Trump Official Brands H‑1B System a “Scam,” Promises Major Overhaul

President Trump’s team has stepped up its overhaul of the H-1B visa program, calling parts of the system a “scam” and pushing changes that favor higher-paid, highly specialized roles while tightening entry-level hiring. Over the past year, officials have issued a sweeping set of rules and are moving to replace the long-running lottery with a wage-based selection system, while also increasing audits and site visits that many employers say add cost and uncertainty.

The most immediate change is the Department of Homeland Security’s H-1B Modernization Final Rule, announced on December 18, 2024 and effective January 17, 2025. The rule updates how “specialty occupation” is assessed, stating that a job’s required degree must be directly related to the actual duties. It also extends cap-gap protection for F-1 students selected for H-1B, letting them keep lawful status and work authorization until as late as April 1 of the next fiscal year, easing employment breaks for new graduates.

The rule codifies USCIS’s practice of giving deference to prior approvals when the parties and facts match, and it formally strengthens site-visit authority and penalties for compliance failures. A key paperwork change is the mandatory Form I-129 (edition 01/17/25) for all H-1B filings starting January 17, with no grace period; older editions are rejected. USCIS’s H-1B information and updates are posted on the USCIS H-1B program page, and the current petition form is available at Form I-129.

Proposed Wage-Based Selection

Administration officials say those steps are only the start. On August 8, 2025, the Office of Information and Regulatory Affairs cleared a draft rule that would swap the random H-1B selection with a wage-based system. Publication in the Federal Register is expected soon, followed by a public comment period.

If finalized, the new system would:

• Rank registrations by offered wage, pushing higher-wage roles to the front.
• Make it harder for entry-level and lower-paid roles to be selected.
• Potentially align visas more with top-end skills, according to supporters.

Critics warn the proposal would shut out promising early-career talent and give very large companies even more of an edge.

“We are going to start picking the best people to come into the country,” President Trump said, framing the changes as part of a broader move to draw top talent and reduce the admission of lower-paid foreign labor.

The White House’s message has set the tone: raise standards, press compliance, and limit pathways that appear to undercut local hiring.

Enforcement, Audits, and Adjudication Trends

Requests for Evidence (RFEs), site visits, and audits are becoming more common under this strategy, according to employers and attorneys. USCIS has signaled it will verify:

• Job locations
• Duties and supervision
• Wage levels

Historical denial-rate context:

• During President Trump’s first term, H-1B denial rates rose to 24%.
• Under President Biden, denials fell to roughly 2–4%.
• Many practitioners now expect denials and RFEs to climb again as adjudications tighten, though outcomes will vary by case strength, wage level, and how clearly the job maps to a specific field of study.

One administrative change with significant practical effects: the Office of the Citizenship and Immigration Services Ombudsman—which helped resolve case problems and bottlenecks—was shut down earlier in 2025. Without this channel, immigrants and employers may have fewer options to fix errors or delays outside normal USCIS processes, increasing the stakes for timely, complete filings.

Policy Changes Overview

• Specialty occupation clarity: Employers must show the job truly requires a degree in a field directly tied to the role’s core duties. Broad or loosely related degrees will face tougher questions, especially for consulting or hybrid roles.
• Cap-gap extension to April 1: F-1 students moving to H-1B can keep working longer while they wait for the October 1 start date, reducing employment gaps for graduating classes.
• Deference to prior approvals: Extension petitions with the same parties and facts should receive deference, barring a material error in the earlier approval.
• Stronger site-visit powers: USCIS affirmed its right to visit worksites, review records, and sanction noncompliant employers.
• Mandatory new form: Only the Form I-129 (01/17/25) edition is valid for H-1B filings starting January 17, 2025; older editions are rejected on intake.

A separate, pending rule would rank H-1B selections by wage, which could reshape who even gets a chance to file a petition under the 85,000 annual cap. The Office of Information and Regulatory Affairs approval means the proposal is close to publication; the comment period and likely legal challenges will define timing and final content.

Impact on Applicants and Employers

• Geographic and demographic effects
  • Indian nationals historically receive about 70% of H-1B visas; a wage-based selection would likely affect Indian IT professionals and recent U.S. graduates most.
  • Smaller U.S. employers that pay below market could lose slots to large firms in high-wage markets.
• Examples
  • A master’s graduate in computer science on an F-1 visa may enjoy a longer cap-gap window but could be ranked behind a senior applicant offering a higher wage.
  • A small Midwest startup offering entry wages might see its H-1B slot go to a large coastal firm that sets top wage levels.
• Universities and research labs
  • Wins: clearer deference on extensions and better cap-gap coverage for alumni moving into research roles.
  • Concerns: chilled recruitment if wage ranking reduces chances for early-career graduates in lower-paying but essential fields.
• Advocacy and business responses
  • Immigration advocates warn a strict wage ladder can reduce diversity in the talent pipeline and hurt fields like public health, education tech, and nonprofit analytics.
  • Business groups welcome clarity on forms and deference but say stepped-up site visits and unpredictable RFEs increase compliance costs and risk.

According to analysis by VisaVerge.com, the combined effect of higher scrutiny, a tighter specialty-occupation test, and wage-based selection could narrow the H-1B pathway to a smaller pool of elite, high-wage roles. Many entry-level workers might look for other status options or leave the United States after graduation.

Legal experts anticipate lawsuits once the wage-based selection rule is published—similar efforts were blocked in the past on statutory authority and fairness grounds. Employers that rely on the H-1B pipeline (including mid-size regional firms and IT consulting shops) are preparing comments and exploring alternatives such as:

• Cap-exempt positions
• Remote teams abroad
• Training U.S. workers in-house

Employer Action Items for FY2026 Planning

Companies planning FY2026 H-1B hiring should manage two parallel tracks:

1. Comply with the Modernization Final Rule already in force.
2. Watch for wage-ranking details that will determine realistic selection chances next round.

Common employer adjustments:

• Tighten job descriptions to match degrees more precisely.
• Raise wages where budgets allow.
• Prepare for site visits by tightening documentation and supervision records.
• Front-load evidence: market wage surveys, detailed duty lists, and supervision plans to reduce denial risk.

What Happens Next

• The wage-based selection proposal is expected to publish soon, launching a formal notice-and-comment period. Employers should prepare to submit comments with data on wages, hiring needs, and regional labor markets.
• Expect more RFEs and site visits through upcoming filing cycles. Set internal calendars for audit readiness, including:
  • Vendor oversight documentation
  • End-client letters
  • Day-one worksite availability
• Verify forms: every H-1B petition filed on or after January 17, 2025 must use the Form I-129 (01/17/25) edition. File from the correct address and include required fees and signatures to avoid rejections.
• F-1 students should plan around the extended cap-gap to April 1, but also prepare backups if wage ranking reduces selection chances: consider STEM OPT extensions, cap-exempt jobs, or different visa categories where appropriate.
• Monitor USCIS and DHS updates. The USCIS H-1B program page posts official guidance. The Federal Register notice will outline the wage-based proposal’s details, timelines, and how to comment.

Practical Implications for Workers and Families

These regulatory shifts are concrete for individuals and employers:

• An entry-wage software tester may see their selection odds fall even with employer support.
• A data scientist with a top-tier offer could benefit from wage ranking but still face more intense petition scrutiny.
• Small firms may raise pay bands or delay projects; large firms may leverage higher wages to secure talent.
• Attorneys expect many employers to present strong upfront evidence to reduce denial risk.

The central question in the coming months: will a wage-based selection replace the lottery in time for the next H-1B cycle? Until that is settled, employers and applicants must meet the already-effective requirements, plan for tougher reviews, and be ready to adjust recruiting strategies if the selection process changes.

For now, the message from Washington is clear: higher pay, tighter degree alignment, more checks, and a smaller welcome mat for entry-level roles, even as F-1 graduates gain longer cap-gap protection that helps them remain on payroll while they wait.