 H-1B cap registration season.

Q: How will this affect Indian IT workers?
A: Indian workers, who traditionally dominate the H-1B program, may face increased competition as the system now prioritizes higher-wage positions, potentially affecting entry-level and mid-level positions.

Conclusion

The elimination of the H-1B lottery in favor of a wage-weighted selection system represents a fundamental shift in how the United States awards work visas to foreign nationals. While the changes aim to protect American workers and attract top global talent, they also create new challenges for employers and workers, particularly those in entry-level positions or lower-wage fields.

For visa sponsors and applicants, the key takeaway is clear: higher wages and specialized skills are now paramount. Employers must be prepared to offer competitive compensation packages, while workers seeking H-1B sponsorship should focus on developing specialized expertise and negotiating higher salaries.

As these reforms take effect in 2026, both employers and workers will need to adapt their strategies to navigate the new H-1B landscape. The long-term impact on the US economy, innovation, and competitiveness will become clearer as the system is implemented and data on visa awards accumulates.

Last Updated: December 24, 2025
Article Status: Current and Comprehensive
Relevance: Highly relevant for employers, visa sponsors, and foreign workers planning H-1B applications