The Biden Administration issued a memo on January 20th immediately freezing “midnight regulations” that the Trump administration issued but had not yet taken effect within 60 days of the election and withdrawing all pending rules that had not yet been published in the Federal Register.
The regulations implemented by the Trump Administration were:
- Changing the H-1B lottery selection process from first filed to higher salary/more skilled first;
- Increasing Department of Labor’s prevailing wage requirements to higher salary percentiles for H-1B visa holders;
- Placing additional obligations on both employers that place visa workers at third-party client sites and on the end-client companies where those workers are placed.
Let’s dig into what this means for this year’s H-1B cap season.
- The Final Rule on Strengthening the H-1B Nonimmigrant Visa Classification Program- Withdrawn
On January 15, 2021, after extensive litigation and a prior unsuccessful attempt in October 2020, to issue an interim final rule, the Department of Homeland Security (DHS) posted an advance (but not yet published) copy of a proposed final rule entitled “Strengthening the H-1B Nonimmigrant Visa Classification Program.”
After the prior interim final rule was rebuked by the courts for failing to follow proper rulemaking procedures as an interim final rule. The Trump administration then attempted to issue a final rule to change how (USCIS) interprets employer-employee relationships for H-1B workers at third-party worksites.
It would have placed increased scrutiny and regulatory burdens on all employers that place H-1B workers off-site at other companies’ locations, including outsourcing companies, staffing agencies, and information technology consulting businesses.
In addition, under the direction of this rule, the DOL was already in the process of revising its own guidance to require certain “secondary employers” (i.e., the third-party worksite companies) to prepare and file their own Labor Condition Applications (LCAs) on behalf of H-1B workers placed at their worksites.
These changes would have increased the request for evidence (RFE) and denial rates for many H-1B employer beyond the all-time highs of denials that the Trump Administration placed on American companies desiring to hire H-1B visa holders.
However, the agency was unable to timely publish the final rule in the Federal Register before President Biden took office, and, as a result, the rule will be automatically withdrawn. While it unknown the level of scrutiny USCIS and the DOL will place on H-1B employers now, it will likely be significantly less negative under the Biden administration.
Result: Higher Approval Rates for H-1Bs.
- H-1B Cap Wage Selection Final Rule— POSSIBLE FURTHER DELAY
On January 8, 2021, the Trump administration published a final rule that considerably changes the lottery system for H-1Bs. This rule favors higher salaried positions. Under the new rule, USCIS will rank lottery registrations in order of the highest wage levels for each occupational classification.
Lottery preference will then be given to H-1B petitions at the highest levels, which will increase their odds of selection. Conversely, this new rule is expected to decrease the chances of H-1B petition selection for those companies that do not pay H-1B workers’ salaries at the highest wage levels.
At the time of the rule publication in early January 2021, it was not yet clear whether USCIS would have sufficient time to implement this new wage prioritization rule before the annual lottery registration process occurs in March 2021. Practically speaking, employers have been stuck waiting for guidance to fully plan for the upcoming H-1B lottery season.
Now, pursuant to the Biden administration’s suggested regulatory freeze on rules enacted within 60 days of the election, DHS is directed to “consider further delaying, or publishing for notice and comment proposed rules further delaying, such rules beyond the 60-day period.” Given this newly directed delay, it is possible that the wage-prioritized selection process will not affect this year’s H-1B lottery.
Result: Likely will not go into effect this season
DOL Strengthening Wage Protections Final Rule— DELAYED
On January 12, 2021 DOL published a final rule to increase the prevailing wages required for H-1B, H-1B1, and E-3 visas, as well as PERM labor certification processes.
The rule increased the current wage system for prevailing wages. Starting in July 2021, and continuing through June 2024, it was expected that the rule would significantly increase prevailing wages over the course of the next three and a half years. This would have adversely impacted the ability of many employers to file visa petitions and green cards.
Now, under the frozen “midnight regulations” memo, it is expected that these prevailing wage changes will be delayed for at least 60 days and that the agency should “consider opening a 30-day comment period to allow interested parties to provide comments about issues of fact, law, and policy raised by those rules, and consider pending petitions for reconsideration involving such rules.” It remains unclear whether the Biden administration will attempt to revise or rescind this prevailing wage increase rule. However we should expect to see action taken during the first few months of 2021.
Result: Unknown. There are advocates for higher wages that may have impact on an increased wage. The Question is whether the Biden Administration will withdraw, change or accept the Trump regulations.
So, there you go, higher approvals, same lottery and same wages as last year likely for this year’s H-1B.