US to Introduce Wage-Based H-1B Lottery from February 2026

The United States will introduce a wage-based selection system for H-1B visas from February 2026, replacing the current random lottery with a model that favours higher-paid roles.

The Department of Homeland Security (DHS) said the reform will rank applicants using a four-tier wage scale based on experience and job complexity. Level I applies to entry-level positions, Level II to roles requiring moderate experience, Level III to fully qualified professionals, and Level IV to senior specialists. 

Under the new system, applications will be weighted rather than treated equally: Level IV applicants will receive four entries in the lottery, Level III three entries, Level II two, and Level I one. DHS estimates this change will reduce selection chances for Level I applicants by 48 percent.

The policy is expected to increase labour costs for employers. DHS data from the 2024 fiscal year show average annual salaries of $85,006 for Level I workers, $103,071 for Level II, $131,454 for Level III, and $162,528 for Level IV. Under the existing lottery system, total annual salaries for H-1B cap-subject workers amounted to $8.86 billion. DHS projects that the wage-based system will raise this figure to $9.36 billion in its first year, an increase of $502 million.

Officials describe the higher wage total as an economic benefit, reflecting a workforce with greater experience. Employers, however, are likely to face higher payroll expenses, particularly in sectors that rely heavily on entry-level foreign workers. DHS estimates that by the fifth year of implementation, the annual increase in wages will reach $2.51 billion, reflecting the typical five-year duration of H-1B status.

The reform also redistributes economic benefits among workers. When a higher-paid applicant is selected instead of a lower-paid one, the value of the visa shifts accordingly. For example, replacing an entry-level role paying about $85,000 with a senior position paying around $160,000 results in a salary difference of approximately $75,000. DHS estimates that such transfers will total $858 million in the first year and rise to $4.29 billion annually from year five onwards.