H-1B Lottery Shifts to Wage-Based Selection in 2027

The U.S. Department of Homeland Security has finalized a major overhaul of how H-1B visas are selected, replacing the random lottery system with a weighted, wage-based system that prioritizes higher-paid and higher-skilled workers.

The final rule takes effect February 27, 2026, and will apply to the FY 2027 H-1B cap registration process.

“Overall, this administration has made its priorities clear,” said Boundless CEO Xiao Wang. “U.S. immigration policy is increasingly focused on attracting the highest-paid individuals from around the world. Employers need to adapt quickly.”

What’s Changing

Under the new rule, U.S. Citizenship and Immigration Services will no longer select H-1B visa registrations purely at random. Instead, each registration will receive a weighted number of “entries” based on the offered wage level, using the Department of Labor’s four-tier Occupational Employment and Wage Statistics (OEWS) system.

Higher wages mean better odds of selection, while still allowing employers to register candidates at all wage levels.

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How the New Weighted System Works

Under the new rule, each H-1B registration receives a different number of entries in the selection pool based on the offered wage level.

• Wage Level IV (highest): 4 entries
• Wage Level III: 3 entries
• Wage Level II: 2 entries
• Wage Level I (entry-level): 1 entry

Higher wage levels receive more entries, which increases the likelihood of selection. Registrations at all wage levels remain eligible, but odds vary based on how the offered salary compares with Department of Labor wage data.

Why DHS Says It’s Making This Change

According to DHS, the random lottery allowed abuse by employers submitting large volumes of low-wage registrations, undermining both program integrity and U.S. worker protections.

“The existing random selection process of H-1B registrations was exploited and abused by U.S. employers who were primarily seeking to import foreign workers at lower wages than they would pay American workers,” said USCIS spokesperson Matthew Tragesser. “The new weighted selection will better serve Congress’ intent for the H-1B program.”

The rule comes after a presidential proclamation requiring employers to pay an additional $100,000 per H-1B visa as a condition of eligibility.

What Hasn’t Changed

• The annual H-1B cap remains 65,000 visas, plus 20,000 for U.S. advanced degree holders
• Entry-level workers are not excluded from the lottery
• Employers may still use alternate prevailing wage surveys, provided the wage supports at least OEWS Level I
• Labor Condition Application procedures remain unchanged

USCIS also confirmed it will announce H-1B registration dates at least 30 days in advance.

A Potential Upside: Fewer Registrations, Better Odds

While the new system clearly favors higher-paid roles, it may also result in a dramatically smaller registration pool, which could improve selection rates across the board.

Wang expects participation to drop sharply:

“Total registrations could fall by more than half as offshore IT consulting firms pivot away from H-1Bs due to the $100,000 fee,” Wang said. “That could significantly improve odds for candidates already in the U.S. A 50% or higher selection rate is possible, and for the highest-paid candidates, it could approach 90%.”

What Employers Should Plan for in 2026

According to Wang, the changes will reshape how companies think about hiring and workforce planning:

• Hiring talent already in the U.S. becomes easier. OPT workers and H-1B transfers may have far better odds than in recent years.
• Higher wage bands matter more than ever. Roles that qualify for OEWS Levels III and IV will be strongly favored.
• Early-career hires still have a shot, especially if overall registrations decline. But outcomes may favor larger employers with higher salary ranges over startups relying heavily on equity.
• Alternative visa strategies are essential. Employers should assess options like L-1, TN, J-1 STEM, or O-1 visas to reduce dependence on the H-1B lottery.

“Overall, this administration has made its priorities clear,” Wang said. “U.S. immigration policy is increasingly focused on attracting the highest-paid individuals from around the world. Employers need to adapt quickly.”

Bottom Line

The FY 2027 H-1B lottery will look fundamentally different. Wage levels now directly influence selection odds, scrutiny at the registration stage is increasing, and participation is likely to shrink.

For employers and foreign nationals alike, planning early and strategically will matter more than ever.

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