On December 23, 2025, the Department of Homeland Security (DHS) announced a significant regulatory overhaul of the H-1B visa selection process. Beginning with the FY 2027 H-1B cap season, the long-standing random lottery system will be replaced with a weighted selection model that prioritizes higher-skilled and higher-paid foreign workers.
This development represents one of the most consequential shifts in H-1B policy in recent years and carries important implications for foreign professionals, U.S. employers, and investors navigating the American immigration system.
What Has Changed in the H-1B Selection Process?
Historically, H-1B cap-subject petitions were selected through a random lottery, regardless of offered wage level or occupational seniority. DHS has now finalized a rule that assigns greater selection weight to registrations associated with higher wages and skill levels, while still allowing participation across all wage tiers.
According to DHS and USCIS, the change is intended to:
- Protect U.S. worker wages and working conditions
- Reduce systemic abuse of the registration process
- Better align H-1B usage with congressional intent
- Incentivize employers to sponsor highly skilled global talent
The statutory H-1B cap remains unchanged at 65,000 visas, with an additional 20,000 reserved for U.S. advanced degree holders .
When Does the New H-1B Rule Take Effect?
- Effective date of final rule: February 27, 2026
- First cap season impacted: FY 2027 H-1B registration cycle
All registrations submitted for FY 2027 and beyond will be evaluated under the weighted selection framework, not a random draw.
How Will “Weighted Selection” Work?
While DHS has not published a public scoring formula, the rule confirms that wage level and skill indicators—as reflected in the Labor Condition Application (LCA) and Department of Labor wage data—will directly affect selection probability.
Key considerations are expected to include:
- Prevailing wage level offered
- Occupational classification and skill complexity
- Compliance with U.S. Department of Labor (DOL) wage requirements
Importantly, the rule does not eliminate eligibility for lower wage levels, but it reduces the statistical advantage previously gained through high-volume, low-wage registrations.
Additional Compliance and Cost Considerations
DHS also referenced prior executive actions that impose heightened financial and compliance expectations on employers, including references to substantial per-visa cost obligations introduced via Presidential action .
For foreign nationals, this signals a broader policy environment focused on:
- Compensation transparency
- Credential strength
- Employer credibility and compliance history
These developments align with broader workforce protection priorities emphasized by the White House.
What This Means for Foreign Nationals and Investors
For H-1B Professionals
- Higher salaries and specialized roles may significantly improve selection chances
- Career planning, job changes, and salary negotiations now carry immigration consequences
- Early legal strategy is critical
For Employers and Foreign-Owned U.S. Businesses
- Compensation strategy and job structuring must be reassessed
- Registration volume alone will no longer be an effective approach
- Immigration planning must integrate wage modeling and DOL compliance
For Investors and Executives
- Alternative visa strategies (L-1, O-1, E-2, EB categories) may become more relevant
- Workforce planning timelines must account for increased scrutiny
Strategic Guidance Moving Forward
The new H-1B weighted selection rule underscores the importance of proactive immigration planning. Employers and foreign nationals should review:
- Wage structures and leveling
- Role descriptions and minimum requirements
- Long-term immigration pathways beyond the H-1B cap
At Ahluwalia Law Offices, we closely monitor regulatory developments from DHS, USCIS, and the DOL to help clients navigate complex immigration transitions with clarity and compliance.
