The United States is transitioning its H-1B visa selection process from a random lottery to a wage-based mechanism, a significant policy shift initiated by the Donald Trump administration. This new system, set to be implemented from February 27, 2026, for the FY27 H-1B cap registration season, will prioritize employees with higher wages and better skills. This change has raised substantial concerns within the Indian IT industry, with industry body Nasscom highlighting its potential adverse effects.

Nasscom has warned that this sudden shift to a wage-weighted model introduces considerable uncertainty, increases compliance complexities, and disrupts long-established workforce planning, particularly for smaller and mid-sized companies operating in the U.S. These firms often align their recruitment with academic calendars, client delivery schedules, and product release cycles, making them particularly vulnerable to such a drastic change. The new system's emphasis on higher wages could restrict entry-level job opportunities, potentially deterring international students from pursuing higher education in the U.S. This, Nasscom argues, could weaken the U.S. talent base and undermine the country's goals of strengthening competitiveness, driving innovation, and supporting its higher education system.

The policy change is especially impactful for Indian IT professionals, who constitute a significant portion of the U.S.-based tech workforce. Nasscom emphasized that the new H-1B visa selection process presents critical legal, economic, and operational concerns due to its significant departure from the previous lottery system. H-1B petitions in Level I and Level II wage bands, which frequently represent entry-level roles for U.S. university graduates in science, engineering, and computing disciplines, are a vital component of the STEM talent pipeline. The new framework, by assigning multiple selection entries based on Occupational and Employment Wage Statistics levels, puts the statutory focus on "specialty occupation" at risk.

While acknowledging the intent behind the proposed changes to promote high-skill employment, curb misuse, and protect U.S. wages, Nasscom has urged for a phased implementation of the wage-weighted approach, along with sufficient lead time. Specifically, they suggested delaying the full implementation until the FY28 lottery cycle. This delay, they believe, would provide employers with the necessary time to adapt processes, ensure compliance, and maintain confidence in the stability of the U.S. talent and investment environment. Nasscom underscored that the H-1B visa program is crucial not only for fulfilling labor needs but also for maintaining the U.S.'s leadership position in industries critical to the 21st century. They called for a balanced, consultative approach to ensure that reforms strengthen, rather than inadvertently weaken, the innovation advantage and global competitiveness of the United States.