Trump Administration Proposes To Scrap H-1B Lottery System

Trump Administration Proposes To Scrap H-1B Lottery System

Why in News?

Recently, the US announced new changes to the H-1B visa program. The US government plans to replace the current lottery system with a weighted selection method. This move comes shortly after a significant increase in visa fees.

What is the US H-1B Visa Program?

• The H-1B visa is a non-immigrant visa that allows US companies to hire foreign professionals in specialty occupations. It is primarily used in fields such as technology, engineering, medicine, and research. 
• The visa enables companies to fill positions that require specialized knowledge and skills not easily available in the local workforce.
• The program has been in operation since 1990 and has become a major pathway for global talent to enter the US workforce.
• Each year, the United States Citizenship and Immigration Services (USCIS) sets a cap of 85,000 H-1B visas, including 65,000 for regular applicants and 20,000 for those with a US master’s degree or higher. 
• The visa is initially granted for three years and can be extended up to six years. Applicants must have a job offer from a US employer and meet specific educational and professional requirements.
• The visa allows dual intent, meaning holders can apply for permanent residency (Green Card) while working in the US. Spouses of H-1B holders can also receive dependent visas (H-4), allowing them to live in the US, and in some cases, work if they meet certain conditions.

Recent Proposal to Overhaul the H-1B Visa Selection Process

• • The United States proposed major reforms to the H-1B visa program, which allows companies to hire skilled foreign workers, particularly in technology and engineering sectors. 
  • The announcement comes shortly after President Donald Trump signed a law increasing the H-1B application fee to $100,000 per visa to prioritize serious employers and reduce system misuse.

• Old Selection Process: Under the previous H-1B selection system, all applicants had an equal chance of selection, regardless of their salary or skill level. The lottery system randomly selected applications, which often resulted in highly skilled, well-paid candidates being grouped with lower-wage applicants in a single pool. Companies could submit numerous applications, particularly for entry-level roles, to increase their chances of securing visas.

• New Selection Process: The new proposal introduces a weighted lottery system based on wage levels. Under this approach, applicants earning in the highest wage tier, around $162,528 per year, will receive four entries in the selection pool, increasing their likelihood of selection. Lower-paid applicants will receive only one entry, reducing their chances but still allowing access for companies hiring across wage levels.

• Aims: The primary aim of the proposed reforms is to ensure that highly skilled and well-compensated foreign professionals are prioritized in the H-1B selection process.

• By introducing a weighted lottery based, the government seeks to favor workers who can contribute significantly to the US economy through advanced skills and expertise. 

• This system is expected to discourage companies from submitting numerous low-salary applications merely to increase their odds. 

• The reforms also aim to incentivize companies to offer competitive salaries, thereby ensuring that foreign professionals filling H-1B positions are appropriately compensated.

Impact of H-1B Visa Reforms on India

• The new weighted lottery system could reduce opportunities for Indian professionals in the US. Indians make up around 71% of all approved H-1B applications according to US Citizenship and Immigration Services data. Entry-level and early-career workers may face lower selection chances, which could directly affect fresh graduates from Indian engineering colleges and IT training programs seeking international work experience.
• Indian IT giants such as TCS, Infosys, and Wipro rely heavily on H-1B visas to place employees in the US. The $100,000 visa fee combined with the weighted lottery could raise operational costs significantly. This could reduce overall US staffing and shift some operations back to India.
• The reforms may force Indian companies to focus on senior and higher-paid professionals for US assignments. This could marginalize younger professionals or those in mid-level roles. As a result, companies might expand domestic hiring and training to prepare employees for global opportunities. 
• Startups in India that depend on H-1B visas to place junior talent in US offices may face challenges. Established firms that can pay top-market wages will have higher selection probabilities. This could make it difficult for small IT firms and startups to compete in securing visas for their employees.
• The changes could influence Indian workforce migration trends over the next decade. Professionals may delay seeking US work visas or explore alternatives such as Europe, Canada, or Australia, where selection is not salary-weighted. This may reduce the inflow of Indian professionals to the US and alter global talent distribution.