H-1B Wage Level Rule Explained: What the New Wage-Based Selection Means for the H-1B Lottery (2026 Update)

The H-1B lottery is no longer a game of pure chance. Starting February 27, 2026, the Department of Homeland Security will implement a wage-weighted random selection process for cap-subject H-1B registrations that prioritizes higher-wage positions. Based on historical data referenced by DHS in the final rule, Level IV wage positions may have approximately 61% selection probability, while Level I positions drop to just 15% - compared to the prior equal-chance selection model (with selection rates varying by year depending on volume but averaging ~29.59% based on historical data. For employers and foreign nationals seeking H-1B specialty occupation visas, understanding this change is critical for strategic planning in the FY 2027 cap season and beyond.

Understanding the H-1B Wage Level Rule and its Evolution

The H-1B program allocates 85,000 visas annually (65,000 regular cap plus 20,000 for U.S. advanced degree holders) for specialty occupation workers. Since demand far exceeds supply, USCIS has historically used a random lottery to select eligible registrations.

The weighted selection rule fundamentally changes this approach by tying selection probability to prevailing wage levels established by the Department of Labor.

What Are H-1B Wage Levels?

The DOL's prevailing wage system divides wages into four tiers based on Occupational Employment and Wage Statistics (OEWS) data:

• Level I (Entry): For workers with basic understanding of duties
• Level II (Qualified): For workers with experience performing routine tasks
• Level III (Experienced): For workers with significant experience and independent judgment
• Level IV (Fully Competent): For workers with expert knowledge and supervisory responsibility

Despite 2020 and 2021 proposed increases that would have raised these thresholds significantly, those rules were stalled in court and eventually withdrawn in December 2021. The current operational percentiles remain unchanged.

The Shift Toward Wage-Based Selection

The DHS final rule, published in the Federal Register on December 29, 2025, implements a weighted system where registrations are entered into the selection pool multiple times based on wage level:

• Level IV: Entered 4 times
• Level III: Entered 3 times
• Level II: Entered 2 times
• Level I: Entered 1 time

Each unique beneficiary still counts only once toward the 85,000 cap - the weighting affects probability, not allocation. As USCIS explained, this system "better serves Congress' intent for the H-1B program" by incentivizing employers to petition for "higher-paid, higher-skilled foreign workers."

H-1B Lottery 2026: The Impact of Wage-Based Selection

The rule becomes effective February 27, 2026 - precisely in time for FY 2027 cap registration expected to begin in March 2026. This timing means employers must adjust strategies immediately.

How the Wage Rule Affects Lottery Odds

The probability shift is dramatic. Under the current random selection model, registrants have equal odds of selection in the lottery draw, though master's cap–eligible registrants effectively get an extra bite at the apple, because they can be considered in both the master's cap and the regular cap lotteries.

The weighted system creates stark differences.

Historical petition data from FY 2020-2024 shows H-1B cap petitions concentrated at lower levels: 28% at Level I, 55% at Level II, 12% at Level III, and only 5% at Level IV. This distribution means the majority of current H-1B participants face significantly reduced selection odds unless employers increase wage offers.

Analyzing the New Selection Dynamics

DHS projects the annual distribution of 85,000 visas will shift substantially:

• Level I selections: Down 10,099 (from 23,830 to 13,731)
• Level II selections: Up 2,373 (to 49,342)
• Level III selections: Up 4,496 (to 14,548)
• Level IV selections: Up 3,230 (to 7,379)

For STEM professionals and other high-skilled workers, the rule's impact depends entirely on how their salary maps to OEWS wage levels for their specific occupation and location. A software engineer earning $150,000 in San Francisco may correspond to Level II, while the same salary in Austin might correspond to Level III or IV.

Navigating H-1B Prevailing Wage Determinations

Understanding how prevailing wages work is essential for optimizing selection probability under the new system. The DOL's wage determination process establishes the minimum salary employers must pay H-1B workers based on job duties, location, and experience requirements.

The Prevailing Wage Request Process

Employers can determine prevailing wages through several methods:

• OFLC Online Wage Library: Free access to OEWS wage data by occupation and geographic area
• Form ETA-9141: Formal prevailing wage determination request to DOL's National Prevailing Wage Center
• Alternative surveys: Private wage surveys meeting DOL statistical validity requirements
• Collective bargaining agreements: Union wage rates for covered positions

For most H-1B employers, the OFLC Wage Search tool provides immediate access to wage levels by Standard Occupational Classification (SOC) code and metropolitan statistical area.

The Registration vs. LCA Wage Level Distinction

A critical distinction exists between the OEWS wage level selected for registration and the level used on the Labor Condition Application:

• Registration wage level: Based on the highest OEWS level that the offered salary equals or exceeds
• LCA wage level: Based on the minimum requirements of the position (education, experience, supervision)

This means a highly-paid entry-level worker could be registered at Level III or IV based on salary, even though the LCA shows Level I based on position requirements. It's important to understand that wage levels reflect relative seniority and job complexity within a specific occupation and location, not simply how much the worker is paid.

Common Considerations for Wage Level Determination

Several factors can complicate wage level determination:

• SOC code selection: The same job title may map to different codes with different wage levels
• Geographic variations: OEWS data varies significantly by metropolitan area
• Beneficiary qualifications: Complications may arise if the beneficiary does not hold a degree in a field related to the OES occupation

For employers seeking guidance on H-1B requirements, working with experienced immigration counsel can help ensure accurate wage level classification and optimal positioning.

Strategic Considerations for H-1B Wage Levels

With selection probability now directly tied to wage levels, employers may want to approach H-1B sponsorship more strategically. The H-1B lottery is no longer a purely random process - the chances of selection now vary based on the wage level offered for the position.

Aligning Job Duties with Wage Levels

Job descriptions and SOC code selection can significantly impact wage level classification. Employers may want to consider:

• Reviewing SOC codes: Ensuring positions are classified under the most accurate and appropriate code, not necessarily the code with the lowest prevailing wage
• Documenting experience requirements: Higher minimum requirements may support higher wage levels on the LCA
• Considering supervisory duties: Positions with management responsibilities often qualify for higher levels
• Analyzing alternative titles: Different job titles may correspond to different SOC codes with different wage structures

Evaluating Salary Considerations

The financial decision to increase wages for H-1B positions may require analysis:

Selection probability gain: Moving from Level II to Level III increases odds by approximately 15 percentage points (from 31% to 46%)

Cost analysis factors to consider:

• Additional salary cost over 3-year H-1B period
• Cost of failed selection (recruiting delays, project impacts, alternative visa options)
• Internal pay equity considerations

Employers considering wage adjustments for foreign national employees may want to consult with both immigration counsel and employment counsel to understand any implications for pay equity and internal compensation structures.

Long-Term H-1B Planning Considerations

For businesses managing multiple foreign national employees, the weighted selection rule may warrant systematic planning. Areas to consider include:

• Reviewing H-1B-eligible roles for SOC code accuracy and current wage level assignments
• Modeling comparative selection probability estimates for Level I-II positions under the new system (note that odds will vary each year based on the pool of registrations)
• Coordinating immigration and compensation teams early in the hiring process
• Evaluating alternative visa categories (O-1, L-1, TN) for candidates who may not achieve higher wage levels

H-1B Application Process: Post-Lottery Steps

Once selected in the lottery, employers must file a complete H-1B petition with documentation consistent with the registration. The final rule outlines the critical consistency requirements.

From Selection to Filing the Petition

The post-selection timeline is structured:

1. Selection notification: USCIS notifies selected registrations via the online account
2. LCA filing: Obtain certified Labor Condition Application through DOL's FLAG system. It is also acceptable to proactively obtain certified LCAs prior to selection, which is a useful strategy to expedite the filing for at-risk cases, i.e. students with expiring F-1 OPT.
3. Petition preparation: Compile supporting documentation, evidence, and forms
4. Filing window: Submit Form I-129 within the designated period (typically 90 days)

Required Documentation and Forms

A complete H-1B petition includes:

• Registration selection notice
• All required fees
• Form G-28: If prepared by attorney
• Form I-129 Petition for Nonimmigrant Worker, H Supplement and Data Collection Supplement
• Certified LCA: Must match registration details (SOC code, wage level, work location)
• (Recommended) Wage level evidence: DOL OFLC Wage Search printouts as of registration date
• Beneficiary qualifications: Degree certificates, transcripts, experience letters
• Maintenance of status documentation, if filing a change of status
• (Recommended) Employer documentation: Tax returns and/or evidence of ability to pay offered wage
• Passport/travel document: Must match information provided during registration

Understanding Processing Times

USCIS processing times vary based on service center workload and case complexity. Regular processing can take several months, while premium processing offers expedited adjudication for an additional fee. If USCIS issues a Request for Evidence (RFE), petitioners typically have a limited time to respond.

For employers needing guaranteed turnaround times, Alma's H-1B services include fast document preparation with a 2-week turnaround guarantee and comprehensive RFE response support.

Compliance Considerations for H-1B Employers

The new rule imposes strict consistency requirements between registration and petition to prevent gaming. USCIS may deny or revoke petitions based on perceived manipulation.

Maintaining H-1B Compliance Post-Approval

Employer obligations continue throughout the H-1B period:

• Wage compliance: Pay at least the higher of prevailing or actual wage
• Working conditions: Maintain conditions specified in the LCA
• Material changes: File amendments for significant changes to employment terms
• Termination procedures: Offer reasonable return transportation costs if terminated before end date

Audit Preparedness

DOL may conduct audits of H-1B employers. Generally, employers should be prepared to demonstrate:

• Public Access File (PAF): Maintained for public inspection at principal place of business
• LCA documentation: Retained for the required period after employment ends
• Wage records: Documentation of actual wages paid versus required wages
• Recruitment records: For H-1B-dependent employers, evidence of U.S. worker recruitment

Anti-Gaming Provisions

The rule includes specific provisions to prevent manipulation:

• Consistency requirement: Petitions must contain the same SOC code, wage level, and work location as registration
• Wage reduction scrutiny: USCIS may deny petitions if wage level is reduced after selection
• Related entity monitoring: Subsequent petitions by related entities face heightened review if changes suggest gaming
• Multiple registrations: When multiple employers register the same beneficiary, USCIS assigns the lowest wage level among all registrations for weighting purposes

For businesses seeking compliance support, Alma's platform includes built-in trackers, proactive alerts, and audit-ready records for HR and mobility teams.

Key Dates and Deadlines for the H-1B Lottery 2026

Timing is critical for the FY 2027 H-1B cap season. The rule's February 27, 2026 effective date means all registrations submitted after that date will use the weighted selection system.

The H-1B Lottery Timeline

Expected FY 2027 Schedule (exact dates announced by USCIS): The registration period is expected to open in early March 2026 and close in late March 2026, with initial selection notification and start of petition filing window anticipated for late March/early April 2026, the petition filing window ending around late June 2026, and the employment start date set for October 1, 2026.

Critical Preparation Dates

Before registration opens, employers should:

• Complete wage level analysis for all prospective H-1B positions
• Verify beneficiary passport/travel document information
• Confirm job offer details (title, duties, salary, work location)
• Coordinate with payroll on potential salary adjustments

Startups and early-stage companies should begin preparation immediately to ensure adequate time for strategic wage positioning.

Don't Miss These Deadlines

Common timing mistakes to avoid:

• Late registration: Missing the registration window means waiting another full year
• Incorrect information: Registration data must match petition exactly
• OEWS data timing: Wage level is locked as of registration date, even if OEWS updates before petition filing
• Petition filing deadline: Missing the filing window forfeits selection

Expert Guidance Through the H-1B Wage Rule Changes

The complexity of the new wage-based system makes professional legal guidance more valuable than ever. The rule introduces multiple new requirements that require careful attention to detail.

Why Legal Expertise Matters

The weighted selection rule creates new strategic considerations:

• Wage level optimization: Determining the right balance between salary cost and selection probability
• SOC code accuracy: Ensuring proper classification for both selection odds and audit compliance
• Documentation consistency: Aligning registration, LCA, and petition details precisely
• Alternative pathways: Evaluating whether O-1, L-1, or other visas might be better options

How Alma Stays Ahead of Regulatory Changes

Alma combines attorney expertise with technology to deliver responsive, accurate immigration legal services. Alma provides:

• Strategic wage level analysis: Help employers understand their positioning under the new system
• Real-time case tracking: Transparent visibility into application status at every stage
• Compliance automation: Built-in alerts for deadlines, expirations, and required actions
• RFE response support: Expert handling of requests for evidence

Personalized Support for Complex Cases

Every H-1B situation has unique considerations. Recent graduates face different challenges than experienced professionals. Multi-location employers need different strategies than single-office companies. Entrepreneurs and founders require specialized approaches.

Alma's attorney-led, tech-enabled platform provides personalized immigration support tailored to individual circumstances - whether you're an individual seeking your first H-1B or a company managing hundreds of foreign national employees.

Disclaimer: This blog is for informational purposes only and does not provide legal advice. Reading it does not create an attorney-client relationship. For advice about your situation, consult a qualified immigration attorney.