H-1B Lottery - Weighted Selection Process

 

The Department of Homeland Security (DHS) published a final rule in the Federal Register on December 29, 2025, which fundamentally changes the H-1B selection process. This rule replaces the traditional random lottery with a "weighted selection process" that prioritizes higher-paid and higher-skilled workers.

The new system is scheduled to take effect on February 27, 2026, meaning it will apply to the FY 2027 cap season (registration typically occurring in March 2026).

The Change: From Random to Weighted

Instead of every registration having an equal chance, the odds of being selected will now depend on the Department of Labor (DOL) Wage Level associated with the job offer.
The lottery pool will assign "entries" to each beneficiary based on their offered salary relative to the Occupational Employment and Wage Statistics (OEWS) data:

• Wage Level IV (Highest): 4 entries in the pool.
• Wage Level III: 3 entries in the pool.
• Wage Level II: 2 entries in the pool.
• Wage Level I (Entry): 1 entry in the pool.

A Level IV applicant is statistically four times more likely to be selected than a Level I applicant.  For beneficiaries with multiple intended work locations, the employer must determine the wage level (I through IV) for the offered salary at each location. The lottery weighting will then be based on the lowest of those levels. It is important to note that this wage can be different from the LCA wage.

Impact on Master Cap

One critical change is that the 20,000 additional slots for U.S. advanced degree holders will now also follow the weighting system. Historically, advanced degree holders were entered twice: once in the regular cap and once in the master's cap. Now, their "weight" is applied to both pools.  For example, if a Master's degree holder is offered a Level III wage, they are entered into the Regular Cap (65,000) with 3 entries; if not selected, they are enterted into the Master's Cap (20,000) with 3 entries. 

Safeguards Against "Gaming"

To prevent employers from artificially inflating wage levels just to win the lottery, the rule includes several strict provisions:

• Continuation of "Beneficiary-Centric" Selection:  Each person is entered into the selection process only once, regardless of how many employers submit a registration for them. 
• Registration Data Requirements: Employers must now provide the specific SOC code (job category), the OEWS wage level, and the precise area of employment at the registration stage.
• Post-Selection Verification: If selected, the employer must submit evidence that the wage level indicated during registration is bona fide. USCIS has the discretion to deny or revoke petitions if they find inconsistencies or attempts to manipulate the odds.

Early Preparation is the Key

The new weighted selection process means employers must be more vigilant in preparing for the H-1B lottery. It is critical to evaluate cases with immigration counsel early, focusing on the following:

• Formally determine the SOC code and wage level before March registration based on the exact work location(s), as these will be locked into the USCIS system and must match the subsequent petition exactly to avoid denial.
• Maintain contemporaneous proof of prevailing wage data and job descriptions used to justify the selected level.
• Ensure the beneficiary maintains valid status to remain eligible for Change of Status (COS). If the petition must be filed for Consular Notification due to a status gap, the $100,000 supplemental fee will be triggered.
• Be ready to explain any subsequent changes in salary, work location, job titles, etc., to avoid allegations of fraud.
• Audit the current pay scale of employees in the same occupation category to avoid potential pay equity issues.

(Immigration laws and policies change regularly.  If you have any questions regarding this article, please visit www.1visa1.com to schedule a legal consultation.)  

Delay of PERM Prevailing Wage Determination

Immigration practitioners may have noticed a gradual delay of the issuance of prevailing wage determinations (PWDs) by the Office of Foreign Labor Certification of the Labor Department.  The processing time has almost doubled in the past few years.  For many years, the average processing time for PWD used to be between 3 and 4 months.  However, the current PWD processing time has increased to about 6 months.  The delay means that advance planning is critical for employment-based immigration cases. 

Requirement of the Prevailing Wage Determination

To petition for a foreign worker for permanent employment in the US, an employer typically has to go through the PERM labor certification process.  PERM certification is proof that the employer is not able to find a qualified and available US worker to fill a particular job opening.  Submission of a prevailing wage request (Form ETA 9141) is an initial step in the PERM application process.  In the PWD, the Labor Department will determinate the marketing wage for the position based on factors such as the job location, duties and requirements.  The employer must offer at least the prevailing wage to any qualified applicant. 

Timing is Critical for Employment Cases

In employment-based green card cases, timing is really everything.  Frist, the PERM process is governed by very strict time restrictions, and any deviations will result in a denial.  Further, consider a typical applicant who was born in India and is working in the US on H-1B visa.  The cutoff dates for the EB-2 and EB-3 categories are about 10 years away. The sooner this applicant applies for PERM, the earlier he can secure a priority date (PD), and the earlier that he can get his green card approved.  Filing PERM early can also facilitate this applicant's H-1B extension under the AC-21 portability rules.  Significantly, the current delay with PWD will cascade down the entire application process for permanent residency.  

Planning Ahead

In light of the current delay of PWD, employers and applicants should plan ahead. Map out an application schedule as soon as possible.  As it does not cost anything to file a prevailing wage request, employers should file the requests early on if they anticipate sponsorship of foreign workers down the road.   It is also possible to start PERM recruiting before the PWD is issued. But be forewarned - there are risks involved in doing so and an employer should only do it under the advisement of an experienced practitioner. 

(Immigration laws and policies change regularly.  If you have any questions regarding this article, please visit www.1visa1.com to schedule legal consultation.) 

New Rules Restricting H-1B Program and Hiking Prevailing Wages

The Trump Administration issued new directives to restrict the H-1B visa program and substantially increase the prevailing wages that employers must pay foreign workers.  

Two new Interim Final Rules (IFRs) affecting hiring of foreign workers were published on October 8, 2020:   

(1) “Strengthening the H-1B Nonimmigrant Visa Classification Program” rule by the DHS/USCIS will take effect 60 days after the date of publication, and

(2)   “Restructuring of H-1B/H-1B1/E-3 and PERM Wage Levels” rule by the DOL took effect immediately upon publication. 

Restrictions on H-1B Visa Program

The H-1B rule essentially attempts to regulate the same issues that were previously raised by USCIS in many Requests for Evidence and case decisions, some of them have already been decided by court decisions.  They include:

• The required degree must be in a specific specialty or specialization:  There must be a direct relationship between the subject area of the required degree and the duties of the position.  Accordingly, generalized or broad degree types such as engineering, liberal arts, business, etc., without further specialization are not sufficient to support an H-1B petition.

• The required degree in a specific specialty must "always", not "normally" or "usually",  be a minimum requirement for entry in the occupation in the United States.

• Third-party worksite is defined as "worksite, other than the beneficiary's residence in the United States, that is not owned or leased, and not operated, by the petitioner."  If an H-1B worker is placed to work at a third-party worksite, the H-1B petition can only be approved for a maximum of one year.

• Employer-employee relationship definition is defined to be the "conventional master-servant relationship as understood by common-law agency doctrine."  It restores the listing of factors to be considered from the January 2010 Neufeld Memo on Employer-Employee Relationship.  

• Employer may not only show that it has the right to control H-1B employees but also must actually exercise that right to control.  

• Employer will be required to provide contracts, work workers, letters, etc., from clients and third parties to prove any third-party worksite engagement. 

Substantial Increases in Foreign Worker Wages

The new rule by DOL substantially increases the wage requirements for H-1B and E-3 "specialty occupation" programs as well as permanent resident (green card) applications.  These wage requirements are governed by the "prevailing wages" set by the Labor Department based on their salary surveys in each employment location.  

Currently there are 4 levels of prevailing wages set by the DOL.  The new rule increases level 1 wage from 17th percentile to 45th percentile; level 2 wage from 34th percentile to 62nd percentile; level 3 wage from 50th percentile to 78th percentile; and level 4 wage from 67th percentile to 95th percentile.  

For example, the level 1 wage of a software developer in the New York and Newark metropolitan area has been increased from $78,811  to $116,251.  Such increases will be financially prohibitive for many employers. 

DOL has indicated that it will not reopen previously issued and approved prevailing wages in LCA or labor applications.  However, all new H-1B and EB-2 and EB-3 green card applications are already subject to the new wage increases. 

Conclusion

The review process of these regulations was shortened to almost non-existent with little or no time for public comments before implementation.  The IFR on prevailing rule took effect almost instantly upon publication.  Lawsuits will almost certainly be filed to enjoin the enforcement of these rules.  In the meantime, plans of many employers and foreign workers will surely be disrupted. Stay tuned for further development of these important issues. 

H-1B Level 1 Wage Approval and Denial

Since late last summer, many H-1B applicants received formal Requests for Evidence (RFEs) from the USCIS regarding the issue of wage level in the H-1B petition and and related Labor Condition Application (LCA).  These RFEs typically question whether the position qualifies as an H-1B specialty occupation if level 1 wage is offered to the employee.  Employers and attorneys have responded to these RFEs using various arguments with explanation.  Our office also responded to quite a few of these RFEs and, thankfully, all decisions have been favorable. 

As the new H-1B cap filing deadline of April 1st approaches, it is unclear what the current position of USCIS is regarding wage level.  Two recent decisions by the AAO (Administrative Appeals Office) may shed some light on this important issue, although they are non-binding decisions. Both decisions were issued on January 25, 2018: one was approved while the other one was denied.  The first case, Matter of G-J-S-USA, Inc., was filed for the position of an investment banking analyst while the second case, Matter of B-C, Inc., was filed for the position of a nontechnical engineer-in-training.  The language and analysis in both decisions are almost identical. The following are the key takeaways of these two cases. 

First, AAO clarifies the relationship between the Labor Condition Application (LCA) and the H-1B petition.  The LCA is certified by the DOL while the H-1B petition is adjudicated by USCIS under the DHS.  In the LCA, there is a wage requirement, and the purposes of the wage requirement is to protect U.S. workers' wages and to protect H-1B workers from wage abuses.  According to the regulation, "DHS determines whether the petition is supported by an LCA which corresponds with the petition,...."  AAO notes that "When accessing the wage level indicated on the LCA, USCIS does not purport to supplant DOL's responsibility with respect to wage determinations."  AAO confirms that it is the DOL that is charged with the responsibility of wage determination but not USCIS, which is an important observation.

Second, AAO confirms that there is no "inherent inconsistency" between the wage level of a position and its nature as a specialty occupation.  This is a very important observation.  It precludes any conclusion that just because level 1 wage is offered in a position, it is not a specialty occupation.  Wage is a factor to consider but not a defining factor.

Third, in determining whether level 1 wage is appropriately assigned, one should compare the requirements and attributes of a particular position with those associated with the corresponding  occupation in the Occupational Information Network (O*NET).  O*NET is a massive database of information primarily maintained by the DOL regarding various occupations in the United States. 

Fourth, the comparison mentioned above comprises of five steps. (1) Identify the O*NET occupation that best matches the sponsored position in terms of educational and other requirements; (2) Compare the educational requirements of the H-1B position and the O*NET occupation; (3) Compare the experience requirements of the H-1B position and the O*NET occupation; (4) Determine if there any special skills or additional requirements of the H-1B position; and (5) Determine if there are any supervisory requirements for the position.

By applying the above five steps, AAO determined that level 1 wage is not appropriate in the investment banking analyst case as the position requires a master's degree in finance or a related field, which is above the normal requirement of a bachelor's degree.  

These AAO decisions are definitely helpful to employers who plan to submit H-1B petitions.  However, the role of DHS and USCIS in wage determination will still need to be clarified.  AAO appears to suggest that in order to determine whether the DOL-certified LCA "corresponds with" the H-1B petition, USCIS needs to review the wage level of the position offered.  Whether this nexus is sufficient and appropriate remains to be determined. 

LABOR APPLICATION RECRUITING MUST NOT FAVOR FOREIGNERS

In March 2005, a new rule governing the filing and processing of labor applications for the permanent employment of foreign workers took effect. This new rule, called PERM, was promulgated by the U.S. Department of Labor to completely revamp the certification process of labor applications. It was an online system with many new features and specific regulatory requirements. There were many questions and uncertainties about the new application process for several years. After more than five years of refinement and exchange between the government and the system users, many of the initial issues have been resolved. However, there are still a number of outstanding questions that have not been addressed by the Labor Department and must be answered by the Board of Alien Labor Certification Appeals (BALCA). Recently, the Board has issued several important decisions regarding the pre-filing recruiting process. There is a common thread in these decisions: that the recruiting materials must not contain any conditions that are less favorable than what is being offered to the foreign worker.

For example, the employer in Matter of Marcel Cleaners Inc. (Feb. 16, 2010) filed a labor application for a laundry supervisor. The State Workforce Agency determined the prevailing wage for this job should be $19.04 per hour and the employer was also willing to pay this wage to any eligible applicant. As part of the recruiting process, the employer must place a job order in the state job bank for this opening so that eligible American workers may apply. The job order showed a wage range of $18.00 to $19.50 per hour. The labor application was denied by a Certifying Officer on the ground that the wage offer in the SWA job order listed a wage that was less than the wage offered to the foreign worker. The employer disagreed with the decision and filed an appeal with the Board, arguing that they usually pay a range of wages to employees depending on the particular person’s work history and abilities. The Board affirmed the denial by pointing out that the lower end of the range of wage range was $1.04 less per hour than the prevailing wage, which contradicted the attestation that the employer would pay eligible workers a wage that equals or exceeds the prevailing wage. The Board continues to point out that the regulations expressly prohibit advertisements of a wage rate lower than the prevailing wage, and the state job order is considered an advertising tool.

Similarly, in another case decided on September 1, 2009, the Board held that, not only must the advertised wage be higher than the prevailing wage, it must also be equal to or higher than the actual wage offered to the foreign worker (Thomas L. Brown Associates, P.C.) Here, the employer posted a Notice of Filing, another pre-filing requirement, with a wage that is higher than the prevailing wage but lower than the actual wage offered to the foreign worker. The Board affirmed the denial, stating that the advertisements must not contain wages or terms and conditions of employment that are less favorable than those offered to the alien.

Finally, in Noll Pallet & Lumber Co. (Dec. 16, 2009), the Board denied labor application for a similar but different reason. Here the employer is hiring a production worker and advertised a requirement for criminal and background checks. However, such a requirement was not listed in the labor application. Again, the Board noted that labor application advertisements must not contain wages or terms and conditions of employment that are less favorable than those offered to the foreign worker. Here, the advertisements contained a requirement for criminal and background checks, which was not imposed on the foreign worker. In other words, the advertisements contained conditions that are less favorable than those offered to the foreign worker.

These decisions illustrate once again that the labor certification process is extremely complicated and great care must be taken to ensure that all legal requirements are met. Sometimes a seemingly trivial matter could result in a denial of an application and cost additional time and money.