Big Changes Coming to the H-1B Visa Process
What This Means for Employers and Workers
The U.S. government is preparing one of the biggest changes to the H-1B visa program in years, and it could have a major impact on how companies — especially small and mid-sized businesses — employ skilled foreign talent. Here’s what’s happening, why it matters, and what you can do now to get ready.
From Lottery to Wage-Based Selection
Current System
Every March, U.S. employers enter foreign workers into a random lottery for 85,000 available H-1B visas. Whether the worker is fresh out of school or a seasoned professional, the odds are roughly the same.
In recent years, H-1B demand has remained robust, but FY2026 brought notable changes. UCIS received about 336,000 unique beneficiary registrations and selected 118,660, resulting in a selection rate of approximately 35% - a significant increase from the roughly 25% to 29% odds in FY 2024 and FY2025. Meanwhile, total registrations fell sharply – from around 470,000 in FY2025 to 344,000 in FY2026, a nearly 27% drop. This decline likely reflects improvements in USCIS’s beneficiary-centric method, which reduces redundant entries by individual applicants.
Under a proposed wage-based system, while the total cap remains 85,000 visas, odds will shift based on wage tier. Given current distribution patterns, applicants in lower tiers could see single-digit chances, whereas top-tier candidates might enjoy selection rates several times higher.
Proposed Change: Weighted Selection Process for H-1B Registrations
On August 8, 2025, the White House approved a proposal from the Department of Homeland Security (DHS) to replace the random lottery with a wage-based selection system.2 The proposed ranking system would place applicants into four wage categories based on how their offered pay compares to the Department of Labor’s (DOL) prevailing wage tables for that specific job and geographic location. Candidates in the highest wage category (Level 4) would be considered first, followed by Level 3, Level 2, and finally Level 1, which includes most junior and lowest-paid positions.
For instance, in some analytical occupations, DOL data shows entry-level salaries in the lower ties and senior-level salaries well into six figures. The actual amounts differ significantly by role and location, but the same four-tier wage framework applies nationwide. Higher wage offers will have a better chance of being selected. The process is not purely “highest salary wins” – there is still an element of chance within each wage level. If there are more applicants in a level than available slots, a lottery will be run within that wage tier.
In practice, USCIS would group all H-1B registrations into the four wage levels categories. The review would start with Level 4 (highest tier). They would select candidates in this tier until either everyone is chosen or the number of allocated visas for that tier is filled. If the number of applicants in a tier is greater than the available spots, a random draw would be held within that tier. Once Level 4 is finished, the same process would ensue for Level 3, then Level 2, and finally Level 1, continuing until such time as the annual H-1B cap is met.
Example: How the Lottery Within a Wage Tier Works
Suppose USCIS has 85,000 visas to aware. They start with Level 4, where there might be, say, 16,000 applicants and 12,000 visas available. If demand exceeds supply in that group, a lottery would be run just for that tier. Then they would move to Level 3 — perhaps 20,000 applicants for 18,000 spots — applying the same within-tier lottery if needed. Levels 2 and 1 would follow in order until the cap is reached, with any underfilled tier automatically advancing all its applicants.
Key takeaway: Even if a person is in Level IV (highest priority), they could still be subject to a random draw if there are more qualified registrations than available visas in that wage tier.
Who Will Feel The Impact?
Small & Mid-Sized Businesses
Smaller companies may find it harder to compete if higher salaries become the main ticket to selection.
This could be especially challenging for start-ups, nonprofits and early-stage tech companies that rely on H-1B talent but operate on tight budgets.
Sectors like software engineering, biotech research, and data analytics – fields already marked by fierce wage competition – might see a widening gap between large corporations and smaller employers in their ability to secure foreign workers.
Early-Career Professionals & Recent Graduates
Under the wage-based system, candidates in Level I or Level II may face much lower odds of selection.
This especially affects international students on OPT or STEM OPT hoping to transition to an H-1B. As reported in Economic Times, “students graduating from U.S. universities on OPT/STEM OPT may find it harder to secure H-1B status” because employers would have to raise wages to higher prevailing wage levels to improve their odds.
The American Immigration Council6 warns that wage-based selection “penalizes younger workers and those early in their careers” and could effectively bar them from accessing the program unless employers are willing to pay wages far above market rates for entry-level roles.
The National Foundation for American Policy (NFAP) points out that many STEM OPT students fall into lower wage levels due to lack of experience, and the new process could disrupt the traditional career pipeline from U.S. universities into the skill labor force.
Highly Skilled, Well-Paid Professionals
Workers offered salaries at Level III or IV will have stronger odds, potentially benefiting more experienced candidates.
What Employers Can Do Now
A. Strategic Wage Review
We will work with you to review your offered wages and determine the prevailing wage for your role and location. If your offer is at Level I or II, we can discuss whether it’s feasible and business-justified to raise it to Level III or IV to improve selection odds.
B. Optimizing Job Descriptions
We can assist with making sure your job descriptions accurately reflect the role’s duties and qualifications. By structuring responsibilities strategically, the position may be able to qualify for a higher wage level.
C. H-1B Budget Planning
If H-1B hiring is critical to your business, it is important to plan salary budgets now to align with the new wage-based selection process and your company’s growth goals.
D. Timeline Tracking and Compliance
The new wage-based system is not active yet. Before any of these changes can be implemented, they must go through the federal rulemaking process. So, what does that mean? It means DHS will start with posting the proposal in the Federal Register, followed by a comment period – usually 30 to 60 days – where individuals, companies, and organizations can provide feedback. After reviewing these comments and making any necessary changes, DHS will publish a final rule that includes the effective date. Until then, the current lottery method remains in place.
While public comment could lead to small adjustments in details, given that the rule has already passed White House review and aligns with their current policy goals, the probability of DHS finalizing it in some form is very high. Employers should plan on the assumption that a wage-based system will govern the FY2027 H-1B lottery.
We will actively monitor the Federal Register, track the comment period, and prepare any necessary submissions on your behalf to ensure your voice – and your business’s needs – are represented before the rule is finalized.
E. Exploring Alternatives
If the wage-based system limits a person’s chances of selection, that doesn’t mean the door is closed. We can help you evaluate other creative and legally compliant pathways to keep critical talent in your workforce. Depending on how your business functions, timeline constraints, and an individual’s qualifications, there are strategies we can explore together to continue employment without interruption and leverage other visa categories.
Our approach is to work with clients to ascertain their hiring goals and risk tolerance to design a tailored plan that fits. Every case is unique, so having a conversation with us about your specific situation can uncover options you might not know exist.
F. Watch for Possible Legal Challenges
Major immigration policy shifts oftentimes end up in litigation with lawsuits from industry groups and advocacy organizations. If litigation is filed, a court could delay or block the rule before it takes effect. Employers should keep this in mind when planning for FY2027 hiring – and be ready to adjust strategies if the rollout is slowed or altered due to legal action. If the rule proceeds without delays, it could be finalized in time for the FY2027 cap season beginning in March 2026; however, significant public comment, litigation, or administrative changes could push implementation back.
The Bottom Line
For years, the H-1B program has been a numbers game. Soon, it will be more of a salary game. Companies that plan ahead — by reviewing wages, adjusting job roles, and understanding prevailing wage data — will be in the strongest position to compete for top global talent.
And for workers, especially those in early-career stages, understanding how wage levels affect their odds will be key to making informed career decisions and finding a pathway forward.
Further Information & Guidance
If you’re an individual or employer with questions about these new developments, contact us for further information.
