On August 8, 2025, the White House Office of Management and Budget (OMB) completed its review of a Department of Homeland Security (DHS) proposal that would revise how H-1B cap petitions are selected. The proposal would introduce a weighted system to the current H-1B lottery process. The next procedural step is publication of the proposed rule in the Federal Register, which will open the matter for public comment before any final regulation can be issued. Until publication, the content of the proposal remains confidential.
Revised Proposed H1B Cap Rule
DHS has confirmed that the proposal would apply a “weighted selection process” to the H-1B cap. While the precise mechanics are not yet public, a weighted model could mean prioritizing petitions based on wage level, academic credentials, or other policy-defined criteria, while retaining an element of lottery selection if demand remains high.
Until the proposed regulation is published in the Federal Register, details such as which criteria will carry weight, how they will be ranked, and whether the lottery will be entirely replaced remain unknown.
For the proposed rule to take effect, it must undergo the full notice-and-comment rulemaking process. Once published, there will be a 30- to 60-day comment period during which stakeholders, including employers, industry groups, and advocacy organizations, can provide feedback. DHS is legally required to review and consider these comments before issuing a final regulation.
The process of analyzing comments, drafting a final rule, and setting an implementation date generally takes several months. As a result, any change to the H-1B cap selection system is unlikely to affect the upcoming FY2026 cap cycle, which has already been completed.
The wage-based H-1B cap proposal is part of a broader DHS regulatory agenda. The department has also indicated plans to update rules governing employment authorization for asylum-seekers and parolees, revise eligibility for cap-exempt H-1Bs, and revisit procedures for employment-based green cards and temporary visas for religious workers.
The proposed rule recalls the 2021 DHS regulation, which was designed to phase out the lottery in favor of wage-level prioritization. That earlier rule was struck down before implementation. If the current proposal replicates or modifies that system, legal challenges can be expected, particularly on the grounds that it may disadvantage certain categories of employers or conflict with congressional intent for the H-1B program.
Background to the Proposal
The H-1B program allows US employers to petition for foreign professionals to fill specialty-occupation roles. Each fiscal year, 65,000 H-1B visas are available under the statutory cap, with an additional 20,000 reserved for US advanced degree holders. Demand consistently exceeds supply, leading to a lottery-based allocation system.
During the final months of the Trump Administration, DHS finalized a rule that would have replaced the random lottery with a wage-based selection process. That system would have prioritized petitions according to the Department of Labor’s four prevailing wage levels, beginning with Level IV (the highest) and moving downwards. If petitions exceeded available visa numbers within a wage level, a lottery would have been conducted within that tier. The regulation was never implemented, having been delayed by the incoming Biden Administration and ultimately vacated by a federal court in 2021.
It is not yet clear whether the 2025 proposal mirrors that earlier rule or introduces new criteria, such as education or other skill-based measures, into the allocation process.
Implications for Employers and Applicants
The DHS proposal to introduce a weighted H-1B cap selection process represents a potential turning point for US immigration practice. Though details remain confidential until publication, the fact that DHS is revisiting the concept of ranking petitions based on wage or similar criteria signals that employers and applicants should begin preparing for a significant shift in filing strategies.
1. Implications for Employers
For employers, the most immediate concern is how a weighted system could alter hiring incentives and workforce planning. Under the current random lottery, every properly filed registration has an equal chance of selection. A wage-based model would privilege higher-paying positions, potentially disadvantaging smaller businesses, startups, nonprofits, and educational institutions that operate under tighter salary structures.
This means that employers may face a competitive disadvantage unless they can offer salaries aligned with higher prevailing wage levels. Unionized employers, or those constrained by collective bargaining agreements, may find themselves unable to adjust wages to meet prioritization criteria. Larger corporations, particularly in the technology sector, may benefit, as they typically offer salaries that align with higher wage tiers.
Strategically, employers should be prepared to reassess how they structure H-1B roles, what salary levels they offer, and how they allocate recruitment budgets. It is also advisable to monitor whether DHS considers education or other skill-based factors in the weighting, as this could influence recruitment pipelines for foreign graduates.
2. Implications for Applicants
For foreign nationals, the impact of a weighted system is significant. Candidates in higher-paid roles or those with advanced qualifications may enjoy stronger odds of selection. Conversely, applicants in entry-level positions, nonprofit roles, or public sector jobs may face reduced opportunities, even if their work is highly specialized.
International students could be particularly affected. Without competitive salaries or priority weighting, graduates from U.S. universities may find it more difficult to secure H-1B status, which could discourage them from pursuing U.S. education in the first place. This raises broader competitiveness issues for American higher education institutions.
Applicants should anticipate the need to provide more detailed evidence of their qualifications and the nature of their role, beyond what is typically submitted in the registration phase.
3. Compliance and Litigation Risks
Any new weighted system will likely generate compliance questions. Employers may feel pressure to raise wages for H-1B candidates beyond internal pay structures, creating potential conflicts with labor and employment obligations. Documentation will become critical, as employers will need to prove that wage levels are legitimate and consistent with Department of Labor standards.
Litigation is also likely. The 2021 wage-based selection rule was struck down before implementation, and any attempt to replicate or expand on it will attract legal scrutiny. Challenges may focus on whether the weighted system is consistent with congressional intent that H-1B visas be allocated in a manner accessible across industries, not just to the highest-paid roles.
Need Assistance?
The H-1B program is central to US access to global talent, and any change to its allocation system carries broad implications. While a weighted model may align with policy goals of prioritizing higher-paid or more skilled workers, it risks creating barriers for smaller employers and reducing opportunities for foreign graduates.
Until the proposed regulation is published, uncertainty will remain. Employers should, however, begin evaluating their exposure. Key steps include:
- Reviewing salary structures for roles typically filled by H-1B workers.
- Identifying positions that may fall into lower wage levels and considering alternative visa options.
- Preparing to engage in the public comment process to ensure their industry’s concerns are represented.
- Monitoring whether DHS includes education or skill-based criteria that could impact recruitment pipelines.
Applicants, meanwhile, should stay informed about possible shifts and discuss with prospective employers how roles and compensation may affect their H-1B prospects under a weighted system.
The most important message for both employers and applicants is to prepare early. The rule is not final, and there will be opportunities to shape its outcome through the comment process. At the same time, it is prudent to assume that a more selective and resource-intensive H-1B process is on the horizon. For specialist guidance, contact us.
Author
Founder & Principal Attorney Nita Nicole Upadhye is a recognized leader in the field of US business immigration law, (The Legal 500, Chambers & Partners, Who's Who Legal and AILA) and an experienced and trusted advisor to large multinational corporates through to SMEs. She provides strategic immigration advice and specialist application support to corporations and professionals, entrepreneurs, investors, artists, actors and athletes from across the globe to meet their US-bound talent mobility needs.
Nita is an active public speaker, thought leader, immigration commentator, and immigration policy contributor and regularly hosts training sessions for employers and HR professionals.