U.S. Citizenship and Immigration Services is expected to soon begin taking regulatory steps to reform the H-1B lottery system. The agency has announced that it will propose the following three changes:

  • Flipping the order of the two H-1B lotteries so that applicants with a U.S. master’s degree will have a greater likelihood of being selected.
  • Requiring companies to “pre-register” for the H-1B lottery before they submit completed H-1B petitions.
  • Prioritizing H-1B visa number allocation based on wages, education or other criteria.

Flipping the order of the H-1B lotteries. Under law, the number of cap-subject H-1B visas cannot exceed 65,000 per year, with an additional 20,000 set aside for applicants with a U.S. master’s degree or higher. Currently, USCIS runs the computer-generated lottery for applicants with a master’s degree first, putting any applicants that are not selected in the “master’s cap” into the broader lottery, which is conducted second.

USCIS is expected to propose changing the order of the lotteries, a move that would increase the chances for master’s degree holders being selected. It is not yet clear whether USCIS will use the formal rulemaking process for this proposal, but the agency has said it intends to apply the new process to April 2019 H-1B cap filings. The change would not affect the H-1B application process for employers or employees and only impacts USCIS’s internal processes.

Requiring companies to “pre-register” for the H-1B lottery. This change was proposed in 2011 but never adopted. Assuming that USCIS uses a similar framework, employers would submit a registration for each beneficiary they intend to sponsor for a cap-subject H-1B visa. USCIS would select registrations that would roughly correspond to the maximum number of H-1B visas available under the cap. Companies would then be permitted to file complete Labor Condition Applications and H-1B petitions for only those beneficiaries whose registrations were selected.

This change would have a significant impact on employers. While USCIS has said employers would save resources they would normally spend on compiling full H-1B petitions, it is possible that if the registration window is too close to April 1, companies would end up expending significant time and resources to prepare petitions anyway. USCIS Director L. Francis Cissna has said he intends to have this change implemented before the 2019 lottery, which may be an aggressive timeline given how long the formal rulemaking process takes and because of competing agency priorities. The possibility of litigation also adds to the uncertainty.

Prioritizing H-1B visa number allocation based on wages, education or other criteria. This proposal stems from a 2017 Executive Order by President Donald Trump directing relevant government officials to prioritize allocation of H-1B visas for “the most skilled or highest-paid petition beneficiaries.” BAL anticipates that USCIS will issue a notice of proposed rulemaking that solicits comments on how USCIS should prioritize H-1B allocation in line with the president’s order. While this proposal could have a sweeping impact on H-1B visa allocation, few details on any potential changes are available at this point. It is too early to say whether USCIS will be in a position to implement any changes in the next six months.

BAL Analysis: While the changes that are being discussed are significant, no proposals have yet been published. The extent to which these planned reforms will affect companies’ H-1B cap planning for April 2019 will depend on the timing and method by which USCIS proposes them. BAL will continue following potential changes to the H-1B program and will update clients as news develops. A more detailed analysis of the reforms USCIS is considering is available here.

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

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