Re: Modification of Registration Requirement for Petitioners Seeking To File Cap-Subject H-1B Petitions; Delay of Effective Date

By Robert Law on March 10, 2021

March 10, 2021

Charles "Locky" Nimick
Chief, Business and Foreign Workers Division
U.S. Citizenship and Immigration Services
5900 Capital Gateway Drive
Camp Springs, MD 20746

Re: Modification of Registration Requirement for Petitioners Seeking To File Cap-Subject H-1B Petitions; Delay of Effective Date

Dear Mr. Nimick:

The Center for Immigration Studies (CIS) submits the following public comment to the U.S. Department of Homeland Security (DHS), U.S. Citizenship and Immigration Services (USCIS) in response to the agency's request for comments on the delayed effective date of the "Modification of Registration Requirement for Petitioners Seeking To File Cap-Subject H-1B Petitions" (H-1B Selection Final Rule), as published in the Federal Register on February 8, 2021. See Modification of Registration Requirement for Petitioners Seeking To File Cap-Subject H-1B Petitions; Delay of Effective Date (CIS No. 2680-21/Docket No: USCIS 2020-0019; RIN 1615-AC61; Document Number: 2021-02665).

CIS is an independent, non-partisan, non-profit, research organization. Founded in 1985, CIS has pursued a single mission — providing immigration policymakers, the academic community, news media, and concerned citizens with reliable information about the social, economic, environmental, security, and fiscal consequences of legal and illegal immigration into the United States. CIS is the nation's only think tank devoted exclusively to the research of U.S. immigration policy to inform policymakers and the public about immigration's far-reaching impact. The Center is animated by a unique pro-immigrant, low-immigration vision, which seeks fewer immigrants but a warmer welcome for those admitted.

I. Introduction

The H-1B nonimmigrant visa program allows U.S. employers to temporarily hire foreign workers to perform services in a specialty occupation, services related to a U.S. Department of Defense (DOD) cooperative research and development project or coproduction project, or services of distinguished merit and ability in the field of fashion modeling.1 Congress defines a "specialty occupation" as one that requires the (1) theoretical and practical application of a body of highly specialized knowledge and (2) attainment of a bachelor's or higher degree in the specific specialty (or its equivalent) as a minimum qualification for entry into the occupation in the United States.2 While certain H-1Bs are not subject to numerical limitation, those are outside the scope of the changes contained in the H-1B Final Rule. Instead, the final rule deals with H-1Bs subject to numerical limit within a given fiscal year, commonly known as the "H-1B cap". The current number of cap-subject H-1Bs that may be granted in a fiscal year cannot exceed 65,000.3 Additionally, Congress has exempted up to 20,000 foreign workers from the H-1B cap provided they have earned a qualifying U.S. master's degree or higher.4

For too long, USCIS has awarded H-1B cap numbers by lottery, an inherently flawed and unfair process. The agency's reason for this approach is founded in administrative convenience, leaving to pure luck which foreign workers obtain H-1B status in a given fiscal year. Initially, this process involved petitioners having to complete full petitions — and pay immigration attorneys substantial fees — and then mailing them in to USCIS. The agency would then run a random lottery on full petitions and reject those not selected for either the general cap or master's exemption. While these petitioners got their H-1B fees refunded, it is doubtful that their immigration attorneys were as generous.

A few years ago, the agency improved the selection process by establishing an electronic registration system through regulation. This innovative solution made two important changes to the H-1B cap selection process: (1) it introduced a cost-saving electronic registration system whereby only those registrations selected would be invited to file a full H-1B petition, and (2) reversed the order which the caps were filled, maximizing the general cap first and then filling the master's exemption. While a noticeable improvement, this structure still retained a lottery for the selection of registrations within each cap. Building off of the H-1B Registration Final Rule, the agency pursued additional rulemaking to eliminate the lottery and replace it with a top-down selection process. CIS supports the H-1B Selection Final Rule as the best method of allocating limited H-1B statutory cap numbers compared to demand and calls for its implementation for the Fiscal Year 2023 H-1B cap selection season.

II. Implementing the H-1B Selection Final Rule

A. Delayed Effective Date of December 31, 2021, Is Sufficient Time for the Agency to Properly Implement the H-1B Selection Final Rule

On January 8, 2021, DHS published the "Modification of Registration Requirement for Petitioners Seeking To File Cap-Subject H-1B Petitions" (H-1B Selection Final Rule) amending the regulations controlling the process by which U.S. Citizenship and Immigration Services selects H-1B registrations for the filing of H-1B cap-subject petitions. Specifically, this final rule established a process where USCIS first selects registrations based on the highest Occupational Employment Statistics (OES) prevailing wage level that the proffered wage equals or exceeds for the relevant Standard Occupational Classification (SOC) code and area(s) of intended employment. The final rule also established the process by which the agency would select H-1B petitions for any year in which the registration requirement is suspended. The H-1B Selection Final Rule was originally set to be effective March 9, 2021.5

However, as a result of the change of administrations on January 20, 2021, the H-1B Selection Final Rule immediately had its effective date delayed an additional 60 days at the direction of the new White House chief of staff. Subsequently, on February 8, 2021, DHS published a new notice in the Federal Register further delaying the effective date of the H-1B Selection Final Rule to December 31, 2021, and seeking public comment on the delay until March 10, 2021.6

In the February 8 notice delaying the effective date to the end of calendar year 2021, the agency stated that:

USCIS has determined that the final rule's 60-day effective date does not afford USCIS sufficient time between the publication of the rule on January 8, 2021, and March 9, 2021, to complete the development and thoroughly test the modifications needed in the H-1B registration system to sufficiently minimize technical risks that result from a compressed testing schedule, as well as to amend policies and train staff to ensure the effective and orderly administration of the cap under the H-1B Selection Final Rule.

In the same notice, DHS says that it "expects" the delayed effective date "will provide USCIS sufficient time to develop, thoroughly test, and implement the modifications to the registration system and selection process and give stakeholders sufficient time to adjust to new procedures arising from the new rule."

Whether or not the agency could have implemented the H-1B Selection Final Rule in March 2021 to apply to the Fiscal Year 2022 H-1B cap season is immaterial. What is clear is that delaying the effective date until December 31, 2021, gives USCIS ample time to develop and test the changes to the registration system and educate the public ahead of the March 2022 registration period for the FY 2023 H-1B cap selection. By December 31, 2021, the agency will have had approximately 14 months to prepare for the H-1B Selection Final Rule from the date the proposed rule published in the Federal Register. Presumably the agency's service center operators and web development teams were actively working on these pieces during the deliberative process of drafting the proposed rule.

Importantly, the H-1B Selection Final Rule fully adopted the proposed rule so there was no last-minute policy deviation that would serve as a setback for full, and successful, implementation. Additionally, the Final Rule's simplicity should limit the amount of development and testing needed. The Final Rule is brilliantly structured to build off of the pre-existing electronic registration system used to allocate the Fiscal Year 2021 H-1Bs without incident. The only minor change, from a technical standpoint, is to add an entry field to the electronic registration where petitioners select the appropriate prevailing wage level that corresponds to each potential foreign worker. From there, the electronic registration system merely needs to select all of the level 4 registrations followed by all of the level 3 registrations. As the agency estimated in the H-1B Selection Final Rule, only at prevailing wage level 2 will there be more registrations than remaining cap numbers. At this point, the system runs a simple lottery to select the remaining invitations among a group of similarly situated and qualified foreign workers.

Further delay or ambiguous signals from DHS about its intention to implement the H-1B Selection Final Rule for the FY 2023 will inject unnecessary uncertainty to the public and fail to maximize the utility of H-1B cap numbers.

B. Commenters Who Question the Legality of the H-1B Selection Final Rule Misunderstand and Misstate the Law

Additionally, I wanted to express agreement with the agency's responses to commenters who claimed that prioritizing H-1B registrations by prevailing wage level was ultra vires or otherwise impermissible. Such commenters misunderstand and misstate the law and I applaud the agency for not capitulating to those baseless claims. As USCIS correctly stated in the proposed rule and the final rule, "Rote ordering of petitions leads to impossible results because petitions are submitted simultaneously. While administering a random lottery system is reasonable, it is inconsiderate of Congress's statutory purposes for the H-1B program and its administration."

Indeed. According to the statute, cap-subject H-1Bs "shall be issued visas (or otherwise provided nonimmigrant status) in the order in which petitions are filed for such visas or status." A literal application of this congressional direction would produce an absurd result. Importantly, Congress did not mandate a lottery when a literal application was impossible. Due to this absurdity, the agency, in the interest of administrative convenience, established the lottery process by regulation. As USCIS subsequently came to recognize, the lottery is "reasonable" but far from ideal.

Recognizing the ambiguity of "filed" in the context of H-1B cap allocation, USCIS a few years ago smartly established the electronic registration process — a precedent step to filing. This earlier step in the process is legitimate, legally sound, and affords the agency great discretion to further refine the registration process. The H-1B Selection Final Rule represents visionary and brilliant thinking and the agency should be commended for creating a mechanism that maximizes the utility of cap-subject H-1Bs.

Similarly, commenters who objected to the decreased likelihood of prevailing wage level 1 registrations being selected as problematic misstate the law. While Congress directed that at least four prevailing wage levels exist, it did not mandate the guaranteed allocation of cap-subject H-1Bs at all prevailing wage levels each fiscal year. Given the limited cap numbers available compared to demand, it is commonsense, and perfectly lawful, for the agency to want to prioritize the highest paid and most skilled foreign workers. By relying on prevailing wage level instead of simply salary, USCIS normalizes the analysis to reward the best skills and wages in a given field and geographic area rather than rewarding higher salaries in expensive coastal cities that nonetheless are lower than fair market value for a similarly skilled American.

III. Conclusion

For too long, one industry (tech) has exploited and abused the lottery system to capture a significant number of H-1B cap numbers, for level 1 and level 2 foreign workers. This reality is not what Congress intended. USCIS should be applauded for correcting this through (1) establishing the electronic registration process as a precedent step to filing H-1B petitions and (2) brilliantly replacing the arbitrary lottery with a strategically sound, and economically promising, structure that prioritizes selections based on prevailing wage levels. The H-1B Selection Final Rule does not change the underlying eligibility criteria for H-1Bs and will not result in fewer cap subject H-1Bs being issued annually. This simplistic but smart regulatory change is just a better way to distribute cap subject H-1Bs. There is no reason the agency cannot have the necessary technical changes to the electronic registration system finalized for the Fiscal Year 2023 selection process in May 2022. The H-1B Selection Final Rule should go into effect on December 31, 2021.



Robert Law
Director of Regulatory Affairs and Policy
Center for Immigration Studies

End Notes

1 See INA section 101(a)(15)(H)(i)(B), 8 U.S.C. 1101(a)(15)(H)(i)(B).

2 See INA section 214(i)(l), 8 U.S.C. 1184(i)(l).

3 See INA section 214(g), 8 U.S.C. 1184(g).

4 See INA section 214(g)(5)(C), 8 U.S.C. 1184(g)(5)(C).

5 See 86 FR 1676.

6 See 86 FR 8543.