The Department of Homeland Security (DHS) on September 24, 2025 published a landmark proposal in the Federal Register to fundamentally change the H-1B lottery process from random selection to a wage-based weighted system, prioritizing higher-paid applicants. The rule is open for public comment for 30 days, and if approved could take effect as soon as the FY2026 H-1B cap season.
DHS is responding to longstanding criticism of the existing H-1B lottery, which currently allocates 85,000 visa slots (65,000 regular plus 20,000 advanced degree) from a pool of nearly 500,000 eligible annual registrations. Under the new proposal, entries into the lottery will be weighted according to the wage offered relative to Department of Labor prevailing wage levels for the role and location.
| Wage Level | Percentile | Lottery Entries |
| Level IV (Fully Competent) | 67th percentile | 4 |
| Level III (Experienced) | 50th percentile | 3 |
| Level II (Qualified) | 34th percentile | 2 |
| Level I (Entry) | 17th percentile | 1 |
DHS predicts this change will boost selection odds by 107% for Level IV earners and decrease odds by 48% for Level I applicants, reshaping incentives across sectors.
How the New System Works
- Employers will declare the offered wage, SOC code, and intended employment area in the H-1B registration.
- Registrations will be entered into the lottery pool multiple times depending on the highest wage level the offer meets or exceeds.
- The “beneficiary-centric” model remains each unique foreign national may only be selected once, regardless of employer duplications. If selected, all employers who registered that person are notified and may file petitions. This prevents candidates from gaining extra chances by having multiple employers submit entries, promoting fairness and reducing fraud.
- Employers must substantiate the appropriate wage level in later filings, with oversight to prevent manipulation or misrepresentation. This means the employer must, during the USCIS petition stage, submit documentation that shows how the offered wage matches the job duties, requirements, location, and experience needed, corresponding to one of the four Department of Labor wage levels (I-IV).
Stakeholder Impact
- Recent graduates and entry-level roles face steeper selection odds, potentially reducing access for new talent and smaller employers.
- International students and those in lower-wage fields may be incentivized to pursue higher-paying positions or advanced degrees.
- Tech, consulting, and large firms offering Level III/IV wages gain a clear advantage in the selection pool.
- Companies and HR teams should review wage strategy, LCA classification, and recruiting approaches to align with the new weighted system.
Next Steps
- The rule is officially published; the 30-day comment period is open for the public and stakeholders. If finalized, the new process could begin with the 2026 lottery pending regulatory review and anticipated legal challenges.
- Employers and institutions should prepare comments and review wage offers, compliance procedures, and recruitment strategies.
Who Wins, Who Loses?
- “Winners”: High-paying, senior roles at large firms; advanced degree holders and those able to command Level III/IV wages.
- “Losers”: Entry-level talent, new graduates, and smaller employers with limited salary budgets.
Action Steps
- Review the Federal Register notice and submit comments within the 30-day window.
- Align wage offers and recruitment strategies to maximize selection chances under the new system.
- Monitor for further developments from DHS and USCIS as rulemaking and potential legal action proceed.
