Trump Administration Releases Final Rule on H-1B Lottery Process

By Greg Siskind

President Trump’s 2017 Buy American Hire American Executive Order promised to “rigorously enforce and administer the laws governing entry into the United States of workers from abroad” in order to create “higher wages and employment rates for workers in the United States, and to protect their economic interests.” (https://www.whitehouse.gov/presidential-actions/presidential-executive-order-buy-american-hire-american/).

The Order, known as BAHA, has been used to justify dozens of changes in immigration processing in the months since. One of the most recent BAHA initiatives is the release of a new final rule by the Department of Homeland Security regarding the method by which USCIS chooses who will get H-1B visas each year. Under the Immigration and Nationality Act, 85,000 H-1B visas are available each year. 65,000 are available to workers who have at least a bachelors degree or equivalent and are coming to work in specialty occupations. An additional 20,000 are available in a second lottery for graduates of advance degree programs in the United States.

USCIS has sought to make changes to the way applicants are chosen for the two pools of visas. Under the system in place for the last 15+ years, two lotteries are conducted for H-1B visas. The process requires petitioners to file their applications and then initially a lottery for the 20,000 advance degree holders is conducted. Those who are not selected in that lottery are then thrown back in the hopper for the second “regular” lottery for main pool of 65,000 H-1Bs.

USCIS suggested two major changes to this process in a proposed rule published on December 3, 2018. First, instead of requiring petitioners to file complete applications, petitioners would file electronically a pre-application requesting an H-1B with very basic information and a lottery would be conducted based on those “pre-filings”. Applicants selected in this electronic pre-registration process would then be invited to apply for H-1Bs and would be required to file during specific windows of time determined by USCIS.

The second major change is a reversal of the two lotteries. So instead of the 20,000 lottery being held and then the losers being added to the second lottery, the lottery for 65,000 would be held first and anyone eligible for the 20,000 lottery not picked in the first go-round would be included in the lottery for advance degree workers. What this means is that the odds for people eligible in the advance degree lottery will go up – probably by 5 to 10%.

When USCIS announced the proposed rule, they suggested they needed to quickly move things along in order to have the new system in place for the 2020 fiscal year lottery which is held in April of the year before (I.e. April 2019). They noted in the proposed rule that they were considering the option to hold off on the pre-registration aspect of the rule for the first year, but go ahead and switch the order of the H-1B lotteries. On January 30th, USCIS released a final rule exercising that option. USCIS intends to accept applications as they have previously and will start pre-filing next year. But they intend to switch the order of the lotteries for this filing season.

USCIS received a number of comments about the proposed rule. One may wonder how the agency was able to review the comments during a period in which the government was shut down, but that question will probably have to be answered after a Freedom of Information Act request is handled. But the agency did indicate that they were concerned enough by comments regarding the agency’s ability to test a new electronic filing system to delay the implementation of that aspect of the rule.

So who are the winners and losers in this new system? First, employers will save significant dollars by not having to submit full H-1B applications in April each year. They will still need to gather information to be included in the pre-filing and immigration lawyers will still need to analyze whether the worker meets H-1B requirements and the position also qualifies. But the process is clearly less difficult than the current application process and employers will pay significantly less if they are not selected in the lottery. This may encourage many employers to take a shot at filing H-1B applications than under the current system. On the other hand, an unintended consequence may be to encourage staffing companies – arguably USCIS’ target with the new rule – to file many more applications now that the cost in time of participating in the lottery system will be much less.

And obviously those with advance degrees from US universities are winners as their odds of being selected will increase. Many may assume this will increase the level of qualifications of those picked in the H-1B lottery. However, keep in mind that advance degree holders from outside the US will see their odds of approval decrease as well. So there may be a wash or even an overall decrease in qualifications as doctoral level degree holders with foreign degrees lose out to masters degree holders from US institutions. Also, one group that will definitely lose are physicians. 25% of the physician supply in the US is made up of graduates of foreign medical schools who train in US residency and fellowship programs. Under the definition of an advance degree, those doctors are only eligible for the regular lottery. So there will very likely be fewer medical doctors in the H-1B supply as a result of the changes.

Another potential problem employers will face is USCIS’ plan to only allow H-1B applications to be filed by those selected in the lottery during specific filing periods. For the last two years, USCIS has suspended premium processing and H-1B applications have taken 8+ months to get to a decision, often after the beginning of the new fiscal year. One can easily envision those required to wait until several months after selection to file being stuck waiting many months longer to get their workers than they requested.

A common theme with all of the skilled worker visa changes in the last two years has been the inevitable lawsuit. The Trump Administration has been extremely ambitious in the changes they’re proposing and this has led to charges of overreaching the actual laws in place governing the immigration system. That very well could happen with this rule, though it is not clear yet who, if any, will challenge the rule. It may take an employer losing the lottery or winning and then facing undue delays in getting a case adjudicated before we see such a suit.

For more information on the new rule, USCIS has posted a press release which contains a link to the final rule at https://www.uscis.gov/news/news-releases/dhs-announces-final-rule-a-more-effective-and-efficient-h-1b-visa-program.