Trump administration plans major overhaul of H-1B lottery system, prioritizing high salaries and high skills; industry: faces legal challenges

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The Trump administration is proposing major changes to the H-1B visa selection process, which is heavily used by the tech industry, shifting visa allocation from the current random lottery to a system based on the required skill level of the position and the salary offered.

According to CCTV News, on September 23 local time, the U.S. Department of Homeland Security announced in the Federal Register that the Trump administration plans to adjust the H-1B visa application process by introducing a weighted selection mechanism, giving priority in the annual quota lottery to applicants with higher skill levels and better salaries. The rule will be officially announced on September 24.

According to the announcement, this move will make it more likely for H-1B applicants with higher wages to be selected, thereby improving employers' chances of bringing in foreign talent for high-skilled positions. The notice emphasizes that H-1B visas are subject to numerical limits and exemption clauses, but in the context of high demand, the government has the right to improve efficiency by upgrading the process.

This proposal is the latest effort by Trump to reform the H-1B program. The H-1B has always been a focus of conservative controversy, with critics arguing that its beneficiaries replace American workers. The proposal will not allocate visas strictly according to the highest wages, but will assign each prospective employee to one of four wage levels, based on U.S. Department of Labor surveys:

Their chances of being selected will be based on the assigned wage level. Employees at the highest of the four wage levels, with an average annual income of about $162,528, will get four entries into the lottery pool; those at the lowest wage level will only get one chance.

The proposal states that this process will bias H-1B visa allocation toward higher-skilled, higher-paid foreigners, while still preserving the opportunity for employers to hire H-1B workers at all wage levels.

During its early months, the Trump administration focused on mass deportation, and is now seeking major reforms to employment-based visa programs.

Late last week, the White House announced that new H-1B applications must pay a $100,000 fee as a condition for entering the United States. This announcement initially caused panic among employers and employees, but the government later clarified that the fee only applies to new applications. The fee took effect on September 21.

The U.S. H-1B visa program is limited to 85,000 new slots annually, with higher education and research organizations exempt from this cap. Employers selected in the online registration lottery may continue to submit formal applications.

The H-1B regulation finalized in the last days of Trump’s first term—but subsequently revoked by President Biden—had planned to prioritize H-1B selection based on the four-tier wage system, to prevent employers from using these visas to fill low-paid, low-skill jobs. The U.S. Department of Labor also attempted to tighten the definition of occupations eligible for “specialty occupation visas” and proposed other regulatory reforms, as part of the “Buy American, Hire American” agenda.

Some business groups warned that Trump’s first wage-based proposal would deprive employers of the chance to hire newly graduated junior professionals from U.S. colleges. They also objected to using the Department of Labor’s wage levels as a proxy for measuring employee skill.

However, industry insiders point out that both the $100,000 H-1B fee and the new wage-based visa allocation process may face legal challenges. Many lawyers warn that regardless of the merits of linking H-1B selection to wages, the proposal is not legal because the Immigration and Nationality Act requires that visas be issued in the order applications are received.

Last year, U.S. Citizenship and Immigration Services already reformed the lottery process so that each sponsored worker has an equal chance of selection, no matter how many employers submit registrations for them. This was due to discovering that some employers might collude to submit multiple registrations unrelated to real job positions in order to game the lottery system, leading to a surge in registrations.

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