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USCIS Withdraws Wage Levels Based H1B Lottery Rule. Why?

DHS published a proposed rule to change how the H1B Visa Lottery process would work during the H1B Registration Process on Nov 2, 2020, later they published final rule on Jan 7th, 2021 with an effective date of March 9, 2021. But, after Biden Administration has taken office, they have moved the effective date of this rule to December 31, 2021. Finally, USCIS withdrew the same rule in December 2021 after losing a court battle. In this article, we will review the final rule details, why delayed, DHS feedback to comments, FAQs.

USCIS Withdraws H1B Lottery with Wage Levels Rule

December 21st, 2021: Today USCIS released an official press note indicating that they are withdrawing the previous H1B Lottery final rule that used Wage Levels based selection. Below is the high-level summary, screenshots of the official news, and links to official sources

  • USCIS officially has withdrawn the H1B Lottery Selection Rule that will be based on Wage Levels today . The reason for withdrawal is DHS lost the case in court back in September 2021. See below section.
  • As part of the regulatory process, USCIS need to officially withdraw the rule from Federal Register as it was published as final rule. Today’s annoucement is for the same process. See below screenshots of the same.
  • What it means is that for next fiscal year, H1B FY 2023 season, the H1B Lottery will be based on standard random selection lottery and not be based on Wage Levels.
  • The reason they are doing it now is that the final rule was set to take effect from December 31st, 2021. So, to meet the deadline, they are doing it. There is no comment period for the same.
  • If you are looking for background on the rule, scroll down below to understand more on the details of H1B Lottery that was planned to be based on Wage levels.
  • Check more at USCIS Official Press Rlease
  • Official Federal Register Rule Withdrawal Notice
USCIS Withdraws H1B Lottery based on Wage Levels
Press Release – USCIS Withdraws H1B Lottery based on Wage Levels
Federal Register Official Rule Withdrawal H1B Lottery Wage Levels
Federal Register Official Rule Withdrawal H1B Lottery Wage Levels

Court Cancels H1B Lottery with Wage Levels Rule

September 15th, 2021 : Today Court canceled the USCIS Rule with H1BVisa Lottery to be based on Wage Levels. It was canceled based on the fact that the then-acting Secretary Mr. Wolf was. not lawfully appointed and hence the rule is invalid. Check all details at : Court Cancels H1B Visa Lottery based on Wage Levels Rule

DHS Delays Implementation Date to Dec 31, 2021

February 4th, 2021 : Today DHS released an alert indicating that they are delaying the “H1B Wage Levels based Lottery selection” until December 31, 2021. Below is the summary of their decision and reason to delay

  • The original effective date for the rule was set to be March 9th, 2021 and now DHS is delaying the effective date of this final rule to December 31, 2021. DHS says there is not enough time for them to implement the new rule for upcoming H1B Visa 2022 season.
  • They need to train their staff, implement the software, do testing, do outreach regarding the same and all of this takes time, which is very limited for to implement this for upcoming new season.
  • Also, they say that they want to give more time for public to give comments and agency need to review the rule in detail and make changes as needed. To meet all of this, the only way they see is to delay the implementation of this final rule to Dec 31, 2021.
  • They plan to use the current H1B Registration Lottery process using random selection as done in last H1B visa 2021 Season
  • Below is official press release screenshot and link to DHS press release and DHS Notice on Federal Register with all information
DHS Delays the H1B Lottery Selection to be based on Wage Levels Rule to Dec 2021
DHS Delays the H1B Lottery Selection to be based on Wage Levels Rule to Dec 2021

Background – H1B Lottery Wage Levels Rule

DHS published a regulation in proposed rule stage on Nov 2, 2020 to change the H1B lottery selection process. As of today, the H1B lottery is based on random selection and there is no preference given to anyone or any criteria.  DHS published the proposed rule to change lottery selection process based on priorities of Trump administration as per Buy American, Hire American Executive Order and Proclamation to suspend H1B, L1 workers to enter US to protect US workers.

The proposed rule had 30 days comment period and received 1103 comments during that period. They also received 388 comments on the rule’s information collection before comment period ended.  The final rule document is about 184 pages. More than 120 pages of the same are comments summary and responses to the same by DHS.  

If you are new to the Wage Levels concept and LCA, you should read What are H1B Wage Levels, How to Find ? and What is H1B LCA, what does it have ?. These articles have all the details you need to know on wage levels and LCA.

Why Wage Levels (Salary) for H1B Lottery Selection : The overall premise of the proposed rule is to have the H1B lottery selections based on wage levels offered for the H1B position. DHS logic is that salary or wage level is a good indicator for the skill. If they select people with higher salaries or in higher wage levels, they are hiring the best of the high skilled workers available in the pool.

For more background information, you can read  H1B Lottery to be based on Wage Levels – 163,000 Impacted to know more the proposed rule and details on the impact.

Now that you have background, let’s dive into the details.

Changes to H1B Lottery based on Wage Levels rule after Comments  

DHS has decided not to change any of the original regulatory text that was part of the proposed rule during public comments or Notice of Proposed Rule Making (NPRM) Stage. In short, DHS just responded to the 1103 + 388 public comments saying that they do not plan to change their stance or take public feedback to enhance or modify the rule.  Below is the actual confirmation from them indicating the same from the final regulation document  

DHS Declines to change the NPRM text in Lottery Wage Levels rule
DHS Declines to change the NPRM text in H1B Lottery Wage Levels rule

Final Rule : H1B Lottery based on Wage Levels – Summary

Below is the summary of the final regulation that was published by DHS in federal register.  

  • Ranking of the H1B Registrations: USCIS will rank the entire pool of H1B registrations submitted based on the OES Wage levels that were selected by the employer in the registration. Essentially, the ranking process is nothing where they will sort the H1B registrations in descending order from Wage Level IV, followed by Level III, Level II and Level I.
  • Selection of Highest Wage Level Registrations: After the ranking/sorting is done, they will select the highest wage level registrations first, then followed by lower wage level registrations, then further lower wage level registrations. Basically, they will select Wage Level IV registrations first, then followed by Wage Level III, then Wage Level II and then finally Wage Level I registrations.  USCIS will select enough registrations to meet the 85,000 H1B visa cap quota. You may read What are H1B Wage Levels, if you are not sure.
  • Multiple H1B Registrations at Same Level: During selection process, if there are multiple H1B registrations on the same wage level, then DHS will conduct random selection or lottery for selecting the required H1B registrations in that wage level. This will only be applied to the wage level that has more registrations.
    • Example: Let’s say in the first run, DHS have selected Level IV and Level III to meet about 60K slots out of 85K cap. Now, they are left with 25K slots open to meet the cap.  Now, imagine they have about 100K registrations with Level II wage in the pool, then DHS would run lottery to pick the 25K slots from the 100K Level II wage registrations.  They will ignore the Level I registrations as they are not required to be considered as pe the change.
  • Multiple Locations in H1B LCA – Multiple Wage Levels : In the LCA, an employer can specify multiple locations of work for the H1B worker. In such cases, there will be multiple prevailing wage levels by location. In such cases, DHS would use the lowest corresponding wage level from the list of locations, wage levels during the lottery selection.
    • Example: If let’s say the LCA has a job that has wage levels of Level 1 in Atlanta with Salary of $75K and Level 1 San Francisco with a Salary of $90K. Though the wage offered in SFO is high and may fall under Wage Level 2 in Atlanta, they cannot use Level 2 for the purpose of lottery or registration. The employer need to use Wage Level 1 only as that is what is the lowest in both places.
  • H1B Amendments and Extensions after Lottery: DHS also says that, after the H1B lottery is done based on the Wage Levels, the employer cannot amend the petition for the same beneficiary to a lower wage level. If they do so, they will be revoked. This is to avoid employers from gaming the system by putting higher wage levels during lottery and then change them to lower wage levels.
  • Wage Levels only during Lottery Situation: DHS says that they will apply all of the rules for selection, only when there is a lottery situation and there are more registration or petitions that are filed in that year. If there are lower number of petitions than 85,000 cap quota then these will not apply.  
  • No Changes to Lottery Order: There will not be any changes to the H1B Lottery order.  First the new lottery selection process would be applied to meet the 65,000 regular quota cap then the same process would be applied to meet the 20,000 US Masters quota cap.

Summary of DHS Response to Public Comments

There were over 100 pages of comments summary and replies by DHS. We have picked the key ones for your review. Below is the summary of the DHS responses to most of the public comments.

  • Wage Level = Skill Level : DHS says that salary & wage levels are a good indicator of skill level and their goal is to attract most skilled applicants in lottery situation. They say the random selection is not fair and wage level based selection is the right approach to select more skilled workers
  • Health Care Workers Concerns : For questions around doctors and health care workers, they say there are many federal programs like “Physician National Interest Waiver” that provide opportunities to file their petitions as cap exempt and doctors or medical professionals should not be impacted with this. They also say that doctors from foreign countries with entry level wages are displacing US medical graduates in US. No data provided though.
  • Universities, Research Entities Concerns: DHS says that higher education & non-profit research or government entities are not subject to annual cap as per congress. There were about 41,000 H1B petitions that were approved under cap exempt categories in FY 2020 along and this change will not impact.  
  • New Foreign Graduates from US Schools Concerns : DHS says that new graduates get OPT and STEM OPT and they can work for few years to get more skill and experience. It should help them get higher wage level when they file for H1B after 2 to 3 years . Also, they say, even for many graduates, companies are willing to pay higher wage level, if their skill is of high demand in the market. They say, employers should hire US Workers, if they are entry level positions.
  • Abuse of H1B Program : DHS says that the wage level based H1B selection will stop the abuse of H1B program by companies that hire foreign workers for less wage and create an unfair market for US workers.
  • Moving Companies to Other Countries, US Economy Impact : DHS says that these changes will not really impact the overall market conditions or US Economy as they are making sure to hire the more skilled workers in lottery situation. They want to protect US workers and their wages. The goal is to stop abuse of low paid workers. Such employers can hire US workers for entry level positions.
  • Legal Authority Concern : DHS says that they have the legal authority to implement these changes as Congress gave them the freedom. Even though, they do not explicitly say that they implement something like this, it is discretion of USCIS to implement such rules to protect US workers and attract better skilled workers.
  • Impact to Small Businesses : for questions where some said small businesses cannot pay high wages, DHS say that the impact of this change is not going to be big for small businesses as per their survey of 300+ small businesses. They say small business can hire US workers for entry level positions for the same salaries.

Now that we know the rule and DHS explanation, let’s look at today’s reality with current comapnies.

Check H1B Wage Levels by Distribution by Company

It is important for you to understand the H1B LCA wage Levels distribution for your or new company that you plan to join. This will help you assess and plan ahead when you are Finding a H1B Sponsor for H1B 2022 fiscal year. H1BGrader.com has built up a feature that lets you find wage levels distribution by year for a company. You can check: Find H1B Wage Levels Distribution by Company

Below are few examples by Company Type, sample screenshot.

H1B Wage Levels Distribution for Facebook vs Infosys
H1B Wage Levels Distribution for Facebook vs Infosys

Next Steps – Implementation, Effective Date, Lawsuits

Update : Court canceled this rule on Sep 15th, 2021. It is not valid anymore.

DHS has published the final rule in Federal Register on January 8th, 2021.  As per the publication update, it will be effective 60 days from the day it is published in Federal register. It will be effective from March 9th, 2021.  See below screenshot for details.

DHS Rule on Wage Levels published in Federal Register - Jan-8-21
DHS Rule on Wage Levels published in Federal Register – Jan-8-21

Lawsuits Potential : The replies provided in the final regulation for some of the questions are not really compelling enough. There is no proper evidence that is provided to back the statements provided by DHS. There is very high potential for lawsuits on this one.  Also, this rule is one of the Trump Administration’s agenda item and this will change with Biden taking office end of this month.  We will keep you posted on the updates on the lawsuits.

Frequently Asked Questions

Below are some of the frequently asked questions.

Will wage levels lottery selection rule be applicable for H1B 2022 Season?

DHS confirmed on Feb 4th, 2021 that they will not be implementing the wage levels based lottery selection for FY 2022 season. They are delaying the rule until Dec 31, 2021. They plan to have it effective for the H1B Visa 2023 season.

Will the H1B Wage Levels Lottery Rule apply to Existing H1B extensions, transfers ?

No, this will be only applicable to new H1B Cap subject petitions that are filed with DHS going forward after the rule is effective.

Can someone file in Wage Level III and later amend to Wage Level II or I ?

No. USCIS clearly says that such things will not be allowed. They will review the previous wage levels and verify, if they are in line with original filing. Anything done to game the system will result in revocation.

Can employers use Private Wage Surveys for H1B Registration? If so, what to select?

DHS says that employers are free to use Private Wage Surveys as along as they are on par with OES wage levels. They would need to select appropriate wage level based on relative OES wage level and the Salary offered.  If the wage is lower than Wage Level 1, then they should select “Wage Leve 1 and below”.  The employer has the burden to prove that the wage levels are on par with equivalent OES wage level.

What do you think of the change in the H1B Lottery system ?  Is it fair a system now ? Share your thoughts in comments.

You may also read USCIS Official annoucement on the changes


Other Articles


  1. Hi Kumar,

    Do you think this will be implemented for April 2021 lottery? I have offer from two companies with different salary levels, if this law is not implemented then I am planning to ask both employers to apply for my visa. If this rule come in then I can go with the one which wage level is high.

    Any assumptions, by when we can get more details on this? Please help

      • SudhaPSG,
        In general, not recommended, unless you have offers from two diff companies like Google and Microsoft. Many try the IT Body shop route and end up in trouble…

      • Wait! So you’re saying during extension it doesn’t matter to cap exempt employer even if the wage does not match the new prevailing wages?

        • H1BExempt,
          No, the reason is, you are NOT going through lottery. This is filed as Cap Exempt under non-profit. What was filed in the beginning is what matters and as long as you are around the same, you are fine.

          • Hi Kumar,

            My employer had filed me as cap exempt h1b on level 4 wage last year. Now due to increased wage level i come somewhere between level 2-3. So will this be problem during extension?

          • H1BExempt,
            If there was any change, you should update it. It all varies by the role that is open, so hard to say. Talk to your attorney.

  2. I read most of the comments, why is this rule unfair ? why should there be a lawsuit ?
    *** If this is unfair , then bills like S386 should be unfair as well ***

    I have a friend who graduated from University of Colorado Boulder , currently working for google as SW with base pay $160k (with amazing benefits almost equal to his base pay) his application did not get selected twice

    On the Other hand, ( not putting anybody down) someone who graduated from university that doesn’t even have proper accreditation joins a consultancy with base pay gets the application selected in lottery , and he is the one who gets I140 (don’t want to talk about consultancies as we all know about it), this guy comes out and complains GC system is not correct and that needs to be fixed ? If the first guy is suffering because of this lottery then why we should expect HR 1044/S386 bills should be approved ?

    On a side note: I am on H1B visa from India, definitely not against anybody , If we don’t encourage merit based system , it will come back and bite us ,aren’t we missing the logic here ?#justAsking

    Kumar , what are your thoughts on this ?

    • I am an architectural designer based in New York. I have a Master’s degree from the top university in the US and 3 years of professional experience. Yet, my wage is still level 1. The wage level 2 is reserved for senior architects.

      • In general, it’s not possible for most architects in the US to make wage level 4 or 3. They are what principals or partners can get.

        • HHH,
          Your wage levels are dependent on you SOC and location. So in other words you would be competing with other architectural designer’s pay to determine your wage level. I live in central Indiana and level 1 wage for your SOC is 46k , level 2 is 60 k , level 3 is 72 k and level 4 is approximately 84.5 k. I looked for some positions and for the junior level most jobs are paying in level 2-3 range.

    • MeritBased,
      The thing is there are many doctors who are working in rural and underserved areas, who would be impacted, that is one the key concerns. Also, not all H1B occupations pay similar high wages like software engineers, so other job titles are impacted due to skewed wages in one industry….These are just some concerns…

      • Hello Kumar,

        I am not sure why doctors in rural areas would be impacted because the wage levels are adjusted based on location and profession. Moreover, doctors are eligible for cap-exempt H1B if they work for certain hospitals/institutions that are non-profit.

        IT jobs do pay high, but based on wage adjustment even a level 1 Software Engineer must make $100k+ in cities like Seattle or SF. So it wouldn’t be wrong to say that even entry-level software engineers have a high bar to get into level 4 and 3.

        • Thank you Hirani, for iterating everything I had in my thoughts. The excuse of “rural and underserved area” doesn’t make a lot of sense as an argument against wage level brackets, as the survey is locality specific and wage levels in this rural and underserved is expected to be low nevertheless they will make it to the bracket they deserve. If anything physicians in those areas are in advantage as it is most likely to be cap except employer.

  3. Acc. to wage prioritization, lets say if there are 60k applications got selected from level – IV & III , remaining applications will be selected from wage II based on their wage ? ex: select the application with 95k wage in level II & than applications with wage 94K ? or they just do lottery from level II ?


      • What are the chances of success for legal cases?. And on what grounds?. Wont USCIS have the option of selecting the petition on any suitable logic compliant with the rules passed by Congress.There is no point in fighting legally , if USCIS can determine the logic of selection legally. After all the Courts have thrown out the cases earlier not because they are illegal, but the procedure followed by USCIS was incorrect. There is no point in spending hard earned dollars to the members of AILA as many of them seem to be inclined to start “crowd funding” for fighting the cases

        • Vasan,
          Well, some of the areas they can fight on is that wage level is not indicator of speciality occupation. Impact to Doctors due to this. How INA does not say skill is based on wage only…so, there are many areas they can litigate on…We need to wait and see.

          • Hi Kumar
            I dont think any particular profession, say Doctors, would be specifically impacted. After all the absolute wages do not matter. The Level 4 to Level 1 wages , say for Doctors, are determined in a particular geographical areas by some formula on the wages of Doctors in that area only, That wont be computed comparing with Engineers or Architects or Software guys. So you cannot say any particular profession would be impacted by comparison. Again INA does not say skill is based on wage. But they also do not say that wage should not be used as a parameter for skills in the absence of any other measurable simple parameters. So unless the litigant suggests a better parameter, wage level on any day is a better parameter than a random lottery for all the 65000 without classifications. That is my 2 cents

          • vasan,
            Definitely better than random lottery. But, doctors in underserved and rural areas are not in higher wage levels and they would be impacted. There has to be some provision to help that kind of cases…This is a concern raised by many of the non-profits and DHS did not address it properly…let’s see.

  4. hi,
    So lets say if there many level3 and level4 applications and the quota gets filled with these then they will not go for level2 applications ? Wouldn’t this be unfair?

    • Yeah, that’s the concept, if you can’t find an level 3,4 wages job, you have no chance to get selected. Try to get job in Amazon, FB, Tesla etc..

    • RaMan,
      Well, that’s their whole point of the rule saying that they want to give slots for high skilled wokers in the pool who are paid higher…their logic is wage = skill level. Higher wage = higher skill as per DHS.

      • Yeah, if you are picked by lottery, then you are highly skilled. What a joke. Do you have any alternative for spotting skilled people instead of going by Wage levels??

        • vasan,
          Sadly, that’s the state of affairs with current system…If you are extremely talented with patents, founder of company, etc , you may go with O-1 visa.

          • Thanks for your advise Kumar, I may not be qualified for an O-1 but I surly am for H1 which I have slimmer chances through a random selection, especially when there are few trying to exploit it with so many applications. If you really think it has been fair all these years I’m sorry man we couldn’t argue anymore.

  5. Hello team,
    Thanks for the excellent video explanation through youtube channel.

    My question is how employee from all the states get a fair shot on this process ?
    Will this favor only people with high wages belonging to sf, boston and seattle ?
    how USCIS can draw comparison for level2 wage of 90K in south carolina to wage levels in big cities?

    would like to hear your thoughts ?


    • I dont know why people dont understand the concept of wage level based on cities and occupation..A level 2 wage of 90k in south carolina for a Job X will be about 120k in bay area (assuming Job X is software engineer). Thats why wage level differs based on cities and states. Nothing is unfair. Just understand the terms properly.

    • Sarath,
      They do not care about the actual wage, they only care about the wage level that someone who are paid. If you have higher wage level in small city or bigger city, you are fine.


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