How did the reclassification affect H-1B visa determinations and employer sponsorships?

1. Immediate mechanics: who is affected and how petitions change

The proclamation and accompanying agency guidance require any new H‑1B petition submitted on or after Sept. 21, 2025 to include a $100,000 payment to avoid restriction on visa issuance and entry; the rule does not apply to H‑1B visas already issued or petitions filed before that date ^{[1] [2] [6]}. USCIS explicitly states holders of current H‑1B visas can continue traveling and that the fee applies to petitions submitted after the effective date, including cap filings such as the 2026 lottery ^[2].

2. Employer sponsorship: cost, exemptions, and legal uncertainty

Practitioners and legal guides warn employers now face a steep per‑worker cost or must qualify for narrow exemptions; firms that do not or cannot pay risk their overseas beneficiaries being barred from visa issuance and entry ^{[5] [7]}. Fragomen and other firms report U.S. government officials confirming that petitions filed before Sept. 21 remain exempt, and that extensions of stay with the same employer are generally unaffected — but for changes of employer, amendments, or new cap‑subject filings employers are urged to seek counsel because ambiguity and RFEs have risen ^{[4] [8]}.

3. Selection and adjudication: tilt toward high wages and program integrity

Beyond the fee, DHS and related rulemaking aim to rework selection to favor higher‑paid, higher‑skilled beneficiaries and to increase scrutiny of employers, particularly those with past violations or heavy third‑party placements; that proposal was publicized in a Federal Register notice and media coverage ^{[3] [9]}. USCIS and DOL rulemaking that are part of the package also contemplate raising prevailing wage levels and prioritizing higher wages in the lottery — changes designed to reduce lower‑wage or “wage‑arbitrage” uses of H‑1B ^{[2] [9]}.

4. How employers are reacting: triage, litigation, and sector risk

Trade and legal reporting note immediate employer concerns: some small businesses and IT outsourcing firms that historically rely on overseas H‑1B hires could face significant disruptions if they must pay or qualify for exemptions; DHS estimated about 5,200 small businesses could be economically affected ^{[3] [7]}. Lawsuits have already been filed in at least one federal court challenging aspects of the changes, and employers are recalibrating hiring plans, cautious about sending employees abroad or filing new petitions ^{[5] [8]}.

5. Practical effects on visa determinations and RFEs

Legal advisories and firm blogs document an uptick in requests for evidence (RFEs) tied to exemption eligibility and proof of status; multiple exempt cases have reportedly received RFEs since October 2025, meaning adjudicators are scrutinizing whether a petition truly qualifies for an exception to the fee ^[8]. USCIS guidance confirms that adjudications for petitions after the effective date will follow the proclamation and subsequent rulemaking priorities, increasing documentation burdens on employers ^[2].

6. Broader context and competing perspectives

The Administration frames these changes as restoring H‑1B to “highest‑skilled” use and protecting U.S. wages ^{[1] [3]}. Immigration law firms and employer groups counter that the fee is punitive, could shrink talent pipelines, and disproportionately hurts small businesses and industries dependent on third‑party placements ^{[7] [3]}. DHS rulemaking authors argue the earlier beneficiary‑centric registration improvements reduced fraud and that the new measures build on that integrity push ^[9].

7. Limitations in available reporting and key open questions

Available sources do not mention the long‑term outcomes (e.g., whether fee revenue will fund programs or the precise legal standards courts will adopt) and do not provide definitive data yet on visa refusal rates or labor market displacement after implementation (not found in current reporting). The Federal Register and agencies indicate further rulemaking is planned, so operational details, waiver standards, and litigation outcomes remain unresolved ^{[9] [2]}.

Bottom line: the reclassification and proclamation materially raise the cost and scrutiny of bringing new H‑1B workers from abroad, exempting prior filings and current holders, while simultaneously pushing the selection framework to favor higher‑paid beneficiaries — a shift that employers, especially smaller firms and outsourcing companies, say could constrain sponsorship unless exemptions or judicial relief alter implementation ^{[1] [2] [3]}.