Preparing For The New H-1B Cap Lottery Based On Wage-Level Selections

Summary

On December 29, 2025, the Department of Homeland Security (DHS) issued a final rule that replaces the current, random, computerized H-1B cap lottery process with a wage-based weighted selection process. Under the new rule, the H-1B cap lottery process will now favor registrants with higher wage levels. In the rule's preamble, DHS explains that it believes that a higher wage level is a reasonable proxy for the higher level of skill, education, and experience of a foreign worker, therefore helping to ensure that the United States retains the "best and the brightest."

When Will the Rule Take Effect?

The rule is set to go into effect on February 27, 2026, and will apply for the upcoming Fiscal Year 2027 H-1B lottery.

How Will the Wage-Based Weighted Selection Process Work and How Will it Impact the Odds of Selection?

Under the revised regulation, the lottery will favor beneficiaries who are being offered higher wages, reviewed against the Department of Labor's Occupational Employment and Wage Statistics (OEWS) occupational classification and geographic area for the offered position. As background, the OEWS wage system categorizes wages from Level I (entry level) to Level IV (very experienced). Under the new system, an H-1B cap registrant with a Level IV wage classification, for example, will have higher odds of being selected in the lottery than a registrant with a Level 1 wage classification.

Specifically: a beneficiary whose offered wage meets or exceeds the Level IV wage for their occupational classification will be entered into the selection pool four times; a beneficiary being offered a wage that meets or exceeds the Level III wage will be entered into the selection pool three times; a beneficiary being offered at least a wage Level II will be entered into the selection pool two times; and a beneficiary being offered at least a wage Level I will be entered into the selection pool one time.

As a result, those applicants being offered a wage that meets a higher level in their occupational category will have a greater chance at being selected in this year's H-1B lottery. Under the previous lottery system, the probability of being selected was approximately 30% regardless of wage levels, based on previous years' lottery results. These odds change under the new system and according to DHS estimates, will be approximately as follows:

Important Details Under the Revised Regulation

While we expect that USCIS will issue more guidance on how the new system will be practically implemented, the regulation already outlines a few important rules to take note of:

• In the previous random, computerized H-1B lottery system, employers were only required to include basic biographic information on each of their H-1B cap registrants. In contrast, under the new wage based weighted selection system, employers will also be required to indicate the offered salary, the wage level that the offered wage matches, the occupational classification, and the area of intended employment.
• If the H-1B cap applicant will work in multiple locations with different wage levels, the H-1B cap registration must utilize the lowest OEWS wage level that the foreign worker's offered wage corresponds to.
• If the offered wage is expressed as a range, the H-1B cap registration must select the OEWS wage level that the lowest wage in the range will equal or exceed.
• When multiple employers register the same foreign worker, the new H-1B cap lottery system will enter the foreign worker based on the lowest wage level classification.
• Form I-129, required for H-1B filings after a registrant has been selected in the lottery, has already been revised to instruct employers to include evidence of the basis of the wage selection in their H-1B cap petition filings. Such evidence could include, but is not limited to, a printout from the DOL's Office of Foreign Labor Certification (OFLC) Wage Search website.
• The rule also finalizes integrity measures to help guard against "bad actors." For example, under the new rule, USCIS has discretion to deny a subsequent petition by the employer if USCIS determines that the filing of the new or amended petition is part of the employer's attempt to unfairly increase an H-1B cap registrant's chance of selection. For example, if the H-1B cap registration was filed for a geographic location and code with a higher wage level, and then the employer filed a subsequent petition to amend the petition to a different location with a lower wage, USCIS can exercise discretion to deny the subsequent petition.

What Can Employers Do to Prepare Ahead of Time?

While the new rule has changed the lottery selection process, wage level analysis has always been an important part of H-1B cap planning. Therefore, we recommend that employers continue to identify their respective H-1B cap registrants as they would have in previous years. In addition, employers should carefully determine and finalize the applicant's job location and offered wage prior to submitting the H-1B cap lottery submission in March 2026. Pryor Cashman will assist employers in evaluating the wage level classification and analysis before the lottery submission so that employers have clarity on the number of entries each registrant will receive.

What Can Employers Expect Next on This Rule?

In the coming weeks, USCIS is expected to publish instructions on how employers should submit H-1B cap registrations under the new selection process. It is also possible that this rule will face legal challenges. Pryor Cashman will continue to closely monitor developments.

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Partner Praveena Nallainathanwas a contributing author to this client alert.

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