Wage-Based Selection of H-1B Visas Could Cut Out the Lowest-Paid Positions

By John Miano, January 18, 2017

Congress has directed that H-1B visa petitions should be processed in the order in which they are received. But what happens when 236,000 visa petitions show up at USCIS processing centers around the country on one day for 85,000 visas? In that situation it is impossible to identify the order in which the petitions were received.

Congress has not enacted a statute to address this situation so that leaves it up to the agency to decide how to handle it. Over the years USCIS has used a random process to select them – a lottery.

This purely random method has not proved entirely successful. It puts companies that seek a few, highly skilled foreign workers at a disadvantage to companies that file huge numbers of visa petitions for low-skilled, low-wage foreign workers.

There is been some discussion in the media that President Trump could change the systems of visa allocation from one that is purely random to one that takes into account salary. The beauty of making such a change is that the administration can just do it. There are no regulations or statutes governing the order visa petitions should be processed. So changing the procedure for visa processing is an easy move for President Trump to make.

I have no inside knowledge as to what the Trump administration is thinking. I have had many discussions with various people and the general consensus is that there are two ways President Trump could approach the problem.

The simplest is to process the visa petitions in order of salary, from highest to lowest. The drawback to this procedure is that it does not take into account geographic and occupational wage differences.

Another approach talked about is to use the skill levels that already exist in the H-1B program. USCIS would look up the occupation and location on the petition, compare it to the corresponding H-1B "skill level." There would then be up to four random lotteries, one for each skill level. The random selection would start with visa petitions having at least a "Level 4" wage. If there are remaining petitions, the process would be repeated for those with "Level 3" wages, "Level 2" wages, and finally (and if necessary) "Level 1" wages, the lowest. The drawback of this system is that it would require additional work to determine the wage level for each visa petition.

To look at the effect a wage-based selection process change might have, let us assume that President Trump takes that latter option because it is the easiest to visualize. Had such a system been in place last year, the breakdown of petitions by skill level would be roughly:

Level 4: 14,160
Level 3: 28,320
Level 2: 70,800
Level 1: 122,720

Under the system I put forth, every petition where the alien earned a Level 4 or 3 wage would have been selected. The battle would have been at the Level 2 wage, where a petition would have had a 60 percent chance of selection. None at the Level 1 wage would be selected.

Looking forward to this year, if you are an employer planning on making an H-1B petition for FY 2018, you face hard choices. You have to keep in mind that President Trump could announce such a change any time prior to (or even slightly after) the April 1 start of petitions processing.

Changing the system would then create winners and losers. Such a wage system creates greater certainty for employers paying the average wage or higher. The Level 3 wage corresponds to the median wage. If you make a visa petition where the alien is to be paid at or above average, you can be pretty certain that you are going to get your visa. The randomness of the past will be gone for such employers.

Likewise, if you part of the majority of employers who use H-1B to import workers at bottom-of-the-barrel wages, you can be absolutely certain that a petition for Level 1 wage will not be granted.

The great unknown is what will happen in the below-average range (34th to 49th wage percentiles). Will employers that formerly filed huge numbers of visa petitions at Level 1 (17th to 33rd percentiles) wages simply not make those petitions this year or will they raise the salaries to the Level 2?

A change to a wage-based lottery is not a magic bullet for the ridiculously low wages paid to H-1B workers. However, it may provide a force towards raising these wages from absurdly below-average to merely below-average.