What to Know About the FY 2027 H-1B Cap (To be Held in March 2026)
Executive Summary:
The upcoming H-1B Cap season will use a new wage-weighted selection process. The electronic registration form will require employers to indicate the job’s occupational category and the minimum prevailing wage level they will pay. DHS will then enter the registration into the selection pool based on that wage level, i.e., Level I = 1 entry, Level II = 2 entries, Level III = 3 entries, and Level IV = 4 entries.
DOL has submitted a proposed “wage protections” rule for review that could materially restructure prevailing wage calculations for H-1B filings; because details are not yet public, employers should plan conservatively when committing to a higher wage level for lottery weighting purposes.
The $100,000 H-1B Proclamation Fee will only apply to defined situations and is not a universal cost for all cap cases. In most H-1B cap scenarios involving a change of status, it should not be triggered.
The State Department has expanded online presence review (including vetting social media accounts) of H-1B applicants and their H-4 dependents, including instructions to set social media privacy settings to “public,” so workers should continue to be very careful about what they post, like, or share online. H-4 spouses and children are subject to the same review and need to be equally careful.
The fiscal year (“FY”) 2027 H-1B Cap season (for October 1, 2026 start dates) will be the first cap season conducted under DHS’s newly finalized wage-weighted cap selection rule. This alert covers:
Who employers should consider sponsoring in the H-1B Cap Lottery,
The new selection mechanics and how wage level choices will affect selection probability,
Why wage-level planning must account for possible DOL prevailing wage changes,
The operational reality of the $100,000 “H-1B Proclamation fee,” including who it does—and does not—apply to, and
The potential impact of ongoing vetting of social media accounts of sponsored workers.
Before we address those issues, here is a brief background on H-1B status and the electronic registration process.
Background on the H-1B Program
H-1B classification allows foreign nationals to work in the United States in “specialty occupations.” The employer must agree to pay the worker the higher of the actual wage or the prevailing wage for the occupation in the area of employment.
Congress has limited the number of new H-1B visas that may be issued during each government fiscal year. There are currently two caps: the first is 65,000 (with 6,800 set aside for the H-1B1 program designated specifically to citizens of Chile and Singapore, so the actual number is 58,200) that is available to all who have a qualifying degree (or its equivalent) and job offer, and the second is an additional 20,000 that are set aside specifically for workers who possess a U.S. Master’s degree or higher.
Because demand for H-1B visas far outweighs the available supply, DHS holds a randomized lottery for the two caps. The lotteries are held in the final weeks of March due to the government fiscal year starting on October 1st and the fact that the earliest that an H-1B petition may be filed is six months prior to the start date (which would be April 1st for cap-subject filings). Employers who are interested in sponsoring a worker for the lottery(ies) file an online registration with DHS that provides basic information about the worker and which cap(s) they qualify for, and pay the required registration fee (which is currently $215 per worker).
Foreign nationals who possess a U.S. Master’s degree or higher are eligible for both caps under the same registration. Prior to the FY 2027 H-1B Cap, the advanced degree exemption was the principal mechanism that a worker could use to increase their selection odds. With the FY 2027 H-1B Cap, employers must also identify the wage level associated with the offered wage for purposes of the weighted selection process, as discussed in Section 2 below. If the worker is selected then the employer will have between April 1st and June 30th to file an H-1B petition on behalf of the worker, which will need to sponsor the worker in the occupational classification, as well as the wage level, that was selected on the registration form.
Once a foreign national is counted against the H-1B Cap, they are generally granted up to six years of H-1B status. Note that if they are sponsored by an employer for a green card within certain timeframes prior to the expiration of the sixth year, they may be eligible to extend H-1B status beyond six years. Otherwise, if they use up their six years, they generally must depart the U.S. for at least a year before becoming eligible for a new six-year period provided they are re-selected for the H-1B Cap in a future lottery.
Who Should Be Considered For FY 2027 H-1B Cap Lottery Registration
Most foreign workers who are sponsored for the H-1B Cap fall into the following categories, as they typically have not previously been counted against it:
F-1 foreign students who have graduated and are employed pursuant to OPT employment authorization, who are graduating this Spring, or who already possess a degree and are working for you pursuant to CPT.
Foreign nationals in other nonimmigrant statuses that present intent or timing challenges for green card sponsorship (TN, H1B1, L-1 from countries subject to Immigrant Visa backlogs, and others).
Foreign nationals in derivative H-4, E-1/E-2 or L-2 status with employment authorization which is tied to the continuing status of their H-1B/E/L spouses.
Foreign nationals who are currently living outside of the U.S. Note: See Section 4, below, regarding their potentially being subject to the 100,000 H-1B Proclamation Fee.
New FY 2027 Cap Lottery Selection Process and How Wage Levels Impact It
The biggest change to the FY 2027 H-1B Cap Lottery is the move to a wage-weighted selection process. As mentioned above, a requirement for H-1B employment is that the employer agree to pay the worker the higher of the actual or the prevailing wage for the occupation in the area of employment. The DOL maintains the Occupational Employment and Wage Statistics (“OEWS”) wage data, a free database covering the wages of approximately 900 occupations across the geographical regions of the United States. Wages are divided into four levels with Level I being the lowest wage for entry level workers and Level IV being the highest wage for fully competent workers.
Under the new rule, the electronic registration form will require employers to provide the occupational code and lowest wage level that they will utilize should the worker be selected in the H-1B Cap Lottery. DHS will then provide the worker with the same number of entries into the selection pool as the selected wage level. In other words, the number of entries will be as follows:
Wage Level I: 1 entry.
Wage Level II: 2 entries.
Wage Level III: 3 entries.
Wage Level IV: 4 entries.
Foreign nationals who possess U.S. Master’s degrees or higher remain eligible for both the regular cap and the advanced degree exemption process and will receive the designated number of entries in both lotteries.
Note that when the foreign national has multiple sponsors for the H-1B Cap Lottery, DHS will assign the lowest wage level used across all registrations filed for that worker (i.e., a Level I registration and a Level IV registration results in the beneficiary being treated as Level I for weighted selection). This means filings by different entities will not create a “best-of” outcome; a lower-wage registration can reduce the weighting applicable to all registrations for that beneficiary.
Why Wage Level Planning Must Account for Potential DOL Prevailing Wage Changes
The DOL’s wage levels are tied to approximate percentiles of reported wages within a given geographic area—for instance, Level I is currently set at roughly the 17th percentile and Level IV at roughly the 67th. Because each wage level is defined by its percentile placement, any change to those percentile benchmarks directly affects the resulting wage rates. Against that backdrop, the prior Trump Administration sought to raise the underlying percentiles through an interim final rule (the “Interim Rule”), which was blocked through litigation, and later through a January 2021 final rule that adopted lower—but still materially higher—percentiles (the “Final Rule”). The Final Rule was rescinded by the Biden Administration before it took effect.
Historical Wage Percentiles
Wage Level I
Current Rule (Will Be Changed): ~17th percentile.
Interim Rule (Blocked): ~45th percentile.
Final Rule (Rescinded): ~35th percentile.
Wage Level II
Current Rule (Will Be Changed): ~34th percentile.
Interim Rule (Blocked): ~62nd percentile.
Final Rule (Rescinded): ~53rd percentile.
Wage Level III
Current Rule (Will Be Changed): ~50th percentile.
Interim Rule (Blocked): ~78th percentile.
Final Rule (Rescinded): ~72nd percentile.
Wage Level IV
Current Rule (Will Be Changed): ~67th percentile.
Interim Rule (Blocked): ~95th percentile.
Final Rule (Rescinded): ~90th percentile.
This historical background is important because, on December 17, 2025, the DOL proposed a new regulation entitled “Improving Wage Protections for H-1B and PERM Employment in the United States.” The proposed rule is under review and has not yet been published for public comment, so the details are not yet available.
Planning takeaway: Employers should be cautious about selecting higher wage levels solely to improve selection odds if doing so could lock the company into a compensation structure that becomes impractical at the next extension, amendment, or change in worksite/role. As a practical rule of thumb, when budgeting for longer-term H-1B planning, employers may wish to pressure-test feasibility using the next higher wage level as a proxy for potential future upward shifts (and then factor in ordinary wage growth/inflation).
Operation of the $100,000 “H-1B Proclamation Fee”
In September 2025, President Trump issued a proclamation that imposed a $100,000 fee as a condition for entry to the United States for certain H-1B workers (the “H-1B Proclamation Fee”). The H-1B Proclamation Fee must be paid to DHS through the pay.gov website.
Who is Subject to the H-1B Proclamation Fee
The fee is triggered where:
The relevant H-1B petition was filed on or after September 21, 2025, and
Either:
The worker is not in the U.S. and does not hold a current or prior H-1B visa,
The relevant H-1B petition requested consular notification, port of entry notification, or pre-flight inspection, or
The relevant H-1B petition requested an extension of stay, change of status, or amendment of status and said request to extend/change/amend status was denied.
The fee must be paid to DHS for any impacted worker in advance of any filing covered under #1 or #2, above. In situation #3, DHS has stated that they will provide instructions to the petitioner on how to pay the fee. Presumably at that point the petitioner could abandon the filing, although it is unclear whether DHS will still issue an approval notice.
Who is Not Subject to the H-1B Proclamation Fee
DHS guidelines are clear that the H-1B Proclamation Fee does not apply to any H-1B petitions that predate the Proclamation’s effective date, or any H-1B petition where an extension of stay, change of status, or amendment to status is approved. Furthermore, it states that any worker who obtains said extension of stay, change of status, or amendment of status will not be considered to be subject to the payment if he or she subsequently departs the U.S. and applies for a visa abroad based on that petition and/or applies for reentry to the U.S. on a current H-1B visa.
When the H-1B Proclamation Fee Will Apply to FY 2027 H-1B Cap Beneficiaries
As a result, the only individuals who are selected in the H-1B Cap Lottery who will be subject to the H-1B Proclamation Fee are individuals who:
Are not in the U.S. when the H-1B petition is filed (because they are ineligible to apply for an extension of stay or change of status),
Request consular notification, port of entry notification, or pre-flight inspection on the H-1B petition, or
Request a change of status (if in another status, like F-1, H-4, etc.), or extension or amendment of stay (if they are working for a cap-exempt employer), and said request is denied. Note that if the foreign national travels outside of the United States while the change of status petition is pending then the request for change of status will be deemed abandoned and then denied. As a result, foreign nationals who are selected in the H-1B Cap Lottery should plan on remaining in the United States.
The current guidelines therefore should exempt most students from the fee, as well as spouses on derivative visas. Note that some students who are working pursuant to CPT where full-time CPT is considered integral to the program may run into difficulty changing their status due to differences in how ICE (who is responsible for running the student visa program) and USCIS (who is responsible for adjudicating H-1B petitions) interpret the student visa regulations.
The Future of the H-1B Proclamation Fee
The H-1B Proclamation Fee has been subjected to litigation, and in December 2025 the trial court found that the Fee is lawful. However, this decision is currently being appealed on an expedited basis, with arguments expected in February 2026. Note that during the COVID pandemic, a different trial court found that the relevant law did not grant the President authority to suspend the entry of foreign workers based solely on domestic economic issues such as American citizens’ loss of employment during a pandemic. In the COVID case, the relevant proclamation was repealed before an appellate court heard the case. As a result, the fate of the H-1B Proclamation Fee is unclear. In the meantime, employers should expect it to be relevant to all decisions related to H-1B visa sponsorship.
Exemption Application Process
The Proclamation allows companies to request an exception to the fee, but guidance states that it will be only in the “extraordinarily rare circumstances” where the Secretary of Homeland Security has determined that:
The beneficiary’s presence in the United States in H-1B status is in the national interest,
No American worker is available to fill the role,
The beneficiary does not pose a threat to U.S. security or welfare, and
Requiring payment would “significantly undermine” the interests of the U.S.
Ongoing Impact of Increased Vetting of Social Media
We have previously written about the Trump Administration’s inclusion of ideological vetting to immigration processes. Unfortunately, the vetting has been increasing. In December 2025, the State Department announced that it is expanding its vetting requirements to include all H-1B applicants and their H-4 dependents, in addition to students and exchange visitors who are already subject to this review. The new guidance directs H-1B/H-4 visa applicants to adjust their privacy settings on all social media to “public.”
Previous guidance has stated that consular officers should look for “any potentially derogatory information about the applicant” and save screenshots of the social media accounts. Listed derogatory information includes indications of:
Hostility toward the citizens, culture, government, institutions, or founding principles of the United States,
Advocacy for aid, aid, or support for designated foreign terrorists and other threats to U.S. national security,
Support for unlawful antisemitic harassment or violence,
A history of political activism, especially when it is associated with violence or with other undesirable criteria outlined above.
Consular officers are instructed to call into question the credibility of any visa applicant where inconsistencies are found between what they state during the interview and what is found online, even if the inconsistency does not raise a ground for inadmissibility to the U.S. Indeed, it states that consular officers have broad authority to deny visa applications under the guise that such a lack of credibility raises questions as to whether the worker, their spouse, and/or their children will abide by the terms of admission.
Additionally, DHS has been requiring that H-1B beneficiaries attend biometrics appointments on a more frequent basis, which could evolve into the agency requesting additional information be brought to the appointments.
As a result, workers, their spouses, and their children should be extremely careful about their online presence and whenever possible limit their social media footprint.
Action Items
This is a lot of information to digest, and given the evolving nature of these policies there may be more information that employers need to consider. In the meantime, they should focus on the following:
Identify candidates for the H-1B Cap Lottery by early February 2026, and if you decide to proceed with registering them for the H-1B Lottery then let them know that they should plan on remaining in the United States until we know for sure whether they were selected and the timing of any petition.
Confirm the offered wage budget and map them to both current and potential future wage levels.
Analyze whether any candidate may require consular processing and assess risk for exposure to the $100,000 fee.
Remind employees and their dependents about ongoing ideological vetting of social media.
