On December 29, 2025, DHS published a final rule amending the registration and selection process for cap-subject H-1B petitions to implement a new “weighted” lottery system that will favor registrants who are offered higher wages. The new system will be effective from February 27, 2026, which means that it will be used in this year’s H-1B cap lottery that will take place in March 2026.
At the time of writing, the $100,000 fee imposed on new H-1B visas for beneficiaries applying from a consulate abroad is still in place. This fee would act as a practical barrier for many cases from moving forward with the H-1B visa in 2026, which may impact the volume of registrations. Yet, we are still seeing interest among applicants in participating in the 2026 lottery among those who are pursuing an H-1B petition as a change of status, in which cases the applicant would be exempt from this fee.
Background of the H-1B Selection Lottery
The H-1B selection lottery is a longstanding fixture of the H-1B visa system because Congress set a maximum number of H-1B visas that can be issued each fiscal year at 85,000, which is called the “cap,” and this applies to most applicants with private sector job offers.
Of the 85,000, 20,000 slots are specifically dedicated to U.S. advanced degree holders (Masters or above), who get two chances at selection because an additional lottery for advanced degree holders is held to fill the 20,000 slots.
The issue is that in the past two decades, demand greatly exceeded the cap such that there were always more applicants than there were visas available. The solution used was to institute a random lottery to select which 85,000 applicants from this pool of applicants would be allowed to proceed with the H-1B visa.
The H-1B selection lottery has become more and more competitive over the years. For fiscal year 2025, over 442,000 people applied to register for the lottery to try their chances at being one of the 85,000 selected. This translated to a roughly 25% chance of selection across the board (with advanced degree holders facing higher odds due to the 20,000 set-aside slots).
Key Changes Coming with the 2026 Lottery
Since September 2025, the White House has signaled its policy intent to advantage higher-paid applicants in the issuance of visas. Consistent with this intent, DHS promulgated a new “weighted” lottery system for the annual H-1B selection lottery which would make it more difficult for lower-paid applicants to be selected for the visa, while increasing the odds of higher-paid applicants.
How the New Lottery Will Work
- Required Information: Applicants must provide information at registration about the wage offered, SOC Code of the position, and the area of intended employment, all of which will determine the Wage Level assigned to the beneficiary.
- Assigning a Wage Level: A “Wage Level” will be assigned to each beneficiary based on the wage offered to the foreign worker by the prospective employer, the type of job which is expressed as a Standard Occupational Classification (SOC) Code in the Bureau of Labor Statistics (BLS) database, and the area of expected employment, which is based on Metropolitan Statistical Areas (MSA).
- Comparison to Prevailing Wages: The government will compare the offered wages with the BLS database of the prevailing wages for that region for that occupation, which is divided into four Levels based on the seniority of the position.
- Level I wages are the average wages paid to an entry-level worker in the U.S. in that kind of occupation.
- Level II wages are those paid to more experienced workers.
- Level III wages represent even more experienced workers.
- Level IV wages are the average wage that a senior worker with many years of experience would typically earn in that occupation.
- Determining the Highest Level: With this data, the government will assign each registrant the highest wage level the actual offered wage equals or exceeds, regardless of the seniority of the position. This means if a junior engineer is offered a wage that exceeds what an average senior engineer would earn in that area according to BLS statistics, they could be assigned a higher wage level for the purposes of the H-1B lottery regardless of the actual seniority of the position.
- Context Matters: The wage level to be assigned would not only depend on the wage offered, but also would differ based on the type of occupation (SOC code), and the area of expected employment.
Example: How Location and Wage Impact Entries
Let’s consider an example. A software developer is offered a wage of $120,000 per year to work at a company in New York City as a junior software developer. According to the BLS data, the highest Wage Level this equals or exceeds is Level I, so the person will be assigned Wage Level I for the purposes of H-1B registration weighting. This would mean the person will be granted only one entry in the lottery.
Under the same facts, let’s say the junior developer will receive the same wages for the same occupation but actually will be working out of Knoxville, Tennessee. Because the wages are now compared to the average data in that region, BLS data now shows the highest Wage Level the person’s wage equals or exceeds is Level III, so the person will be assigned Wage Level III for the H-1B lottery weighting. This would mean the person will be granted three entries into the lottery.
New Entry Allotments and Selection Odds
After each beneficiary is classified into a Wage Level based on the wage offered, the occupation, and the area of expected employment, the government will enter each beneficiary into the lottery in the following manner:
- Level I: 1 entry
- Level II: 2 entries
- Level III: 3 entries
- Level IV: 4 entries
DHS estimates that the weighting system will have the expected impact of decreasing the odds of selection of Level I beneficiaries by 48%. Conversely, it will increase the odds of selection for higher wage levels:
- Level II: 3.35% increase in selection chances
- Level III: 55.02% increase in selection chances
- Level IV: 106.69% increase in selection chances
As such, applicants who are paid at the highest level would be twice as likely to be selected than under a purely random selection system.
The same weighting scheme would apply to advanced degree holders for the 20,000 cap selection. Advanced degree holders who are offered higher level wages would be more likely to be selected as compared to others in that pool who are offered lower level wages.
Overview of Key Comparisons: Current Lottery vs. 2026 Weighted Lottery
| Feature | Current Lottery System | New Lottery System (2026) |
| Selection Method | Pure random selection | Random selection with wage level-based weighting |
| Beneficiary-Centric | Yes – 1 unique registration per beneficiary | Yes – 1 unique registration per beneficiary. If multiple registrations with different wages are submitted for one beneficiary, USCIS will use the registration with the lowest wage level. |
| Consideration of Wage Level, SOC Code, and Location | No | Yes – odds differ based on the highest OEWS wage level the offered wage equals or exceeds (the wage level depends on the position SOC code and area of intended employment). |
| Wage Level I | 1 entry | 1 entry |
| Wage Level II | 1 entry | 2 entries |
| Wage Level III | 1 entry | 3 entries |
| Wage Level IV | 1 entry | 4 entries |
| Advanced Degree Lottery | Yes – pure random selection | Yes – random selection with wage level-based weighting |
| Expected Advantage/Disadvantage | No advantage or disadvantage | Level I: 48% decrease in chances*
Level II: 3.35% increase in chances Level III: 55.02% increase in chances Level IV: 106.69% increase in chances |
*Estimates of selection odds were published by DHS in the Final Rule, calculated based on the historic distribution of registrations across wage levels. Actual impact on selection odds may differ if there is a significant deviance of actual filing distribution volumes in 2026 compared to historic trends.
Strategic Considerations for Applicants and Employers
The takeaway of all this is that wage strategy, the location of employment, and the nature of the position (the SOC code) will directly affect the odds of selection in the H-1B lottery. Positions that are offered entry-level wages will remain eligible, but face a lesser chance of selection, a 48% decrease in the odds.
Employers may choose to offer higher wages to the foreign worker, regardless of the actual seniority of the position, as a strategy to increase the odds that the foreign worker would be selected. Of course, once the foreign worker is selected, the employer must stick to the wages that were offered.
Another takeaway is that registration for the H-1B lottery will now require a lot more detail than before, and it will be critical to report these details accurately at the first instance. Registration will require employers to provide the offered wage, SOC code of the position, and area of intended employment, based on which the registration will be weighted.
After the lottery takes place, the employer must be very careful about changing the wage, area of employment, or SOC code. Any discrepancies may result in USCIS interpreting it as a misrepresentation to increase the odds of selection and can result in denial of the petition.
