Wage-Based H-1B Lottery System Proposal Sparks Concerns for Startups and Graduates

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The Trump Administration seeks to abolish the present H-1B Lottery System and replace it with a wage-based model. According to DHS, the new system will highlight and promote skilled and well-paid candidates, with the top-paying nominees having greater chances of being selected. This comes just a few days after Donald Trump announced an exorbitant H-1B Visa Fee Hike to $100,000 per application.


Impact on Global Talent and the US Tech Sector


Under the rule, applicants earning the highest among the four wage levels, an annual salary of about $162,528, would get four entries in the selection pool, substantially increasing their chances. At the entry level, one entry would be granted to workers. Immigration lawyer Nicole Gunara said the rule could tilt the system toward large, established companies that can pay their employees more. This may make hiring international talent for junior positions difficult for startups and smaller firms.

Indian IT majors such as Tata Consultancy Services, Infosys, and Wipro, which rely heavily on H-1B processes, might face cumbersome costs with the intention of cutting down their hiring. Many analysts foresee companies trying to offshore some jobs back to India or elsewhere to cut down on costs.

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Political Context and Business Reactions


White House officials say the change will stop misuse of the visa program and protect American jobs. “This common-sense action discourages companies from spamming the system and driving down wages,” said White House spokeswoman Taylor Rogers. Will Scharf, White House staff secretary, called the H-1B program one of the “most abused visa systems.”

However, critics argue that the wage-based model could hurt fresh graduates and early-career workers who often depend on H-1B visas to gain a foothold in the US tech industry. The change could have the upside of making the foreign population feel older, which would result in a higher wage bill, but could also disadvantage the younger talents.


Analysis: How This Could Reshape Hiring Trends


If implemented, the proposal would significantly shift the H-1B Lottery System toward rewarding experience and pay scale rather than chance. This may be good for big tech firms, but difficult for startups competing for top talent. 

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For Indian applicants who form the majority of about 71% of H-1B approvals, the Trump H-1B Visa Rules would mean negotiating an increased salary before applying. This change could alter global hiring trends and make companies rethink their workforce strategy in the next few years.