Introduction
The H-1B visa program, created under the Immigration and Nationality Act (INA), has long functioned as a dual-purpose instrument: supplying U.S. employers with global talent in specialty occupations while embedding statutory safeguards to protect U.S. workers. For decades, when registrations exceeded statutory caps, the U.S. Citizenship and Immigration Services (USCIS) conducted a random lottery to allocate H-1B numbers, subject to prevailing wage and labor condition rules.
In September 2025, the Administration announced sweeping reforms — arguably the most consequential changes in the H-1B system since its inception. Among the most significant:
- A $100,000 supplemental fee for new H-1B entrants from abroad.
- A wage-weighted lottery system, replacing the purely random allocation.
- Revisions to prevailing wage levels, effectively raising the salary floor for H-1B eligibility.
These measures, enacted partly through Presidential Proclamation and partly through agency rulemaking, seek to prioritize “high-wage, high-skill” immigration. However, they also present serious legal and operational questions regarding statutory authority, fairness, and administrative feasibility.
This article examines the statutory framework, the substance of the September 2025 reforms, the Notice of Proposed Rulemaking (NPRM) issued by DHS, anticipated litigation, and compliance strategies. We conclude with recommendations on how Immigration Fleet Law Firm can help employers navigate this unprecedented transition.
Statutory and Regulatory Framework
INA and H-1B Authority
The H-1B visa is authorized under INA § 101(a)(15)(H)(i)(b). Employers must file a Labor Condition Application (LCA) pursuant to 8 U.S.C. § 1182(n), attesting to:
- Payment of the higher of the actual wage (paid to similarly employed U.S. workers) or the prevailing wage for the occupation and location.
- Maintenance of working conditions that do not adversely affect U.S. workers.
- Non-displacement and good faith recruitment obligations in certain cases.
The Department of Labor implements prevailing wage rules under 20 C.F.R. Part 655, dividing wages into four levels (Level I–IV) corresponding to percentiles of the wage distribution.
H-1B Cap and Lottery
Congress has capped H-1Bs at 65,000 annually, with 20,000 additional slots for U.S. master’s or higher degree holders. Since the late 2000s, USCIS has conducted a random lottery when registrations exceeded available visas.
Key Changes under the September 2025 Proclamation
1. $100,000 Supplemental Fee for Overseas Beneficiaries
- Effective Date: September 21, 2025.
- Applicability: New H-1B petitions filed for beneficiaries outside the United States.
- Exemptions:
- Petitions filed before the effective date.
- Extensions, amendments, and change-of-status filings for individuals already in the U.S.
- Agency Discretion: DHS retains authority to carve out exemptions in the national interest.
Legal Questions: Traditionally, Congress sets immigration fee structures. Critics argue the Executive lacks authority to impose a six-figure fee without legislative authorization, characterizing it as a regulatory tax. Litigation is anticipated, focusing on the separation of powers and the Administrative Procedure Act (APA).
2. Wage-Weighted Lottery System
The random lottery will be replaced by a weighted allocation tied to wage levels:
| Wage Level | Approx. Percentile | Lottery Entries |
| Level I | 17th percentile | 1 entry |
| Level II | 34th percentile | 2 entries |
| Level III | 50th percentile | 3 entries |
| Level IV | 67th percentile | 4 entries |
Thus, higher-wage offers increase the probability of selection, though lower-level wages remain technically eligible. This change does not alter statutory minimums but skews allocation toward higher-paying employers.
3. Prevailing Wage Revisions
The proclamation directs the Department of Labor to raise prevailing wage levels through rulemaking. Expected impacts include:
- Significant upward adjustment of all wage levels.
- Reduced viability of entry-level H-1B hiring.
- Increased costs for employers across sectors.
- Downstream effects on PERM labor certifications and green card sponsorships, which rely on the same wage structure.
DHS Notice of Proposed Rulemaking (NPRM) – September 2025
On September 24, 2025, DHS published an NPRM to formalize the weighted lottery:
- Citation: 8 CFR Part 214; [CIS No. 2820-25; DHS Docket No. USCIS-2025-0040]; RIN 1615-AD01.
- Agency: U.S. Citizenship and Immigration Services, DHS.
- Action: Proposed amendment of regulations to implement a weighted selection process for H-1B cap-subject registrations.
- Summary: DHS proposes that H-1B visas be allocated preferentially to “higher skilled and higher paid” workers, generally favoring wage levels III and IV.
This NPRM codifies what the proclamation introduced in policy form. Stakeholders have a short comment period, after which DHS may finalize rules before the FY2026 cap season.
Implications and Risks
- Economic Burden – The $100,000 fee will deter small businesses, startups, and nonprofits from accessing foreign talent.
- Pipeline Constraints – Entry-level and early-career professionals will be disproportionately disadvantaged.
- Compliance Demands – Employers must meticulously document wage determinations, job duties, and LCAs.
- Fraud Risks – Incentives may emerge for employers to inflate wages or titles to boost lottery odds.
- Litigation Likelihood – Challenges under the APA, separation of powers, and due process are expected.
- Equity Concerns – Wage as a sole metric risks disadvantaging fields like education, research, and healthcare, where salaries lag tech benchmarks.
Strategic Recommendations for Employers
- Review Compensation Structures – Assess feasibility of moving positions to higher wage levels to improve odds.
- Plan Budgets – Factor supplemental fees and elevated wages into workforce costs.
- Enhance Documentation – Maintain robust wage surveys, internal pay data, and detailed job descriptions.
- Explore Alternatives – Consider O-1, L-1, TN, or EB-based green cards for critical talent.
- File Early – Where possible, submit petitions before new thresholds or deadlines.
- Leverage Exceptions – Monitor DHS discretionary exemptions tied to national interest.
- Stay Informed – Track litigation and rulemaking updates that could delay, suspend, or overturn reforms.
Immigration Fleet Law Firm: Supporting Clients Through Change
At Immigration Fleet Law Firm, PLLC, we provide:
- Regulatory Navigation – Ensuring compliance with heightened wage and fee rules.
- Strategic Workforce Planning – Advising on salary structures and workforce design to maximize H-1B outcomes.
- Alternative Visa Counsel – Building O-1, EB-1, or L-1 strategies where H-1B becomes unviable.
- Litigation Readiness – Assisting clients in challenging unlawful rules or joining industry coalitions.
- Tailored Guidance – Offering individualized advice to both employers and employees.
Conclusion
The September 2025 reforms represent not an incremental shift but a structural redefinition of the H-1B system. By introducing a six-figure supplemental fee and privileging high-wage roles in the lottery, the Administration seeks to prioritize elite talent while discouraging entry-level usage.
The DHS NPRM (RIN 1615-AD01) confirms that these reforms are moving rapidly toward codification. Whether they survive judicial scrutiny remains to be seen.
For now, employers must prepare: document carefully, budget strategically, and consult experienced counsel. Immigration Fleet Law Firm stands ready to equip clients with the legal insight, proactive strategy, and advocacy necessary to navigate this new era of H-1B immigration.
