USCIS Proposes Significant Changes to the H-1B Lottery Process

On December 3, 2018, the U.S. Department of Homeland Security (DHS) issued a proposed rule which, if finalized after notice and comment, would significantly change the H-1B lottery process. These proposed changes further implement the 2017 Buy American Hire American executive order. 

Background about H-1B visas

H-1B visas are available for professional-level workers and are designed to help U.S. employers supplement the U.S. workforce with skilled workers for positions involving the theoretical or practical application of a body of highly specialized knowledge. New or initial H-1B visas are statutorily “capped” at 65,000 visas per year, with an additional 20,000 H-1B visas (“advanced degree exemption”) made available specifically to individuals who have a master’s level or higher degree from a U.S. educational institution. H-1B visas are approved to start with the federal fiscal year (October 1), and applications are first eligible for submission during the first week of the prior April each year. Due to oversubscription of these visas (198,460 applications were filed in 2017), a lottery system is used to select applications in this lottery.

The Buy American Hire American Executive Order

On April 18, 2017, President Trump signed the Buy American, Hire American executive order with the goal of promoting the purchase of American-made goods and the hiring of American workers. The executive order specifically targeted the H-1B program:

In order to promote the proper functioning of the H-1B visa program, the Secretary of State, the Attorney General, the Secretary of Labor, and the Secretary of Homeland Security shall, as soon as practicable, suggest reforms to help ensure that H-1B visas are awarded to the most-skilled or highest-paid petition beneficiaries.

Since the President signed this executive order, DHS and U.S. Citizenship and Immigration Services (USCIS) in particular have taken a series of steps with the ostensible goal of implementing this directive.

The Proposed Rule

The proposed rule would make two major changes designed to streamline the H-1B submission and selection process and to increase the number of H-1B visas allotted to individuals eligible for the advanced degree exemption.

Electronic registration

The first major change would replace the current lottery process, which involves the submission of paper applications, with an electronic registration system. This rule would first institute a registration process and require that all employers wishing to submit H-1B petitions for the fiscal cap season pre-register during a specific period. Although specific details of the registration process remain unclear, the proposal would establish an electronic registration system and designate a period where any employer seeking to sponsor a new or initial H-1B worker would need to register its intent to apply for a specific individual. The registration would be used to determine if there is oversubscription for the year, and to notify employers if their application(s) is selected for review. Therefore, physical H-1B petitions would only be filed for petitions that have been confirmed for selection. 

To prevent employers from over-registering “with non-meritorious registrations,” or hedging their bets by registering cases without intent to follow up with actual petitions for these individuals, the rule would only allow petitioners to file one registration for a beneficiary per fiscal year and petitioners would be required to attest to their intent to file a petition for each beneficiary they sponsor.

If the cap is not met during the registration period, applications can continue to be accepted on a rolling basis after the initial acceptance date until the cap is met. The proposed rule also contains provisions for keeping a “reserve” of unselected registrations or possibly re-opening the registration period if the additional selected petitions do not result in the issuance of all statutorily available H-1B visas.

It is not clear at this time whether this means that employer registration will be required for the 2020 Fiscal Year in April 2019 — that will depend upon whether the rule is enacted as written and whether USCIS is able to prepare and implement the necessary technology in a timely fashion. The rule permits delaying this requirement if the technology is not available in time to be utilized in the upcoming cap season.

Increasing the selection of Masters/Advanced Degree cases

The rule also seeks to increase the selection rate of new H-1B visa petitions for individuals eligible for the advanced degree exemption. Currently, USCIS first selects the 20,000 “master’s cap” petitions — those seeking to sponsor workers who have a U.S. degree at the master’s level or higher — before selecting from all remaining petitions the remainder of the available number of visas. The new rule would reverse this order — selecting the 65,000 petitions for review and then selecting the additional 20,000 from the pool of petitions eligible for the advanced degree exemption. Statistically, this would increase the chances of selection for this exemption.

USCIS estimates that this would increase by about 16% the number of selected petitions eligible for the advanced degree exemption. It stands to reason that those petitions which are ineligible for the advanced degree exemption have a lower chance of selection under this rule.

Written comments on the proposed rule will be accepted through Jan. 2, 2019.

Client Takeaways

• Employers should be prepared for a more “adventurous” H-1B lottery process in 2019 than in prior years! DHS has carved out an aggressive timeline for implementing this new rule with heavy reliance on relatively untested technology for the new registration platform. If the rule is enacted in its present form, employers seeking to sponsor new H-1B workers next year should be prepared for the use of a relatively untested platform at a critical time in the H-1B sponsorship process.
• Employers should be mindful of the greater likelihood of selection of individuals eligible for the advanced degree exemption in the H-1B lottery and, conversely, of the lower likelihood of selection of individuals ineligible for this exemption.

As always, we encourage employers to evaluate their workforces and determine which employees or incoming staff should be sponsored for next year’s lottery at the beginning of 2019, if not earlier. We will continue to keep clients abreast of the status of this rule. Employers wishing to submit a comment on the proposed rule can do so at https://www.regulations.gov or by mail.