The Department of Homeland Security (DHS) published a proposed rule on Sept. 24, which seeks to alter the annual H-1B cap lottery system. Under the proposal, priority would be given to registrants with the highest wage for their occupation and area of employment corresponding to the Department of Labor’s Occupational Employment and Wage Statistics (OEWS).
As proposed, employers would be required to indicate the occupational code, OEWS wage level, and area of employment in each candidate’s H-1B lottery registration. If the beneficiary will work in multiple locations, the employer would be required to select the lowest corresponding OEWS (prevailing wage) wage level associated with the position offered. If more than one employer submits a registration on behalf of the same foreign national, the foreign national would be entered into the H-1B cap lottery based on the registration with the lowest prevailing wage level. Similarly, if a foreign national will work in multiple work locations, the foreign national would be entered into the H-1B cap lottery based on the work location with the lowest prevailing wage level corresponding to their actual salary.
Beneficiaries whose wage offered corresponds to Level 4 (the highest tier) of the Department of Labor’s four-level wage structure would be entered into the selection pool four times. A Level 3 beneficiary would be entered three times; a Level 2 beneficiary, two times; and a Level 1 beneficiary, once.
If a beneficiary is selected in the lottery, the employer’s USCIS Form I-129 H-1B petition would need to include documentation supporting the wage level indicated in the registration was appropriate for the occupation. USCIS could deny the petition (or revoke if approved) if it is determined that the petitioner attempted to unfairly increase the odds of the beneficiary’s selection by selecting an inappropriate wage level or by reducing the wage offered, with limited exceptions.
As part of this proposed regulation, the agency views a higher wage as a reflection of the beneficiary’s higher skills or value to the employer (“which, even if not related to the position’s skill level per se, reflects the unique qualities the beneficiary possesses”).
If finalized as proposed, the regulation could limit employers’ access to some candidates, including recent graduates from U.S. universities filing entry-level roles in MSAs like the Bay Area, where OEWS wages are already high for many occupations. It may also restrict access to the lottery for smaller companies and startups that are unable to pay higher-tiered wages for talent.
DHS plans to accept public feedback on the regulation for the required 30-day period. After the comment period closes, DHS must review the feedback before finalizing the rule and publishing it in the Federal Register with an effective date typically 30 to 60 days after publication. As a result, this proposed regulation could be enacted in time to affect the FY2027 H-1B cap lottery. Once the rule is finalized, legal challenges are possible, which could further delay the regulation’s implementation as well as substance.
We are monitoring the progress of the proposed rulemaking and will provide further updates as available, including changes in the final published rule and the potential impact on employers and H-1B beneficiaries in the upcoming FY2027 lottery and beyond.
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