Fundamental Changes to H-1B Visas: The Weighted Lottery Selection and the $100,000 Fee

Published Feb 26, 2026

The H-1B Specialty Occupation Worker program[1], which enables companies to employ professional workers (non-citizens) on a temporary basis, is undergoing its most significant transformation since the program's inception in 1990.[2] Two major policy changes will fundamentally alter how H-1B visas are allocated and accessed.

• Modified Lottery Selection Process

  For years, demand for H-1B visas has exceeded supply, necessitating a lottery system to determine which petitions are selected for processing. On September 24, 2025, the Department of Homeland Security (DHS) issued a Notice of Proposed Rulemaking (NPRM) to implement a weighted selection process for the annual H-1B lottery.[3]

  The proposed rule modifies the lottery to prioritize higher-paid and higher-skilled workers. DHS finalized the rule on December 29, 2025, without adopting any public comments or changes.[4] The rule takes effect on February 27, 2026.

• Presidential Proclamation: New Application Fee

  On September 19, 2025, the President issued a proclamation establishing a $100,000 fee that employers must pay before filing H-1B petitions for beneficiaries residing outside the United States.[5] This substantial fee represents a new barrier to entry for companies seeking to sponsor foreign workers.

These initiatives collectively represent the most substantial revision to H-1B visa allocation procedures in over three decades. Both large corporations and small businesses that rely on the H-1B program to fill essential positions will need to adapt to these new requirements.

Background

While the rule making promulgated by DHS and Presidential Proclamation 10973 are separate H-1B reform initiatives, collectivity they have the potential to significantly impact both employer participation in and the beneficiaries who are selected for H-1B Cap-subject visas on an annual basis.[6] Further, these reforms to the H-1B visa program may dramatically impact the level of participation in the H-1B visa program.

When Presidential Proclamation 10973 was announced on September 19, 2025, it was widely understood to be the imposition of a $100,000 fee paid by employers for nonimmigrant workers seeking to enter the United States on H-1B visas. In fact, however, Presidential Proclamation 10973 was issued pursuant to sections 212(f) and 215(a) of the Immigration and Nationality Act (INA), 8 U.S.C. § 1182(f) and § 1185(a), both of which pertain to the restriction on entry of certain immigrants and nonimmigrants as designated by the President. INA § 212(f) authorizes the President…”by proclamation…to impose on the entry of aliens any restrictions he may deem to be appropriate.” INA § 215(a) provides that the President may restrict such entry “subject to such limitations and exceptions as the President may prescribe.” Taken together, under Presidential Proclamation 10973 these two statutory provisions restrict the entry of all H-1B nonimmigrants subject to the exception of an employer-paid fee of $100,000.

Two separate legal challenges were subsequently filed challenging Presidential Proclamation 10973. The first of these challenges, Global Nurse Force v. Trump was filed on October 3, 2025, in the U.S. District Court for the Northern District of California.[7] The suit was brought by a coalition of labor unions, health care providers, schools, and religious organizations. The second legal challenge, Chamber of Commerce of the United States v. U.S. Department of Homeland Security was filed on October 24, 2025.[8] A Memorandum Opinion was issued on December 23, 2025, dismissing the complaint.[9] The Chamber of Commerce has appealed this ruling to the Court of Appeals for the D.C. Circuit.[10]

As discussed more fully below, it is anticipated that the combined effect of these two H-1B visa reform initiatives will not only reduce the level of participation in the H-1B visa program overall, but will fundamentally change the types of positions, the geographic location of those positions, and the beneficiaries who are selected in the FY2027 H-1B Lottery this year.

Analysis

H-1B Wage Level Rule

As noted above, on September 24, 2025, DHS published a NPRM in the Federal Register proposing to change the process by which USCIS selects H-1B registrations for unique and eligible beneficiaries entitled “Weighted Selection Process for Registrants and Petitioners Seeking to File Cap-Subject H-1B Petitions” (H-1B Wage Level Rule).[11]

The H-1B Wage Level Rule will affect H-1B Cap-subject petitions by changing the methodology by which H-1B registrants are selected in the annual H-1B Lottery. Historically, each registrant was afforded an equal chance of selection, a process referred to in the rule as “random selection.”[12] Under the H-1B Wage Level Rule, registrations will be submitted to the H-1B Lottery a number of times that corresponds to their Occupational Employment and Wage Statistics (OEWS) wage level, a process referred to in the rule as “weighted selection.”[13] As reflected in the table below using data published in the rule, by adopting a “weighted” selection versus a “random” selection methodology, the likelihood of selection increases significantly at wage levels III and IV while decreasing significantly at wage level I.[14]

Data Issues in the H-1B Wage Level Rule

There are several issues with the data relied upon by DHS in support of the H-1B Wage Level Rule. The first issue presented by the data in Table 3 published in the rule is that it utilizes only the number of unique beneficiaries with eligible registrations to calculate the 5-year average. For FY2025, DHS implemented a regulatory change referred to as the “Beneficiary-centric Rule,” whereby H-1B registrants were required to identify the intended beneficiary by name.[15] The Beneficiary-centric Rule was not implemented until March 2024 for the FY2025 H-1B Lottery, however, so DHS utilized data from periods when registrants were not required to submit beneficiary-centric registrations and excluded large numbers of registrations for beneficiaries with multiple registrations when calculating the estimated number of future H-1B registrations.

Table 3 published in the rule reflects that the number of unique beneficiaries with eligible registrations varies significantly from the total number of registrations in the years preceding implementation of the Beneficiary-centric Rule. As reflected in the table below, it wasn’t until the Beneficiary-centric Rule was implemented for FY2025 that the number of registrations neared parity with the percentage of unique and eligible registrations. These wide variations between total registrations and the number of unique and eligible registrations between FY2020 and FY2023 indicate that the data relied upon prior to the implementation of the Beneficiary- centric Rule in FY2024 may not be sufficiently accurate for purposes of estimating future numbers of unique and eligible registrants.

The second issue presented is the data used to estimate the total number of H-1B registrations by OEWS wage level. The current iteration of the H-1B registration process does not capture wage level data at the time of registration. Instead, wage level data is captured on a Department of Labor, Labor Condition Application (LCA) that is filed after selection in the H-1B Lottery and prior to filing an H-1B petition with USCIS.

Given this absence of historical wage level data for H-1B registrations, DHS utilized LCA data to estimate the total number of registrations by wage level. The LCA data, however, is a subset of the total number of H-1B registrations, as only selected H-1B Lottery winners will ultimately file an LCA. In the final rule, several commentators raised concerns with adopting this methodology and instead proposed that DHS capture wage level data for the FY2027 H-1B registration period, conduct an analysis, and then implement the proposed rule when more accurate data would be available. DHS declined to adopt this recommendation in the final rule.[16]

The absence of historical wage level data for H-1B registrations further undermines the quality of the data upon which DHS relies to estimate future H-1B registrations by wage level. By utilizing LCA wage level data, DHS is presuming that the wage level percentages of selected H- 1B Lottery winners accurately correspond to the total population of H-1B registrants, including those who were not selected in the H-1B Lottery.

Apart from the underlying data quality issues, the final rule separately addresses concerns with the methodology used to calculate H-1B Lottery selections. Specifically, some commentators raised issues with the concept of "non-replacement" in calculating the estimated number of H-1B Lottery selections.[17] Non-replacement refers to removing non-selections during the H-1B Lottery selection process as will occur under weighted selection. In other words, if an H-1B registrant is a wage level IV, their registration will be submitted to the H-1B Lottery four times. If one of the four registrations is selected, the remaining three registrations will be removed before continuing with selections.

The final rule acknowledges that calculating the estimated number of H-1B lottery selections by wage level while accounting for duplicate registrations is "intractable"—defined as "not easily governed, managed, or directed."[18][19] Because replacement is included in the calculation (meaning non-selected registrations for the same beneficiary are not removed), the rule overstates the number of selected beneficiaries and the estimated impact.[20]

To address this calculation issue, DHS employed a "Monte Carlo Simulation"—a mathematical technique that predicts possible outcomes of uncertain events through repeated random sampling.[21] DHS appears to have applied this simulation to repeatedly sample the H-1B data by wage level, multiplying registrations by different amounts (e.g., 4x for Level IV) to project possible outcomes. However, the rule does not disclose how many times the data was randomly sampled or the outcomes of other samplings. When one commentator requested that DHS release the raw data used to calculate wage level estimates, the agency declined.[22]"

The use of the Monte Carlo Simulation while a positive step by DHS to address underlying statistical challenges with non-replacement, still ignores the quality issues associated with the underlying data itself. As DHS acknowledges in the final rule, the registration process didn't capture wage level data, so DHS used LCA data from the selected petitions to develop percentages for a future registration.[23] Some commentators suggested that the registration process be modified first, data collected, and then proceed with this rule, but again DHS declined to do so in the final rule.[24]

Policy Issues in the H-1B Wage Level Rule

In addition to the data quality issues that impacted the ability of DHS to estimate the number of prospective H-1B registrants by OEWS wage level, there are also several policy-related arguments made by DHS in support of the rule that may ultimately be problematic upon implementation during the FY2027 H-1B registration and subsequent H-1B Lottery.

Firstly, the final rule relies heavily on an Economic Policy Institute article for the proposition that higher paid workers are higher-skilled.[25] While the rule does cite several other news and media articles, the significant reliance on the Economic Policy Institute article for the central premise that higher wages correspond to higher-skilled workers is likely inadequate to support such a blanket proposition. Also, despite there being over 440 federal agencies,[26] many of which are engaged in economic policy and analysis, the rule does not cite a single federal agency study or report for the premise articulated in the rule that higher paid employees are generally higher- skilled.[27]

The final rule also dismisses several concerns submitted by commentators that any type of geographic weighting is necessary because DHS states that the “rule neutralizes geographic differences in salary amounts by taking into account the area of intended employment when weighting registrations.”[28] The rule states that because “the registrant must select the lowest corresponding OEWS wage level that the beneficiary's proffered wage will equal or exceed…This provision removes a potential incentive to inflate wage levels through strategic location choices, including through remote work, to help ensure integrity of the selection process.”[29] The rule, however, leaves unaddressed concerns that employers will attempt to manipulate the wage level process in advance of registration by relocating positions from higher cost metropolitan areas to lower cost rural areas for purposes of raising the wage level for a position while simultaneously reducing salary levels.

By way of example, if an H-1B registrant submits for the position of software developer (SOC 15-1252),[30] and the position is located in Hattiesburg, Mississippi, the Level IV wage is $80,122.00 per year.[31] The same position and wage level in San Jose, California is $264,514.00 per year, a difference of $184,392.[32] Even if employers are unlikely to relocate a position(s) from San Jose to Hattiesburg, it is entirely foreseeable that other advantageous geographic relocations are more likely to occur. Using the same example again, if the software developer position were relocated from San Jose to Dallas, Texas, the Level IV wage for Dallas would be $156,998.00 per year (a difference of $107,516.00 from San Jose).[33] It is entirely foreseeable that H-1B registrant employers will make this kind of position relocation to reduce salaries and/or increase lottery selection chances. The savings alone in this example would cover the H- 1B visa fee under Presidential Proclamation 10973 if the beneficiary were outside the United States. The rule states that DHS will exercise its new regulatory authority included in the rule to revoke an approved H-1B petition or deny an amended petition if it is subsequently determined that an employer raised a proposed wage for H-1B Lottery selection purposes only to subsequently reduce the beneficiary’s wage after selection.[34] This regulatory authority, however, does not address prospective geographic position relocations in advance of the H-1B registration process.

The final rule also states that the rule will not “disproportionately disadvantage or advantage registrants in certain geographic areas” and that weighting “already considers the area(s) of intended employment.”[35] What the rule fails to acknowledge, however, is that wage leveling impacts the chances of selection in a manner that fundamentally differs from random selection, so there is a new incentive for employers to engage in geographic relocation of positions.

A second policy issue created by the rule concerns instances where the petitioning employer has a registration that is selected in the lottery, but the employer subsequently elects to change the geographic location, also referred to as the area(s) of intended employment or metropolitan statistical area (MSA) for the intended position. There may be a variety of legitimate business- related reasons that a petitioning employer may need to geographically relocate a position between the time of registration and the time the LCA and subsequent petition are filed.

The rule states in relevant part that “If the new or amended petition included the same proffered wage but changed the work location such that the proffered wage now corresponded to a lower OEWS wage level for the new location than the level indicated on the registration, USCIS will consider that change in determining whether the new or amended petition was part of the petitioner's attempt to unfairly increase the odds of selection.”[36] The text of the new 8 CFR 214.2(h)(8)(iii)(D)(1) provided in the rule states that “In its discretion, USCIS may find that a change in the area(s) of intended employment would be permissible, provided such change is consistent with the requirement of a bona fide job offer at the time of registration as stated in paragraph (h)(10)(ii) of this section. USCIS may deny or revoke the approval of an H-1B petition that does not meet these requirements.[37]

This language in the rule and the new 8 CFR 214.2(h)(8)(iii)(D)(1) has raised concerns by some prospective registrants that even if there is a business-related justification to relocate a position after registration and selection in the H-1B Lottery, and the proffered wage for the intended position remains the same, USCIS may nevertheless deny or subsequently revoke a petition because the wage level changed when the position was relocated to a different area of intended employment or MSA. For bona fide registrants who are attempting to ensure compliance with the new rule, this presents a significant concern.

A third policy issue in the final rule is that the rule repeatedly states that if the proposed wage indicates a specified wage level and the employer values the services of that beneficiary, the employer can always increase the proposed wage to a higher wage level.[38] Doing that, however, is inconsistent with the structure of the OEWS wage level methodology on which the rule itself relies (Level I: Entry, Level II: Qualified, Level III: Experienced, Level IV: Fully Competent).[39] For example, it is logically inconsistent to assume that an employer is going to offer an otherwise entry level employee (Level I) a fully competent salary (Level IV) because doing so would include the expectation that the beneficiary would be able to perform all of the duties of a fully competent employee. Even if the employer didn't have this expectation, the stated purpose of the rule (attracting higher-skilled employees) would still be undermined because it wouldn't be the higher-skilled employees being selected, it would only be the highest paid at that point.

A fourth policy issue is that only a small percentage of petitioning employers increasing salaries and corresponding wage levels will dramatically change the wage level composition of the H-1B registrants in the H-1B Lottery. As discussed above, the percentages of wage level registrations are based on a total of 320,711 estimated average registrations with LCA data being used to calculate the number of registrations by wage level (since the registration process doesn't currently capture wage level data).[40] The estimated 15,657 registrations for Level IV is just 5% of the average estimated total of 320,711 unique and eligible registrations. If the total number of H-1B registrants were to increase the total percentage of Level IV registrations to improve their chances of selection even modestly (e.g., from 5% to 15%) as a percentage of the total composition of unique and eligible registrants, then the 61% estimated chance of selection in the H-1B Lottery for Level IV registrations will increase dramatically. In effect, this will result in what several commentators in the rule expressed concern about...that very few or no Level I registrants will be selected in the H-1B Lottery.[41]

A fifth and final policy issue, originally acknowledged in the NPRM and adopted in the final rule relates to the number of the unique small business entities that are estimated to be eliminated from selection for H-1B visas in the H-1B Lottery under weighted selection.[42] DHS acknowledges in the rule that 5,193 small entities, or 30 percent of the 17,069 small entities, will be affected by the rule because under the Regulatory Flexibility Analysis (RFA), these small business entities will no longer have Level I wage petitions selected in the H-1B Lottery and/or the small business entities will experience cost increases.[43] DHS acknowledges that 30 percent is a significant number and that the rule will have a significant economic impact on a substantial number of small entities that file H-1B cap-subject petitions.[44] DHS states, however, that any other alternative process would undermine the overall utility of the rule, which is to generally favor the allocation of H-1B visas to higher paid and higher-skilled workers.[45] This position, however, departs from the overarching stated policy objective of both the rule and Presidential Proclamation 10973, which is to address large corporations who were abusing the H-1B program by utilizing overseas IT staffing firms to recruit lower paid, entry level workers.

The Potential Impact of Presidential Proclamation 10973 on the Wage Level Rule

Apart from the changes implemented under the rule to the H-1B program, the interplay between the rule and Presidential Proclamation 10973 will result in significant changes to the numbers and types of petitioners who receive H-1B visas in the forthcoming FY2027 H-1B Lottery. The $100,000 fee assessed as an exception to the restriction on entry outlined in Presidential Proclamation 10973 is conditioned on whether the H-1B beneficiary was granted such status in the United States through a change of status (in which event the fee would not apply) or is outside the United States (in which event the fee will apply in most instances).[46] Recent graduates from American universities who originally came from abroad and are still in the U.S. would generally not be subject to the $100,000 fee.

Data on the number of H-1B beneficiaries who were granted H-1B visas through either a change of status or through consular processing is published annually by USCIS in a congressional report entitled “Characteristics of H-1B Specialty Occupation Workers.”[47] As reflected below, the number of H-1B beneficiaries who were granted H-1B visas through consular processing versus change of status in the United States has increased each year since FY2021 as a percentage of the total number of H-1B visas issued with the exception of FY2024, when it declined slightly.[48]

While there was a slight decline in FY2024 in the number of H-1B visas issued through consular processing, amongst the justifications outlined in Presidential Proclamation 10973 is to address companies that “…close their IT divisions, fire their American staff, and outsource IT jobs to lower-paid foreign workers.”

These statements contained in Proclamation 10973 when combined with the guidance published on the USCIS website on October 20, 2025, demonstrate that the focus of the restriction on entry and the imposition of the $100,000 fee as an exception to that restriction on entry was directed primarily towards H-1B visas issued through consular processing. The effect, therefore, is that many employers will seek to avoid the restriction on entry and imposition of the fee by registering and petitioning for beneficiaries who are already in the United States through the H- 1B visa change of status process when filing registrations for the FY2027 H-1B Lottery.

Conclusion

The H-1B Wage Level Rule and Presidential Proclamation 10973 are transformational initiatives designed to make fundamental changes to how H-1B nonimmigrants are petitioned for and selected in the H-1B Lottery. By concurrently implementing a weighted selection methodology in the H-1B Lottery and a restriction on entry designed to reduce and deter employers from submitting H-1B registrations on behalf of beneficiaries outside the United States, the composition of H-1B Lottery selectees is likely to change significantly.

The Proclamation and the H-1B Wage Level Rule in particular, however, rely upon data that is extrapolated from other data sources to support a proposition with relatively limited evidence that higher paid workers are generally higher-skilled. In addition, the quality of the data used to estimate the impact of the H-1B Wage Level Rule along with the lack of government-sponsored economic analyses may result in unintended and adverse impacts to the H-1B program and the broader United States economy.