The US has modified the H-1B visa lottery, transitioning to a wage-based selection process starting in February 2026. Higher-paid positions will get priority, pushing employer wage bills higher, and redistributing millions in salaries away from entry-level workers toward senior professionals.
The new rules will have two major impacts. Firstly, the low-paid and low-skilled workers will see their chances diminish, and secondly, US employers will see a hike in their wage bill.
Here, it is explained how the chances for an H-1B visa will decrease by 48 percent for level I workers. Now, we look at how salaries shift from low to higher-level employees.
4-Level Wage System
In the new H-1B rule, there is a four-level wage system for H-1B positions, based on the worker’s experience and job requirements. Level 1 wages are for new entry-level workers, Level 2 for experienced workers, Level 3 for fully competent professionals, and Level 4 for experts or senior-level professionals.
Why Level IV Benefits
Registrations for unique beneficiaries or petitions assigned wage level IV will be entered into the selection pool four times, those assigned wage level III will be entered into the selection pool 3 times, those assigned wage level II will be entered into the selection pool 2 times, and those assigned wage level I will be entered into the selection pool one time.
Impact on the Total Wage-Bill
The new rules will have a direct impact on the total wage bill of US employers. The Department of Homeland Security has estimated the ‘annual quantified economic impacts of the new H-1B rule’ using the average annual salary of H-1B cap-subject workers by wage level in FY 2024.
In 2024, the average annual salary for wage level I was $85,006, for wage level II it was $103,071, for wage level III it was $131,454, and for wage level IV it was $162,528.
The estimated total annual salary paid to H-1B cap subject workers under the current selection process in FY 2024 dollars was $8,862,595,799 ($8.8 billion), according to DHS.
However, under the weighted selection process, the estimated total annual salary paid to initial H-1B cap-subject workers will increase because there will be fewer wage level I workers and more wage level II, III, and IV workers.
DHS estimates that the total annual salaries paid to H-1B workers will increase by $502,080,486 to $9,364,676,285 ($9.4 billion). The $502 million increase is the estimated quantifiable economic benefit resulting from the final rule in the first year.
The maximum initial granted period of stay for H-1B status is three years, with extensions for up to three years thereafter. DHS considered the average H-1B cap-subject worker’s duration of H-1B status as 5 years for calculations. Therefore, from year 5 onward, accrued five-year benefits are $2,510 million each year.
Transfer of Wages
In addition to the $502 million in first-year benefits, the $9.4 billion in first-year H-1B wages resulting from the final rule also contains a transfer from wage level I workers to wage level II, III, and IV workers.
When H-1B allocations change from wage level I workers to higher wage level workers, the benefits of the H-1B classification are transferred from wage level I workers to higher wage level workers.
For example, if a wage level IV worker whose annual salary is $160,000 is selected instead of a wage level I worker whose annual salary is $85,000, then $85,000 of benefits are transferred from the wage level I worker to the wage level IV worker (the difference of $75,000 is a benefit to the level IV worker).
DHS estimates that transfers from wage level I workers to other wage level workers will be $858 million in the first year under the final rule. In years 5 and beyond, the transfers will be approximately $4,292 million.