H-1B Visa Lottery 2026: US Employers Shift to Cautious Strategy Amid Regulatory Changes
The upcoming H-1B visa lottery scheduled for March 2026 is poised to mark a significant departure from previous years, as American employers are preparing to implement a more measured and strategic approach to their filings. According to a report from the Economic Times, companies across various sectors are conducting thorough audits of job roles, offering elevated base salaries well in advance of registration, and reducing speculative applications in response to mounting regulatory and financial pressures.
Regulatory Changes Drive Employer Restraint
The landscape for H-1B visa sponsorship has been fundamentally altered by recent policy shifts. The Donald Trump administration's announcement of a substantially increased H-1B visa fee, set at $100,000, coupled with the introduction of a wage-weighted selection system, has compelled employers to reevaluate their hiring strategies. Immigration experts and recruiters anticipate a notable decline in the number of registrations, projecting a drop from last year's 358,737 filings to a range between 250,000 and 330,000 for the current cycle.
Anshul Lodha, Managing Director at PageGroup India, emphasized the strategic adjustments being made. "Employers are meticulously auditing job roles and job codes, and are proactively offering competitive salaries long before the registration window opens," he explained. "Targeted salary realignment, especially for specialized or high-impact positions, significantly enhances the likelihood of selection in the lottery." Lodha further noted that widespread restructuring of compensation packages, such as reducing restricted stock units or equity to artificially boost base salaries, remains limited as companies strive to balance their immigration objectives with employee retention and internal pay equity.
Legal Risks and Compliance Pressures Intensify
The report underscores that the evolving strategy is not solely driven by cost considerations but also by heightened regulatory risks. Shilpa Malik, Managing Attorney at VisaNation Law Group, described the current trend as "strategic restraint." "Employers are submitting fewer registrations and treating each application as a critical business decision, closely tied to seniority levels, justifiable wages, and long-term retention value," she stated.
Malik also issued a warning regarding the alignment between job duties and Standard Occupational Classification codes. "Misalignment in this area has become one of the fastest routes to receiving Requests for Evidence and encountering post-approval complications," she cautioned. Consequently, companies are increasingly avoiding aggressive tactics, such as manipulating job codes or relocating roles to lower-wage geographic hubs, to mitigate legal exposure.
Structural Flaws in Wage-Based Selection System
Divij Kishore, Founding Attorney at Flagship Law, raised concerns about inherent flaws within the wage-weighted selection framework. He pointed out that wage levels vary significantly based on job classification and geographic location, meaning that an identical salary can fall into different tiers across cities. "Linking selection probabilities to salary levels can lead to outcomes that deviate from the regulatory intent," Kishore argued. "Higher compensation does not invariably correlate with greater responsibility or seniority within an organization."
Kishore further highlighted that the substantial $100,000 fee could potentially divert global talent away from the United States, thereby undermining the nation's competitive edge in attracting highly skilled professionals from around the world.
Sectoral Impact and Disparities
The new regulatory environment is expected to have a varied impact across different industries. Information technology outsourcing and services firms, which traditionally rely heavily on high-volume, lower-wage overseas hiring, are likely to experience the most significant disruption.
Large technology corporations are better equipped to absorb the increased costs associated with higher wages and fees, yet they are also adopting a more selective approach to H-1B sponsorship. Conversely, startups and small businesses face the most formidable challenges, as the combined burden of sponsorship costs and the wage-based selection mechanism renders H-1B hiring increasingly less feasible for these entities.
The contrasting experiences of visa holders further illustrate the widening gap in the employment landscape. For instance, an OTP visa holder in California recently faced termination after his startup declined to sponsor his H-1B visa. In contrast, a senior manager at a US retailer successfully negotiated a substantial salary increase to facilitate his transition from an L-1 visa to an H-1B, highlighting the growing disparity between entry-level candidates and senior hires in the current visa climate.
