H-1B Overhaul via Executive Action: From Lottery to Weighted Selection

Since late 2025, the H-1B program has undergone the most significant structural changes in its history, moving from a random lottery to a wage-weighted selection system and imposing a $100,000 supplemental fee for many new petitions. Lawmakers and agencies present the shift as protecting American workers. Together, the new selection math and the new price tag are reshaping what the H-1B visa program is for.

The practical result is a program that now rewards higher wages and penalizes cost-sensitive hiring, even when the role still meets the “specialty occupation” standard. Two policy pillars drive the shift: one changes who gets selected; the other changes who can afford to file. For employers, the combined effect is not subtle. For workers, it changes the odds of staying, especially for those early in their careers.

The two pillars remaking H-1B: selection by wage, then selection by wallet

DHS and USCIS framed the changes as a course correction. Their central claim is that the prior random system encouraged high-volume registrations aimed at lower-cost labor. The new structure pushes employers toward higher-paid, higher-skilled roles and raises the cost of bringing new workers from abroad.

Pillar 1: Wage-weighted selection replaces a pure lottery

Under the weighted selection system, H-1B registrations enter the selection pool with “entries” tied to the DOL wage level for the offered job. DOL wage levels run from Level I (entry-level) through Level IV (highest). Instead of one registration equaling one chance, each registration now has more than one chance depending on wage level.

Weights are fixed and straightforward:

• Level IV (highest): 4 entries — about a 107% increase in selection probability
• Level III: 3 entries
• Level II: 2 entries
• Level I (entry-level): 1 entry — about a 48% decrease in selection probability (estimated ~15% chance)

These wage levels are rooted in DOL prevailing wage concepts used in the Labor Condition Application process. Employers still file H-1B registrations first, then H-1B petitions after selection. What changes is the selection engine: more entries go to higher-wage offers.

📅 Effective Feb. 27, 2026: Weighted selection applies to FY 2027 H-1B cap registrations

Pillar 2: A $100,000 national-interest filing fee for many new cases

The second pillar is a supplemental $100,000 national-interest fee that attaches to many “new” H-1B filings tied to overseas processing. The fee’s design matters: it does not hit every filing equally, and that differential treatment is part of why it changes employer behavior.

Key points about the fee:

• The fee generally applies when a worker is outside the United States or needs a new visa stamp, i.e., the case involves consular notification.
• Many filings for people already inside the country avoid the extra charge.
• USCIS described a narrow exception route (often discussed as a national-interest exception). DHS can grant exceptions, but USCIS warned they would be granted only in “extraordinarily rare circumstances,” tied to proof that no American worker is available and that paying would “significantly undermine U.S. interests.”

Table 1: Lottery vs. wage-weighted selection (what changed, and when)

Table 2: The $100,000 fee—when it applies, and who is exempt

Why agencies say the new rules protect U.S. workers

Matthew Tragesser, speaking for USCIS on December 23, 2025, tied the weighted selection system to worker protection and enforcement concerns. He said the prior randomness “was exploited and abused” by employers seeking lower wages. He argued that weighting will better match Congress’ intent and “strengthen America’s competitiveness by incentivizing American employers to petition for higher-paid, higher-skilled foreign workers.”

USCIS posted the statement in its Newsroom at uscis.gov (see: USCIS Newsroom).

The White House used sharper language in the September 19, 2025 presidential proclamation that paired entry restrictions with the supplemental fee. The proclamation argued the H-1B nonimmigrant visa program “has been deliberately exploited to replace, rather than supplement, American workers with lower-paid, lower-skilled labor,” and warned that large-scale replacement “has undermined both our economic and national security.”

✅ Official rationale in their own words: USCIS said weighted selection discourages lower-wage abuse and pushes “higher-paid, higher-skilled” petitions; the White House proclamation said the program had been used to replace Americans with “lower-paid, lower-skilled labor.”

Legal authority also moved quickly from policy to precedent. U.S. District Judge Beryl Howell upheld the President’s authority on December 23, 2025, citing “broad statutory authority” under INA 212(f) to impose the fee structure tied to entry.

What wage-weighting does to the H-1B talent pipeline

Start with the math. A Level IV role has four entries versus one for Level I. Even before counting real-world wage distributions, the design shifts selection toward senior hires and away from early-career roles.

International students on F-1 OPT sit close to the center of this change. Many new graduates price into Level I or Level II wage bands. Under the weighted selection system, that means fewer entries and lower selection odds. The estimate attached to Level I—about a 15% chance—captures how steep the decline can be for entry-level offers.

Hiring teams will react in predictable ways:

• Wage offers may rise for a smaller number of roles to reach Level III or Level IV, rather than spreading H-1B bets across many junior positions.
• Employers may reserve H-1B registrations for candidates already in the U.S. if the role can be filled through change of status and thus avoid the $100,000 filing fee.
• Recruiting from abroad becomes concentrated at the top of the market, where the business case can absorb the six-figure surcharge as part of total compensation costs.

The $100,000 fee and the retreat from overseas recruiting

A fee that large acts like a gate. Many employers can pay legal fees and standard filing costs and then compete in selection. A $100,000 add-on changes the decision at the budget stage, before a manager ever reviews a résumé.

Early FY 2026 numbers point to reduced participation: total H-1B registrations fell 26.9% as employers opted out amid the cost and tighter framing of the program. That drop matters because the H-1B system is capped, so fewer registrations can mean fewer employers even trying, not just fewer workers being chosen.

Smaller employers feel this first:

• Startups often hire for specialized roles but manage burn rate tightly.
• Non-profits rarely have discretionary funds for a six-figure fee.
• Rural healthcare providers depend on hard-to-fill roles and may not be able to meet Level IV pay bands.

Each of those sectors can still need an H-1B worker, but need does not pay the surcharge.

⚠️ Extensive implications for startups, non-profits, and rural employers due to the $100,000 fee and the high-skill emphasis

How employers and workers may adapt inside the new rules

March 2026 matters because it kicks off the first registration season fully shaped by the weighted selection system for the FY 2027 H-1B cap. Employers that wait until after March planning cycles may miss the chance to structure offers and wage levels in time.

Several near-term adaptations are already rational:

1. Role leveling and wage review

– Employers will scrutinize whether a job can be justified at Level III or Level IV under DOL wage standards, and whether internal pay bands can support it.
– DOL references remain central (see: DOL and prevailing wage resources at Foreign Labor Certification Data Center).

1. Preference for in-country candidates

– The $100,000 filing fee pushes many firms toward candidates already in the U.S. who can file without consular notification.

1. F-1 OPT contingency planning

– Students and new graduates may need backup plans earlier, since Level I odds are structurally weaker under weighted selection.

USCIS continues to publish program guidance for H-1B petitions and H-1B registrations at H-1B Specialty Occupations.

The program has not just changed rules. It has changed its target worker. Employers planning for the March 2026 registration window now face a clear choice: offer higher wages to compete under weighted selection, or exit the FY 2027 H-1B cap race entirely.