On September 24th, the Department of Homeland Security proposed a regulation in the Federal Register seeking to change the H-1B cap lottery process by giving higher selection odds to beneficiaries with higher wages based on the Department of Labor’s four-level prevailing wage system.
DHS will accept public comments for 30 days. The new system would not take effect until the rulemaking process is completed, which can take several months. Legal challenges to the finalized rule are also anticipated.
Under the current H-1B registration process, petitioners must electronically register each beneficiary for whom they intend to file a cap-subject H-1B petition. USCIS then conducts a purely random selection process based on these electronic registrations. If a beneficiary is selected, the petitioner may proceed to file an H-1B cap-subject petition on their behalf.
The Department of Homeland Security (DHS) has proposed changes to the H-1B cap lottery system that would prioritize beneficiaries with higher wages, based on their occupation and geographic location as defined by the Department of Labor’s Occupational Employment and Wage Statistics (OEWS).
Weighted selection system:
The proposed method of H-1B quota allocation would be based on the Department of Labor’s OEWS Wage Levels. The proposal would apply to H-1B registrations submitted under both the regular cap and the advanced degree exemption. Each beneficiary would be counted only once in the numerical allocation projections, regardless of the number of registrations or selection pool entries submitted on their behalf.
The weighted selection system would determine which beneficiaries are selected in the H-1B cap lottery, with the number of entries each beneficiary receives corresponding to their OEWS wage level.
Beneficiaries offered a Level IV wage would be entered into the selection pool four times; Level III beneficiaries, three times; Level II beneficiaries, two times; and Level I, one time.
Under the proposed system, employers would select the box corresponding to the highest OEWS wage level that the beneficiary’s proffered wage meets or exceeds, based on the applicable SOC code and area of intended employment. The proffered wage, SOC code, and area(s) of intended employment must be specified in the Labor Condition Application (LCA) filed with the petition. If the beneficiary will work in multiple locations, the employers must select the box for the lowest applicable wage level among those locations. Where OEWS prevailing wage data is unavailable, the registrant would follow Department of Labor (DOL) guidance on prevailing wage determinations (PWDs) to identify the appropriate OEWS wage level to select on the registration.
If a beneficiary is selected in the lottery, the employer’s USCIS Form I-129 H-1B petition must include documentation verifying that the wage level indicated in the registration accurately reflects the occupation. USCIS may deny or revoke the petition if it determines that the petitioner attempted to unfairly increase the beneficiary’s chances of selection by either overstating the wage level on the registration or offering a lower wage in the petition than what was indicated during the lottery registration. In its proposal, DHS recognizes that there are legitimate reasons that an intended work location might change between the time of registration and the time of filing. As such, USCIS may find in its discretion that a change in intended work location corresponding to a lower wage level would be allowed.
The proposed rule also permits USCIS to deny any new or amended petition filed by the same petitioner for the same beneficiary if it determines that the petition was submitted as part of an attempt to manipulate the registration process and improve the beneficiary’s chances of selection.
In its proposal, DHS acknowledges that employers may choose to offer higher wages to certain beneficiaries to improve their competitiveness in the proposed weighted selection system. While the proffered wage may not always correspond directly to the skill level required for the position, DHS views it as a clear indicator of the beneficiary’s value to the employer and, therefore, a reflection of the beneficiary’s “unique qualities.”
DHS is accepting public comments on the regulation for 30 days until October 24, 2025, after which time DHS will issue a final rule. However, no specific deadline has been set for the issuance of the final rule, but DHS is seeking to implement the final rule before the start of the FY27 H-1B cap registration in March 2026.
Vialto will continue to monitor this development and provide further guidance as information becomes available.
For a deeper discussion on the above, please reach out to your Vialto Partners point of contact, or alternatively:
Manish Daftari
Partner
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