$100,000 Renewals In, Lottery System On It’s Way Out?

Concept of H1b Visa for foreign workers showing wooden letters with US or United states flag as background

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The H1-B visa immigration program was born in 1990 and designed for highly-educated, high-skilled workers to enter, work and live in the United States. Today, it is being remade in ways that could permanently alter who gets to work in the United States and on what terms. On Friday, confusion over new visa rules came to light after a Presidential proclamation in the Oval Office left existing visa holders scrambled to re-enter the country at various airports before new fees and requirements took effect.

At the center of the controversy is a staggering $100,000 fee that the administration added to the H-1B visa, and confusion around whether it was for new petitions or renewals. While that detail was ultimately cleared up by the United States press secretary on X, for many current H1-B holders, they weren’t sure if they needed to get back into the US before the 1,000% price increase kicked in. And if they were leaving the country, uncertainty arose about whether the holders would be allowed to return without any updated documents.

Each year, approximately 85,000 new applicants are awarded H-1B specialty occupation visas: 65,000 under the regular cap and an additional 20,000 for applicants with advanced U.S. degrees. In 2024 over 470,000 H-1B were processed before being entered into a lottery. The lottery is used to offer equal odds of approval for a new graduate entering the workforce as it would for a seasoned engineer commanding a six-figure salary.

Looking ahead, that mechanism is looking to be replaced with a wage-based merit system. In a filing on July 17th, the US Department of Homeland Security (DHS) submitted for a proposed rule titled “Weighted Selection Process for Registrants and Petitioners Seeking To File Cap-Subject H-1B Petitions”. The proposal introduced a “weighted selection process” which is far different than the lottery system used today. The petition is currently on its way through the system having already been submitted to the Office of Information and Regulatory Affairs.

Under the proposed framework, H-1B applications will be prioritized by salary, with the highest-paying jobs moving to the front of the line. This change is designed to grant access to those holding the most valuable and in-demand roles, ensuring that visas flow toward highly compensated workers in industries such as advanced technology, finance, and healthcare. American companies seeking to hire a foreigner on an H1-B visa must first attest that they are not been able to find American workers with similar skills and that the foreign applicant will earn a salary similar to what an American worker would earn.

But this will have an effect on entry-level workers and employees from smaller employers in sectors like education, research, and early-stage startups. Those areas have traditionally relied on modest salary payouts and will struggle to compete to get candidates approved over their larger peers.

India, China Account For Most H-1B US Visas

In fiscal year 2024, nearly 400,000 H-1B petitions were approved, including new cases and a quarter-million visa renewals or extensions. The majority of beneficiaries came from India, which accounted for almost 75% of approvals, followed by China with around 12%. A handful of other countries, from the Philippines to Canada to South Korea, represent just over one percent each. On the employer side, big technology companies such as Amazon, Microsoft, and Apple as well as services firms like Infosys, TCS, and Cognizant are some of the names that lean into these employees.

Employers will now face new economics. A $100,000 petition fee makes sense only for the most valuable roles, and the wage-based ranking all but ensures that companies willing to pay at the top of the market will crowd out those that cannot.

Historically, U.S. immigration policy has been rooted in principles of opportunity, diversity and merit. The introduction of a more formal pay-to-play system challenges these ideals, possibly undermining public trust in the fairness and integrity of the immigration process.

It also raises questions about the message this sends to the global community. Is the U.S. prioritizing financial gain over its commitment to being a beacon of hope and opportunity for the most talented?

Not yet, but with scale, perhaps.