Preparing for the FY 2027 H-1B Cap Lottery

H-1B Cap Season Preview: What Employers Need to Know for FY 2027

• The fiscal year (FY) 2027 H-1B cap lottery registration period is expected to open in early March 2026 and close in mid-March. After the registration window closes, U.S. Citizenship and Immigration Services (USCIS) will conduct the lottery and allocate H-1B numbers for qualifying specialty occupation positions.
• Each year, 85,000 H-1B numbers are available, including 20,000 reserved for individuals with a U.S. master’s degree or higher. Because demand continues to far exceed supply, USCIS uses a lottery system to determine which registrations may proceed to filing.
• This upcoming cap season is expected to operate under a new framework, which changes how registrations are selected. As a result, employers are strongly encouraged to begin planning well in advance of the March 2026 registration period.

Shift to a Wage-Weighted Lottery System
Under the new rules, the Department of Homeland Security will implement a wage-weighted selection process. Rather than each registration receiving a single entry, candidates will receive multiple entries based on the wage level associated with the offered salary under the Department of Labor’s four-tier wage structure:

• Level 4 wages: four entries
• Level 3 wages: three entries
• Level 2 wages: two entries
• Level 1 wages: one entry

This represents a significant change from prior years, when each beneficiary was entered into the lottery only once, regardless of wage level.

Identifying the Correct Wage Level
At the registration stage, employers must identify the highest wage level that the offered salary meets or exceeds based on the position’s occupational classification and intended work location. Careful wage analysis will be critical under the new system.

Potential Impact on Selection Rates
It remains unclear how the wage-weighted lottery will affect overall selection rates. However, entry-level candidates or those offered Level 1 wages may face reduced odds if higher-wage registrations make up a larger portion of the pool.

Clarification of the New $100,000 H-1B Fee
Following the Presidential Proclamation titled “Restrictions on Entry of Certain Nonimmigrant Workers,” USCIS issued guidance significantly narrowing the scope of the $100,000 H-1B fee. The fee generally applies only to beneficiaries outside the United States who do not hold valid H-1B status or a visa at the time of filing.

The fee does not apply to petitions approved as a change of status, extension, or amendment of stay for individuals already in the United States, including most F-1 students transitioning to H-1B status, unless USCIS denies the change of status and requires consular processing due to a prior immigration issue. As a result, the Proclamation is expected to affect relatively few first-time H-1B beneficiaries. Limited national-interest exceptions may be granted by DHS. Litigation challenging the fee remains pending.

Steps Employers Should Take Now
Employers should begin reviewing their workforce and upcoming hires to identify individuals who may need H-1B sponsorship, including:

• Recent graduates in F-1 OPT or STEM OPT
• F-1 students working under CPT
• Employees approaching maximum time limits in another status (e.g., L-1B)
• Employees in TN, E, or L-1 status who may later pursue permanent residence
• Individuals working with L-2 employment authorization
• Individuals working for cap-exempt employers who have never been counted against the cap

Once potential candidates are identified, employers should begin compiling job descriptions, salary information, and worksite details. This allows time to assess potential wage adjustments, budget implications, and filing fees under the new rules.

Given the regulatory changes, financial considerations, and eligibility complexities, early legal review will be essential to navigating the FY 2027 H-1B cap process strategically.

If you have employees you would like to sponsor in the FY 2027 H-1B cap lottery, please contact Laleh Sharifi at LSharifi@SGRLaw.com 

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