On January 7, 2020, the Department of Homeland Security (DHS) released its final rule to amend regulations governing the process by which U.S. Citizenship and Immigration Services selects H-1B registrations for filing of H1B cap-subject petitions. 86 FR 1676. Should the registration process (implemented in 2020) be suspended, the final rule would apply to the filing and selection of actual H-1B petitions.
The new rule focuses on the impact of wage on whether or not the registration is selected in the H1B lottery. By way of background, the Department of Labor splits H1B wages into four levels:
Level I – entry-level workers (no experience necessary).
Level II – qualified employees (1-2 years of experience, generally).
Level III – experienced employees (up to 5 years of experience, generally).
Level IV – fully qualified employees (substantial experience).
An H1B wage depends on the job, the amount of experience required to perform the job and the geographic location of where job will be performed. Prior to the publication of the new rule, USCIS randomly selected H-1Bregistrations (and thus the cap-subject petitions). Under the new rule, USCIS will rank and select H-1Bregistrations based on the amount of the wage offered, as per the Occupational Employment Statistics (OES) wage level for the relevant occupation (SOC) code and geographic area(s) of intended employment.
So, for example, if 1,000 H-1B registrations for software engineers in the Los Angeles area are filed, USCISwill initially select only the registrations that offer a Level 4 wage. This process of giving preference to registrations with Level 4 wage will be applied to each occupation in every geographical region. Assuming USCIS receives more H-1B registration with wage Level 4 than the annual numerical quota of 85,000, then all of the selected registrations will be subject to the H1B lottery. Under the new system, provided there are visa numbers under the cap left, once all Level 4 wage registrations have been selected, the process will then move on to include registrations with wage Level 3 and so on.
This final rule will benefit employers who are able to pay H-1B workers a wage corresponding to OES wage Level 3 or 4 because it will increase their chance of selection in the H1B cap selection process.
It is likely that the new rule will be challenged in courts or even reversed by the incoming Biden Administration. Nonetheless, employers planning to file new cap-subject H-1B petitions in 2021 should plan in accordance with the new rule and consider whether they can increase the offered wage to maximize their chance of getting selected in the H1B lottery. The budgeting process for 2021 has ended for most employers, but those who can make adjustments in the offered wage may be rewarded in the H-1B registration process.
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ETA (January 20, 2021):
Today, January 20th, the Biden Administration placed a temporary, 60-day regulatory freeze on certain rulemaking, including the rule listed below. As such, the implementation of this rule is suspended.