December 30, 2025

DHS Announces Major H-1B Changes

Major H1-B Changes include a Weighted Selection System coming for FY 2027

The Department of Homeland Security issued two significant H-1B final rules in December 2024 and December 2025 that will reshape how employers petition for foreign workers. The most impactful change, a weighted selection system based on wage levels, takes effect February 27, 2026, and will apply to the FY 2027 cap season and beyond.

Weighted Selection Process: The Major Shift

Starting with the FY 2027 registration period, USCIS will abandon the current random lottery in favor of a weighted system that favors higher-paid and higher-skilled workers. Under this new framework, registrations will be weighted based on the Department of Labor’s Occupational Employment and Wage Statistics (OEWS) wage levels:

Level IV wages: Four entries in the selection pool
Level III wages: Three entries in the selection pool
Level II wages: Two entries in the selection pool
Level I wages: One entry in the selection pool

Each unique beneficiary counts only once toward the numerical cap, regardless of how many times they appear in the selection pool. This means that a beneficiary at wage level IV has approximately 4 times the probability of selection as a beneficiary at level I.

Impact on Selection Probabilities

USCIS projections indicate that level IV registrations have approximately a 61% chance of selection, while level III registrations have about a 45% chance. Level II registrations maintain roughly the same odds as the current system (approximately 31%), but level I registrations drop to around 15% probability.

The weighted system applies to both the regular 65,000 cap and the 20,000 advanced degree exemption. This represents a significant departure from the 2021 wage-based rule that courts vacated—the new weighted approach maintains opportunities for selection at all wage levels rather than effectively eliminating lower-wage positions.

Business Implications for Employers

Employers should anticipate several strategic shifts:

Registration Strategy: Companies will need to evaluate whether offering higher salaries to increase selection probability makes financial sense for critical hires. The weighted system incentivizes employers to provide competitive wages that align with higher OEWS levels.
Workforce Planning: Organizations that rely heavily on entry-level H-1B workers may see reduced selection rates and should develop alternative talent acquisition strategies, including increased recruitment of U.S. workers for those positions.
Documentation Requirements: Petitioners must now provide additional information during registration, including the OEWS wage level, Standard Occupational Classification (SOC) code, and area of intended employment. This information must match what appears on the Labor Condition Application and the subsequent H-1B petition.

The Modernization Rule: Enhanced Flexibility

The January 2025 modernization rule, which took effect January 17, 2025, brought several employer-friendly changes:

Specialty Occupation Definition: DHS clarified that positions “normally” requiring a bachelor’s degree qualify, eliminating the previous interpretation that a degree must “always” be required. Employers may also specify a range of acceptable degree fields, provided each relates directly to the position’s duties.
Entrepreneurs and Business Owners: H-1B status is now available to beneficiaries with ownership stakes in their petitioning companies, provided they perform specialty-occupation duties and meet other program requirements.
Extended Cap-Gap Protection: F-1 students transitioning to H-1B receive automatic extensions of their status and work authorization through April 1 of the following calendar year (up from the previous September 30 deadline), providing up to six additional months of lawful status.
Deference Policy Codified: USCIS must defer to prior approvals in extension cases involving the same parties and facts unless there is a material error, new adverse information, or changed circumstances.
Enhanced Enforcement: The rule codifies USCIS authority to conduct site visits at worksites, including third-party locations. Refusal to comply with site visits may result in denial or revocation of the petition.

Compliance Considerations

The combined effect of both rules creates new compliance obligations:

Registrants must ensure wage level selections are accurate and supported by documentation
Petitions must contain the same wage level, SOC code, and geographic information provided during registration
Site visit protocols should be established, including designated points of contact and document access procedures
Form I-129 petitions must use the January 17, 2025, edition to comply with the modernization rule requirements

Looking Beyond the Major H-1B Changes

These rules reflect DHS’s commitment to ensuring the H-1B program serves its congressional intent: helping U.S. employers fill genuine labor shortages with highly skilled workers while protecting American workers’ wages and job opportunities. Employers should prepare now for the FY 2027 registration season by evaluating their compensation structures, registration strategies, and compliance procedures.

For guidance on how these changes impact your immigration program, reach out to the team at Gunn-Menefee Immigration Lawyers.