Visa registration for the H-1B program opens March 4, as President Donald Trump’s reshaping of the system—introducing a $100,000 fee on new visas and a wage-ranking distribution—takes effect. The changes are expected to significantly increase costs for companies sponsoring workers, potentially altering compensation strategies and sparking legislative challenges.
The new fee and wage-ranking system represent a significant shift in the H-1B program, which Trump has previously criticized as facilitating the replacement of American workers with lower-paid foreign labor. Texas Governor Greg Abbott last month directed state agencies and universities to limit their hiring of H-1B workers, citing a preference for Texas residents. Representative Greg Steube (R-Fla.) has introduced legislation to end the H-1B program altogether, echoing concerns about displacement of U.S. Workers.
CIOs are bracing for higher costs under the new rules. Michelle Abeckjerr, an immigration attorney at Abeckjerr Immigration Law, stated that smaller companies with limited budgets “are not going to have a fair chance in the H-1B lottery this year.” The wage ranking system, which prioritizes higher salaries, gives an advantage to well-capitalized employers like Amazon, Microsoft, and Google.
The wage ranking system assigns odds of winning the visa lottery based on the offered wage level. Federal documents show a 61% chance of success for Level 4 wages (roughly $125,694 in some areas) compared to just 15% for Level 1 wages (around $76,773 in Miami). Employers indicate the intended wage level when submitting petitions, effectively creating a tiered system.
Jimit Arora, CEO of Everest Group, noted that Steube’s bill to end the program is unlikely to pass, but its introduction contributes to uncertainty surrounding the H-1B program. “It propagates uncertainty,” Arora said, adding that CIOs may avoid increasing their reliance on H-1B workers as a result.
Miranda Zolot, general counsel at Oyster, believes the changes will similarly put upward pressure on salaries for American workers in similar roles. “I consider it will also raise salaries for American workers who are in those same roles in order to prevent attrition,” Zolot said.
Despite a recent wave of AI-driven layoffs creating a temporary surplus of tech labor, Divij Kishore, an immigration attorney at Flagship Law, anticipates the 85,000 visa cap will still be reached. He expects a “redistribution of visas toward higher-paying positions and well-capitalized employers.”
Victor Janulaitis, CEO of Janco Associates, suggested that larger companies will be better positioned to absorb the added costs, particularly for critical AI talent.
Some companies are already reassessing their H-1B strategies. During an earnings call last month, Wipro Chief Human Resources Officer Saurabh Govil indicated the company was “debating” whether to apply for H-1B visas, despite submitting over 2,400 petitions in 2023.
Kusum Mundra, an economics professor at Rutgers University, anticipates IT services firms will increasingly turn to international students already in the U.S. On optional practical training (OPT) to avoid the $100,000 fee. She also warned that employers might offer inflated salaries on paper to improve their lottery odds, then revert to lower wages once visas are approved, potentially limiting worker mobility and bargaining power.
Manish Daftari, a partner at Vialto Law, expects employers will adopt a cautious approach this year, observing how the new system unfolds. The long-term impact of the changes remains to be seen.
