🍁 Happy Friday! Today's newsletter is a lengthy 1,886 words, an 8-min read—but I hope is well worth it for you all!

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1 big thing: Simulating selection outcomes for a 'weighted' H-1B lottery in FY 2027

The more time passes, the more bullish I become that the ‘Weighted Selection’ rule will be finalized and implemented in time for next year’s H-1B lottery.

So yesterday in our Oct 15 Immigration Insiders meeting, Jonathan Micale—former operational executive and service center director at USCIS—and I showed how a weighted H-1B lottery will work using the FY 2026 registration pool broken down by prevailing wage level (OEWS Levels I–IV).

Then, we simulated how employers might respond to the new incentive structure created by this rule—and recalculated several market-driven lottery scenarios to show how the selection odds would change under each one.

Why it matters: The rule presents a completely new reality for practitioners. Gone will be the days of randomized selection.

In it’s place, there will be real strategy involved in increasing selection odds—but that strategy will involve companies considering significant changes to their sponsorship policies and current best practices.

Timing matters: In order to execute on those changes in time for next year’s H-1B cap registration, global mobility teams—and the law firms advising them—will need to start now.

The changes: Many of the summaries of this rule I’ve seen in the news and on LinkedIn omit important information that practitioners need to know.

So in case you didn’t (or don’t want to) read the 36-page proposed rule, here’s the breakdown of the new process:

• Pre-Registration: Employers determine the SOC code, work location, and corresponding prevailing wage level (I–IV) under the OEWS system based on the proffered wage they intend to pay each applicant. If multiple worksites or pay ranges exist, the employer must choose the lowest corresponding wage level.

• Registration: The new online registration form will include a checkbox or dropdown for wage level and certification of a bona fide job offer. No proof is uploaded.

• Selection: Under the rule, each unique beneficiary is entered once, but the entry is counted more than once based on the prevailing wage level: Level I = 1 entry, Level II = 2, Level III = 3, Level IV = 4. If multiple employers register the same person, USCIS uses the lowest wage level submitted to calculate entries.

• Submission & Adjudication: When filing a petition for a selected applicant, employers must submit an LCA showing the same SOC, wage, and location as in registration. USCIS verifies the wage still meets or exceeds the selected level. Lowering the wage level via an amendment or extension filed later can lead to denial or revocation.

This new process changes the game theory: Many practitioners may (and should) consider ways to increase the prevailing wage level of the individuals they register in the lottery.

Here are a few examples of how that could be done:

• Pay applicants a higher real salary to increase the associated prevailing wage level.

• Use remote work to place applicants in locations where the home office carries a higher prevailing wage level.

• Relocate applicants to company offices situated in areas where it’s possible to pay higher prevailing wage.

• Reclassify applicants under SOC codes with higher prevailing wage levels, provided the role changes do not require major salary increases.

• Delay registration for Level I wage applicants until a higher salary can be justified, using a temporary or permanent H-1B alternative in the meantime (e.g., L-1, TN, E, H-1B1, O-1, or F-1 OPT/STEM OPT).

Before diving into our simulation of the possible selection outcomes driven by these new registration strategies, there’s some essential background to cover first.

Starting with: To their credit, USCIS actually gamed out how they project the weighted selection rule would impact the lottery results—but, their projection misses the mark is some key ways.

In their model, USCIS provides the new probability of being selected under the weighted lottery vs. the existing lottery, where it’s equal odds all around regardless of prevailing wage level.

They say for Level I ≈ 15%, Level II ≈ 31%, Level III ≈ 46%, Level IV ≈ 61%.

This is really important: These selection odds are estimated using the average registration data from FY 2020 - FY 2024. Their analysis is assuming that FY 2027 will have the same breakdown of registrations by prevailing wage level as FY 2020 - FY 2024.

As we’re about to cover—this is very unlikely to happen.

Additionally, USCIS estimates how many selections there will be in each wage level category. As the rule intends, they estimate there will be about 10,000 fewer selections for wage level I applicants that will be redistributed to applicants at wage levels II, III, and IV.

But there are a few problems with this analysis.

First off: USCIS fails to factor in the likely changes to the registration pool driven by the incentive structure created by this new system. The market is going to react—and how companies approach their registration strategies for this upcoming lottery will be significantly different than any year in the past. 

Second: The data USCIS chose to use in this analysis were averages from the FY 2020 through FY 2024 H-1B caps.

So they omit data from the two most recent lotteries in FY 2025 and FY 2026—which I don’t have to tell all of you were very different than previous lotteries. The new data we pulled bears that out too.

That said, in the first table in the analysis above from the USCIS rule, the breakdown of registrations by prevailing wage that they lay out is mostly consistent with what we estimate FY 2026 looked like.

The important exception: There were far more Level I registrations and selections in the FY 2026 lottery than in the lotteries between FY 2020 - FY 2024. Under this new weighted lottery, that changes would change the selection odds.

We pulled the latest data from the LCA disclosures that the Dept. of Labor releases quarterly—since it’s the most accurate to the current market. This allowed us closely estimate the prevailing wage level break down of selected registrations in the FY 2026 H-1B lottery.

Using the Est. # of Unique Registration in FY 2026 as our baseline, we modeled FY 2027 by adjusting the distribution of registrations across prevailing wage levels—changes that are likely to occur naturally under the new incentive structure created by the rule.

The key question is: by how much?

Below are the market scenarios we simulated to illustrate how different registration strategies could shift selection odds:

• Scenario A – Mild Shift: Companies register 20% fewer Wage Level I applicants and 20% more applicants distributed evenly across Wage Levels II–IV

• Scenario B – Moderate Shift: Companies register 40% fewer Wage Level I applicants and 40% more applicants distributed evenly across Wage Levels II–IV

• Scenario C – Extreme Shift: Companies register 80% fewer Wage Level I applicants, Wage Level II increases 20%, and Wage Levels III & IV increase by 30% each.

• Scenario D – $100k Fee-Driven Retreat: Overall registrations shrink by 50% because of the uncertainty around the $100k fee—and recreate Scenario B but with fewer total registrations.

*In simulating the weighted lottery for Scenarios A - C, we assume total eligible registrations (343,981) and total selections (120,141) from FY 2026 will remain the same in FY 2027; for Scenario D, we cut the number of registrations by 50% (171,991), but keep total selections the same. We distributed the “N/A - Alternative Survey” registrations evenly across Levels I - IV—as it is unclear how USCIS will handle those selections in the lottery.

How to read this: Read the grid left to right. As Level I registrations shrink, selections move up the wage ladder into Levels II, III, and IV. This is because each registration at those levels is counted more times and there are simply more of them in the pool.

The majority of registrations in FY 2026 were for wage level I & II applicants. USCIS’s simulation can make it feel like Level II is insulated as a result—but it isn’t.

If Level I climbs into II, then some Level II registrations will likely climb into Level III. As more Level III and Level IV registrations are submitted, the selection odds for Level II are vulnerable like Level I—though to a lesser extent.

The real takeaway: Level I registrations are more vulnerable than the USCIS analysis lets on. Immigration practitioners should factor this into your registration strategy—because your competitors will be.

The caveat: Because this rule likely won’t be finalized and announced as implemented until just weeks or months before the lottery, most of the market won’t have time to adjust or deploy new strategies to improve their odds.

As a result, my forecast for next year’s selection outcomes falls somewhere between the USCIS model and Scenario A—some up-leveling will occur, but not dramatically.

If the weighted lottery returns for a second year and practitioners have more time to prepare, Scenario C becomes much more likely.

Finally, there’s the real shake-up scenario: Yesterday’s news that the U.S. Chamber of Commerce is suing the Trump administration over the $100k H-1B fee makes it increasingly unlikely that any company will actually need to pay this fee for any applicant before the Mar 2025 H-1B registration period.

That means employers will still be motivated to enter as many registrations as possible and maximize their selection odds.

However, if the $100k fee were to take effect—or even discourage enough companies from participating at full scale—here’s how the landscape would shift.

If overall registrations drop by half while the distribution shifts of prevailing wage levels shifts up like in Scenario B, per-registrant odds of selection jump significantly for Levels III and IV.

Selection counts still sum to 120,141, but the experience changes because the pool is thinner and the weighting amplifies that.

Before we wrap up, one key takeaway from my conversation with Jonathan Micale yesterday: I asked whether USCIS is already building the operational infrastructure to implement this rule.

His response: “Yes, teams are already planning. You need new fields, training, testing, and deployment before cap season.”

The bottom line: This isn’t a thought exercise anymore—it’s very likely the new reality for the H-1B cap. That means practitioners should start planning now:

• Get your SOCs, worksites, and OEWS levels nailed down for every role you expect to register.

• Pressure-test what it would take—legitimately—to move candidates to PW Levels III or IV.

• Decide where you can shift worksites or lean on remote without any threats to compliance.

• Build a bridge plan for roles that can’t move up this cycle.

If you want to run your own simulation using the FY 2026 baseline and scenarios we compiled, please reach out.

I’m happy to help you plug in your portfolio and see how the odds change in the various scenarios we laid out.

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📩 That’s it for this week! I want to hear your feedback and questions, so drop me a note anytime at [email protected].

See you next week!