Legal Bulletin: Strategy Considerations for FY 2027 H-1B Cap Weighted Lottery and $100,000 Fee

Overview

The FY 2027 H-1B cap season will introduce significant structural changes to the selection process and increased financial risk for some employers. DHS will replace the random H-1B lottery with a wage-based weighted selection system. USCIS is expected to open FY2027 cap registration in March 2026, with the new rule taking effect on February 27, 2026. Please see below for strategy considerations in light of the new rules and the continued $100,000 fee.

Key Changes for the FY 2027 H-1B Cap

1. Weighted H-1B Lottery Based on Wages

DHS will replace the previous random lottery with a weighted allocation system tied to DOL’s four-level OEWS (Occupational Employment and Wage Statistics) prevailing wage framework:

• Level IV wage → entered 4 times in the selection pool 
• Level III wage → entered 3 times
• Level II wage  → entered 2 times
• Level I wage   → entered 1 time

In the H-1B lottery registration, employers must indicate the highest OEWS wage level met or exceeded by the offered salary for the relevant occupation and work location.

2. Wage Level Determination at Registration

The wage level listed in the H-1B cap registration is:

• Based on the offered salary, not LCA methodology (where the wage level is based on minimum education and experience requirements); and
• Separate from the wage level ultimately listed on the Labor Condition Application.

For roles with multiple work locations, employers must use the lowest applicable OEWS wage level among those locations for the registration.

If multiple employers register the same foreign national, USCIS will use the registration with the lowest wage level for lottery weighting purpose.

3. Strategic Wage Increases Permitted

DHS has expressly acknowledged that employers may choose to offer higher wages to improve selection odds, even if those wages exceed what would otherwise be required based on job duties and experience for LCA purposes. DHS views higher wages as reflecting the beneficiary’s value to the employer.

4. Impact on Entry-Level Candidates

While Level I candidates remain eligible, the new system strongly favors higher-paid roles, raising concerns about access for entry-level professionals. If many employers cluster at Level III or IV, Level I candidates could face significantly reduced odds of selection.

5. Change in Location After Submission of Registration 

In the event there is a change in the work location after the registration has been submitted, USCIS may exercise discretion to approve the change, provided the employer can show that the registration was based on a bona fide job offer at the time of submission. 

The $100,000 H-1B Fee Still in Effect 

1. $100,000 H-1B fee applies to H-1B Cap petitions filed or approved for consular notification.
2. $100,000 H-1B fee does not apply to H-1B Cap petitions approved for change of status from another nonimmigrant visa status. However, for petitions filed for change of status which USCIS ultimately determines is not approvable as change of status (e.g., due to a status violation or an inadmissibility issue), the employer would be required to pay the $100,000 fee or obtain a national interest exception in order to secure approval for consular notification.

Practical Takeaways for Employers

• Early wage analysis is critical: Offered salary, job location(s), and SOC code will directly affect lottery odds.
• Assess fee exposure upfront: Employers should evaluate whether candidates are clearly eligible for a change of status before registration.
• Budget and workforce planning may shift: Higher wages and potential fee liability may reduce overall cap participation, while increasing competitiveness among higher-paid roles.
• Potential litigation: While court challenges are possible, employers should plan on the rule taking effect as scheduled.

Conclusion

The FY 2027 H-1B cap represents a fundamental shift from chance-based selection to a compensation-driven system, layered with unprecedented financial exposure for certain cases. Employers should work closely with immigration counsel well in advance of registration to align wage strategy, risk tolerance, and hiring objectives.

For questions about the new weighted lottery, wage analysis, or the $100,000 H-1B fee, please contact your WR Immigration attorney.