H-1B Visa Changes 2026: What Employers Must Know About Fees, Lottery Odds, and Workforce Risk

The H-1B visa changes in 2026 represent the most significant shift in the program in decades. A $100,000 supplemental fee, a wage-based H-1B lottery, expanded FDNS enforcement, and the elimination of automatic EAD extensions are transforming immigration from an administrative function into a core workforce risk for employers.

For companies that depend on foreign national talent, these changes alter hiring economics, selection probability, compliance exposure, and retention strategy — often simultaneously. Employers must now evaluate sponsorship decisions alongside financial forecasting, geographic workforce design, and operational continuity planning.

Employers need clarity — on cost exposure, selection probability, compliance risk, and operational safeguards. Here’s what’s changing and how to plan for it.

2025–2026 H-1B changes at a glance

The $100,000 H-1B fee: Scope, risk, and budget impact

What’s known about the 2025 H-1B supplemental fee

A presidential proclamation issued in September 2025 introduces a $100,000 supplemental fee for certain H-1B visa petitions filed on or after September 21, 2025. This fee primarily applies when:

• The H-1B beneficiary is outside the United States and does not already hold valid H-1B status, or
• The petition requests consular notification, even if the worker is physically present in the U.S.

Who is exempt from the fee

The supplemental fee does not apply to:

• F-1 students changing status to H-1B from within the U.S.
• H-1B extensions, amendments, or transfers for employees already in valid H-1B status

Budget and planning considerations

Employers sponsoring H-1B workers overseas should factor this supplemental fee into hiring budgets, as it can significantly increase the cost of international talent acquisition. Modeling potential scenarios now can help avoid unexpected budget impacts.

You can read more about increased fees for H-1B visas in Safeguard Global’s blog post from September 2025.

Legal status

A federal court declined to block implementation of the fee in December 2025. Additional litigation remains pending, but employers should plan as if the fee will remain in effect through at least September 2026, when the proclamation is scheduled to expire unless extended.

Business Impact

For employers hiring directly from abroad, the cost math changes immediately:

These numbers force explicit considerations. Does the role justify a six-figure premium? Should U.S.-based pipelines, such as F-1 graduates or domestic sourcing, take priority? Does it make more sense to hire the person in Toronto or London and skip the visa entirely? A narrow national-interest exemption exists, but agency guidance describes qualifying cases as extraordinarily rare. Don’t build a hiring plan around it.

How the wage-based H-1B lottery changes employer strategy

Each year, U.S. Citizenship and Immigration Services (USCIS) receives far more H-1B registrations than the statutory annual cap allows (currently 85,000 new visas, including the advanced-degree allocation). When demand exceeds supply, USCIS conducts a lottery to determine which registrations may proceed to full petition filing.

Beginning with the March 2026 registration cycle, USCIS plans to replace the traditional random selection process with a wage-weighted system. Under the proposed model, registrations receive weighted entries based on the Department of Labor’s four prevailing wage levels:

Higher wages don’t guarantee selection, but they materially improve odds. USCIS modeling estimates suggest Level IV registrations may approach approximately 60% selection probability, while Level I registrations may fall closer to 15%. These are agency projections, not outcomes — actual results depend on registration volume and wage distribution.

How worksite location and wage levels impact H-1B lottery odds

H-1B lottery outcomes are influenced less by absolute salary and more by prevailing wage level, which depends on both occupation and geographic location. For example, a software engineer earning $120,000 may qualify as Level II in San Francisco but as Level III or IV in Austin. This makes compensation strategy, job classification, and worksite location critical factors in selection odds.

For a 500-person tech company sponsoring 15 H-1Bs annually, the strategic trade-offs are tangible:

• Is a $15,000–$25,000 salary increase justified to move a candidate from Level I to Level II, effectively doubling their lottery entries?
• Should entry-level roles shift entirely to domestic hiring pipelines to improve selection probability?
• Does redistributing roles to lower-cost geographies enhance both lottery odds and total compensation economics?

These decisions are now CFO-level considerations, not just compliance questions for immigration counsel, highlighting the intersection of talent strategy, payroll budgeting, and U.S. immigration policy.

FDNS site visits: Compliance is no longer optional

The Fraud Detection and National Security Directorate (FDNS) has significantly expanded unannounced H-1B site visits. Employers should operate under the assumption that inspections are expected — not exceptional.

What FDNS reviews

During a site visit, FDNS officers evaluate whether your H-1B petition accurately reflects the employee’s real-world work conditions and complies with both Department of Labor and USCIS requirements.

Specifically, officers verify:

• Worksite location and job duties match what was listed in the petition
• Wage compliance, including salary consistency with the certified Labor Condition Application (LCA)
• A valid employer–employee relationship, particularly in third-party placement scenarios
• Properly maintained Public Access Files (PAFs) and supporting documentation

Failure to cooperate, inconsistencies between filings and reality, or inability to produce documentation can lead to petition denial, revocation, and increased scrutiny across your broader immigration program.

For employers utilizing third-party placement models, compliance risk multiplies. FDNS officers may conduct verification at the end-client location — not just your corporate office — and will assess supervision, control, and contractual structure.

What to do

Designate a trained point of contact who knows how to handle an unannounced visit without improvising. Maintain audit-ready Public Access Files. Make sure H-1B employees understand their own petition details — FDNS officers will ask them directly. And run quarterly internal compliance audits, not annual checkups. By the time you find a problem annually, FDNS may have found it first.

Elimination of automatic EAD extensions: Workforce disruption and employer compliance risk

As of October 30, 2025, most categories no longer receive automatic EAD extensions while renewal applications are pending. Employment authorization now ends on the card expiration date, even if a renewal is timely filed. This affects H-4 spouses, adjustment-of-status applicants, and asylum applicants. F-1 STEM OPT retains its separate 180-day extension, and TPS categories may receive relief via Federal Register notices.

The operational problem is straightforward and severe: based on USCIS processing data as of late 2025, a substantial share of EAD renewals exceed 180 days. That means even diligent employers who file on time can lose workers to authorization gaps — employees forced off payroll, sitting at home, waiting for a card.

File renewals at the earliest permitted date (180 days before expiration). Implement layered alert systems at 180, 90, and 30 days. And update your I-9 practices — receipt notices no longer suffice as continued work authorization for most categories.

Immigration uncertainty and employee retention risk: Managing workforce attrition in 2026

The compliance changes get the headlines, but the retention impact may matter more over the long term.

Foreign national employees living through this environment aren’t just tracking policy changes — they’re recalculating whether staying with their current employer is worth the risk. When visa outcomes are unpredictable, when EAD gaps can pull them off payroll, when a lottery redesign might favor a different company’s offer, the rational move is to explore options. And they are.

This is where California’s stay-or-pay ban (Assembly Bill 692, effective January 1, 2026) compounds the pressure. The law prohibits requiring workers to repay training, relocation, or employment-related costs upon separation, with penalties of $5,000 or actual damages, whichever is greater. Employers who previously relied on repayment agreements as a retention backstop need to pivot to positive retention tools — deferred bonuses, equity vesting schedules, career development commitments — or accept higher attrition.

The employers who hold onto critical talent through this period will be the ones who communicate clearly about immigration timelines and realistic outcomes, provide visible support through the process, and treat visa-dependent employees as people navigating genuine uncertainty — not headcount to be managed.

Strategic alternatives to default H-1B reliance

H-1B should now be treated as one option within a broader immigration portfolio strategy — not the default pathway. Each alternative fits a different workforce profile and business objective:

• O-1 visa (extraordinary ability): Suitable for individuals with significant achievements — researchers with major publications, engineers with patents, executives with documented industry impact. High evidentiary standard, but not subject to the H-1B lottery or annual cap.
• L-1 visa (intracompany transfer): Allows transfer of employees who have worked for a foreign affiliate for at least one year. Often the fastest path for senior technical or managerial talent if international offices already exist.
• TN visa (USMCA professionals): Available to Canadian and Mexican professionals in designated occupations. Generally faster and more cost-effective than H-1B, though limited to listed professions.
• Direct green card strategies (EB-1 and EB-2 NIW):
• EB-1: For extraordinary ability individuals, outstanding researchers, and multinational executives/managers.
• EB-2 National Interest Waiver (NIW): For advanced-degree professionals whose work benefits the United States. These options bypass the H-1B process entirely for top-tier, long-term talent.
• Global hiring models: Placing employees in jurisdictions with favorable immigration frameworks (e.g., London, Dublin, Singapore) can reduce reliance on U.S. visa constraints and mitigate H-1B lottery risk.

What this means for your organization

The 2026 H-1B environment rewards preparation. Three questions should drive your workforce planning:

• Which roles or teams are most dependent on H-1B talent — and what happens to the business if those roles go unfilled for six months?
• Where does the organization have geographic or structural flexibility to hire outside the U.S. visa system?
• And what’s the total cost of sponsorship now — not just legal fees, but the $100,000 supplemental, the salary adjustments for lottery positioning, the operational disruption of EAD gaps?

Employers who work through these questions now will maintain access to global talent. Those who wait will face higher costs, worse odds, and more disruption — with fewer options to absorb the impact.

Immigration risk is now a business continuity issue — not just paperwork

For many companies, immigration is no longer just a compliance function — it is a workforce planning and financial risk issue.

Consider a mid-size technology firm with 20 active H-1B sponsorships and critical 2026 product launches. A single unfavorable H-1B lottery cycle can derail hiring plans. An EAD renewal delay can force a key employee off payroll mid-project. A proposed $100,000 supplemental fee on certain overseas hires can destabilize budgets overnight.

These are not hypothetical scenarios. HR leaders and CFOs are actively modeling immigration-related risk across headcount planning, project timelines, and revenue forecasts.

The 2025–2026 immigration changes — including increased enforcement, EAD authorization gaps, and lottery restructuring proposals — fundamentally shift the risk profile for employers that depend on foreign national talent. Delays and denials no longer affect just one petition; they disrupt product delivery, strain teams, and compound into broader business continuity challenges.

Employer action plan for 2026: Immediate immigration compliance priorities

Businesses should treat 2026 workforce planning as a coordinated immigration risk strategy — not an administrative exercise. Immediate action steps include:

• Model prevailing wage levels for every anticipated 2026 H-1B registration. If lottery selection becomes wage-tier weighted, compensation strategy will directly influence selection probability and hiring outcomes.
• Scenario-plan for the proposed $100,000 supplemental fee on certain overseas hires. Even while litigation and rulemaking continue, budget forecasting should account for potential exposure to avoid last-minute cost shocks.
• Accelerate EAD renewal tracking and filing. Submit renewal applications at the earliest permitted date (180 days before expiration) and implement layered 180/90/30-day escalation alerts to prevent avoidable work authorization gaps.
• Conduct a pre–year-end audit of California employment agreements. Remove or revise stay-or-pay provisions in light of Assembly Bill 692 to avoid statutory penalties and litigation risk.
• Establish and train a formal FDNS site visit response team. With inspections expanding, employers should maintain a documented response protocol, centralized Public Access Files, and designated personnel prepared to engage with officers immediately.

Organizations that act early will preserve hiring flexibility, protect workforce continuity, and reduce exposure to compliance disruption in an increasingly restrictive immigration environment.

How Safeguard Global can help

The rising H‑1B costs, lottery uncertainty, and tighter work authorization rules are no longer just compliance issues — they are strategic business risks. Safeguard Global helps companies model the total cost of hiring under these new conditions and determine whether global employment structures can reduce sponsorship expenses while maintaining operational flexibility.

When U.S.-based hiring becomes costly or uncertain, Safeguard Global’s employer-of-record (EOR) solution provides a compliant way to hire, onboard, pay, and manage employees in 187+ countries — without establishing a local entity. This enables organizations to maintain access to critical talent, redistribute roles globally, and continue business operations without disruption.

By partnering with Safeguard Global, employers gain more than compliance support: they build resilient, long-term talent strategies that withstand policy changes, litigation outcomes, and unpredictable immigration shifts. For companies navigating a more complex global hiring landscape, this is how you protect your workforce, your projects, and your bottom line.

Frequently Asked Questions (FAQs): H-1B visa changes 2026

Who must pay the $100,000 H-1B fee?

The fee applies to certain petitions filed on or after September 21, 2025, primarily for beneficiaries outside the U.S. or petitions requesting consular notification. F-1 status changes, extensions, amendments, and transfers are generally exempt. Employers should model the financial impact in advance for international hires.

Is the $100,000 fee permanent?

No. The fee is tied to a presidential proclamation expiring in September 2026. Litigation is ongoing, and courts have declined to block it so far. Companies should plan as if it will take effect but track legal developments closely.

How does the wage-based lottery work?

USCIS weights lottery entries by prevailing wage level: Level IV receives four entries, Level I receives one. Higher wages improve selection odds but do not guarantee approval. Employers may want to model multiple scenarios to optimize hiring outcomes.

Does paying more guarantee selection?

No. Selection depends on total registrations and wage distribution in a given lottery cycle. Paying higher wages increases statistical odds but does not ensure selection.

Are entry-level H-1B positions still viable?

Yes, but with significantly lower lottery odds under the wage-based system. Employers should explore alternative visa pathways or domestic talent pipelines for junior roles.

What happens if an EAD expires while renewal is pending?

For most categories, employment authorization ends on the card expiration date, even if the renewal application was filed on time. Employers must file early and implement tracking systems to prevent gaps in work authorization.

Are FDNS site visits mandatory?

Not in every case, but FDNS inspections have expanded significantly. Employers should assume visits are likely and maintain audit-ready systems, including Public Access Files and documentation of worksite compliance.

How does California’s stay-or-pay ban (Assembly Bill 692) affect employers?

Effective January 1, 2026, employers cannot require repayment of training, relocation, or employment-related costs when an employee separates. Employers should pivot to deferred bonuses, equity vesting, or other positive retention strategies.

What visa alternatives exist beyond H-1B?

Options include:

• O-1 for individuals with extraordinary ability or achievements
• L-1 for intracompany transfers of employees who worked at a foreign affiliate for at least one year
• TN visas for Canadian and Mexican professionals under USMCA
• EB-1 and EB-2 National Interest Waiver (NIW) green card strategies for long-term top-tier talent
• Global employment models using employer-of-record structures to hire internationally without U.S. sponsorship