The Department of Homeland Security overhauled how H-1B visas are awarded, replacing a random lottery with a wage-weighted system that ranks applicants by salary level—a change that has drawn sharp criticism from Amazon, Google, Meta, Apple, and Microsoft. The new rule, which took effect for fiscal year 2027 registrations in March 2026, dramatically reduced sponsorships for entry-level positions and triggered a 38.5% drop in overall applications, as major tech employers shifted hiring strategies away from the U.S.
Tech industry groups argue the system contradicts its stated purpose of attracting top talent, while some economists point to wage data suggesting no genuine shortage exists. The policy debate hinges on a core tension: whether H-1B restrictions protect U.S. workers or undermine innovation by deterring qualified foreign professionals.
Table of Contents
- How the New Wage-Based System Works
- Registration Applications Have Plummeted
- Entry-Level Workers Face Steeper Odds
- Tech Companies Are Hiring Elsewhere Instead
- Industry Claims Versus Wage Evidence
- The $100,000 Fee Is No Longer in Effect
How the New Wage-Based System Works
The wage-weighted lottery, finalized by DHS and effective February 27, 2026, assigns visa lottery entries based on salary level rather than random chance. Positions in the highest wage tier—Level IV—receive four lottery entries; Level III gets three; Level II receives two; and Level I (entry-level) gets just one.
This structure heavily favors higher-paid workers and reduces employers' ability to file large volumes of applications for junior positions. The actual selection outcomes exceeded government projections in unexpected ways. Level III positions achieved a 69.2% selection rate versus the 45.9% DHS had projected, while Level II reached 50.0% compared to a 30.6% projection—eliminating many entry-level sponsorships that historically fueled the pipeline for early-career tech workers.
Registration Applications Have Plummeted
H-1B registrations for fiscal year 2027 dropped 38.5% compared to the prior year, a sharp decline reflecting employer response to both the wage system and lingering fee uncertainty. Major tech firms including Amazon, Google, Meta, and Microsoft all cut H-1B filings in response.
Amazon alone had received over 14,000 H-1B approvals in the first half of 2025 but significantly reduced its sponsorship volume after the February 2026 rule took effect. The registration decline signals reduced willingness from both employers and foreign workers to invest in U.S. H-1B pathways, as companies and talent weigh the program against alternatives abroad.
Entry-Level Workers Face Steeper Odds
The wage-weighted system created a two-tier outcome: higher-paid specialists now have much stronger odds, while entry-level positions became harder to sponsor. A Level I worker faces roughly a 15.3% selection rate—and possibly lower in competitive years—whereas Level III candidates now exceed 69% selection odds. This shift affects workers with 0-2 years of experience in computer science, engineering, and other fields where H-1B sponsorship traditionally launched careers. Career paths that once relied on entry-level H-1B positions have contracted, potentially pushing early-career talent toward other visa categories or away from U.S. opportunities altogether.
Tech Companies Are Hiring Elsewhere Instead
Rather than sponsor higher-wage H-1B workers, major tech employers including Amazon, Google, Meta, Apple, and Microsoft have expanded hiring in Canada, India, and the UAE. This geographic shift allows companies to tap global talent pools without navigating U.S. visa restrictions or increased compliance costs. Foreign tech workers cite H-1B uncertainty and tighter restrictions as reasons for relocating to Canada, the U.K., and the Gulf. The talent drain reflects a broader reality: when U.S. visa policy becomes volatile or restrictive, companies and workers pursue alternatives.
Industry Claims Versus Wage Evidence
Tech industry groups, including the Information Technology Industry Council, argue that the wage-lottery changes will worsen skill shortages in STEM fields, citing research showing a 10% increase in H-1B admissions correlates with a 2% rise in total invention. They also note that over half of U.S. unicorn companies were founded by immigrants initially on H-1B visas.
Economists counter with a data-driven challenge to these claims: if genuine skill shortages existed, worker wages would rise to attract supply. Yet median weekly earnings in computer and mathematics occupations grew only 0.27% from 2019 to 2023—a nearly flat trajectory inconsistent with acute labor scarcity. This contradiction remains unresolved and central to the policy debate.
The $100,000 Fee Is No Longer in Effect
A separate policy uncertainty resolved when a federal court invalidated the $100,000-per-petition H-1B fee that the administration had imposed in September 2025. The U.S. District Court for Massachusetts ruled the fee functioned as an unconstitutional tax beyond executive authority, and the Trump administration's appeal was denied on July 24, 2026. The fee is currently unenforceable, removing one compliance cost factor but leaving the wage-weighted lottery as the primary policy constraint on H-1B hiring.
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