DHS Overhauls H-1B Selection: Prioritizing High-Skilled Talent for FY 2027

By: Norka M. Schell, Esq.

The Department of Homeland Security (DHS) has officially finalized a transformative rule that fundamentally changes how H-1B work visas are awarded. Effective February 27, 2026, the long-standing random lottery system will be replaced by a weighted selection process designed to prioritize higher-skilled and higher-paid foreign professionals.

This change is a cornerstone of the administration’s “America First” approach to labor, aiming to protect the wages and job opportunities of American workers by ensuring the H-1B program is used for its intended purpose: bringing in specialized talent that cannot be found locally.

The End of the “Random” Lottery

For years, the H-1B program has been criticized for a “luck-of-the-draw” system that critics argued allowed companies to flood the pool with lower-wage, entry-level workers.

Under the new regulations, the lottery is no longer purely random. Instead, the probability of selection is now tied directly to the Department of Labor (DOL) wage levels. This “weighted” approach ensures that petitions for roles with higher experience and higher pay have a significantly greater chance of being selected.

How the Weighted Selection Works

The new system uses the four-tier prevailing wage structure. The higher the wage level an employer commits to paying, the more “entries” that specific registration receives in the selection pool:

Note: This rule applies to the annual limit of 85,000 visas (65,000 for the regular cap and 20,000 for U.S. advanced degree holders).

Protecting the American Workforce

The DHS maintains that the previous system was “exploited and abused” by employers seeking to undercut American wages. By shifting the advantage to higher wage levels, the government incentivizes businesses to recruit only the most highly specialized foreign talent.

USCIS spokesman Matthew Tragesser emphasized that the change “strengthens America’s competitiveness by incentivizing American employers to petition for higher-paid, higher-skilled foreign workers.”

Key Financial Barriers: The $100,000 Supplemental Fee

This selection overhaul does not exist in a vacuum. It follows a recent Presidential Proclamation requiring employers to pay an additional $100,000 per visa as a condition of eligibility for certain new H-1B petitions.

• Purpose: To further deter the use of the H-1B program for roles that could be filled by domestic workers.
• Enforcement: Proof of payment via pay.gov must be submitted at the time of filing the H-1B petition.
• Exemptions: While certain “national interest” exceptions may exist, they are expected to be rare.

What This Means for Employers and Applicants

With the FY 2027 H-1B cap registration season beginning in March 2026, stakeholders must act quickly:

1. Wage Level Audits: Employers must carefully classify roles. Inflating a wage level just to increase lottery odds could lead to denials or fraud investigations.
2. Budgeting for 2026: Between the new weighted system and the $100,000 fee, the cost of H-1B sponsorship has risen dramatically.
3. Strategic Hiring: Smaller businesses and startups may need to explore alternative visa categories (like O-1 or TN) if the H-1B proves cost-prohibitive.

This regulatory shift represents one of the most significant changes to the H-1B program in decades, moving the needle from a system of chance to a system based on economic value and skill.