Proposed Rule Would Shift H-1B Lottery to Wage-Based Selection
The Department of Homeland Security (DHS) has submitted a proposed rule that could fundamentally reshape the H-1B cap selection process. If finalized, the long-standing random lottery would be replaced by a wage-based selection system, starting as early as the FY 2026 cap season.
What Would Change?
Instead of selecting registrations randomly, USCIS would prioritize entries based on the wage level offered to the beneficiary, using Department of Labor prevailing wage data. The order of selection would start at Level IV (highest wage) and proceed down to Level I, with lower wage levels being selected only if visa slots remain.
This system would also allow for mini-lotteries within each wage tier, if the number of entries at a specific level exceeds the available slots.
Why This Proposal?
DHS argues that this change would better reflect the purpose of the H-1B program: to attract highly skilled foreign workers for roles that are difficult to fill domestically. A wage-based approach is intended to:
• Discourage mass low-wage filings,
• Incentivize employers to offer more competitive salaries, and
• Prioritize more experienced or specialized workers.
A similar rule was proposed in the final months of the Trump administration but was later withdrawn by the Biden administration due to legal and implementation concerns. This new proposal reflects a more refined approach and is currently under review by the Office of Management and Budget.
What Employers Should Know
• Implementation Timeline: The rule may take effect as soon as the March 2025 registration window for FY 2026.
• Legal Landscape: Previous attempts at similar changes faced court challenges. Stakeholders should monitor for potential litigation that could delay or block implementation.
• Interaction with 2024 Integrity Rule: USCIS’s recent rule change requiring registration by unique beneficiary means employers will need to be especially strategic in their filings.
Strategic Implications
If this rule moves forward:
• High-wage and senior-level positions will be more likely to be selected.
• Lower-wage and entry-level roles may face increased difficulty under the new system.
• Employers will need to evaluate salary structures and potentially adjust wage levels for H-1B candidates to remain competitive.
Institutions such as universities and research organizations—many of which already offer Level III or IV wages—could benefit from this structure.
Meanwhile, outsourcing firms or startups offering Level I or II wages may face new hurdles.
Preparing for What’s Ahead
While this rule is not yet final, it signals a clear shift in how the U.S. government may prioritize H-1B petitions in the coming years. Employers who regularly sponsor foreign workers should begin reviewing internal policies, job offers, and wage levels to ensure they remain competitive and compliant if the rule is implemented.
Our firm is closely monitoring the proposal and will continue to share updates as more details become available. If your company is planning to register candidates for the FY 2026 cap season, now is the time to start thinking strategically.
Heckler Law Group is ready to guide your company through the detailed nature of U.S. immigration to ensure a smooth process. Get started by requesting a free case evaluation, and our team will contact you promptly.