DHS Finalizes Rule to Prioritize Selection of H-1B Registrations with Highest Salary in Annual Lottery
The Department of Homeland Security (DHS) is changing the way the annual H-1B lottery is conducted so that priority is given to registrations with the highest wage level. This final rule will be published on January 8 (tomorrow), and take effect 60 days thereafter on March 9, 2021. The effective date means these changes will apply in the upcoming annual lottery in March 2021 unless legal action is taken to prevent the rule from going into effect. [Fingers crossed!]
Under the new rule, USCIS will sort and rank the registrations for the annual H-1B lottery based on wage level offered, and prioritize selection of the ones with the highest wage level (Level 4). Specifically, DHS will revise the H-1B registration form to ask which of the four prevailing wage levels is being offered to the prospective H-1B worker as provided on the OES online wage library, which is typically used to complete the Labor Condition Application (“LCA”). Although a completed LCA is not required for the registration process, the OES online wage library will need to be consulted to identify the SOC code for the occupational category and the corresponding wages in the area of intended employment.
Generally, the four levels of a prevailing wage are classified as follows: Level 1 is entry level; Level 2 is for qualified workers; Level 3 is for experienced workers; and Level 4 is for fully competent workers. If an employer is relying on an alternative wage survey, it will be treated as a Level 1 wage. DHS notes that in the last two years, nearly 70% of the registrations were for H-1B workers at Level 1 or Level 2 wages.
If USCIS receives more registrations at a particular level than the projected number needed to meet the annual limit, then it will run a random selection of all registrations within that particular wage level. If USCIS does not receive more registrations than H-1B visas available for that fiscal year, then all registrations will be selected. The registration window also would remain open until the annual limit for H-1B visas is reached.
DHS originally proposed this rule on October 28 2020, explaining that salary is a reasonable measure for skill level and/or value of the worker, and the H-1B visa program should be for the most highly skilled, most valuable, and highest paid workers. DHS also reasons that the purely random selection process hurts US employers who cannot optimize their chances for selection.
The agency received 1,103 public comments in response to the proposed rule from individuals, professional associations, trade and business associations, employers, law firms, advocacy groups, schools/universities, lawyers (including our firm), and research organizations in both opposition and support of the proposed rule. It disagreed with all the comments expressing concern that the emphasis on the highest salary for selection shuts out new graduates, entry level professionals, medical residents, and healthcare workers.
The agency also declined requests to defer implementation of this new wage-based ranking system to next year in 2022.
By way of background, there is an annual limit to the number of H-1B visas available. There are approximately 65,000 H-1B visas available and an additional 20,000 H-1B visas available for individuals with a U.S. master’s degree (or higher). Because demand for the H-1B visa usually surpasses the annual limit, USCIS opens a registration period on March 1 for three weeks. If at the end of the three-week window it gets more registrations than the number of H-1B visas available, it runs a random lottery the last week of March. It first selects the 65,000 H-1B visas. Then, it pulls all the US master’s degree holders from the pool of registrations that were not selected and runs a second lottery for the 20,000 H-1B visas. Employers whose registrations have been selected are notified by April 1.
We will continue to monitor the situation and provide updates as we have more information.
This update is for informational purposes only. Should you wish to discuss this development further, please do not hesitate to contact me.