On December 23, 2025, the U.S. Department of Homeland Security (“DHS”) issued a Final Rule that significantly changes how cap-subject H-1B visas are allocated. Historically, employers registered candidates and relied on a random lottery because demand far exceeded the annual cap of 65,000 visas, plus an additional 20,000 for individuals with advanced U.S. degrees. Under the prior system, employers had roughly a 30% chance of being selected to file a full H-1B petition, regardless of the wage level or skill requirements of the position.
The new rule eliminates the random lottery and replaces it with a weighted wage-based selection process. Registrations will now be entered into a selection pool multiple times based on the wage level offered to the foreign national, as determined by the Department of Labor’s four-tier Occupational Employment and Wage Statistics (“OEWS”) system. Positions offered at the highest wage level will receive the most weight, while lower-wage positions will still remain eligible but with fewer entries. According to the DHS, the goal is to encourage higher wages and higher-skilled positions, while reducing perceived misuse of the H-1B program for lower-paid roles.
This Final Rule takes effect on February 27, 2026, and will apply to the FY 2027 H-1B cap registration season. It follows other recent federal immigration developments, including litigation over a $100,000 H-1B application fee and broader changes affecting work authorization and travel. Together, these shifts may prompt employers—particularly California businesses that rely on skilled foreign labor—to reassess their workforce planning and explore alternative visa options such as O-1, TN, or employment-based green card pathways.
For guidance on how these changes may affect your business and immigration strategy, please contact info@mnklawyers.com.
