H-1B: US Ends Lottery System, Wage-Based Selection Begins

The United States is preparing for one of the most sweeping transformations of its high-skilled immigration framework in decades, as the Trump administration moves to overhaul how H-1B visas are allocated. In a statement issued on Tuesday, the Department of Homeland Security (DHS) confirmed it is ending the long-standing random lottery system and replacing it with a wage-weighted selection process aimed at prioritising higher-paid and higher-skilled applicants.

The announcement follows President Donald Trump’s proposal to impose a steep $100,000 entry fee on new H-1B visa applications, a move that has already sent ripples through the global technology and business community. Together, the fee hike and the revised selection process mark a decisive shift in the administration’s approach to legal immigration, particularly programmes relied upon by US employers to source specialised foreign talent.

What the new H-1B policy means

Under the revised framework, H-1B visas will no longer be distributed purely by chance. Instead, applications will be ranked based on wage levels established by the US Department of Labor (DOL). Employers offering higher salaries will receive a significantly stronger chance of securing a visa slot, effectively tilting the system in favour of premium compensation and advanced skill sets.

DHS said the new approach is designed to better protect American workers by discouraging low-wage hiring practices and preventing misuse of the programme. The rule will take effect on February 27, 2026, ahead of the FY 2027 H-1B cap registration season, which typically opens in March.

Why the lottery system is being scrapped

According to US Citizenship and Immigration Services (USCIS), the existing lottery model had become vulnerable to manipulation. Officials argued that some employers exploited the system by submitting large volumes of lower-wage registrations, increasing their odds while undercutting domestic wages.

USCIS spokesperson Matthew Tragesser said the reforms are intended to realign the programme with its original purpose. “The existing random selection process was exploited by employers seeking to import lower-paid foreign labour,” he said, adding that the new wage-weighted system would encourage businesses to seek “higher-paid, higher-skilled” professionals instead.

The $100,000 H-1B fee proposal

The proposed $100,000 H-1B application fee represents a dramatic jump from current costs, which typically range between $2,000 and $5,000 depending on company size and compliance requirements. If implemented, the new fee would significantly raise hiring costs for US firms, particularly in technology, engineering and healthcare sectors.

Administration officials argue the fee will act as a filter, ensuring that only employers with genuine high-value roles seek overseas workers, while discouraging dependency on cheaper foreign labour.

Impact on Indian professionals

Indian nationals constitute one of the largest groups of H-1B visa holders in the United States, making the US H-1B visa rule changes especially consequential for India’s skilled workforce. While the wage-based system could benefit senior and highly paid professionals, entry-level applicants and outsourcing-driven roles may face steeper barriers.

Immigration experts believe the changes will fundamentally reshape recruitment strategies, with US companies likely to focus on fewer but more specialised hires.