The United States is overhauling the H-1B visa lottery system, shifting to a wage-based selection process starting in February 2026. Under the new rules, higher-paying positions will be given priority, a move expected to raise employer costs and redirect a significant share of wages from entry-level roles to more senior positions.
The changes are likely to have two major effects. Lower-paid and lower-skilled workers will see their chances of securing H-1B visas diminish, while employers may face higher overall labor costs as they compete for higher-paying roles.
The impact on entry-level workers is particularly stark. Estimates suggest that the probability of securing an H-1B visa for wage level I roles could fall by as much as 48 percent once the wage-based system is implemented.
READ: Three in 10 immigrants avoided holiday travel due to immigration fears: Survey (
The policy does more than alter selection odds. It also reshapes how salaries are distributed across the H-1B workforce. By prioritizing higher-paying roles, a larger share of total wages is expected to flow to mid- and senior-level employees, reducing opportunities and limiting salary growth for workers at the lower end of the pay scale.
Under the new framework, H-1B entries will be weighted by wage level. Petitions tied to wage level IV roles will receive four entries in the selection pool, while wage level III positions will receive three. Applications classified under wage level II will be entered twice, and wage level I roles will receive a single entry.
This weighting system significantly boosts the odds for higher-paying jobs while sharply reducing the chances for lower-wage positions.
The shift is also expected to directly affect how much US employers spend on H-1B workers. The Department of Homeland Security analyzed the annual economic impact of the rule using average salaries for cap-subject H-1B workers across wage levels in fiscal year 2024. At the time, average pay was $85,006 for wage level I roles, $103,071 for level II, $131,454 for level III, and $162,528 for level IV positions.
Based on these figures, DHS estimated that under the current selection system, total annual wages paid to H-1B cap-subject workers amounted to about $8.86 billion in FY 2024 dollars, underscoring the scale of employer payrolls now set to shift under the revised rules.
READ: US revokes 85,000 visas amid stricter security, vetting measures (
Under the weighted selection system, overall payroll costs are expected to rise as the mix of workers moves away from wage level I roles toward higher-paying positions in wage levels II, III, and IV. With fewer lower-wage entrants and a greater share of senior hires, total salary payouts are projected to increase.
According to DHS estimates, annual wages paid to H-1B workers would rise by about $502 million, pushing the total to roughly $9.36 billion, or $9.4 billion, in the first year of the new rule. DHS characterizes this $502 million increase as a measurable economic benefit tied to the policy change in its initial year.
H-1B visas are issued for an initial period of up to three years, with the option of a three-year extension. For its analysis, DHS assumed an average stay of five years for cap-subject H-1B workers. Based on that timeline, the cumulative wage impact grows substantially, with five-year benefits totaling approximately $2.51 billion annually from the fifth year onward.