The H-1B Cap filing season will likely look very different this coming spring. Employers must consider additional factors for filing H-1B lottery cases, including preparing for the new wage-based weighted system of H-1B cap allocation and making further determinations regarding whether petitions will be subject to the $100,000.00 H-1B fee surcharge.
Background
The H-1B cap lottery system will introduce a new weighted lottery submission which will increase the odds of selection for beneficiaries offered the highest wages according to the Department of Labor’s four-level prevailing wage system. The rule, introduced in the Federal Register on December 29, 2025, was issued in accordance with the administration’s desire to attract the best and the brightest to the United States. It is anticipated that the system will be implemented on February 27, 2026, and will include information confirming the prevailing wage level, occupation and DOL code as well as the salary that each prospective beneficiary registered in the H-1B cap registration system will earn as of October 1st, 2026 – the effective date of the H-1B petition approval.
The Department of Labor’s Weighted System and How it Will Affect H-1B Filings
In the past, H-1B registrants were permitted one filing per employee and each filing confirmed only the name and identification of the employer and employee and solicited information whether a filing was to be submitted under the “Master’s Cap” for those holding U.S. master’s degrees, or for those holding U.S. or foreign bachelor’s degrees or equivalent. The breakdown was 20,000 for the U.S. Master’s cap and the remainder for those possessing bachelor’s degrees, domestic or foreign. The total amount of H-1B petitions permitted in these two categories have remained at 85,000 since the early aughts.
Going forward, the new H-1B allocation system will be based on the Department of Labor’s Occupational Employment and Wage Statistics (OEWS) wage levels. When registering for the FY 2027 cap, employers will be required to state the OEWS wage level to which the offered salary relates to that occupation and geographic area of employment. Beneficiaries whose wage offer corresponds to Level 4 (highest wage level) of the four-level OEWS wage structure will be entered into the cap lottery four times. Level 3 beneficiaries will be entered three times: Level 2 beneficiary two times and for Level one beneficiary, once.
Multiple Employers and Multiple Work Locations
For multiple employers, the regulations state that the foreign national would be entered into the H-1B cap lottery according to the registration with the lowest wage level. For H-1B registrations with multiple locations, the employer must ascertain the OEWS wage level for each location and select the lowest wage level corresponding to the OEWS regulations. The employer may also offer a higher wage to be more competitive in the H-1B cap selection, if the offered wage level is at Level 4.
Odds of Selection in the Cap Lottery
It is hard to predict how the new weighted lottery system will affect this year’s registration and filing, but it is contemplated that many larger international employers who file thousands of H-1B registrations for candidates located abroad will sit out this year’s lottery filings due to cost concerns as well as the $100,000 fee that is to be levied for foreign nationals located outside of the United States.
Hiring Entry Level Foreign National Employees
Entry-level positions, which will have the lowest chance of selection in the lottery and are utilized for transition to full-time employment for foreign nationals graduating from U.S. universities and graduate schools, may not be a choice option for U.S. employers who will not offer highest level wages to assure selection in the lottery.
The $100,000 Filing Fee – What is its Role in the Upcoming Lottery Selection Process?
The $100,000 filing fee will not apply to H-1B cap petitions which are filed and approved for a change of status (i.e. from F-1, J-1, R1, O1 or J-1 to H-1B). If an H-1B candidate is not located in the United States, the petition would be filed with a ‘consular notification’ where the H-1B candidate might apply for the H-1B visa upon prior approval of the H-1B petition by USCIS, and the employer would be mandated to pay the $100,000.00 fee.
It would also be prudent for employers and counsel to determine whether or not foreign nationals are eligible for the granting of changes of status. Failure to maintain student status, violating status and other criteria may result in the failure of USCIS to approve the H-1B petition with a grant of change of status resulting in the levying of the $100,000.00 fee for the employer to cover in such instances.
Pending Lawsuits
Two federal lawsuits challenging the H-1B $100,000 fee remain pending in courts. A federal judge has already dismissed the U.S. Chamber’s challenge to the $100,000 fee imposed by the administration. At the time of this writing, federal lawsuits challenging the weighted wage regulations remain a possibility, but any preliminary relief requested by plaintiffs remains unknown at this time. For the time being, employers are best advised to prepare for the H-1B lottery with the weighted wage system in mind.
Our guidance is to consult with counsel. Employers would also be well advised to consider other visa options for foreign talent, including the L-1, E, O, TN, H1B1, E3 visa categories.
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