The Department of Homeland Security (DHS) has finalized a significant rule that alters the selection process for H-1B cap-subject petitions. Filed on December 23, 2025, the final rule, titled “Weighted Selection Process for Registrants and Petitioners Seeking to File Cap-Subject H-1B Petitions”, moves the H-1B lottery system away from a random selection process to one based on wage levels. This final rule is effective February 27, 2026, and will be in place for the fiscal year 2027 H-1B cap registration season.
Background: Moving to a Wage-Based Selection
Under this new rule, the selection probability is increased by granting candidates multiple entries in the lottery pool based on their specific wage tier. Individuals offered a Level IV wage receive four entries, Level III receive three, and Level II receive two, while Level I earners remain at a single entry.
Previously, the H-1B cap selection process (the “lottery”) relied on a random selection of registrations, regardless of the salary offered to the beneficiary. The new rule finalizes the “Weighted Selection Process,” which prioritizes registrations for H-1B workers who are offered higher wages.
This regulatory change is designed to improve the integrity of the H-1B cap selection process and better protect the economic interests of U.S. workers. By prioritizing higher wage levels, the DHS aims to ensure that H-1B visas are awarded to the most highly skilled and highest-paid beneficiaries.
Key Provisions of the Final Rule
- Weighted Selection. The DHS will implement a wage-based selection process that operates in conjunction with the H-1B registration requirement.
- Prioritization. Registrations will be ranked and selected based on the Department of Labor (DOL) wage levels, favoring Level IV and Level III wages over lower tiers.
- No Changes from Proposal. The final rule adopts the provisions set forth in the Notice of Proposed Rulemaking without changes, confirming the administration’s commitment to the wage-based approach.
Notably, even though the rule is finalized, it may be subject to legal challenges which may delay implementation.
Next Steps for Employers
Absent legal challenges and with the H-1B cap season typically opening in March, employers should immediately assess how this rule impacts their hiring strategies for foreign nationals.
- Review Compensation Strategies: Evaluate current salary offers for prospective H-1B beneficiaries. Offers meeting Level I or Level II wage criteria may have a significantly reduced chance of selection under the new weighted system.
- Assess Budgetary Impact: Prepare for potential increases in labor costs if adjustments are needed to meet higher wage levels to ensure a viable chance of selection.
- Consult with Legal Counsel: Contact your immigration attorneys immediately to determine the specific wage level categorizations for your intended petitions and to strategize for the upcoming registration period.
