The end of the H-1B lottery

Overview

On December 29, 2025, the Department of Homeland Security published its final rule replacing the H-1B lottery with wage-weighted selection. It takes effect February 27, 2026.

Under the new system, a software engineer offered $150,000 (Level IV) gets four entries; one offered $65,000 (Level I) gets one—an 8.5% chance versus 25% under the prior system. The change targets fraud. In FY 2024, 758,994 registrations competed for 85,000 slots; 408,891 were duplicates, up 140% year-over-year.

Shell companies flooded the system. Disney laid off American IT staff and made them train H-1B replacements paid 40% less. On December 24, a federal judge upheld the $100,000 H-1B fee Trump imposed in September, rejecting a U.S. Chamber of Commerce lawsuit.

U.S. consulates in India began canceling thousands of H-1B visa appointments in December, pushing them to mid-2026 due to new mandatory social media screening. India's Nasscom called for delaying wage-weighting until FY 2028, warning it will crush entry-level hiring and favor deep-pocketed Big Tech over startups and research institutions. Twenty states sued Trump over the $100K fee; Vice President JD Vance defended the restrictions as 'true Christian politics,' saying companies shouldn't 'bypass American labor for cheaper options in the third world.'

The battle spans courtrooms, consulates, and Congress: Will wage-weighting stop fraud, or just hand visas to Google while crushing entry-level hiring?

Play on this story Voices Debate Who Said What? Predict

Key Indicators

758,994

FY 2024 H-1B Registrations

Applications for 85,000 available slots—a 60% jump from 474,421 the prior year

408,891

Duplicate Registrations

Multiple employers filed for same beneficiaries in FY 2024—54% of all submissions

Level IV Wage Advantage

Highest-paid workers get quadruple entries versus lowest wage tier under new system

70-75%

Indian National Share

Percentage of H-1B holders from India; ~300,000 Indians work in US on these visas

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People Involved

Alejandro N. Mayorkas

Finalized wage-weighted H-1B rule December 2025

Chuck Grassley

Co-sponsor of H-1B reform bills since 2007

Elon Musk

Defending H-1B visas amid MAGA backlash, December 2024-January 2025

Donald Trump

Flip-flopped on H-1B policy; now supports program

J.D. Vance

Defending H-1B restrictions as pro-American worker policy, December 2025

Beryl A. Howell

Ruled Trump's $100,000 H-1B fee lawful, December 24, 2025

Rob Bonta

Leading 20-state lawsuit against $100,000 H-1B fee

Organizations Involved

U.S. Citizenship and Immigration Services (USCIS)

Federal Agency

Administering H-1B program; enforcing fraud crackdown

USCIS runs the H-1B cap lottery and processes petitions for the 85,000 annual visas.

Cognizant Technology Solutions

IT Services and Consulting Corporation

Major H-1B user; sued in Disney case

Global IT services company that files thousands of H-1B petitions annually, often for lower-wage positions.

HCL Technologies

IT Outsourcing Firm

Major H-1B user; sued in Disney case

Indian multinational IT services firm and heavy H-1B petitioner, often criticized for wage suppression.

The Walt Disney Company

Media and entertainment conglomerate

Faced backlash and lawsuit over 2015 H-1B layoffs

Used H-1B outsourcing to replace American IT workers in 2015, sparking national controversy.

National Association of Software and Service Companies (Nasscom)

Industry Trade Association

Opposing wage-weighted H-1B rule; calling for delay until FY 2028

India's premier IT industry association representing over 3,000 companies employing 5.4 million workers.

U.S. Chamber of Commerce

Business Advocacy Organization

Lost lawsuit challenging $100,000 H-1B fee, December 24, 2025

Largest U.S. business lobbying group; filed October 2025 lawsuit against Trump's $100K H-1B fee.

Timeline

1990 February 2026

22 events Latest: February 27th, 2026 · 3 months ago Showing 8 of 22

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February 2026
New System Takes Effect
Latest Implementation

Wage-weighted selection begins for FY 2027 H-1B cap season.
February 27th, 2026
December 2025
Rule Published in Federal Register
Regulation

Wage-weighted selection rule formally published.
December 29th, 2025
Judge Upholds $100,000 H-1B Fee
Legal

U.S. District Judge Beryl Howell rejects U.S. Chamber of Commerce lawsuit, ruling Trump's September proclamation imposing $100K fee falls within executive authority under Immigration and Nationality Act.
December 24th, 2025
Nasscom Calls for Delay Until FY 2028
Industry Response

India's IT industry association warns wage-weighted selection will disadvantage startups, small businesses, and entry-level STEM graduates; urges phased implementation starting FY 2028 instead of FY 2027.
December 24th, 2025
DHS Announces Wage-Weighted Selection
Regulation

Final rule replaces lottery with wage-based weighting effective Feb 2026.
December 23rd, 2025
Social Media Screening Begins at U.S. Consulates
Enforcement

U.S. Embassy in India starts mandatory online presence reviews for all H-1B and H-4 applicants, canceling thousands of December-January appointments and rescheduling to March-August 2026.
December 15th, 2025
20 States Sue Over $100,000 H-1B Fee
Legal

Coalition led by California, New York, and Massachusetts files lawsuit alleging Trump's September fee violates Administrative Procedure Act and exceeds executive authority.
December 12th, 2025
September 2025
Trump Imposes $100,000 H-1B Fee
Executive

New fee targets program abuse; Indian IT stocks plunge.
September 20th, 2025
December 2024
Musk-Bannon H-1B Feud
Political

MAGA coalition splits over visas; Trump sides with Musk, calls program 'great.'
December 28th, 2024
March 2024
FY 2024 Registrations Hit Record
Data

758,994 registrations submitted; 54% are duplicates for same workers.
March 2024
May 2023
USCIS Launches Fraud Investigations
Enforcement

Agency investigates dozens of companies for coordinated lottery gaming.
May 2023
March 2023
Grassley-Durbin Bill Reintroduced
Legislation

H-1B and L-1 Visa Reform Act filed again; dies in committee.
March 28th, 2023
June 2020
Trump Bans New H-1B Visas
Executive

Temporary ban issued, later struck down by federal courts.
June 2020
March 2020
Electronic Registration Launches
Policy

USCIS introduces online H-1B lottery registration; fraud explodes.
March 1st, 2020
April 2017
Trump's 'Buy American, Hire American'
Executive

Executive order directs agencies to review H-1B program for abuse.
April 18th, 2017
January 2016
Workers Sue Disney
Legal

Laid-off employees file federal lawsuit alleging illegal replacement with H-1Bs.
January 2016
June 2015
New York Times Exposé
Media

Disney H-1B scandal breaks nationally, triggering congressional scrutiny.
June 2015
January 2015
Disney Layoffs Take Effect
Corporate

Workers laid off after training H-1B replacements paid 40% less.
January 30th, 2015
October 2014
Disney Notifies IT Workers of Layoffs
Corporate

250 Disney IT staff told they'll be replaced by H-1B workers from outsourcing firms.
October 2014
2007
First Grassley-Durbin Reform Bill
Legislation

Senators introduce H-1B fraud prevention bill; fails to pass.
2007
2004
Cap Set at 85,000
Legislation

H-1B Visa Reform Act sets 65,000 regular cap plus 20,000 for US master's degrees.
2004
1990
H-1B Program Created
Legislation

Immigration Act of 1990 establishes H-1B visa for specialty occupations.
1990

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Historical Context

3 moments from history that rhyme with this story — and how they unfolded.

1967-2015

Canada's Points System Shift (2015)

Canada pioneered points-based immigration in 1967, awarding visas based on education, language, age, and skills without employer sponsorship. For decades, immigrants arrived without job offers, leading to credential mismatches—engineers driving taxis. In 2015, Canada introduced Express Entry, a hybrid model: candidates still need points, but employers select from a pre-approved pool, blending supply-driven points with demand-driven hiring.

Then

Applications spiked; processing times dropped from years to months.

Now

Immigrant employment outcomes improved significantly as employer involvement ensured job market fit.

Why this matters now

The US H-1B wage-weighted system mirrors Canada's evolution: moving from pure randomness toward valuing market signals—here, wages as a proxy for skill and demand—without abandoning employer sponsorship entirely.

1996-2018

Australia's 457 Visa Abuse and Reform (2017)

Australia's Temporary Skill Shortage (subclass 457) visa allowed employers to sponsor foreign workers. By 2017, widespread abuse emerged: employers sponsoring workers for fake jobs, paying below-market wages, or using 457s to suppress Australian salaries. In April 2017, Prime Minister Malcolm Turnbull abolished the 457 visa, replacing it with the Temporary Skill Shortage (TSS) visa with stricter wage floors, mandatory labor market testing, and occupation lists tied to genuine shortages.

Then

Visa grants dropped 20%; businesses protested disruption.

Now

Wage protections strengthened; public trust in skilled migration partially restored.

Why this matters now

Like the 457 visa, the H-1B lottery faced exploitation by employers seeking cheap labor rather than scarce talent. The US wage-weighted rule parallels Australia's wage floor approach: using compensation as a gatekeeper to prioritize genuine skill needs over cost arbitrage.

2014-2015

Disney's H-1B Layoffs (2015)

In October 2014, Walt Disney World notified 250 IT workers they'd be laid off and replaced by H-1B workers from Cognizant and HCL—outsourcing firms paying $61,000 versus Disney's $100,000 salaries. Workers spent 90 days training their replacements or lost severance. The scandal broke nationally in June 2015 via the New York Times, sparking lawsuits alleging illegal displacement and congressional hearings on program abuse.

Then

Disney reversed 35 layoffs; lawsuits filed but largely dismissed on standing grounds.

Now

The case became a rallying cry for H-1B critics, illustrating wage suppression and the gap between statutory intent (fill labor shortages) and corporate practice (cut costs).

Why this matters now

The Disney case epitomizes the problem DHS's wage-weighted rule aims to solve: employers using H-1Bs not for specialized talent but for cheaper labor. By prioritizing higher wages, the new system theoretically blocks the cost-cutting outsourcing model that enabled Disney's layoffs.