On December 29, 2025, the Department of Homeland Security (DHS) issued a final rule implementing a weighted selection process for cap-subject H-1B petitions that prioritizes higher-paid foreign national workers. The new rule will become effective on February 27, 2026, and will be in place for the Fiscal Year 2027 (FY27) H-1B cap registration season, which begins March 2026.
Background
The H-1B nonimmigrant visa classification is for foreign national workers in “specialty occupations,” meaning occupations that require the theoretical and practical application of highly specialized knowledge (generally by requiring at least a bachelor’s degree, or equivalent, in a specialized field relevant to the occupation).
For each fiscal year, there are only 85,000 new (or “cap-subject”) H-1Bs available: 65,000 for foreign nationals with a bachelor’s degree (or equivalent) from a US or foreign college or university (“Regular Cap”), and an additional 20,000 for foreign nationals with a graduate degree from a US college or university (“Master’s Cap”). To be considered for one of these cap-subject H-1Bs, employers submit an H-1B registration for their sponsored foreign national worker, also known as a beneficiary. When the demand for cap-subject H-1Bs exceeds the numerical quota, DHS conducts a “lottery” to determine which beneficiaries will receive an H-1B for that fiscal year.
In FY2025, DHS changed the H-1B “lottery” process to select H-1B registrations by unique beneficiary. In other words, each beneficiary who has an H-1B registration submitted on their behalf is entered into the “lottery” once, regardless of how many separate employers may have submitted a registration on that beneficiary’s behalf. If that beneficiary is selected in the “lottery,” each employer that submitted an H-1B registration for that beneficiary will be eligible to file an H-1B petition on that beneficiary’s behalf.
How will the new weighted selection process change the H-1B registration/lottery?
DHS’s new weighted selection process will further change how the H-1B “lottery” is conducted. Beginning with the FY27 H-1B cap registration season, the beneficiary-centric selection process will remain in place; however, the new weighted selection process will prioritize the highest-paid H-1B beneficiaries. Specifically, during the H-1B registration process, employers will now need to identify (1) the geographic area(s) of intended employment, (2) the relevant occupational category or Standard Occupational Classification (SOC), and (3) the corresponding Occupational Employment and Wage Statistics (OEWS) wage level.
OEWS wages are issued by the Department of Labor and assigned at four levels: Level 1 (entry-level), Level 2 (some experience), Level 3 (qualified worker), and Level 4 (fully competent/experienced worker). Under the weighted selection process, H-1B registrations indicating wage Level 4 will be entered into the selection pool four times, those assigned wage Level 3 will be entered into the selection pool three times, those assigned wage Level 2 will be entered into the selection pool two times, and those assigned wage Level 1 will be entered into the selection pool one time. The lowest wage level controls when multiple employers submit an H-1B registration for the same beneficiary and/or there are different location(s) of employment, each with a different wage level. For example, if Employer A submits an H-1B registration for a beneficiary indicating a Level 4 wage, and Employer B submits an H-1B registration for that same beneficiary indicating a Level 1 wage, the beneficiary will be entered into the selection pool one time using the Level 1 wage.
The obvious consequence of the new weighted selection process is that beneficiaries assigned a Level 4 wage will have a significantly higher likelihood of selection in the H-1B lottery. According to DHS, the “purpose of this rule is to allow DHS to implement the [H-1B] numerical cap in a way that incentivizes employers to offer higher wages or to petition for positions requiring higher skills and higher-skilled aliens, that are commensurate with higher wage levels. This weighted selection process will generally favor the allocation of H-1B visas to higher-skilled and higher-paid aliens…” However, opponents of the new weighted selection process argue that it provides advantages to larger employers and industries that can afford to offer higher wages, while disadvantaging a large segment of US employers that have historically relied on the H-1B visa program to obtain skilled workers. In addition, opponents argue the rule will further contribute to the so-called “brain drain” of top international talent, as foreign national workers (and especially international students) seek opportunities outside the US.
In addition to the new weighted selection process, this year’s H-1B registration will be further complicated by President Trump’s September 19, 2025 proclamation requiring employers to pay an additional $100,000 fee to sponsor new H-1B petitions filed on behalf of beneficiaries outside the US and/or requesting consular notification, port of entry notification, or pre-flight inspection for a beneficiary in the United States.
Please contact your Nixon Peabody immigration professional to further discuss recent changes to the H-1B registration/lottery.