Comprehensive Legal Analysis of DHS’s Final Regulation Effective February 27, 2026
On December 29, 2025, the Department of Homeland Security (DHS) published a Final Rule in the Federal Register establishing a weighted selection process for H-1B cap-subject registrations. The rule, codified at 90 Fed. Reg. 60,864 (Dec. 29, 2025) and to be incorporated at 8 C.F.R. § 214, replaces the longstanding random lottery system with a wage-based weighted selection methodology beginning with the FY2027 H-1B cap season.
This regulatory change becomes effective February 27, 2026, and fundamentally alters the manner in which USCIS will allocate H-1B cap numbers. The weighted selection process applies to cap-subject registrations submitted during the FY2027 registration period and thereafter.
The rule stems from DHS’s earlier Proposed Rule published at 90 Fed. Reg. 45,986 (Sept. 24, 2025) and reflects DHS’s policy objective of prioritizing higher-wage positions within the H-1B allocation process.
I. FY2027 Registration Timeline and Procedural Framework
On January 30, 2026, USCIS announced that the FY2027 H-1B registration period will:
- Open at 12:00 noon ET on March 4, 2026
- Close at 12:00 noon ET on March 19, 2026
- Selections will be completed and notifications issued by March 31, 2026
- The filing window for selected petitions will run from April 1, 2026 through June 30, 2026
Registrations will continue to be submitted electronically through the myUSCIS online portal, and the registration fee remains $215 per beneficiary.
Notably, USCIS continues to operate under a beneficiary-centric selection system, meaning that selection is made for the beneficiary, and all registrants for that beneficiary will be notified if selected.
II. Structure of the Weighted Selection Process
Under the Final Rule, each unique beneficiary will be entered into the selection pool based on the highest Occupational Employment and Wage Statistics (OEWS) wage level that the proffered wage exceeds, up to a maximum of four entries.
The weighted entry allocation is as follows:
- Level I Wage: 1 entry
- Level II Wage or higher: 2 entries
- Level III Wage or higher: 3 entries
- Level IV Wage or higher: 4 entries
Each beneficiary receives at least one entry. Additional entries are awarded for each OEWS wage level exceeded by the offered salary.
As stated in the Proposed Rule (90 Fed. Reg. 45,994), USCIS will enter each unique beneficiary into the selection pool in a weighted manner consistent with the applicable OEWS wage level.
The practical consequence is that higher wage offers result in greater statistical probability of selection, as beneficiaries at Level IV effectively receive four “opportunities” in the lottery pool.
III. Illustrative Example of Wage Weighting
The Practice Pointer provides a detailed example using a Software Developer (SOC 15-1252.00) in San Francisco County, California.
The OEWS prevailing wage data for that occupation and location is:
- Level I: $135,699
- Level II: $161,637
- Level III: $187,574
- Level IV: $213,512
Under the weighted rule:
- An offered wage of $145,000 receives 1 entry (exceeds Level I only).
- An offered wage of $175,000 receives 2 entries (exceeds Level II).
- An offered wage of $205,000 receives 3 entries (exceeds Level III).
- An offered wage of $235,000 receives 4 entries (exceeds Level IV).
IV. Critical Distinction: Weighted Registration Wage vs. LCA Prevailing Wage
The Final Rule explicitly clarifies that the OEWS wage level determination used for lottery selection is not the same as the prevailing wage determination required for Labor Condition Applications (LCAs) (90 Fed. Reg. at 60,902).
Although both processes rely on OEWS wage levels, they serve distinct regulatory purposes:
- The weighted wage level is used solely for lottery entry allocation.
- The LCA prevailing wage determination remains governed by existing Department of Labor (DOL) regulations and the 2009 Wage Guidance.
Nothing in the Final Rule modifies LCA procedures or DOL requirements. If a registration is selected, employers must still conduct a separate and independent prevailing wage analysis when filing the LCA.
There may be situations where the weighted registration wage level differs from the LCA prevailing wage level. Practitioners must be prepared to explain and document such discrepancies.
V. The “Lowest Wins” Rule and Anti-Manipulation Safeguards
To prevent strategic manipulation of wage levels, DHS incorporated a strict anti-gaming framework commonly referred to as the “lowest wins” rule.
A. Multiple Worksites
If a beneficiary may work at multiple worksites, the registration must use the lowest applicable wage level across all locations.
B. Multiple Employers
If multiple employers submit registrations for the same beneficiary, USCIS will compare all registrations and assign entries based on the lowest wage level submitted by any registrant (90 Fed. Reg. at 60,964; 8 C.F.R. § 214.2(h)(8)(iii)(A)(4)(ii)).
Thus, even if one employer offers a Level IV wage, the presence of another Level I registration will reduce the beneficiary’s total entries to one.
C. Wage Ranges
If the offered wage is expressed as a range, the employer must use the lowest wage in the range to determine the weighted registration wage level (90 Fed. Reg. at 60,964).
Importantly, the lowest wage in the range cannot fall below the prevailing wage.
D. Alternative Wage Surveys
If a valid alternative wage survey is used and the offered salary is below OEWS Level I, the beneficiary receives only one entry, equivalent to Level I.
E. Absence of OEWS Data
If OEWS data is unavailable for the SOC code or geographic area, employers must follow DOL prevailing wage methodology and document how the wage level was determined. The SOC code relied upon must be provided in the registration.
VI. Expanded Registration Requirements
The weighted selection process introduces new substantive registration obligations.
For each FY2027 registration, employers must:
- Identify the correct SOC code.
- Specify the area(s) of intended employment.
- Attest to the offered H-1B wage.
- Determine and select the appropriate weighted wage level (I–IV).
- Maintain supporting documentation for the wage determination.
- Provide complete and consistent beneficiary biographical information.
- Attest under penalty of perjury that the job offer is bona fide.
USCIS has emphasized that discrepancies between registration data and petition data may result in denial, revocation, or enforcement action.
VII. Form I-129 Consistency and Adjudicatory Scrutiny
The H-1B cap-subject petition must contain and be supported by the same position information listed in the selected registration (90 Fed. Reg. at 60,907).
Proposed Form I-129 revisions require detailed disclosure, including:
- Education level required.
- Field(s) of study.
- Years of experience required.
- Special skills required.
- Supervisory responsibilities.
- SOC code (must match registration and LCA).
- Weighted registration wage level.
If information does not match, USCIS may reject or deny the petition unless adequately explained with supporting documentation.
USCIS has expressly stated it will compare registration, LCA, and petition information to detect manipulation.
VIII. Documentation and Record Preservation
USCIS encourages employers to retain:
- Printouts of DOL OFLC Wage Search results as of the registration date.
- Documentation supporting SOC classification.
- Copies of any wage survey relied upon.
This is particularly important because:
- OFLC wages are adjusted annually on July 1.
- GEO levels may change during the year.
- Wage data may differ between registration and petition filing.
Contemporaneous documentation will be critical in defending against RFEs or audits.
IX. Compliance Risks and Enforcement Exposure
The Final Rule highlights significant compliance risks, including:
- RFEs or Notices of Intent to Deny (NOIDs).
- FDNS site investigations.
- Department of Labor LCA audits.
- Petition denial or revocation.
- Allegations of fraud or misrepresentation.
- Potential exclusion from H-1B program participation.
Particular scrutiny may arise where:
- The petition wage is lower than the registration wage.
- Worksite locations shift.
- Wage level analyses differ between registration and LCA.
USCIS retains discretion to allow certain changes in area of intended employment, provided the original job offer was bona fide.
X. Operational Impact on Employers
Historically, employers were not required to perform OEWS wage analysis at the registration stage. Under the new system, employers must complete substantive wage analysis prior to registration submission.
This represents a substantial procedural shift requiring:
- Advanced job description drafting.
- SOC code confirmation.
- Worksite verification.
- Wage documentation protocols.
- Coordination between HR, payroll, and immigration counsel.
Particular scrutiny may arise where:
- The petition wage is lower than the registration wage.
- Worksite locations shift.
- Wage level analyses differ between registration and LCA.
USCIS retains discretion to allow certain changes in area of intended employment, provided the original job offer was bona fide.
XI. Outstanding Questions
The Practice Pointer identifies several unresolved issues, including:
- Whether USCIS will hold stakeholder engagements.
- Whether discrepancies between registration wage level and LCA wage level will automatically trigger RFEs.
- Whether specific documentation retention periods will be imposed.
- Whether litigation may delay implementation.
Conclusion
The FY2027 H-1B cap season marks a transformative regulatory shift from random allocation to wage-weighted prioritization. While the system incentivizes higher wage offerings, it also introduces significant compliance complexity and enforcement risk.
Employers must approach the FY2027 H-1B cap season with heightened diligence, strict documentation practices, and consistent alignment between registration, LCA, and petition filings. Failure to do so may result in severe adjudicatory and enforcement consequences.
The weighted selection rule fundamentally changes H-1B cap strategy and requires comprehensive legal preparation well in advance of the March 4, 2026 registration opening.
