The H-1B visa program, a crucial channel for foreign skilled workers to join U.S. companies, has experienced a cascade of regulatory updates since September, significantly unsettling employers nationwide. Immigration lawyers report that businesses are urgently revising their foreign worker travel policies and formulating contingency staffing arrangements, including offshoring tasks, to absorb the impact of these evolving directives.
Rohit Srinivasa, an immigration attorney in Los Angeles specializing in startups and mid-sized technology firms, highlighted unpredictability as a principal challenge for companies, noting it undermines business planning.
The policy changes began with the introduction of a $100,000 fee on new H-1B applications submitted after September. Subsequently, increased social media vetting requirements disrupted visa holders’ international travel, with some stranded abroad during the holiday season. Most recently, a new wage-based lottery system, instituted to incentivize higher salary offers by providing more lottery entries to top pay tiers, marks another significant shift.
These continuous revisions are prompting businesses to tighten their sponsorship policies, adjust budgets to balance higher expenses, and devise strategic responses to a moving regulatory target, according to interviews with five immigration lawyers.
A Measured Shift in Visa Sponsorship Practices
Immigration experts describe a more cautious stance among employers regarding who they sponsor for H-1B visas. Divij Kishore, a New York-based attorney at Flagship Law serving sectors spanning technology, healthcare, and energy, observes a 40% to 50% decline in inquiries about H-1B sponsorship compared to previous years. Historically, by this stage in the cycle, clients typically present lists of employees for the spring lottery; this year, however, uncertainty over evolving costs has dampened such outreach.
Conversely, K. Edward Raleigh of Fragomen, representing prominent Silicon Valley tech corporations like Apple and Nvidia, reports that while H-1B filings, largely renewals, remain steady, companies are nonetheless sharpening their sponsorship criteria and proceed cautiously to avoid triggering substantial fees.
Interestingly, although the $100,000 fee applies narrowly to new visa requests for workers currently residing outside the U.S., and excludes many common cases such as current students transitioning to work visas or existing H-1B holders changing employers, firms remain wary due to the unpredictable nature of administrative decisions. Ted Chiappari of Duane Morris comments on the constant policy fluctuations that keep employers uncertain week to week.
Emerging Trends in Visa Issuance and Hiring Strategies
Data from the National Foundation for American Policy indicates a decline in H-1B visa grants to Indian IT consulting companies, contrasting with notable increases for major technology companies like Amazon, Meta, Microsoft, and Google, which ranked as the top four recipients of approved H-1B applications in fiscal year 2025. This shift reflects pre-existing adjustments in hiring strategies that the recent policy turbulence has further compounded.
Despite the upheaval, Srinivasa believes that the H-1B framework remains deeply ingrained in the U.S. economic system, undergoing reform rather than being replaced.
Certain industries, particularly universities and nonprofit healthcare organizations—traditionally reliant on H-1B workers for faculty and medical staff—have largely ceased filing fee-subject petitions. These institutions benefit from the ability to sponsor throughout the year without lottery constraints, but current conditions have effectively halted that recruitment pipeline, according to Chiappari.
Alternative Visa Options and International Adjustments
Companies are not abandoning visa sponsorship; rather, they are broadening their approach to include alternative visa categories and global operational models.
Srinivasa notes a marked increase in demand for O-1 visas, targeting individuals with extraordinary ability substantiated by patents, awards, professional memberships, and media recognition, though this option fits a selective group. Entrepreneurs from countries with U.S. trade treaties increasingly pursue E-2 investor visas, which also authorize spousal work. The EB-1C category enables firms to transfer managers internationally for a year before relocating them to the U.S.
Multinational corporations are expanding international offices, especially in Indian cities like Bengaluru and Hyderabad. They utilize L-1 visas to transfer employees to U.S. operations or engage third-party employer-of-record services like Deel and Rippling to manage immigration documentation.
Kishore mentions clients proactively contacting offshore staffing providers to build capacity in anticipation of potential limitations on U.S.-based hiring. "If they cannot spend that same hundred dollars within the U.S. next year, they will spend the hundred dollars outside the U.S.," he remarked.
Implications of the 2026 Wage-Based Lottery System
The forthcoming H-1B lottery adjustment, effective in 2026, will introduce a wage-weighted entry system. Applicants receiving offers in the highest salary bracket will gain four lottery entries, whereas those in the lowest wage tier receive a single entry. This move is intended to prioritize the most skilled workers, according to government statements.
Raleigh reports that employers are already strategizing how the changes might alter recruitment priorities, although specifics remain unclear. This structure is expected to favor large tech companies with the capacity to offer premium salaries but could create hurdles for smaller enterprises, nonprofits, and early-stage startups.
Startup-focused attorney Sophie Alcorn observes that many founders forgo substantial salaries due to mission commitment but may struggle under the new system to secure the appropriate talent through the lottery.
Kishore critiques the assumption that salary equates to skill, illustrating with an example: a first-year associate at a major law firm making $225,000 would have better lottery odds than a similarly skilled associate at a smaller firm earning less. Some legal advisors caution against inflating salaries solely to game the system, citing the typically moderate wage differentials (around $20,000 to $30,000) compared with the significant $100,000 fee, and noting companies are not hastily increasing pay.
Initially, some attorneys hoped that the $100,000 fee would indirectly benefit foreign students studying in the U.S. by reducing H-1B entries and thus improving their lottery odds. However, this hope is diminished by the new salary-weighted lottery, as lower-paid new graduates will receive fewer chances, Kishore explains.
Corporate Policy Adjustments and Compliance Concerns
Beyond the policy amendments, companies are revamping compliance and human resource protocols to manage risks associated with visa regulations. Raleigh emphasizes the critical importance of ensuring continuous valid immigration status for workers, since lapses can necessitate leaving the U.S. and reapplying for a new visa, risking incurring costly fees.
Srinivasa notes that firms are updating guidance on social media activity for foreign-born employees in reaction to intensified scrutiny and encouraging the avoidance of international travel to minimize complications, even if travel remains legally permissible.
Chiappari continues to receive frequent inquiries from anxious H-1B holders about travel safety. Despite legal assurances, many visa holders remain reluctant to travel abroad, resulting in postponed personal engagements such as weddings and holidays as well as deferred work assignments abroad.
Kishore advises companies to prepare pragmatically and stay agile in responding to the swiftly evolving visa landscape in the coming months.