H-1B Wage-Based Selection: How the New Lottery Model Would Work

The H-1B visa ecosystem is on the verge of its most significant structural overhaul since the creation of electronic registration. Following the publication of the Restriction on Entry of Certain Nonimmigrant Workers proclamation in September 2025, the Department of Homeland Security and U.S. Citizenship and Immigration Services (USCIS) have advanced a regulatory proposal that replaces the traditional random lottery with a selection system tied to wage levels published by the Department of Labor.

The practical effect is straightforward: the salary offered to the foreign worker is no longer just an eligibility requirement — it becomes the primary factor determining selection odds. This article offers a technical reading of what is proposed, what has already been finalized, and what remains subject to change during the notice-and-comment period required by the Administrative Procedure Act.

How the H-1B Logic Would Change

Today, H-1B candidates enter a random selection pool after electronic registration. Each beneficiary receives, as a rule, a single entry regardless of the compensation offered. The new proposal inverts that logic and introduces a multiplier tied to the wage level determined by the Occupational Employment and Wage Statistics (OEWS, formerly OES) program of the Bureau of Labor Statistics.

The OEWS tier scale remains the same one used today in the Labor Condition Application (LCA):

• Level I — entry-level professionals at the beginning of their career.
• Level II — qualified professionals with full basic competency.
• Level III — experienced professionals capable of independent judgment on complex decisions.
• Level IV — fully competent professionals with significant responsibility and team oversight.

The proposed model replicates that hierarchy for the lottery. The preliminary rule under discussion assigns:

• One entry for Level I.
• Two entries for Level II.
• Three entries for Level III.
• Four entries for Level IV.

The higher the offered salary, the more lottery tickets the beneficiary holds. Selection remains capped at 65,000 slots in the regular cap and 20,000 additional slots under the master’s cap, but the profile of who gets selected would change dramatically.

Projected Impact by Wage Level

Immigration policy analyses — drawing on USCIS data and projections consistent with the historical distribution of petitions — point to the following comparative scenario between the current and proposed systems:

• Level I: estimated 48% drop in selection probability.
• Level II: modest 3% increase.
• Level III: significant 55% increase.
• Level IV: approximately 107% increase.

The message is clear. Entire career paths today depend on entry-level salaries classified as Level I — particularly those involving recent STEM graduates, professionals in medical training outside the J-1 context, and candidates in lower cost-of-living regional markets. Under the reform, these profiles would see their real selection odds plummet, while employers able to pay Level III and Level IV wages would capture the lion’s share of the cap.

Winners and Losers Under the New Model

The reform creates three groups with distinct impacts.

Big Tech, Finance, and Senior Biotech

Companies with strong payroll capacity stand to benefit. Experienced professionals in software engineering, AI, data science, product management, and investment banking typically already fall into Level III or IV. The reform turns competitive compensation into a direct selection advantage, aligning corporate interests with a lottery that rewards high salaries.

Recent Graduates and Early-Career Professionals

F-1 students planning to use OPT as a bridge to H-1B face the most severe impact. The Level I range — common for first jobs at consulting firms, early-stage startups, and academic labs — loses nearly half its selection probability. The practical consequence is that the classic F-1 → OPT → H-1B transition path becomes compressed, requiring alternative routes such as J-1, O-1, or employer-sponsored EB-2/EB-3 adjustment.

Small Businesses and Early-Stage Startups

Smaller employers, even when hiring qualified talent, frequently position offers at Level I or Level II due to cash constraints. Without the capital to pay Level III salaries, these employers face an uneven playing field in competing for international talent. The long-term effect may be an even greater concentration of H-1B usage among large corporations.

New Registration Requirements

The proposal reinforces the integrity of the electronic registration system by requiring more substantive data at the time of submission. If approved in its current form, the registration phase would collect:

• The OEWS wage level that the offered salary meets or exceeds.
• The SOC code from the Standard Occupational Classification for the position.
• The geographic area of employment, given that prevailing wages vary by metropolitan statistical area.
• Clarifications on salary ranges or multiple worksites, so that the registration accurately reflects the effective wage level of the offer.

The critical point is the linkage between what is declared during registration and what is later presented in the LCA and I-129 petition. Material discrepancies between registration and petition — in salary, worksite, or job description — can support denials or revocations. The final rule is expected to detail the exact enforcement standard, but the trend points toward stricter scrutiny.

Interaction with the $100,000 Fee

The same September 2025 presidential proclamation introduced a special $100,000 fee for certain H-1B filings, fueling litigation challenging its legality. The regulatory landscape therefore combines two simultaneous shocks: a direct cost increase from the new fee and a structural change in the selection criterion. For employers, the financial impact must be modeled together, since paying Level IV wages and absorbing the additional fee could make hiring for certain roles economically unviable.

The outcome of the legal challenges to the fee directly influences who retains an appetite to bet on H-1B under the new model. Even if the fee is struck down, the wage-based criterion is expected to move forward on its own, since it rests on an independent regulatory basis and prior administrative case law.

What Could Still Change

The proposal follows the Administrative Procedure Act rulemaking process, with a mandatory notice-and-comment period. During that window, business associations, universities, immigration law firms, and foreign governments submit technical comments. Points open to adjustment include:

• The exact number of entries per wage level (the 1-2-3-4 model is not the only option; earlier versions explored linear and non-linear alternatives).
• How to treat master’s cap occupations relative to regular cap positions.
• The treatment of cap-exempt employers (universities, research hospitals, nonprofit organizations), which traditionally operate at lower wage levels.
• Administrative handling of registrations covering multiple worksites in different geographic areas.

The final rule may also include transition provisions: some deference to registrations already planned before the rule’s publication, or a grace period for employers to adjust compensation structures.

Strategies for Employers and Professionals

Those preparing for upcoming cap cycles should evaluate both defensive and offensive moves.

For Employers

• Review the salary structure for roles that typically require H-1B sponsorship, identifying positions that could be reclassified to Level III or IV through reasonable scope adjustments.
• Map geographic areas with lower prevailing wages, considering relocation to metropolitan statistical areas where the same absolute salary represents a higher OEWS level.
• Diversify the immigration portfolio by expanding use of O-1, L-1, EB-1, and EB-2 for critical profiles that may be shut out of H-1B under the new regime.

For Professionals

• Negotiate salary aggressively before registration. Each OEWS level gained doubles or triples real selection odds.
• Explore opportunities with cap-exempt employers (universities, hospital systems, research institutes) as a stable bridge that bypasses the lottery altogether.
• Consider complementary pathways such as EB-2 NIW, especially for profiles with strong academic output, a significant STEM position, or demonstrated impact of national interest.

Expected Timeline

No official date has been set for publication of the final rule. A typical notice-and-comment cycle takes between six and eighteen months, depending on comment volume and potential litigation. Market expectations point to the wage-based model being in effect for the FY 2027 cap cycle, with a registration window in March 2026 — though procedural delays and court challenges could push implementation to FY 2028.

Monitoring the Federal Register, USCIS Newsroom publications, and reports from the Office of Information and Regulatory Affairs (OIRA) is the most reliable way to track the rule’s development. Each interim publication offers clues about the final design and compliance deadlines.

Victoria Harper

Editor-in-Chief

Meet the author

Leading journalism and editorial content at Visto n’ Visa, Victoria helps make immigration topics clear, trustworthy, and easy to understand. Her focus is on delivering useful, human, and relevant content for people exploring new paths abroad.