USCIS has finalized a long-anticipated rule that fundamentally changes how H-1B cap-subject petitions will be selected for filing. Starting with the FY 2027 cap season (registration expected March 2026), the agency will abandon its traditional random lottery and implement a weighted selection system that favors higher wages.

The final rule, published by the Department of Homeland Security (DHS), also introduces new registration requirements, including additional data elements and post-selection documentation obligations designed to improve integrity and reduce abuse of the system.

This marks the second major overhaul of the H-1B selection process since the electronic registration system was introduced, following the introduction of ‘Beneficiary-centric’ selections which eliminated the benefit of a worker having multiple sponsors in the lottery.

Key Change – Weighted Selection Based on Wage Level: Under the new rule, H-1B registrations will no longer have an equal chance of selection. Instead, USCIS will assign weighted entries based on the highest DOL wage level that the beneficiary’s offered wage equals or exceeds:

• Level I → 1 entry

• Level II → 2 entries

• Level III → 3 entries

• Level IV → 4 entries

Importantly, USCIS will retain the statutory advanced degree exemption (commonly known as the “Master’s cap”), which sets aside 20,000 H-1B slots for individuals holding U.S. master’s or higher degrees. However, the wage-weighted selection process will apply to both the regular cap and the master’s cap pools, meaning that even within each group, companies offering higher salaries to their H-1B candidates will have a greater chance of their registrations being selected.

New Information Required at Registration: To support this wage-based weighting process, employers must now provide additional information at the time of registration, including:

• The SOC code (Standard Occupational Classification) for the position

• The area of intended employment (job site or work sites)

• The highest OEWS wage level the offered wage equals or exceeds (Levels I–IV)

• An attestation that this information is accurate and consistent with the petition to follow

This is a change from prior practice, where wage level data was not collected during registration.

Important Distinction – Registration Wage Level vs. LCA Wage Level: The wage level selected at registration is not necessarily the same as the wage level used in the Labor Condition Application (LCA) filed with the H-1B petition.

• The Registration wage level is determined numerically by comparing the offered salary to wage thresholds published by the Department of Labor (DOL) for the SOC code and location.

• The LCA wage level is based on a multi-factor analysis under DOL rules, considering experience, supervision, and job complexity.

This means an employer might select Level II for registration purposes (if the salary exceeds the Level II threshold) but still use Level I on the LCA if that is appropriate based on job duties and requirements of the position.

Administration’s Stated Goal is Reducing Abuse and Promoting Program Integrity: Per the administration, this rule is a direct response to perceived patterns of abuse USCIS has observed in the H-1B cap system, including:

• Mass registration submissions for low-wage positions,

• Duplicate entries for the same individual by affiliated entities, and

• Use of the program for lower-skilled, lower-paid roles is contrary to congressional intent.

Per the administration, by favoring higher-paid positions and requiring accurate data at registration, USCIS aims to restore the program’s original purpose: to attract highly skilled foreign workers in fields of need, without undercutting U.S. wages.

Next Steps for Employers: Employers planning to sponsor H-1B workers in FY 2027 should:

• Evaluate compensation levels for prospective H-1B candidates in light of OEWS data,

• Prepare documentation now to justify the selected wage level at registration, and

• Ensure job descriptions, wage levels, SOC codes, and work locations are consistent across the registration, LCA, and petition.

Effective Date: The final rule takes effect on February 27, 2026, and will apply to all registrations submitted for the FY 2027 H-1B cap season, which is expected to open in early March 2026. While the rule is scheduled to align with the upcoming registration period, the late timing of the announcement raises questions about USCIS’s readiness to implement the necessary system changes.

This concern is not unprecedented. In 2019, USCIS finalized a similar rule to introduce the electronic H-1B registration system but ultimately delayed implementation by a year due to technical challenges. The difference now is that USCIS already has a functioning registration portal; the changes involve modifying data fields and applying weighted selection logic, rather than building a system from scratch. While that should ease the rollout, employers should still monitor USCIS updates closely in early 2026 for potential delays or guidance.

How GIP Can Help

Accurately preparing information for this new registration requirement introduces new risks and complexities for employers navigating this process, since USCIS will not allow material changes to the information submitted for a registration.  Our team is available to assist with:

• Reviewing offered wages in comparison to OEWS wage data

• Determining appropriate wage levels for both registration and LCA

• Preparing documentation to support compliance

• Designing internal workflows for the updated H-1B registration process

Please contact us to schedule a strategy session ahead of the FY 2027 registration period.