The H-1B Cap Lottery Has Changed: What the New Wage-Weighted Selection Rule Means for Employers and Workers

The H-1B cap process has long been criticized as a pure lottery that rewards luck rather than economic value. Beginning with the 2026 cap season, that criticism is no longer academic. The Department of Homeland Security has finalized a new regulation that fundamentally alters how H-1B registrations are selected, replacing the traditional random lottery with a wage-weighted selection system.

This change does not eliminate randomness, but it does change the odds in a way that matters greatly for both employers and foreign professionals.

Under the new rule, each H-1B registration is assigned a number of “entries” into the selection pool based on the Occupational Employment and Wage Statistics (OEWS) wage level associated with the job offer. A registration tied to a Level I wage receives one entry. A Level II wage receives two entries. Level III receives three entries. Level IV receives four entries. USCIS then conducts a random selection from this expanded pool until the annual cap is reached. To see the wage levels for a particular job position, please visit: https://flag.dol.gov/wage-data/wage-search

In practical terms, a Level IV registration has four times the chance of being selected compared to a Level I registration. Selection is still random, but no longer equal.

This shift reflects a clear policy choice. DHS is signaling that higher-paid positions, which it views as more specialized and economically valuable, should receive preference under the cap. The agency has framed this as a way to better align the H-1B program with congressional intent to attract highly skilled workers, while reducing incentives for mass filings at the lowest wage tiers.

What this rule does not do is just as important as what it does. It does not impose a new mandatory wage floor. Employers are not required to pay a Level III or Level IV wage to participate. Level I positions are still eligible. However, the statistical reality is unavoidable: lower wages now come with lower odds.

This is where many employers and workers are making a dangerous assumption. Some believe they can simply “select” a higher wage level to improve selection chances. That is incorrect and risky. The regulation requires employers to identify the highest OEWS wage level that the offered wage actually meets or exceeds for the specific occupation and geographic area. Wage level selection must be bona fide and defensible. Misclassification can expose the employer to LCA denial, petition denial, site visit failures, or fraud findings.

Another misconception is that this rule guarantees selection for high-wage roles. It does not. A Level IV registration can still lose, and a Level I registration can still win. The system adjusts probabilities, not outcomes. Employers should view this as a risk-management change, not a promise.

From a strategic perspective, the new rule forces earlier and more serious wage planning. Employers who historically relied on entry-level wages for cap cases must now weigh whether those roles remain viable under the cap at all. Some may shift toward cap-exempt strategies. Others may increase wages to reflect genuine seniority and improve odds. Workers, meanwhile, need to understand that job level, not just credentials, now materially affects selection probability.

For employers who sponsor H-1B workers, this regulation makes careful job design, accurate SOC selection, and defensible wage analysis more important than ever. For foreign professionals, it reinforces the value of roles that reflect true specialization and experience rather than nominal job titles.

The H-1B program has not become a merit system in the pure sense, but it is no longer a blind lottery either. Those who treat it as business as usual are likely to be disappointed. Those who adapt thoughtfully, with proper legal guidance, will be better positioned in this new landscape.

Legal Disclaimer:
This article is provided for general informational purposes only and does not constitute legal advice. Reading this article does not create an attorney-client relationship. Immigration law is complex and fact-specific, and outcomes depend on individual circumstances. Call (213) 251-5533 for a free legal consultation with Attorney Thomas Lee before making decisions related to H-1B sponsorship or wage determinations.