The Department of Homeland Security (DHS) has officially released a final regulation that fundamentally changes how H-1B visas are awarded.
Replacing the traditional randomized lottery, the new system will implement a “weighted selection” process designed to favor higher-paid foreign workers. The rule is scheduled to take effect on February 27, 2026, ensuring the new framework is operational before the annual spring H-1B cap season.
Key Highlights:
- Lottery Replacement: The random selection process is being replaced by a system that prioritizes petitions based on wage levels.
- How it Works: Candidates are assigned odds based on four wage levels:
- Level 4 (Highest Wage): 4 entries in the selection pool.
- Level 3: 3 entries.
- Level 2: 2 entries.
- Level 1 (Lowest Wage): 1 entry.
- Administration Goals: Officials state this incentivizes employers to hire higher-skilled, higher-paid workers and aligns with Congress’s intent for the visa program.
- Criticism: Business groups argue that wage levels often reflect seniority rather than actual economic value, potentially disadvantaging junior but highly paid talent in competitive fields.
- Broader Context: This move follows a separate White House proclamation—recently upheld by a federal judge—that added a $100,000 fee for H-1B workers hired from outside the U.S.
The U.S. Department of Homeland Security has finalized a sweeping change to how H-1B cap visas are awarded, replacing the long-running random lottery with a wage-weighted selection system that gives higher odds to higher-paid job offers. The shift is presented by the administration as a way to prioritize “higher-skilled” roles, reduce abuse, and strengthen wage protections for U.S. workers — but it is also drawing criticism from universities, startups, nonprofits, and advocates who warn it could disadvantage early-career talent and lower-paying regions.
The rule is scheduled for publication in late December 2025 and is set to take effect 60 days later, placing implementation in late February 2026. That timing means the new process is expected to apply to the FY 2027 H-1B cap season — the annual cycle in which employers register candidates and U.S. Citizenship and Immigration Services (USCIS) selects enough registrations to meet the statutory limits.
WHAT IS CHANGING
For years, USCIS used a random selection process when the number of registrations exceeded the annual H-1B cap. Under the new framework, the agency will still select enough registrations to meet the same cap numbers, but the “chance” of selection will no longer be equal for all registrations. Instead, selections will be weighted by wage level, using the Department of Labor’s prevailing wage structure.
In practical terms, employers offering higher wages — relative to the prevailing wage levels for the job’s occupation and location — will have better odds in the selection process. DHS argues that higher wages are a useful proxy for specialized roles and market demand, and that prioritizing those wages better aligns the program with its stated purpose of filling high-skill labor needs without undercutting domestic wages.
HOW THE WEIGHTED SYSTEM WORKS
The new system relies on the standard prevailing wage tiers commonly known as Levels I through IV. Each wage level is assigned a different weight — essentially multiple “entries” into the selection pool:
• Wage Level I: 1 entry
• Wage Level II: 2 entries
• Wage Level III: 3 entries
• Wage Level IV: 4 entries
That means a Level IV registration has four times the selection chances of a Level I registration, all else equal. The core structure of the H-1B cap does not change: the program still includes the 65,000 regular cap plus the additional 20,000 slots reserved for beneficiaries with qualifying U.S. advanced degrees.
DHS has also indicated that registrations will require more detailed wage-related information, tied to the job’s occupational classification and location, because wage level is now integral to the selection mechanics rather than simply a compliance item later in the petition process.
WHY DHS SAYS IT’S DOING THIS
DHS describes the reform as an effort to move the H-1B program closer to a merit-based allocation in which the highest-value, most in-demand roles are more likely to receive visas. The agency and administration officials have framed the lottery as a flawed mechanism that can unintentionally reward lower wage offers and encourage strategies that flood the system with registrations.
By making wage level the core selection factor, DHS says it can reduce incentives to treat the process as a numbers game and instead encourage employers to sponsor workers for roles that reflect stronger compensation and, by implication, higher specialization.
WHO BENEFITS — AND WHO COULD LOSE
Supporters argue the reform advantages jobs that are more likely to require deep expertise and that pay at the top of the market. Large companies that routinely offer salaries at higher prevailing wage tiers may see improved odds for their registrations. Roles classified at higher wage levels in major metro areas are also likely to gain relative advantage in the selection pool.
Critics, however, warn that wage is an imperfect stand-in for skill, and that the weighting could penalize legitimate hiring needs in settings where wages are structurally lower. Universities, research institutions, nonprofits, and early-stage startups often operate under fixed budgets and pay scales. Hospitals or clinics in rural or underserved areas may also offer wages below top metropolitan benchmarks even for critical specialist positions. Early-career candidates — including many recent graduates — could be disproportionately affected if entry-level wages map to the lower tiers.
There is also concern that the system may encourage wage inflation strategies designed primarily to increase selection odds, potentially reshaping recruiting and compensation practices in ways that do not necessarily reflect real labor market needs.
BROADER CONTEXT: A TOUGHER H-1B ENVIRONMENT
The wage-weighted rule arrives amid a broader push to tighten and reshape employment-based immigration policy. Over the past year, the H-1B program has been at the center of legal and political battles, including disputes over new fees and restrictions aimed at limiting or discouraging certain hiring pipelines. The combined effect signals a more aggressive approach to steering the program toward higher wages and stricter controls.
WHAT HAPPENS NEXT
As the effective date approaches, employers will closely watch implementation details: how wage levels will be determined for registrations, how the agency will handle disputed classifications, what data fields will be mandatory at registration, and how USCIS will prevent manipulation while processing the enormous volume typical of the cap season.
If the rule proceeds as planned, the FY 2027 season will mark a fundamental change in strategy for employers and applicants. Companies may adjust salary offers, job structures, and recruitment plans to improve selection probabilities. For workers, the reform could mean that the most competitive path is increasingly tied to wage level — making compensation, occupation, and geography even more decisive factors in the race for a limited number of visas.
