Our Perspective: New H-1B Rules Could Advantage Strategic Filers for the FY 2027 Cap Season
by: By: Julia Funke
Introduction
Throughout 2025, there were several changes to the H-1B program announced. From the 100k fee to social media vetting at the consulates and now an updated lottery process, the current administration has made it clear H-1B program reform is one of its top priorities. While many of these changes signal a more restrictive environment for employers, the most recent announcement updating the H-1B lottery selection process may turn out to be beneficial for those looking to secure highly skilled foreign talent. To take advantage of the new changes and strategically plan for the next H-1B cap season, it is important to understand exactly what the new rules are and how this will impact filing.
Weighted Lottery Selection
In December, USCIS announced a new rule to change the H-1B lottery process, which will be in effect for the upcoming H-1B cap season beginning in March 2026. Rather than a random lottery, the new selection process will prioritize the most highly paid, highly skilled candidates. While initial reactions to this update have been mixed, with many rightfully concerned about the detriment to small businesses and loss of opportunity for new graduates, the new system could serve as a major advantage for petitioners who can now ensure a greater likelihood of selection in a process which historically relied on luck alone.
Each year, there are 65,000 H-1B visas available, with an additional 20,000 for those who hold U.S. advanced degrees (master’s degrees or higher) for a total of 85,000 available visas. The new selection process framework will apply to both the H‑1B Regular and the U.S. Master’s Cap.
Under the new H-1B rule, the selection process will be weighted, prioritizing those who are registered under the highest wage level. The higher the wage level, the greater the number of entries the registration will be granted in the lottery:
- Registrations at wage level IV will be entered into the selection pool four times.
- Registrations at wage level III will be entered into the selection pool three times.
- Registrations at wage level II will be entered into the selection pool two times.
- Registrations at wage level I will be entered into the selection pool once.
According to the Final Rule, the weighted selection process is projected to reduce the selection probability for Level I wage registrations by approximately 48%, for a mere 15% chance of being selected. However, the selection chances for Levels II, III, and IV are projected to increase by 3%, 55%, and 107%, respectively. In other words, for Levels II-IV, the odds of being selected will either stay relatively the same or increase dramatically. Overall, the rule aims to incentivize employers to file under higher wage levels, which will give them more control over the outcome by increasing the chances of selection.
As in the past, if an employee is registered through more than one company, the beneficiary will only be counted once against the cap. If multiple registrations exist for the same beneficiary at different wage levels, the lowest wage level will be used in determining the weighted entry number. What this means is if Company A registers a candidate under Level IV, but Company B registers the same candidate under Level II, the candidate will only be entered into the selection pool twice, consistent with the Level II designation. In other words, Employer A will not have the benefit of four entries into the candidate pool even though they used Level IV, since Employer B used Wage Level II. If the candidate is selected, the candidate will be permitted to file the H-1B petition with any employer who registered them (all employers will receive a selection notice), but the petition must be filed using the SOC code, wage level, and work location submitted for that specific employer’s registration.
Consular Cases & the 100K Fee
While the 100k fee is objectively problematic as a policy, it may serve as an advantage for FY 2027 H-1B Cap filers from within the U.S., assuming it is not struck down by one of the several lawsuits currently pending. If the 100k fee stays in place, the overall registration in this year’s H-1B cap will likely be significantly lower. Since the 100k fee applies to any H-1B filed in consular processing, it is very unlikely employers will register candidates who are currently outside the U.S. This should result in a significantly smaller pool of candidates for this year’s H-1B cap. In conjunction with the weighted selection process, this should make it much easier for employers to have their registrations selected, if planned strategically. If filed using higher wage levels, in a pool that is significantly smaller than years past, the odds will be much higher a given candidate will be selected. This could greatly benefit F-1 students, L-1/L2 visa holders, H-4 dependents, and other nonimmigrant visa holders already in the U.S. seeking to change status to H-1B.
Other Things You Should Know: Possible Increase in Prevailing Wages
Notably, the new H-1B rule coincides with an update from the Department of Labor signaling that adjustments to wage level determination are on the horizon. On December 17, the Office of Information and Regulatory Affairs published an update showing a pending regulatory action proposed by the U.S. Department of Labor titled “Improving Wage Protections for H-1B and PERM Employment in the United States.” The OIRA will have 90 days to review the proposed rule, which will then be published and subject to a 60 day public notice and comment period before becoming final. While the substance of the rule remains confidential until formally published for public comment, it is very likely that we will see higher prevailing wage requirements in the coming year. In the final days of the first Trump Administration, the DOL finalized a rule that would have increased the prevailing wages required under all four levels, but it never went into effect following the administration change. Now, we may see some version of that rule revived and employers should plan accordingly. It is still early in the regulatory process, but it is clear change is coming. For those selected in the FY 2027 Cap, it will be important to file the corresponding H-1B petition early during the filing period (which runs from April 1- June 30) as we could see increased prevailing wages under a new DOL rule before it closes.
Cap-subject H-1B petitions aside, employers should also actively evaluate their current H-1B needs to identify upcoming amendments, extensions, and transfers and file those as early as possible, before any new restrictive requirements are in place.
FY 2027 H-1B Cap Preparation & Strategic Planning
As we approach the next H-1B registration period, which will open in March, it is important to be proactive. There will be notable changes in the process this year, as employers will now be required to provide the SOC code, work location, and wage level at the time of registration. While previously this process required only basic biographic information, employers will now need to make high-level petition-related decisions at the time of registration instead. As the registration period is only open for a limited period, planning ahead will be especially important this year.
Once registered with an SOC code, wage level, and location, those details must remain the same for any subsequent H-1B petition filed based on that selection. In other words, you cannot register in Level IV to increase your odds of selection but then file the H-1B petition under Level II. The required prevailing wages can vary greatly depending upon location, job title/SOC code, and wage level, meaning it will be critical to work with an experienced attorney well ahead of time to finalize these details for all planned registrations. Working with experienced counsel will ensure you are able to register at one of the higher wage levels (II-IV) to increase the number of entries and selection probability, while being mindful to avoid overly-inflated, cost-prohibitive wage requirements.
If selected, it is important employers can provide evidence the candidate qualifies for the role. In other words, if you choose an SOC code, you will later have to prove the beneficiary’s background aligns with that SOC code. This may mean obtaining education and/or experience evaluations ahead of registration, to determine what SOC codes may be possible for a given candidate to then determine the best fit based on required salary and wage levels. Again, early planning will be crucial.
Finally, it’s important to note that the Department of Labor’s wage levels correspond with skill level. Level I is for entry level, very basic positions. Level II is for mid-level roles, while Level III is for more senior level positions which often include supervisory duties and greater required experience. Level IV is for positions that require extensive experience, leadership, and recognized expertise. While we have not historically received Requests for Evidence from USCIS questioning whether the LCA was filed in a wage level too high (RFEs for LCAs filed under wage levels deemed too low are quite common), it is possible that USCIS could question a petition filed under a higher wage level if the candidate is entry level and the position does not align with the wage level requirements. In other words, if you file a petition in Wage Level IV simply to increase the odds of being selected, but the candidate only has 1-2 years’ experience, you will not be able to show the position requires 5-10 years of experience and is truly a Wage Level IV position. USCIS will then find either that the LCA was improperly filed or that the beneficiary is not qualified for the role indicated in the LCA. As such, decisions about wage levels and SOC codes will need to be carefully considered with the advice of an experienced H-1B attorney. Carefully planning in the weeks ahead will be critical to success in this year’s H-1B cap.
Conclusion
While the H-1B landscape is growing increasingly restrictive and we can expect more changes to come in 2026, it remains the most widely used work visa in the U.S. with few available alternatives. Adapting your immigration program to address changes in the H-1B landscape will be critical to continued success in securing the best and brightest foreign talent. Now, more than ever, the right legal advice matters.
At Immigration USA, we are carefully monitoring all immigration news and we will continue to update our clients about any policy changes. The FY 2027 H-1B cap is quickly approaching – reach out today to start planning your next steps.