On December 29, 2025, the Department of Homeland Security (DHS) published a final rule that will replace the H-1B cap lottery random selection process with the wage-based weighted selection proposed earlier this year. As the final rule takes effect 60 days after publication, the new selection process will be implemented for the upcoming FY27 H-1B cap lottery to be held in 2026.
The final rule that was published in the Federal Register on December 29, 2025 will amend the H-1B cap selection process and modify it to a weighted system. Specifically, the lottery will now 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). The OEWS wage survey categorizes occupations on the basis of occupation, geographical location, and wage levels ranging from Level I (entry level) to Level IV (advanced senior role).
Pursuant to the wage-based weighted selection, the number of times a beneficiary can register for the lottery will be based on their wage classification. Thus, beneficiaries qualifying as Level IV receive four entries into the lottery pool, beneficiaries qualifying as Level III receive three entries, beneficiaries qualifying as Level II receive two entries, and beneficiaries qualifying as Level I receive a single entry.
If a beneficiary is selected in the lottery, then in order for a company to file an H-1B petition on their behalf, the offered wage, SOC code, and area(s) of intended employment must be specified in the Labor Condition Application (LCA) that is filed with the H-1B cap petition. If the beneficiary will work in multiple locations, the employer must select the box for the lowest applicable wage level among those locations. That means the beneficiary will be classified at the lower level for the purposes of the lottery selection. Finally,where OEWS prevailing data is unavailable and the petitioner relies on an alternative wage survey, the registrant is to be registered as prevailing wage Level I.
The new selection process will materially impact selection odds, favoring individuals with higher prevailing wage classifications. Under the proposed weighted selection, it is estimated that the probability of being selected to file for an H-1B under the cap lottery would be about 15% percent for Level I, 30% for level II, 45% for level III, and 61% for level IV. As the registration form now requires the inclusion of the registrant’s SOC code, prevailing wage level, and location, employers will need to conduct the LCA analysis prior to registering beneficiaries.
Vialto will continue to monitor the situation and provide further guidance as it 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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