H-1B Shake-Up 2027: How Wage-Based Selection and a $100,000 Fee Are Reshaping Skilled Immigration
H-1B Cap FY 2027: Lottery Ends, Wage-Based Selection Begins; $100,000 Fee Introduced
The H-1B cap season for fiscal year (FY) 2027 will be the first to run under a wage-based selection system and a new $100,000 petition fee, changes introduced by the Trump administration in response to growing political pressure over high‑skilled immigration during 2025. The shift replaces the long‑running lottery, raises costs significantly for many U.S. employers, and is expected to favor highly paid, senior foreign professionals over recent graduates and entry‑level workers, according to government filings and policy analysts.
Reporting based on: U.S. Department of Homeland Security and U.S. Citizenship and Immigration Services (USCIS) regulations and rule summaries, public statements by administration officials, and expert commentary from immigration attorneys and labor economists available as of January 7, 2026.
Political Pressure and the 2025 Push to Reshape H-1B
The H-1B visa program, created under the Immigration Act of 1990, allows U.S. employers to hire foreign workers in “specialty occupations” that typically require a bachelor’s degree or higher. For years, demand for new H‑1B visas has exceeded the annual cap of 85,000, leading USCIS to use a random lottery to select registrations, a process critics said did not distinguish between higher‑ and lower‑paid roles.
In 2025, calls to terminate or substantially restructure the program intensified among some U.S. lawmakers and worker advocacy groups, who argued that outsourcing and staffing companies used the visa to undercut domestic wages, particularly in technology and IT services. Supporters of the program, including many multinational employers and university leaders, countered that H‑1B workers filled critical skills gaps and supported innovation in sectors such as software, semiconductors, and health care.
Against that backdrop, the Trump administration moved to overhaul how H‑1B visas are allocated and how much employers pay to participate. Administration officials framed the measures as part of a broader “America First” agenda intended to, in their view, reward higher wages and deter what they described as “abuse” of the system by high‑volume filers.
USCIS, a component of the U.S. Department of Homeland Security, issued regulations that replace the random selection process with a wage‑based mechanism and add a one‑time $100,000 petition fee for most cap‑subject filings beginning with the FY 2027 season.
From Lottery to Wage-Based Selection for FY 2027
Under the new rule, officially described by USCIS as the “H‑1B Wage-Based Selection” system, the traditional lottery will be discontinued for cap‑subject H‑1B visas. The agency has stated that the change will take effect for registrations submitted for the FY 2027 cap season, with the wage‑based rule beginning on February 27, 2026, in time for the annual spring registration window.
Employers will continue to submit electronic registrations for each prospective H‑1B worker, a process USCIS formalized in 2020. Once the registration window closes, USCIS will identify unique beneficiaries and rank them based on the wage level indicated relative to the U.S. Department of Labor’s prevailing wage system for the specific occupation and location.
According to USCIS summaries of the policy, if a foreign worker is selected as a unique beneficiary, each registrant that filed on that worker’s behalf will receive a selection notice and may file a cap‑subject petition. This approach is intended, in part, to discourage duplicate, low‑wage filings and prioritize what the agency characterizes as “higher‑skilled, higher‑paid” positions.
The new rule has been presented by administration officials as a way to “align H‑1B selection with market wages” and reduce incentives to offer lower salaries to maximize the chances of selection. However, employer groups and some attorneys note that the system may structurally favor larger, well‑capitalized firms able to offer top‑tier wages, while start‑ups, small businesses, and academic institutions could face disadvantages.
Four Wage Levels and Changing Odds for Workers
The wage‑based selection process relies on the existing four‑tier prevailing wage framework used in labor condition applications for H‑1B jobs. These tiers are tied to experience and job complexity:
- Level 1: Entry‑level roles, typically for new hires and recent graduates.
- Level 2: Positions for workers with some experience beyond entry level.
- Level 3: Fully qualified professionals performing at the prevailing market rate.
- Level 4: Specialists or senior‑level professionals with extensive experience or advanced expertise.
USCIS analyses and related policy documents forecast a significant shift in selection probabilities across these wage levels once the new system is implemented. Based on estimates circulated with the rule, the probability of being selected to file a cap‑subject petition is expected to:
- Decrease by about 48% for Level 1 positions compared with the current lottery system.
- Increase by about 3% for Level 2 positions.
- Increase by about 55% for Level 3 positions.
- Increase by about 107% for Level 4 positions.
For fresh graduates and early‑career professionals, immigration lawyers say the projected drop in Level 1 selection rates could make it substantially harder to secure an initial H‑1B in FY 2027 and beyond. Some universities and student advisers are warning international students that they may need to consider alternative pathways, such as higher‑paying offers, advanced degrees, or different visa categories.
By contrast, senior‑level professionals and highly paid specialists at Level 4 stand to see the greatest benefit. Analysts note that the probability of selection for these roles more than doubles under the projected model, even as employers face higher payroll costs to meet the elevated wage thresholds associated with top tiers.
Labor economists are divided on the likely consequences. Some argue that the system could push employers to upgrade roles and salaries, potentially raising standards for both U.S. and foreign workers. Others caution that companies might respond by shifting more work offshore or reducing hiring of entry‑level talent in the United States if they cannot justify higher wages or face repeated non‑selection at lower levels.
New $100,000 H-1B Petition Fee and Who Is Exempt
The second major change affecting the FY 2027 H‑1B cap is a substantial new cost for many employers. Beginning September 21, 2025, a one‑time $100,000 petition fee has been required for most new cap‑subject H‑1B petitions, in addition to existing filing and anti‑fraud fees. For companies that previously spent under $10,000 per H‑1B case, according to immigration practitioners, total costs can now exceed $100,000 when the new fee is included.
The fee must be paid by the U.S. employer after a worker’s registration is selected and before filing the full petition. USCIS and administration officials say the measure is designed to reduce speculative filings and ensure that only employers with a “high level of commitment” to sponsored workers proceed, as well as to generate additional revenue for processing and enforcement activities.
However, the policy includes several notable exemptions. According to agency guidance summarizing the new rules:
- F-1 students moving to H‑1B status under the cap are exempt from the $100,000 petition fee.
- Existing H-1B visa holders changing employers or extending status are exempt.
- H-1B renewals are not subject to the new fee, and employers do not pay the $100,000 for extensions within the typical six‑year maximum stay.
These exemptions mean that the fee falls most heavily on new cap‑subject hires who are not transitioning from student status and on employers seeking to bring in new foreign professionals from abroad. Large technology firms and consulting companies that rely on a steady influx of H‑1B workers could face multi‑million‑dollar increases in annual costs if they continue filing at previous volumes.
Business groups and some trade associations have criticized the fee as “punitive” and out of step with other advanced economies’ work visa charges. Some argue it will discourage investment and push high‑value projects overseas. Supporters of the measure, including lawmakers who have long pressed for restrictions on high‑volume H‑1B use, counter that the steep fee may deter what they see as “bulk” filings and encourage employers to focus on fewer, higher‑paid roles.
How Employers, Workers, and Students May Be Affected
The combination of wage‑based selection and the new fee is expected to have uneven impacts across sectors and categories of workers. Large technology companies that already pay upper‑tier salaries may be positioned to benefit from higher selection rates at Level 3 and Level 4, though they will bear higher upfront costs per new hire. Smaller firms, non‑profits, and research institutions could face challenges matching prevailing wages at top levels and justifying six‑figure petition expenses.
For international students in F‑1 status, the landscape is mixed. On one hand, exemptions from the $100,000 fee could make them comparatively more attractive candidates. On the other, students typically begin at Level 1 wages, where projected selection probabilities decline sharply. University career advisers and immigration experts are encouraging students to understand the new wage tiers and, where possible, seek positions that can qualify for higher levels or leverage advanced degrees.
Experienced H‑1B professionals already in the United States generally retain their existing pathways. Their status can be extended up to six years, and, as USCIS guidance notes, renewals and transfers are not subject to the $100,000 fee. However, many such workers rely on periodic travel abroad for visa stamping, and backlogs or consular delays abroad can still disrupt employment.
Labor advocates who have long opposed the H‑1B program say the new rules do not fully address their core concerns about potential displacement of U.S. workers, but some acknowledge that prioritizing higher wages could reduce incentives for employers to use the program for lower‑paid roles. Immigration advocates, by contrast, warn that the changes could narrow opportunities for talented graduates and early‑career workers, particularly from countries that send large numbers of STEM professionals to the U.S.
Indian H-1B Holders, Consular Backlogs, and Remote Work Responses
Indian nationals make up a significant share of H‑1B visa holders, particularly in information technology and engineering roles. Recent consular scheduling issues have added further uncertainty for this group. In late 2025, the U.S. Embassy in India rescheduled many existing visa interview appointments that had been booked for dates starting December 9, pushing some interviews as far as September of the following year.
Those delays left some H‑1B workers temporarily stranded in India, unable to return to their jobs in the United States until a new visa stamp could be issued. In response, some multinational companies, including Amazon, permitted affected employees to work remotely from India for an extended period, in some cases until at least March, according to internal communications shared with workers.
Under current rules, H‑1B status is typically granted in increments of up to three years, with a maximum admission period of six years, although extensions beyond that limit are possible in some green card cases. While status extensions can often be approved without workers leaving the country, consular interviews and visa stamping remain necessary for re‑entry after international travel, creating a potential chokepoint when embassy capacity is limited.
Immigration attorneys note that while the new wage‑based selection and fee rules do not directly govern consular operations, the combined effect of policy changes and processing disruptions can be significant for individuals planning careers and family life across borders.
Supporters, Critics, and Ongoing Legal and Policy Debates
The FY 2027 H‑1B changes have generated strong reactions from multiple sides of the immigration debate. Supporters of the wage‑based selection argue that it is more consistent with a “merit‑based” immigration philosophy by steering visas toward higher‑paid roles and, by extension, what they see as higher skill levels. Some lawmakers who have pushed for tighter controls on outsourcing companies say that prioritizing wages helps curb use of the program for lower‑cost labor.
Critics, including many business coalitions and technology industry groups, contend that the new framework may narrow the talent pipeline and reduce flexibility. They argue that innovation ecosystems depend not only on senior experts but also on junior talent who grow into advanced roles. The $100,000 fee, they say, could be particularly burdensome for start‑ups and small firms that drive job creation but have limited cash reserves.
Some immigration attorneys and advocacy organizations also question whether such a steep fee and strict wage prioritization are consistent with the intent of the original H‑1B statute. Legal challenges to previous H‑1B‑related regulations have focused on procedural issues under U.S. administrative law, such as whether agencies adequately justified changes and provided sufficient opportunity for public comment. Observers are watching closely to see whether similar litigation emerges in response to the FY 2027 reforms.
Economists and policy researchers emphasize that the long‑term effects of the changes will depend on how employers respond. Possible outcomes include higher wages for some foreign workers, reduced overall H‑1B demand, more offshoring of roles, or shifts toward alternative visa categories and remote work arrangements outside the United States.
Outlook for the FY 2027 H-1B Season and Beyond
As the FY 2027 H‑1B cap season approaches, employers and foreign professionals are adjusting strategies to account for both the wage‑based ranking system and the $100,000 petition fee. Many large companies are reviewing salary structures, headcount plans, and remote work options, while prospective applicants are assessing how their roles and pay levels align with the four prevailing wage tiers.
The policy shift marks a clear turning point for the program’s design: selection is now explicitly tied to wages, and participation for many employers carries a substantially higher financial commitment. How these changes will affect the overall number of filings, the composition of the H‑1B workforce, and the broader U.S. labor market is likely to remain a subject of close scrutiny by policymakers, businesses, and worker advocates in the years ahead.
For now, experts recommend that companies and applicants monitor USCIS updates, consult qualified legal counsel on compliance with the new rules, and plan early for the FY 2027 registration cycle under a system that places far greater emphasis on wages and petition costs than in previous years.
