U.S. employers preparing for the FY2026 H-1B cap season may soon face a fundamentally different lottery process. The Department of Homeland Security (DHS) has proposed a rule that would replace the current random selection method with a wage-level-based system. The new approach would prioritize higher-paid—and often more senior—positions by increasing their odds of selection through a weighted entry system.
Under the current model, each H-1B registration is treated equally, regardless of the offered wage. The proposed change would introduce a tiered system based on U.S. Department of Labor (DOL) wage levels:
- Level I (Entry-Level): 1 lottery entry
- Level II (Qualified): 2 lottery entries
- Level III (Experienced): 3 lottery entries
- Level IV (Highly Skilled): 4 lottery entries
While the random lottery would remain, the probability of selection would increasingly favour mid-to-senior-level roles. According to DHS estimates, Level I applicants could see their selection chances fall by nearly half, while Level IV applicants could more than double their odds.
Implications for talent strategy and compliance
Entry-level candidates face steeper odds
The shift could notably affect recent graduates and early-career professionals, particularly international students transitioning from F-1 status via Optional Practical Training (OPT). These candidates typically qualify for Level I positions, meaning they would hold only a single entry in the lottery under the new framework.
Higher wages, higher stakes
Employers may look to adjust salaries or reclassify roles to achieve higher wage levels and improve selection odds. However, wage levels are tied not just to compensation, but also to job requirements, duties, and geographic location. Offering a high salary alone won’t suffice—roles must align with the DOL’s criteria for higher skill levels to qualify for additional lottery entries.
Organizations should anticipate increased scrutiny from U.S. Citizenship and Immigration Services (USCIS), particularly if wage levels appear inflated solely for the purpose of improving lottery odds. Future petitions could be denied or revoked if misaligned with initial filings.
Operational and cost considerations
Employers will likely face additional administrative obligations under the proposed rule, including:
- More extensive wage research and documentation
- Careful SOC code and geographic wage level alignment
- Enhanced recordkeeping requirements
- Higher legal and compliance costs
USCIS estimates increased registration time due to the added documentation burden. Employers must also prepare for intensified verification efforts, as the proposal includes stricter fraud prevention and enforcement mechanisms.
Next steps and employer action
The proposed rule is currently open for public comment through October 24, 2025. Given its potential impact on early-career hiring, talent pipelines, and workforce planning, employers should consider submitting feedback.
Should the rule be finalized, implementation could take effect in time for the FY2027 cap season, with registrations likely closing in March 2026. Until then, employers are encouraged to:
- Reassess H-1B strategies in light of the proposed weighted system
- Evaluate compensation structures and job classifications
- Consider alternative visa pathways (e.g., L-1, TN, O-1)
- Strengthen partnerships with immigration counsel to navigate complex filings
Strategic considerations moving forward
For employers who rely heavily on early-career H-1B talent—particularly in technology, engineering, or research-intensive industries—this proposed rule represents a significant policy pivot. It places new emphasis on wage-driven prioritization while retaining a degree of lottery-based randomness.
Meanwhile, companies hiring for senior-level roles may see improved chances of securing limited H-1B visas, but at the cost of additional documentation, compliance, and possible salary escalation.
As the regulatory landscape evolves, staying informed and agile is essential. Employers should take a proactive approach to workforce planning, ensuring alignment between business needs, immigration compliance, and the realities of the U.S. H-1B cap system.
This immigration update is for informational purposes only and is not a substitute for legal or scenario-specific advice. Furthermore, it is important to note that immigration announcements are subject to sudden and unexpected changes. Readers are encouraged to reach out to Newland Chase for any case- or company-specific assessments.
