California employers need to take a close look at how they document employee Hiring talent in the United States is becoming increasingly difficult—especially in industries like technology, healthcare, finance, and engineering. Many businesses struggle to find qualified candidates, while larger corporations compete aggressively for top graduates from highly ranked universities. As a result, companies of all sizes are turning to foreign talent to fill critical roles. But the process is no longer what it used to be. Over the past year, the H-1B visa system has become more complex and more expensive—raising an important question: is sponsorship still a practical option for businesses?
Here’s an example of where things get more complicated: A growing start-up needs a software developer with a background in economics and finance. Its human resources team begins the search by posting job openings on multiple platforms and working with recruiters. After a month of interviews, they still cannot find the right candidate. Some candidates decline offers because the company cannot meet salary expectations, while others are simply not the right fit.
Eventually, a recruiter introduces a foreign candidate who recently earned an MBA in finance from a U.S. university and is working under Optional Practical Training (“OPT”). The company hires her, and she quickly becomes a critical asset. But when they learn her work authorization is temporary, they must decide whether to sponsor her to stay. As a result, they contact a business immigration attorney to explore their options.
Counsel informs the start-up that their best course of action to retain the employee is to sponsor her through an H-1B visa for specialty occupations because the initial requirements for an H-1B visa are met. These requirements are that the job involves highly specialized knowledge and the beneficiary of the visa has a bachelor’s or higher degree in a directly related specific specialty from a U.S. university or its equivalent. The H-1B visa would allow her to live and work in the U.S. for a total of six years—an initial three-year period, with the possibility of a three-year extension. Counsel adds that because the employee is in the U.S. working legally, she would be eligible to file a change of status from F-1 to H-1B.
Counsel also explains that the process starts with the registration of the employer with United States Citizenship and Immigration Services (“USCIS”) and the filing of a petition on behalf of the employee, but the process changed in September 2025. Before, once a petition was filed, it entered an annual lottery where petitions were chosen randomly, but multiple petitions could be filed for the same beneficiary. Once the petition was selected, the visa was approved if all the legal requirements established by USCIS were met.
Beginning September 21, 2025, a $100,000 fee was introduced for certain H-1B petitions, particularly where the employee must enter the United States from abroad, and the annual lottery continued to have a regular cap of 65,000 visas plus an advanced degree cap of 20,000 per year, but the selection process has also changed. First, the selection system moved to a beneficiary-centric model, meaning that each beneficiary is entered into the selection process only once, eliminating the ability to increase selection chances through multiple registrations. Second, while the process still involves a lottery, it is no longer purely random. The selection process may give greater weight to higher-paid and more specialized positions. These changes mean that sponsoring a foreign worker is a strategic decision that depends on cost, timing, and probability of selection. Consequently, employers now have only one opportunity per candidate, and that opportunity is influenced by how the role is structured and compensated.
In our case, the employer would not have to pay the $100,000 because the employee is already in the U.S. with a valid F-1 visa working under OPT, but she will still be subject to the selection system. There is also an important advantage in this scenario that many employers overlook. Because the employee is already in the U.S. working under OPT, she may benefit from what is known as the “cap-gap” rule. This rule allows certain employees to automatically extend their work authorization if an H-1B petition requesting a change of status is timely filed on their behalf. In practical terms, this means the employee can continue working without interruption while the H-1B petition is pending and until the H-1B start date. However, if the potential employee is outside the U.S., the $100,000 fee may apply, depending on the specific circumstances of the petition.
In both scenarios, the employer and the employee will have to meet the initial requirements listed above with adequate documentation. The employer will also have to make a cost-benefit analysis to determine whether applying for an H-1B visa to sponsor a highly skilled foreign worker is the right decision since there will be several expenses involved such as filing fees, legal fees, internal and administrative costs, and the risk of denial.
In sum, a change of status from an F-1 visa with an OPT work permit to an H-1B visa is often more beneficial and cost-effective for employers. It allows for continuity of employment and may avoid additional costs associated with hiring from abroad. By contrast, in the case of a brand-new H-1B petition where the $100,000 fee may apply, employers must carefully evaluate whether the investment makes business sense, particularly when considering the total cost, timing, and likelihood of selection.
The takeaway is clear: sponsoring foreign talent is no longer just a hiring decision—it is a business investment. While the H-1B program remains a valuable tool for accessing highly skilled workers, recent changes have made the process more complex, more competitive, and, in some cases, significantly more expensive. For businesses, especially small and mid-sized companies, the key is planning ahead. Understanding where the employee is located, evaluating the total cost, and assessing the likelihood of success are now essential steps before moving forward. In today’s environment, the question is no longer simply whether you can sponsor a worker—but whether doing so makes strategic and financial sense for your business.
If you have questions about H-1B visas or alternative work visa options, contact Koegle Law Group for a confidential consultation.
Disclaimer: This article is intended for general informational purposes only and does not constitute legal advice. The information contained herein may not reflect the most current legal developments and is not guaranteed to be correct, complete, or up to date. Nothing in this article should be construed as creating an attorney-client relationship. Employers and HR professionals should consult with competent employment counsel regarding their specific facts and circumstances before taking any action.
About Koegle Law Group, APC
Koegle Law Group, APC is a boutique employment law and business litigation firm serving employers and business owners. Our attorneys advise clients on wage and hour compliance, PAGA defense, class action defense, employment counseling, and general business matters. For a confidential consultation, contact us at:
Koegle Law Group, APC – www.koeglelaw.com; info@koeglelaw.com
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