New Proposed Rule to Change H-1B Lottery

The Trump Administration has published a proposal to change the H-1B lottery process as soon as 2019. The aim of these changes is to more closely align the H-1B classification with President Trump’s Buy American Hire American (BAHA) Executive Order. The two primary changes would consist of:

• Employer Registration: Under the new proposal, USCIS would require employers to register in advance and identify the foreign national it wishes to sponsor. Registrations would then be the basis of the H-1B selection process. Those with chosen registrations would then file H-1B petitions with USCIS. The registration period would last 14 days and would begin at least 14 days before the first business day in April. Notice of the registration period would be posted 30 days in advance on the USCIS website. If more registrations were received than available H-1B slots, a lottery would be conducted. Unselected H-1B registrations would be held in reserve in the event some H-1B numbers are not utilized.
• Emphasis on Master’s Degrees: The other major change would be in how the additional 20,000 slots for holders of U.S. master’s degrees are allocated. This change would flip the regular and master’s cap selection order. Under the new proposal, the regular cap would be conducted first. After the regular cap selection process, the master’s cap would be conducted from the remaining individuals. This should increase the number of workers selected for positions that require a U.S. master’s degree, since all such degree holders would have a chance at the standard 65,000 slots before going into the exclusive 20,000-slot pool.

There are certainly questions regarding whether or not these changes are an improvement or even will accomplish the goals of BAHA. Por ejemplo, the rules presupposes that persons holding U.S. master’s degrees will be sponsored for jobs requiring more skills and higher wages. However, the master’s cap is administered based on the degree held by the foreign national — not the education the job requires. Moreover, many other factors such as geography and prior work experience factor into the required wage to be paid, which this process does not account for.

The new H-1B process will favor industries that hire individuals with U.S. master’s degrees and will likely come at the expense of industries that do not. This process would also favor persons with U.S. master’s degrees from lower ranking universities over persons with degrees from prestigious foreign universities. This change could have an adverse impact on attracting top-tier international talent.

Aside from policy concerns, employers face many uncertainties surrounding the implementation of these changes for the upcoming year. While USCIS states it would like to implement the changes for 2019, it seems unlikely that such significant changes will be in place with only a few months to go. This means employers are caught in the undesirable situation of needing to plan for both the new process and the old process. We would recommend that employers start identifying candidates for H-1B sponsorship at the earliest possible time as companies may be required to submit information about applicants earlier than ever.

Gee & Zhang LLP will continue to monitor and update regarding changes to the H-1 B lottery. Please contact us with any questions or concerns as to how these changes may affect your business. You may also submit comments to USCIS on these proposed changes through January 2, 2019.