US Prepares to Raise H-1B Visa Wages, Pressuring Major IT Service Firms

The U.S. government is preparing to raise the minimum wage for H-1B visa workers, which will likely increase labor costs for companies that rely on them.

This move is part of a broader policy shift that includes a new lottery system favoring higher-paid workers and a proposed $100,000 annual fee per new visa.

Major IT service companies like Accenture, Infosys, and Cognizant are particularly affected due to their significant revenue from North America and heavy use of H-1B visas.

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Recent reports indicate the U.S. government is moving to increase the required wages for skilled foreign workers on H-1B visas.

This development became highly credible after the White House's Office of Management and Budget (OMB) cleared a new Department of Labor (DOL) wage proposal on February 23, 2026. This is the final procedural step before a proposed rule is published for public comment, signaling that changes are imminent. The core idea is to raise the 'prevailing wage' floors, which is the minimum amount companies must pay H-1B workers based on their occupation and location.

However, this isn't happening in a vacuum. It's the third major change tightening the screws on the H-1B program. First, a new wage-weighted lottery system just took effect on February 27, 2026. This system gives more lottery entries to employers who offer higher salaries, directly incentivizing higher pay. Second, a presidential proclamation from September 2025 introduced a steep $100,000 annual fee for each new H-1B worker, though this is currently being challenged in court. Together, these three measures—a higher wage floor, a wage-prioritized lottery, and a hefty fee—fundamentally alter the cost and strategy for hiring foreign talent.

This policy shift directly impacts major IT service vendors like Accenture (ACN), Infosys (INFY), and Cognizant (CTSH). Why them specifically? It's because their business models are highly exposed. For instance, in 2025, North America accounted for about 50% of Accenture's revenue, 58% of Infosys's, and a substantial 75% of Cognizant's. Furthermore, companies like Infosys have historically been among the top sponsors of H-1B visas. Higher U.S. labor costs, therefore, bite directly into their profit margins.

Looking back at past attempts gives us a sense of how significant these wage hikes could be. A 2020 rule, which was later struck down by courts on procedural grounds, proposed dramatically raising wage levels. A subsequent 2021 proposal, though more moderate, still aimed for a noticeable increase. The current proposal will likely try to achieve similar goals while avoiding the legal mistakes of the past.

In response, these IT firms face a strategic choice. They can try to pass the increased costs on to their clients, accelerate the shift of work to offshore or near-shore locations to reduce reliance on U.S.-based workers, or focus on higher-value services that can justify the higher salaries. The coming months will reveal how this new landscape reshapes the IT services industry.

Glossary -
H-1B Visa: A non-immigrant visa that allows U.S. employers to temporarily employ foreign workers in specialty occupations.
Prevailing Wage: The average wage paid to similarly employed workers in a specific occupation in the area of intended employment. The Department of Labor sets these wage levels.
OMB (Office of Management and Budget): The largest office within the Executive Office of the President of the United States, responsible for producing the President's Budget and measuring the quality of agency programs, policies, and procedures.