US govt set to favour high-paid workers in H-1B visa process overhaul

Trump administration proposes weighted H-1B visa selection, replacing lottery with wage-based tiers; move could hit Indian IT firms while favoring high-skilled, high-paid roles in US tech

The Donald Trump administration has proposed amendments to the process by which US Citizenship and Immigration Services (USCIS) selects H-1B visa applications, just days after announcing a $100,000 fee on new filings from next year. 

The Department of Homeland Security (DHS) has outlined plans for a weighted selection system that would favour the allocation of H-1B visas to higher-skilled workers over the decades-old lottery system when applications exceed the annual cap. Under the proposal, visas would be allocated according to wage tiers, giving higher-paying jobs a greater chance of selection. 

“Through the proposed regulatory revisions, DHS aims to implement the numerical cap in a way that incentivises employers to offer higher wages, or to petition for positions requiring higher skills and higher skilled aliens, that are commensurate with higher wage levels,” said a federal register notice on Tuesday. 

“The proposed process would favour the allocation of H-1B visas to higher skilled and higher paid aliens, while maintaining the opportunity for employers to secure H-1B workers at all wage levels.”

 

Gaurav Vasu, founder and CEO of market intelligence firm UnearthInsights, said the move aligns with previous predictions. “With this, H-1B is now for only high-skilled resources with over $500,000 average salaries, plus $100,000 fees. This is now meant for only high-end resources for multinational GCCs like Amazon, Microsoft, and Google, and multiple other large, mid and small GCCs,” he said. 

 

Pareekh Jain, founder of Pareekh Jain Consulting and ERIIT, noted that the change was long anticipated. “This was the proposal that Trump had put forward in his first term as US president. This was always the plan, apart from the $100,000 fee now introduced. This will do away with the lottery system and only those on higher salaries will get access. For Indian IT firms, this will have an impact. Perhaps the impact will not be seen immediately as growth is in the slow lane and AI too has had its effect. But when growth comes, this will create problems for the sector.”

 

The proposal signals the administration’s intent to overhaul the H-1B system, the main gateway for thousands of Indian engineers to work in the US through service providers such as TCS and Infosys. It also reflects a determination to ensure that visa holders are highly skilled and paid higher wages than at present.

 

Indian IT companies have long faced criticism for paying H-1B employees below prevailing US wages and for not hiring Americans in these roles -- a contentious issue among Trump’s supporters and officials. Large providers, including TCS, Infosys, HCLTech, and Wipro, have invested in US facilities since the first Trump administration, pledging to hire locally and develop corporate universities, such as Infosys’s facility in Indiana. These initiatives are likely to expand under the new regulations.

 

Data from USCIS shows that the top five Indian IT services companies received 11,711 H-1B visas for 2025, down sharply from 23,506 in 2022. Motilal Oswal noted that roughly 20 per cent of employees of these firms are currently based onsite in the US. Of these, 20–30 per cent are on H-1B visas, meaning visa holders represent just 3–5 per cent of the active workforce. 

 

A Kotak Institutional Equities report on the $100,000 fee warned that “our bear case assumes no changes in sourcing patterns and increased competition for onsite talent, leading to a 10 per cent wage inflation, in which companies would have about 100–200 basis points (bps) margin impact. Our base case is that companies would prefer to replace expiring H-1Bs with subcontractors in the near term, paying 20–25 per cent higher wages on average and assuming no significant changes to wages on a comparable basis.” The impact would be negligible in this scenario, with margin impact contained at about 20–30 bps for tier-1 IT and 20–50 bps for mid-tier peers.

 

Implementation of the proposed regulation could take months or even years. DHS estimates that the 10-year rollout, between 2026 and 2035, would cost around $30 million annually. It also projects annual net benefits of $472 million in 2026, rising to $974 million in 2027, $1.5 billion in 2028, and nearly $2 billion each year from 2029 through 2035.

 

(With inputs from Shivani Shinde in Mumbai)