The Department of Homeland Security (DHS) significantly altered how H-1B cap-subject petitions are selected in a final rule published Monday in the Federal Register.
The change modifies the current random lottery system and introduces a weighted selection process based on wage levels. Under the current selection process, each beneficiary has an equal chance at selection in the random lottery, regardless of wage level.
Here are more details about the final rule:
Weighted selection based on wage levels
H-1B registrations will be assigned a specific number of entries in the cap lottery based on the wage level of the offered position, as classified under the Department of Labor’s Occupational Employment and Wage Statistics (OEWS). Employers will be required to certify the wage level at registration.
Specifically:
- Level IV = four entries
- Level III = three entries
- Level II = two entries
- Level I = one entry
Accordingly, all beneficiaries will remain eligible to be selected in the random H-1B cap lottery, but lower-wage offers will statistically have a lower chance of selection. Additionally, if a beneficiary will be employed at multiple worksites, the lowest applicable wage level will be applied.
This system will apply to both the regular cap, as well as the master’s cap (spots specifically reserved for beneficiaries who have obtained an advanced degree or higher from a U.S. college or university).
The rule will also continue to only count each beneficiary once in the lottery, regardless of how many employers submit registrations on their behalf.
Prevailing wage levels
The final rule does not modify how prevailing wage levels are determined by the Department of Labor (DOL).
However, President Donald Trump instructed the Secretary of Labor to “initiate a rulemaking (process) to revise the prevailing wage levels” as part of the “Restriction on Entry of Certain Nonimmigrant Workers” proclamation released in mid-September.
When will the final rule take effect?
The final rule is expected to be in place before the FY2027 H-1B lottery registration begins on Feb. 27, 2026.
However, the final rule will likely face litigation in federal court, which could affect when and how it is implemented. The attorneys at Garfinkel Immigration Law Firm continue to monitor the situation closely and will alert clients when and if circumstances evolve.
What should employers do to prepare?
With the publication of the final rule, employers should carefully evaluate their FY2027 H-1B pipeline early with immigration counsel and identify which roles and candidates may benefit from or be disadvantaged by the weighted lottery system.
In the long term, employers should consider benchmarking roles and deciding whether the business can offer higher wage levels, align internal job leveling and titles, and get internal compensation approvals finalized before registration opens.
Employers should also consider consulting with immigration counsel to review other visa options for candidates who may be disadvantaged by the new lottery rules, and/or to consider early green card sponsorship where appropriate, especially for roles that are hard to fill.
What is the H-1B cap lottery?
A legislatively established statutory cap limits approvals of new H-1B petitions in a fiscal year to 85,000, with 20,000 of that total reserved for foreign nationals who have obtained an advanced degree or higher from a U.S. college or university.
A random-computer generated lottery is held when demand for an H-1B cap-subject visa exceeds supply in a given fiscal year, which is almost always the case.
The H-1B nonimmigrant visa category is available for U.S. companies to fill a “specialty occupation” with a qualified foreign national. A specialty occupation is one that generally requires a bachelor’s degree or higher, or its equivalent, as a minimum, entry-level credential.