Explained: How US is changing H-1B visa system and who it affects

The Trump administration on Tuesday finalised sweeping changes to the way coveted H-1B work visas are awarded, replacing the random lottery with a system that favours higher-paid and higher-skilled foreign workers.

The Department of Homeland Security said the new rule will introduce a weighted selection process for H-1B visas, giving employers offering higher salaries a better chance of securing visas for foreign professionals.

The changes will take effect on February 27, 2026, in time for the fiscal year 2027 H-1B cap registration season.

“The rule is another crucial step to strengthen the integrity of the H-1B nonimmigrant visa program,” DHS said in a statement, arguing that the existing lottery system had been exploited by employers seeking to hire foreign workers at lower wages than US workers.

The H-1B program, administered by US Citizenship and Immigration Services, allows American companies to hire foreign workers in specialty occupations such as technology, engineering and healthcare.

Congress caps the program at 65,000 visas a year, with an additional 20,000 reserved for workers who hold advanced degrees from US universities. Demand far exceeds supply, often by several times, forcing the government to use a selection mechanism to decide who gets a visa.

What is changing under the new rule?

Under the final rule, when visa demand exceeds the annual cap, USCIS will conduct a weighted selection based largely on wage levels tied to a job’s occupation and location.

Positions paid at the highest government-defined wage level will receive four entries in the selection pool, mid-tier wages two or three times, while the lowest-paid qualifying positions will receive just one, according to an unpublished final rule reviewed by Upstox.

Each foreign worker will still count only once toward the annual cap, but higher-paying jobs will have a significantly better chance of being selected.

According to the administration, the approach is designed to discourage abuse of the program to fill relatively low-paid, lower-skilled jobs, while still allowing employers at all wage levels to participate.

“The existing random selection process was exploited and abused by US employers who were primarily seeking to import foreign workers at lower wages than they would pay American workers,” USCIS spokesperson Matthew Tragesser said in a statement. “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.”

The overhaul follows a draft regulation released by DHS in September that outlined plans to replace the lottery with a wage-based system. That proposal drew criticism from business groups and the technology industry, which relies heavily on H-1B visas and employs large numbers of Indian IT professionals, but was praised by labour advocates who say the program undercuts American workers.

The administration has already imposed additional requirements on H-1B employers, including a proclamation requiring companies to pay an extra $100,000 per visa as a condition of eligibility.

“As part of the Trump administration’s commitment to H-1B reform, we will continue to demand more from both employers and aliens so as not to undercut American workers,” Tragesser said.

The changes will apply to all H-1B registrations submitted on or after the rule’s effective date, including those under the advanced degree exemption.

Applications filed before then will be processed under the existing rules, DHS said.