The H-1B Landscape: What’s Changing? Who’s Affected? What Does it Mean for Chicago?

Numerous changes are happening to and on the horizon for the United States H-1B visa lottery system. The White House Office of International and Regulatory Affairs (OIRA) approved a rule proposed by the Department of Homeland Security to replace the H-1B random lottery system.  New guidelines and processes through the H-1B “Modernization Rule” went into effect on January 17, 2025.

Additionally, in July 2025, the Department of Homeland Security proposed changes to the H-1B lottery system. The new system, “Weighed Selection Process for Registrants and Petitioners Seeking to File Cap-Subject H-1B Petitions”, will be implemented in 2026 for the H-1B fiscal year (FY) 2027 if approved. This new process will prioritize applicants with higher salaries, potentially reducing opportunities for lower-wage applicants. 

The program overhaul will impact many industries and employees in Chicago, Illinois, and nationwide.  Scott D. Pollock and Associates, P.C., actively tracks every development to ensure our valued clients receive informed and strategic guidance.

Timeline of Recent Key Changes to the H1-B Visa Process with the Modernization Rule

March of 2024 saw the introduction of the Beneficiary-Centric Lottery. The H-1B lottery selection process moved from a registration-based system to one where each unique beneficiary receives one registration, promoting a more even chance of selection.

Since January 2025, further changes have been enacted through the Modernization Rule. 

Why These Changes Matter

The Modernization Rule brings increased scrutiny and enforcement measures for employers and employees. The following are some of the impacts of the Modernization Rule on employers and employees. 

Employer Impact

H1-B Lottery: The new rules mean that the lottery is more likely to reward unique individuals over employers. The ability of large companies to enter multiple applications will create a more even playing field for smaller businesses.

Compliance and Oversight: Increased enforcement measures mean adhering to higher standards. USCIS can conduct employer and third-party site visits to ensure compliance.

File Amended Petitions: Employers must file a petition for material changes to employment terms.

Employee Impact

H-1B Lottery: Employees are now counted as one in the lottery regardless of how many employers register on their behalf.

F-1 Student Transitions: The cap-gap work authorization makes it easier for students transitioning from F-1 OPT or STEM OPT visas to H-1B status.

Improved Flexibility with Job Offers: Those selected in the lottery can choose from multiple job offers.

Impact of H-1B Visa Changes on Businesses

If the H-1B selection process is overhauled from a random selection process where all applicants have the same chance to a system that rewards higher wages, employers could change how they hire. Under the new system, employers may be more likely to sponsor higher-level applicants to increase the odds of being able to hire global talent, dramatically affecting the number of opportunities for international employees.

With this in mind, businesses could be impacted in numerous ways.

• Loss of entry-level talent who build future senior talent.
• Increase in labor costs, where startups, small businesses, and nonprofits could especially struggle.
• Industries with domestic labor shortages will not have enough staff.
• Reduction in the diversity of perspectives that come from different backgrounds, which is vital for our global economy.

H-1B Visa Levels

The H-1B visa is divided into four levels. Under the new rule, levels three and four would be prioritized, giving levels one and two lower odds of being granted an H-1B visa. Levels one and two are generally composed of recently graduated international students, early-career professionals, and those who work in less highly compensated jobs.

About 85,000 H-1B visas are granted yearly, with far more applicants. Last year saw over 300,000 applicants. Under this proposed system, and according to analysis of historic data, there is a chance that no level one or two applicants will be granted an H-1B. 

Level 1 – Entry Level: Requires limited or no prior work experience. Often, recent graduates, trainees, or junior-level employees.

Level 2 – Qualified: Some prior work experience and a more developed understanding of the position.

Level 3 – Experienced: Significant experience and knowledge of the field.

Level 4 – Fully Competent/Expert: Extensive experience, expert knowledge, and leadership.

What H-1B Visa Changes Mean for Chicago, Illinois

Chicago is an economic center for many industries, including technology, finance, healthcare, and academic research. The ability to hire global talent at all levels is essential to industry leaders who want to stay competitive and vital for small businesses to grow. 

Sponsoring an H-1B applicant is time-consuming and intensive; these latest changes could make it more challenging. When filing an H-1B application in Chicago, it is advisable to work with one of our experienced employment-based immigration attorneys.

How Our Chicago, Illinois Lawyers Can Help

The new and proposed H-1B visa changes mark a turning point in employment immigration policy. If you are an employer who relies on global talent or an international applicant needing assistance, contact us for guidance or to answer your questions about the latest and upcoming H-1B visa changes.