|On January 8, 2021, the U.S. Department of Homeland Security (DHS) issued a final rule that would replace the current random H-1B cap registration (lottery) selection process with a selection process based on the prevailing wage level.
Under the regulation, H-1B visa numbers will be allocated according to salary levels, giving priority to those earning the highest salaries in their respective occupations and geographic areas of employment. It would not change the order of selection between the regular cap and the advanced degree exemption.
The final rule is set to take effect 60 days from publication, in time for the FY2022 cap filing season this spring. The rule is vulnerable to legal challenges in federal court on both procedural and substantive grounds. The rule could also be placed on hold by the incoming Biden Administration as it reviews regulations finalized in the last days of the Trump Administration. (However, note that the incoming Biden Administration has expressed general support in its immigration platform for the concept of H-1B cap allocation based on wage level. At the same time, the platform recognizes the value of retaining foreign talent, in calling to expand the number of visas for high-skilled workers and exempt recent graduates of U.S. Ph.D. programs in STEM fields from visa caps.)
Under the final rule, allocation of H-1B quota numbers would be based on the highest OES prevailing wage level that the offered wage equals or exceeds, starting with Level IV, and then continuing to select H-1B petitions in descending order from OES wage Levels III, II and I. A computerized lottery would then be used if the number of registrations for a specific wage level exceeded the number of H-1B cap slots available. In the proposed rule, DHS predicted that no individuals paid Level 1 wages would be selected for H-1B petitions, and about 25% of individuals who would receive Level 2 wages also would not be chosen. DHS asserted that everyone at Level 3 and Level 4 would be selected but concedes that many more individuals at Level 2 wages may be shut out of petitions if there are more registrations submitted than in the past for H-1B visa holders at Level 3 and Level 4 wages.
In preparation for the rule, DHS is currently revising its online H-1B cap registration form to collect the wage and occupation classification data needed to rank registrations. If the online registration tool is not configured in time for the FY2022 registration cycle (commencing in March 2021), USCIS could suspend the online cap registration process, and instead require employers to submit fully completed H-1B petitions for selection under the H-1B cap, as was the practice in the years prior to 2020.
McCown & Evans is closely following the implementation of this rule and will provide updates as additional information is released.