The New H-1B Weighted Lottery: What Employers and Employees Must Know

December 23, 2025

Executive Summary

The Department of Homeland Security has finalized regulations that fundamentally change how H-1B cap registrations will be selected, effective for the FY 2027 lottery (registration opening around March 2026). Under the new weighted selection process, registrations for higher-paid workers will have significantly better chances of selection than those for lower-paid workers.

Key Points:

• Weighting by Wage Level: Registrations at Wage Level IV will be entered into the lottery pool four times; Level III, three times; Level II, two times; and Level I, one time. This dramatically increases the chances of selection for higher-paid positions.
• Selection Probability Shift: Under the current random lottery, every beneficiary has approximately a 30% chance of selection. Under the new system, Level IV registrations will have a selection probability of over 61%, Level III registrations will have over 45%, while Level I registrations will see their odds decrease.
• New Information Requirements: Employers must provide the SOC code, area of intended employment, and corresponding OEWS wage level at registration. This information must match the subsequently filed petition.
   
• Strict Consistency Rules: The petition must contain the same position information and wage level as the registration. Discrepancies can result in denial. If an employer files an amended petition that reduces the wage level, USCIS may deny or revoke it if it is determined to be part of an attempt to game the selection process.
   
• Cap-Exempt Employers Unaffected: Universities, nonprofit research organizations, and related entities remain exempt from the cap and are unaffected by this rule.

The Bottom Line: Employers seeking H-1B workers must now carefully evaluate the wage level they are offering for positions. Those who can offer higher wages will have substantially better lottery odds. Those offering Level I wages will find it significantly harder to secure H-1B workers through the cap lottery.

How the Weighted Selection Process Works

Fundamentally, the new system replaces randomness with weighted randomness. The existing beneficiary-centric selection process remains in place; each unique beneficiary is still counted only once, regardless of how many employers submit registrations on their behalf. The change is in how that single chance is weighted.

When USCIS receives more registrations than needed to fill the 85,000 annual cap (65,000 regular plus 20,000 for the advanced degree exemption), it will conduct a weighted random selection. Each registration is assigned a wage level based on the highest OEWS (Occupational Employment and Wage Statistics) wage level that the proffered salary equals or exceeds for the relevant SOC code in the area of intended employment.

The Weighting Mechanics

Note: Each unique beneficiary is still counted only once toward the numerical cap, regardless of how many times they are entered in the selection pool or how many employers submit registrations on their behalf.

To put this in perspective: under the current system, a software engineer earning $90,000 at an entry-level position and a senior architect earning $250,000 have the same chance of selection. Under the new system, the senior architect's registration would be entered into the pool four times while the entry-level engineer's registration would be entered only once, dramatically shifting the odds in favor of the higher-paid professional.

Understanding Wage Levels

The OEWS wage levels are determined by the Department of Labor based on the occupation (SOC code) and geographic location. These levels reflect relative skill and experience requirements within each occupation:

• Level I: Entry level, requiring a basic understanding of duties and performing routine tasks under close supervision.
• Level II: Qualified, with moderate complexity and limited exercise of independent judgment.
• Level III: Experienced, with special skills or knowledge and substantial independent judgment.
• Level IV: Fully competent, with mastery of the occupation and expert judgment.

A Critical Nuance: The wage level for registration purposes is determined by the highest OEWS wage level that your proffered salary equals or exceeds. This differs from the LCA wage level, which is based on the position's requirements. An employer can pay more than the prevailing wage, and if that higher salary crosses a higher wage-level threshold, the registration would be weighted at that higher level.

For example, if the Level II prevailing wage for a software developer in Austin is $100,000 and the Level III threshold is $130,000, an employer offering $135,000 would be classified as Level III, even if the position requirements only call for Level II experience. This is a significant planning opportunity that employers should understand.

New Registration Requirements

The electronic registration form will require additional information beyond what is currently collected:

1. OEWS Wage Level: Registrants must select the highest OEWS wage level that the beneficiary's proffered wage equals or exceeds.
2. SOC Code: The Standard Occupational Classification code for the proffered position.
3. Area of Intended Employment: The geographic location that served as the basis for the wage level determination.

Multiple Locations: If the beneficiary will work in multiple locations, the registrant must select the lowest corresponding OEWS wage level among all the locations. This provision is designed to prevent employers from strategically choosing the most favorable location to inflate their wage level.

Multiple Registrations for the Same Beneficiary: If more than one employer submits a registration for the same beneficiary at different wage levels, USCIS will use the lowest wage level among all registrations when determining the beneficiary's weighting. This is significant: a speculative or low-wage registration from one employer could drag down the weighting for a legitimate high-wage registration from another employer.

Consistency Requirements and New Grounds for Denial

DHS has built substantial enforcement mechanisms into this rule. Employers must understand that the information provided at registration is effectively locked in.

Registration-Petition Consistency

The H-1B petition filed after selection must contain and be supported by the same identifying information and position information provided in the registration, including the SOC code and area of intended employment. The petition must also include a proffered wage that equals or exceeds the prevailing wage for the corresponding OEWS wage level indicated on the registration.

Additionally, petitioners must submit evidence of the basis for the selected wage level, such as a printout from the DOL OFLC Wage Search website for the beneficiary's SOC code and area of intended employment as of the date of registration. This is crucial: even if OEWS data changes between registration and petition filing, the wage level on the petition must reflect the data that was current at the time of registration.

New Grounds for Denial and Revocation

USCIS may deny or revoke a petition if:

• The statements on the petition, registration, or LCA were inaccurate, fraudulent, or misrepresented a material fact.
• The registration did not represent a bona fide job offer.
• A subsequent new or amended petition is filed that reduces the proffered wage or changes the location such that it would correspond to a lower wage level, if USCIS determines this was part of an attempt to game the selection process.

This last point deserves special attention. If an employer registers at Level IV, the beneficiary is selected, and then the employer files an amended petition six months later, changing the work location to a lower-cost area (where the same salary would correspond to Level III), USCIS will scrutinize whether this was a bait-and-switch scheme. If USCIS determines it was, the petition can be denied and any prior approval revoked.

How This Affects Different Stakeholders

International Students and Recent Graduates

The impact on international students is nuanced. Those with advanced degrees from U.S. institutions who secure high-paying positions will see their chances improve substantially. The combination of the existing advanced-degree exemption (which already gives master's and Ph.D. graduates two chances at selection) and a high wage level could make selection highly likely.

However, for students seeking entry-level positions at Level I wages, the path becomes considerably harder. DHS acknowledges this but argues that protecting U.S. workers in entry-level positions is part of the rule's purpose. Students in this category may need to consider alternative strategies, such as negotiating higher starting salaries, seeking positions that genuinely require advanced skills, or exploring cap-exempt employment opportunities.

A practical note: If you are an international student on OPT and multiple employers are considering sponsoring you, you should coordinate carefully. A speculative low-wage registration from one employer could drag down the weighting applied to a legitimate high-wage registration from another.

Startups and Small Companies

Small companies and startups face a challenging calculus. DHS explicitly states that the rule does not treat small entities differently from large corporations. If a startup truly values a candidate and their unique skills, it can offer a higher wage to improve selection odds. Many startups, however, operate on thin margins and offer equity compensation rather than high cash salaries.

Unfortunately, equity compensation, stock options, and deferred compensation do not count toward the wage calculation for registration purposes. Only base wages are considered. This creates a structural disadvantage for companies whose compensation models are equity-heavy.

The silver lining for legitimate startups is that the rule may reduce competition from IT staffing companies that have traditionally filed large numbers of registrations at lower wage levels. If those registrations are now less likely to be selected, startups offering competitive wages may find their odds improving relative to the prior random system.

IT Staffing and Outsourcing Companies

Make no mistake, this rule is aimed squarely at the staffing company model. DHS cites extensive evidence that the H-1B program has been "deliberately exploited" by IT outsourcing firms to bring in "lower-paid, lower-skilled workers to the detriment of U.S. workers." The Presidential Proclamation underlying this rule specifically identifies IT outsourcing as a source of program abuse.

Companies that have historically filed high volumes of registrations at Level I and Level II wages will see their selection rates decline substantially. Some commenters predicted that this would simply cause IT companies to inflate their wage offers on paper, only to later reduce actual pay or bench workers. DHS responds that existing wage enforcement mechanisms, including LCA requirements and site-visit verification programs, should deter such schemes.

Whether this rule fundamentally changes the IT staffing model or simply shifts it toward higher-paid consulting roles remains to be seen. What is certain is that the days of filing hundreds of Level I registrations and winning the lottery through sheer volume are ending.

Healthcare Employers

Healthcare employers raised significant concerns during the comment period, and DHS's response contains important clarifications. The good news is that over 94% of H-1B petitions approved for physicians, surgeons, and dentists are cap-exempt, typically because they are employed by universities, teaching hospitals, or research institutions. These employers are unaffected by the weighted lottery.

Additionally, physicians participating in Conrad 30 and related J-1 waiver programs, who agree to serve in Health and Human Services-designated shortage areas, are cap-exempt. These pathways remain fully available.

For the small percentage of healthcare H-1B petitions that are cap-subject, the weighting applies. DHS notes that different physician specialties have different SOC codes with different prevailing wage structures, so a primary care physician would be weighted against other primary care physicians, not against higher-paid specialists.

Cap-Exempt Employers

Universities, nonprofit research organizations, governmental research organizations, and nonprofit entities related to or affiliated with institutions of higher education remain completely exempt from the H-1B cap. This rule does not affect them at all. For these employers, business as usual continues.

This exemption status becomes more valuable under the new system. Candidates who might have taken a chance on the lottery at a cap-subject employer may now more strongly prefer cap-exempt positions, potentially benefiting universities and research institutions in their recruitment efforts.

What Should You Do Now?

For Employers

1. Review Your Wage Levels Now: Before the FY 2027 registration period opens (around March 2026), audit the positions you intend to sponsor. Use the DOL's OFLC Wage Search tool to determine the prevailing wage levels for each SOC code and location. Identify which wage level tier each position falls into.
2. Consider Wage Adjustments: For critical hires, calculate whether offering a higher salary would push the position into a higher wage level. Run the numbers: if increasing a salary by $10,000 moves a candidate from Level II to Level III, the improved selection odds may be worth the investment.
3. Lock In Your Position Details: Because the registration information must match the petition, finalize the job title, SOC code, location, and salary before registration. Changes later can be problematic and may be scrutinized.
4. Document Wage Level Basis: Save a copy of the OEWS wage data for your SOC code and location as of the registration date. You will need to submit this evidence with your petition.
5. Consider Cap-Exempt Structures: If your organization has any relationship with a university or can structure a role through a nonprofit research organization, explore whether a cap-exempt filing is possible.
6. Plan for the Long Game: If you cannot offer Level III or IV wages now, consider hiring candidates through OPT or STEM OPT while developing their skills and increasing compensation over time for future lottery attempts.

For Prospective H-1B Workers

1. Negotiate Thoughtfully: Understand that your starting salary now directly affects your lottery odds. When negotiating job offers, discuss the H-1B implications openly. Some employers may be willing to offer higher wages to improve their chances of selection.
2. Communicate with All Potential Sponsors: If multiple employers might register you, understand that the lowest wage level among all registrations will determine your weighting. A speculative low-wage registration from one company can hurt your chances across the board.
3. Prioritize Cap-Exempt Opportunities: Positions at universities, research institutions, and affiliated nonprofits bypass the lottery entirely. These opportunities become relatively more valuable under the new system.
4. Consider Geographic Flexibility: The same salary may correspond to different wage levels in different locations. A position in a lower cost-of-living area may register at a higher wage level than the same salary in an expensive metropolitan area.
5. Explore Alternative Visa Categories: If your lottery odds at Level I are poor, consider whether you may qualify for an O-1 (extraordinary ability) or another classification. The O-1 has no cap and no lottery.
6. Build Your Case for NIW or EB-1: Consider whether your work could support a National Interest Waiver or an EB-1 green card petition. These immigrant visa categories do not require lottery selection and, for some individuals, may offer a more certain path.

Observations from Practice

Several aspects of this rule deserve additional commentary.

First, the timing is extraordinarily tight. The rule is scheduled for publication on December 29, 2025, with an effective date 60 days later, in February 2026. The FY 2027 registration period typically opens in early March. Employers and their counsel have barely two months to understand these rules, analyze their candidate pools, potentially adjust compensation offers, and prepare for a fundamentally different registration process.

Second, the enforcement mechanisms are muscular. The ability to deny or revoke petitions based on discrepancies between registration and petition, or based on subsequent amended petitions that USCIS believes were part of a scheme to game the lottery, gives USCIS substantial discretion. Employers must be prepared to justify any changes in employment terms between registration and petition, and potentially for years afterward.

Third, the rule incentivizes employers to offer higher wages, but only up to a point. Once you hit Level IV, there is no additional benefit to providing even higher wages. A software architect earning $200,000 and one earning $400,000 have identical lottery odds, so long as both are at Level IV.

Finally, this rule does not exist in isolation. It follows Presidential Proclamation 10973, which imposed additional fees and restrictions on H-1B workers. Together, these actions represent a significant tightening of the H-1B program. Employers and workers should anticipate continued scrutiny and should approach H-1B sponsorship as one component of a broader immigration and talent strategy.

Summary

The new weighted H-1B lottery represents a fundamental shift in how the United States allocates temporary work visas to specialty occupation workers. Higher-paid workers will have significantly better chances; lower-paid workers will face longer odds. Whether this achieves the stated goal of attracting the "best and brightest" while protecting U.S. workers remains to be seen.

What is certain is that the old approach of filing a registration and hoping for the best is no longer optimal. Employers and prospective H-1B workers must now engage in strategic planning regarding wage levels, job locations, and compensation package structures. Those who adapt quickly will have advantages; those who do not may find the H-1B cap increasingly challenging to navigate.

As always, individual circumstances vary. This article provides general information and should not be construed as legal advice. Employers and individuals facing H-1B decisions should consult with qualified immigration counsel to develop strategies suited to their specific situations.

Rajiv S. Khanna

Managing Attorney, Law Offices of Rajiv S. Khanna, PC