Trump plans overhaul of H-1B visa favouring high paid workers 

The notice, published in the Federal Register on September 24, proposes an overhaul of the H-1B visa process to establish a “weighted selection process” favouring “higher skilled and higher paid” workers. 

If finalised, the proposal would give greater odds of selection to workers with higher wages, if the number of applicants exceeds the 85,000-limit set by Congress, which has been the case every year for over a decade. The system would replace the current lottery selection process.

The changes – initially put forward for White House review in July – follow a major hike in the H-1B visa fee to $100,000 announced last week, triggering widespread panic among US companies and prospective foreign employees.  

Prior to the announcement, employers typically paid between $2,000 to $5,000 for H-1B visa applications, with Trump claiming the increase would put an end to employers “abusing” the system by hiring foreign workers at a “significant discount” in comparison to American workers. 

As per yesterday’s proposal, prospective employees would be assigned to four wage bands, with applicants in the top band (level four) placed into the selection pool four times, those in level three entered three times, and so on.  

The Department of Homeland Security (DHS) has said the process would “incentivise employers to offer higher wages or higher skilled position to H-1B workers and disincentivise the existing widespread use of the H-1B program to fill lower paid or lower skilled positions”. 

The department said it “recognised the value” in maintaining opportunities for lower wage earners and maintained they would not be precluded from the visa, unlike the Trump’s 2021 proposal which “left little or no opportunity” for lower earners.

But critics argue the proposed weighted system will harm US employers’ ability to build international knowledge and fill jobs.

“By favouring more experienced foreign workers and reducing the number of new job entrants, US companies will find themselves struggling to grow,” Intead CEO Ben Waxman told The PIE News.  

The plans now face a 30-day public comment period before they are considered by the administration for a final rule, a process that could take several months.  

Extensive feedback to government from US businesses on how the proposal would damage US competitiveness is widely expected, with experts also anticipating possible court challenges against the legislation.

Early reports from Bloomberg have suggested the US Chamber of Commerce has begun polling member companies about a potential lawsuit to challenge the $100,000 fee hike.

DHS itself has estimated that 5,200 small businesses currently employing H-1B visa holders would suffer significant damages due to loss of labour.

“There simply are not enough American computer science graduates to support the decades-long record of US innovation and economic growth. That is the wonder of the US tech sector,” said Waxman.

“Why would the US government want to constrain that engine?” he asked.

With analysis by the Chamber of Commerce forecasting a continued decline in the US labour force participation by 2030, advocacy bodies such as IIE have emphasised the importance of international students to fill gaps in labour markets across the country.   

There simply are not enough American computer science graduates to support the decades-long record of US innovation and economic growth

Ben Waxman, Intead

The visa, popular with tech companies, enables US employers to temporarily employ foreign workers in “specialty occupations” spanning a wide range of industries from healthcare and teaching to computer science and financial analysis.  

Under the current system, there is a statutory annual cap of 85,000 new H-1B visas: 65,00 for regular H-1B visas and 20,000 for individuals with advanced degrees from US institutions known as the master’s cap. 

Each year, US employers submit registrations to USCIS for each worker they want to sponsor for a visa. Typically, this number exceeds the cap, in which case, applicants are placed into a random lottery which determines who is awarded a visa. 

Since 2012, 60% or more of H-1B workers have held a computer-related job.

Amazon remains the single largest sponsor, with 10,000 out of its total 1.56 million employees holding H-1B visas. Microsoft, Apple and Meta have also expanded foreign hiring through this stream in recent years, according to Newsweek analysis of new federal data.

Commentators have already warned that if the new structure is implemented, the US tech sector will ramp up offshoring facilities and jobs. “Not the outcome anyone in the US wants,” said Waxman.

The visa program has been the subject of much debate in recent months, with Elon Musk, himself once an H-1B worker, coming out in defence of the visa against calls for its abolition from some MAGA hardliners who argued it allowed firms to suppress wages and sidelines American workers.  

Denial rates for H-1B visas peaked at 15% during Trump’s first administration due to stricter immigration rules and the tightening of the definition of “specialty occupations”.  

India, America’s largest source of international students, is also the top country of origin for H-1B visa holders, with Indian nationals making up 73% of new H-1B approvals in 2023.

China was the second-most common birthplace of H-1B workers, accounting for 12% of skilled workers approved in 2023, while no other birthplace accounted for more than 2% of the total.