Donald Trump delivers remarks during a meeting with German Chancellor Friedrich Merz in the Oval Office at the White House on June 05, 2025. The Trump administration plans to publish a new H-1B rule expected to introduce additional restrictions on how employers use the visa and who qualifies for it. (Photo by Anna Moneymaker/Getty Images)
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The Trump administration plans to publish a new H-1B rule expected to propose additional immigration restrictions on how employers use the visa and who qualifies for it. Shortly before the White House announced a $100,000 fee on many H-1B visa holders, the Department of Homeland Security published its regulatory agenda. The agenda includes a rule to change the H-1B visa category.
The summary for the upcoming rule “Reforming the H-1B Nonimmigrant Visa Classification Program” states: “DHS will propose to reform the H-1B program by revising eligibility for cap exemptions, providing greater scrutiny for employers that have violated program requirements, and increasing oversight over third party placements, among other provisions. These changes are intended to improve the integrity of the H-1B nonimmigrant program and better protect U.S. workers’ wages and working conditions.” The regulatory notice lists December 2025 as a possible publication date for the rule.
H-1B temporary visas are important since they typically are the only practical way for a high-skilled foreign national to work in the United States long term and eventually gain permanent residence (a green card). The H-1B annual limit is 65,000, with a 20,000 exemption for individuals with a master’s degree or higher from a U.S. university. At U.S. universities, international students account for 73% of full-time graduate students in electrical and computer engineering. Under U.S. law, in addition to government fees often exceeding $6,000, employers must pay the higher of the actual or prevailing wage paid to U.S. professionals with similar experience and qualifications. Research indicates that H-1B visa holders are paid the same or higher salaries than U.S. workers with comparable levels of education and experience.
During Donald Trump’s first term, U.S. Citizenship and Immigration Services implemented policies that resulted in historically high H-1B denial rates, until lawsuits and a subsequent legal settlement led to the agency’s reversal of these practices. However, the Trump administration failed to publish a final rule to change the H-1B visa category. The rule was published late in the president’s term, on October 8, 2020, and a judge blocked the H-1B rule on the grounds that it violated the Administrative Procedure Act. By starting the process early in Trump’s second term, administration officials seeking to impose new H-1B restrictions hope to avoid the fate of their 2020 rule.
A Second Chance On The 2020 Immigration Rule
The Trump administration’s new H-1B rule will likely incorporate elements of its unsuccessful 2020 regulation. The rule published in October 2020 had two main goals: 1) To make it more challenging for high-skilled foreign nationals to qualify for H-1B status, and 2) to prevent H-1B visa holders from working at customer sites.
In December 2024, the Biden administration published a final H-1B rule that addressed some of the issues in the Trump administration’s rule. However, Biden officials decided on those issues in ways the business community viewed more favorably.
In the first version of its rule, which was a proposed rule, the Biden administration used the phrase “directly related specific specialty,” stating a position must require “A U.S. baccalaureate or higher degree in a directly related specific specialty or its equivalent” to enter the occupation. That phrase also appeared in the Trump administration’s October 2020 rule and would have narrowed the positions considered specialty occupations.
After attorneys and companies warned that the wording would prevent many foreign-born professionals from working in America, the Biden administration modified that section in its final rule. Although DHS retained the ‘directly related’ requirement in the definition of ‘specialty occupation,’ it added language clarifying that “directly related means there is a logical connection between the degree or its equivalent, and the duties of the position.” DHS added, “The specialty occupation definition also clarifies that although the position may allow for a range of qualifying degree fields, each of the fields must be directly related to the duties of the position.”
Kevin Miner of Fragomen noted at the time that the original language could have prevented adjudicators from allowing the H-1B category to account for emerging technologies and degree fields. “The final rule solves this concern by noting that ‘directly related’ just means that there is a ‘logical connection’ between the education and the H-1B role, which should help the H-1B category continue to evolve with technology and new kinds of jobs as they develop,” said Miner in an interview.
The Trump administration could revise this language to make it more restrictive. However, the Supreme Court decision to end Chevron deference (to federal agencies) may limit its ability to go beyond what the statute permits on this and other measures. In June 2024, the U.S. Supreme Court ruled in Loper Bright Enterprises et al. v. Raimondo: “The Administrative Procedure Act requires courts to exercise their independent judgment in deciding whether an agency has acted within its statutory authority, and courts may not defer to an agency interpretation of the law simply because a statute is ambiguous; Chevron is overruled.”
The Trump administration could revisit areas that employers supported in the Biden H-1B final rule. For example, employers and university groups favored the extension of “cap-gap” protection for international students to prevent disruptions to students’ status and work authorization. Employers and university groups also supported provisions in the final rule that allow more organizations to qualify as H-1B cap-exempt nonprofit research institutions and greater leeway for H-1B visa holders to become entrepreneurs.
The Biden final rule also eliminated the application of the “itinerary requirement” to H-1B visa holders working at different locations. Employers argued that requiring a detailed itinerary of where and how long an H-1B professional works conflicted with modern work practices.
A U.S. Citizenship and Immigration Services office in the Long Island City neighborhood of the Queens borough of New York City. (Photo by John Moore/Getty Images)
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Trump’s 2020 Immigration Rule Restricted H-1B Visa Holders Working At Customer Locations
For much of Donald Trump’s first term, Trump officials sought to make it infeasible for an employer to send an H-1B visa holder to work at a customer’s location. A 2018 “Contracts and Itineraries” memo imposed new H-1B restrictions. When companies wanted to send H-1B employees to work on customer sites, USCIS often limited the approval period, sometimes to a single day. (The October 2020 rule would have limited H-1B visa holders working on customer sites to approvals lasting only one year.) Court losses and a legal settlement led to the agency ending the practices.
In rulemaking, Trump officials attempted again to make working in H-1B status at a customer’s location far more challenging. They adopted a controversial definition of what qualified as an employer-employee relationship, changing the long-held Department of Labor meaning. After a judge blocked the October 2020 interim final H-1B rule, the Trump administration posted online (but did not publish) a “final rule” in mid-January, together with a Department of Labor memo.
Although the measures did not take effect, attorneys argue that they represented a radical interpretation of labor and immigration law. Trump officials believed they could prevent companies from employing H-1B professionals who fulfill contracts at customer locations by shifting the legal obligations onto customers. In January 2021, via the unpublished final H-1B rule and DOL memo, the Trump administration sought to require not only information technology and professional services companies to submit H-1B petitions and labor condition applications but also their customers. That would have made the customers, in effect, employers of the H-1B visa holders rather than the recipients of services.
To give a mundane example, picture a landscaping company telling a homeowner they need to assume immigration obligations for the company’s employees who mow the homeowner’s lawn or trim the bushes. Few, if any, customers will assume immigration or other legal obligations for individuals they cannot hire or fire.
The Trump administration’s rule blocking IT and other services at customer sites would have affected not only suppliers but also the companies that receive services. A similar provision in a future rule could also affect productivity. University of California-Davis’ Giovanni Peri and Kevin Shih and Colgate University’s Chad Sparber concluded that the presence of foreign STEM workers accounts for approximately 30% to 50% of the aggregate productivity growth in the United States between 1990 and 2010. A percentage point increase in the share of foreign STEM workers in a city’s employment mix “increased the wage growth of native college-educated labor by about 7 to 8 percentage points,” according to the research.
According to industry experts, IT services provided today, particularly those delivered by more established companies, are specialized and often involve substantial contracts worth several hundred million dollars or even $1 billion. The contracts typically provide skills, services or knowledge that U.S. companies do not possess in-house, or that may not make practical or financial sense to staff in-house, particularly for project-oriented work. Examples include incorporating AI throughout a healthcare provider’s network, providing technical support for a clothing company’s hardware and software across multiple platforms and initiating digital solutions to improve the operations of a pharmaceutical company.
Analysts note that by entering into expensive contracts to receive these services, companies demonstrate that they view these expenditures as necessary to compete, which means they improve the productivity of U.S. companies. H-1B visa holders are not the only professionals to service these contracts, but industry experts consider these types of technical services essential, given how the U.S. and global economy function today. (In FY 2025, there were entries for 442,000 unique beneficiaries in the H-1B registration process, according to DHS, which indicates that if no major companies that provide information technology services had received approved new H-1B petitions in FY 2025 as in previous years, the agency still would not have selected more than 300,000 H-1B beneficiaries due to the 85,000 annual limit. That indicates the most significant problem in the H-1B category for employers seeking high-skilled foreign nationals is the low yearly limit relative to the demand in a technology-driven economy.)
A New Immigration Rule To Restrict Employment-Based Green Cards
DHS will also propose a rule that could affect employment-based immigrants. According to the abstract, the proposed rule will, among other things, “update provisions governing extraordinary ability and outstanding professors and researchers; modernize outdated provisions for individuals of extraordinary ability and outstanding professors and researchers; clarify evidentiary requirements for first preference classifications, second preference national interest waiver classifications, and physicians of national and international renown.” The regulatory notice lists January 2026 as a possible publication date.
Attorneys believe the proposed rule may be the Trump administration’s opportunity to eliminate the Biden administration’s efforts to clarify and expand eligibility for O-1A visas and national interest waivers.
On January 21, 2022, the Biden administration announced new guidance that encouraged more employers and high-skilled foreign nationals to use the O-1A visa category and national interest waivers.
“O-1A [are for] individuals with an extraordinary ability in the sciences, education, business, or athletics (not including the arts, motion pictures or television industry),” according to USCIS. Receiving a national interest waiver allows individuals and employers to avoid the costly and time-consuming PERM process when filing for an immigrant visa in the employment-based second preference category.
After the new guidance, O-1A applications rose from 7,710 in FY 2021 to 10,010 in FY 2023, and the approval rate remained above 90%. There is no annual limit on O-1A visas.
Receipts for national interest waiver requests increased by 51% from FY 2021 to FY 2022 (14,610 to 21,990), according to a National Foundation for American Policy analysis. For FY 2022 to FY 2023, receipts for national interest waiver requests rose by 81%, from 21,990 to 39,810, although the approval rate declined.
Efren Hernandez, until recently a supervisory policy analyst at USCIS and now the founder of EH3 Immigration Consulting, believes DHS may make it harder for individuals to qualify under the employment-based first preference, also known as EB-1. He pointed out in an interview that to demonstrate “extraordinary ability” under the EB-1 category, a green card applicant must “provide evidence of a one-time achievement (i.e., Pulitzer, Oscar, Olympic Medal)” or to meet at least 3 of 10 criteria, such as “evidence of your authorship of scholarly articles in professional or major trade publications or other major media.” DHS could raise that bar, for example, by requiring an applicant to meet 5 of 10 criteria or not allowing reasonable alternatives in fields that don’t have annual awards or that match the examples USCIS cites.
In recent research, economists Exequiel Hernandez (UPENN Wharton School), Britta Glennon (UPENN and NBER) and Jens Friedmann (Erasmus University Rotterdam School of Management) concluded that the more restrictions a company encounters on hiring foreign-born talent, the more acquisitions it will subsequently make. “In terms of immigration policy, our findings challenge the narrative that constraining immigration creates more opportunities for native workers,” according to the authors. “An acquisition is a very strong, costly commitment—both in terms of the purchase price and in the organizational adjustments required to make such a transaction work. It is unlikely that firms would be responding to immigration restrictions through acquisitions unless the need for the foregone talent were real.”
Exequiel Hernandez said in an interview that the research shows policymakers harm U.S. competitiveness when they restrict high-skilled immigration. “I think the paper is one more drop in the ocean of evidence that high-skilled immigration policy in the U.S. cannot be based on the assumption that there’s a readily available pool of U.S.-born workers firms would hire if we restrict visas for foreign-born workers.”
