WASHINGTON- The United States employers are preparing for a sharp rise in skilled immigration costs as revised H-1B visa selection rules move toward implementation in early 2026. The policy shift is expected to significantly alter hiring economics for industries that rely on foreign professionals, including technology, engineering, and aviation-linked services.
The changes will affect companies operating around major business and travel hubs such as San Francisco (SFO), where United Airlines (UA) and other large employers coexist with technology firms that hire H-1B workers. Under the new framework, higher wages will directly influence selection outcomes, raising overall payroll obligations for US employers.
US H-1B Rule Changes
The revised H-1B selection system replaces the random lottery with a wage-weighted process designed to favor higher-paid roles.
Beginning February 2026, registrations tied to senior and expert-level wages will receive multiple entries into the selection pool, while entry-level positions will receive only one.
The Department of Homeland Security has structured the system around four wage levels tied to experience and job complexity. Level I covers entry-level roles, Level II includes experienced workers, Level III represents fully competent professionals, and Level IV applies to senior experts and specialists.
Under this approach, Level IV registrations will receive four chances in the selection pool, Level III will receive three, Level II will receive two, and Level I will receive one.
This redistribution sharply reduces selection odds for lower-paid roles and shifts visa access toward higher-cost hires.
Employer Wage Impact
The wage-weighted system is projected to push the annual H-1B wage bill for US employers from $8.8 billion to $9.4 billion in the first year alone.
DHS estimates the increase at approximately $502 million, driven by a higher share of Level II, III, and IV workers being selected.
Average salaries highlight the scale of the change, with Level I workers earning about $85,000 annually, compared with more than $162,000 for Level IV professionals.
As selection outcomes tilt toward higher wage tiers, employers will face sustained increases in payroll expenses across the duration of H-1B employment.
Since H-1B status typically spans five years, DHS projects cumulative wage impacts of roughly $2.5 billion annually once the system reaches maturity. These higher costs will be most visible in sectors that already compete aggressively for senior talent.
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Wage Redistribution Effects
Beyond higher payroll totals, the rule introduces a structural transfer of income away from entry-level workers toward senior professionals.
When a Level IV worker replaces a Level I worker in the selection process, the salary difference represents a direct shift in economic benefit.
For example, replacing an $85,000 entry-level hire with a $160,000 senior hire transfers wage opportunity away from early-career applicants.
Over time, this effect is expected to reduce access to H-1B visas for new graduates while strengthening prospects for experienced global professionals.
The redistribution may also influence workforce planning, encouraging employers to prioritize fewer but more senior hires rather than building entry-level pipelines. This shift could reshape talent development strategies across multiple industries.
Bottom Line
The move to a wage-based H-1B selection system marks a decisive shift in US skilled immigration policy.
While the rule raises employer wage bills to an estimated $9.4 billion annually, it also concentrates visa access among higher-paid professionals, fundamentally changing how global talent enters the US workforce.
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