New Regulation Replaces H-1B Cap Lottery Process with Selection Process Based on Wage Level

By Immigration Attorneys Donald Parker and Victoria Morte

In 2020, the USCIS revised the lottery process, conducting the H-1B Lottery through an online registration system.  Sponsoring employers registered foreign nationals for the lottery online in the first three weeks of March.  In the last week of March, the USCIS first conducted a random lottery including all registered foreign nationals, selecting enough registrations to meet the standard cap, and then conducted a second lottery from the remaining registered foreign nationals who earned a U.S. Master’s degree or higher and who were not selected in the first lottery to meet the advanced degree cap.

H-1B “Specialty Occupation” visas are available in a limited number each year – 20,000 to foreign nationals who have earned a U.S. Master’s degree or higher (the “advanced degree cap”) and 58,200 visas to other foreign nationals whose position and credentials qualify them for an H-1B visa (the “standard cap”).  Because approximately 200,000 foreign nationals apply for the limited number of H-1B visas annually, the U.S. Citizenship & Immigration Service (USCIS) determines which petitions will be processed for an H-1B visa through a lottery system held at the end of March or early April of each calendar year.  H-1B Petitions selected in the lottery are not guaranteed an approval and must be adjudicated by the USCIS.  Petitions that are selected and then approved have an effective date on or after October 1^st of the same calendar year.

On January 8, 2021, the U.S. Department of Homeland Security again revised the H-1B selection process, publishing a final Regulation that eliminates the random lottery selection and replaces it with a selection process based on the Department of Labor’s Occupational Employment Statistics (OES) four-level wage system.  This Regulation will go into effect 60 days after its publication, on March 9, 2021, and is intended to apply to the H-1B selection process for this year’s lottery.  

The new H-1B selection system will operate as follows:

• As has been the case in the past, the first selection process will be with respect to the 58,200 visas available in the standard cap – USCIS will first consider all registered foreign nationals, selecting enough petitions to satisfy the standard cap.  After that is completed, USCIS will conduct a second selection process with respect to  the 20,000 H-1B visas available under the advanced degree cap to foreign nationals who have earned a U.S. Master’s degree or higher and who were not selected in the first process. 

• Within each of these groups, USCIS will select registrations based on the highest OES prevailing wage level that the offered salary equals or exceeds, starting with registrations that meet or exceed level IV and then selecting cases in descending order from OES wage levels III, then II, and then I.  As an example, in the first allocation for the standard cap, all registrations where the foreign national’s offered wage equals or exceeds an OES Level IV wage in their occupational category will be selected first.  The next registrations selected will be those where the offered wage equals or exceeds a Level III wage, and on through Level II and Level I wages, until all 58,200 visas have been allocated.

• Once the number of registrations at an OES wage level exceeds the number of H-1B cap slots available, the USCIS will use a computerized lottery system to select registrations that fall within this wage level.  Once USCIS selects enough registrations to exhaust the available H-1B visas under the standard cap and then the advanced degree cap, no further selections will be made.

• Where an offered wage is lower than the OES wage level I because a private wage survey is used, USCIS will rank the registration in the same category as an OES wage level I.  

• If the foreign national will work in multiple locations, USCIS will rank the filing according to the lowest corresponding OES wage level that the offered wage will equal or exceed.

• Where there is no available OES prevailing wage information for the offered position, USCIS will rank the filing based on the OES wage level that corresponds to the requirements of the position.

The USCIS is currently revising its online H-1B cap registration form to request information on the OES wage level associated with the offered wage and position.  These changes will become effective upon implementation of the final rule. OES wage information provided in the H-1B registration will be compared to any H-1B petition filed in connection with that registration to ensure that the petitioning employer is adhering to the wage level it designated – filed petitions that do not will be denied.  In addition, subsequent amended petitions lowering the wage may be denied if USCIS determines that the petitioner is attempting to reduce the offered wage following selection at a higher wage level.

Note that there may be an opportunity to submit H-1B cap registrations prior to the March 9, 2021 effective date under the lottery system that was used in 2020.  The final Regulation states that registrations “filed prior to the effective date of this final rule will be based on the regulatory requirements in place at the time the registration”.  Since the new Regulation won’t go into effect until March 9^th, and in 2020, the H-1B registration period opened on March 1^st it is possible that H-1B registrations submitted in the first week of March will be exempt from the new Regulation.   

Additionally, whether this new Regulation will apply at all to the H-1B cap selection process this March is unclear.  The incoming Biden Administration may place this Regulation – along with other regulations finalized during the last days of the Trump Administration – on hold in order to review its contents and determine whether it should take effect.  It is also possible that the Regulation will be challenged in federal court and struck down on several grounds.  If the rule is ultimately implemented for the FY 2022 cap season, we can expect that the USCIS will issue instructions on how it will implement the rule in the up-coming H-1B registration system.  

We will closely monitor developments in this area and provide updates on this blog and the Parker Gallini LLP web site.