United States: DHS Proposes Wage Level-Based Weighted System of H-1B Cap Allocation

As proposed, the revised method of H-1B quota allocation would be based on the Department of Labor’s OEWS Wage Levels. Beneficiaries registered for the H-1B cap lottery would be entered into the selection pool using a weighted system. Beneficiaries whose offered wage corresponded 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.

Employers would be required to indicate the appropriate occupational code, OEWS wage level, and area of employment in each candidate’s registration for the H-1B cap lottery. If a beneficiary were selected in the lottery, the employer’s USCIS Form I-129 H-1B petition would need to include documentation showing that the wage level indicated in the registration was appropriate for the occupation. USCIS could deny the petition (or revoke, if already approved) if it determined that the petitioner attempted to unfairly increase the odds of a beneficiary’s selection by selecting an inappropriate wage level or by changing the wage offered to a lower wage level in the petition than that indicated in the lottery registration for that beneficiary. The proposal does, however, recognize that there are legitimate reasons that an intended work location might change between the time of registration and the time of filing the petition, so USCIS may, in its discretion, find that a change in the intended work location (corresponding to a lower wage level) would be permissible, provided that it views the change as consistent with a bona fide job offer at the time of registration.

The H-1B cap registration would capture the OEWS wage level associated with the wage being offered to the prospective H-1B employee. If the beneficiary were to work in multiple locations, the employer would be required to select the lowest corresponding OEWS wage level associated with the position. If more than one employer submits a registration on behalf of a foreign national, the foreign national would be entered into the H-1B cap lottery according to registration with the lowest prevailing wage level.

USCIS explicitly recognizes that some employers may choose to offer a higher wage to certain foreign nationals in order to be more competitive in the H-1B selection process. USCIS says that in this circumstance, an offered wage need not be directly related to skill level; the agency views a higher wage as a reflection of the beneficiary’s 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, particularly those offered a wage corresponding to Level 1, the entry-level tier of the DOL wage system.

Today’s regulation is a proposal only, but it could be finalized in time to affect the FY 2027 H-1B cap season, which will begin in March 2026. If the rule is implemented, employers and their immigration counsel would need to undertake an evaluation of prospective H-1B candidates to determine the appropriate wage level for each, well before USCIS begins to accept registrations for the FY 2027 cap. 

DHS will accept public feedback on the regulation for 30 days after the proposal is published in the Federal Register. Once the comment period closes, DHS must meaningfully consider the feedback; though there is no deadline for this review, the agency usually considers feedback for at least a period equal or similar to the public comment period. Once the review is complete, the regulation would be finalized and published in the Federal Register with an effective date that is typically 30 to 60 days after publication. If the rule is finalized, legal challenges are possible.

Feedback from the business community will be crucial to inform the government about the impact of the rule on U.S. competitiveness in the marketplace for talent. If your organization is interested in submitting a comment, please contact your Fragomen professional or the firm’s Government Strategies and Compliance Group.