DHS Publishes Final Rule to Replace H-1B Cap Random Selection Process with Wage-Based Selection Process

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DHS Publishes Final Rule to Replace H-1B Cap Random Selection Process with Wage-Based Selection Process

Today USCIS published a Final Rule amending regulations governing the process by which U.S. Citizenship and Immigration Services (USCIS) selects H-1B registrations for filing of H-1B cap-subject petitions.

When will the Rule take effect?

Unless there is an injunction, the rule is slated to take effect in 60 days, on March 9, 2021, in time to apply to the upcoming FY2022 H-1B selection process.   It is possible that litigation will result in an injunction prior to that date.  Despite receiving almost 1500 comments in response to the proposed rule issued in November, there are no changes in the final rule.  This raises questions about whether DHS properly followed the Administrative Procedures Act.   There are also questions surrounding what the Biden administration may do with the rule, especially given that it was finalized so late in the Trump administration’s term.

Unless implementation of the rule is blocked, we anticipate that USCIS will announce that the H-1B registration window for FY2022 H-1B cap-subject submissions will begin on March 9, 2021.  However, USCIS has not yet announced the registration window for FY2022 H-1B petitions (for employment beginning on October 1, 2021).    Last year USCIS accepted H-1B registrations from March 1, 2020 to March 20, 2020.  When USCIS officially announces the H-1B registration period, we will issue another client alert.

If implementation of the new rule is blocked, we anticipate the registration process would mirror last year’s, with the registration window opening in March, and a selection based on a random lottery occurring.   Again, we will monitor the situation and advise of changes.

What does the Rule change?

The regulation will end the random H-1B lottery process and instead select registrations based on salary.   Under the new rule, USCIS will rank and select H-1B registrations based on those which are offering the highest wages.  The registrations will require information about the salary offered to the prospective H-1B employee.  The salary offered will be compared to the U.S. Department of Labor’s Occupational Employment Statistics (OES) survey wage level for the relevant Standard Occupational Classification (SOC) code for the position, and the geographic area(s) of the employment (the worksite).

In the proposed rule USCIS predicted that under the new system:

  • No entry-level hires paid at a Level 1 OES wage would be selected
  • 75% of those paid at a Level 2 would be selected
  • 100% of those paid at Level 3 and Level 4 would be selected in the lottery

How will the registrations be ranked? 

USCIS will rank and select from among all properly submitted registrations on the final registration date on the basis of the highest OES wage level that the proffered wage equals or exceeds for the relevant SOC code and area of intended employment, beginning with OES wage level IV and proceeding in descending order with OES wage levels III, II, and I.

What if the employer uses a non-OES salary survey?

If the proffered wage is lower than the OES wage level I, because it is based on a prevailing wage from another legitimate source (other than OES) or an independent authoritative source, USCIS will rank the registration in the same category as OES wage level I.

What if the H-1B employee will work in multiple locations?

If the H-1B beneficiary will work in multiple locations, or in multiple positions if the registrant is an agent, USCIS will rank and select the registration based on the lowest corresponding OES wage level that the proffered wage will equal or exceed.

What if there is no current OES wage information for the position? 

Where there is no current OES prevailing wage information for the proffered position, USCIS will rank and select the registration based on the OES wage level that corresponds to the requirements of the proffered position.

Will the new rule apply to both the H-1B regular cap and H-1B advanced degree exemption?

Yes.  But it will not change the order of selection between the two as established by the prior rule.

Will this new rule affect all H-1Bs?

No.  It will only affect cap-subject H-1Bs registrations and petitions.   It will NOT impact H-1Bs for cap-exempt petitioners such as universities.  It will NOT impact cap-exempt beneficiaries such as those applying for H-1B extensions or H-1B transfers.  

Where can I find the OES Wages?

FLC Data Center https://www.flcdatacenter.com/OesWizardStart.aspx

Why did USCIS make this change?

Under current federal regulations, a Labor Condition Application (LCA) certified by the U.S. Department of Labor must be included with each H-1B petition.  The wage may be based on Levels I – IV, depending on the skills required for the position.  Among other things, the LCA certifies that the employer will pay the H-1B beneficiary at least the actual or prevailing wage, whichever is higher, for the occupational classification in the geographical location in which the position is located.  The reason for this requirement is to ensure that wages of the domestic workforce are not depressed.    Employers who violate the terms and conditions of the LCA are subject to civil monetary penalties, payment of back wages, and debarment from the H-1B program.

However, per the related Press Release, USCIS found the existing regulations to provide insufficient protection and the new wage-based selection process is designed to address that.  USCIS seeks to change the H-1B program, which was Congressionally-mandated to be used for specialty occupations (to be eligible for an H-1B, the position must require at least a bachelor’s degree or its equivalent in a specific specialty, and the beneficiary must hold the same), and re-direct the program such that an H-1B may be used to fill only high-skilled, highly-paid positions.

What information will be required with the registration?

USCIS has not yet published details of updated registration form/ process.  However, in light of the new rule, in addition to the information about the employer and employee as was required last year, the new registration process will likely also require details regarding the position offered to the beneficiary, including the job title, job description, worksite location(s), position requirements and salary.

Additional information

H-1B registration final rule

USCIS press release: https://www.uscis.gov/news/news-releases/uscis-modifies-h-1b-selection-process-to-prioritize-wages

Forbes article:  DHS Publishes Final Rule To End H-1B Visa Lottery


This update was prepared by Fausta M. Albi, Partner, Larrabee Albi Coker LLP.

Legal Disclaimer:   This e-blast is provided for informational purposes only and does not substitute for legal advice based on the circumstances of a specific matter.  Immigration laws and policies change frequently, often without notice.  It is therefore important to seek direct legal counsel based upon individual circumstances.


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