Explainer: What is the new H-1B wage-based selection all about
Empower your mind, elevate your skills
The White House has approved a proposal to select H-1B petitions based on wages in a shift from the current norm of using lottery. The rule, if implemented, will likely impact those at entry-level salaries in the US, and force technology firms to make changes in their overseas talent hiring plans.According to a Bloomberg report, the approval from the Office of Information and Regulatory Affairs came on August 8 and will be released to the public soon.Every year, the US Citizenship and Immigration Services (USCIS) approves 85,000 H-1B visas allocated to highly skilled foreign workers through a lottery system, which picks petitions at random.Indians have been one of the largest beneficiaries of the visa. According to the FY24 report from the USCIS, 71% of total H-1B visas, including fresh visas and renewals, issued between October 2023 and September 2024, were to Indian nationals, followed by the Chinese at 12%.The Trump administration now wants to revive the previous proposal by the Department of Homeland Security (DHS) that would select H-1B petitions based on wages.In the final rule released in 2021, the USCIS said, 'Modifying the H-1B cap selection process will incentivise employers to offer higher salaries, and/or petition for higher-skilled positions, and establish a more certain path for businesses to achieve personnel needs and remain globally competitive.'This means that those with higher salaries will be prioritised, over entry-level employees. For instance, for the role of a software engineer in San Francisco, between Level 1 with annual compensation of $135,699, and Level 4 at $213,512, the latter would be preferred as per the role. The compensation was based on the current wage data from the US Department of Labor.This US government decision is likely to impact hiring for entry-level positions. Immigration experts said the move may also hit diversity in hiring talent as it prioritises wages. Indian IT companies and US technology firms may also have to pay higher wages for their employees to qualify, inflating operating costs and pressuring margins.Nothing changes yet. In 2021, the new rule for H-1B saw significant push back and was withdrawn by the then Biden administration. It was also blocked by the federal courts.Now that the White House has approved the proposal, Gnanamookan Senthurjothi, founder, Visa Code, said the USCIS will release it for public feedback in the federal register.Immigration firm Fragomen in a note said after a period of 30-60 days, the agency will take into consideration the comments and will then publish the final rule with the implementation period. 'There is no set time frame for publication of a final rule, though the process typically takes several months,' the note said.
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