United States: DHS Proposal to Alter the H-1B Cap Selection Process Is Sent to OMB for Review
July 21, 2025
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At a glance
- A Department of Homeland Security proposed rule that would apply a weighted selection process for H-1B cap cases has been submitted to the Office of Management and Budget (OMB) for review – the first step in the federal rulemaking process.
- Though the exact content of the proposed rule is not yet known, it could seek to use factors such as offered wage level to determine which employers and beneficiaries will be allotted quota numbers in the annual H-1B cap, possibly supplanting the annual H-1B lottery.
- When the draft proposal clears federal review, it will be published in the Federal Register for public feedback. The rule will not take effect unless and until it passes through the entire OMB rulemaking process, which typically takes several months.
The issue
The Department of Homeland Security (DHS) is seeking federal review of a proposed rule that would apply a weighted selection process to the annual H-1B cap. Though details are confidential until publication in the Federal Register, the proposed rule could seek to supplement or replace the annual H-1B cap lottery by giving priority in the selection process to registrants who meet or exceed certain criteria, such as wage or education level.
This is not the first time that an alteration to the cap selection process has been attempted. During the final weeks of the first Trump Administration, DHS finalized a regulation that would have largely replaced the computerized H-1B lottery with a system that allocated H-1B visa numbers according to the Department of Labor’s four-level prevailing wage system. That regulation would have first distributed H-1B cap numbers to registrants offered a wage that equaled or exceeded Level IV, the highest wage tier of the prevailing wage system, then would have selected registrations in descending order from Wage Levels III, II, and I; a computerized lottery would have been used only if the number of registrations for a specific wage level exceeded the number of H-1B cap slots available. The final rule was postponed in the first days of the Biden Administration and ultimately vacated by a federal court without having been implemented.
It is not yet known whether the proposal now under review is the same as the rule finalized in early 2021.
What’s next for the proposal
The federal rulemaking process typically takes several months or more. DHS’s H-1B allocation proposal is now undergoing review at the Office of Management and Budget (OMB). OMB has 90 days to review the regulation but could take more or less time to do so. When the proposal clears OMB review, it will be published in the Federal Register for public feedback during a period that typically lasts 60 days. DHS is required to give meaningful review to public comments, though there is no minimum or maximum period for this stage of review. After the text of the rule is finalized, it will be published in the Federal Register with an implementation date, which typically falls 30 or 60 days after publication.
Comments from the business community will be important to make the Administration aware of the rule’s impact on the position of the United States in the competition for global talent. If your organization wishes to comment on the proposed rule after it is published, please contact your designated Fragomen professional or the firm’s Government Strategies and Compliance Group.
This alert is for informational purposes only. If you have any questions, please contact the immigration professional with whom you work at Fragomen.
