H‑1B Visa Scam: US Targets Fraud, Plans Wage‑Based Selection Overhaul

August 27, 2025 William Johnson US Local News 0

President Donald Trump has long criticised the H‑1B program,

Washington, DC – August 27, 2025 – The H-1 B visa program, a lifeline for thousands of skilled foreign workers, is facing its most severe criticism yet. Senior US officials have branded it a “scam” and signalled sweeping reforms that could reshape how global talent enters America.

US Commerce Secretary Howard Lutnick told Fox News:

“The current H‑1B visa system is a scam that lets foreign workers fill American job opportunities. Hiring American workers should be the priority of all great American businesses.”

The Numbers Behind the Controversy

FY 2025 H‑1B Cap Season:

  • 470,342 eligible registrations were filed – a 38% drop from FY 2024’s record 758,994, after a crackdown on fraud.
  • 442,000 unique beneficiaries applied; 114,017 were selected – a 26% selection rate.
  • The average number of registrations per beneficiary decreased from 1.70 in FY 2024 to 1.06 in FY 2025, reflecting a reduction in multiple filings.

Fraud Concerns:

In FY 2024, 408,891 registrations were tied to applicants entered multiple times, up from 165,180 in FY 2023.

USCIS investigations have led to petition denials, revocations, and criminal referrals for companies accused of gaming the lottery.

Past scams include “bench and switch” schemes. Firms like Cloudgen LLC brought workers on fake contracts, then switched them to real jobs. They earned over $493,000 in profits before pleading guilty in 2021.

Infosys paid a record $34 million fine in 2024 for using B-1 visas as H-1B workarounds, hiding skilled labor to cut costs.

USCIS fights back with site visits and probes. They check wages, duties, and locations to stop abuse like “benching,” where workers wait unpaid.

In 2024, rules added passport checks to curb multiple entries. Registrations dropped to 480,000, showing less fraud.

Still, experts like Ron Hira say oversight is weak. “Employers systematically steal H-1B workers’ wages,” he warned.

What’s Changing

The Trump administration plans to replace the random lottery with a wage‑based selection system as early as FY 2027. Under this model:

  • Higher salaries = higher priority in selection.
  • Jobs will be ranked by US Department of Labor wage levels (Level IV = most experienced, Level I = entry‑level).
  • If one wage tier exceeds available slots, a mini‑lottery will run within that tier.

Lutnick also linked the overhaul to a new “Gold Card” plan – granting US permanent residency to foreigners investing $5 million or more, potentially attracting $1.25 trillion in capital.

Impact on Indian Workers

Indian nationals dominate the H‑1B landscape, securing over 72% of approvals in recent years. A wage‑based system could:

Benefit: Senior engineers, AI specialists, and other high‑paid professionals.

Hurt: Entry‑level graduates and outsourcing firms that rely on lower wage levels.

Immigration analyst Russell A. Stamets warns:

“Such activities make the H‑1B lottery system a nightmare for genuine applicants.”

Political and Industry Reactions

Supporters say the changes will protect US jobs and ensure only the “best and highest‑paid” candidates are selected.

Critics argue it could sideline talented but lower‑paid professionals, especially in education, research, and non‑profit sectors.

Former President Donald Trump has struck a mixed tone:

“America needs capable and talented people,” he said earlier this year, while still calling for tighter controls.

 

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About William Johnson 419 Articles
Demystifying the world of finance is my mission. As a finance news writer with 7 years of experience, I've covered everything from breaking market news to in-depth analysis of industry trends. I'm here to keep you informed and empowered in your financial journey.