What Changed for the H-1B Lottery in 2026 (And What Employers Need to Know)

The H-1B lottery opening March 4 is not the same lottery employers ran last year. Two major rule changes take effect for the FY 2027 cap season, and together they represent the most significant structural shift to H-1B selection in the program’s history.

First, USCIS is replacing the random lottery with a wage-weighted selection process. Second, a $100,000 supplemental fee applies—though only to certain petitions filed for beneficiaries outside the United States. Both changes are effective before the March registration window opens.

Employers who approach this cap season the way they approached last year’s will either lose positions in the selection pool or pay six figures they didn’t budget for.

The Weighted Selection System Replaces Random Chance

DHS published the final rule on December 29, 2025, effective February 27, 2026. The rule applies to all 85,000 annual H-1B cap numbers—the 65,000 regular cap under INA § 214(g)(1) and the 20,000 U.S. advanced degree exemption.

Under the prior system, every registration had an equal chance of selection regardless of wage level. Under the new system, registrations receive weighted entries based on the Department of Labor’s Occupational Employment and Wage Statistics (OEWS) prevailing wage tiers:

A Level IV registration has four times the selection probability of a Level I registration. According to Penn Wharton Budget Model projections, the rule increases the average compensation of selected H-1B beneficiaries by approximately 8.5 percent compared to the prior random lottery.

What Employers Must Provide at Registration

The new rule requires employers to submit more information during registration than before. In addition to basic beneficiary information, employers must now provide:

• The Standard Occupational Classification (SOC) code for the proposed position
• The geographic area of intended employment
• The offered wage and corresponding OEWS wage level

USCIS assigns the beneficiary to the highest wage level that the offered wage meets or exceeds for the relevant SOC code and location. If a beneficiary will work in multiple locations, employers must select the lowest wage level among those locations.

These details are final at registration. If selected, the petition must match the information provided during registration. USCIS retains discretion to deny petitions where the wage level claimed at registration doesn’t align with the supporting documentation filed later.

The Lowest-Wage-Level Rule for Multiple Registrations

If multiple employers register the same beneficiary at different wage levels, USCIS assigns that beneficiary to the lowest wage level among all registrations. This prevents employers from layering registrations at artificially high wage levels to improve odds.

The $100,000 Supplemental Fee

Presidential Proclamation 10973, issued September 19, 2025, requires a $100,000 payment for new H-1B petitions filed for beneficiaries outside the United States or where consular notification is requested. The fee took effect September 21, 2025.

The fee does not apply to:

• Beneficiaries currently in the United States in valid nonimmigrant status seeking a change of status (such as F-1 students transitioning to H-1B)
• Petitions filed before September 21, 2025
• Previously issued, currently valid H-1B visas

For employers sponsoring workers already in the U.S. on F-1 OPT, H-4, L-1, or other valid status, the change-of-status exemption eliminates the $100,000 fee. For employers recruiting from abroad, the fee fundamentally changes the cost calculation for H-1B sponsorship.

The Fee Faces Active Litigation

Three federal lawsuits challenge the $100,000 fee. As of mid-February 2026:

Chamber of Commerce v. DHS (D.D.C.): A federal district judge upheld the fee on December 23, 2025, ruling the Proclamation fell within presidential authority under INA § 212(f). The Chamber appealed, and the D.C. Circuit is hearing the case on an expedited schedule with oral arguments expected in February 2026.

Global Nurse Force v. Trump (N.D. Cal.): A hearing on class certification and a preliminary injunction motion is scheduled for February 19, 2026. If the court grants an injunction, USCIS would be barred from collecting the fee during litigation.

State of California v. Noem (D. Mass.): Twenty state attorneys general filed suit in December 2025 challenging the fee under the Administrative Procedure Act.

The fee remains in effect unless a court issues an injunction. Employers should plan for the fee to apply to FY 2027 cap petitions but monitor these cases closely—court orders could come with short notice.

FY 2027 Registration Timeline

The FY 2027 registration window is shorter than prior years:

The registration fee is the same per beneficiary (non-refundable regardless of selection). Selections take place after the window closes, so registering on the first day provides no advantage over registering on the last day. However, waiting until the final hours risks technical issues.

What This Means for Employer Strategy

Wage Level Decisions Require Advance Planning

Employers need to determine SOC codes and defensible wage levels before registration opens. Selecting an artificially high wage level to improve lottery odds creates risk—USCIS will compare the registration to the petition documentation, and inconsistencies can result in denial.

The practical question is whether positions can be legitimately restructured to support higher wage levels. For entry-level roles at Level I, the weighted system may significantly reduce selection probability. Employers filling positions that genuinely require more experience and command higher wages benefit directly.

The $100,000 Fee Pushes Employers Toward Domestic Talent Pools

For employers who previously recruited internationally and sponsored H-1B workers from abroad, the $100,000 fee creates a strong incentive to identify candidates already in the United States. F-1 OPT students, workers in other valid nonimmigrant status, and individuals eligible for change of status avoid the fee entirely.

Alternative Visa Categories Deserve Serious Evaluation

Between wage-weighted selection reducing odds for entry-level positions and a potential $100,000 fee for overseas workers, employers should evaluate whether other visa categories serve their needs more effectively:

• L-1 intracompany transfers for multinational companies moving existing employees to U.S. operations
• TN status for Canadian and Mexican professionals in USMCA-listed occupations
• O-1 extraordinary ability for individuals with demonstrated expertise in their field
• E-2 treaty investor for nationals of treaty countries investing in U.S. businesses

Each category has different requirements, timelines, and costs. The calculation changes significantly when H-1B carries a potential $100,000 surcharge and reduced lottery odds.

Preparing for the March 4 Registration Window

Employers should have the following confirmed before registration opens:

• Beneficiary identity information (passport data, name, date of birth) verified for accuracy
• SOC code determined based on actual job duties, not aspirational descriptions
• Offered wage confirmed and documented
• OEWS wage level identified for the SOC code and geographic area
• Payment arrangements established for the registration fee per beneficiary
• Assessment of whether the $100,000 supplemental fee applies (beneficiary location and immigration status)

The beneficiary-centric selection process implemented in FY 2025 continues. Each beneficiary is selected only once regardless of how many employers register them, and registrations are tied to passport numbers.

When H-1B Planning Requires Legal Strategy, Not Just Paperwork

This is the first cap season where the lottery outcome depends on employer decisions made before registration—specifically, wage level classification and SOC code selection. Getting those decisions wrong doesn’t just waste the fee. It either reduces selection odds or creates a mismatch between registration and petition that leads to denial after selection.

Our H-1B visa lawyers work with employers nationally on cap registration strategy, wage level analysis, and petition preparation. For employers evaluating whether H-1B remains the right category given the new cost structure, we advise across the full range of employer immigration options.

Need to prepare for the FY 2027 H-1B cap season?

Contact our immigration attorneys to discuss registration strategy, wage level positioning, and whether alternative visa categories better serve your hiring needs.

Related Resources:

• Can You Switch Employers on an H-1B Visa? Yes—Here’s How
• Top U.S. Work Visas and Employment-Based Green Cards Employers Should Know
• How Employers Can Use the L-1 Visa to Transfer Global Talent