Wage-Based System for H-1B Lottery Finalized
This is a follow up to our October 3rd article regarding changes coming for the H-1B lottery by adopting a wage-based lottery system.
This week, the Department of Homeland Security (DHS) published final rules that will change the H-1B cap lottery process to a weighted selection process that favors beneficiaries receiving higher wages. The new rule will be in place for the Fiscal Year 2027 H-1B cap registration process, which will be conducted in March 2026.
How the New System Works
The new weighted selection system will give greater chances of selection to beneficiaries offered higher wage positions. Specifically, each H-1B lottery registration will be assigned a wage level (level 1 through 4) based on the offered wage relative to the Occupational Employment and Wage Statistics survey for the relevant Standard Occupational Classification in the geographic area. Registrations will be entered into the selection pool multiple times depending on wage level: a beneficiary receiving a salary that meets level 4 of DOL’s four-level prevailing wage system will be entered into the selection pool four times, a beneficiary receiving level 3 salary will be entered three times, a beneficiary receiving level 2 salary will be entered two times, and a beneficiary receiving level 1 salary will be entered into the lottery pool once.
Employers’ H-1B lottery registrations will be required to indicate the appropriate occupational code, wage level, and area of intended employment and the subsequently filed H-1B petition must show that the wage level indicated in the registration was appropriate for the occupation. However, certain changes in wage coupled with a change in the intended work location between the time of registration and H-1B filing may be permissible, if USCIS views the change as consistent with the job offer at the time of registration.
For H-1B employees that will work at multiple locations, the employer must select the lowest wage level associated with the position (e.g., if the offered salary meets level 2 in one worksite and level 1 in another worksite, the registration will be entered into the lottery once). Additionally, if more than one employer submits a registration on behalf of a foreign national, the foreign national will be entered into the lottery based on the registration with the lowest prevailing wage level.
Impact on Employers
Employers seeking to file H-1B for new graduates (e.g., F-1 status holders) who only qualify for entry-level positions at entry-level wages will have lower odds of being selected in the H-1B lottery, while employers seeking to file for seasoned employees whose salary meet higher prevailing wage levels (e.g., experienced employees in L-1, O-1, TN status) will have higher odds of being selected.
Also, job site differences will give registrations different odds of being selected despite the job duties and offered salary being the same. For example, in the San Francisco bay area, a Software Developer with a salary of $165,000 only meets level 1 prevailing wage in Santa Clara County but meets level 2 prevailing wage in Alameda, Contra Costa and San Francisco Counties, and level 4 prevailing wage in Solano County.
Furthermore, it is conceivable that employers will be incentivized to reduce non-guaranteed pay (bonus, stock grants, etc.) to increase the base salary to meet a higher level of prevailing wage.
Finally, employers and their immigration counsel will need to budget more time for each H-1B registration due to the need to evaluate each candidate’s occupational classification, salary and prevailing wage, in order to determine the appropriate wage level for each registration.
If you have any questions, please contact your ILG attorney or reach our firm at .