The Department of Homeland Security has finalized a new H‑1B weighted lottery that will reshape who gets a chance at one of the United States 🇺🇸’ most sought‑after work visas, and the numbers show recent graduates taking the hardest hit. The rule takes effect February 27, 2026, and applies to FY 2027 cap registrations for the annual 85,000 H‑1B slots. Under the new system, the entry‑level jobs that many new degree holders start with will get far fewer “tickets” in the lottery than higher‑paid roles. For universities and employers planning spring and summer hiring, the change lands like a paywall.
DHS’s final rule, published in the Federal Register on December 29, 2025 after a proposal dated September 24, 2025 and a comment period that closed October 24, 2025, replaces the long‑running random draw with a wage‑weighted selection. USCIS estimates that a typical Wage Level I registration—often the first full‑time role after graduation—will see its selection probability fall to 15.29%, down from 29.59% under the prior approach, a 48% drop. By contrast, Wage Level II edges up to 30.58% from 29.59%. The shift matters because the statutory cap still stays at 65,000 regular visas plus 20,000 for U.S. master’s degrees.
How the new weighting works
USCIS will assign each registration a number of entries based on the wage level tied to the wage offer. The entries are:
- Level I — 1 entry
- Level II — 2 entries
- Level III — 3 entries
- Level IV — 4 entries
All entries go into the same drawing, so a Level IV candidate has four chances for every one chance given to a Level I candidate. DHS says this approach will favor “higher‑paid, higher‑skilled” workers when demand exceeds supply. That is a break from the previous system where every registration started equal.
Quick reference table: Wage levels and entries
| Wage Level | Description (brief) | Lottery entries |
|---|---|---|
| Level I | Entry‑level roles, often first full‑time job after graduation | 1 |
| Level II | Mid entry / intermediate | 2 |
| Level III | Competent work, higher responsibility | 3 |
| Level IV | Fully competent, often leadership duties | 4 |
How wage level is determined
The wage level is not arbitrary. It’s derived from government data and depends on:
- Standard Occupational Classification (SOC) code for the job
- Geographic area of employment
- Offered salary
USCIS uses Occupational Employment and Wage Statistics tied to the SOC code and location to place the role into a wage level. Those details matter at the registration stage because they determine how many lottery entries the registration receives.
Recent graduates—especially in technology and engineering—often sit at the lower end of local pay scales (around the 34th percentile or below), which can place them in Level I even when the work requires a degree today.
Cap structure and effect on exemptions
The rule does not change the basic cap split: 65,000 standard numbers and 20,000 reserved for U.S. advanced‑degree holders. However, the weighting changes who benefits when registrations exceed available slots.
- If the master’s pool becomes oversubscribed, the same weighting rules apply inside that exemption.
- A new graduate with a U.S. master’s degree who is offered a Level I salary can still be outdrawn by a more senior candidate with a higher wage level, even within the exemption pool.
For FY 2026, USCIS will still run the old random process; the new weighted system takes effect for FY 2027 registrations. Stakes rise after that.
Key takeaway: the system shifts advantage toward higher wages—so salary offers and classification choices at registration carry new, measurable consequences.
Employer and market implications
Employers that rely on early‑career talent are already weighing whether to raise offers to reach Level II or higher, because the multiplier can change hiring outcomes overnight. However:
- Large firms in major hubs may find it easier to raise offers.
- Startups, nonprofits, manufacturers, and employers in lower‑cost areas may struggle to match those pay levels.
The source material notes small businesses face $85,006 in average lost labor costs for each missed Level I worker—a figure that captures delays, overtime, and the churn of recruiting again. Critics warn the system could drive wage inflation without adding new skills, as firms bid up salaries mainly to buy entries.
Because wage levels are measured against local pay data, the rule may tilt the program toward markets with higher salaries. In rural regions or smaller metros, a fair entry‑level offer can still fall into Level I because the local wage scale is lower, cutting the applicant’s lottery weight before anyone reviews the résumé. That geographic effect worries schools, which send graduates to employers far from tech centers, and could narrow the mix of employers that can compete for H‑1B workers—pushing more hiring toward firms that already dominate the visa process and can pay at Level III or IV.
Legal and policy reactions
DHS framed the change as a way to protect domestic labor, saying the cap should be allocated in a manner that better reflects pay and skill. Supporters argue the old random draw encouraged volume gaming and rewarded registration quantity over job quality.
Opponents counter:
- Lawsuits are likely.
- DHS “overstepped” its authority by effectively turning a congressionally capped program into a wage contest.
- Analysis by VisaVerge.com suggests the legal fight may focus on whether DHS can reorder selection criteria without Congress rewriting the statute.
Companies are already recalculating offers for next year in response.
Practical registration and filing advice
The mechanics mean paperwork choices can carry higher stakes:
- Employers must provide accurate worksite details and select the correct occupation when they register, because the wage level flows from the SOC code and location.
- The new weighting happens at registration—before a petition is submitted.
- Any later petition still requires Form I‑129.
USCIS posts official program basics and cap‑season updates on its H‑1B page: https://www.uscis.gov/working-in-the-united-states/temporary-workers/h-1b-specialty-occupations
Filing instructions for Form I-129 remain the place to confirm current requirements: https://www.uscis.gov/i-129
Those records can be reviewed if a case is questioned.
Impact on students and hiring timelines
For students on Optional Practical Training and managers who use the H‑1B cap to keep teams stable, the change brings new anxiety: the offer that fits a first job may now come with the lowest odds. Advisers say the squeeze will be sharpest where pay is set by entry‑level bands and employers can’t raise salaries just to reach Level II.
USCIS’s estimate captures the cliff:
- Wage Level I selection probability: 15.29%
- Prior random draw probability: 29.59%
With the rule effective in 2026, many graduating classes may see hiring decisions move earlier as companies decide which roles to register first.
DHS is replacing the random H-1B lottery with a weighted system based on four wage levels. Starting FY 2027, higher-paid roles (Levels III and IV) will receive triple or quadruple the selection chances of entry-level roles (Level I). This shift targets protection for domestic labor but significantly lowers the probability of selection for recent graduates from 29.59% to approximately 15.29%.
