DHS Proposes H-1B Lottery Reform: What Employers and Candidates Need to Know

Every year, thousands of foreign professionals and U.S. university graduates take part in the H-1B visa lottery. Until now, the selection process has been random, which drew criticism from both businesses and government. The U.S. Department of Homeland Security (DHS) now proposes a new approach — giving priority to applications with higher offered wages.

Current system: Random lottery once the cap is reached.

DHS proposal: Weighted selection — the higher the wage level, the greater the chance of winning.

• Employers must specify the Prevailing Wage Level and SOC code for the position.

  
  

How the Weighted Lottery Works

The system is divided into four wage levels (Level I – IV). Each candidate receives a different number of “entries” into the lottery:

• Level IV (highest wage) → 4 entries

• Level III → 3 entries

• Level II → 2 entries

• Level I (entry level) → 1 entry

👉 This means candidates with higher salaries will have significantly greater chances of being selected.

New Rules on Fairness and Transparency

• The salary and job title in registration must fully match the final H-1B petition.

• For multiple work locations, the lowest wage level will be counted.

• If multiple employers register the same candidate, the lowest wage level will apply.

• Applications can only be filed if there is a real job offer.

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Timeline

• Public comment period: 30 days (starting September 24, 2025).

• If approved, the system will take effect for the H-1B 2027 cycle (registrations in spring 2026).

DHS emphasizes that low-wage positions are not completely excluded, but their chances will be much lower.

Who Wins and Who Loses?

Winners:

• Large companies offering competitive salaries.

• Positions at Level III and IV.

Losers:

• Entry-level jobs (Level I) — chances drop by nearly half.

• Small businesses and startups unable to compete on wages.

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Impact on the Labor Market

• Reinforces the trend of H-1B going to more highly skilled and higher-paid workers.

• Limits opportunities for young professionals and recent graduates.

• Increases the risk of lawsuits against DHS for overreach.

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What Employers Should Do Now

• Review wage levels for H-1B candidates.

• Ensure accuracy and transparency in all filings.

• Monitor rulemaking progress and submit comments.

• Consider alternative visa programs for foreign hires.

The proposed DHS changes could dramatically reshape the H-1B landscape for both employers and foreign specialists. If approved, wages will become the key selection factor, meaning companies must start preparing now for a new reality.