USCIS Creates Weighted Selection Process for H-1B Cap Lottery, Favoring High Wage Earners

On December 23, 2025, the Department of Homeland Security (DHS) announced that it is publishing a final rule which will change the priority given to the selection of H-1B registrations submitted in the annual H-1B cap registration lottery. DHS’ stated goal in finalizing this regulation is based on the allegation that the existing H-1B lottery random selection process has been “exploited and abused by US employers who were primarily seeking to import foreign workers at lower wages than they would pay American workers.”

This final rule will become effective February 27, 2026, and will be in place for the FY 2027 H-1B cap registration season, for H-1B registrations submitted in March 2026.

Background

The H-1B “cap” or “quota” is a limitation on the number of “new” H-1B petitions that can be approved in a fiscal year. The current quota is 85,000, of which 20,000 are reserved for individuals who hold a United States master’s or higher degree.

For the past 12 years, there have been far more petitions filed than available H-1B numbers. As a result, United States Citizenship and Immigration Services (USCIS) historically has performed a computer-generated lottery to select which petitions would be processed. In 2020 (Fiscal Year 2021), USCIS implemented an H-1B registration system. Under this registration system, employers submit an electronic registration to USCIS for selection in the H-1B cap lottery, and then submit a full H-1B petition to USCIS if the registration is selected. Each registration had an equal chance of selection based on whether the registration was in the “Master’s” quota or the “regular” quota.

Summary of the weighted selection process

This new regulation amends the H‑1B electronic registration system to give higher-paid applicants a greater chance of selection. The weighted selection process applies to all cap‑subject H‑1B registrations, including the 65,000 “regular” cap and the 20,000 “Master’s” cap selections.

When completing an H-1B registration on behalf of an employee or candidate, employers must provide the below details:

• Wage level (I–IV) from the Department of Labor’s (DOL) Occupational Employment and Wage Statistics (OEWS) wage system
• DOL Standard Occupational Code (SOC) that is aligned with the offered position
• Geographic location of employment.

DHS will use these details to assign weighted entries in the lottery based on the offered wage level. The registration will receive a weighted entry as follows:

USCIS Verification of Accuracy of H-1B Registration

The final rule makes clear that USCIS will verify the integrity of the wage level, job code and job location for any H-1B petition that is filed to USCIS based on a selected H-1B registration. The final rule states that USCIS will confirm the following:

• The employer selected the appropriate occupation and its wage level in the H-1B registration for the proffered position
• The position information provided in the selected registration is the same as the information provided in the H-1B petition
• The position information on the registration was true and correct, and represents a bona fide job offer
• Any filing of a new or amended petition does not indicate an attempt by the employer to unfairly increase the odds of selection during the registration selection process.

Impact to US Employers

This final rule may have a crippling effect on many US employers hire entry-level professional employees to maintain and expand their workforce. A number of industries including healthcare, biotech, technology, finance, consulting, and education are dependent on a global talent pool in order to maintain and expand operations. This final rule will significantly limit a needed source of talent for a US-based workforce. In addition, small employers and start-up companies will likely struggle to hire H-1B workers who are subject to the H-1B lottery.

Potential Chaos for March 2026 H-1B Lottery

This final rule will likely be subject to litigation, as small employers and nonprofit companies that are subject to the H-1B lottery will be adversely impacted. Employers should be aware that USCIS has the right to suspend the H-1B electronic registration process, “in its discretion, if it determines that the registration process is inoperable for any reason.” USCIS has the ability to announce that the electronic registration process has been suspended, and could require the filing of full H-1B petitions in order for H-1B candidates to be included in the H-1B cap lottery.

The potential need to file a full H-1B petition to USCIS for inclusion in the lottery may be further burdened if there is a government shutdown following the expiration of the current Continuing Resolution for federal funding, which expires on January 30. If there is another government shutdown, processing of Labor Condition Applications (LCAs) may be suspended by DOL.

Conclusion

Employers who plan on filing H-1B registrations for employees and candidates should plan early to identify the details of proposed employment, and consult with immigration counsel to understand how the new weighted lottery system will impact odds of selection.

Please contact a member of the Mintz Immigration Team for more information: https://www.mintz.com/industries-practices/immigration

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