H-1B Lottery Revamp Plan Undercuts Trump Goals, Employers Warn

A Trump plan to shake up the annual H-1B visa lottery would undermine the administration’s goal of favoring the most economically valuable foreign workers to the US, industry groups caution.

A Department of Homeland Security proposal would replace the random selection process for the specialty occupation visas with one that Trump officials say will prioritize the most-skilled and highest-earning workers. It’s pursuing that plan as it also imposes a new $100,000 entry fee on H-1B workers from outside the US that critics say will block hiring by all but the biggest employers.

Even if the lottery proposal survives legal challenges expected after it’s finalized, employer groups and policy advocates say its use of four wage bands to set odds of selection would favor older, less skilled workers over recent graduates in high-demand fields.

“We don’t think this rule gets them to at least where their stated purpose is,” said Julia Massimino, executive vice president of government affairs at the Information Technology Industry Council, a trade association that represents tech and communications companies.

Unintended Consequences

The H-1B program is capped by Congress at 85,000 new visas each year, including 20,000 reserved for workers with at least a master’s degree. Because demand far exceeds available H-1B slots, DHS holds an annual lottery in the spring—a process that even many supporters say is a poor method of distributing the primary visa for skilled foreign workers.

DHS said in its proposed rule that weighting lottery selection based on wage levels would lower incentives to use H-1B slots “to fill relatively lower paid, lower skilled positions, better aligning the H-1B program with Congressional intent.”

Rather than simply awarding visa slots based on the highest salaries paid, the rule would boost the odds of selection for each prospective worker according to which of four “wage levels” they’re slotted in. The higher the wage level of a position, the greater the worker’s chance of selection.

But just because a worker is placed in a higher wage level doesn’t actually mean they’re highly paid, ITI, the Business Round Table, and others pushing back on the proposal say.

Those wage bands are determined by earnings relative to others in a specific occupation and labor market, not pay for prospective H-1B workers overall.

Critics say using that wage-level system to award visas would actually reward older, more senior workers and IT contractors—not the most highly-skilled talent. And international graduates in high-demand fields—even those highly compensated—will likely lose out because they’d be more junior within their fields and labor market.

The Institute for Progress, a Washington think tank that advocates for policy improvements in areas including scientific research and high-skilled immigration, estimates that wages would only increase the median salary for H-1B workers by 3% overall while new college graduates would receive 7% fewer H-1B jobs under the DHS proposal.

That’s because the agency used a tool that was intended to enforce compliance with minimum pay standards, not compare the compensation levels, said Jeremy Neufeld, IFP’s director of immigration policy.

Under the proposal, a landscape architect in Wage Level IV, the highest bracket, making $36,000 would be favored over a surgeon making $300,000 in the lowest wage level, the group found. The greater risk though is lower-paid IT workers who would claim a large share of visas under the wage level framework, Neufeld said.

“That’s what leads to these absurd outcomes,” he said. “There’s hardly any movement in actual pay new H-1B workers are going to get. Meanwhile, the visas going to outsourcers are going to increase.”

IT Contractors

The H-1B lottery overhaul, which was expected since President Donald Trump took office in January, revived an initiative from his first administration that was blocked by a federal court on procedural grounds. That regulation was widely criticized by business and higher education groups because it would close off the program to early-career workers by eliminating the lowest wage level entirely.

The Biden administration also tightened the lottery, giving each worker the same chances of selection regardless of how many employers submitted entries on their behalf. Both administrations have sought to target IT consulting firms that account for some of the biggest hiring through the H-1B program for relatively lower-paying jobs. Anti-immigrant conservatives aligned with the Trump administration have ramped up attacks on the program, claiming it undermines American workers.

The lottery proposal though has disappointed even groups that have assailed the H-1B program. The Institute for Sound Public Policy, which advocates for US tech workers, said it “maintains a status quo hostile for American workers.”

Many supporters of the H-1B program are on board with steering visas to the most highly paid workers, said Connor O’Brien, a research and policy analyst at Economic Innovation Group, which backs policies supporting skilled immigration. But the Trump administration’s lottery proposal represents “a major missed opportunity” to accomplish that goal, he said.

The Institute for Progress said DHS could award H-1B slots with a wage-based system that accounts for age and geography to prevent unfair advantages for companies in high-cost markets.

EIG also proposed alternatives, including a model that would account for projected life-time earnings or a model based purely on salaries. That could incentivize employers to offer higher pay to get the most high-skilled talent regardless of occupation while still preserving opportunities for young workers, O’Brien said.

“I’d much rather have employers compete for H-1B visas by raising wages, rather than massaging job descriptions to meet an arbitrary wage-level standard,” he said. “That’s a healthy dynamic. It’s a win-win.”