H-1B Wage-Based Selection: Levels, Risks, and Rule Origins

The H-1B weighted lottery, in effect starting with the fiscal year 2027 cap season, gives each registration between one and four entries in the selection pool based on the wage level the employer offers: Level IV counts as roughly four chances, Level III as three, Level II as two, and Level I as one.¹ The annual cap itself hasn’t changed: 65,000 regular visas plus 20,000 reserved for holders of qualifying U.S. advanced degrees.² What changed is how USCIS fills those slots.

How the Selection Actually Runs

Under the old system, every registration went into one pool and a computer picked winners at random. Salary played no role. Under the weighted process, selection is still random, but each registration’s odds scale with its wage level. A Level IV registration is roughly four times as likely to be selected as a Level I registration in any given draw.¹

This is not a hierarchy that fills Level IV first and then works its way down. Entry-level registrations at Level I can still be picked; they just carry lower odds. USCIS said it designed the system this way to favor higher-paid workers while keeping the pool open to employers with genuine entry-level needs.³

The weighting applies to both pools. USCIS runs the weighted selection first against the 65,000 regular cap. Unselected registrations for beneficiaries with a qualifying U.S. master’s degree or higher then move into the 20,000 advanced degree pool, where the weighted process runs a second time.

What the Four Wage Levels Mean

The wage levels come from the Occupational Employment and Wage Statistics (OEWS) survey, which the Department of Labor uses to set prevailing wages across immigration programs.⁴ Each level corresponds to a percentile range within the wage distribution for a given occupation and geographic area:

Level I (Entry): approximately the 17th percentile. Routine tasks, close supervision, basic grasp of the field.
Level II (Qualified): approximately the 34th percentile. Moderate experience, more complex duties, limited oversight.
Level III (Experienced): approximately the 50th percentile. Solid expertise, specialized responsibilities, possible supervision of others.
Level IV (Fully Competent): approximately the 67th percentile. Independent judgment, may lead projects or departments.

Because OEWS data is occupation-specific and location-specific, the dollar gap between levels varies enormously. For a software developer in the San Francisco metro area, the spread between Level I and Level IV can run $60,000 or more per year. The same job title in a lower-cost metro might show a gap closer to $30,000. Two employers offering identical salaries for the same role in different cities can land at different wage levels.

How Employers Pick the Level on a Registration

The employer, not USCIS, determines the wage level. The process runs through DOL’s Foreign Labor Application Gateway, which hosts the OEWS wage data.⁴ Three steps:

Match the job to a Standard Occupational Classification (SOC) code that reflects the position’s actual duties. Assigning a higher-paid SOC code than the work supports is one of the most common ways employers get themselves into trouble.
Look up the local prevailing wage at each of the four levels using the SOC code and the county or metropolitan statistical area where the work will be performed.⁵
On the registration, indicate the highest OEWS wage level that the offered salary equals or exceeds. If the salary falls below Level I because the employer is using a different legitimate prevailing wage source, the employer still selects Level I.⁶

Two anti-gaming rules matter here. When a beneficiary will work in multiple locations, the employer must use the lowest corresponding wage level across those locations. When the offered wage is expressed as a range, the employer uses the bottom of the range to determine the level.⁶ Both rules prevent employers from cherry-picking the most favorable figure to inflate their weight.

Who Isn’t Affected

The weighted lottery only touches cap-subject petitions. Federal law exempts three categories of employers from the cap entirely, and their petitions never enter the lottery regardless of wage level:²

Institutions of higher education and their related or affiliated nonprofit entities.
Nonprofit research organizations.
Federal, state, or local government research organizations.

A beneficiary who will spend at least half their time working at a cap-exempt entity can also qualify for the exemption even if the direct employer is not itself cap-exempt. A position at a university-affiliated lab sidesteps the lottery entirely, and the wage-level weighting doesn’t come into play.

How the Rule Got Here

The current framework was not the first attempt. DHS tried to implement a wage-based ranking system in October 2020 through an interim final rule that skipped notice-and-comment, citing the pandemic. The U.S. Chamber of Commerce and others sued, and in December 2020 the U.S. District Court for the Northern District of California vacated the rule, finding that DHS had not established good cause to bypass the Administrative Procedure Act.⁷

DHS returned to the topic through proper rulemaking, publishing a proposed rule in September 2025 and finalizing the weighted selection rule on December 29, 2025.⁸ The current rule differs from the vacated 2020 version in two ways that matter. It went through notice-and-comment. And it uses a weighted lottery rather than a strict top-down hierarchy. The 2020 rule would have filled all Level IV slots before touching Level III. The 2025 rule gives every level a real chance, at different odds.

A Change That Could Reshuffle the Math

On March 27, 2026, the Department of Labor proposed shifting the percentile benchmarks that define each wage level upward:⁹

Level I: from the 17th percentile to the 34th percentile.
Level II: from the 34th percentile to the 52nd percentile.
Level III: from the 50th percentile to the 70th percentile.
Level IV: from the 67th percentile to the 88th percentile.

DOL estimates the change would raise average H-1B wages by roughly $14,000 per year. For the weighted lottery, the effect is that a salary that currently qualifies as Level III might only qualify as Level II under the new benchmarks, cutting that registration’s lottery weight from three chances to two. Employers hoping to hold their existing wage-level classification would need to raise pay. The comment period closed May 26, 2026, and the rule has not been finalized.

The Risk of Overstating the Wage Level

The weighted system creates an obvious incentive to inflate the level on a registration, whether by picking a higher-paying SOC code than the duties support or by claiming a level the offered salary doesn’t reach. USCIS checks this at the petition stage: when the employer files Form I-129 after selection, the wage level and SOC code must be consistent with what appeared on the registration. A mismatch can lead to denial.

The Department of Labor enforces prevailing wage compliance separately. Consequences for wage-related violations on H-1B petitions include back pay orders, civil fines that can reach $35,000 per violation for willful misrepresentation, and debarment from the H-1B program for at least one, two, or three years depending on the severity of the violation. Registrants must also attest, under penalty of perjury, that they haven’t coordinated with other entities to submit duplicate registrations for the same worker.¹⁰ Getting the SOC code and wage level right the first time is the foundation the whole petition stands on.

1
U.S. Citizenship and Immigration Services. H-1B Cap Season
2
Office of the Law Revision Counsel. 8 USC 1184 – Admission of Nonimmigrants
3
U.S. Citizenship and Immigration Services. DHS Changes Process for Awarding H-1B Work Visas to Better Protect American Workers
4
U.S. Department of Labor. Prevailing Wage Information and Resources
5
Foreign Labor Certification (OFLC). OFLC Wage Search
6
U.S. Citizenship and Immigration Services. H-1B Electronic Registration Frequently Asked Questions
7
U.S. Citizenship and Immigration Services. U.S. District Court for the Northern District of California Vacates the Strengthening the H-1B Program Interim Final Rule
8
Federal Register. Weighted Selection Process for Registrants and Petitioners Seeking to File Cap-Subject H-1B Petitions
9
SBA Office of Advocacy. DOL Proposes Rule to Increase Wage Levels for H-1B Visa, PERM Labor Visas
10
U.S. Citizenship and Immigration Services. H-1B Electronic Registration Process