The Biggest Change to H-1B in a Decade
For fiscal years 2021 through 2026, every H-1B registration had the same chance of being selected in the lottery. A first-year analyst at a consulting firm and a principal engineer with 15 years of experience were treated identically: one registration, one equal shot.
That system is over. On December 2, 2025, the Department of Homeland Security published a Final Rule titled "Improving the H-1B Registration Selection Process," which replaces the random lottery with a wage-weighted selection system starting with FY2027. The rule takes effect on February 27, 2026 — days before the March registration window opens.
The change is paired with a 21x increase in the registration fee (from $10 to $215) and continues the beneficiary-centric model introduced in FY2025. Together, these three changes represent the most significant structural reform to the H-1B cap selection process since the electronic registration system launched in FY2021.
Old System vs. New System
Here is a side-by-side comparison of the FY2026 and FY2027 selection systems:
| FY2026 (Old) | FY2027 (New) | |
|---|---|---|
| Selection method | Random lottery | Wage-weighted selection |
| Registration fee | $10 | $215 |
| Level I odds | ~31% | ~20.5% |
| Level II odds | ~31% | ~36.8% |
| Level III odds | ~31% | ~49.7% |
| Level IV odds | ~31% | ~60.1% |
| Multiple registrations | One per beneficiary | One per beneficiary |
FY2026 odds based on ~336,000 registrations with ~120,000 selections. FY2027 odds based on projected ~280,000 registrations with the wage-weighted formula.
How Wage-Weighted Selection Works
Under the new system, each registration receives a number of "weighted entries" based on the prevailing wage level of the offered position:
| Wage Level | DOL Description | Weighted Entries | Relative Advantage |
|---|---|---|---|
| Level I | Entry-level (17th percentile) | 1 | Baseline |
| Level II | Qualified (34th percentile) | 2 | ~1.8x Level I |
| Level III | Experienced (50th percentile) | 3 | ~2.4x Level I |
| Level IV | Expert (67th percentile) | 4 | ~2.9x Level I |
The wage level is determined by the Department of Labor's prevailing wage system. Your level depends on the offered salary compared to other workers in the same occupation and geographic area. A software engineer earning $130,000 in Austin might be Level III, while the same salary in San Francisco could be Level I.
USCIS pools all weighted entries together, then draws randomly from that pool until the selection target is met. The math follows the formula: P(selected) = 1 − (1 − f)w, where f is the per-ticket selection fraction and w is your number of weighted entries. This means Level IV does not get exactly 4x the odds of Level I — the actual multiplier is closer to 2.9x due to the independent-draw mechanics.
The New Fee Structure
The registration fee increased from $10 to $215 per beneficiary. Here is how the new fee breaks down:
Covers administrative costs of the registration and selection process
Mandated by the USCIS fee schedule rule to fund asylum processing
The fee increase is designed to serve two purposes. First, it offsets USCIS administrative costs that were previously subsidized. Second — and more consequentially — it is expected to deter frivolous and speculative registrations.
Under the old $10 fee, some employers filed registrations for candidates they had no genuine intent to sponsor, treating it as a low-cost option. At $215, the calculus changes. DHS estimates this will reduce total registration volume, though the exact impact is uncertain. Our model projects approximately 280,000 registrations for FY2027, down from 336,153 in FY2026.
Note: the $215 fee is currently subject to a legal challenge, with a federal court hearing scheduled for February 19, 2026. If the court blocks the fee, the old $10 fee could remain in effect for the FY2027 cycle.
FY2027 Timeline
Key dates for the FY2027 H-1B registration and selection cycle:
DHS Final Rule published
Wage-weighted selection and fee increase formally announced in Federal Register
Federal court hearing on registration fee
Legal challenge to the $215 fee; could affect FY2027 if court issues injunction
Wage-weighted rule takes effect
The selection methodology officially changes from random to wage-weighted
Registration period opens
Employers and attorneys begin submitting H-1B registrations via myUSCIS
Registration period closes (est.)
Final deadline for submitting FY2027 registrations
Selection results announced (est.)
USCIS notifies selected registrants; filing window opens April 1
Winners and Losers
The wage-weighted system fundamentally shifts who benefits from the H-1B lottery. Here is how different groups are affected:
Better Off: Level III & IV Workers
Senior engineers, experienced specialists, managers, and anyone paid at or above the 50th percentile for their occupation and location. A Level IV worker goes from ~31% odds under the old system to ~60.1% — nearly doubling their chances. Level III workers see a jump from ~31% to ~49.7%.
Typical profiles: Staff/principal engineers at major tech companies, experienced healthcare professionals, senior finance roles, anyone with 8+ years of specialized experience.
Worse Off: Level I Workers
Entry-level positions, recent graduates, and roles filed at the 17th percentile wage. Level I odds drop from ~31% to ~20.5% — a one-third reduction. The impact falls disproportionately on IT consulting firms that historically filed large volumes of Level I positions.
Typical profiles: Junior developers at IT staffing firms, entry-level analysts, recent Master's graduates in their first role, any position where the offered wage is near the bottom of the prevailing wage range.
Roughly Neutral: Level II Workers
Level II workers see odds of ~36.8%, modestly higher than the old ~31% random baseline. This group is the closest to break-even under the new system.
Typical profiles: Mid-career professionals with 3-5 years of experience, software engineers at mid-sized companies, analysts and accountants at competitive but not top-of-market salaries.
What Employers Need to Know
The wage-weighted system changes H-1B filing strategy in several concrete ways:
- Salary offers now affect lottery odds directly. An employer offering a Level II salary instead of Level I doubles their candidate's weighted entries. For critical hires, increasing the offered wage to cross a level threshold is a mathematically rational strategy.
- The $215 fee changes the cost calculus for speculative filings. An employer filing 50 registrations now pays $10,750 in fees alone, compared to $500 under the old system. This is expected to reduce "spray and pray" registration strategies.
- Prevailing wage research matters more than ever. The wage level is determined by occupation and geographic area. Employers should verify the exact SOC code and MSA for each position, since small differences in classification can shift a worker between levels.
- Beneficiary-centric rules remain in effect. Each beneficiary can only be registered once, regardless of how many employers want to sponsor them. Multiple registrations for the same person are rejected.
- Plan for the compressed timeline. With the wage-weighted rule taking effect February 27 and registration opening March 4, employers have very little time to adjust their strategies. Prevailing wage determinations and salary decisions should be finalized now.
What's Still Uncertain
While the DHS Final Rule is published and set to take effect, several factors remain unresolved:
The February 19 court hearing
A federal court hearing is scheduled for February 19, 2026, challenging the $215 registration fee. If the court issues an injunction, the old $10 fee could apply to the FY2027 cycle. This would likely increase registration volume and change everyone's odds. The wage-weighted selection method itself is not directly at issue in this case, but a broader injunction is possible.
Actual registration volume
We estimate ~280,000 registrations, down from 336,153 in FY2026. The actual number depends on how employers respond to the fee increase and wage-weighting. If volume drops more than expected, everyone's odds improve. If the fee is blocked and volume stays high, odds compress.
Future legal challenges to wage-weighting
The wage-weighted selection methodology could face separate legal challenges on statutory authority grounds. DHS derives its authority from the INA's broad grant to "establish procedures" for H-1B selection, but critics argue Congress intended a random process. No such challenge has been filed as of this writing, but the legal landscape around H-1B regulation remains active.
Wage level distribution of registrants
The exact odds for each level depend on the distribution of registrants across wage levels. Our model uses historical LCA data (approximately 32% Level I, 38% Level II, 19% Level III, 11% Level IV), but the new incentive structure could shift this distribution. If fewer Level I workers register due to lower odds, the remaining Level I registrants' actual odds improve slightly.
Find out where you stand
Enter your salary, occupation, and location to see your estimated FY2027 selection probability under the new wage-weighted system.
Calculate Your H-1B Odds