USCIS Proposes Weighted H-1B Lottery Favoring Higher Wage Levels

USCIS recently proposed a rule that would significantly alter the H-1B lottery process for skilled foreign workers in specialty occupations. The rule is open for public comment until October 24, 2025. If finalized, it would apply to the upcoming H-1B cap lottery for Fiscal Year 2027, held in the spring of 2026.

The H-1B Visa Lottery

In 1990, Congress established a cap of 65,000 new H-1B visas issued per year, plus an additional 20,000 visas for individuals with advanced degrees who have earned a master’s degree or higher from a U.S. university. Since the demand for H-1B visas typically outpaces their availability, USCIS conducts a random lottery each year.

The Current Lottery Process: Better Odds for Beneficiaries with Advanced Degrees

In its current version, the H-1B cap lottery process looks like this:

• Electronic Registration: Employers (registrants) submit an electronic registration and pay a registration fee on behalf of a foreign worker (beneficiary). Each registration must be based on a bona fide job offer and contain basic data points, such as the employer’s name, EIN, and address, the beneficiary’s name, DOB, passport number, and whether the beneficiary qualifies for the advanced degree exception.

USCIS selects registered beneficiaries in a random lottery with two rounds:

• Round 1: All registered beneficiaries are entered into the lottery to compete for 65,000 visas, with equal chances of being selected.[1]
• Round 2: Beneficiaries with advanced degrees who did not make it in the first round get another opportunity to be selected for one of the 20,000 spots allocated under the advanced degree exemption (aka the master’s cap).

Employers whose H-1B beneficiary was selected have a time window within which they can file a complete H-1B petition.

Under the current rule, beneficiaries with advanced degrees have better odds, since they get a second chance to be selected. Certain institutions of higher education (or related nonprofit entities), nonprofit research organizations, and government research organizations are exempt from the cap, do not have to register prospective H-1B employees in the lottery, and can therefore file H-1B petitions year-round. These cap exemptions would remain in place under the new rule, as would the current cap of 65,000 plus 20,000 for advanced degrees.

Under the Proposed Rule: Higher Wage Levels Are Favored

Under the proposed rule, the following would change:

• Electronic Registration: Employers would have to provide additional information at the registration stage, specifically the proffered wage, the beneficiary’s wage level,[2] SOC[3] code, and geographical area(s) of intended employment (similar to the information required for the Labor Condition Application (LCA) and actual H-1B petition).
• Round 1: Registered beneficiaries would enter the lottery based on their assigned wage level. If the offered pay is equal to or higher than:
• • Level IV: the beneficiary would receive four entries in the lottery
  • Level III: three entries
  • Level II: two entries
  • Level I: one entry
• Round 2: Beneficiaries with advanced degrees who were not selected in the first round would get another chance, under the same weighted system as in Round 1.

If the proffered wage is expressed as a range or if the beneficiary would work in multiple locations or positions with different wage levels, the lowest applicable wage level would determine the beneficiary’s weight in the lottery.

The proposed rule recognizes that employers may offer particularly desirable beneficiaries a wage above the position’s required skill level for the purpose of giving these individuals a competitive edge in the lottery. This would align with the rule’s stated intent of favoring higher-skilled, higher-valued, or higher-paid H-1B workers.

Critics of the proposed rule argue that weighting beneficiaries by wage level would disadvantage highly skilled workers who are just entering the workforce, many of them recent graduates of U.S. universities on F-1 visas in important and cutting-edge STEM fields. The Institute for Progress (IFP), a non-partisan think tank, estimates that a system weighted by wage levels would cut the number of F-1 students obtaining H-1B status each year by about 7%. If finalized, legal challenges to the rule are likely.

[1] Minus 6,800 visas that are reserved for H-1B1 visas for residents of Singapore and Chile.

[2] The Department of Labor (DOL) distinguishes between four different wage levels, based on complexity, experience, and skills required for a position. The wage levels are categorized as Level I (entry-level), Level II (qualified), Level III (experienced), and Level IV (fully competent).

[3] The Standard Occupational Classification (SOC) system is used to categorize workers into occupational groups (e.g., Computer and Mathematical Occupations) and different levels and occupations within each group.