Introduction
As the U.S. moves toward the FY 2026 H-1B cap season, employers and immigration stakeholders face a transformed regulatory environment. The combined effects of the January 2025 “modernization” rule, new executive actions, and heightened program integrity enforcement warrant a forward-looking, law-anchored perspective. This article offers predictions and strategic guidance for employers navigating the 2026 H-1B season, grounded in legal realities and current USCIS developments.
Legal & Regulatory Foundation: The New Baseline
To anticipate 2026, one must first understand the key legal and regulatory changes that now frame the H-1B program.
A. H-1B Final Rule — Effective January 17, 2025
- The Department of Homeland Security (DHS)/U.S. Citizenship and Immigration Services (USCIS) promulgated a final rule titled “Modernizing H-1B Requirements, Providing Flexibility in the F-1 Program, and Program Improvements”, effective January 17, 2025.
- This final rule codifies changes in definitions (including “specialty occupation”), deference policy, and strengthens oversight and fraud prevention.
- Some components, especially regarding registration, had been phased in earlier (e.g. beneficiary-centric registration via a prior notice)
- The purpose of the modernization rule is explicitly stated to be improving program integrity and streamlining processes while maintaining compliance safeguards.
Legal Implications for Employers: Under this rule, USCIS has clearer authority to deny, revoke, or audit H-1B petitions on grounds such as misalignment of job duties, overbroad job descriptions, ambiguous wage determinations, or weak documentation.
B. Presidential Proclamation: Fee & Entry Restrictions (Effective September 21, 2025)
- On September 19, 2025, the White House issued a Proclamation: Restriction on Entry of Certain Non-immigrant Workers, which directs that beginning 12:01 a.m. EDT on September 21, 2025, H-1B petitions for beneficiaries currently outside the U.S. must be accompanied by a $100,000 supplemental payment (in addition to existing fees) for approval.
- The Proclamation gives the Secretary of Homeland Security discretionary authority to reject petitions not so accompanied and restrict entry of affected non-immigrants.
- It also states that the restriction does not apply to petitions submitted before 12:01 a.m. EDT September 21, 2025, nor to renewals of existing valid H-1B visas.
- The Proclamation further provides for national interest exemptions: the Secretary may waive the requirement (for individuals, entire companies, or entire industries) if deemed in the national interest.
- The restriction is set for 12 months (unless extended), meaning it covers new filings for that period.
Legal Uncertainties: The Proclamation is controversial and there is active litigation challenging it as exceeding executive authority or bypassing the Administrative Procedure Act.
Key Clarifications: According to USCIS FAQ and White House statements:
- The $100,000 fee applies only to new H-1B petitions filed on or after the effective date (not to existing holders or renewals)
- Current H-1B visa holders may continue to travel and re-enter the U.S. without paying this supplemental fee, though entry may be conditioned in certain cases for those applying abroad.
C. Integration of the Registration and Selection Process
- USCIS had previously introduced a beneficiary-centric registration process and anti-fraud measures (under a Final Rule, such as “Improving the H-1B Registration Selection Process and Program Integrity”) which were implemented for FY 2025 and onward.
- Under this scheme, only one registration per unique beneficiary is permitted; multiple filings per beneficiary have been discouraged and restricted.
- USCIS itself notes that under the new regulation, instances of multiple filings have dropped considerably.
II. Recent H-1B Cap Data & Trends
Before turning to predictions, examining recent data is essential.
- For FY 2026, USCIS announced that the initial registration selection period is complete, and that the H-1B cap (65,000 regular + 20,000 master’s cap) has been reached.
- USCIS reported a decline in the total number of registrations compared to FY 2025, which many attribute to the stricter registration rules.
- Because the pool of registrations shrank, the effective selection rate (registrations selected ÷ eligible registrations) rose relative to prior years.
- The ratio of multiple registrations per beneficiary has approached near 1:1, consistent with the new restrictions.
- Stakeholders are also monitoring emerging proposals (or signals) from USCIS to adopt a weighted or merit-based selection method in lieu of pure lottery.
These trends suggest that the playing field is tightening, and that every registration counts more than ever.
Predictions for FY 2026 & Beyond: What Employers Should Expect
Based on the legal baseline, policy signals, and data trends, the following predictions are offered for FY 2026 (and the early FY 2027 cycle). These should be treated as informed conjecture, not guaranteed outcomes.
1. Registration Volumes Will Either Stabilize at Lower Levels or Decline Further
The dramatic drop in speculative, low-quality filings is likely to continue. Many small consulting firms or marginal employers may opt out entirely if compliance burdens or risk are too high.
Implication: The overall registration pool may shrink further, which would modestly increase the chances for high-quality submissions—though absolute competition for 85,000 slots remains stiff.
2. Effective Selection Rates Will Remain Elevated, But Margins Will Tighten
With fewer total registrations, the percentage chance for a well-prepared registration may remain in the 25-35% range. However, as competition among serious firms intensifies, margins of error in documentation or job definition will become less tolerable.
3. Enforcement, RFEs, Audits & Site Visits Will Escalate
Under the modernization rule, USCIS has enhanced authority to conduct post-adjudication audits, revoke approvals, and ramp up site visits. Ambiguous job scope, weak documentation of beneficiary qualifications, or wage mismatches may increasingly trigger Requests for Evidence (RFEs) or denials.
Implication: Employers should treat every petition as if it may be scrutinized later—not just at the adjudication stage.
4. The $100,000 Supplemental Fee Will Reshape Employer Strategy
If the Proclamation is enforced and upheld:
- Many employers may deem new H-1B filings cost-prohibitive, especially for entry to mid-level positions.
- The market will tilt toward large, well-capitalized firms that can absorb the additional cost.
- Some employers may delay or reduce the number of first-time H-1B petitions.
However, because the Proclamation allows national interest exceptions, some critical hires may still clear this hurdle with waiver requests.
5. Momentum Toward Merit-Based or Weighted Selection
Signals are increasing that USCIS or DHS may propose switching from pure lottery to a weighted system (e.g., favoring higher wage, advanced degree, or length of experience).
If that shift materializes:
- Employers who recruit for premium, high-wage roles will have an edge.
- Lower-wage, entry-level roles may see reduced chances under a merit system.
- Investments in documenting qualitative strength (credentials, project record, unique skills) will matter more.
6. Green Card Pressure Will Intensify
Because many H-1B holders view it as a bridge toward permanent residence, the backlog in employment-based green cards (especially for Indian and Chinese nationals) will become more burdensome. Employers will increasingly need to plan green card pipelines in tandem with H-1B strategy so that beneficiaries do not stall indefinitely in status limbo.
Legal & Strategic Roadmap for Employers
To succeed under the evolving regime, employers should adopt a proactive, legally rigorous posture. Below is a recommended roadmap.
A. Legal Review & Pre-Filing Audit
- Job Description & Duties
Ensure that the job duties tightly align with a recognized specialty occupation. Avoid generic or overly broad language that may attract scrutiny under the “specialty occupation” standard. - Wages & Prevailing Wage Levels
Validate that offered wages meet or exceed the prevailing wage for the geographic area and that wage levels are defensible (e.g. based on reliable salary surveys). - Beneficiary Qualification Documentation
Confirm that the beneficiary’s credentials (degree, specialized coursework, experience) are clearly documented, with equivalence analyses if needed. - Corporate Structure & Contractual Relations
Especially for third-party or client site placements, document worksite contracts, supervision, reporting structure, and show control over the beneficiary’s work. - Recordkeeping & Compliance Readiness
Maintain contemporaneous logs, resumes, correspondence, and be ready for site visits or audits.
B. Financial & Budget Planning
Prepare for increased costs — especially if the $100,000 supplemental fee is enforced. Include budgetary buffers, legal reserves, and contingency funds.
C. Risk Mitigation via Alternative Paths
- Explore non-H-1B visa categories (O-1, L, TN, etc.) where appropriate.
- In parallel, initiate employment-based (EB) green card filings (EB-1, EB-2, EB-3) early to reduce reliance on H-1B success alone.
- Where justified, plan for national interest waiver (NIW) or exceptional ability paths for high-end hires.
D. Litigation Monitoring & Adaptability
- Keep track of ongoing litigation challenging the $100,000 Proclamation or other H-1B reforms. Outcomes may influence policy mid-cycle.
- Be prepared to adjust strategy (e.g. filing deadlines, waiver requests, selection weighting) as clarifications emerge.
E. Communication & Internal Governance
- Train HR, legal, and project teams to understand the elevated scrutiny of each petition.
- Use internal checklists and cross-functional review before submitting registration or petition.
Risks, Caveats & Legal Uncertainties
- The $100,000 supplemental fee and entry restriction are novel and legally contested. Courts may enjoin enforcement or require procedural rulemakings.
- A merit-based or weighted selection framework is not yet final; its design and implementation timeline remain speculative.
- Changes in Congress, DHS leadership, or future executive orders may shift policy midstream.
- External factors—e.g. labor market dynamics, economic downturns, political pressures—may influence USCIS priorities or enforcement patterns.
Conclusion
The FY 2026 H-1B cap cycle promises to be more demanding, more scrutinized, and less forgiving of lax compliance. For employers, success will depend less on volume and more on precision: defensible job definitions, robust documentation, legal audit readiness, and financial foresight. The once-permissive environment is giving way to a regulated regime where every petition must withstand legal and administrative pressure. Those who anticipate, prepare, and adapt early will be best positioned to succeed in this evolving landscape.
