In March, USCIS conducted an initial random selection for registrations for the Fiscal Year 2025 H-1B cap. Recently, they determined they would need to select additional registrations to reach the FY 2025 regular cap and as of Aug. 5, USCIS announced a sufficient number of registrations for the second H-1B lottery had been reached and all prospective H-1B petitioners with selected registrations that are eligible to file had been notified.

Only petitioners with selected registrations are eligible to file H-1B cap-subject petitions and every year demand outpaces supply. Under federal law, 85,000 cap-subject visas are available each year, including 20,000 set aside exclusively for advanced degree holders. In recent years, demand for H-1Bs has skyrocketed — even through a global pandemic and an uncertain economy. On top of that, the H-1B registration fee is set to jump from $10 to $215 next year, providing another hurdle for employers hiring highly skilled foreign national talent.

The H-1B program continues to be oversubscribed, and given the low selection rate in recent years, contingency planning is as important as ever. A good H-1B contingency plan for valued employees can set an organization up for success. Whether it is a backup plan for employees whose current work authorization will expire this year or next or an effective talent recruitment plan for future employees, organizations can utilize these common H-1B alternative visa options to better ensure sponsorship:

In this election cycle, the issue of immigration is not just about what is happening at the border. The direction of the H-1B visa program is also on the line.

The H-1B nonimmigrant visa program allows U.S. employers to hire foreign workers in specialty occupations to work temporarily in the United States. This in-demand program is the primary pathway by which employers can recruit and hire foreign workers with expertise in specialized fields such as technology, engineering and healthcare — often filling crucial skills gaps.

Since many immigration policy changes are made through the executive branch, the winner of the election will heavily influence the future of employment-based immigration. We can already predict what both potential futures might look like, assuming a Harris administration would likely continue the modernization initiatives started by President Biden and a Trump administration would bring back policies similar to those it attempted to issue at the end of its first term.

As a reminder, here is a look at the H-1B visa regulations the former president had in the pipeline before the 2020 election and what they could mean for a potential second Trump administration.

Attempted H-1B visa regulations from the first Trump administration

In its final days in office, the Trump administration issued a series of regulations aimed at restricting the use of the H-1B program as part of its implementation of Trump’s April 2017 “Buy American and Hire American” executive order. The order laid the foundation for many of the policies Trump’s administration pursued to restrict employment-based immigration programs. In a second Trump term, we would expect to see similar policy priorities.

Increased wage requirements 

The first of Trump’s H-1B regulations was the October 2020 Department of Labor wage rule, an Interim Final Rule (IFR) that — effective immediately — significantly increased wage obligations for H-1B, H-1B1, E-3 and PERM programs. The rule required that minimum salaries for foreign-born professionals be set far higher than what was typically paid to similar U.S. employees. No advance notice was given to employers, who were left scrambling to adapt.

The rule was blocked in federal court in December 2020, but had it not been, it likely would have had the effect of pricing H-1B visa holders and other employment-based immigrants out of the U.S. labor market.

The DOL published a similar final rule to amend H-1B wage obligations on Jan. 14, 2021, just days before the end of Trump’s presidency. The rule was scheduled to take effect on March 15, 2021 — during H-1B cap registration. After taking office on Jan. 20, 2021, the Biden administration delayed the final rule’s effective date and issued a public request for information to determine how to best approach the issue. A court vacated the Trump-era rule, and the Biden administration has not taken further action on the issue.

While it is unlikely that the same wage rule would be issued in a second Trump administration, as it was vacated in court, we expect that a second Trump administration would resume efforts to increase wage obligations by a significant margin.

Narrowed definition of “specialty occupation” 

The Department of Homeland Security under the Trump administration also issued a second rule, “Strengthening the H-1B Nonimmigrant Visa Classification Program,” on Oct. 8, 2020 — the same day DOL issued the wage rule. This IFR had a 60-day delayed effective date, and therefore did not ignite the kind of chaos we saw following the wage rule. Although this rule was also blocked in court, the Trump administration still attempted to issue a final rule by posting the text of it online a week before President Biden’s inauguration.

Had the rule gone into effect, it would have narrowed eligibility for the H-1B visa, including by providing that a position must always require a degree in a directly related specific specialty to qualify as a “specialty occupation.” In addition, the rule would have heightened evidentiary requirements for positions involving third-party placements and shortened the validity period for those cases.

Limited eligibility for early career professionals 

Finalized in January 2021, the H-1B wage-prioritization regulation would have reshaped the H-1B cap selection process and limited opportunities for early career professionals. The rule was scheduled to take effect March 9, 2021, just before cap registration, but the Biden administration issued a notice on Feb. 8 delaying the effective date. Although it never took effect, the U.S. Citizenship and Immigration Services regulation would have replaced the annual H-1B lottery with a new selection process that prioritized H-1B registrations based on the wage level the petitioning employer would pay the beneficiary.

The proposed prioritization system would likely have eliminated eligibility for Level 1 and many Level 2 positions. Newly graduated international students would have been most impacted, as they are more likely to be hired into entry-level positions that offer Level 1 and 2 wages. In September 2021, a federal court vacated the rule and the Biden administration later withdrew it. Though President Biden did signal support for a wage-based allocation process, USCIS did not take any action to pursue this policy during his administration.

The transition between the Trump and Biden administrations brought about great uncertainty for employers because it was not clear if any of Trump’s rules were going to be in place for the 2021 H-1B cap season, for which companies had already spent months planning. We watched, in real time, as all three Trump rules went through litigation, were revisited by the Biden administration and were ultimately vacated in court.   

Where the deference policy stands 

Along with the restrictive H-1B policies Trump attempted during his first term, another change we would expect to see again in a potential second term is the rescission of the longstanding “deference policy.”

In October 2017, USCIS issued a policy memorandum that took effect immediately, directing USCIS officers to no longer give deference to prior agency determinations in extension of status cases. USCIS officers began reviewing extension cases as if they were completely new petitions. As a result, the agency issued requests for evidence and denials at higher rates than ever before. This led to a great deal of confusion and anxiety among foreign national employees and created challenges and business disruptions for employers.

The Biden administration reinstated the deference policy in April 2021 via policy memorandum. In October 2023, USCIS proposed to codify the policy into the regulations as part of the H-1B modernization proposal, which is currently moving through the regulatory process. Though the Biden administration has moved to make the policy permanent, it is currently only a policy memorandum. If the policy is not codified before Biden leaves office, a second Trump administration would be able to once again rescind the deference policy by simply issuing a policy memorandum — and create the same unpredictable, inconsistent adjudication environment we saw during the first Trump term.

How employers can prepare for the H-1B program’s future 

If Trump is elected for a second term, it is highly likely that the administration would pursue similar policies. Here are three ways you can be prepared for that potential scenario:

1. Stay tuned into the first Trump administration’s thinking and actions on these issues, even when comments on the campaign trail may be inconsistent with past actions as president and current campaign platform.
2. To the extent possible, work with your immigration counsel to file petitions and extensions under current policies.
3. Stay informed about the status of in-flight policies and what’s on the new administration’s agenda. Taking a proactive approach to “what if” scenarios can go a long way in protecting business continuity.

BAL’s Government Strategies team is well-versed in these regulations and can consult your organization on the best path forward. Schedule a consultation with our team to get started.

This article was originally published on Law360.com.  

The H-1B nonimmigrant visa is one of the most popular work authorized visa options among U.S. employers, but the overwhelming demand exceeds the limited supply since H-1B visas are subject to an annual cap of 85,000 visas, with 20,000 specifically reserved for individuals with a U.S. Master’s degree or higher.

When U.S. Citizenship and Immigration Services receives more H-1B registrations than there are visas available (which has been the case for more than a decade),  the agency randomly selects who can file an H-1B petition through a lottery system.

After USCIS conducted a second H-1B lottery selection for Fiscal Year 2025, our inboxes were flooded with questions from clients. Here are our responses to some of the top questions we received.

A quick recap on this year’s H-1B lottery

Before we get into what’s next, let’s quickly recap where we’ve been.

USCIS opened H-1B cap registration for Fiscal Year 2025 from March 6 through March 25, 2024. That same week, USCIS began sending selection notices and starting April 1, petitioners with selected beneficiaries were able to submit H-1B petitions on their behalf. The overall registration selection rate for the first lottery was 25.6%.

In late July, USCIS announced that it would conduct a second H-1B registration lottery out of the previously submitted registrations. The second lottery only applied to the regular cap as the FY 2025 master’s cap numerical allocation had already been met. The second lottery increased the selection rate by 3.1%, resulting in a 28.7% total registration selection rate.

What does it mean if a beneficiary was selected in the second lottery?

So, what’s next for those who have been selected? Well, now it’s time to verify that all the information provided at the time of registration is still accurate or if the case needs to be updated. If it remains accurate, then we’re submitting Labor Condition Applications to the Department of Labor, getting those certified and filing the H-1B petitions with USCIS.

There is a 90-day filing window within which petitioning employers can submit H-1B petitions. The window ends November 7, 2024.

It’s important to note that being selected in the lottery really is just the first step. Being selected in the lottery merely allows the petitioning employer to file an H-1B petition on behalf of the selected employee in which the petitioner must establish eligibility for H-1B status.

What if a beneficiary was selected, but they had multiple employers register for their H-1B?

Something new this year is if a beneficiary is selected by one petitioner, they are selected by all.

In short, if a foreign national received competing job offers, and multiple employers submitted registrations on their behalf, then the individual gets to decide which employer they wish to proceed with and which employer will ultimately file an H-1B petition on their behalf.

Let us be clear though: the individual can’t just take their selection notice to any employer and apply for a job. The petition must be filed by an employer who submitted a registration for that individual.

What if a beneficiary was selected, but circumstances have changed since the registration period?

Given the amount of time that passes between preparing for H-1B registrations and the selection period, especially in the case of a second lottery, no doubt circumstances change.

There are individuals who may have been on time-limited work authorized visa statuses, such as F-1 students on Optional Practical Training whose work authorization may have lapsed and they’ve now changed status, gone back to school or departed the U.S.

We’ve been talking to organizations to see if there is still interest in sponsoring those individuals. For some, there certainly is and they’ve kept in touch knowing that the lottery remained open and there was a chance that a selection could come through. But there are certainly employers who have already severed ties with beneficiaries whose employment authorization lapsed and therefore will not proceed.

What does it mean if an employee wasn’t selected in the first or second lottery?

For those not selected, their registration remains active and in “Submitted” status. USCIS will take in the petitions from the second lottery selections and determine whether they now have a sufficient number to close the annual cap. Until that number is reached, the cap will potentially remain open.

When the annual cap is met and USCIS is no longer accepting H-1B petitions, the status of those cases will change from “Submitted” to “Not Selected.”

Will there be a third H-1B lottery for FY 2025?

It is extremely unlikely that there will be a third round of H-1B selections this year. We were honestly surprised to see a second lottery considering that USCIS has met the annual cap in the first lottery for the past few years. Maybe organizations were a bit more optimistic in March when registering than in the summer when having to file the petition. But given the fact that we only saw a 3.1% selection rate with the second round, we’re likely at that annual cap.

At this point, we’re advising employers to plan as if their unselected employees will not be selected and to move forward with any other potential options available. For example, some employees may be eligible for other visa statuses, such as O-1, TN, H-1B1 or E-3. In addition, some employees may be eligible to work as a dependent of their spouse, if they hold certain immigration statuses.

Whatever your luck in the lottery this year, our team is equipped and ready to help you file a H-1B petition for selected employees, strategize a contingency plan or start preparing for next year’s lottery.

 

Copyright © 2024 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.

As an HR or global mobility professional, your plate is already full. Adding visa requirements to the mix can feel overwhelming. But by familiarizing yourself with the different visa types, you can smoothly navigate the evolving immigration landscape and enhance your recruitment and mobility strategies.

To support your global hiring and relocation efforts, this article explores some of the most common nonimmigrant visa types and their specific requirements.

H-1B visas: Specialty occupations

The H-1B visa is designed for foreign workers in specialty occupations that require theoretical or technical expertise in specialized fields such as technology, engineering and healthcare.

Key requirements: 

1. Employer sponsorship: The employer must offer a job that requires a bachelor’s degree or higher in a specific specialty.
2. Labor condition application: The employer must file a labor condition application, or LCA, with the Department of Labor, ensuring that hiring the foreign worker will not adversely affect the wages and working conditions of U.S. workers.
3. Educational qualifications: The candidate must possess the necessary degree or its equivalent in education and/or work experience.

BAL insight: Previously, the H-1B lottery allowed multiple registrations for the same beneficiary by different employers, increasing the chances for certain individuals. In 2024, USCIS updated its rules and now limits registrations to one per beneficiary, the so-called beneficiary-centric process, regardless of how many employers submit registrations on the foreign national’s behalf. This change aims to level the playing field and give every applicant an equal chance of selection. Even if your H-1B registrations were not selected, BAL can work with you to identify alternative options.

L-1 visa: Intracompany transferees

The L-1 visa is for employees transferring within their multinational company to a U.S. office. There are two categories: L-1A for executives and managers and L-1B for employees with specialized knowledge.

Key requirements: 

1. Qualifying relationship: The foreign national and the U.S. entity must have a qualifying relationship (parent, subsidiary, affiliate or branch).
2. Employment duration: The employee must have worked for the foreign entity for at least one continuous year within the past three years, excluding any time spent in the U.S. during those three years.
3. Position requirements: For L-1A, the position must be managerial or executive in nature. For L-1B, the position must require specialized knowledge.

BAL insight: L-1 applicants can apply under a company’s approved Blanket L petition, which allows applications for the visa directly at a U.S. Embassy or Consulate abroad or a Canadian port of entry (Canadians only). A company may qualify for a Blanket L petition by meeting certain regulatory criteria, including engaging in commercial trade or services, doing business for one year or more with an office in the U.S. and having three or more domestic and foreign branches, subsidiaries and affiliates. L-1B applicants are not eligible to apply under the Blanket if they do not have at least a bachelor’s degree in a related field.

O-1 visa: Individuals with extraordinary ability or achievement

The O-1 visa is for individuals with extraordinary ability in the sciences, arts, education, business or athletics, or extraordinary achievements in the motion picture and television industry.

Key requirements: 

1. Extraordinary ability defined: Having “extraordinary ability” in the fields of science, education, business or athletics means a level of expertise indicating that you are one of a small percentage who have risen to the very top of the field. Whereas extraordinary ability in the arts means distinction, i.e. a high level of achievement in the arts.
2. Employer sponsorship: The O-1 petition must be filed by the foreign national’s employer or a U.S. agent (also known as “petitioner”).

BAL insight: The team at BAL has experience helping foreign nationals obtain an O-1 visa and can assess on a case-by-case basis for eligibility and evidentiary requirements. Check out our case study to see BAL’s visa expertise in action with a biotech company.

TN visa: The United States-Mexico-Canada Agreement

The TN visa allows qualified Canadian and Mexican citizens to seek temporary entry into the United States to engage in business activities at a professional level.

Key requirements: 

1. Citizenship: The applicant must be a citizen of Canada or Mexico.
2. Job offer: The applicant must have a prearranged full-time or part-time job with a U.S. employer.
3. Professional qualifications: The position must qualify as a profession under one of the enumerated occupations in the US-Mexico-Canada Agreement, and the applicant must possess the qualifications to practice in the profession, also as enumerated in the USMCA.

H-1B1 visa: temporary specialty occupation workers from Chile or Singapore

The H-1B1 visa allows specialty occupation workers from Chile and Singapore to temporarily work in the U.S. An annual maximum of 1,400 Chilean national professionals and 5,400 Singaporean national professionals in specialty occupations may work in the U.S. in H-1B1 status.

Key requirements:

1. Citizenship: The applicant must be a citizen of Chile or Singapore.
2. Position requirements: The U.S. position must require at least a bachelor’s degree in a relevant field and the employee must have a relevant degree (or equivalent experience). The salary must be paid by the U.S. company and meet prevailing wage levels.
3. Not portable: The H-1B1 visa is not portable, meaning the foreign national cannot start working for a new employer in the U.S. until a change of employer petition has been approved.

E-3 visa: certain specialty occupation workers from Australia

The E-3 visa allows Australian professionals in certain specialty occupations to temporarily work in the U.S. A maximum of 10,500 Australian citizens per fiscal year are allowed to work in the U.S. in E-3 status.

1. Citizenship: The applicant must be a citizen of Australia.
2. Position requirements: The U.S. position must require at least a bachelor’s degree in a relevant field and the employee must have a relevant degree (or equivalent experience). The salary must be paid by the U.S. company and meet prevailing wage levels.

Final thoughts: emerging visa trends

BAL is committed to helping HR and mobility professionals reduce immigration complexity by guiding you through recent shifts in immigration policy. To help you stay informed, here are a few emerging trends that may impact your approach to hiring.

• Application fee price hikes. USCIS recently implemented a massive overhaul of its fee structure for immigration filings, with fees rising significantly across the board. We recommend using BAL’s USCIS fee calculator to calculate the impact of the USCIS immigration filing fee increases on your program. While the fee hikes are significant, BAL has used them as an opportunity to help employers rethink their immigration strategies.
• Increased scrutiny and compliance. USCIS has increased scrutiny on visa petitions, particularly for H-1B and L-1 visas. Employers must ensure that their petitions are thoroughly documented and compliant with all regulations. Subscribe to BAL’s newsletter to ensure you’re up to date with the latest immigration changes.
• The political landscape. Immigration policies are continually evolving. With the shifting political landscape and the upcoming U.S. presidential election, it’s even more important to stay informed about legislative changes so you can adjust your mobility strategy and remain prepared amid political uncertainty.

Stay informed with help from BAL

Immigration is a complex industry that requires specialized partners to help you navigate the ever-changing landscape in real time. To assist you in managing these challenges, we invite you to join BAL Community — an interactive forum developed exclusively for HR and in-house mobility professionals. By connecting with peers and experts, you can ensure your organization remains compliant and competitive in the global talent market.

Since 2021, the semiconductor industry has announced nearly $80 billion in new investments in the United States. Congress passed the CHIPS and Science Act of 2022 to strengthen semiconductor manufacturing, development and research and design in the United States. Most recently, on July 9, 2024, the Biden-Harris Administration announced an investment of up to $1.6 billion to establish and accelerate domestic capacity for semiconductor advanced packaging.

Importantly, the significant demand for high-end chips is the result of the recent surge of research and applications in artificial intelligence (AI). Advancements in AI research is centered on the use of high-performance chips to construct computing platforms. With the federal funding incentives and an increasing demand for chips, the U.S. semiconductor industry is positioned for high-stakes competition worldwide.

Highly skilled talent for a high-demand industry

The semiconductor industry relies on a highly specialized combination of education, skills and expertise. Identifying key talent plays a pivotal role in this rapidly evolving industry. A shortage of skilled professionals could lead to delays or hinder the full utilization of invested capital.

Companies in the semiconductor industry are in a race to attract and retain talent to ensure their projects progress as planned to secure their market share and further invest in new research areas. As such, companies must be strategic in global workforce planning. This includes ensuring that their foreign national employee population maintains stable and secure options for U.S. employment authorization.

While there is a broad range of U.S. work permit categories, these are some of the most common visa classifications to hire highly skilled foreign national talent into the semiconductor industry.

H-1B specialty occupation visas

H-1B visas are the most sought visa type among semiconductor companies, including but not limited to the following occupations: electrical engineers, electronics engineers, industrial engineers, software developers and logistics engineers.

The H-1B program permits employers to temporarily employ eligible foreign workers for a maximum of six years. One of the significant benefits of the H-1B visa is the possibility of extending the H-1B status beyond the statutory six-year limit if the foreign worker has reached certain milestones in the green card application process.

However, noted limitations to the H-1B visa program are timing and availability. H-1B visas are subject to a registration process and a lottery system. Employers that are interested in registering their employees in the H-1B lottery must plan ahead and implement contingency planning in the event the employee is not selected in the lottery.

L-1 intracompany transfer visas

The second most common visa type, particularly for global semiconductor companies, is the L-1 visa. The L-1 visa category provides opportunities for U.S. employers with qualifying international offices to transfer employees in either managerial (L-1A) or specialized knowledge (L-1B) positions from a foreign qualifying entity to their U.S. entity. The qualified employee must have at least one year of managerial or specialized knowledge experience with the foreign entity within the three years immediately preceding the filing of the L-1 petition.

For instance, companies may utilize the L-1 visa for an employee to transfer semiconductor device fabrication technology knowledge from a foreign entity to the U.S. entity. Companies also tend to transfer managers in different time zones to the U.S. to better manage their U.S. teams against tight project completion deadlines.

The L-1A visa can be renewed for up to seven years. On the other hand, the L-1B visa has a five-year limit. Engineers in the L-1B category may gain managerial responsibilities during their employment in the U.S. They are permitted to amend their status to L-1A to benefit from the additional two years of employment authorization. Companies who wish to sponsor their L-1 employees for a green card tend to start the process early, as it can take several years depending on the employee’s country of birth and visa preference category.

Nationality-specific nonimmigrant visas

Pursuant to bilateral agreements between the U.S. and another country, certain nationalities are eligible for temporary nonimmigrant visas.

• H-1B1 for citizens of Chile and Singapore. The H-1B1 visa shares many common eligibility factors with the H-1B visa. However, unlike H-1B, H-1B1 does not have a six-year limitation, but sponsoring employers can only seek extensions in one-year increments.
• E-3 for Australian citizens. Similar to the H-1B visa, the proposed U.S. position must require a bachelor’s degree (or its equivalent) at a minimum. The six-year limit does not apply to E-3 visas. Sponsoring employers can seek extensions of up to three years indefinitely.
• TN for citizens of Canada or Mexico. The TN visa has a limited list of professional classifications. To qualify for TN status, the proposed U.S. job must fit into one of the listed classifications. The most common professional classification for companies in the semiconductor industry is “engineer.” TN visa status is issued for up to three years and can be extended indefinitely.

O-1 “extraordinary ability or achievement” visas

In general, individuals demonstrating extraordinary ability in business, science, education, art or athletics may qualify for an O-1 visa. Employers in the semiconductor industry tend to pursue this option for their engineers who have an advanced degree(s) and distinguished achievements, including published journal articles, peer review for academic journals, national or international awards and/or employment in a critical or essential capacity for distinguished organizations.

Employers may request up to three years initially and may extend the petition indefinitely in one-year increments. Due to the high legal standard as well as the significant required evidence for an O-1 visa, the preparation process is long and labor intensive. As such, employers should plan accordingly.

Challenge accepted: BAL offers a seamless immigration experience

It is challenging to navigate immigration considerations while balancing the demands of an industry that is positioned to experience explosive growth. For this reason, it is critical for semiconductor companies to engage experienced immigration counsel to plan for and mitigate any possible employment interruption of their foreign national employee population.

BAL is a leading corporate immigration law firm with over 40 years of experience. We partner with organizations in the semiconductor industry and other tech fields to power human achievement, ensuring you have the highly skilled talent you need to be competitive. Our team of legal immigration experts will ensure a timely, compliant process that takes the administrative burden off your plate. Schedule a consultation to learn how we can support your immigration program.

It’s that time of year again for employers planning to secure nonimmigrant talent.

U.S. Citizenship and Immigration Services conducted the H-1B lottery last week to determine which registrations will be eligible to file petitions. Although the data on this year’s lottery selection rates is not yet available, the good news is that the current trend in low H-1B denial rates means a high probability of approval for those who have been selected. This hasn’t always been the case.

H-1B denial rates by year

Despite significant improvements in recent years, H-1B denial rates have fluctuated wildly under the different administrations. From 2013 to 2015, during the Obama administration, the H-1B denial rates for initial employment were 7%, 8% and 6%, according to analysis of USCIS data by the National Foundation for American Policy. They rose substantially to 10% in 2016, the first year of the Trump administration.

With that administration’s more restrictive policies — including the “Buy American and Hire America Executive Order” of 2017 and the “Recission of the December 22, 2000 Guidance memo on H-1B computer-related positions,” which instructed adjudicators to deny petitions for many occupations interpreted as not requiring a bachelor’s degree — denial rates surged from prior years, peaking at 24% in 2018.

Fiscal Year	Denial Rate For Initial Employment
2013	7%
2014	8%
2015	6%
2016	10%
2017	13%
2018	24%
2019	21%

Source: National Foundation for American Policy

During the last year of the Trump administration, denial rates dropped to 13% in 2020 due in part to adverse judicial rulings. Denial rates continued to drop under the Biden administration, hitting their lowest point in 2022.

Fiscal Year	Denial Rate For Initial Employment
2021	4%
2022	2.2%
2023	3.5%

Source: National Foundation for American Policy

Beyond 2024

There was a slight bump in denial rates from fiscal year 2022 (2.2%) to fiscal year 2023 (3.5%), the NFAP analysis showed. The NFAP reported that about 200 medium-sized businesses accounted for two-thirds of these denials, possibly because smaller and medium-sized companies may not have expert counsel or structured immigration programs that can help ensure the right legal requirements are met. For larger companies — which typically utilize dedicated immigration counsel — denial rates are nearer to zero percent. This low denial rate trend is not likely to reverse itself for the remainder of 2024.

Whether the trend will continue beyond that is up in the air. After all, this is an election year. Under a Biden administration, denial rates could hover near the current status quo. However, a Trump administration could be less predictable and return to more restrictive policies.

The upside for employers

The decline in H-1B denials has brought predictability that didn’t exist for employers just a few years ago. For larger employers who utilize immigration counsel, the H-1B denial rate is near zero, compared to nearly 25% in 2018.

This year’s changes to the H-1B selection process do add a bit of unpredictability because beneficiaries selected in the lottery will get to choose among employers if more than one employer submitted a registration on their behalf.

And in the broader picture, the overwhelming demand for a limited supply of H-1B cap-subject visas (just 85,000 per year) still makes planning a challenge. The new selection process may eventually lead to an improved lottery selection rate; however, legislative action is needed to address the perpetual H-1B visa shortfall.

 

Earlier this month, the Department of Homeland Security published a regulation to overhaul the H-1B lottery and move to a one-beneficiary, one-selection system rather than the current employer-focused process. This change has the backing of the business community and is designed to reduce incentives for bad actors to submit multiple registrations for the same individual.

It also has the potential to reduce the overall number of H-1B registrations and improve H-1B selection rates.

Still, we expect H-1B demand to outpace supply once again this year. Under federal law, 85,000 cap-subject visas are available each year, including 20,000 set aside exclusively for advanced degree holders. In recent years, we’ve seen demand for H-1Bs skyrocket — even through a global pandemic and an uncertain economy.

As we discussed in a recent webinar, H-1B contingency planning is as important as ever. It is particularly important to have a backup plan for employees whose current work authorization will expire this year or next year, though it doesn’t hurt to begin planning even earlier.

Some of the more common H-1B alternatives include:

• Nationality-specific nonimmigrant visas. Under bilateral agreements, certain nationalities are eligible for temporary nonimmigrant visas. These visas include H-1B1 specialty occupation visas for citizens of Chile and Singapore, E-3 specialty occupation status for Australian citizens and TN classification for citizens of Canada and Mexico. All of these visa types have some elements in common with the H-1B visa, but there are also some key differences. For example, the TN category is limited to a set list of occupations in the United States-Mexico-Canada Agreement (previously the North American Free Trade Agreement), rather than the H-1B’s broader pool of specialty occupations.
• L-1 intracompany transfer visas. The L-1 category allows companies with international offices to transfer employees in managerial or specialized knowledge positions from a foreign branch or affiliate office to their U.S. offices. Only employees with at least one year of experience in the company’s foreign operations in the last three years are eligible. Some companies may consider longer-term strategies of employing select candidates in their overseas office for a year and then applying for L-1 status. Employers must take into consideration other countries’ residence and work authorization requirements to a brand or affiliate office outside the U.S.
• O-1 “extraordinary ability” visas. Individuals demonstrating extraordinary ability in business, science, education, art or athletics may qualify for an O-1 visa. This category requires evidence of distinguished achievements such as published articles, peer-reviewed activities, major awards, high salaries or employment in a critical capacity for a well-known organization. Fair warning: Applying for an O-1 visa is a long, evidence-intensive process. Candidates should begin at least eight months before they plan to submit their application.
• J-1 exchange visas. Companies may bring foreign students and graduates of foreign universities to the U.S. as trainees for up to 18 months or as interns for up to 12 months. One of the limitations to this category is that employers may not hire a J-1 visitor for a position that is filled or would be filled by a full-time or part-time employee. Exchange visitors also must prove their intent to return to their home country and in some cases must return to their home country for two years at the end of their J-1 status.
• Spousal visas. In some cases, spouses of nonimmigrant visa holders may be eligible for work authorization. For example, L-2 and J-2 visa holders can qualify for work authorization and H-4 visa holders may be eligible depending on how far their spouse is in the green card process.
• Immediate green card sponsorship. This option is available in limited circumstances as an H-1B alternative. For example, it could be an option for employees who still have most of their F-1 STEM OPT work authorization remaining and are not in an impacted green card category. Even if it is not considered as an H-1B alternative, early green card sponsorship may be worth pursuing. BAL is available to help employers determine the best green card strategy, including whether to pursue permanent labor certification (PERM) or a national interest waiver.

Every cap season has its own flavor, and we don’t always know how economic trends and regulatory changes will impact H-1B demand.

We do know the H-1B program continues to be oversubscribed. Given the low selection rate in recent years, we know many employees will be back in the lottery this year. On top of that, the H-1B registration fee is set to jump from $10 to $215 next year, providing another incentive for employers to submit registrations now.

As we said in our webinar: Plan early and often. A good H-1B contingency plan for valued employees can set you up for success this year and well into the future.

Michelle Funk is a partner and the head of BAL’s office in Tysons, Virginia. Gabriel Castro is a senior associate and head of BAL’s office in Los Angeles. Michelle and Gabriel’s recent webinar “Plan early and often: H-1B alternatives in a tight labor market,” is available on-demand here.

 

Michelle Funk, Delya Ghosh, Tiffany Derentz, Martin Robles-Avila, Eileen Lohmann and Matt Dillinger contributed to this article.

If the first few weeks of the year are an indication, it will be hard to miss immigration in the headlines in 2024. Already, it has emerged as a key issue in congressional spending fights and the 2024 presidential campaign, which is beginning to kick into a higher gear. Border policy and campaign rhetoric may drive the news cycle, but federal agencies will continue to work out of the spotlight on regulations that will have a huge impact on business immigration programs. On top of that, the U.S. Supreme Court will decide three cases that could upend current immigration litigation procedures. Here are five questions we are watching:

• Will USCIS overhaul the H-1B lottery in time for the FY2025 cap season?

  Big changes are in store for the H-1B program this year after the Department of Homeland Security published a 227-page H-1B “modernization” proposal in October 2023. One immediate question is whether changes to the H-1B lottery will be in place for this year’s cap season. Under U.S. Citizenship and Immigration Services’ proposal, the agency would shift to a one-beneficiary, one-selection system rather than the current employer-focused process. This proposed change is designed to eliminate incentives for bad actors to submit multiple H-1B registrations for the same individual — and has the potential to reduce the overall number of registrations and boost H-1B selection rates for employers. Business and immigration coalitions have called on USCIS to make immediate changes to the lottery. The agency has indicated that it may finalize the lottery provisions before the rest of the proposed rule and has submitted a final rule for White House review. With H-1B registration expected to open in March, however, the timeline is tight.

• Will the State Department expand its domestic visa renewal pilot?

  The State Department took a big step last month in announcing the launch of a domestic visa renewal pilot program, scheduled to begin Jan. 29. Domestic visa renewal has not been widely available since 2004, and advocates for its revival see it not only as a way to make visa renewal easier for certain individuals but also as a means to reduce the workload at embassies and consulates abroad. The pilot is limited in scope, open to approximately 20,000 H-1B holders whose prior visas were approved during certain time frames at U.S. visa processing posts in Canada and India. No one knows for sure what comes next, but the State Department has indicated that once the pilot concludes on May 1, it will evaluate its success before potentially resuming domestic visa renewals more broadly.

• How dramatically will filing fees increase?

  USCIS is poised to finalize increases to immigration filing fees in 2024 — the big question is by how much. In January 2023, the agency proposed a new fee schedule that would see fees increase by a weighted average of 40% — and more for most high-skilled classifications. Among the biggest increases would be a jump from $10 to $215 in the H-1B registration fee. Business and trade organizations responded to the proposal by saying that while USCIS must adjust fees to cover its costs, the agency should take steps to improve services and reduce fee increases where possible. According to its regulatory agenda, USCIS is targeting April 2024 to publish a final regulation. USCIS submitted the rule for White House review in early January, suggesting the agency may be accelerating its timeline. There will likely be a delayed effective date and litigation could further slow implementation, but employers should have an idea of how dramatic the fee increases will be within a matter of months.

• Will the Biden administration’s AI executive order help ease the green card process?

  In October, President Biden issued an executive order on artificial intelligence that included a call for streamlined immigration processes to help keep the U.S. competitive in AI and related fields. Among other measures, Biden called on the Department of Labor to consider updates to the “Schedule A” shortage occupation list. Employers seeking to sponsor foreign nationals for Schedule A jobs do not require permanent labor certification (PERM) to begin the green card process. The DOL is currently seeking public input on STEM and non-STEM jobs that should be added to the list and recommendations about how to establish a methodology for future updates. Employers will be watching this development carefully: Schedule A has not been updated since 2004, and the ability to bypass PERM for these shortage occupations can save months or even up to a year in the green card process.

• How will federal court rulings affect immigration?

  In the immigration community, all eyes will be on the Fifth Circuit Court of Appeals this year, as it is expected to rule on the legality of the Biden administration’s regulation designed to “preserve and fortify” Deferred Action for Childhood Arrivals, or DACA. The ruling will almost surely be appealed to the U.S. Supreme Court, though the Court likely won’t hear the case during its current term.

The Supreme Court is poised to decide a trio of cases that do not facially involve immigration but could upend immigration-related policy and procedures. The justices heard arguments in November in Securities and Exchange Commission v. Jarkesy, a case questioning the scope and authority of administrative law judges to decide disputes over federal matters, including immigration violations. They heard two other cases on Jan. 17 — Relentless, Inc. v. Department of Commerce and Loper Bright Enterprises v. Raimondo — that challenge the decades-old Chevron doctrine, which requires courts to defer to federal agencies’ interpretations of statutes that are not clear or are silent on the question at issue. Taken together, the cases could have a revolutionary impact on immigration litigation, including the power that immigration judges have over noncitizens and the standard of review used by federal judges in reviewing immigration decisions.

What does all this mean for employers? The business community has shown support for reforming the H-1B lottery, piloting domestic visa renewal and updating the Schedule A list of occupations, all of which, in one way or another, make it easier to obtain a nonimmigrant visa or green card. Employers are understandably less enthused about the fee increases, which could dramatically increase costs amid continued frustration with USCIS delays and inefficiencies. The potential impact of the Supreme Court cases on business is difficult to determine.

The presidential election will also have major consequences for immigration programs. President Joe Biden has generally, though not always, pursued business-friendly policies on high-skilled immigration, while the Republican frontrunner, Donald Trump, took a much more restrictionist tack in his term as president and continues to use inflammatory rhetoric on the campaign trail. What seems clear is that the coming months will determine not only how immigration programs operate in this year but potentially for years to come.

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We sat down with BAL’s legal experts to discuss this year’s H-1B season. 

Question: What are some of the challenges with the H-1B visa program you are seeing so far this year? 

Answer: The cap season was drastically bad for most employers who had registered cases. We didn’t realize that the national average was so low, although we knew that our internal average was falling right into those percentages. But to have less than 20% of registrations selected was unprecedented.  

Q: What are the implications for employers? 

A: The H-1B cap and the lottery process itself has become unreliable because of these low selection numbers compared to registrations. It is forcing employers to plan so much more ahead, and then if they get good candidates who only have one or two chances at the lottery, they are reconsidering whether they should even hire those candidates, which is really a shame. In our economy, and for our U.S. businesses that are trying to attract foreign talent, they are hitting a lot of dead ends. 

Many of our clients are doing contingency planning for their valuable foreign talent who have submitted up to three times and still haven’t been selected in the H-1B lottery. This involves developing training programs for these individuals or finding roles for them in overseas offices. But some are starting to reconsider continuing to recruit from certain foreign programs, such as foreign engineering programs, for example. Particularly, U.S. employers that don’t have international offices and can’t send someone to work in an overseas office, they are considering the E-Verify program so that they can participate in STEM Optional Practical Training (OPT). And they are also starting the permanent residence process early so the individual will have a green card-based work option by the time their OPT expires.  

Q: What do you recommend employers do? 

A: Start planning as early as you can. Unless Congress makes some change, the chances are this cycle of very low selection percentages will continue. It seems to get much lower every year.  

Q: What other options do employers have?  

A: For employers willing to hire students, there is OPT, which is for temporary employment directly related to a student’s major area of study who is here on an F-1 visa. F-1 visas allow students to work part time while school is in session and full time when school is not in session. Students can stay in the U.S. for one year, and up to three years if they are eligible for an extension. 

Another similar option is Curricular Practical Training (CPT), also for F-1 visa students, which allows students to come to the U.S. for training and to work in paid internship positions. CPT allows for full-time or part-time work. 

The main difference between OPT and CPT is OPT can be completed before or after a student graduates. CPT must be completed before graduation. 

 J-1 visas are for students specifically in the U.S. for educational or cultural exchange programs. Students in J-1 status are allowed to work only part time, not more than 20 hours per week, during an academic year and full time only during summer and official university breaks. 

H-3 nonimmigrant visas allow foreign nationals to come to the U.S. as trainees in any field that is not available in their home country and stay for up to two years. 

Q: What are the options for employers who are not hiring students?  

A: Employers can consider hiring foreign nationals from countries the U.S. has immigration or trade-related treaties with, such as Canada and Mexico (eligible for TN visas), Australia (eligible for E-3 visas), and Chile and Singapore (eligible for H-1B1 visas). 

Q: Are you seeing any of the alternatives become more common? Are employers turning toward L-1s for intracompany transferees or O-1s for those with extraordinary abilities, for example? 

A: An emerging trend among larger companies is to establish a contingency plan specifically for their foreign population. 

What we have seen in the last five years among larger clients that have international offices is some activity in developing rotation programs and using the H-3 trainee visa category for that, especially in the manufacturing and engineering industries. Employers tend to have already established training programs that often are at least three to six months of rigorous training before employees really get into their manufacturing or engineering role. So H-3 has been popular, although it is highly regulated and scrutinized by USCIS.  

Others have started contingency planning for L-1s, developing an international rotation program so they can eventually send a talented person they want to retain in the U.S. to work in a foreign location for a couple of years and then bring them back to the U.S. 

Both the L-1 and the H-3 visas require that the U.S. employer have an affiliated office overseas to either transfer employees to or send them to after their training rotation.