H-1B lottery prioritization rule vacated, current rules expected for FY23 cap season

A federal judge on Wednesday set aside a regulation that would have replaced the current H-1B lottery with a system prioritizing individuals with the highest offered salaries.

Key Points:

• District Judge Jeffrey White ruled that Chad Wolf was not lawfully serving as Acting Secretary of Homeland Security when the Department of Homeland Security (DHS) issued the final H-1B lottery prioritization rule in early January, toward the end of the Trump administration.
• Judge White vacated the rule and remanded the matter DHS.
• Judge White indicated last week that he was “tentatively inclined” to vacate the rule, and noted in his ruling this week that the current Secretary of Homeland Security, Alejandro Mayorkas, had not ratified the rule.
• The lottery prioritization rule had been scheduled to take effect Dec. 31, in time for the FY23 H-1B cap season.

Background: In December 2020, as part of this same lawsuit, Judge White set aside the Department of Labor’s prevailing wage regulation and the DHS “H-1B strengthening” rule. In April, the court allowed the plaintiffs to add a challenge to the H-1B lottery prioritization rule to the case. In June, the court vacated the updated version of the DOL wage rule and allowed the claims related to the lottery rule to continue. The U.S. Chamber of Commerce, National Association of Manufacturers, Presidents’ Alliance on Higher Education and Immigration and other plaintiffs filed a brief in August arguing that the rule was “unlawful three times over,” including because Acting Secretary Wolf was not lawfully appointed.

BAL Analysis: The H-1B lottery prioritization rule would have had a dramatic effect on the allocation of H-1B visas, and this ruling makes it unlikely that U.S. Citizenship and Immigration Services (USCIS) will be able to implement the new process for the FY23 H-1B cap season. At this time, current rules are expected to remain in place, under which USCIS will select registrations through a random lottery as it has in the past. The government has not yet indicated whether it will appeal the ruling. We cannot rule out that the Biden administration could pursue a new regulation to implement a wage-based H-1B allocation process, but this is unlikely to happen before the upcoming cap season.

This alert has been provided by the BAL U.S. Practice group. For additional information, please contact berryapplemanleiden@bal.com.

Copyright © 2021 Berry Appleman & Leiden LLP. All rights reserved. Reprinting or digital redistribution to the public is permitted only with the express written permission of Berry Appleman & Leiden LLP. For inquiries, please contact copyright@bal.com.