DHS Final Rule Postpones Pre-registration and Reorders H-1B Selection Process

On January 30th, 2019, the Department of Homeland Security (DHS) published a final rule for the Registration Requirement for Petitioners Seeking to File H-1B Petitions on Behalf of Cap-Subject Aliens. The final rule delays the main component of the regulatory change taking effect — digital “pre-registration” system for employers seeking to sponsor H-1B visas. However, the final rule moves forward with reordering of the selection process.

The goal is to award H-1B visas to recipients with advanced degrees. At a glance, the rule seems to be positive but would be achieved at the expense of other qualified applicants.

Moreover, the new selection process will take effect in time for the FY2020 cap season that begins April 1, 2019.

Selection Process Until Now

In 2004, Congress set a total limit of 85,000 H-1B visas available each year. There are 65,000 H-1B visas available to all applicants and 20,000 cap-exempt visas allocated for advanced degree holders (Master’s degree or higher).

Currently, USCIS selects the first 20,000 advanced degree petitions submitted. All of the remaining petitions then compete for the other 65,000 spots open for all kinds of educational backgrounds.

Selection Process from Now On

The proposed rule switches this selection order. From now on, USCIS will fill the 65,000 cap-subject slots first and then allocate the remaining 20,000 cap-exempt visas to advanced degree holders.

The first problem with the proposed rule is that there could be a cut to the total number of H-1B visas issued. This would happen if the first 65,000 visas are given only to the advanced U.S. degree holders.

In this case, there may not be enough petitioners left who qualify for the 20,000 advanced degree cap-exempt category.  

Such scenario is precisely why Congress wrote into law the cap exemption for foreign nationals who have “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” (8 U.S.C. 1184(g)(5)(C)).

Congress recognized that U.S. employers need a diverse labor market made up of workers with a variety of educational backgrounds. The proposed rule bypasses Congress’ original intent while restricting how many H-1B visas are issued and who will have better chances at receiving H-1B status.

Reversing the selection order could have serious drawbacks for other qualified applicants (including Master’s and PhDs) who obtained their degree(s) outside of the U.S. Moreover, the change would undermine what U.S. employers seek in a competitive labor market.

The rule would essentially cripple U.S. businesses’ ability to meet their need for highly qualified workers at all levels since eligible cap-exempt candidates would fill the cap-subject pool. The new H-1B lottery process provides a possibility for USCIS to avoid filling the 85,000 visa cap.

Why Change the Selection Process?

The proposed rule stems from the “Buy American, Hire American” presidential executive order that directs agencies to find ways to award H-1B visas “to the most-skilled or highest-paid petition beneficiaries.” USCIS argues that changing the lottery order will increase the chances for advanced degree holders from U.S. universities to be selected since they would all be included in the cap-subject lottery before competing for the cap-exempt H-1B visas.

There is no good argument against increasing the number of foreign-national with advanced U.S. degrees who can stay and work in America. However, perhaps there are better means to achieve this end.

Changing the order in which H-1B visa petitions are selected will undoubtedly be to the detriment of other qualified applicants.

The pre-registration requirement won’t go into effect until the USCIS completes the setup of the process. Another notice will be released when the pre-registration is required.