What the Rule Reached
The prevailing-wage system sorts every H-1B position into four tiers, and the two lowest are defined below the local median wage for the occupation. About 60% of positions are certified at those two levels.[2] Under random selection, an employer filing at Level 1 had the same odds as one filing at Level 4. Weighting the lottery by wage level changes that arithmetic directly.
| Element of Policy 3 | 2026 rule | Status |
|---|---|---|
| Selection favors higher wages | Yes | Weighted lottery, effective Feb 27, 2026 |
| Staffing agencies barred | No | Still eligible to sponsor |
| Direct employment required | No | No such requirement |
| H-1B program terminated | No | Program continues |
| H-1 framework restored | No | Not proposed by rule |
| Renewals limited | No | Extensions uncapped |
The Limits of the Instrument
The second major measure did not survive. A proclamation issued September 19, 2025 imposed a $100,000 fee on certain new H-1B petitions. On June 8, 2026, the U.S. District Court for the District of Massachusetts vacated it, holding that the charge was a tax rather than an immigration restriction and that the President lacked authority to impose it.[4] The First Circuit declined to stay that ruling on July 24, 2026, leaving the vacatur in effect.
Two measures, two outcomes
The weighted lottery was adopted through notice-and-comment rulemaking under existing statutory authority, and it is operating. The entry fee was imposed by proclamation and was struck down within nine months. The difference is not the policy goal, which was similar in both cases. It is whether Congress had granted the authority being exercised. Policy 3 asks Congress to grant it directly.
What regulation cannot do is change what the visa is. The H-1B statute permits staffing firms to sponsor workers they place at third-party worksites, sets no direct-employment requirement, and allows extensions without limit. Each of those is written into the Immigration Act of 1990, and each requires an amendment rather than a rule.[2]
Policy Connection
Policy 3 proposes terminating H-1B and restoring the original H-1 framework: direct employment only, no staffing agencies, genuine specialty occupations, with defined transition rules for current visa holders. The 2026 rule advances the wage objective and leaves the structural provisions in place, which is the expected limit of regulatory authority.
See The Level 1 Loophole for the wage mechanism in detail, and the scorecard for how this compares across all five policies.
Sources & Methodology
- Federal Register: Weighted Selection Process for Registrants and Petitioners Seeking To File Cap-Subject H-1B Petitions - DHS final rule text, wage-level entry weighting, and the February 27, 2026 effective date
- USCIS: H-1B Employer Data Hub - Registration volumes, approvals by employer, and wage-level certification distribution
- Niskanen Center: Legal Immigration in Numbers - Year-over-year visa issuance by category, compiled from State Department monthly statistics
- Federal Register: Restriction on Entry of Certain Nonimmigrant Workers (Proclamation 10973) - The September 2025 proclamation imposing the $100,000 fee, vacated by the District of Massachusetts on June 8, 2026
Methodology note
The weighted lottery took effect for the FY2027 cap season, so its effect on the composition of selected registrations will not be measurable until USCIS publishes selection data for that cycle. The 25% decline in H-1B issuance covers consular visa issuance and is not a count of petitions approved; the two differ because a large share of H-1B approvals are extensions for workers already in the United States. Litigation over the $100,000 fee is ongoing and the status described here is as of the publication date.