New H-1B Reform Leaked: Is the Door to U.S. Residency Closing for Average Applicants?

Recently, while all attention was focused on Trump’s new policy of barring foreign H-1B lottery applicants with an annual income below $100,000, the draft of the 2026 H-1B weighted lottery reform released by the U.S. Department of Homeland Security (DHS) has sent shockwaves through the U.S. residency-seeking community! This document outlining the weighted lottery rules has completed the preliminary review and will be officially published in the coming days — marking the end of the random lottery era. The "salary-weighted system" will become the sole criterion for determining the fate of U.S. residency applications, and the destinies of hundreds of thousands of applicants are about to be reshaped. For further details, please refer to our article published on September 10th: From Campus to Capitol: How New Immigration Rules Will Reshape International Student Pipeline (Part 3) – H-1B Visa: From Random Lottery to “Weighted Selection” System.

If you and your company have questions about U.S. immigration policy or need tailored legal support, please contact our Partner, Anna Sun, at contact@consultils.com.

How Does the Weighted System Work? The End of "Relying on Luck"

According to this policy draft, the H-1B lottery will no longer be a "blind draw" with equal probability for all applicants. Instead, it will adopt a weighted selection process based on the four-tier salary system defined by the U.S. Department of Labor (DOL), with an operational logic that can be described as a "rigorous screening":

• Weighting by OEWS Wage Levels: In the lottery pool, candidates at Wage Level IV will have their names entered 4 times, Level III 3 times, Level II 2 times, and Level I only once. This means: the higher the salary level, the more "chances" an applicant has of being selected. For example, among 1,000 applicants, a Level IV candidate is equivalent to holding 4 "lottery tickets," while a Level I candidate only has 1.​

• Multiple Registrations Weighted by the Lowest Level: To prevent speculative practices such as "inflating salary claims" for higher weighting.​

• Striking Projected Disparities in Selection Rates: The selection rate for Level I is expected to drop to approximately 15%, while that for Level IV may soar to over 60%, exacerbating the polarization between high and low salary groups.

  
  

  

  (DHS Official Website: 2026 H-1B Weighted Lottery Unpublished Documents)

The Weighted System Triggers a Chain Reaction, Impacting Multiple Groups

New Graduates Become the Hardest Hit

• Due to limited work experience, most international new graduates have salaries concentrated in Level I or Level II. Even STEM majors rarely meet the salary threshold for Level III. Under the weighted system, they will face extremely low selection probabilities.

• In the past, many new graduates hoped to start their U.S. career through the H-1B program, but this path will now be significantly narrowed. They may be forced to adjust their U.S. residency plans or choose to return to their home countries for development.

Applicants for Low-Salary Positions Face Shrinking Survival Space

• Beyond new graduates, applicants in administrative roles, entry-level clerical positions, and some liberal arts-related jobs also mostly have salaries at lower levels. Under the screening logic of the weighted system, they will barely have any advantage in the lottery.

• Even if they meet the basic H-1B application requirements, they may miss out on opportunities due to "salary bottlenecks."

  
  

Small and Medium-Sized Startups Suffer a "Devastating Blow"

• For cash-strapped small and medium-sized startups, the new policy is nothing short of a disaster. To compete for quotas, they will be forced to raise position salaries to Level III or above, directly increasing labor costs by over 50% — considering that labor costs already account for more than 60% of total costs for most startups.

• More critically, after being forced to abandon recruitment, not only may core projects be halted, but existing foreign employees may also leave due to expired status and failed lottery attempts, ultimately trapping these companies in a vicious cycle of "talent shortage and business decline."

Companies Dependent on Foreign Employees Fall into a "Labor Shortage Crisis"

• Take industries highly reliant on foreign talent, such as technology outsourcing, IT services, and engineering — over 80% of their H-1B applications are concentrated in positions at Level II or below. Under the draft rules, these applications will likely become "also-rans." In the short term, these companies can neither offer high enough salaries to meet Level III or above requirements nor quickly recruit enough local talent to fill vacancies.

• More seriously, the draft mentions "strengthened verification of salary authenticity," which completely invalidates practices such as temporary salary increases or salary splitting used by companies to "meet salary level requirements." Ultimately, they may be forced to downsize their business scale or even outsource core operations overseas.

Regional Disparities May Intensify the "Matthew Effect"

• Significant salary differences exist across regions. For instance, an annual salary of $100,000 may qualify for Level III in the Midwest but only Level II in Silicon Valley. Applicants for ordinary positions in popular employment destinations like the Bay Area and New York will be at a "disadvantage" compared to peers with the same salary in other regions.

• However, it should be noted that high-salary positions are also relatively concentrated in economically developed areas; in contrast, small and medium-sized cities have fewer high-salary positions and a higher proportion of low-salary roles.

Under the Weighted System, the H-1B Application Landscape Will Undergo In-Depth Adjustments

Overall, the implementation of the H-1B weighted lottery system essentially represents a major shift in the U.S. strategy for talent introduction, with a stronger focus on attracting high-skilled, high-salary talent. This adjustment may shift the focus of H-1B competition from "quantity competition" to "quality competition" — meaning an applicant’s salary level and professional skills will become the key factors determining their success in the lottery.

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More notably, the draft also mentions "enhanced verification of salary authenticity," indicating that it is completely unfeasible for employers to "fabricate salaries" to help applicants meet the requirements.​

Although the policy has not yet been officially implemented, we anticipate that the final version will not differ significantly from the draft. It is expected that starting from the 2026 lottery, applicants will be required to provide the Standard Occupational Classification (SOC) code, work location, and salary level of the position during the lottery registration phase.

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If you need to plan for the 2026 lottery in advance, please contact the ILS Immigration Team. We will provide you with customized response solutions to ensure that your company can still safeguard talent mobility and minimize compliance risks amid major policy changes.

Emergency Contact Hotline： 626-344-8949

Email Inquiry： immigrationlaw@consultils.com

As part of the "From Campus to Capitol" article series, we have released three in-depth analyses focusing on changes to U.S. immigration policies:

1. The first article focuses on the Trump administration’s proposal to "end the abuse of foreign student visas"; click the link to read the full text.

2. The second article interprets the U.S. Department of State’s tightening of non-immigrant visas; click the link to read the full text.

3. The third article analyzes H-1B visas: the reform from random lottery to a "weighted selection" system; click the link to read the full text.

4. The fourth article analyzes the Dual Impact of H-1B Entry Restrictions and the Gold Card Program; click the link to read the full text.

Disclaimer：This article is based on the latest policy information as of September 21, 2025. Given the rapid changes in immigration policies, it is advisable for enterprises to pay close attention to official updates and consult professional immigration lawyers for the latest guidance. Our firm will continue to track policy developments and provide clients with timely and accurate professional services.

As Partner and Head of Immigration at ILS, Anna advises global employers on all aspects of U.S. business immigration. She helps companies recruit and retain executives and highly skilled professionals essential to their U.S. operations, with experience spanning industries from autonomous driving and biotech, to entertainment, logistics, and manufacturing.

Previously, Anna practiced at leading global law firms and served as in-house counsel and compliance manager in the telecommunications, finance, and gaming industries. This diverse background equips her with practical, cross-industry insights that inform strategic, business-focused immigration solutions.

Email: contact@consultils.com | Phone: 626-344-8949