New Labor Challenges for Employers: Major Changes to H-1B Visa Process and Enforcement

Applies to: All Employers

Effective: As Indicated

Discussion

Last month, the federal government announced several changes to the H-1B visa program. On September 19, 2025, the President issued a proclamation instituting a dramatic change in the H-1B petition process and set off confusion over the weekend.

On the heels of this announcement, the Department of Homeland Security (DHS) issued a proposed rule to replace the current random lottery system with a weighted system that prioritizes high paying jobs. Lastly, the Department of Labor (DOL) announced new employer H-1B enforcement measures. There appears to be a lot of misinformation about these proposals. Here’s what employers need to know.

New H-1B Visa Fee

Citing abuse of the H-1B visa program in order to replace American workers with lower-paid labor, the proclamation restricts entry into the United States by requiring a payment of $100,000 for H-1B petitions effective September 21, 2025. Employers must provide payment prior to filing an H-1B petition on behalf of a potential worker who is outside the United States. The fee requirement is set to expire twelve months from the effective date unless it is extended. The Secretary of State was instructed to issue additional guidance. The Secretary of DHS is also permitted discretion to waive the fee requirement if “the hiring of such aliens to be employed as H-1B specialty occupation workers is in the national interest and does not pose a threat to the security or welfare of the United States.”

The proclamation instantly created confusion for employers by not providing clarity in several areas. The Department of State (DOS) and the U.S. Citizenship and Immigration Services (USCIS) issued guidance to address the most common questions asked below. Employers should use the following information in conjunction with consulting with their immigration legal counsel since additional guidance is expected.

Does the new $100,000 fee apply to new or existing H-1B visa holders?

A September 20, 2025 USCIS memo stated the fee applies to new petitions. The memo goes on to make clear it does not apply to petitions filed before the effective date of the proclamation, currently approved petitions, or to individuals who currently have valid H-1B visas in their possession.

Should current H-1B visa holders refrain from traveling outside the United States due to the proclamation?

No. The USCIS memo also clearly states the proclamation “does not impact the ability of any current visa holder to travel to or from the United States.”

Does the proclamation apply to fees connected with renewing currently valid H-1B visas?

No. The DOS FAQ issued September 21, 2025 states that current payments or fees required for H-1B renewals are not affected by the proclamation.

In addition to the new fee requirement, the proclamation also instructs the Secretary of Labor to initiate rulemaking to revise the prevailing wage levels to be consistent with the goal of the proclamation to protect American workers. The proclamation also instructs the Secretary of Homeland Security to “initiate a rulemaking to prioritize the admission as nonimmigrants of high-skilled and high-paid aliens.”

Legal challenges to the new fee requirement and other proposed changes are almost certain. Congress has the right to establish naturalization rules under the U.S. Constitution. In addition, there is legal precedent which supports Congress’ right to establish the terms and conditions of visas.

DHS Proposal To Replace Random Lottery Selection

DHS issued a proposed rule on September 24, 2025 entitled Weighted Selection Process for Registrants and Petitioners Seeking To File Cap-Subject H-1B Petitions. The proposed rule would implement a weighted selection process to favor allocation of H-1B visas to higher skilled and higher paid foreign workers while still preserving the ability of employers to obtain workers at all wage levels. Currently, the United States uses a lottery system where it allocates a limited number of H-1B visas (the H-1B cap). Registrants are randomly selected based on properly submitted electronic registrations. The intention of the proposed rule is to move away from random selection to a weighted selection process.

The weighted selection process would rely on each beneficiary’s equivalent wage level based on the highest Occupational Employment and Wage Statistics (OEWS) wage level that the beneficiary’s employer intends to pay. This wage would equal or exceed the relevant Standard Occupational Classification code in the area of intended employment. There would be four wage bands into which beneficiaries would be assigned. The higher the wage band, the more registrations the beneficiary would be entitled to, thereby increasing their likelihood of selection. The wage bands and corresponding registrations are as follows:

• OEWS Level I = 1 registration for “entry” level workers;
• OEWS Level II = 2 registrations for “qualified” workers;
• OEWS Level III = 3 registrations for “experienced” workers; and
• OEWS Level IV = 4 registrations for “fully competent” workers.

Regardless of the number of registrations submitted for a beneficiary, the beneficiary would only be counted once toward the allocation of H-1B visas. The selection process would still occur through a random, computer-generated process. The fiscal year cap on total H-1B workers would also still be maintained.

Written comments on the proposed rule are due by October 24, 2025. Legal challenges are also expected. Data from DHS in 2020 showed that the vast majority of H-1B workers were paid at Level I or II wages. This means the weighted selection process will require employers to increase their wages in order to obtain a higher likelihood of their beneficiary being selected in the new process.

DOL Increased Enforcement Measures

On September 19, 2025, the DOL announced enhanced enforcement measures to ensure employers comply with H-1B requirements. Project Firewall’s intent is to make sure employers prioritize hiring American workers and hold employers accountable for H-1B abuse. As part of its enforcement, the DOL will conduct investigations of employers to maximize H-1B program compliance which will be personally certified by the Secretary of Labor for the first time in the DOL’s history. Investigations will be certified where there is reasonable cause to believe an employer is non-compliant.

Employers found to be in violation of the H-1B program can be required to pay back wages to affected workers, pay civil monetary penalties, and be barred from future use of the H-1B program. The DOL will also share information with the following government agencies to ensure compliance: U.S. Department of Justice's Civil Rights Division, Equal Employment Opportunity Commission (EEOC), and USCIS.

Next Steps for Employers

Employers who rely on H-1B workers are facing multiple changes and increased scrutiny in how they participate in the H-1B visa program. What should employers do to manage the scope and scale of these changes?

Because these proposed changes are new, additional guidance and legal challenges are expected. Legal counsel can help advise employers on how best to protect their business operations and stay compliant. There is also a lot of misinformation regarding the changes which is causing confusion for holders of H-1B visas. Work with legal counsel to draft communications that keep affected workers up to date on what is required. Employers should also prepare for the implementation of these changes while legal challenges are pending. This includes ensuring job descriptions and pay levels are commensurate with the H-1B program requirements. Individuals within the organization who oversee or are part of the H-1B petition process should be kept informed and trained on the most current requirements.

Action Items

1. Consult with legal counsel experienced in immigration.
2. Communicate consistently with H-1B workers.
3. Review job descriptions and pay levels.
4. Train appropriate personnel on the requirements.

For a summary of the latest updates, visit the Federal Policy Hub for Employers and connect with one of our employee benefits consultants or HR experts to ensure you always remain compliant.