H-1B $100,000 Supplemental Fee Reshapes FY2027 Lottery and Small Business Applications

The H-1B visa program has undergone a significant transformation with the introduction of a new $100,000 supplemental fee. This substantial cost, effective September 21, 2025, applies specifically to new H-1B petitions filed at U.S. consulates abroad, impacting a crucial segment of the applicant pool. The policy change has already demonstrated profound effects on both the volume of applications and the H-1B lottery selection rates for Fiscal Year 2027, alongside creating considerable challenges for small-scale employers across the United States.

The New $100,000 Supplemental Fee: Details and Exemptions

The $100,000 supplemental fee is a pivotal addition to the H-1B visa application process, becoming effective for petitions filed on or after September 21, 2025. This fee is exclusively levied on new H-1B petitions where the beneficiary is outside the United States and undergoing Consular Processing. Crucially, the fee does not apply to all H-1B applicants. Exemptions are in place for individuals already present in the U.S. who are filing for a Change of Status. Furthermore, H-1B extensions are also not subject to this additional cost, providing some relief for existing visa holders and employers seeking to retain their foreign talent. This targeted application of the fee aims to influence specific pathways into the H-1B program, as detailed by Gozel Law and Y-Axis.

Severe Impact on Small Employers and Application Volume

The introduction of the $100,000 supplemental fee has made the H-1B program largely unaffordable for many small-scale employers, leading to a noticeable decline in participation. Reports indicate a 15% drop in applications from employers not subject to the yearly cap, highlighting the immediate financial strain imposed by the new regulation. USCIS data further underscores this challenge, revealing that only 85 payments of the $100,000 fee were made between September 21, 2025, and mid-February 2026. This low uptake signifies a severe impact on small firms, non-profits, and rural hospitals, which often rely on the H-1B program to fill specialized roles but lack the extensive financial resources of larger corporations. The cumulative effect of these changes has created a difficult operating environment for smaller entities seeking to sponsor H-1B workers, as reported by Livemint.

FY2027 Lottery Selection Rates Surge Amidst Smaller Applicant Pool

The first H-1B lottery for Fiscal Year 2027, conducted under the new regulations, saw a significant increase in selection rates, jumping to an estimated 50-60%. This surge is primarily attributed to a substantially smaller applicant pool, a direct consequence of the new $100,000 fee and the implementation of a wage-based selection system. The higher cost has deterred a considerable number of potential applicants, particularly those who would typically undergo consular processing. While a higher selection rate might appear beneficial for individual applicants who proceed, it reflects a broader contraction in the overall demand and accessibility of the H-1B program for new foreign talent, especially those outside the U.S. seeking initial entry. Business Standard reported on these elevated selection rates, linking them directly to the reduced applicant volume.