(CALIFORNIA) — U.S. employers filed fewer H-1B-related labor condition applications in the first quarter of Fiscal Year 2026, even as demand stayed concentrated in Software developers and in California developers, government data showed.
DOL OFLC data for the quarter ending December 2025 recorded 76,164 Labor Condition Applications (LCAs) filed, a 23.1% decline from the same period a year earlier.
The drop matters early in the FY 2026 cycle because LCA activity often signals how many employers are preparing to sponsor foreign workers, even before petitions reach U.S. Citizenship and Immigration Services.
Software roles remained central to that pipeline, and California continued to dominate, keeping the H-1B Visa debate focused on whether changing rules and new costs will reshape which jobs, workers and regions win approvals.
USCIS framed the FY 2026 cap picture early, announcing on March 31, 2025: “U.S. Citizenship and Immigration Services has received enough electronic registrations for unique beneficiaries during the initial registration period to reach the fiscal year (FY) 2026 H-1B numerical allocations (H-1B cap), including the advanced degree exemption (master’s cap).” The agency posted the alert at FY 2026 H-1B initial registration selection process completed.
That “cap reached” language refers to the annual numerical limits on new H-1B approvals, including a separate pool for applicants covered by the advanced degree exemption, also known as the master’s cap.
Fee policy changed the cost side of the program later in the year, when a Presidential Proclamation added a new payment requirement tied to filing dates.
A USCIS page summarizing the proclamation said: “Under the Proclamation, new H-1B petitions filed at or after 12:01 a.m. eastern daylight time on September 21, 2025 must be accompanied by an additional $100,000 payment as a condition of eligibility.” USCIS included that language on its H-1B specialty occupations page.
Regulators also moved the selection rules toward wage-based weighting. On Dec. 23, 2025, DHS announced a final rule to: “.amend regulations governing the process by which USCIS selects H-1B registrations. The rule implements a weighted selection process that will favor allocating H-1B visas to higher-skilled and higher-paid aliens while maintaining the opportunity for employers to secure H-1B workers at all wage levels.” The rule is effective February 27, 2026, DHS said in an alert at DHS announces final rule to modernize H-1B selection process.
The first-quarter DOL OFLC figures sit upstream from USCIS decisions. LCAs are employer attestations tied to job roles, worksites and wage requirements, and they do not by themselves mean a worker has a visa.
Even so, immigration lawyers, employers and workers watch LCA filings because they indicate how many positions companies are positioning for the H-1B pipeline, and where those positions cluster.
In Q1 FY 2026, employers filed 76,164 LCAs and DOL certified 75,488, reflecting a high certification rate that the data described as over 90%.
Software Developers accounted for the largest share of certified positions, with 55,517 (34%) of all certified roles, the DOL OFLC data showed.
Geography also stayed concentrated. California led with 53,940 certified positions, or 33% of the national total, followed by Texas at 12.6% and Washington at 7.8%.
Nearly 68% of all certified H-1B positions were located in five states: California, Texas, Washington, New York, and Illinois, the data showed, underscoring how a small set of labor markets captures most of the program’s certified demand.
Officials did not attribute the Q1 decline to a single cause in the government statistics, but the quarter unfolded after a series of compliance and cost changes that employers must now price into sponsorship decisions.
The additional $100,000 payment attaches to “new H-1B petitions filed at or after 12:01 a.m. eastern daylight time on September 21, 2025,” creating a higher upfront threshold for filing in cases covered by the proclamation language published by USCIS.
That added cost can influence which jobs employers choose to sponsor, and when, especially for firms that submit multiple petitions or rely on H-1B hiring to staff client work.
USCIS also implemented a “beneficiary-centric” approach for the FY 2025 and FY 2026 caps, a change the government data described as reducing “multiple registrations” for the same person, which can make topline demand appear lower while shifting the count toward unique individuals.
For employers, fewer duplicate registrations can change expectations about how many entries translate into real petition work, because the registration pool can better reflect distinct candidates rather than repeated submissions.
The coming shift to a weighted selection rule adds another moving part. DHS said the final rule effective February 27, 2026 “will favor allocating H-1B visas to higher-skilled and higher-paid aliens” while still “maintaining the opportunity” for employers at all wage levels, which puts compensation strategy closer to the center of cap-season planning.
For workers and companies, the combination of lower LCA volume and changes in selection mechanics shapes how people read the odds. The government figures described a higher selection rate under the unique beneficiary system, putting it at roughly 35% in FY 2026 versus 29% in FY 2025.
That directional increase can look encouraging for registered beneficiaries, but the cost environment and the tilt toward higher pay can raise questions about who gets sponsored in the first place, particularly for roles and candidates at lower wage levels.
The data also pointed to pressure on early-career candidates. It described the combination of the $100,000 fee and the shift toward higher-wage selection as making it harder for “entry-level developers or those at lower wage levels to secure sponsorship,” and it tied the wage-focused change to a timeline “starting FY 2027.”
Operational performance offered a different signal. Despite lower volume, the government data said USCIS processed 100% of applications on time during the Q1 period, which it described as indicating no backlogs for remaining filings.
Even with that on-time figure, cap season still concentrates filings and deadlines, and companies typically align internal recruiting and legal review around registration and petition windows, especially when selection outcomes drive whether petitions can proceed.
The concentration story remained unmistakable in the Q1 numbers: California and Software developers led by wide margins, and the spread across a handful of states reinforced how the program continues to track the country’s largest tech and consulting ecosystems.
Software developer roles also persisted as the top category by share. The DOL OFLC figures put Software Developers at 55,517 (34%) of certified positions, far ahead of Electronics Engineers at 11.9% and Occupational Therapists at 6.0%.
California’s lead stood out not just in rank but in scale. The state’s 53,940 certified positions represented 33% of the national total, leaving all other states competing for the remaining two-thirds, even as Texas and Washington followed as the next-largest shares.
Such concentration can shape recruiting behavior. Employers seeking H-1B workers for Software developers can face the combined effects of competition within dominant hubs, shifting selection mechanics, and higher filing costs that may change which roles get prioritized for sponsorship.
Outside the largest hubs, the same concentration can alter incentives, pushing some firms to weigh whether to sponsor at all, or to focus sponsorship on positions that align with higher wage levels if the weighted selection process rewards those filings.
For California developers and other Software developers tracking the FY 2026 cycle, the most direct way to confirm cap updates and rule effective dates remains the federal websites that publish the underlying alerts and program descriptions.
USCIS maintains its H-1B program information on its H-1B specialty occupations page, and it posts cap and selection alerts through its newsroom, including the March 31, 2025 notice at FY 2026 H-1B initial registration selection process completed and the Dec. 23, 2025 rule announcement at DHS announces final rule to modernize H-1B selection process.
DOL publishes LCA filings and certifications through its OFLC performance reporting, including the data cited for Q1 FY 2026, at foreignlaborcert.doleta.gov.
Reconciling the two sets of metrics requires keeping the pipeline straight: DOL OFLC LCA counts track employer labor-condition attestations tied to roles and locations, while USCIS metrics track registrations, selections and petitions that determine who ultimately receives an H-1B approval under the cap and the advanced degree exemption.
As DHS put it when finalizing the selection change, the new approach “will favor allocating H-1B visas to higher-skilled and higher-paid aliens while maintaining the opportunity for employers to secure H-1B workers at all wage levels.”
H-1B Visa Applications Drop 23% as California Developers Lead Demand
Data for FY 2026 shows a significant decrease in H-1B labor filings, even as tech hubs like California and Texas remain the top destinations for software talent. New federal rules now emphasize wage-based selection and impose higher financial burdens on employers. While processing times remain efficient, the combination of increased costs and a shift toward high-earning beneficiaries marks a transformative phase for U.S. specialty occupation visas.
