Immigration Alert 

A. Background

The H-1B cap selection process has been operating on a purely random lottery basis, providing equal selection odds to all properly registered applicants, regardless of role seniority, compensation level, or skill set.

The Department of Homeland Security (DHS) of the U.S. has now finalised a regulation¹ that fundamentally alters this approach. The rule is scheduled for publication in the Federal Register on 29 December 2025 and effective from 60 days thereafter, positioning it for implementation during the FY 2027 H-1B cap registration season (anticipated in March 2026).

The stated policy objectives of the new regulation are to better align the H-1B program with market wages, prioritise higher-skilled roles, and discourage perceived misuse of the lottery system. While the regulation may still be subject to judicial challenge, DHS has indicated its intent to operationalise the framework for the upcoming cap cycle.

B. Change / Development

1. Introduction of a Wage-Weighted Selection Process

The finalised rule replaces equal-chance randomness with weighted random selection, based on the Department of Labor’s Occupational Employment and Wage Statistics (OEWS) wage levels.

Each unique beneficiary will continue to be counted only once toward the annual H-1B cap. However, the number of entries assigned to that beneficiary in the selection pool will vary depending on the offered wage:

OEWS Wage Level	Entries in Selection Pool	Estimated Selection Probability*
Level IV	4 entries	Over 60%
Level III	3 entries	Approximately 45%
Level II	2 entries	Moderate (below Level III, above Level I)
Level I	1 entry	Approximately 15%

As a result, higher-paid positions are expected to have materially stronger selection probabilities than entry-level roles under the new framework.

2. Additional Registration Data Requirements

At the electronic registration stage, employers will be required to specify:

• The SOC code for the preferred position

• The area of intended employment

• The highest OEWS wage level met by the offered salary

This information will form the basis of the applicant’s weighting and must remain consistent with the subsequently filed H-1B petition.

3. Strict Alignment and Enforcement Mechanisms

The regulation introduces enhanced compliance safeguards:

• The H-1B petition must match the wage level, SOC code, and work location listed at registration.

• Reductions in wage or material changes in location after selection may result in denial or revocation if deemed an attempt to manipulate selection outcomes.

• Where multiple employers submit registrations for the same beneficiary, the lowest wage level among all registrations will be used for selection purposes.

These provisions significantly reduce flexibility after registration and increase the importance of accuracy and intent at the outset.

4. Scope of Impact  

• Cap-exempt employers (universities, nonprofit research organisations, and affiliated entities) remain unaffected.

• International students and entry-level professionals may face reduced odds unless roles support higher wage tiers.

• Startups and smaller employers may encounter challenges, as equity-based or deferred compensation does not count toward wage calculations.

• High-volume, lower-wage filing models, particularly within IT staffing and outsourcing, are expected to see lower selection success under the new system.

C. Conclusion

This regulatory change represents a structural shift in how H-1B visas are allocated—moving away from chance and toward compensation-based prioritisation.

What this means for employers

• Wage planning is now central to H-1B strategy. Employers should assess where sponsored roles fall within the OEWS wage framework well before registration opens.

• Targeted compensation adjustments may materially improve outcomes. For critical roles, modest salary increases that elevate a position into a higher wage tier may significantly enhance selection probability.

• Role details must be finalised early. Job title, SOC code, work location, and salary should be locked in prior to registration, as post-selection changes carry increased scrutiny.

• Documentation is essential. Employers must retain OEWS wage data that supports the wage level selected at the time of registration.

• A phased approach may be required. Where higher wage tiers are not immediately feasible, employers may need to rely on OPT or STEM OPT while developing roles and compensation over time.

BDO India perspective

Employers that align compensation strategy, role design, and immigration planning early will be better positioned to secure key talent under the evolving H-1B framework.

BDO India is closely monitoring the publication and implementation of this rule and will continue to share relevant updates as further guidance becomes available.