FY 2027 Budgeting for Level III Wages to Boost H-1B Selection Odds

Starting with the FY 2027 H‑1B cap season, employers face a new math problem: higher wages buy better selection odds, and a new $100,000 fee raises the cost of every visa. The Department of Homeland Security final rule takes effect February 27, 2026, and applies to H‑1B registrations expected in March 2026 for jobs starting October 1, 2026.

The rule weights each registration by the wage level tied to the offered salary under the Department of Labor’s Occupational Employment and Wage Statistics (OEWS). A recent Presidential Proclamation adds $100,000 per H‑1B visa, on top of existing filing and attorney costs, so finance teams need budget changes well before March.

According to analysis by VisaVerge.com, the new weighting model shifts the cap lottery away from entry‑level offers and toward mid‑career and senior pay bands in the United States 🇺🇸.

How wage weighting changes the cap lottery

DHS assigns multiple “entries” in the selection pool for each unique beneficiary, based on the wage level the offered salary meets or exceeds for the occupation’s SOC code and work location.

• Level IV wage: 4 entries in the pool
• Level III wage: 3 entries
• Level II wage: 2 entries
• Level I wage: 1 entry (entry‑level roles face the lowest odds)

In plain terms, Level III or IV prevailing wages give a 3x or 4x boost compared with Level I, because a single registration is counted multiple times. All wage levels remain eligible, but the odds diverge sharply.

Wage level is not a job title or manager label. It is a percentile match between the offered salary and OEWS wage data for the SOC and area of employment. If an offer meets Level III thresholds but not Level IV, it sits at Level III.

Multi‑site roles need extra care. When a worker may rotate among locations or positions, employers must use the lowest equivalent wage level across those locations or roles. That single choice can reduce entries from four to one.

Immediate cost drivers for FY 2027 budgets

The most visible budget change is the $100,000 per‑visa fee tied to the Presidential Proclamation. Employers also need to plan for higher base pay if they want better lottery odds.

For large programs, that fee can exceed recruiting budgets. Smaller firms feel it immediately, even with one hire.

Several planning numbers in the rulemaking debate have shaped employer models:

• In one simulation of 100,000 registrations, targeting Level III instead of Level I produced +4,496 net registrations at Level III.
• Employers in tech and consulting report planning wage bumps of 15% to 30% for key roles.
• For a set of 10 registrations, moving from Level I to Level III can triple expected selections, but payroll can rise 20% to 50% depending on the occupation and city.

Those ranges matter most in high cost‑of‑living markets, where Level III and Level IV thresholds sit far above current entry‑level pay. They also matter in regulated pay bands, where internal salary structures move slowly.

A practical way to frame the tradeoff is “cost per likely selection.” A Level IV offer costs more in salary (and the fee is the same), but four entries change the selection curve when demand again exceeds supply.

Selection demand still exceeds supply

Cap pressure is the context behind wage weighting. The regular H‑1B cap remains 85,000, plus 20,000 for U.S. advanced degree holders. Employers have lived for years with selection rates that swing as registrations rise.

Wage weighting does not expand the cap. It reshuffles odds within the same fixed numbers. That is why payroll planning and selection modeling now belong in the same meeting.

Key takeaway: the cap is fixed; wage weighting reallocates odds. Budgeting and selection strategy must be coordinated.

Pay equity and compliance risks when raising wages

Higher offers help selection odds, but they also tighten scrutiny. Employers should run internal pay equity checks before registering, because mismatches with comparable U.S. workers draw attention and can trigger denials.

A clean approach compares:

• the proposed H‑1B wage against U.S. worker wages in the same role and location,
• the worker’s education and experience against the role requirements,
• and the company’s salary bands and promotion rules.

Once the company files, consistency matters. The wage level used at registration must match what the employer proves at the petition stage. Register at Level III and file at Level II, and the case draws fraud questions.

Documentation and forms that need to match

The compliance chain starts with the Labor Condition Application (LCA), filed with the Department of Labor. Many employers file the LCA using Form ETA-9035/9035E. That form supports the wage and worksite details that feed the cap strategy. The official page is Form ETA-9035/9035E.

After selection, the employer files the H‑1B petition with U.S. Citizenship and Immigration Services, typically using Form I-129. Petition evidence should support the SOC code, the wage level, the work location, and the job duties.

Common proof includes:

• an OEWS wage printout or wage library evidence tied to the SOC and city
• an offer letter with salary and start date
• internal compensation records that show the pay fits company practice

Timeline employers should put on the calendar

The final rule’s effective date, February 27, 2026, sets the stage for the first weighted selection cycle. Employers that wait until February to set salaries will scramble.

A workable planning timeline:

1. Q2–Q3 2025: Identify roles likely to need H‑1B in FY 2027 and map SOC codes and worksites.
2. Q4 2025: Pull OEWS wage targets and test whether current bands hit Level III or Level IV.
3. January–February 2026: Finalize compensation, approvals, and job descriptions.
4. March 2026: Submit H‑1B registrations with fixed wage and worksite details.

This sequence also leaves time to budget for the proclamation fee and to update vendor and attorney agreements.

Using the DOL FLAG system for wage targets

Employers often start in the DOL FLAG system to pull OEWS data by SOC and location. Update it each quarter when data refreshes. Aim for a salary that clearly meets the chosen wage level.

Borderline wages create risk later. A change in location, remote work, or SOC coding can shift the required level. When the level drops, entry count drops too.

When to reserve H‑1B for mid and senior roles

The new weighting favors jobs that already pay in the upper percentiles. That reality pushes many employers to rethink which roles enter the cap.

Entry‑level hiring still matters, but it may move to other routes, including:

• F‑1 Optional Practical Training for recent graduates
• O‑1 for top performers with strong evidence
• L‑1 for intracompany transfers
• TN for eligible Canadian and Mexican professionals

That pipeline approach keeps H‑1B slots for roles where Level III or IV pay fits business needs, and where the odds justify the higher cash outlay.

What finance and HR should model together

Budgeting for FY 2027 now needs a joined model that includes payroll, selection odds, and compliance.

A strong model answers four questions:

1. How many H‑1B registrations are planned, and which must be Level III or higher?
2. What is the added annual payroll cost to hit Level III or Level IV thresholds?
3. How many visas will trigger the $100,000 fee under the Presidential Proclamation?
4. What is the company’s risk tolerance for audits, denials, and wage corrections?

USCIS provides baseline program information and cap season updates on its official H‑1B page at USCIS H-1B Specialty Occupations.

For many employers, the decision becomes simple: pay at Level I and accept low odds, or pay at Level III or IV and budget for a much higher per‑hire price.