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Business Standard

H-1B visa revamp may leave fresh graduates with no shot at US jobs: Decoded

On August 8, the US Office of Information and Regulatory Affairs (OMB) approved a proposal to change H-1B visa rules, a move that could make it harder for fresh graduates to secure a visa. The plan, titled 'Weighted Selection Process for Registrants and Petitioners Seeking to File Cap-Subject H-1B Petitions,' is now with the US Citizenship and Immigration Services (USCIS) and will soon be opened for public comment. What are the H-1B visa changes? 'While the text of the proposed rule has not yet been released, the proposal could potentially replace the current random H-1B lottery system with a wage-based selection process,' said Sheela Murthy, president and CEO of the Murthy Law Firm. It is expected to revive a move from Donald Trump's first term that would have ranked petitions by the wages offered. 'In January 2021, near the end of Trump's first term in office, he unsuccessfully attempted to implement a rule that would have tied the H-1B lottery selection process to the wage level. Presumably, the new rule will be similar to the 2021 rule,' Joel Yanovich, attorney at the Murthy Law Firm told Business Standard. H-1B Visa: From lottery to wage-based selection 'Right now, the H-1B selection is like a lucky draw — you enter the lottery and hope your name comes up. Under the wage-based system, luck takes a back seat. USCIS would see the salaries being offered for H-1B visas and select applications starting from the highest going down until the annual cap was exhausted,' Sanjay Laul, founder of MSM Unify explained to Business Standard. Currently, the lottery is triggered when applications exceed the annual cap of 85,000 visas — 65,000 for regular applicants and 20,000 for those with a US master's degree or higher. If this happens, USCIS runs a computerised draw to decide who can proceed. The programme is heavily used by the technology sector. 'If the rule is substantially similar to the 2021 rule, cap-subject H-1B petitions filed for entry-level positions would likely have next-to-no chance of being selected. This would undoubtedly harm foreign nationals who are recent graduates,' said Yanovich. Four wage tiers The four tiers come from the US Department of Labor's prevailing wage levels for a given job and location: Level 1: Entry-level pay for the position Level 2: Qualified workers with some experience Level 3: Experienced workers with advanced skills Level 4: Highly specialised, senior workers Under the 2021 plan, level 4 roles would be selected first, followed by lower levels. 'The change applies both to the regular cap (65,000 visas) and advanced degree exemption (20,000 visas for holders of US master's degrees), thereby fundamentally altering how all H-1B slots are distributed. Employers will also be required to substantiate their claims concerning wages with documents such as the Labour Condition Application, prevailing wage data, and proof of the actual offer to the applicant,' said Laul. Impact on Indian applicants 'Indian professionals, especially in IT, have dominated H-1B numbers for years — roughly seven out of every ten visas go to Indian nationals. With the new system, the higher-paying roles, often in big US tech companies, will be first in line. That means applicants in mid-level service roles, which are common in the IT services industry, may find it tougher,' said Laul. He added that India could still remain the top recipient, but competition among Indian applicants themselves would be sharper. Sectors such as AI, fintech and biotech, where salaries are higher, could see more representation. In the 2023 financial year, around 191,000 H-1B visas went to Indian nationals. This rose to about 207,000 in FY 2024. Your salary will be your ticket 'In this new setup, your salary isn't just your pay — it's your ticket in. If you can move to an employer that pays at the top of the scale or negotiate a bump before applying, your odds go up. Location matters too. A software role in San Francisco will have a higher prevailing wage than the same role in a smaller city. And if you can upskill into niche, in-demand areas like AI engineering or cloud architecture, you're automatically in a higher-wage bracket. It's all about positioning yourself where the wages and the chances are better,' Laul explained. Big fish eats the small Big tech companies can pay top rates and will naturally rank higher under this system. 'Smaller businesses and startups, even if they're doing great work, might not be able to match those salaries, which means fewer chances for them to bring in global talent. It could make the H-1B pool more elite, but also less diverse in terms of company size and industry,' said Laul. Will the proposal need congressional approval? 'The rule would not need congressional approval. But, if the rule does not comply with the framework of the H-1B programme as set by Congress in the statute that created it, the rule could be struck down by a federal court,' said Yanovich. Murthy said that while the proposal signals possible changes to H-1B selection, it is just the start of a long regulatory process. 'Without access to the actual rule text and given the multiple steps required for finalisation, it remains uncertain whether, when, or in what form these changes might be implemented,' she said.