The U.S. Department of Homeland Security has replaced the random H-1B lottery with a wage-weighted selection system that fundamentally changes who gets picked for an H-1B visa. The final rule took effect February 27, 2026, and will govern the FY 2027 cap registration opening March 4. For F-1 graduates on OPT and STEM OPT, the shift means entry-level job offers now carry dramatically lower selection odds—while higher-paid roles see their chances more than double.
The stakes are enormous and immediate. Under the old random lottery, every registration had the same chance of selection—roughly 35% in FY 2026. Under the new system, a Level IV wage position may have approximately a 61% chance of being picked, while a Level I position drops to around 15%. That is not a marginal tweak. It is a structural overhaul that will reshape hiring strategies, salary negotiations, and career planning for hundreds of thousands of foreign nationals and their employers. Combined with a $100,000 per-petition fee imposed by presidential proclamation last September—which a federal court has upheld—the FY 2027 H-1B season represents the most expensive and competitive cap cycle in the program’s history.
Wage-Weighted Lottery Now In Effect
The DHS final rule became effective February 27, 2026. FY 2027 cap registration opens March 4 at noon ET and closes March 19 at noon ET. Selection notifications expected by March 31, 2026. This is the first cap season using wage-weighted selection.
$100,000 Fee Upheld — Appeal Pending
A D.C. federal court upheld the $100,000 H-1B petition fee on December 23, 2025. The U.S. Chamber of Commerce appeal is fast-tracked in the D.C. Circuit with oral arguments expected in February 2026. A separate preliminary injunction hearing is set for February 19, 2026. The fee applies to FY 2027 cap petitions filed for beneficiaries abroad.
How the Wage-Weighted Lottery Works
On December 23, 2025, DHS published a final rule replacing the random H-1B cap lottery with a weighted selection system based on Department of Labor wage levels. The rule was published in the Federal Register on December 29, 2025, and became effective February 27, 2026—just days before the FY 2027 registration window opens. DHS received 2,731 public comments during the rulemaking process and issued the final rule without any changes from the proposed version published in September 2025.
The mechanics are straightforward. Each H-1B registration is assigned a wage level based on the Department of Labor’s Occupational Employment and Wage Statistics (OEWS) system, which classifies wages into four tiers by occupation and geographic area. When USCIS conducts the lottery, registrations at higher wage levels are entered into the selection pool multiple times—giving them proportionally better odds of being selected. A Level IV registration gets four entries, a Level III gets three, a Level II gets two, and a Level I gets one. Each beneficiary is still counted only once toward the 85,000 annual cap, but the number of entries directly determines the probability of selection.
This is not a minor adjustment to the existing system. It is a wholesale replacement of the equal-chance model that has governed H-1B selection for years. The practical effect is that compensation strategy now doubles as immigration strategy, and the classification decisions employers make at registration time carry consequences that extend through the entire petition process and beyond.
| Wage Level | Lottery Entries | Projected Selection Odds | Historical Share of Registrations | Description |
|---|---|---|---|---|
| Level IV | 4 entries | ~61% | ~5% | Senior roles with expert knowledge, supervisory responsibility |
| Level III | 3 entries | ~46% | ~12% | Experienced professionals with significant autonomy |
| Level II | 2 entries | ~31% | ~55% | Mid-level professionals with moderate experience |
| Level I | 1 entry | ~15% | ~28% | Entry-level roles, routine tasks, close supervision |
Key Rule: Lowest Wage Level Controls
If a beneficiary has multiple registrations from different employers at different wage levels, the lowest wage level among all registrations determines the entry weight. For example, if one employer registers you at Level III and another at Level I, you receive only 1 entry. Candidates should coordinate with employers before registration.
The projected selection probabilities come from DHS’s own analysis using historical registration data. Under the old random model, every registration had an equal chance—roughly 29.6% based on recent years’ averages. The weighted system creates a clear hierarchy: Level IV registrations see their odds roughly double, Level III gets a 55% boost, Level II stays roughly flat with a modest 3% increase, and Level I drops by nearly half.
A February 2026 analysis by the Penn Wharton Budget Model confirmed that the new rule will shift the H-1B visa allocation toward higher-paid workers, increasing the average compensation of selected applicants by approximately $9,554—from $112,309 under the random lottery to $121,863 under the weighted system. The study also found that Level I registrations would make up only 14% of selected registrations, down from 27% under the current system, while Level IV registrations would rise from 15.5% to nearly 26%.
Why F-1 Graduates on OPT/STEM OPT Feel the Impact First
Most new graduates enter the labor market at or near Level I wages. Historical H-1B petition data from FY 2020–2024 shows that 28% of all cap registrations were at Level I and another 55% at Level II. Only 12% were at Level III and just 5% at Level IV. For F-1 graduates transitioning from OPT or STEM OPT to H-1B status, the overwhelming majority of job offers fall into those lower wage tiers—particularly in entry-level software development, data analysis, financial analysis, and other roles typically offered to workers with limited post-graduation experience.
Under the random lottery, that concentration at lower wage levels did not matter. A Level I registration had the same chance as a Level IV registration. Now it matters enormously. A recent graduate whose employer registers them at Level I has approximately a 15% chance of selection. A mid-career professional at Level IV has a 61% chance. That is a four-to-one difference in odds that directly affects whether the graduate can remain in the United States, continue their career, and eventually pursue permanent residence.
The stakes extend beyond the lottery itself. For an F-1 worker on OPT or STEM OPT, the registration outcome determines whether their employer can file an H-1B cap petition, whether the worker can maintain status past their OPT expiration, and whether long-term immigration plans—including employer-sponsored green card processes—can proceed on schedule. A failed lottery means another year of uncertainty, another year of OPT or STEM OPT usage, and the possibility that the worker exhausts their available status before getting another shot at the cap.
The advanced degree exemption offers a partial buffer. The 20,000-visa master’s cap remains part of the cap structure, and graduates with U.S. master’s degrees or higher get an additional selection opportunity. But the weighted system applies equally to both the regular 65,000 cap and the master’s cap. A master’s degree helps by giving the applicant two bites at the apple—but within each pool, the wage level still governs the odds.
FY 2027 Cap Season: Dates, Fees, and New Registration Requirements
USCIS announced on January 30, 2026, that the FY 2027 H-1B cap registration period will open at noon Eastern on March 4, 2026, and close at noon Eastern on March 19, 2026. The agency intends to issue selection notifications by March 31, 2026. Selected petitioners will have a 90-day filing window from April 1 through June 30, 2026, to submit full H-1B petitions with an employment start date of October 1, 2026, or later.
This year’s registration process introduces new data requirements that did not exist in prior cap seasons. For the first time, employers must provide the Standard Occupational Classification (SOC) code, the area of intended employment, and the OEWS wage level corresponding to the offered salary at the registration stage—not just at petition filing. This front-loading of detailed classification information means that errors or inconsistencies at registration can create compliance problems later, including Requests for Evidence, denials, or revocations if USCIS determines the employer inflated the wage level to improve lottery odds.
📅 FY 2027 Cap Season Timeline
📋 New Registration Data Required
📊 FY 2026 Registration Stats
The FY 2026 registration data provides context for what employers can expect in FY 2027. Last year saw approximately 339,000 unique beneficiaries—a significant 26.9% drop from the 442,000 in FY 2025, driven in part by USCIS’s beneficiary-centric selection model that eliminated duplicate registrations by multiple staffing firms for the same worker. The registrations-per-beneficiary ratio fell to just 1.01, effectively ending the practice of gaming the lottery through multiple submissions.
For FY 2027, immigration analysts expect registration volume to decline further. The combination of the wage-weighted system—which discourages low-wage registrations—and the $100,000 per-petition fee is projected to reduce participation significantly, particularly from offshore IT consulting firms that historically submitted large volumes of Level I and Level II registrations. Some analysts project that registrations could fall by more than half, which would paradoxically improve selection odds across the board, including for remaining Level I applicants. If that happens, candidates already in the United States on OPT or other valid status could see selection rates of 50% or higher, with the highest-paid candidates potentially approaching 90%.
The $100,000 Fee: What It Means for FY 2027 Cap Petitions
On September 19, 2025, President Trump issued a presidential proclamation requiring a $100,000 supplemental payment for certain new H-1B petitions filed after September 21, 2025. The fee is a one-time charge per petition, separate from existing USCIS filing fees, and it applies to all new H-1B petitions for beneficiaries outside the United States. The proclamation is effective for 12 months, expiring September 21, 2026, unless extended—meaning it covers the entire FY 2027 cap season filing period from April through June 2026.
The legal landscape around the fee remains contested but currently favors the government. On December 23, 2025, U.S. District Judge Beryl Howell in Washington, D.C., granted summary judgment to the administration, ruling that the fee falls within the president’s broad authority under Section 212(f) of the Immigration and Nationality Act. The U.S. Chamber of Commerce and Association of American Universities immediately appealed, and the D.C. Circuit fast-tracked the case—appellants filed their brief by January 9, 2026, the government responded by January 30, 2026, and oral arguments are expected in February 2026.
Two additional lawsuits are also pending. Global Nurse Force v. Trump, in the Northern District of California, has a preliminary injunction hearing set for February 19, 2026. A coalition of 20 state attorneys general, led by California and Massachusetts, filed a third challenge on December 12, 2025, in the District of Massachusetts. Any of these cases could produce an injunction that blocks or modifies the fee before the April petition filing deadline—but employers should not count on it.
💰 Who Pays the $100,000 Fee
✅ Who Is Exempt
Critical F-1 Student Exemption
F-1 students in the U.S. who are selected in the FY 2027 lottery and whose employers file a change of status petition (rather than consular processing) are exempt from the $100,000 fee—provided USCIS approves the change of status. This makes the change-of-status route significantly cheaper and is a major strategic consideration for employers sponsoring F-1 workers already in the country.
The F-1 change-of-status exemption is arguably the single most important planning detail for employers sponsoring OPT workers this cap season. If a student is selected in the lottery and the employer files a change of status request that USCIS approves, the $100,000 fee does not apply. But if the student travels abroad while the petition is pending or if USCIS converts the case to consular processing for any reason, the fee becomes payable. This creates a strong financial incentive for F-1 students to remain in the United States from the time of lottery selection through petition approval—and for employers to ensure the change-of-status request is properly filed and granted.
For employers hiring candidates from outside the United States, the calculus is different. The $100,000 fee applies to all new petitions requiring consular processing. When combined with existing USCIS filing fees, attorney fees, and the new premium processing costs (which increase on March 1, 2026), the total government cost for a single H-1B petition can now exceed $101,000—effectively pricing many small and mid-sized employers out of the program entirely. Some immigration analysts expect this to cause a significant drop in overseas registrations for FY 2027, which could improve selection rates for in-country candidates.
Student Strategy: Competing at Higher Wage Levels Without Misclassification
The wage-weighted system rewards higher wage levels, but it also raises the stakes for accuracy. USCIS retains discretion to deny or revoke petitions if it determines an employer inflated the wage level at registration to improve lottery odds. Attempts to amend petitions after selection—by changing the worksite, duties, or salary—will be presumptively disallowed unless the employer can demonstrate the change is legitimate and not part of a scheme to manipulate the system.
This means the practical goal for students is straightforward but demanding: compete for roles that legitimately support Level III or Level IV wages. That requires focusing on positions where higher wages naturally fit the job requirements—senior technical roles, specialized engineering positions, finance roles requiring advanced quantitative skills, or jobs in high-cost-of-living metro areas where even standard roles may command wages above the Level II threshold.
Geography matters more than ever under the weighted system. The OEWS wage levels are calculated by occupation and area of employment. A software developer role in San Francisco may qualify for Level III at a salary that would only reach Level I in a smaller market. Students and employers should carefully evaluate how the area of intended employment affects the wage level determination—and consider whether a higher-cost location might improve lottery odds even after accounting for the salary increase.
- Target Level III/IV roles — Focus job search on positions where duties and market rates support higher wage classifications.
- Build experience on OPT — Use OPT/STEM OPT time to take on leadership, ownership of systems, and client-facing work that justifies higher-level duties.
- Evaluate geography — Consider how work location affects OEWS wage levels for your occupation.
- Coordinate with employers early — Discuss wage level, SOC code, and registration strategy well before March 4.
- Prepare alternative paths — Research O-1, L-1, TN, or J-1 STEM options in parallel.
- Confirm single registrations — If multiple employers may register you, ensure only the highest wage level is submitted (lowest level controls).
- Inflate wage levels — Claiming a higher wage level than the duties justify invites denials, revocations, and compliance enforcement.
- Ignore the SOC code — A mismatched SOC code can undermine the wage level claim during adjudication.
- Plan international travel after selection — Leaving the U.S. while a change-of-status petition is pending could trigger the $100,000 fee.
- Accept multiple low-level registrations — Multiple registrations at different levels default to the lowest, reducing your odds.
- Wait until March to prepare — Employers need finalized job descriptions, wage analysis, and SOC codes before registration opens.
- Assume the $100K fee won’t apply — Courts may not block it before the April filing deadline.
Students should also understand a subtlety in how wage levels are determined for registration purposes. The registration wage level is based on the offered wage, not the position’s education or experience requirements. This means that even if a role would normally be classified as Level I under the LCA based on its minimum qualifications, the employer can register at a higher wage level if the offered salary meets or exceeds the OEWS threshold for that higher level. In practice, this means an employer willing to pay above the Level II or Level III threshold for an entry-level position can improve the registration’s lottery odds—but the salary must be genuine and sustainable, not a temporary bump designed to game the system.
Employer Playbook: Classification, Pay Equity, and Compliance
For employers, the wage-weighted system transforms H-1B registration from an administrative exercise into a strategic decision with financial, compliance, and workforce implications. The classification choices made before March 4 will determine not just lottery odds but also the employer’s exposure to post-selection scrutiny.
The most important step is getting the SOC code right. The SOC code determines which OEWS wage data applies, and an incorrect code can either understate or overstate the wage level. Employers should review job descriptions carefully, ensure the SOC code reflects actual duties performed (not aspirational descriptions), and confirm the area of intended employment is accurate—especially for remote or multi-location roles, where the lowest wage level among all worksites must be used.
Pay equity is an emerging concern that many employers have not yet addressed. If an employer raises wages for H-1B candidates to improve lottery odds, it may inadvertently create compensation disparities with U.S. workers in comparable roles. Immigration law firms and employment counsel are broadly advising employers to conduct privileged pay equity audits before registration to identify and address any internal inconsistencies. The goal is to ensure that wage increases for H-1B registrations are defensible as market-rate adjustments, not lottery manipulation.
📋 Employer Pre-Registration Checklist
USCIS has signaled it will take enforcement seriously. The final rule explicitly states that attempts to amend petitions after selection—by changing the worksite, duties, or occupation to one that would correspond to a lower wage level—will be presumptively disallowed. The agency retained discretion to deny or revoke petitions where it determines the registration misrepresented the wage level, worksite, or occupation. Employers that play it straight and document their classification decisions thoroughly will be in the strongest position; those that try to game the system face meaningful downside risk.
Alternatives When H-1B Odds Drop: O-1, L-1, and Other Paths
Not every candidate will land a Level III or Level IV job offer, and the $100,000 fee makes H-1B sponsorship prohibitively expensive for many employers—particularly smaller companies and nonprofits. For workers who fall outside the sweet spot of the new system, alternative visa strategies are no longer optional. They are essential contingency planning.
The two principal alternatives are the O-1 visa for individuals with extraordinary ability or achievement and the L-1 visa for intracompany transferees within multinational organizations. The O-1 is uncapped—there is no lottery—and is available to individuals who can demonstrate sustained national or international recognition in their field. For STEM professionals, this typically means a combination of published research, patents, conference presentations, awards, and evidence of a salary or compensation substantially above the norm. The bar is high but not unreachable, particularly for applicants who have been building their professional profiles during OPT or STEM OPT.
The L-1 is available when a multinational company transfers a qualifying manager, executive, or specialized knowledge worker from an overseas office to a U.S. location. This path requires the worker to have been employed abroad for at least one continuous year within the preceding three years. For companies with international offices, structuring rotational assignments that build L-1 eligibility can serve as a viable backup when H-1B selection is uncertain.
Other options worth evaluating include the TN visa for Canadian and Mexican nationals in qualifying professions under the USMCA trade agreement, the E-2 treaty investor visa for nationals of treaty countries who are investing in a U.S. business, and direct employer-sponsored permanent residence through PERM labor certification—which, while slower, is not subject to the H-1B lottery at all. Immigration counsel should be evaluating the full spectrum of options for each candidate well before the March registration deadline.
Legal Challenges and What Could Still Change
The FY 2027 H-1B cap season is proceeding under two major policies that are both active and both being challenged in court. The wage-weighted lottery rule has not yet been subject to a legal challenge seeking to block its implementation, though immigration law firms and advocacy groups have signaled they believe DHS exceeded its statutory authority in using wage as a proxy for skill. Fisher Phillips, a major employment law firm, has advised employers to assume the rule will apply unless and until a court says otherwise—noting that the Supreme Court’s recent limitations on universal injunctions make it harder for a single court to block a rule nationwide.
The $100,000 fee faces more immediate legal jeopardy. Three separate lawsuits are pending: the U.S. Chamber of Commerce case (now on expedited appeal in the D.C. Circuit), the Global Nurse Force case in Northern California (preliminary injunction hearing February 19, 2026), and the 20-state attorney general coalition case in Massachusetts (filed December 12, 2025). A ruling in any of these cases could block or modify the fee before the April–June petition filing window. Employers should monitor these cases closely and be prepared to adjust their filing strategy on short notice if a court intervenes.
Beyond the immediate litigation, the broader policy environment continues to evolve. The September 2025 presidential proclamation that imposed the $100,000 fee also mandated enhanced security vetting for H-1B applicants, including social media screening. DHS has proposed additional changes to prevailing wage requirements and the definition of specialty occupation. Any of these developments could further alter the H-1B landscape before the FY 2027 petition filing period begins in April.
Frequently Asked Questions
The convergence of the wage-weighted lottery, the $100,000 fee, new registration requirements, and active litigation has created an unusually complex cap season. Below are answers to the most common questions based on the latest available guidance as of early February 2026.
Registration opens at noon Eastern on March 4, 2026, and closes at noon Eastern on March 19, 2026. USCIS intends to issue selection notifications by March 31, 2026. There is no advantage to registering on the first day—selections occur after the window closes, not on a first-come basis.
The non-refundable H-1B registration fee is $215 per beneficiary. This is separate from the $100,000 supplemental fee, which applies later at the petition filing stage for qualifying petitions. The Treasury Department has increased the daily credit card limit to $99,999.99 for H-1B registrations.
Yes. The weighted selection applies to both the regular 65,000 cap and the 20,000 advanced degree exemption (master’s cap). However, beneficiaries with U.S. master’s degrees or higher still get considered in both pools—first in the master’s cap lottery, then in the regular cap if not selected—giving them two chances.
Based on DHS estimates using historical data: Level IV: ~61%, Level III: ~46%, Level II: ~31%, Level I: ~15%. These are projections—actual odds will depend on the total number of registrations and how they are distributed across wage levels in FY 2027. If registrations drop significantly due to the $100,000 fee, odds could improve across all levels.
If multiple employers register the same beneficiary at different wage levels, the lowest wage level controls. For example, if Employer A registers you at Level III and Employer B at Level I, you get only 1 entry. Candidates should coordinate with all potential sponsors to ensure only appropriate registrations are submitted.
F-1 students in the United States whose employers file a change of status petition are exempt from the $100,000 fee—provided USCIS approves the change of status. If the student leaves the U.S. while the petition is pending or if the case is converted to consular processing, the fee becomes payable. Staying in the U.S. through petition approval is critical.
No. The wage level must be justified by the offered salary relative to the OEWS prevailing wage for the specific occupation and location. USCIS will compare registration data to the petition filing and retains discretion to deny or revoke petitions if it determines the employer selected an inappropriate wage level. Post-selection amendments that lower the wage level are presumptively disallowed.
No. The wage-weighted rule applies only to initial cap-subject registrations for the annual lottery. H-1B extensions, amendments, and change-of-employer petitions for workers already counted against the cap continue to be filed and adjudicated under existing procedures.
No. Cap-exempt petitions—filed by universities, nonprofit research organizations, and government research organizations—do not go through the lottery and are therefore unaffected by the weighted selection rule. However, cap-exempt employers may still be subject to the $100,000 fee for new petitions, as the presidential proclamation did not provide a blanket exemption for cap-exempt organizations.
The wage-weighted lottery rule has not yet been directly challenged in court. The $100,000 fee is the subject of three active lawsuits, with the D.C. Circuit appeal and a California preliminary injunction hearing both expected in February 2026. A ruling could block the fee before the April filing period, but employers should plan as if both policies will remain in effect. Monitor developments closely and be prepared to adjust strategy on short notice.
📚 Official Sources
- USCIS – H-1B Cap Season (FY 2027)
- USCIS – FY 2027 Registration Period Opens March 4
- USCIS – H-1B Electronic Registration Process
- Federal Register – Weighted Selection Process Final Rule (Dec 29, 2025)
- USCIS – DHS Changes H-1B Selection Process (Dec 23, 2025)
- Penn Wharton Budget Model – Projected Effects of New H-1B Lottery (Feb 2026)
- USCIS – H-1B Specialty Occupations ($100,000 Fee Information)
Disclaimer: This article is for informational purposes only and does not constitute legal advice. Immigration law and policy change frequently. Consult a qualified immigration attorney for advice specific to your situation. Information is current as of February 2026 and based on available government sources and official guidance.
