H-1B Changes: $100,000 Fee, Entry Restrictions, And Weighted Lottery System

On September 19, 2025, President Trump signed a presidential proclamation ("Restriction on Entry of Certain Nonimmigrant Workers") that imposes a $100,000 fee per H-1B employee and restricts entry into the U.S. for certain H-1B visa holders unless this fee is paid. The proclamation went into effect on September 21, 2025.

The government has issued guidance indicating that the fee only applies prospectively to petitions that have not yet been filed before the effective proclamation date. We are awaiting further clarification on the proclamation. In the meantime, we have summarized below some of the key points and proposed changes to the H-1B Lottery System.

Key Points

• The Proclamation does not apply to the following:
  • Beneficiaries of H-1B petitions that were filed prior to the effective date of the proclamation
  • Beneficiaries of currently approved H-1B petitions
  • Beneficiaries in possession of validly issued H-1B nonimmigrant visas
• The Proclamation also requires the Department of Labor (DOL) and Department of Homeland Security (DHS) to initiate rulemaking to revise prevailing wage levels upward and to prioritize "high-skilled, high-paid" H-1B workers. (See below for "Proposed Changes to H-1B Lottery System")
• The restriction is expected to last 12 months, subject to extension.

Practical Immediate Steps for Employers and Employees

Until more guidance is provided, the following actions are strongly recommended:

• Consult with your legal / immigration department to determine whether you are subject to the $100,000 fee.
• Monitor further government guidance for clarification on who is exempt (e.g., change of status, extensions, change of employer, cap-exempt employers, national interest exceptions, etc.).
• Consider alternatives for employees who will be adversely impacted (e.g., other nonimmigrant visa categories or green card pathways).

Open Questions and Legal Risk / Uncertainty

• The process and criteria for national interest or other exemptions are not yet defined.
• Potential legal challenges and court injunctions may delay or block enforcement.
• Changes in the prevailing wage rules and what "high-skilled, high-paid" will mean in practice.

Proposed Changes to the H-1B Lottery System

On September 24, 2025, DHS is scheduled to publish a Notice of Proposed Rulemaking (NPRM) proposing significant changes to the H-1B lottery system. The public is invited to submit written comments on the NPRM by Friday, October 24, 2025.

Background

Under the current H-1B lottery system, each fiscal year, there are two main numerical allocations for new H-1B visas:

• The Regular Cap: 65,000 slots available for all qualified H-1B candidates.
• The Advanced Degree Exemption (U.S. Master's Cap): An additional 20,000 slots are reserved for candidates who have earned a qualifying U.S. master's degree or higher from a U.S. institution of higher education.

U.S. employers must submit an H-1B registration on behalf of each existing employee – or candidate for H-1B employment – to enter them into the lottery.

USCIS then utilizes a two-stage lottery process, in which it first puts all registrations (including those eligible for the U.S. Master's Cap) into the lottery for the 65,000 regular cap slots. Then, USCIS conducts a second lottery for the 20,000 U.S. master's cap slots from among the registrations for candidates who possess U.S. master's degrees and were not selected under the regular cap.

Summary of Proposed Changes

Transition from Pure Random Lottery to Wage-Level Weighted Selection

• The proposed rule shifts the current H-1B cap selection process from a random lottery to a weighted selection process based on the candidate's offered wage.
• Employers will be required to consult the U.S. Department of Labor's Occupational Employment and Wage Statistics (OEWS) data to identify the Standard Occupational Classification (SOC) code and location that corresponds to an offered role. The OEWS assigns four wage levels to each SOC code and location of employment.
• Under the proposed lottery system, employers must select the highest wage level that the offered wage equals or exceeds.
• Registrations are then entered into the selection pool multiple times, according to their assigned wage level:
  • Wage Level IV (highest): four entries
  • Wage Level III: three entries
  • Wage Level II: two entries
  • Wage Level I (lowest): one entry
• The stated goal of the new system is to increase the probability that higher-paid, and presumably higher-skilled or higher-valued, candidates are selected for H-1B cap-subject petitions, while still allowing some opportunity for lower wage levels to be selected.

Unique Candidate-Centric Selection and Multiple Registrations

• Under the NPRM, the selection process would remain candidate-centric. In other words, USCIS would continue to count the unique candidates who submit registrations, not the number of registrations submitted for an individual candidate.

• So long as each registration is supported by a bona fide job offer, it will still be possible for multiple employers to submit registrations for a single candidate. In this case, under the proposed changes, USCIS would assign the candidate to the lowest wage level among all submitted registrations. For example: If one employer submits an H-1B registration at wage level I, and a separate employer submits a second H-1B registration for the same candidate at wage level IV, the candidate is assigned to wage level I for selection purposes. This is intended to prevent "gaming of the system." USCIS will also introduce additional integrity checks to ensure registrations reflect bona fide job offers with consistent, truthful information.

Anticipated Impact to Industries Under the Proposed Lottery Rule

• The proposed changes are expected to have varying impacts across different industries depending on the occupational and wage profile of their H-1B petitions.
• USCIS expects a decrease in the rates of selection in industries who historically register many entry-level (wage level I) workers.
• Additionally, small businesses who rely on hiring at lower wage levels will be disproportionately affected by the changes. For example, the NPRM notes that 5,193 small entities are estimated to experience a cost increase greater than 1% of their revenue due to lost labor, and 2,665 small entities could see losses exceeding 5% of their revenue.

The proposed rule includes DHS's analysis of anticipated of impact across industries and sectors:

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.