H-1B Registration System Is Broken But Not Beyond Repair

In late April, U.S. Citizenship and Immigration Services released data showing what the U.S. immigration law community already knew: The H-1B registration system is broken.

This year, USCIS received 780,884 total registrations for just 85,000 visas available under congressionally mandated caps. The data also revealed that more than half of the registrations were submitted on behalf of beneficiaries with multiple registrations — i.e., multiple companies submitted registrations for the same individual. In April, the Wall Street Journal reported that roughly 408,000 registrations were submitted on behalf of just 96,000 individuals.

Employers are required to state that they actually intend to hire individuals they put in the lottery. USCIS raised allegations of abuse of the registration process, saying the large number of individuals with multiple registrations “raised serious concerns that some may have tried to gain an unfair advantage by working together to submit multiple registrations on behalf of the same beneficiary.”

Many of the problems were predicted when the registration system was implemented in 2020 and, if anything, it is surprising that the system wasn’t flooded to this extent sooner.

Before 2020, employers had to file full H-1B petitions the first week of April for H-1B-elgible foreign workers they hoped to hire. USCIS would then conduct a lottery to determine which petitions it would adjudicate.

USCIS designed the new registration system to reduce costs for employers and the administrative burden on the agency. Under the system, employers submit registrations in March on behalf of individuals they intend to sponsor, and then are invited to submit full petitions for those who are selected.

The problem is the registration system created a low barrier to entry. The registration fee of just $10 and minimal required information provide little incentive not to place foreign workers in the lottery. When it proposed the registration system, USCIS mentioned the risk of companies “flooding the system with non-meritorious registrations.”

This problem now appears to be a reality. So how can it be fixed?

Let’s start by giving USCIS some credit. The agency’s decision to release more detailed data than in the past has given stakeholders a peek behind the curtain and provided them a better opportunity to suggest solutions. In its April announcement, USCIS also said it had “already undertaken extensive fraud investigations.”

Furthermore, as the agency works on a proposed regulation to modernize the H-1B program, it has committed to “bolstering the H-1B registration process to reduce the possibility of misuse and fraud in the H-1B registration system.” USCIS has not yet indicated what specific measures it will propose, but these actions show the agency recognizes the gravity of the problem and is working on solutions.

However, the rulemaking process takes time, and according to the most recent regulatory agenda, the proposed H-1B rule is not expected until the end of the year. USCIS has also proposed increasing the registration fee from $10 to $215 as part of a broader proposal to dramatically increase fees to cover costs. The final increase could be smaller, but even a $215 fee might have a limited impact on the number of registrations companies submit.

In addition, uncertain timetables and the possibility of litigation for both the not-yet- proposed H-1B modernization rule and the fee rule — which has been proposed but not targeted to be finalized until March 2024 — make it impossible to know whether changes could be implemented before next March’s registration window.

The future of the H-1B registration process is of paramount concern. In the near term, USCIS should continue to provide as much transparency as possible to the public, including regarding the number of petitions it receives and its actions to address potential misuse of the system. Additional information about whether the agency plans to conduct a second registration lottery would enable employers to plan and set expectations with their employees.

While there is no silver bullet, some possibilities the agency could consider include selecting registrations by unique beneficiary, such that eligibility for H-1B sponsorship does not hinge on the number of registrations filed on a beneficiary’s behalf, and transitioning to online filing in conjunction with a “Known Employer” program.

The agency should continue to seek input from stakeholders and approach this issue thoughtfully but with urgency.

Employers can ill afford another lottery like this year’s, where just 14.6% of registrations were selected. In the absence of congressional action to raise the H-1B cap, which has remained at 85,000 since 2006, more transparency and a well-crafted regulation could help ensure this in-demand resource remains viable.

For all its limitations, the H-1B program remains the primary pathway for high-skilled foreign nationals to remain in or come to the U.S. to pursue a career. The program is crucial to helping large and small employers hire and retain needed talent in industries ranging from tech to health care to engineering. The importance of getting the registration system right cannot be understated.