The second Trump administration has implemented several policy and regulatory changes in its first year designed to make the H-1B non-immigrant employment category less desirable and useful to employers. These changes affect the annual CAP process, the method by which H-1B visa application registrations are selected, employer compliance obligations, wage requirements, and the feasibility of sponsoring workers who are outside the United States. Will this result in a smaller H-1B CAP registration pool for FY2027, possibly in no lottery at all? Further, what increased scrutiny are employers facing?
First, the September 19, 2025, Presidential Proclamation, Restriction on Entry of Certain Nonimmigrant Workers, established a $100,000 non-refundable required payment as a condition of eligibility for those outside of the United States to be eligible for an H-1B visa or grant of status at a consulate, port of entry, or pre-flight inspection outside of the US. This additional fee poses a financial risk to any employer, who has no assurances that the H-1B petition will be approved, or whether the employee will maintain employment with the sponsoring employer for the full period of authorized stay. While H-1B visas are portable, meaning that a visa beneficiary is not required to remain with the sponsoring US employer while in valid status in the US, the Presidential Proclamation adds significant uncertainty to sponsoring employers.
Second, the new H-1B CAP lottery has changed the selection process from a randomized basis to a wage-level weighted system. This approach increases the likelihood that candidates offered higher wages will be selected as they are given additional chances based on the wage level corresponding to the offered wage – one chance for Level 1, two for Level 3, three for Level 3, and 4 for Level 4. This reduces the likelihood that lower paid employees, often newer workers, will be selected.1 The Department of Homeland Security (DHS) estimates that the odds of selection for a Level 1 candidate drops by 48%, those at Level 2 increases by 3%, those at Level 3 by 55%, and those at Level 4 by 107%.2 DHS estimates, however, do not suggest that this will affect the number of F-1 selections: "Under current policy, 47.6% of selected new H-1Bs are conversions from F-1 student status. The New DHS Rule reduces the F-1 share by 1.5 percentage points to 46.1%."3
Third, the prevailing wage system will be revamped by a new Department of Labor (DOL) wage rule, the details of which are yet to be announced.4
Moreover, US employers will likely face, if they have not already, increased site visits through the US Citizenship and Immigration Services (USCIS) Fraud Detection and National Security (FDNS) Directorate.5 The regulatory changes in the H-1B Modernization rule that took effect January 17, 2025, has made failure to comply with site visits at client locations a basis for denial and revocation.6 Compliance lapses that may once have resulted in follow-up inquiries now carry greater enforcement risk. Employers must clearly document work locations, supervision, and job duties, especially where employees are placed at non-employer worksites. These changes heighten risk for consulting firms, staffing companies, and employers with distributed or hybrid work models.
This increasing scrutiny on H-1B employers and workers will be further honed by a February 27, 2026, announcement of an April 1, 2026, change to the USCIS I-129 Form, the application used by H-1B petitioners to file for the benefit, which now requires the employer to fully disclose the minimum requirements for the offered non-immigrant position. The employer must specify the required field of study to qualify for the position, minimum number of years of experience, special skills required, and the number of other workers the H-1B employee would supervise. These details will not only be used by USCIS to examine whether the employer's filing is appropriate as to the occupation and wage level for the role before adjudicating the petition, but will also serve to hold employers accountable for any deviations from the application discovered during site visits after the H-1B employee begins working. In practical terms, the new form does more than memorialize job requirements on paper; it effectively imports DOL's wage-level guidance7 directly into the USCIS adjudication process. By locking employers into clearly articulated minimum qualifications tied to prevailing wage levels, the revised form is likely to exert upward pressure on wage selections. This may compel employers to select higher wage levels than they may have in the past, when the wage selection criteria were not disclosed in the application process and the employer could interpret the selection in a way that allowed them to use lower wage levels. This greater level of detail and disclosure will require employers to carefully track their filings for consistency with their actual business needs and across related petitions. These changes go into effect April 1, 2026, in time for this year's CAP filings.
Collectively, these various measures will have a chilling effect on employers' reliance on and participation in the H-1B program. What is unknown is the numerical impact that these will have on the H-1B CAP for FY 2027, registrations for which occur this month, March 2026.
Historically, the H-1B CAP, the numerical annual limit on the number of new H-1B applications that can be processed (65,000 general applicants and 20,000 advanced degree-holder applicants) has been reached shortly after the filing window opens. The only exceptions to this were in the years following the 2008 financial crisis, when the H-1B CAP was reached, not immediately, but instead several months into the fiscal year.8
Under the preregistration system, employers prepared and filed entire H-1B CAP applications in time for an April 1st receipt date in hopes of selection. US Citizenship and Immigration Services (USCIS) typically received enough petitions in the first day or two of April to require a random lottery among the submissions. Those applications not selected would be rejected and mailed back to the petitioners. Starting in 2020 for Fiscal Year 2021, USCIS began an electronic registration process, allowing employers to register for the CAP allowing employers to submit a basic registration with the full petition filed only after selection.
The randomized lottery assumes that USCIS will receive more registrations than it has available H-1Bs. If the service receives fewer registrations than the allowable number of new H-1B applications, then all submitted registrations will be allowed to proceed with filing.
Is it possible that the chilling effect on H-1B filings could be so severe that it results in no randomized lottery this year?
While possible, it would have to follow from a very sharp drop in registrations.
Since the registration process began, the number of eligible registrations has been as high as over 750,000 in 2024, and as low as 269,424 in its first year. Last year, the number of registrations was 343,981. For the randomized lottery to not be required, the number of registrations this year would need to be a quarter of last year's numbers.
We do not yet, but will soon know how the changes in 2025 and 2026 affect the CAP this year, but if we do see a precipitous drop in numbers then we will know the Trump administration has made significant strides in gutting the H-1B program.
Despite these changes, the H-1B visa does remain an option for employers.
The $100,000 fee does not apply to those changing status in the US from another valid non-immigrant status, so it is likely that we will see applications for changes of status filed for those in F-1 status (again, 47.6% of selected new H-1Bs recently have been changes of status from F-1 student status), as well as those in the US on dependent H-4, L-2 and other similar categories. In fact, if overseas filings decline sharply, the odds of selection for these U.S.-based candidates could actually increase.
Further, despite the increased emphasis on filing disclosures and post filing inspections, employers who already pay their employees competitive wages and have the right processes and legal guidance to comply with the stricter environment can still file for and employ H-1B professionals. Employers with questions should seek legal advice and perform proper review of their H-1B usage to ensure compliance. Additionally, employers can utilize private wage surveys if DOL's prevailing wages published by the Occupational Employment and Wage Statistics program are not in line with the market wages. So while the use of the H-1B visa category may have become less attractive and more tedious to employers, it is still an option available for some.
CONCLUSION
The recent changes to the H-1B program — spanning fees, selection methodology, compliance enforcement, application forms, and wage policy — create a cumulative chilling effect on employer participation. While it remains unlikely that registrations will fall enough to eliminate the lottery entirely, a significant decline would signal that the current policy environment has materially reduced employer reliance on the H-1B program. Employers planning for FY 2027 should expect higher costs, increased compliance scrutiny, and greater strategic importance placed on the accuracy of wage levels, worksite documentation, and U.S.-based talent pipelines.
Footnotes
2. https://www.federalregister.gov/d/2025-23853/p-858
4. www.reginfo.gov/public/do/eoDetails?rrid=1219761
7. https://www.dol.gov/sites/dolgov/files/eta/oflc/pdfs/npwhc_guidance_revised_11_2009.pdf
8. https://redbus2us.com/h1b-visa-cap-reach-dates-history-graphs-uscis-data/
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