The U.S. Department of Homeland Security (DHS) and U.S. Citizenship and Immigration Services (USCIS) are moving forward with plans to reform how H-1B visas are awarded, potentially replacing the current lottery system with a selection process based on merit. The change was disclosed in a recent regulatory filing submitted to the Office of Management and Budget’s Office of Information and Regulatory Affairs (OIRA).
The proposed regulation, titled “Weighted Selection Process for Registrants and Petitioners Seeking To File Cap-Subject H-1B Petitions,” suggests the government may begin favoring applicants with higher qualifications or wage offers over random selection. Once the review is complete, the rule will be published in the Federal Register, setting the stage for what could become the most significant change to the visa system in years.
High Demand Meets Growing Criticism
The H-1B program allows U.S. employers to hire foreign workers in specialized fields such as technology, engineering, and science. Every year, demand for these visas far exceeds the cap—reached again for Fiscal Year 2026. Many of the biggest names in tech, including Amazon, Google, and Microsoft, rely heavily on H-1B talent.
While companies argue that the program helps them fill critical skill gaps, critics say it undermines American workers, particularly those entering the tech industry. Some experts have long warned that the system enables employers to replace U.S. workers with cheaper labor, while outsourcing companies often dominate visa allocations.
U.S. Graduates Struggle to Compete
Critics of the current H-1B system argue that it disadvantages recent American graduates, especially in tech-related fields. According to government data, over 134,000 U.S. citizens or permanent residents graduated with computer science degrees in 2023. Yet during the same period, more than 110,000 work permits were issued to foreign nationals in similar occupations under H-1B, OPT, and spousal work authorization programs.
This imbalance is drawing attention as job market conditions remain difficult for new graduates. Data from the Federal Reserve Bank of New York showed a 5.8% unemployment rate for recent college graduates in early 2025. For computer science and computer engineering graduates, the rates were even higher—6.1% and 7.5%, respectively.
Adding to the concern, a ZipRecruiter survey found that more than one in four tech graduates regret choosing fields such as computer science, IT, or data science, citing limited job prospects.
Visa Programs Under Fire for Wage Suppression
The criticism extends beyond job displacement. Researchers and labor policy advocates have also flagged systemic issues in how the H-1B and OPT programs are administered. They argue that companies can legally pay foreign workers less than U.S. market wages by classifying them under lower wage levels—particularly Level 1 and Level 2 positions, which fall below the local median.
This practice, they contend, creates downward pressure on wages and working conditions, affecting both American workers and the foreign professionals on these visas. In some cases, companies reportedly pay 20% to 40% less than the prevailing wage for equivalent roles.
Outsourcing and Offshoring Concerns Mount
Beyond wage issues, experts point to how some companies use the visa program to facilitate offshoring. Outsourcing firms, including major names in IT services, reportedly operate on a model where a large portion of work is shifted overseas, while H-1B workers in the U.S. serve as on-site coordinators.
Roughly 40% of H-1B visas are believed to go to firms using this model, where only a fraction of the work remains within the U.S. This strategy, critics say, allows companies to reduce costs while bypassing American workers who might otherwise fill those roles.
Proposed Solutions: From Wage Rules to Recruitment Reform
Several policy recommendations have been floated to address these long-standing issues. Advocates suggest the Department of Labor should enforce a wage rule aimed at ensuring fair pay for foreign workers, while USCIS could implement a system that gives priority to applicants offered higher wages.
Other proposals include requiring secondary employers of H-1B workers to certify that their hiring won’t negatively impact local wages, increasing audits to verify compliance, and cracking down on the misclassification of job skill levels.
There’s also a push for Congress to require employers to prove they’ve made genuine efforts to hire qualified U.S. workers before turning to foreign labor—an approach used in countries like Canada. Some labor experts are calling for random audits of companies that rely heavily on H-1B workers to ensure accountability.
