President Donald Trump’s revamp of the H-1B white-collar outsourcing program has prompted cautious approval from advocates for American professionals and college graduates.
“It does not end H-1Bs, but it fundamentally reshapes who benefits from them,” said Hany Girgis, a tech-training CEO.
Employers and their lawyers are expected to file lawsuits against the new rules, which somewhat shift the distribution of new H-1B workers towards employers who offer higher wages.
That shift will modestly pressure companies to hire young American graduates — but will not restrict the huge inflow of foreign workers via other programs, including the “cap-exempt” H-1B, J-1, L-1, L-2, OPT, and CPT work-permit programs.
“The new rule replaces the random lottery for selecting visa recipients with a process that gives greater weight to those with higher skills,” says a press statement for the agency that awards the visas:
The existing random selection process of H-1B registrations was exploited and abused by U.S. employers who were primarily seeking to import foreign workers at lower wages than they would pay American workers,” said U.S. Citizenship and Immigration Services spokesman Matthew Tragesser.
“The new weighted selection will better serve Congress’ intent for the H-1B program and strengthen America’s competitiveness by incentivizing American employers to petition for higher-paid, higher-skilled foreign workers. With these regulatory changes and others in the future, we will continue to update the H-1B program to help American businesses without allowing the abuse that was harming American workers.”
The “rule is effective Feb. 27, 2026, and will be in place for the FY 2027 H-1B cap registration season,” said the statement.
Trump’s revamp comes amid conflicting pressures in the White House.
Many college graduates want to end the outsourcing programs. But investors and business groups want to keep the programs, which generate massive profits and kickbacks for hiring managers and CEOs. However, many investors, CEOs, and India-backed lobbyists want the white-collar migration to continue, partly because it enables them to transfer jobs to low-wage workers in India.
But Trump’s revamp also confirms public pressure on the White House to fix those other programs which are smashing up the American middle class, and wrecking the ability of shareholders to balance CEOs’ focus on profits with professionals’ focus on research and product quality. “Maybe now is the moment to eliminate H-1B and OPT pipelines that undercut wages and block new grads,” said Girgis.
In September, Trump blasted the program, saying the H-1B program is used by companies even as they fire thousands of American professionals:
Another IT firm was approved for nearly 1,700 H-1B workers in FY 2025; it announced it was laying off 2,400 American workers in Oregon in July. A third company has reduced its workforce by approximately 27,000 American workers since 2022, while being approved for over 25,000 H-1B workers since FY 2022. A fourth company reportedly eliminated 1,000 jobs in February; it was approved for over 1,100 H-1B workers for FY 2025.
The program has helped foreign workers take one of every four jobs in the U.S. science, technology, and engineering sector, the proclamation says:
The number of foreign STEM workers in the United States has more than doubled between 2000 and 2019, increasing from 1.2 million to almost 2.5 million [emphasis. added], while overall STEM employment has only increased 44.5 percent during that time. Among computer and math occupations, the foreign share of the workforce grew from 17.7 percent in 2000 to 26.1 percent in 2019 [emphasis added].
The proclamation added: “The key facilitator for this influx of foreign STEM labor has been the abuse of the H-1B visa.”
Trump also imposed a $100,000 fee on the arrival of some new H-1B workers in 2026. The rule is not expected to have any significant benefit for Americans because there are so many alternative pipelines of foreign white-collar workers.
Business groups sued, but lost the issue on Wednesday because the fee is clearly allowed by law, according to a judge: “Congress has granted the president broad statutory authority, which he has used to issue the proclamation addressing, in the manner he sees fit, a problem he perceives to be a matter of economic and national security.”
The courtroom win strengthens Trump’s ability to set additional reforms to the outsourcing visa, say advocates for Americans. For example, the federal government can bar the use of H-1Bs by companies with federal contracts. The Department of State can also further tighten oversight of the fraud-ridden process for granting visas to Indians.
The legal setback was lamented by Daryl Joseffer, chief counsel of the U.S. Chamber of Commerce:
The $100,000 fee makes H-1B visas cost-prohibitive for businesses, especially small- and medium-sized businesses that can least afford it. We are disappointed in the court’s decision and are considering further legal options to ensure that the H-1B visa program can operate as Congress intended: To enable American businesses of all sizes to access the global talent they need to grow their operations.
Vice President JD Vance is also helping Trump to zig-zag forward amid competing demands from voters and investors.
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