The Department of Homeland Security (“DHS”) has announced a significant change to how H-1B cap registrations will be selected. A final rule published in the Federal Register on December 29, 2025 revises the long-standing random lottery system used for H-1B cap selection, replacing it with wage-based selection. The rule will take effect on February 27, 2026, and will apply to the Fiscal Year 2027 (“FY2027”) H-1B cap registration season. The lottery selections for FY2027 are made on April 1, 2026.
From Random Lottery to Wage-Based Selection
Under the new rule, the H-1B selection process will no longer be purely random. Instead, DHS is implementing a weighted, wage-based selection system that prioritizes higher-paid workers. The weighting is tied to the Department of Labor’s prevailing wage framework, which assigns wage levels based on the nature of the job duties, the required education and experience, and the geographic location of employment. These wage levels are derived from the Department of Labor’s Occupational Employment and Wage Statistics (“OES”), which provide wage distributions for specific occupations within defined metropolitan and non-metropolitan areas.
Each offered wage is evaluated relative to others in the same occupation and location and classified into one of four wage levels. Lower wage levels generally correspond to entry-level or less complex roles, while higher wage levels reflect positions requiring greater responsibility, specialized expertise, or more extensive experience.
How the New Weighted System Works
Rather than each registration receiving a single entry into the lottery, the number of entries will now depend on the wage level offered:
• Wage Level 4 (highest wage tier) will receive four entries in the selection pool;
• Wage Level 3 will garner three entries;
• Wage Level 2 will have two entries; and
• Wage Level 1 (entry-level) will have a single entry.
As a result, H-1b applicants offered wages at the higher end of the prevailing wage scale for their occupation and location will have a greater statistical likelihood of selection, while registrations at lower wage levels will remain eligible but with reduced selection odds under the weighted system.
What This Means for Employers and Foreign Workers
This shift represents a major policy change aimed at favoring higher-paid, more senior roles under the H-1B program. Employers offering lower or entry-level wages may see reduced odds of selection, while employers competing for highly skilled, higher-paid professionals may benefit from increased selection chances.
As the FY 2027 cap season approaches, employers and foreign nationals should carefully evaluate wage levels and workforce planning strategies in light of this new selection framework. Alternatives to the H-1B visa are viable and employers should consider their options when they begin their recruitment process.
Preparing for the FY 2027 Cap Registration
In advance of the FY 2027 H-1B cap registration period, employers should begin reviewing offered wages and job classifications earlier than in prior years, as wage level will now play a direct role in selection. Accurate determination of the appropriate occupational classification and geographic wage data will be critical, since the wage information submitted at the registration stage will be used to weight selection. Employers should also consider how this change may affect hiring timelines, budgeting, and overall talent strategy, particularly for roles traditionally offered at lower or entry-level wage tiers. Early planning and a careful assessment of alternative visa options may help mitigate uncertainty and reduce reliance on the H-1B cap process under this new framework.