Be Prepared for New H-1B Lottery Rule Effective April 1, 2019
Insight & Impact - Labor & Employment Newsletter 03/14/19 Eric Ledbetter, Nneka Umeh
ISSUE: On January 31, 2019, the Department of Homeland Security (DHS) issued a final rule to revise regulations governing H-1B cap-subject petitions. Each year, there are more H-1B petitions filed than new H-1B visas available. This creates the necessity for a selection process. The final rule will change how the current selection process occurs in two ways:
- First, it will reverse the order by which U.S. Citizenship and Immigration Services (USCIS) selects H-1B petitions under the H-1B general cap and the advanced degree cap, effective April 1, 2019.
- Second, the final rule also introduces an electronic registration requirement for petitioners seeking to file H-1B cap-subject petitions. This portion of the final rule is suspended for this year.
IMPACT: Reversing the order of the selection process may face litigation
USCIS will select the number of petitions projected to meet the 65,000 general cap limit through the new selection process. This selection pool will also include all H-1B beneficiaries with a master's or higher degree from a U.S. institution of higher education. Subsequently, USCIS will select a certain number of U.S. Master's or higher petitions projected to meet the 20,000 advanced degree exemption.
While this portion of the rule takes effect April 1, 2019, this reversal appears to be in direct conflict with 8 USC 1184 (g)(5) which states, "The numerical limitations contained in paragraph (1)(A) shall not apply to any nonimmigrant alien issued a visa or otherwise provided status under section 1101(a)(15)(H)(i)(b) of this title who…(C) 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." As a result of this apparent conflict with federal law, DHS is expected to face litigation over the legality of this portion of the new final rule.
Read more Insight & Impact from March 2019:
- New Litigation Relating to Pension Plan Actuarial Assumptions
- NLRB Returns to Its Long-Standing Independent Contractor Test
- States Push Back Against Restrictive Covenants in Employment Agreements
Electronic registration requirement
The DHS final rule adds a registration stage to the established process with the goal of streamlining the existing H-1B cap selection procedures, but does not change the overall number of foreign workers that may be hired under existing statutory authority. This rule provides for a 14-day registration period of at least 14 days prior to the first day a petition can be filed. The registration period will be announced at least 30 days in advance in the Federal Register. After USCIS determines the selected registrants, petitioners will have 90 days to submit the corresponding H-1B petition. In order to construct the registration website and tools, USCIS is suspending the registration requirement for this year's cap season.
Beneficiary information required to electronically register
This final rule does not amend the eligibility requirements for H-1B nonimmigrant classification. Each registration will only be required to include the beneficiary's full name, date of birth, country of birth, country of citizenship, gender, and passport number, with USCIS reserving the option to require "other basic information." USCIS will use this information to check for duplicate registrations during the registration phase. The limited amount of information required to register will simplify the process to apply in the annual H-1B selection process. DHS does not currently have data on how this change may increase the number of registrations, disadvantaging small businesses as larger companies may have access to greater resources to flood the registration system. On the other hand, USCIS' discretion to request "other basic information" introduces uncertainty as to what is required to register for the H-1B cap application process.
Registration selection and notification
Currently, USCIS advises whether it has received sufficient H-1B petitions to fill the cap after accepting all petitions submitted in the first five business days in April. If necessary, USCIS then conducts a lottery to select petitions. Similarly, USCIS will determine whether it is necessary to keep the electronic registration period open beyond the initial 14-day timeframe in order to receive the number of registrations projected as needed to fill the available H-1B cap numbers. Under the new final rule, USCIS will also be able to reopen the registration period and will announce the same on its website.
However, USCIS has not codified an advance period to notify the public should they choose to reopen the electronic registration period if additional H-1B cap numbers remain available. The timing of this subsequent registration period and when and how frequently USCIS will assess registration and petition filing numbers are not specified in the final rule. This variability may increase the amount of time during which a cap petition can be registered, selected, filed, and reviewed, requiring employers to build more flexibility into potential employment start dates for foreign workers.
Even in years during which the registration process is suspended, USCIS will first select petitions submitted for the general cap, including petitions submitted for individuals with a U.S. Master's or higher degree. USCIS will then select from the remaining petitions a number projected to satisfy the advanced degree exemption. Accordingly, DHS estimates USCIS may select up to 16 percent more H-1B cap-subject petitions annually for beneficiaries with a U.S. master's or higher degree.
Once USCIS develops an electronic registration tool for the H-1B cap, companies will initially submit prospective beneficiary information via electronic registration. Companies with registrations selected by USCIS will be invited to submit H-1B petitions during a 90-day filing window. As the H-1B eligibility requirements do not change under the final rule, employers should still conduct an H-1B eligibility analysis prior to submitting an H-1B registration on behalf of a foreign worker.
For more information on implementing the new H-1B lottery final rule or questions on other immigration matters, please contact your local Quarles & Brady attorney or: