Recent H-1B Regulatory and Legal Updates and Their Impact on FY2027 H-1B Cap Cases

H-1B Cap Lottery and Weighted Wage Selection

The Dept. of Homeland Security (DHS) has released its final regulation (to be published on Dec. 29), replacing the random H-1B Cap Lottery process by a new Weighted Wage Selection process, to “generally favor the allocation of H–1B visas to higher-skilled and higher-paid” Foreign Nationals. The regulation is set to take effect on Feb. 27, 2026 and will therefore impact the upcoming FY2027 H-1B Cap process, although it remains subject to legal challenge.

How Will the Weighted Wage Selection Process Will Work?

Under the current random selection system, the only differentiator that could give an H-1B registrant an advantage at selection is whether they hold a U.S. Master’s (or higher) degree at the time of filing.  The new selection process, however, will give preference to H-1B registrants offered the highest wages, as determined under the Dept. of Labor’s OFLC wage survey and its four-level wage range.

Sponsoring employers will be required to provide, at the time of registration, the position’s SOC occupational code, area of employment, and corresponding OFLC Wage Level (from I to IV), no matter what the employer’s job requirements are.  The Foreign National will then receive the same number of H-1B Cap entries.

For instance: if the employer will offer a salary of $160,000/yr to a Mechanical Engineer in Austin, TX, the assigned Wage Level will be Level IV. The Foreign National will therefore receive 4 entries in the H-1B Cap lottery.

Where the H-1B registrant is expected to work in multiple locations, they will be assigned the lowest wage Level across those locations.

For instance: if the Mechanical Engineer will work in both Austin, TX and Santa Clara, CA, their $160,000/yr salary meets the Level III wage only. The Foreign National will now therefore receive only 3 entries in the H-1B Cap lottery.

Note also that if a Foreign National is registered by multiple employers, they will also be assigned the lowest Wage Level of the several registrations.

Finally, the regulations also address review of changes to the proposed H-1B employment that would have impacted the Weighted Wage selection, i.e., changes of position (such as promotion), worksites and/or salary, particularly when said change(s) would have given the H-1B registrant fewer entries in the lottery.

For instance: if the Mechanical Engineer is, after registration, promoted to a Manager in Santa Clara, CA, with a salary of $180,000/yr, the new salary will meet the Level I wage only.  Our H-1B registrant had received 3 entries in the lottery, but as a Manager in Santa Clara, CA, would have been registered at a Level I wage only, and would only have received 1 H-1B Cap lottery entry.

Acknowledging that such changes may be legitimate, the burden will be on the employer to demonstrate the appropriateness of the Registration OFLC Wage Level information, particularly when the Registration Wage Level was higher than the Wage Level at post-selection filing.  Should USCIS determine the registration data gave an unfair advantage to the Foreign National, USCIS may deny (or revoke post-approval) the H-1B petition.

Consideration and Pointers for FY2027 H-1B Cap

• Carefully assess your potential H-1B registrant employees’ position, worksite and salary before registration, to accurately determine the corresponding OFLC Wage Level and, consequently, the number of entries the H-1B registrant will receive.
• Monitor changes in employment, not only before registration, but also after selection, to ensure accurate petition filing, and adequately document that the change was legitimate (particularly if, as a result, the H-1B registrant received more H-1B Cap entries than they would have under the new job offer).
• Consider and plan for contingencies early, particularly for entry-level H-1B registrants, registered at OFLC Wage Levels I-II, whose selection rate is expected to drop.

What next? The new selection process will clearly disfavor entry-level workers, even when they are filling critical workforce gaps in key industries (e.g., healthcare, education and manufacturing). While legal challenges are expected, it will be important in the next few months for employers to carefully plan for registrations and assess any available alternate sponsorship options when available.

$100,000 H-1B Fee Proclamation Upheld by the Court

On Sept. 19, 2025, the White House issued a proclamation requiring employers filing new H-1B petitions to pay a one-time fee of $100,000 (in addition to existing H-1B filing fees) for petitions filed on/after Sept. 21, 2025, as a “necessary” measure to prioritize U.S. workers and to help reduce improper use of the H-1B program.

On Dec. 23, a District Court Judge in Washington, D.C. upheld the proclamation, rejecting the U.S. Chamber of Commerce legal challenge in summary judgment. The U.S. Chamber filed an appeal on Dec. 30, and two additional and separate legal challenges remain pending. As of now, the fee remains in effect.

Per USCIS’s latest guidance, H-1B petitions impacted by the $100,000 fee include those petitions approved for Consular (or Port-of-Entry) H-1B Processing, either as requested by the H-1B Employer (e.g., Foreign National outside the U.S.), or because USCIS found the Foreign National ineligible for a change to/extension of H-1B status in the U.S.

The additional $100,000 fee has particularly impacted the recruitment of physicians and medical professionals in medically underserved areas that have relied on foreign healthcare workers to fill critical gaps in the workforce.[1] The proclamation will also impact the filing of H-1B Cap-subject petitions selected in the upcoming FY2027 lottery (in March 2027).

Consideration and Pointers for FY2027 H-1B Cap

The additional $100,000 H-1B fee may impact employers’ decision to register and sponsor Foreign National workers in the upcoming H-1B Cap season:

• Consider and plan for contingencies early for “at-risk” employees who, while present in the U.S., may not be eligible for change of status to H-1B. Some employees might be eligible for alternate work status (e.g., O-1 “Extraordinary Ability” status, treaty-based status such as E-3, TN or H-1B1, or dependent status)
• Certain employers might have to opt out from sponsoring current employees working for their organization overseas, or to limit sponsorship to certain key and business-critical employees only.
• Consider whether the Foreign National might be eligible for a National Interest exception. An exception may be requested by email at H1BExceptions@hq.dhs.gov, with evidence that:
  • The sponsored Foreign National’s presence in the U.S. is in the “national interest”,
  • No U.S. worker is available to fill in the role,
  • The sponsored Foreign National “does not pose a threat to the security or welfare” of the U.S., and
  • Payment of the $100,000 fee by the sponsoring employer would “significantly undermine the interests” of the United States.

It is important to note a critical distinction between the  September proclamation, which permits such exception be granted to the Employer or even to an industry as a whole; and USCIS’s October instruction which have limited exceptions to individuals.  As a result, and while certain employers could have availed of an employer-wide or industry-wide exception (e.g., healthcare employers in medically underserved areas), there is no mechanism at this time to file such request.

What Next?

While the U.S. Chamber of Commerce’s (USCC) challenged was dismissed, USCC may appeal the Court’s decision, and two legal challenges remain pending:

• Global Nurse Force[2]: filed in Oct. 2025 (Northern District of California), the lawsuit was filed by a coalition of healthcare staffing firms, unions, educators, religious organizations and individual visa holders, and argues that the Proclamation (1) exceeds the President’s statutory authority under the Immigration and Nationality Act (INA), and (2) constitutes an unauthorized tax that only Congress may impose.
  • Latest status: on Dec. 18, 2025, the coalition filed a motion for preliminary injunction, requesting the court to pause enforcement of the fee, and to certify a class of employers harmed by the fee so that relief, if granted, could apply broadly and uniformly.
• A coalition of 20 states[3] have also filed a legal challenge on Dec. 12, 2025, arguing that the proclamation is unlawful, was put in place in violation of the Administrative Procedure Act (APA) and the U.S. Constitution, and harms public and private employers seeking to fill specialized roles in key fields and industries subject to workforce shortages.

With pending litigation, the situation will continue to evolve over the next few months. Feel free to contact a member of Clark Hill’s Immigration Law Practice, and subscribe here to receive future Immigration Law alerts directly to your inbox.

This publication is intended for general informational purposes only and does not constitute legal advice or a solicitation to provide legal services. The information in this publication is not intended to create, and receipt of it does not constitute, a lawyer-client relationship. Readers should not act upon this information without seeking professional legal counsel. The views and opinions expressed herein represent those of the individual author only and are not necessarily the views of Clark Hill PLC. Although we attempt to ensure that postings on our website are complete, accurate, and up to date, we assume no responsibility for their completeness, accuracy, or timeliness.

[1] See “Study Shows Increase of H-1B Visa Fees Will Most Impact Rural and High-Poverty Counties,” Mass General Brigham (Oct. 30, 2025), available at https://www.massgeneralbrigham.org/en/about/newsroom/press-releases/increase-of-h1-b-visa-fees-will-impact-rural-and-high-poverty-counties.  Citing M. Liu & al., “Health Care Professionals Sponsored for H-1B Visas in the U.S.,” JAMA, 334(22), 2035-2038 (2025). 

[2] Global Nurse Force v. Trump, 4:25-cv-08454 (N.D. Cal.).

[3] State of California v. Noem, 1:25-cv-13829 (D. Mass.).  Those states include California, Massachusetts, Washington, Arizona, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maryland, Michigan, Minnesota, North Carolina, Nevada, New Jersey, New York, Oregon, Rhode Island, Vermont, and Wisconsin.