The global technology industry is deeply concerned about the Trump administration’s proposed H-1B visa reform, which would replace the present lottery-based system with a wage-weighted model.
The top IT industry association in India, Nasscom, is spearheading the resistance and has described the idea as operationally disruptive, fiscally unsound, and legally dubious.
Both Indian and American business organisations have criticised the plan, which comes after a significant cost increase to $100,000 for new H-1B visa applicants. They caution that it might jeopardise U.S. competitiveness and upset long-standing hiring patterns.
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Understanding the Proposed H-1B Visa Reform
The H-1B visa program has been a pillar of America’s high-skilled immigration strategy for many years. In specialised professions like information technology, engineering, medicine, and research, where domestic talent frequently falls short, it allows U.S. firms to hire foreign workers.
Currently, a random lottery is used to distribute visas, guaranteeing equal opportunity for all eligible candidates. The Trump administration’s planned change, however, aims to do away with this lottery and replace it with a wage-based selection system that would give preference to candidates who can command higher pay.
The U.S. Department of Homeland Security (DHS) has proposed:
- Registrations will be ranked by Occupational Employment and Wage Statistics (OEWS) wage levels.
- Applicants will be classified from Level I (entry-level) to Level IV (highly experienced).
- Higher wage levels will receive greater odds of selection.
A Level I applicant would only receive one entry in the visa selection pool, but a Level IV applicant would receive four.
According to the DHS, this wage-weighted system will ensure that only the most qualified professionals are chosen and deter visa abuse.
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Nasscom’s Strong Rebuttal: “Flawed, Biased, and Disruptive”
Nasscom warned the DHS during official consultations that the wage-based H-1B visa system will affect both international talent and U.S. firms by creating geographic and sectoral inequities.
Due to regional salary disparities, a Level 2 wage earner in New York could be ranked higher than a Level 4 wage earner in Iowa, according to the organization’s startling example. It contended that such differences would unjustly harm workers in lower-cost areas and smaller businesses.
More than 11,000 complaints have already been sent to the DHS, according to Nasscom, highlighting the widespread concern across businesses.
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“A Sudden and Unfair Transition” — Nasscom President Rajesh Nambiar
Nasscom President Rajesh Nambiar denounced the proposal’s abrupt implementation following nearly two decades of stability in a thorough submission dated October 30.
Employers in the United States have built their employment cycles, budgets, and project schedules around the current random lottery approach for almost two decades. These established habits would be upended by an abrupt switch to a wage-weighted paradigm, according to Nambiar.
He pointed out that the majority of businesses plan their recruiting months in advance, coordinating with client demands, product launches, and university graduation cycles. He claimed that the proposed modification will make regulations more complicated, delay projects, and raise concerns about compliance for both foreign workers and employers.
Nasscom also warned that the new methodology may be manipulated, since businesses might inflate pay to increase their number of entries in the visa lottery, negating the goal of merit-based selection.
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U.S. Business Groups Join the Opposition
The largest business association in the United States, the U.S. Chamber of Commerce (USCC), has also expressed opposition to the wage-weighted visa reform.
The Chamber warned that the proposed method could harm startups and small enterprises that depend on early-career or mid-level professionals, challenging the notion that higher wages inevitably translate into greater economic gains.
“The proposed regulation, by its very design, would significantly diminish opportunities for early-career professionals to secure an H-1B visa,” said Patrick Shen, USCC Vice President for Immigration Policy.
Additionally, he cautioned that American businesses may shift jobs overseas if they are unable to obtain the necessary expertise here, undermining the whole objective of increasing employment domestically.
Small businesses make up 76% of all H-1B petitioners, according to industry data, and they would be disproportionately affected by higher wage-based charges and lower selection probability.
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Legal and Policy Challenges: “Congress, Not DHS, Should Decide”
The Information Technology Industry Council (ITI) and Nasscom are two trade bodies that contend that the DHS is not authorised to make such significant policy changes.
They argue that any significant immigration change cannot be implemented unilaterally by administrative agencies without first passing Congress.
Another problem identified by the ITI Council, which includes leading tech companies like Microsoft, Intel, and IBM, is that the wage-based system does not account for all forms of remuneration, including stock options, bonuses, and equity grants, which are typical in the IT industry.
“The proposed wage measurement ignores non-salary compensation, such as restricted stock units or equity, leading to inaccurate assessments of workforce value,” stated Julia Massimino, Executive Vice President for Government Affairs at ITI.
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The Wage-Based Model vs. Global Immigration Systems
Supporters of the Trump administration’s plan frequently draw comparisons between it and point-based immigration systems in nations like Australia, the UK, and Canada, where high earnings can increase an applicant’s prospects.
Nasscom noted that these parallels are merely surface-level. Instead than concentrating only on wages, those systems are governed by comprehensive legislation that assesses a variety of factors, such as education, experience, language proficiency, and flexibility.
According to Nasscom, “the U.S. proposal’s singular focus on salary fails to reflect the holistic, merit-based evaluation models used by other nations.”
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Projected Economic Impact: DHS vs. Industry Perspective
DHS estimates that the wage-based system might result in significant financial gains—roughly $502 million in FY2026, increasing to $2.01 billion annually starting in FY2029—mainly from increased wage contributions and administrative efficiency.
Industry leaders, however, contest these numbers, claiming that the measure might have the opposite impact by deterring businesses from growing or recruiting in the United States.
Over 1.6 million skilled workers are employed by Nasscom’s member companies in the United States, which contribute about $198 billion to the country’s GDP—more than the yearly production of 20 states.
Importantly, two-thirds of these positions are located in states like Texas, Ohio, North Carolina, and Illinois, which support local economies and job growth, rather than in big tech hubs like Silicon Valley and New York. Nasscom cautioned that this geographic equilibrium might be upset by a wage-centric system.
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Calls for a Gradual, Business-Friendly Transition
Nasscom and affiliated groups are against the existing version of the policy, however they have suggested a gradual change rather than a complete rejection.
In order to give businesses enough time to modify their hiring procedures, budgets, and compliance systems, they have suggested delaying the new H-1B system, which was initially scheduled for March 2027, until at least FY2028.
They contend that a delay of this kind would reduce operational risks and avoid abrupt disruptions in projects that depend on foreign technical skills.
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Broader Implications: The Future of Global Talent Mobility
For qualified professionals, particularly those from India, which routinely makes up the majority of H-1B applicants, the H-1B visa program has long been seen as a route to the American Dream.
However, there is already anxiety among international talent pools due to recent regulatory changes, cost increases, and rhetoric about “visa misuse.” Young graduates and mid-level professionals, who are the foundation of digital innovation, would be further deterred from looking for opportunities in the United States by a wage-based system.
Furthermore, knowing that post-graduation employment may be restricted by income ceilings may cause international students to reconsider studying in the United States, ultimately undermining the country’s appeal as a centre of global innovation.
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Conclusion: Reform or Risk?
The debate over H-1B visa reform highlights the need to strike a careful balance between safeguarding local workers and maintaining American technical supremacy.
Although the Trump administration’s plan seeks to give preference to higher-paid people, detractors contend that it ignores the realities of international labour markets and the mutually beneficial relationship between American businesses and foreign experts.
The outcome of this legislative debate will decide the competitiveness of the U.S. IT environment as well as the future of skilled immigration, as Nasscom, USCC, and ITI continue to push back.
As Washington debates whether the H-1B visa should continue to be a gateway to opportunity or turn into a gatekeeper of pay, the world is currently watching.