H-1B Cap Season 2026
The FY2027 H-1B Lottery Used a Wage Formula for the First Time. Here's What Actually Happened.
The FY2027 H-1B cap lottery replaced the random draw with a wage-level weighting system for the first time. Level I registrations saw about 15 percent selection odds. Level IV saw about 61 percent. Every selected petition also carries a $100,000 additional fee this cycle. Here is what the first-year results showed, and what employers and workers need to know before the filing window closes June 30.
The rule that was finally implemented
The FY2027 H-1B cap season is the first to run under a wage-level weighted selection system. That is not a proposed rule or a concept that might eventually take effect. The Department of Homeland Security published the final rule on December 29, 2025, and it became effective on February 27, 2026, just before the registration window opened. The randomness of the old lottery is gone for cap-subject registrations going forward.
What changed is how many lottery entries each registration receives. Under the prior system, every registration got one entry regardless of the offered wage. Under the new system, the number of entries is determined by where the offered salary falls within the Department of Labor's prevailing wage levels for the specific occupation and geographic area. Higher-wage positions receive more entries. The pool is drawn from all entries combined, so the result is a meaningfully different selection rate depending on which wage tier you are in.
The policy rationale, from DHS's perspective, is that the H-1B program is meant for specialized positions requiring expertise, and wage level is a reasonable proxy for that. Critics argued the rule would hurt entry-level hiring and reduce program diversity. The rule went through years of regulatory back-and-forth, and FY2027 is the first year it was actually implemented. Agree with the policy direction or not, the selection system has changed structurally.
How the multiplier works
The DOL prevailing wage system divides wages into four levels. Level I is approximately the 17th percentile of the wage distribution for an occupation in a given metropolitan statistical area — the entry point into the profession. Level II is around the 34th percentile. Level III is the 50th percentile. Level IV is the 67th percentile and above, the most experienced and highest-paid range.
Under the new lottery: a Level I registration gets one lottery entry. Level II gets two entries. Level III gets three entries. Level IV gets four entries. USCIS combines all entries into a single pool and draws until enough registrations are selected to meet the cap. Because Level IV registrations each contribute four times as many entries as Level I registrations, they are selected at much higher rates.
This does not mean employers can claim Level IV to improve their odds regardless of what they are paying. The wage level on an H-1B registration has to match the offered wage under DOL prevailing wage methodology. USCIS cross-references wage attestations against DOL data. A Level IV claim on a Level II salary is a compliance problem. And the dollar values are always occupation-specific and location-specific — Level IV for a software engineer in San Francisco is a different number than Level IV for the same role in a smaller metro area. Employers cannot pick the most favorable wage level and work backward from it.
What the first-year numbers showed
The registration window for FY2027 ran from March 4 through March 19, 2026. Immigration attorneys and tracking services estimated total unique beneficiary registrations at between 200,000 and 250,000 — a roughly 40 percent decline from the 336,153 registrations submitted for FY2026. USCIS had not published official registration totals as of early May, but the directional estimate from firms tracking client registration volumes has been consistent.
USCIS began sending selection notifications on March 27, 2026, and confirmed it had selected enough registrations to meet the cap — 65,000 regular cap slots plus 20,000 master's exemption slots. The overall selection rate across all wage levels is estimated at 34 to 42 percent, roughly comparable to FY2026's 35.3 percent.
That overall figure masks what actually happened by wage level. Tracking by immigration attorneys of actual client outcomes put Level I selection odds at roughly 15 percent, Level II at around 29 to 31 percent, Level III at around 44 to 46 percent, and Level IV at approximately 60 to 61 percent. A Level I applicant in FY2027 had roughly the same odds as anyone had during the peak years when 700,000-plus registrations flooded the system. A Level IV applicant had better-than-even odds. The spread is wide.
The $100,000 fee that has nothing to do with the lottery rule
Separate from the wage-weighting rule is a Presidential Proclamation that took effect on September 21, 2025. It requires an additional $100,000 payment with every H-1B petition filed at or after 12:01 a.m. Eastern on that date. This is not part of the DHS wage-weighting final rule. It is an independent executive action layered on top of the standard USCIS filing fees.
The standard fees for a cap-subject H-1B petition at a large employer — the $730 base filing fee, $500 fraud prevention fee, $4,000 ACWIA training fee, and biometric service fee — already run several thousand dollars. The $100,000 proclamation fee is on top of all of that. Employers filing multiple H-1B cap petitions this cycle are absorbing this as a material cost line. Some have responded by narrowing who gets filed for. Some have shifted costs to sponsored employees, which raises its own compliance questions.
The proclamation is scheduled to expire around September 2026 unless extended. Every petition filed during the current April 1 through June 30, 2026 window is filed under this fee structure. Attorneys advising employers have generally been counseling them to plan as if the fee remains through September rather than counting on a court challenge or administrative reversal to resolve before the petition is filed.
Why registration volume dropped 40 percent
The drop from roughly 336,000 registrations in FY2026 to an estimated 200,000 to 250,000 in FY2027 probably reflects several overlapping factors. The $100,000 fee is a likely contributor. When the downstream cost of a selected registration is $100,000 above historical levels, employers who previously registered every plausible candidate have reasons to narrow the list to higher-confidence selections. Marginal registrations — people a company might file for at low cost but would not file for at high cost — shift out of the pool.
General immigration environment factors also played a role. USCIS site visit activity, processing holds affecting nationals of certain designated countries, RFE rates on specialty occupation determinations, and broader organizational uncertainty about H-1B strategy in 2025 and 2026 all created headwinds for registrations that were speculative rather than high-confidence. Tech companies that had cut immigration compliance headcount during layoffs in 2024 had reduced bandwidth for large registration campaigns.
The practical effect of reduced volume is that overall selection odds improved. The same 85,000 cap slots distributed across a smaller pool means a higher fraction of registrations get through. But the wage-weighting concentrates those gains in the higher wage tiers. The combination of the multiplier effect and the self-selection of employers toward higher-wage registrations compressed Level I odds to around 15 percent even as overall odds stayed in the 34 to 42 percent range.
What not-selected registrants can do
Not being selected in FY2027 is not a permanent outcome. The most direct path for many people is cap-exempt H-1B employment. Institutions of higher education, nonprofit and government research organizations, and affiliated entities are not subject to the H-1B cap. Someone whose employment qualifies under a cap-exempt category can be on H-1B without going through the lottery. The arrangement has to be a genuine employment relationship with the exempt entity — USCIS has been skeptical of pass-through structures where a staffing arrangement with a cap-exempt entity is designed primarily to access H-1B without cap exposure.
Existing H-1B holders changing employers do not go through the cap. If you are already in H-1B status from a prior cap year and want to transfer to a new employer, no new lottery registration is needed. F-1 students on OPT or STEM OPT who were not selected have time in current authorization to try again in FY2028. The registration window for FY2028 would open in March 2027. A 24-month STEM OPT extension gives enough runway for two or three lottery cycles.
O-1A extraordinary ability visas are cap-exempt and carry no fixed maximum duration. For people with publications, patents, peer recognition, high-salary evidence, or other qualifying criteria, O-1A is worth evaluating seriously rather than as a fallback. The legal standard overlaps significantly with EB-1A extraordinary ability. A well-documented O-1A petition can be approved in weeks with premium processing. For people who were not selected and who have the professional record to support it, exploring O-1A concurrently with planning for the next H-1B cycle makes practical sense.
The filing window closes June 30
Selected registrants have until June 30, 2026 to file complete H-1B cap petitions. A selected status in the USCIS online account means the registration was chosen — it does not mean a petition is filed or pending. The actual Form I-129, with all required documentation, supporting materials, and the $100,000 proclamation fee, has to be submitted to USCIS before the window closes.
Premium processing for H-1B petitions costs $2,805 and guarantees an initial decision within 15 business days. That response is an approval, denial, or Request for Evidence — an RFE is not a final denial, and responding to it continues the case. Non-premium cap-subject H-1B cases have been taking several months. Since H-1B status for FY2027 takes effect October 1, 2026, filing non-premium before June 30 still gives USCIS over three months. Premium is worth the cost when timeline or eligibility is uncertain.
If your registration shows as not selected, there is no petition to file. A non-selection cannot be appealed through any USCIS administrative process. A legal challenge to the selection system itself is a different matter and belongs in federal court, not in a service request to USCIS.
What people keep getting wrong about the new rule
The most common misconception is that Level IV means paying $200,000. As a universal statement, that is wrong. Level IV means the offered wage is at or above the 67th percentile for the specific occupation in the specific metropolitan area where the position is located. In a high-cost market for a senior technical role, that number may exceed $200,000. In a different market or a different occupation, it is a lower number. The dollar amounts are occupation-specific and location-specific. There is no single Level IV threshold that applies everywhere.
A related misconception is that the new rule created a clean two-tier system where lower-paid workers are categorically shut out. The approximately 15 percent Level I selection odds are low, but they are not zero. With an estimated 200,000 to 250,000 registrations and 85,000 cap slots, a meaningful number of Level I registrations were selected. The system shifted who is likely to succeed, not who is categorically excluded.
The third misconception is that employers with budget can simply register everyone at Level IV and reliably get through. The offered wage must genuinely reflect the DOL prevailing wage for the position. An employer who claims Level IV on a registration while planning to pay a Level II wage is making a misrepresentation on a federal form. USCIS scrutinizes H-1B petitions precisely on wage compliance. The new rule created an incentive to document wages accurately, not a mechanism to game the selection process. This article is informational only and does not constitute legal advice. H-1B strategy, alternative visa options, and the implications of the FY2027 results for specific situations should be worked through with a licensed immigration attorney.