Husys, an India-based HR outsourcing firm, says it can now legally onboard a pre-vetted engineer in India in as little as eight hours. That pitch is landing differently in 2026, because the alternative, sponsoring that same engineer on an H-1B visa, can now cost a US company more than $300,000 before the employee's salary is counted.

That number is not hypothetical. It is the sum of a stack that has been building for years and finally tipped.

How the math broke

Start with the baseline. Filing fees, attorney fees, and compliance costs for a new H-1B petition now exceed $9,400, and that is before a company pays a dollar toward recruiting or salary. Layer in what employers actually spend on a fully-loaded software engineer hire, including recruiting costs and the standard costs of employing someone, and you reach $200,000 to $215,000 in first-year cost before the contested $100,000 fee enters the picture.

That fee has its own chaotic history. A presidential proclamation issued September 19, 2025 imposed the $100,000 charge on new petitions requiring consular processing. A federal court in Massachusetts struck it down on June 8, 2026, ruling it functions as a tax only Congress can impose. Four days later, the same court reinstated it pending appeal. The government filed with the First Circuit on June 18, 2026. The fee is in effect today.

For a CFO building a hiring budget, the dollar figure is one problem. A fee that is litigated, reversed, reinstated, and appealed inside a single quarter is another problem entirely. You cannot plan headcount around a cost that might be illegal by the time the candidate starts.

Where the fee applies, total first-year cost for a consular-processed H-1B software engineer can exceed $300,000, not counting salary. Companies that then pursue a green card for that engineer should expect another $20,000 to $40,000 across the later immigration stages.

The lottery got harder too

Cost is only half of it. Effective February 27, 2026, the federal government replaced the random H-1B lottery with a wage-weighted system. Candidates are now entered multiple times based on the wage level of the offered job: four entries at the highest wage tier, three at the next, down to one entry for entry-level roles.

Historically, 83% of H-1B petitions have concentrated at the two lowest wage levels, meaning most past applicants now face sharply reduced odds unless employers raise offered salaries significantly. The government's own analysis projects the rule will drive $502 million in first-year wage increases and shift $858 million annually away from entry-level positions. That is not a side effect. It is the stated design. Early-career roles, exactly the ones startups and growing mid-market companies most want to fill, are being priced and probabilistically squeezed out of the system at the same time.

What the alternative looks like

The Employer of Record model, often called EOR, is the mechanism companies are turning to. Under this arrangement, a firm like Husys legally employs the engineer in India on behalf of the US company, handling local contracts, payroll, and compliance with Indian labor law. The US company directs the work. The engineer stays in India.

The people filling these roles are often the same engineers US companies already interviewed and wanted to hire before the visa math changed. The talent was never the bottleneck.

India's ongoing rewrite of its labor codes, consolidating dozens of legacy statutes into four broad frameworks, is adding structure and predictability to this model at a useful moment. Whether that regulatory shift makes Indian employment arrangements more or less favorable for specific roles will depend on how the codes are implemented, but the direction is toward greater standardization, which EOR providers say makes compliance more straightforward to manage at scale.

The deeper shift is structural. When a legal pathway becomes expensive enough, slow enough, and unpredictable enough, companies stop using it. They do not wait for it to improve. They find a different architecture for getting the same work done.

The H-1B system is not disappearing. But for the segment of US employers that needed it most, entry-level and mid-career technical roles at companies without the legal budgets of large corporations, the math stopped working sometime in 2026.