DHS Proposal to Replace H1B Lottery

By: Vandana Marath

On July 17, 2025, the U.S. Department of Homeland Security (DHS) sent a proposed rule for review, the first step in the federal rulemaking process, to the Office of Management and Budget (OMB) to replace the random H-1B lottery with a wage-based selection algorithm.

DHS described this new selection process where USCIS will rank and select petitions based on the highest Occupational Employment Statistics (OES) wage level beginning with OES wage level IV and proceeding in a descending order with OES wages levels III, II, and I.

Instead of application selection through a random lottery, this new rule will give preference to employers who offer higher salaries. Those applications offering the highest wages for the job type will be considered first and thereafter the selection will move down the wage level until the annual visa limit is reached.

This rule is currently under review and will not affect Fiscal Year 2026 as the H-1B cap limit has already been reached. But this rule may take effect for the Fiscal Year 2027 H-1B cap cycle. Once the draft proposal completes the federal review process, it will be published in the Federal Register to allow for public comment. The rule will not become effective unless and until it successfully completes the full rulemaking process overseen by OMB, which generally requires several months.

As the proposed rule moves forward, the Chugh, LLP immigration team will continue providing updates when they become available. For case-specific questions, please contact your trusted Chugh, LLP attorney.