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On December 3, 2018, the Department of Homeland Security (“DHS”) published a notice of proposed rulemaking seeking to require petitioning employers to electronically pre-register with U.S. Citizenship and Immigration Services (“USCIS”) during a designated registration period in connection with their H-1B cap-subject filings. The proposed rule also seeks to invert the lottery selection process by which USCIS randomly selects cap-subject H-1B petitions for adjudication. By way of background, the H-1B visa program is amongst the most popular and widely used employment-based visa programs for foreign nationals seeking to work in the United States with a U.S. employer. The law mandates an annual cap on the amount of new H-1B visas that can be issued in a fiscal year: 65,000 for regular cap petitions and 20,000 for petitions that qualify under the Master’s cap (i.e., beneficiaries with a Master’s degree or higher from a U.S. institution of higher education). Because demand consistently exceeds the number of H-1B visas available in a given year, USCIS has historically conducted a computer-generated lottery in which H-1B petitions received, typically during the first week of April, are selected at random for adjudication. To illustrate this trend, in FY2019, USCIS received 94,213 regular cap petitions and 95,885 Master’s cap petitions.

DHS’ new proposed rule contemplates two changes:

  1. Requiring petitioners seeking to file cap-subject H-1B petitions to first register electronically during a designated registration period. In promulgating the proposed change, DHS stated that it anticipates that this electronic registration process would reduce overall costs for petitioners and create a more efficient and cost-effective overall H-1B cap petition process for USCIS by helping to alleviate massive administrative burdens as the agency would no longer need to physically receive and handle hundreds of thousands of H-1B petitions and supporting documentation before actually conducting the lottery selection process. USCIS also explained that it would help to reduce waiting times for cap selection notifications, which this year ran well into September.
  2. Reversing the order in which regular cap and Master’s cap petitions are selected at random for adjudication. Currently, in years when the H-1B cap and the advanced degree exemption are both reached within the first five business days that H-1B cap petitions may be filed, the advanced degree exemption is selected prior to the “regular” H-1B cap. The proposed rule would reverse the selection order and count all registrations or petitions towards the number projected as needed to reach that H-1B cap first. Once a sufficient number of registrations/petitions have been selected for the regular H-1B cap, USCIS would then select qualifying registrations or petitions towards the advanced degree exemption. According to DHS, this proposed change would increase the chances that beneficiaries with a Master’s or higher degree from a U.S. institution of higher education would be selected under the H-1B cap and that H-1B visas would be awarded to the most-skilled and highest-paid beneficiaries. The agency projects that this new proposed process could result in an estimated increase of up to 16% in the number of selected H-1B beneficiaries with a Master’s degree or higher from a U.S. institution. The agency’s position is that this would render the selection process and overall H-1B program more “meritorious” and would better further the interests of the current administration’s Buy American and Hire American Executive Order.

As a part of the process of proposed rulemaking seeking to amend the regulations, there is now an open period for the public to submit comments regarding the proposed changes. Comments must be received by January 2, 2019.