Labor & Employment Law Daily Wrap Up, EXPERT INSIGHTS—New Weighted Selection Process for H-1B Cap Lottery Set to Take Effect in 2026, (Jan 7, 2026)

Law Firms Mentioned:Buchanan Ingersoll & Rooney

Organizations Mentioned:Buchanan Ingersoll & Rooney, PC

By Christopher R. Thorn and Stephanie Ng of Buchanan Ingersoll & Rooney PC

On December 29, 2025, the Department of Homeland Security (DHS) published a final rule that replaces the current H-1B random lottery process with a weighted selection system designed to favor beneficiaries with higher wages, as determined by the Department of Labor’s (DOL) four-tier prevailing wage system. This final rule takes effect on February 27, 2026, meaning it will be in place for the upcoming cap lottery in March 2026 for H-1B petitions with start dates in the Fiscal Year 2027.

Overview of the New Rule

Under the revised system, the selection of H-1B beneficiaries registered for the cap will be determined by a weighted pool, with entries based on the offered wage relative to the DOL's Occupational Employment and Wage Statistics (OEWS) four-tier prevailing wage system:

Beneficiaries offered a Level 4 wage (highest) will be entered into the pool four times.
Level 3 wage offers will result in three entries.
Level 2 wage offers will include two entries.
Level 1 wage offers will qualify for a single entry.

Employers registering prospective H-1B employees will need to specify the appropriate occupational code, the OEWS wage level and the area of employment. When a registration is selected, the employer must submit the corresponding documentation during the petition process to verify that the wage level indicated in the registration was appropriate for the position.

U.S. Citizenship and Immigration Services (USCIS) retains discretion to deny or revoke petitions if it determines that an employer attempted to manipulate the odds by selecting an inappropriate wage level or offering a lower wage than initially registered. Nonetheless, the regulation acknowledges that changes in work location—if bona fide—may be permissible, even if they result in a lower wage level.

Wage Offerings and Wage Levels

The registration process will reflect the OEWS wage level associated with the wage offered to the prospective employee. Employers must select the highest wage level that the offered wage meets or exceeds for the relevant occupation and location. If the employee will work in multiple locations, the lowest wage level among those locations must be chosen.

It’s important to note that the wage level indicated in the registration is based on the offered wage, not the wage level used for the Labor Condition Application (LCA), which is primarily determined by the position’s educational and experience requirements, as guided by DOL regulations. This means even if a job offer would otherwise be classified as level I under the OEWS wage level structure for LCA purposes based on the requirements of the position, the beneficiary could still be assigned to a higher equivalent wage level based on a high salary for registration purposes.

Implications for Employers

This policy shift could impact employers' hiring strategies, especially for entry-level candidates at Level 1 wages, who may face reduced chances of selection. To improve their odds, employers may offer higher wages, which could lead to increased labor costs and potential shifts in hiring practices. While the DHS intends for the rule to be in effect for the FY 2027 season, it is possible that the regulation will be challenged in federal court, which could delay its implementation. Importantly, this rule does not affect “cap-exempt” H-1B petitions, including extensions of stay, change of employer, amendments, or initial H-1B petitions filed by organizations that are deemed to be not liable for the H-1B annual cap.

Conclusion

The upcoming change to a weighted H-1B lottery represents a significant shift in how H-1B visa applicants are selected, favoring higher-paid beneficiaries and potentially reshaping employer hiring strategies. Stakeholders should monitor developments closely and adapt their processes accordingly to navigate this evolving landscape effectively. Our team continues to closely monitor the progress of this regulation. Please contact our Immigration team members if you have any questions.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Christopher R. Thorn

Stephanie Ng

Buchanan Ingersoll & Rooney PC

Union Trust Building

501 Grant Street

Suite 200

Pittsburgh, PA 15219-4413 United States

Tel.: +1 412 562 8800

E-mail: shari.boyle@bipc.com

URL: www.bipc.com/

Attorneys: Christopher R. Thorn and Stephanie Ng (Buchanan Ingersoll & Rooney).

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