Proposed Changes to H-1B Visa Selection Process Bring Greater Uncertainty, Unpredictability for Employers

Americans can submit a public comment in response to this rule before January 2, 2019

On December 3rd, 2018 the Department of Homeland Security published a Notice of Proposed Rule Making titled Registration Requirement for Petitioners Seeking To File H-1B Petitions on Behalf of Cap-Subject Aliens. The rule would establish a new digital “pre-registration” system for H-1B applications and would change the order in which H-1B petitions are selected.

Ultimately, the stated goals of the proposal – to recruit and retain more H-1B recipients with advanced degrees – are positive, but would be done at the expense of other needed, qualified applicants. These goals can be achieved more effectively and fairly through legislative changes. Further, rushing to implement this process for the FY2020 cap season (beginning April 1, 2019) would force significant costs on employers who have already prepared to apply under the current system.

Stick with us and read on for more information about the proposal.

Background on the H-1B visa

The H-1B visa is a nonimmigrant visa for temporary workers in specialty occupations. It is often used to hire high-skilled temporary workers in Science, Technology, Engineering and Math (STEM) fields. Employers file petitions for each individual H-1B recipient to work in the specific job for which they are needed. In order to be sponsored under the H-1B program, the foreign national must have a bachelor’s degree or equivalent in their field of expertise, and the employer must file a Labor Certification Application (LCA) with the Department of Labor documenting the need for the worker. H-1B status is valid for three years and can be renewed once, for a total duration of six years; however, many H-1B holders are further sponsored for green cards, and may extend their H-1B status annually until the green card number becomes available (which, in certain cases, can take decades).

Each year, 85,000 H-1B visas are available – this ceiling was set by Congress in 2004. 65,000 of the visas are available to all applicants, while an additional 20,000 are set aside for those who have an advanced degree (Master’s or higher) from a U.S. college or university. Some applicants (e.g. those employed by non-profit organizations) are exempt from all caps.

Employers may not begin petitioning for prospective H-1B employees until six months before the beginning of the fiscal year– October 1– when H-1B status may begin, so the application period for H-1B visas opens on April 1st of the same year. When the U.S. Citizenship and Immigration Services (USCIS) receives enough applications to fully satisfy the 85,000 limit, it will not accept further H-1B petitions. Since 2014, USCIS has received far above the requisite amount of petitions within the first week, meaning no cap-subject H-1B petitions are accepted beyond that first week. When this happens, a random lottery is conducted to select the H-1B petitions that will be adjudicated. The first 20,000 petitions received by USCIS filed on behalf of foreign nationals with advanced degrees are exempted from the cap, and the remaining petitions, regardless of education levels, compete for the remaining 65,000 slots.

In Fiscal Year 2019, just over 190,000 petitions were received in the first week petitions could be filed for the 85,000 available visas. Of these, half were eligible for the advanced degree exemption.

Overview of the Proposed Rule

DHS’ proposed rule would make two significant changes to the H-1B petition process:

1. Establish a digital “pre-registration” system for H-1B petitions

2. Switch the order petitions are selected to be adjudicated, with the 65,000 “cap-subject” petitions being selected first, followed by the advanced degree exempted filings

In order to be eligible to receive an H-1B visa, employers would pre-register at least two weeks before the opening of the application window (April 1) with basic information like employer’s name and contact info, the beneficiary’s name and contact information, and their education level. If USCIS receives more than enough petitions to fill the 65,000 cap, they would randomly select from this set of pre-registrations a sufficient number to meet the caps. Those selected here would then be invited to submit full petitions, including an approved Labor Condition Application (LCA). If there were fewer registrations, all would be invited to file.

USCIS claims the pre-registration system will support its effort to digitize the agency, move its processes online, and reduce the amount of paper petitions it has to review. The agency believes the pre-registration will save employers time and money by allowing them to wait until they find out if they have been selected before preparing a full petition.

The second major change is to the sequence in which petitions are selected. Currently, the 20,000 petitions eligible for the advanced degree exemption are selected first, followed by the 65,000 cap-subject petitions (beneficiaries with a Master’s or above from a U.S. institution who are not selected in the first round are eligible to be selected in the second round as well). Existing law, found in 8 U.S.C. 1184(g)(5)(C), says that the cap will not apply to any foreign national who “has earned a master’s or higher degree from a United States institution of higher education (as defined in section 1001(a) of title 20), until the number of aliens who are exempted from such numerical limitation during such year exceeds 20,000” (emphasis added). The “until” language has traditionally been interpreted to mean the 20,000 additional must be filled before eligible applicants are subject to the general cap. USCIS does not provide any rationale for changing the process, which some already argue would be a new interpretation of the statute.

USCIS argues that changing the order of the lotteries will increase the likelihood that H-1B beneficiaries will be those who hold an advanced degree, as the full population of U.S. Master’s degree holders would be included in the cap-subject selections before any are set aside for the exemption. This follows from the the President’s Executive Order “Buy American, Hire American,” which directed agencies to find ways to ensure “H-1B visas are awarded to the most-skilled or highest-paid petition beneficiaries.”  For a more thorough analysis of the rule and its potential implications, read this breakdown from immigration attorney Greg Siskind.

Analysis of the Proposed Rule and Potential Problems

The effort to digitize immigration services has been a focus for this Administration and is desperately needed to move our immigration system into the 21st Century. The proposed pre-registration system could go a long way to reduce the cost of filing petitions and save time, money, and resources, particularly for smaller employers hoping to hire qualified workers.

However, there are serious issues with DHS’ efforts to push the registration rule into effect immediately, and potential problems not addressed in the rule. Similarly, while the goal of increasing the number of advanced-degree holders graduating from US schools who are able to stay and work in the country is laudable, it is not clear this change to the selection process is the best way to achieve it, as it comes at the expense of other qualified applicants and could have other unintended consequences.

Timing
USCIS is proposing to require petitioners to use the digital pre-registration system for the FY2020 application period beginning just around the corner– on April 1, 2019. The final rule governing the process would likely be published just months prior– in February or March of that year. This means that employers won’t have final clarity on the new process until a matter of weeks before the filing period opens. The vast majority of employers filing a thorough and strongly evidenced petition will have already begun to prepare their petitions under the old process anyway, undermining USCIS’ basis for the proposed rule to save time, resources, and paperwork.

Furthermore, especially in light of USCIS’ recent Issuance of Certain RFEs and NOIDs memo, which permits USCIS adjudicators to more readily deny an H-1B filing if it lacks certain information, employers will most likely err on the side of caution to provide a comprehensive filing, which takes time, just in case USCIS does not have the program running by April 1.  USCIS recognizes the challenge to administer the proposed program in time for 2020 filings, and included language allowing the agency to suspend the process for FY2020 if needed; but USCIS has simultaneously signaled its hopes to push the process forward for 2020 without justification.

These timing issues could also become inherent to the H-1B process itself as the agency proposes “staggering” application windows and allowing only 60 days for employers to prepare petitions after hearing back from the agency. Under the current system, delays across the process (including in approving an LCA from DOL or receiving a decision on a petition from USCIS) cause difficulties for workers hoping to begin work on October 1st who do not hear back in time – the staggered application windows could exacerbate these issues.

Potential for False Demand
Because the requirements for registering under the new process require very little information from an employer, there is a risk of employers flooding the system with registrations that are not ultimately followed by legitimate, well-evidenced applications. USCIS acknowledges this risk in their proposal and suggests some ways they will work to mitigate the threat, but even the agency admits “DHS does not currently have a solution for the registration process, or any of its filing processes, that guarantees prevention of all non-meritorious registrations or filings prior to adjudication.”

Changes in Selection Sequence
While few would argue with the goal of recruiting and retaining more advanced degree-holders, particularly those who graduated from U.S. colleges and universities, there could be harmful consequences of USCIS’ proposal here. For one, the reversed process could disadvantage qualified applicants educated outside of the U.S., including those with PhDs and specializations in crucial fields. This could also disadvantage employers seeking to hire qualified and needed lower-level bachelor’s degree-holders, as the cap-subject pool would be crowded by those who are eligible for the exemption.

More concerning is the potential for USCIS to use the new lottery process to avoid issuing the full 85,000 available visas. David Bier of the Cato Institute explains:

Suppose 20,000 master’s degree holders apply during a year, while 65,000 bachelor’s degree holders apply. There should be enough visas for everyone under Congress’s scheme. But under DHS’s regulation, the 20,000 master’s degree holders would be counting against the 65,000 cap throughout the year. Once that’s hit, then there’s maybe 5,000 master’s degree holders left and 15,000 bachelor’s degree holders. But only the 5,000 can get visas under the master’s exemption, resulting in a 15,000 visa cut to the H-1B program.

Congress created the advanced degree exemption because they did not intend the program to be solely for those advanced degrees holders – they recognized a need for workers with different educational backgrounds. This rule could be used to go around Congress’ intent and further restrict not only who is likely to receive H-1B status, but how many.

Legal Justification
This brings us to one of the biggest challenges with this proposal – it is unclear if it is lawful for USCIS to change a process that Congress seemed to already specify, via legislation simply through rulemaking. As noted above, the current process seems to follow from federal statute establishing that advanced degree holders are not counted against the cap until the 20,000 advanced degree exemption H-1B spots are granted. It will be interesting to see how USCIS will argue that the new system, which would first process U.S. Master’s holders in the general cap before selecting the petitions exempted because of advanced degrees, is in line with Congressional intent. Observers are already calling the legality of the proposal into question.

Speak up about the rule

Federal law gives all of us a chance to make our voices heard by submitting a “public comment” on the proposed H-1B regulation. The government must consider each perspective and either explain why they disagree with it– based on facts– or change the rule.

While the proposed rule includes some positive steps and goals in modernizing our immigration system, it is undeveloped and needs input from the very employers who utilize the H-1B program to complement their workforce. If the rule were implemented as it is written today, it would impose massive costs on employers who have prepared to file under the current system, abandoning all of the time- and cost-savings DHS proposes with no clear upside. Further, there are significant questions about the legality of the sequencing of which petitions would be considered. A legislative approach that not only ensures that U.S. employers can hire adequate workers who hold advanced degrees, but also one that ensures they have enough lower-level yet still high-skilled workers, is a smarter and more effective approach. Rather than rushing through this rule, USCIS should work with Congress to pass meaningful reforms like raising the H-1B cap, exempting graduates of U.S. institutions with advanced degrees from caps, and providing them immediate and reliable green card pathways.

You can submit a comment on the proposed rule using our easy comment tool here, or directly through Regulations.gov.