H-1B Processing Changes 2025–2026

Significant H-1B reforms have been implemented. The Department of Homeland Security (DHS) enacted the final rule effective January 17, 2025. These updates to H-1B requirements not only enhance the ability of U.S. companies to fill job vacancies in crucial fields but also aim to strengthen the U.S. economy. 

Sponsoring an H-1B worker costs and works differently than it did a year ago. A September 2025 presidential proclamation imposed a $100,000 fee on certain new H-1B petitions — one a federal court upheld in December 2025 — and a final rule effective February 27, 2026 replaced the random H-1B lottery with a wage-weighted selection system for the FY2027 cap. For Illinois employers in tech, healthcare, research, and engineering, the question is no longer how the program changed. It’s which candidates are still worth sponsoring, and how to file without triggering a six-figure fee.

If you sponsor foreign professionals, the math behind your H-1B program shifted twice in a single year. The cost of a new petition for a worker abroad jumped from roughly $2,000–$5,000 to potentially $100,000. And the odds of selection in the cap lottery no longer fall evenly — they now tilt toward higher-paid roles. These are not minor administrative updates. They change who you can realistically hire, where that person needs to be when you file, and how you plan a hiring budget for the spring cap season. The January 2025 modernization rule that many employers were still adjusting to is now the smallest of three moving parts. This is the practical breakdown of what changed, what’s still in effect, and the decisions Illinois employers face going into the FY2027 cap.

The $100,000 H-1B Fee: Who Pays and Who Doesn’t

On September 19, 2025, the administration issued a proclamation requiring a one-time $100,000 fee for certain H-1B petitions, effective for filings on or after 12:01 a.m. Eastern on September 21, 2025. The fee is paid through pay.gov before the petition is filed — not after approval — and a missing payment results in denial.

The reason this matters so much comes down to where the worker is. The fee applies when the beneficiary is outside the United States and does not hold a valid H-1B visa at the time of filing, or when the petition requests consular notification, port-of-entry notification, or preflight inspection. It does not apply to:

• Petitions filed before September 21, 2025
• Change-of-status, extension, or amendment petitions for workers already in the U.S. in valid status — including F-1 students changing to H-1B from within the country
• Workers who already hold a valid H-1B visa
• Travel by current H-1B holders

A “national interest” exception exists, but it is written to be used in extraordinarily rare cases, requires meeting four strict criteria, and must be requested through a dedicated DHS channel before filing. It is not a practical workaround for most employers.

The fee was challenged immediately. On December 23, 2025, the U.S. District Court for the District of Columbia upheld it, finding the proclamation was issued lawfully under the President’s authority to restrict entry. Additional cases remain in progress in other courts, so the rule could still be narrowed or blocked. For now, employers should plan as though the fee applies — building a hiring strategy around a hoped-for court ruling is a risk no budget should carry.

The Wage-Weighted Lottery Replaces the Random Draw

The second change rewrote how cap-subject petitions are selected. For years, every registration had an equal shot in a random lottery. A final rule effective February 27, 2026 ended that for the FY2027 cap season.

Selection now favors higher wages. The system uses the Department of Labor’s four-level prevailing wage framework, and a registration is entered into the pool more times as the offered wage level rises — a Level IV (highest) offer is weighted most heavily, a Level I (entry-level) offer the least. The mechanism is straightforward: more entries means a higher probability of selection. An entry-level salary that would have had an even chance under the old draw now sits at the bottom of the weighting.

When registering, employers must now supply the occupation’s SOC code, the area of intended employment, and the highest OEWS wage level the offered salary meets. The practical effect is that wage decisions made months before the lottery now directly affect whether a candidate gets selected at all.

For an Illinois employer, this reshapes who is worth registering. A recent graduate offered an entry-level salary is a far weaker bet than a mid- or senior-level hire — not because of the candidate’s qualifications, but because of how the offered wage maps onto the weighting.

What the January 2025 Modernization Rule Still Requires

The earlier modernization rule — effective January 17, 2025 — remains in force, and its requirements still govern how petitions are built. It updated the program in three areas, and an updated Form I-129 became integral to filing under it.

• Specialty occupation. The definition was broadened so employers can accept a range of qualifying fields of study tied to the job’s duties. A bachelor’s degree is generally required, though not in every case. The position’s duties and the degree relationship still have to line up.
• Bona fide position. Employers must show a genuine specialty-occupation role exists and is available at the time of filing, supported by evidence such as contracts or work orders. Speculative or placeholder positions don’t survive scrutiny.
• Worksite changes. A new Labor Condition Application triggers an amended petition that must be filed before the worksite change takes effect.

The rule also expanded cap-exemption clarity for workers supporting qualifying nonprofits, research organizations, and universities, and confirmed that beneficiaries with a controlling interest in the petitioning company may qualify if they primarily perform specialty-occupation work. If your organization may be cap-exempt, that status is now more valuable than ever — cap-exempt filings sidestep the lottery weighting entirely, though current guidance does not exempt them from the fee analysis where a beneficiary is abroad.

Heightened Scrutiny and Compliance Exposure

The modernization rule expanded USCIS authority to conduct worksite site visits to confirm H-1B compliance, and refusing to cooperate can lead to denial or revocation of the petition. Layered on top, expanded State Department vetting now reviews H-1B and H-4 applicants’ social media and online work history as part of security screening.

The throughline across all of these changes is documentation. A petition that would have cleared review a year ago can now draw a denial if the position’s legitimacy, the wage level, or the employer’s compliance posture isn’t fully supported. With a $100,000 fee potentially at stake before filing, a denial is no longer just a delay — it can be an expensive one.

What Illinois Employers Should Decide Now

The combined effect of the fee and the wage weighting creates a sharp strategic divide, and it favors candidates who are already in the United States.

A foreign graduate on F-1 status who changes to H-1B from within the country avoids the $100,000 fee entirely. A comparable candidate located abroad generally triggers it. That single difference can make a U.S.-based hire dramatically more cost-effective than an equally qualified candidate overseas. Employers planning employment-based immigration sponsorship should weigh candidate location as heavily as candidate qualifications.

Concrete decisions worth making before the FY2027 registration window:

• Audit your candidate pool by location and status. Identify who can file as a change of status from inside the U.S. versus who would trigger the fee from abroad.
• Align offered wages with the weighting. Where a role’s budget is flexible, a higher wage level meaningfully improves selection odds.
• Reassess F-1 talent already on your team. OPT and STEM-OPT workers become your lowest-risk H-1B candidates under the new structure.
• Build the fee into worst-case budgeting for any candidate who must be petitioned from abroad, rather than assuming a court will eliminate it.
• Confirm cap-exempt eligibility if you partner with universities, research institutions, or qualifying nonprofits.

Employers can review the current requirements through USCIS’s H-1B program resources, but the filing decisions — candidate location, wage strategy, change-of-status timing — are where having counsel involved before registration protects the most value. Our attorneys work with employers on H-1B petitions and specialty-occupation sponsorship across these scenarios.

Frequently Asked Questions About the 2025–2026 H-1B Changes

Does the $100,000 fee apply to every H-1B petition?

No. It applies to new petitions for beneficiaries who are outside the United States without a valid H-1B visa, or petitions requesting consular or port-of-entry notification. It does not apply to change-of-status, extension, or amendment petitions for workers already in valid status inside the U.S., including F-1 students changing to H-1B from within the country.

Is the $100,000 fee still in effect after the lawsuits?

As of mid-2026, yes. A federal court upheld the fee in December 2025, finding the proclamation was lawfully issued. Other challenges remain in progress, so the rule could still change, but employers should plan as though it applies.

How does the wage-weighted lottery work?

The random lottery was replaced for the FY2027 cap. Selection now uses the Department of Labor’s four-level wage system, and higher wage levels receive more entries in the pool — increasing the chance of selection. Registrations must include the SOC code, area of employment, and the highest wage level the offered salary meets.

Are F-1 students affected by the $100,000 fee?

Generally no, as long as they change to H-1B status from within the United States. USCIS has confirmed that change-of-status filings for those maintaining valid status are not subject to the fee, which makes F-1 graduates already in the U.S. among the lowest-risk candidates to sponsor.

Is the January 2025 modernization rule still in effect?

Yes. Its requirements — the broadened specialty-occupation definition, the bona fide position evidence standard, the worksite-change amendment rule, and expanded site-visit authority — all still govern how H-1B petitions are prepared and reviewed.

Talk to a Chicago H-1B Attorney Before You File

Employment immigration law is constantly changing. Staying current with guidelines and regulations is critical to ensuring your employment goals have a better chance of success The decisions that now determine an H-1B outcome — whether the fee applies, how a candidate’s wage level affects selection, and whether a change of status is the safer path — are made before a petition is ever submitted. Scott D. Pollock & Associates advises Illinois employers on H-1B strategy, specialty-occupation petitions, and employment-based sponsorship under the current rules.

H-1B nonimmigrant visas allow employers to hire top-notch talent from the global workforce, improving their opportunities to achieve greater economic success for themselves and the United States.Complying with the rules of H-1B visas is particularly challenging when adapting to H-1B visa updates. Unfamiliar guidelines can cause stress and confusion. The new streamlined H-1B visa updates should lead to more transparency, flexibility, and integrity. In the meantime, we are here to answer any questions and guide you through the process, giving you an advantage in hiring the best talent for your team.

 

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