DHS Finalizes Rule Replacing Random H‑1B Lottery with Wage-Based Weighted Selection for 2026

The U.S. Department of Homeland Security (DHS) has issued a final rule that replaces the longstanding random H‑1B cap lottery with a wage‑level‑based weighted selection system, set to take effect in time for the fiscal year 2027 H‑1B cap season beginning in March 2026.

Under the new rule, beneficiaries registered for the H‑1B cap will be entered into the selection pool with entries weighted according to the wage offered by their prospective employer under the Department of Labor’s four‑level prevailing wage system.

A beneficiary offered a Level 4 wage receives four entries in the selection pool, Level 3 three entries, Level 2 two entries, and Level 1 one entry, giving higher‑wage positions statistically greater odds of selection than lower‑wage positions.

Employers must indicate the appropriate wage level, occupational code, and work location in each registration, and U.S. Citizenship and Immigration Services (USCIS) may deny or revoke petitions if it determines that an incorrect wage level was indicated to unfairly increase selection odds.

The rule is scheduled to take effect 60 days after its December 29 publication in the Federal Register, though it may face court challenges before implementation.

Requirements for Offered Wages

H‑1B cap registrations will reflect the OEWS wage level corresponding to the wage offered to the prospective employee. When submitting a registration, the sponsoring employer must select the highest OEWS wage level that the offered wage meets or exceeds for the relevant occupation in the intended work location.

If the employee will work in multiple locations, the employer must use the lowest applicable OEWS wage level. Additionally, if multiple employers register the same foreign national, that individual will be entered into the H‑1B lottery using the registration with the lowest prevailing wage level.

It’s important to note that the OEWS wage level on the registration is based on the offered wage, not the wage level used on the Labor Condition Application (LCA) required for selected petitions. The LCA wage level is determined mainly by the minimum education and experience required for the position, along with other factors outlined in Department of Labor (DOL) guidance.

This new rule, which gives higher odds to higher-wage H‑1B beneficiaries, follows President Trump’s presidential proclamation introducing a $100,000 fee for certain H‑1B petitions and comes as the Office of Management and Budget reviews a DOL proposal expected to increase prevailing wage levels for H‑1B positions.

Considerations for U.S. Employers

The new rule may limit access to candidates offered a Level 1 (entry-level) wage while encouraging employers to raise salaries for H‑1B cap candidates to improve their chances of selection. As a result, candidates with lower OEWS wage levels will face reduced odds in the lottery.

Employers and their immigration counsel will need to carefully assess each prospective H‑1B candidate and determine the appropriate wage level well in advance of USCIS opening FY 2027 cap registrations in March.

Looking Ahead

The Trump Administration plans for the rule to take effect in time for the FY 2027 H‑1B cap season in March of 2026, though it could face challenges in federal court. If implemented, USCIS is expected to release guidance for stakeholders on completing and submitting H‑1B cap registrations under the new wage-based selection system.

The Law Offices of Jacob Sapochnick is closely monitoring the rule’s rollout and will provide updates as developments occur.

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