February 19, 2019 Douglas Lightman

USCIS H-1B Visa Final Rule Analysis

On January 31, 2019, the United States Department of Homeland Security issued a final rule regarding changes to the H-1B visa program. This change involves reversing the order in which H-1B visas are selected, while also amending how employers apply for them on behalf of potential employees although the latter change will not be implemented for fiscal year 2020.

Brief Background: What is the H-1B visa?

H-1B visas are issued to foreign workers who are going to work temporarily in a specialty occupation field. As a nonimmigrant visa, it is valid for three years and may be renewed for up to six, and in some cases can be extended beyond the 6-year max period if a green card process is underway. While it is possible for an employee to switch to a green card, the process can take years. Employers like nonprofit research organizations or higher education institutions are exempt from the H-1B visa cap.

Employers often apply for H-1B visas for workers in the fields of science, technology, finance, engineering and math. The visa only allows the employee to work at the company for which the visa is approved. Eligible workers must possess a bachelor’s degree or the equivalent in the relevant field. The potential employer must sign an attestation with the US Department of Labor to pay the foreign worker the minimum prevailing wage as per the occupation, location of employment and skill level required of the role.  This attestation is an online application known as the Labor Condition Application (LCA). The application has to be completed and certified prior to submitting the petition for the H-1B visa.

The fiscal year begins on October 1, but employers are not permitted to submit a petition for an H-1B visa more than six months prior to that date. As such, the application process begins on April 1 every year. There is an annual cap of 85,000 H-1B visas and this cap is generally filled within the first few days of April.

The first 20,000 visas are set aside for applicants who have a Master’s degree or higher from a university in the United States. This is known as the Master’s Cap. Once these are filled, the remaining 65,000 H-1B visas go to the other applicants and the individuals with Master’s degrees who were not selected in the Master’s Cap.

However, the order of this H-1B petition selection will change beginning with fiscal year 2020.

Reason for Changes and Initial Proposals

The Buy American and Hire American Executive Order, issued by President Trump on April 18, 2017, instructed the DHS to create new rules and guidance that ensure that the highest-paid and most-skilled workers are more likely to get the H-1B visa. The executive order also directed agencies to protect the interests of U.S. workers.

On Nov. 30, 2018, the USCIS announced that it will introduce an electronic pre-registration for H-1B petitioners with a vision to digitize their organization, migrate the filing process online and reduce the total number of paper applications. This will save employers time and money as they can prepare full-length petitions only once they know they have been selected.

USCIS also proposed a change in the sequence in which the H-1B petitions are selected. It is believed that this reversal in the H-1B petition selection process will have the effect of granting visas to more foreign workers who have a US Master’s degree or higher.

Overview Of Proposal

Electronic Pre-Registration System

The efforts to implement digital systems in the immigration services process is a step forward for the USCIS in keeping with the 21st Century.

The electronic pre-registration system makes the H-1B petition process more efficient and cost-effective for employers. Smaller businesses, which lack the resources of larger companies, may particularly benefit from this change.

Rather than prepare an entire petition, employers will now be required to submit basic information using the electronic pre-registration system. This includes:

i) the name, mailing address and ID number of the employer;
ii) the name, contact information and job title of the employer’s authorized representative;
iii) the name, passport number, country of birth and citizenship, date of birth and gender of the beneficiary along with whether the beneficiary has an advanced degree from a U.S. institution; an
iv) the accredited representative or attorney of the employer.

Employers will not be required to submit the Labor Condition Application (LCA) at this pre-registration stage.

Electronic Pre-Registration: Potential Concerns

When this electronic pre-registration system was announced in 2018, there were concerns that it would not be executed in time for the 2020 fiscal year (April 1, 2019 filing for October 1, 2019 start-date). With uncertainty surrounding its implementation, its effect of streamlining the process for employers before the filing deadline was unlikely. As a result, USCIS has decided to postpone implementation of the electronic pre-registration system until next year.

Delaying the electronic pre-registration also allows the system to be tested further to ensure it works correctly. When the USCIS is ready to put the system in place, it will announce the implementation in the Federal Register. It will also give a minimum of 30 days’ notice of the designated electronic pre-registration period.

An additional concern is the potential rise in frivolous applications due to the relative ease of this electronic pre-registration system. To combat this, petitioners will be required to acknowledge that the information provided is true and accurate and that the intent is to employ the worker as described in the registration. While the DHS cannot guarantee a way to prevent pointless petitions, it does not anticipate a significant issue with it either.

If the number of registrations outstrip available visas, there will be a random lottery conducted in the same manner as the present one with the reverse sequence of the lotteries being the main difference. Applications not selected would be put in reserve.

Employers will then be required to submit full petitions for selected applicants.

H-1B Master’s Cap Reversal

Currently, the 20,000 H-1B category comprising of advanced degree exemptions (Master’s Cap) are selected first, followed by the 65,000 regular H-1B petitions (Regular Cap). The new ruling effectively reverses this with initially filling the 65,000 Regular Cap and then the additional 20,000 Master’s Cap.

The change in the Master’s Cap will be in place beginning fiscal year 2020. This means that the applications received beginning April 1, 2019 will be the first in which the lottery is reversed in this manner.

It is estimated that an additional 5,300 foreign workers who have an advanced degree from a U.S. university will receive an H-1B visa as a direct result of this change.

Technology companies in particular may benefit from this change. It may also ensure that the United States directly benefits from the skills of qualified graduates that its universities have spent time and money educating.

H-1B Master’s Cap Reversal: Potential Drawbacks

While having more qualified H-1B visa applicants with advanced degrees from US educational institutions is a desirable goal, there are a few drawbacks to this reversed system of H-1B petition selection.

One is that it may reduce the number of qualified foreign-trained applicants with the necessary skills who may have done some training in the United States but did not actually obtain a Masters degree in the country.

Another is that it may eliminate high-skilled foreign applicants with only a Bachelor’s degree. The original intent of the Master’s Cap exemption, as passed by Congress, was to ensure that H-1B visas were not restricted solely to workers with advanced degrees.

There are some arguments that the USCIS is interpreting the original statute dealing with the H-1B visa cap in a new way. Some point out that the USCIS has not provided a rationale for the new interpretation and argue that if such a change is to be made, it should be a legislative one rather than having a government agency reinterpret an existing law.

The Bottom Line

While the changes to the H-1B petition process is a step towards the right direction, nothing has changed for employers in terms of process and expectation.

There are no changes to the filing process this year. The USCIS plans to replace this system with an electronic filing system, which needs to be tested further before implementation.

The only difference is the order in which the lottery is conducted. Whether this affects employers’ abilities to staff their workforce in positions that do not require advanced degrees from an accredited US institution or whether it alters the total number of visas issued — that remains to be seen.

For companies that wish to employ foreign workers for fiscal year 2020, the filing window for H-1B opens on April 1, 2019. At Lightman Law Firm, we will continue to monitor this space and keep you updated of its latest developments.

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Douglas Lightman

The award-winning Lightman Law Firm was founded by Douglas M. Lightman, Esq. Mr. Lightman has extensive experience in immigration law and international matters through both work and personal experience. Prior to forming Lightman Law Firm, Mr. Lightman spent several years at an international tax consulting and compliance firm where he focused on international tax consulting and cross border transactions. Mr. Lightman is a United States trained lawyer who received his law degree from Brooklyn Law School and is a member in good standing of the Bar of the State of New York and a member of the American Immigration Lawyers Association, the world's largest organization of immigration lawyers. To discuss your possible case with Mr. Lightman or another immigration lawyer from Lightman Law Firm LLC, call (212) 643-0985 or fill out the consultation request form on your right. A representative of our firm will contact you shortly upon review of your request.