On September 24, 2025, the Department of Homeland Security (DHS) published a proposed rule that would significantly alter the annual cap-subject H-1B lottery selection process, replacing the current randomized lottery with a wage-based weighted system. This change would give priority to higher-paid workers in the annual allocation of H-1B visas under the cap.

If the proposed rule becomes a final rule, it would prioritize the selection of H-1B cap-subject registrations based on the wage level offered to the prospective H-1B candidate, assigning more weight to those offered higher wage levels as defined by the Department of Labor’s (DOL) Occupational Employment and Wage Statistics (OEWS). Under the proposed rule, beneficiaries offered a position at the highest wage level (Level 4) would receive four entries in the lottery pool, whereas those offered a position at a normal entry-level wage (Level 1) would receive only one.

Clearly, the proposed rule would unfairly advantage the “hyperscaler” technology companies at the epicenter of the AI boom (e.g.; Amazon, Tesla, Google, Microsoft) who can offer higher level wages to their H-1B candidates, while distinctly disadvantaging early-career professionals, recent graduates, and employers in other industries. Moreover, the proposed rule relies on DOL wage levels as a proxy for skill, which may not accurately reflect the qualifications of foreign workers or the complexity of the proffered position. Additionally, the proposed rule would impose new obligations on petitioning employers during the H-1B registration process which do not exist under the current lottery system. For example, sponsoring employers would be required to certify the occupational code, wage level, and work location for each H-1B cap registration. In cases where a single beneficiary has multiple registrations from separate petitioning entities, the lowest wage level among all registrations would be used to determine the candidate’s selection weighting thus, introducing variables in the process which are outside of any one petitioning employer’s control

Key Details of the Proposed H-1B Cap Selection Change:

• Under the proposed rule, each H-1B lottery registrant would be placed into one of four wage tiers, based on prevailing wage data from the Department of Labor (DOL).
• Selection odds would increase with higher wage levels offered: workers in the highest tier could be entered into the selection pool up to four times, while those in the lowest tier would only be entered once.
• This proposed rule is designed to favor highly paid candidates, while technically allowing participation across all wage levels.
• The proposed rule discourages the use of H-1B visas for lower-wage or entry-level positions.

While the DHS proposed rule not only favors large cap technology companies who are willing to pay their employees higher wages, it also  includes the requirement of the Presidential Proclamation issued on September 19, 2025, which imposes a $100,000 fee on all new H-1B petitions (i.e.; H-1B cap-subject petitions) filed on or after September 21, 2025, further limiting the accessibility of the H-1B lottery to employers who are willing to make that type of investment for an individual employee. While it appears that this fee is limited to new petitions only, and not extensions, transfers or amendments, the Administration’s $100,000 fee, together with this proposed rule, if they withstand legal challenges, will serve to severely thwart participation in the H-1B lottery for most petitioning entities in the United States

While we remain confident that the Federal Courts will determine the $100,000 fee under the Presidential Proclamation to be punitive and “not rationally related” to the adjudicative services offered by USCIS as required under the regulations, given the potential impact of the proposed rule’s changes to the H-1B lottery for the FY2027 cap season (commencing March 2026) and beyond, employers should begin:

(1) assessing their current and future H-1B sponsorship strategies, including an evaluation of whether sponsored positions and salaries align with higher wage levels within the occupational classifications and geographic location;

(2) begin the review process for wages, occupational classifications and job descriptions earlier, with a focus on closer coordination between HR, legal, and compensation teams to ensure compliance and optimize selection chances;

(3) consider how job structure, title, and geographic location may influence prevailing wage calculations; and

(4) consult with counsel to assess available alternatives to the H-1B classification such as the O-1 non-immigrant classification or a National Interest Waiver.

We will continue to monitor regulatory developments and legal challenges and will provide you with further updates as more information becomes available.

  For further information, please contact:

Anthony F. Siliato | Scott R. Malyk | Lin R. Walker | Stacey A. Simon

Meyner and Landis LLP

One Gateway Center, Suite 2500, Newark, New Jersey 07102

Asiliato@meyner.com | Smalyk@meyner.com | Lwalker@meyner.com | Ssimon@meyner.com

Disclaimer: The information contained herein is intended only for informational purposes and is not a substitute for legal advice. Further, reading this Client Alert in no way establishes an attorney/client relationship between you and Meyner and Landis LLP. Readers should consult legal counsel for definitive advice regarding the current law and regulations and how those apply to your unique situation within your organization.