The H-1B Proclamation Nuances You Need to Know

UPDATE:

The USCIS has just clarified in an Action Decision Memorandum the following details regarding the implementation of the new H-1B fees:

“This proclamation only applies prospectively to petitions that have not yet been filed. The
proclamation does not apply to aliens who: are the beneficiaries of petitions that were filed prior
to the effective date of the proclamation, are the beneficiaries of currently approved petitions, or
are in possession of validly issued H-1B non-immigrant visas. All officers of United States
Citizenship and Immigration Services shall ensure that their decisions are consistent with this
guidance. The proclamation does not impact the ability of any current visa holder to travel to or
from the United States.”

CBP has confirmed that current H-1B holders should be able to enter the U.S. as usual.

Original Blog:

On September 19, 2025, the White House issued a proclamation titled “Restriction on Entry of Certain Nonimmigrant Workers,” signaling a significant shift in U.S. immigration policy. This proclamation introduces new financial and procedural hurdles for employers seeking to hire H-1B workers and mandates changes to prevailing wage standards. While the measure is framed as a tool to protect U.S. workers, its downstream effects are likely to be far-reaching, affecting not only employers but also international students and the broader labor market. Legally, this proclamation is not an Executive Order, nor is it legislation passed by Congress. Instead, it is a presidential directive issued under the authority of INA § 212(f), which allows the President to suspend entry of noncitizens if deemed detrimental to U.S. interests. It carries the force of law and is effective immediately unless blocked by litigation or rescinded.

The H-1B visa itself is a nonimmigrant classification that allows U.S. employers to temporarily employ foreign workers in specialty occupations, typically requiring at least a bachelor’s degree or equivalent in fields such as information technology, engineering, medicine, or finance. Employers must first file a Labor Condition Application with the Department of Labor, attesting that the worker will be paid at or above the prevailing wage and that their employment will not adversely affect U.S. workers. Contrary to a common misconception, the LCA does not require proof that a U.S. citizen or permanent resident cannot fill the position, because the H-1B system is cap-based and demand-driven rather than shortage-based. The visa is initially granted for up to three years, with extensions possible to a maximum of six years, and it has historically provided a primary pathway for international students and professionals to transition from temporary status to permanent residency.

The U.S. workforce in the IT and tech sector is substantial, with approximately 16.1 million individuals employed in 2025, representing about 7.25 percent of the total U.S. workforce. Of the total H-1B population, estimated at 442,000 to 470,000 workers across all categories, roughly 65 percent—approximately 286,000 to 305,500 individuals—are employed in computer-related or IT roles. Despite this concentration, H-1B IT workers constitute only about 1.9 percent of the total IT workforce and roughly 0.28 percent of the entire U.S. workforce, highlighting that while they play a crucial role in high-skilled occupations, they remain a small fraction of the overall labor market.

The H-1B program operates on an annual cycle. In March, USCIS opens an electronic registration window for employers, followed by a lottery if registrations exceed the statutory caps of 65,000 for regular petitions and 20,000 for applicants with U.S. master’s degrees. Employers whose registrations are selected file full petitions between April and June. Once approved, workers abroad must obtain visa stamping before they can begin employment, with the earliest start date set at October 1, the beginning of the U.S. government fiscal year.

As announced, the September 2025 proclamation adds a $100,000 fee for employers seeking H-1B workers outside the U.S., in addition to filing fees, and instructs the Department of Labor to initiate rulemaking to increase prevailing wage levels. The proclamation also includes a National Interest Exception for certain companies, such as the so-called “Magnificent 8,” and other individuals or industries deemed essential by the Secretary of Homeland Security. The measure is set to remain in effect for 12 months, with the possibility of renewal.

The policy implications are profound, particularly for small and medium-sized businesses, which may be disproportionately affected by the $100,000 fee and stricter wage standards. Many U.S. employers may turn to outsourcing or near shoring to fill talent gaps, potentially benefiting countries such as Canada. Instead of hiring American workers, U.S. companies might send those jobs overseas. International students are also likely to reconsider U.S. higher education pathways, as H-1B has traditionally been a bridge from F-1 status and OPT to permanent residence. The upward adjustment of prevailing wages will further restrict the flow of foreign workers, including H-1B and L-1A/L-1B transferees. Some H-1B workers may explore Canadian work permits through the Global Talent Stream LMIA, which offers rapid processing of about eight business days for high-demand, highly skilled positions.

Overall, the 2025 proclamation represents a major policy shift with significant downstream effects. It reinforces the role of large corporations that qualify for the National Interest Exception while creating barriers for smaller employers, except for cutting-edge small employers deemed to serve the National Interest. In effect, the proclamation allows the Administration to pick and choose which companies, on a granular level, will be permitted to hire skilled foreign workers on H-1B visas. Needless to say, the proclamation also successfully addresses the well-documented fraud and abuse by a number of unscrupulous U.S. employers, who did use the H-1B visa to depress wages and to “sell” a pathway toward permanent residency. But many companies that benefited from access to skilled international workers will now be denied access to that talent pool. It is indisputable, with Elon Musk stating as much, that a great part of current American ingenuity was built on the back of the H-1B program.

As mentioned, the proclamation is also likely to reduce the inflow of international students and foreign talent into the U.S., reshape labor supply in the IT and tech sector, and drive some high-skilled workers to explore alternative destinations such as Canada, U.K., Australia, and Europe. Employers and prospective H-1B workers should carefully evaluate the impact of these changes and seek professional guidance to navigate the evolving regulatory landscape.

We also expect litigation efforts to try to block President Trump’s proclamation, not only on the H-1B issue, but on the new Executive Order announcing the Gold Card immigrant visa program. More to come.