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The US is tightening H-1B visas. Its economy may pay the price
ET Bureau | May 12, 2026 4:19 AM CST

Synopsis

A wave of legislative proposals in Washington targets the H-1B visa program and the broader immigration pipeline for skilled workers. Bills like the End H-1B Visa Abuse Act 2026 propose pauses, reduced caps, higher salaries, and elimination of Optional Practical Training.

Lubna Kably

Lubna Kably

Lubna Kably is a senior editor, who focuses on various policies and legislation. In particular, she writes extensively on immigration and tax policies. The Indian diaspora is the largest in the world; through her articles she demystifies the immigration-policy related developments in select countries for outbound students, job aspirants and employees. She also analyses the impact of Income-tax and GST related developments for individuals and business entities.

A flurry of anti-H-1B legislative proposals has emerged in Washington, targeting not just temporary work visas but the broader pipeline that attracts international students and skilled professionals to the US. The latest proposal introduced last month is the End H-1B Visa Abuse Act 2026. The bill seeks a 3-yr pause on new H-1B visas, reduction of annual cap from 65,000 to 25,000, a minimum salary threshold of $2 lakh, elimination of optional practical training (OPT), the post-study work programme for international students, and restrictions on H-1B holders transitioning to green cards.

The legislation also proposes barring staffing firms from using H-1B visas, and requires sponsoring employers to certify that they cannot find a qualified American, and have not conducted layoffs. It also disallows H-1B holders from bringing dependents to the US.

Some measures suggested in the bill, like prohibiting federal agencies from sponsoring or employing non-immigrant workers, are being witnessed in some states. Florida's public university system has halted new H-1B visa hires till January 2027. Texas governor Greg Abbott ordered a similar hiring freeze for state agencies and public universities that will remain in place till May 2027.


In February, EXILE (Ending Exploitative Imported Labor Exemptions) Act was introduced that seeks to eliminate H-1B altogether starting FY2027. The bill frames the visa programme as harmful to Americans. Around the same time, End H-1B Now Act was introduced, which also aimed at abolishing H-1B.

PAUSE (Pausing All Admissions Until Security Ensured) Act, introduced in late 2025, seeks to freeze legal immigration admissions until certain restrictive provisions are introduced in law, like ending adjustment of status for H-1B visa-holders (transition to a green card) and scrapping OPT. It also seeks to deny various benefits to non-citizens.

Among these bills, H-1B and L-1 Visa Reform Act introduced in September 2025 stands apart. This legislation has bipartisan backing and carries greater policy significance. It prioritises visa issuances to STEM workers, mandates higher salaries for foreign hires, and requires employers to certify that H-1B hires have not displaced American workers.

US immigration legislation is notoriously difficult to pass, particularly in the senate where bipartisan support is usually essential. Bills that seek to abolish entire visa categories, or freeze skilled immigration, face resistance from large sections of the US business community, universities, hospitals and tech companies.

But dismissing these proposals as mere political theatre would be a mistake. The Trump regime has already begun reshaping the H-1B landscape through executive action and regulatory changes. H-1B cap lottery for the fiscal beginning this October saw a major shift with a weighted selection process that favours higher-paid applicants.

The next likely frontier is wage escalation across all levels of H-1B hiring. This is arguably the clearest signal that the future of H-1B policy will increasingly revolve around salary levels.

Immigration policy driven primarily by political messaging often creates distortions. The US does have legitimate concerns that include misuse, wage suppression and over-dependence on temp foreign labour. But blunt restrictions are rarely effective policy.

Just weeks after tightening visa restrictions and freezing processing for individuals from travel-ban countries, the Trump regime quietly reversed course for physicians after hospitals, medical groups and residency programmes warned of severe disruptions to patient care. Doctors from affected countries were again allowed to continue visa, work permit and green card processing because the US healthcare system simply could not afford to lose them.

The same logic applies more broadly to science, engineering, medicine and emerging technologies. What America needs is rational reform. Australia, for instance, regularly updates a relatively focused skilled occupation list based on actual labour shortages. Instead of allowing H-1B to become overly concentrated in a few sectors, the US could also move towards such a transparent and dynamic shortage-based system.

Canada's points-based permanent residency model also offers useful ideas. Rather than trapping skilled workers in decade-long green card backlogs dependent on employer sponsorship, the US could adopt a more merit-driven pathway that rewards education, skills, work experience and labour market demand.

US universities actively recruit foreign students, who contribute billions of dollars in tuition and research output. Yet, after graduation, many face enormous uncertainty. The masters cap within H-1B is one mechanism that partly recognises the value of US education. But reserving just 20,000 slots in the annual H-1B lottery does not do full justice. Expanding priority pathways for green cards for graduates of accredited US universities would make far more economic sense than forcing such talent out.


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