DHS Proposes Weighted Lottery System for H-1B Visas Favoring Higher Wages

By C. Matthew Schulz

In a significant policy development, the U.S. Department of Homeland Security (DHS) has published a proposed rule to amend the H-1B cap-subject visa selection process. Announced in the Federal Register on September 24, 2025 (90 Fed. Reg. 45986), the proposed regulation would shift from a random lottery to a weighted selection system, prioritizing higher wage levels to better align with congressional intent and program integrity goals. The public has until October 24, 2025, to submit comments on the proposal via regulations.gov (Docket No. USCIS–2025–0040).

Summary of the Proposed Changes

Under the current H-1B cap system, USCIS randomly selects from the pool of properly registered applicants, without regard to wage level or occupation. The new proposal, if finalized, would create a tiered weighting system that favors registrations offering higher wages (as determined by DOL wage levels 1–4). This means that employers offering wages in the top levels would have a significantly better chance of selection than those offering level 1 or level 2 wages.

Key elements of the proposed rule include:

• Weighted Registration: The probability of selection increases with each higher wage level offered for the position.
• Wage-Level Neutrality Preserved: The system retains a chance for all wage levels to be selected, but with lower probability at the lower end.
• Goal Alignment: DHS argues that this structure better reflects the statutory purpose of the H-1B program by allocating limited visas to higher-skilled, higher-compensated workers.

The rulemaking also aims to reduce potential gaming of the system by discouraging multiple low-wage registrations intended solely to boost odds under the current random selection process.

Understanding the Rulemaking Process

This proposed rule is part of the federal notice-and-comment rulemaking process, governed by the Administrative Procedure Act (APA) and codified in 5 U.S.C. § 553. Here's how the process works:

1. Notice of Proposed Rulemaking (NPRM): DHS publishes the proposed rule in the Federal Register, soliciting public comment.
2. Public Comment Period: Stakeholders—including employers, attorneys, advocacy groups, and individuals—have 30 days (or longer) to submit feedback. For this rule, comments are due by October 24, 2025.
3. Agency Review: After the comment period closes, DHS reviews all submissions and may modify the rule in response.
4. Final Rule Issuance: DHS will then publish a final rule in the Federal Register, including a summary of and response to significant comments.
5. Effective Date: Most rules take effect at least 30 days after publication. Given the timing, the final rule could be in place before the next H-1B registration cycle in early 2026, likely in March 2026, but only if DHS meets tight administrative deadlines.

Current System for Allocating H-1B Cap-Subject Visas

Currently, the H-1B cap system allows 65,000 standard H-1B visas plus 20,000 additional visas for U.S. advanced degree holders (commonly known as the master's cap). Since 2020, USCIS has used an electronic pre-registration system. If more registrations are received than available visas (as is typically the case), USCIS conducts a random lottery to select registrants eligible to file full petitions.

This lottery system does not consider salary, occupation, or employer size. As a result, companies offering entry-level wages for legitimate specialty occupations—such as school districts, nonprofits, and rural hospitals—have the same selection odds as large tech firms offering six-figure salaries.

Weighing the Pros and Cons of the Proposed Weighted System

Potential Advantages

Program Integrity. DHS argues the new system will reduce fraud and abuse by discouraging mass low-wage registrations and better targeting truly high-skilled workers. 

This proposal ignores US law passed by Congress making H1B visas available to all specialty occupations that require a bachelor’s degree or equivalent. 

The proposal does not address why DOL and USCIS have historically low enforcement rates, including the current Administration, of existing regulations that prohibit employers from H1B pay and working conditions that are less than paid to similarly employed US workers, as well as prohibitions after layoffs.

Higher Earnings Potential: Prioritizing higher wages may help align the H-1B program with its intent to supplement, not undercut, the U.S. labor market. 

Statutory Support: The proposed rule cites INA § 214(g) to claim US law requires that H-1B workers should be highly skilled and not adversely affect U.S. wages. 

In fact, INA § 214(g) does not do this at all. 

That provision provides the current numerical limits and how they are allocated. Regarding selection, the law does not mandate the current random selection nor the proposed weighted selection, stating merely: “The Secretary of Homeland Security shall provide a method for allocating H-1B petitions in cases where demand exceeds the numerical limitations, including a lottery system, unless otherwise provided by regulation.”

Potential Disadvantages

Disadvantage to Essential but Lower-Paid Occupations: Employers hiring foreign nationals in important but modestly compensated fields may find it harder to compete. 

The proposed system looks merely at the wage offered without consideration to how it compares to the average wage paid to that same occupation in the specific geographic area. Examples:

• Schoolteachers (SOC 25-2021), for example, often fall into Level 1 or 2 wage categories under DOL prevailing wage data, especially in rural or urban public schools.
• Healthcare workers, such as occupational therapists (SOC 29-1122) or clinical social workers, are similarly affected, with wages falling below tech sector standards.

Equity Concerns: The new system will most certainly disadvantage nonprofit organizations, startups, or institutions serving under-resourced populations.

Legal Risks: Tying selection probability to wage may stretch the bounds of existing statutory authority, and future litigation is likely to challenge the rule if finalized.

Looking Ahead

The proposed changes represent one of the most substantial shifts in H-1B cap administration in recent years. Employers, workers, and stakeholders have a limited window to weigh in before the rule becomes final. DHS has signaled its intent to move quickly, aiming for implementation before the next cap-subject H1B registration cycle opens in March 2026.

As this rule evolves, affected employers—particularly those in public education, health care, and nonprofit sectors— and prospective H1B workers should monitor developments closely and consider submitting public comments to advocate for fair and balanced implementation.

For updates and to comment on the rule, visit the official federal docket at: https://www.regulations.gov/docket/USCIS-2025-0040.