The H-1B visa landscape is about to undergo its most significant transformation in decades. With the Department of Homeland Security announcing the rollout of wage-based selection in August 2025, hundreds of thousands of international students currently on OPT and waiting for their H-1B opportunity face a fundamental shift in how their American dream unfolds.
This isn't just another policy tweak – it's a complete reimagining of the H-1B selection process that will disproportionately impact fresh graduates and entry-level professionals who have traditionally relied on the lottery system for their chance at permanent employment authorization.
The new wage-based system would replace random lottery selection with a merit-driven ranking approach. Applications would be prioritized from highest to lowest wage offers, with approvals granted in descending order of compensation. This structure incentivizes employers to provide competitive salaries, curtails exploitation by budget-focused staffing companies, and protects U.S. workers in similar roles from wage suppression.
However, opponents raise concerns that this system might unfairly penalize candidates in traditionally lower-wage regions. To mitigate this geographic bias, the proposed framework would utilize Bureau of Labor Statistics wage benchmarks that factor in regional market variations. Rather than comparing absolute dollar amounts, the system would assess how each salary offer performs against local wage standards.
The DOL defines four wage levels:
Level I: Entry level (17th percentile)
Level II: Qualified (34th percentile)
Level III: Experienced (50th percentile/median wage)
Level IV: Fully competent (67th percentile)
This regional adjustment creates interesting dynamics: a $100,000 offer in a lower-cost area might receive higher priority than a $105,000 offer in an expensive metropolitan region, provided the former represents a more significant premium above local market rates. This approach ensures that geographic location doesn't automatically disadvantage qualified candidates while still prioritizing positions that offer genuine wage premiums within their respective markets.
To quantify the impact of such a rank-ordering system on the H-1B market, The Heritage Foundation conducted a simulation that filters and certifies only the top 70,000 applications based on wage levels by year. Drawing on actual certified petition data, the analysis calculated wage distributions (10th, 25th, median, 75th, and 90th percentiles) for the selected occupations and compared them to wage benchmarks from the Bureau of Labor Statistics (BLS).
Their calculation shows the average wage offered across all occupations increases significantly under the proposed policy. For example, in the case of software developers, the new median wage for certified H-1B applicants aligns with the 90th percentile of wages in the field. In comparison to the data above, as you can see it the median wage is already exceed Level IV, the highest level's requirement.
The most significant impact of wage-based selection will be felt by recent graduates currently on OPT. The goal is to prevent misuse and prioritize higher-paying jobs, but the change could make things harder for those who just starting their careers in the U.S.
Sixty percent of H-1B positions certified by the U.S. Department of Labor are assigned wage levels well below the local median wage for the occupation.This statistic reveals that the majority of current H-1B holders are in Level I or Level II positions – exactly the category that will face the greatest disadvantage under wage-based selection.
For international students who are still on OPT, this creates several challenging scenarios:
However, this approach has practical trade-offs:
Employer willingness: Not all employers can easily relocate roles or justify offers tied to other geographies.
Cost of living vs. wage level: While a candidate may rank higher in Austin, their real income after cost of living adjustments might not differ as much.
Policy shifts: USCIS may refine how “wage levels by location” are interpreted, which could affect this strategy’s effectiveness.
The wage‑based H‑1B selection system has taken a major step forward. On August 8, 2025, the Office of Information and Regulatory Affairs (OIRA) signed off on the proposed rule, followed by formal approval from the White House on August 14, 2025. The rule is now slated for publication in the Federal Register, where a 30–60 day public comment period will follow. If all goes smoothly, this revolutionary system—ranking H‑1B applications by Department of Labor wage levels I through IV—will be implemented for the FY 2027 cap season, with employer registrations likely opening in March 2026.
With the FY 2026 H-1B application season behind us, the Class of 2025 will be the first graduating group to enter the wage-based H-1B system in March 2026 for FY 2027. Unlike past years where lottery luck played a key role, students will now be ranked based on their offered salaries relative to Department of Labor prevailing wage levels. What can you do?
Target Higher-Paying Roles: Focus your job search on employers and positions that can place you at Level II or above in the prevailing wage system. Specialized skills in fields like AI, cybersecurity, data science, or advanced software engineering typically command higher salaries and improve selection odds.
Consider Relocation: Salary benchmarks vary widely by location. A job that qualifies as Level I in Silicon Valley may count as Level II or III in Austin or Dallas, boosting your competitiveness in the H-1B pool. Strategic relocation can directly impact your chances.
Leverage Hybrid Professional Programs: If you are not immediately competitive in terms of salary, consider joining a hybrid professional master’s program. These programs allow F-1 international students to extend their stay, gain work authorization through CPT, and accumulate U.S. work experience. By the time you apply again, you may be better positioned for higher-level roles that meet wage benchmarks.
Accumulate Experience Early: Use OPT and internships wisely. Even one year of specialized work experience can significantly increase your earning potential and move you up a wage level.
By the time you apply, you'll be navigating the wage-based selection system from day one. That means:
Your academic and internship choices should focus on roles with higher wage potential,
You should build skills in fields that traditionally command better pay,
Early career planning becomes essential—aim for employers who offer above entry-level salaries to improve your ranking.
If you're already on H-1B:
Renewals and transfers typically won't be affected by the new selection criteria,
However, expect intensified competition at higher wage levels, especially for promotions or more senior roles,
On the upside, there might be less competition from entry-level applicants, as the new system favors higher-paid candidates.
The transition to wage-based H-1B selection represents the most significant change to high-skilled immigration in decades. For the hundreds of thousands of international students currently on OPT or planning their American careers, this shift demands strategic thinking, skill development, and careful planning.
The new system isn't necessarily better or worse than the lottery – it's different, and it rewards different attributes. Instead of rewarding luck, it will reward market value, specialized skills, and strategic positioning. This creates both opportunities and challenges for international students.
The opportunity lies in the potential for higher wages across the board, reduced exploitation, and a merit-based system that rewards skill development and specialization.
The challenge lies in the increased difficulty for fresh graduates, the potential geographic concentration of opportunities, and the risk of excluding talented individuals who haven't yet had the chance to demonstrate their market value.
Success in this new environment will require:
The wage-based system is coming whether we're ready or not. The question isn't whether it's fair or unfair – it's how to position yourself for success in this new reality. For international students, that means starting now to build the skills, experience, and strategic positioning that will matter in a world where your wage level determines your visa chances.
The American dream isn't disappearing – it's just becoming more expensive. And for those willing to invest in the skills and strategies that the new system rewards, the opportunities may be greater than ever before.
As immigration policies continue to evolve, staying informed and strategically positioned becomes more critical than ever. The wage-based H-1B system represents just one piece of a larger puzzle that international students must navigate to build successful careers in the United States.