US Reshapes H-1B High Salary Payment Access
The Department of Homeland Security has changed the H-1B quota from a random lottery to a weighted selection based on salary levels, while pushing employer costs to six figures through presidential announcements and new regulations. Automatic extensions for spouse work permits have also been eliminated.
The weighted lottery has become the final rule, effective February 27, 2026, for the FY 2027 quota season, with the registration window from March 4 to 19. Salary level four corresponds to four entries, level three to three, level two to two, and level one to one; remaining entries for the same beneficiary become void after winning. External samples from the first quarter show winning rates of about 64% to 68% for levels three and four, and about 40% for level one, with a gap of about 24 to 28 percentage points.
The $100,000 additional fee comes from presidential announcement 10973 on September 19, 2025, targeting new applications from abroad starting September 21, originally set to expire on September 21, 2026. The Massachusetts Federal District Court ruled on June 8, 2026, in the case of California v. Mullin that it constituted illegal taxation and revoked it; the First Circuit Court of Appeals denied the government's request for a stay on July 24. The immigration bureau subsequently stated it would comply with the court, suspending the fee collection, while indicating it still plans to continue collecting if the ban is lifted. Another lawsuit in the District of Columbia had supported the fee, creating a circuit conflict. The announcement itself does not cover changes of status and extensions within the country.
On August 25, the Department of Homeland Security issued another proposed rule, adding a fixed fee of $103,265 to each capped H-1B application, including an additional 20,000 slots for U.S. master's degree holders and F-1 to H-1B transitions, exempting employers from quotas such as universities and specific research institutions. The algorithm divides the approximately $8.777 billion cost by an estimated 85,000 applications and rounds it; the comment period is about 30 days, ending around September 24, and it has not yet taken effect. The Department of Labor also has a proposed rule to increase the current level four wages, with entry-level wages potentially rising over 30%, averaging about $14,000 annually, applicable only to future applications.
Accompanying tightening measures have been implemented or are under review. Starting September 2025, mailing stickers and third-country stamps will be eliminated, and interviews must occur in the applicant's nationality or residence country; from December 15, social media reviews will be added for H-1B and H-4 applications, with some appointments for applicants from India, Ireland, and Vietnam canceled and postponed. From October 30, H-4 employment authorization card renewals will no longer enjoy a 540-day automatic extension, and work must stop when the card expires; a lawsuit has been filed in the Central District of California, with no ruling yet. Proposals to eliminate the 60-day job search window after termination and to completely abolish the H-4 spouse work permit are still with the Office of Management and Budget, with the text unpublished and not final.
In market mechanisms, buyers are U.S. employers competing for 65,000 regular slots plus 20,000 master's slots, while the seller is the federal government repricing scarce visas. The transaction is driven by rules, not market clearing: salary weighting changes winning probabilities, and six-figure fees determine who can afford the entry ticket. Funds are shifting from IT outsourcing and entry-level employers to high-paying positions and the treasury; beneficiaries are large tech and financial employers capable of offering level four wages, as well as similar high-skilled labor domestically; those under pressure are applicants and their employers from countries like India that rely on level one wages, training paths, dual-income spouses, and layoff buffers.
Source: Public Information
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This combination is not just a single fee increase, but rewrites the "professional occupation + random quota" left by the 1990 Immigration Act into "price + salary ranking." Congress created scarcity with 65,000 plus 20,000 master's slots, and the lottery was a pretense of neutrality during excess applications; the Department of Homeland Security's final rule on December 29, 2025, changed the neutral lottery to one vote for level one and four votes for level four, effectively replacing the lottery machine with the Department of Labor's current wage table. The presidential announcement adds another $100,000, which the court classified as a tax, after which the department shifted to a fee authorization comment process, rewriting it as $103,265 and expanding it to in-country transitions. The path is: first test with an executive order, then after losing, redo it using the fee provisions in the code.
Capital and jobs are thus realigning. Outsourcing companies previously relied on bulk level one and two wages to win lotteries; after weighting, the same quota is more likely to go to employers capable of offering local level four wages. The proposed fee spreads nearly $8.8 billion across 85,000 applications, transforming the visa from a work permit into a capital expenditure item, directly squeezing small employers and startups out of the pool. The cancellation of automatic extensions for spouse work permits and the proposed abolition of H-4 work rights turn the second family income from a buffer into a risk item, effectively increasing the sunk costs of staying in the U.S.
The benchmark is Australia's skilled immigration points and Canada's Express Entry: replacing lotteries with salary or human capital rankings. The U.S. takes a more extreme approach by tying ranking and six-figure entry fees together, closer to privatizing public quotas for auction, just that the auction rules are written as weighted random rather than openly priced. The industry phase is a control period, not an expansion period—the total number of quotas has not increased, and the screening variable has shifted from "who registers first" to "who is more expensive."
The structural change is the transfer of pricing power. The pricing power of scarce visas has shifted from lottery luck to employer payrolls and Treasury fee formulas. The mechanism is: Congress does not change the statutory cap, the administrative department changes the distribution function and cost function within the cap; the court negates "presidential taxation," the department switches to a new legislative track of "cost recovery." As long as the quota remains at 65,000 plus 20,000, price and weight will continue to replace the lottery, becoming the real access threshold.
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When the quota remains unchanged, the rule is just a price increase.
Where the lottery disappears, the wage table begins to allocate opportunities.
After administrative fees are ruled illegal, it will be rewritten as cost recovery and come again.