A New Spin on the H-1B Lottery: What Employers Need to Know for FY 2027

The fiscal year (FY) 2027 H‑1B cap lottery is expected to open in March 2026. Once the registration window closes, which is anticipated in mid-March, U.S. Citizenship and Immigration Services (USCIS) will select registrations and allocate H‑1B numbers for foreign professionals in specialty occupations.

Each year, 85,000 H‑1B slots are available, including 20,000 slots reserved for individuals who earned a U.S. master's or higher degree. Because demand exceeds supply, USCIS relies on a lottery to determine which candidates may proceed with H‑1B sponsorship.

This year's H‑1B cap season will operate under a new regulatory framework that changes how registrations are evaluated. Employers with prospective H‑1B candidates should begin preparation well before the expected March 2026 registration period.

Shift to a Wage‑Weighted Selection Process

The U.S. Department of Homeland Security will adopt a new selection system this year that gives candidates multiple entries in the lottery based on the wage level that corresponds to the offered salary under the U.S. Department of Labor's four‑tier structure. Candidates offered a Level 4 wage receive four entries in the selection pool, followed by three entries for Level 3, two for Level 2 and one for Level 1, the entry‑level tier. This marks a departure from the prior system where each beneficiary was entered only once.

Determining the Applicable Wage Level

For registration, employers must identify the highest wage level that the offered salary meets or exceeds for both the position's occupational classification and intended worksite.

Impact on Selection Odds

It is not yet clear how the new system will affect overall selection rates. However, early‑career workers or others receiving Level 1 wages may face reduced chances if higher‑wage candidates make up a greater share of the registration pool.

New $100,000 Fee for Certain Petitions

A new $100,000 statutory fee may apply to some petitions filed after cap selection. This fee generally applies when a beneficiary must obtain an H‑1B visa abroad or is ineligible to change status in the U.S. as a result of a status violation or other issue. The fee should not apply, however, if USCIS approves a valid change‑of‑status request.

Practical Steps Employers Should Take Now

Employers should audit their current workforce and upcoming hires to identify individuals who may require H‑1B sponsorship, including:

• recent graduates in F‑1 Optional Practical Training (OPT) or science, technology, engineering or mathematics (STEM) OPT
• F‑1 students working in Curricular Practical Training (CPT)
• individuals with H‑4 or L‑2 work authorization
• employees in Trade NAFTA/USMCA (TN), E or H‑1B1 status who may later pursue permanent residence
• candidates abroad or in the U.S. who are subject to the H‑1B cap
• employees nearing maximum time limits in another status (e.g., L‑1B)
• individuals working for cap‑exempt employers who have never been counted against the cap

After identifying potential registrants for the H-1B cap lottery, employers should begin compiling job descriptions, salaries and worksites for each individual. This will allow time to consider budget impacts related to potential wage adjustments and filing fees.

Given the new rules, potential financial impact and complexity of eligibility assessments, early legal review is essential for a compliant and strategic H‑1B cap season.

Additional information regarding the H-1B cap lottery process for 2026 will be forthcoming. If you have employees you would like to sponsor in the H-1B cap lottery, please contact the authors or a member of Holland & Knight's Immigration, Nationality and Consular Team.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.