Preparing for the FY 2027 H-1B Cap: What Employers Need to Know Now

The upcoming H-1B cap season for FY 2027 is expected to look very different from prior years. The federal government has announced plans to move away from a purely random lottery and toward a selection system that gives preference to higher-paid roles and to candidates already present in the United States.

For employers, this means that compensation, job details, and work location will matter earlier in the process and may directly affect whether a registration is selected. With H-1B registration expected to open in March 2026, now is the time to prepare.

Key Takeaways

• The H-1B lottery is changing. The government plans to move from a random lottery to a wage-weighted system, where higher-paid roles have better chances of selection.
• Wages matter more, and much earlier in the process. Employers will need to identify the Department of Labor wage level at the time of registration, not later in the petition process.
• Some cases may be more expensive. A new $100,000 H-1B fee may apply in certain situations, particularly when a case requires consular processing or a change of status is not approved (typically when an individual is not already in the United States in valid status)
• Early planning reduces risk. Reviewing roles, salaries, work locations, and candidate eligibility now can help employers avoid last-minute issues and unexpected costs.

What’s Changing in the H-1B Lottery

In past years, once USCIS received more registrations than available H-1B visas, it selected cases at random. Under the new approach announced by the Department of Homeland Security (DHS), selection will instead be weighted based on the wage offered for the role.

USCIS plans to rely on the Department of Labor’s Occupational Employment and Wage Statistics (OEWS) system. OEWS divides wages into four levels based on the type of job and the geographic location.

More entries mean a higher chance of selection, similar to having multiple “tickets” in a drawing.

What This Means in Practice

• A Level IV role has four times the chances of a Level I role
• Moving a role up even one wage level can materially improve selection odds
• Lower-wage roles remain eligible but will generally be selected less often

How Wages Affect Selection

One of the most important changes for employers is when wage decisions come into play.

Under the expected rules, employers will need to identify the applicable OEWS wage level at the time of registration, not after selection. That wage level determines how many times the registration is entered into the lottery.

The wage level is based on:

• The offered salary
• The job’s occupation (SOC code)
• The employee’s primary work location

If a role involves more than one work location, employers must review wage data for each location and use the lowest applicable wage level for registration. That lower level will also control the number of lottery entries.

Employer Strategy Considerations

As the offered wage directly affects selection odds, employers may need to take a more deliberate approach to the H-1B cap.

This may include:

• Deciding which roles justify higher offered wages
• Reviewing whether salaries align with higher government-mandated wage levels
• Assessing how the new system affects early-career hiring

Some employers may choose to increase salaries to improve selection chances. Any increase should reflect a real business need and fit within the company’s broader compensation structure. USCIS has indicated that offering a higher wage is permitted as long as the job offer is genuine.

Candidates with a U.S. master’s degree may also have better odds of selection. Because these individuals can benefit from the advanced degree exemption, employers may want to consider this when deciding which candidates to register and how to plan overall H-1B strategy.

Employers should also consider planning beyond the H-1B alone. As the cap process is competitive and outcomes are not guaranteed, relying on a single visa option can create risk. Based on the role, the employee’s background, and business needs, options like other employment-based visas may be worth exploring.

Multiple Registrations and Good-Faith Requirements

Submitting multiple registrations for the same individual will not improve selection odds. If more than one employer registers the same person, USCIS has stated it will use the lowest wage level among those registrations, meaning fewer lottery entries.

USCIS is also expected to closely review registrations to confirm they reflect real, good-faith job offers. Employers should be prepared to support the role, salary, and work location listed in the registration if questions arise.

Cost and Risk Considerations: The $100,000 H-1B Fee

Employers should also be aware of a new $100,000 H-1B fee, which may apply.

In general:

• Petitions approved as a change of status within the U.S. are not subject to the fee
• Petitions filed for consular processing, or cases where a change of status is not approved, may trigger the fee unless an exception applies

Since this determination may occur after filing, employers should factor potential fee exposure into sponsorship decisions early, especially for candidates outside the U.S. or with prior status issues.

Preparing Now: A Suggested Timeline

• Now: Identify roles and candidates likely to need H-1B sponsorship
• January–February 2026: Review wages, locations, and eligibility for change of status
• March 2026: Submit H-1B registrations
• Post-Selection: Finalize filing strategy and assess fee exposure

Starting early opens up more flexibility and helps prevent surprises. If you would like a partner in navigating the details, Ellis is here to help.

Employer Checklist

Here’s an overview of the key points employers should consider as they prepare for the upcoming H-1B cap.

Step 1: Identify Roles and Candidates

• List roles that may require H-1B sponsorship for FY 2027
• Identify current employees and candidates who will need sponsorship
• Flag early-career or entry-level roles that may be affected by wage weighting

Step 2: Review Wages and Job Details

• Review offered salaries for each role
• Confirm job titles and core duties align with the correct SOC code
• Compare salaries to OEWS wage levels for the intended work location(s)
• Identify which wage level each role falls into for registration purposes

Step 3: Evaluate Work Locations

• Confirm primary work location for each role
• Identify any secondary or remote work locations
• Determine the lowest applicable wage level if multiple locations apply

Step 4: Assess Selection Strategy

• Decide which roles to prioritize for H-1B registration
• Consider whether salary adjustments are appropriate and sustainable
• Align immigration strategy with compensation and workforce planning

Step 5: Review Change of Status Eligibility

• Confirm whether each candidate is eligible for a change of status in the U.S.
• Flag candidates outside the U.S. or with status issues
• Assess potential exposure to the $100,000 H-1B fee

Step 6: Prepare for Registration

• Gather required candidate and employer information
• Coordinate internal approvals for registration decisions
• Work with immigration counsel to finalize registration strategy

Step 7: Plan for Post-Selection Filing

• Confirm filing approach
• Budget for potential government fees and legal costs
• Prepare supporting documentation early to meet filing deadlines

There is a lot involved in preparing for the H-1B cap, and many key decisions need to happen early. Working with experienced immigration counsel can make the process much easier to manage. 

Ellis helps employers navigate these steps and plan ahead with confidence—get in touch today.

Ellis will continue to monitor developments and share updates as additional guidance becomes available.

This material is for informational purposes only and does not constitute legal advice. Immigration laws and policies are subject to change, and outcomes depend on individual facts and circumstances.