The Trump administration has introduced a proposal to prioritize higher-paid, highly skilled foreign workers in the H-1B visa program. Unveiled days after a $100,000 fee requirement for new applications was announced, the plan would shift the system toward wage-based selection. It could be implemented as early as the 2026 filing season.
Proposal Targets Wage-Based Selection
The Department of Homeland Security (DHS) announced Tuesday that the new process would restructure H-1B visa selection. If applications exceed the 85,000 annual cap, employers offering higher wages would receive preference in having their candidates approved.
According to DHS, the initiative is intended to curb wage suppression and safeguard U.S. workers from what the administration characterizes as unfair competition. The proposal is part of a broader immigration crackdown, which has already introduced new deportation measures and financial hurdles for employment-based immigration programs.
$100,000 Fee Announcement Adds Pressure
The wage-based system builds on Friday’s announcement of a $100,000 application fee for new H-1B visas. That move created uncertainty among workers and employers, with reports of employees rushing back to the U.S. ahead of the implementation of the change. The White House later clarified that the fee applies only to first-time applicants.
Industry leaders, such as major tech firms, have expressed concern that the combination of high fees and more stringent eligibility requirements will restrict access to global talent pools. For firms that depend on high-skilled workers in technology, information, software engineering, and artificial intelligence, the policy shift would disrupt their hiring plans.
Historical Context of H-1B Reform
Efforts to reform the H-1B system have continued. Under Trump’s first term, similar reforms were enacted but derailed by judicial actions. A similar rule proposed by President Biden was delayed and ultimately reversed in 2021, before it was set to take effect.
By resubmitting the policy today, the administration is signaling a new commitment to transform employment-based immigration. If finalized, the new rule could take effect before the March 2026 H-1B registration cycle, potentially altering the processing of tens of thousands of visa petitions each year.
Economic and Labor Market Impacts
The wages paid to H-1B workers by employers are estimated to rise substantially if DHS implements the regulation. The estimates range from an additional $502 million in fiscal year 2026 to $1 billion in 2027 and $2 billion by 2029, per year. It will provide more protection for U.S. workers, proponents claim.
However, the department acknowledged that roughly 5,200 small businesses relying on H-1B visas could be significantly impacted, with reduced access to skilled workers. Detractors argue that the shift will harm innovation and growth, particularly in industries that rely on international talent to remain competitive.
Supporters and Critics Respond
Advocates of the H-1B program highlight its value in bridging skill gaps within industries such as engineering and computer programming. Opponents argue that it helps companies remain competitive in a global world and promotes innovation. High-profile figures, such as Elon Musk, have credited the program with allowing entrepreneurial growth.
Critics charge that businesses use the program to reduce salaries and replace experienced American professionals. India receives the most H-1B visas by a wide margin, with 71% of approvals in the last year, followed by China with nearly 12%. This reliance, critics argue, poses a threat to the low-cost labor system.
A Look Ahead
The wage-based system would go into effect during the 2026 H-1B season if the bill were enacted, affecting the way employers compete for the 85,000 visas made available annually.
For now, the administration’s push reflects a fundamental shift in how employment-based immigration is structured, introducing both financial and regulatory barriers.
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