Small Business Employers Take Note of The Changing H-1B

The proposed reform will have a material impact on a program confronting many challenges. 

 

Recently, the Department of Homeland Security issued a Notice of Proposed Rule Making to consider a reform to the H-1B non-immigrant visa program.

The proposed reform would have a material impact on a program confronting many challenges.

“Because of the concern expressed by the current Administration that the H-1B visa program has adversely affected American workers, there has been pressure, consistent with President Trump’s April 18, 2017 Hire American-Buy American (“HABA”) executive order, to reform the program so as to “ensure that H-1B visas are awarded to the most skilled or highest paid petition beneficiaries.” 

On December 3, 2018, the Federal Register published a Notice of Proposed Rule Making (“NPRM”), proposing a change in the way in which H-1B petitions are selected for review.

The H-1B visa is the most feasible work visa for the vast majority of prospective foreign national employees.

The problem has been that, in recent years, demand for these visas has outstripped supply by more than two and one-half times.

Under current law, Congress only allocates about 65,000 visas per year, with an additional 20,000 H-1B visas allocated to advanced degree graduates from qualified U.S. educational institutions.

In past articles, we have commented on how HABA has worked to make it more difficult for newly minted graduates to obtain H-1Bs as reviewers are construing the regulations more restrictively.

The proposed rule is designed to re-enforce the effort to make the H-1B a more merit-based visa, favoring beneficiaries holding advanced degree from U.S. universities and colleges.

The proposed rule, which USCIS plans to implement in the 2020 H-1B cycle (which begins on April 1, 2019), proposes a streamlined process involving a registration period during which employers would file through the USCIS.gov website a limited application to be considered for the H-1B lottery.

The registration information required would include:

(1) the employer’s name and Employer Identification Number

(2) contact information

(3) the beneficiary’s name, date of birth, country of origin, gender and passport number

(4) information on whether the beneficiary has attained an advance degree from a U.S. institution

(5) attorney’s or accredited representative’s information.

The lottery for the 65,000 H-1B visas would be conducted with respect to all registrants, after which a separate lottery would be conducted with respect to the additional 20,000 visas that have been specifically allocated to advanced degree (MA or higher) beneficiaries who graduated from U.S. educational institutions.

According to government analysis, reversing the manner of selection, with a general pool lottery followed by an advanced degree lottery, is expected to increase, over all, the number of advanced degree beneficiaries selected for H-1B status.

Only after the lotteries are conducted would selected-registrants be obliged to file completed H-1B petitions, the idea being that petitioners would enjoy a cost-saving in not having to file H-1B petitions before the lotteries are, actually, conducted.

According to the NPRM, the registration period would be for a period of at least 14 days, immediately preceding the first day for filing H-1B applications for the relevant fiscal year, which is April 1.[2]

Only after a registration is selected for further adjudication would the petitioner have to obtain a certified Labor Condition Application from the U.S. Department of Labor and file a full H-1B petition.

The NPRM proposes that once a registration has been selected, the employer would have up to sixty days to file its H-1B petition.

An innovation in this regard is the proposal that filing periods would be staggered so that some registrants would be obliged to file their petitions, for example, from April 1 through May 30, while others would be instructed to file from May 1 through June 30, in an effort to help USCIS avoid surges in filings.

Referring to the current rule that H-1B employment cannot start less than six months from the petition filing date, the Department of Homeland Security acknowledged that employing a staggered filing system would require modification of this rule so that there could be less than a six-month interval between petition filing and the designated employment start date.

While the proposed reform to the H-1B visa selection process is a laudable effort to impose some order on, what has been, a chaotic and expensive system, the American Immigration Lawyers Association (“AILA”), in its January 2, 2019 Responsive Comment to the NPRM, pointed out that to roll out the system for the 2020 cycle (this April 2019) would be premature.[3]

Among the issues of concern raised by AILA was the prospect that the registration process would result in a flood of registration applications of dubious merit: “By not forcing employers to go through an initial eligibility assessment, there is no incentive for employers who are not well-versed in immigration law and H-1B requirements to abstain from registering any position that they believe mightqualify for an H-1B.”  (Emphasis added in original).

AILA also expressed concern that the electronic system could be vulnerable to hacking and manipulation.

Moreover, it is possible that the cost savings supposedly accruing to employers, as the result of the proposed registration process, is overstated since significant preparatory work would still need to be performed by legal and/or human resources professionals in advance of registration to ensure that a petition meets legal requirements.

Among the other issues flagged by AILA was that the NPRM did not address the importance of allowing H-1B petitioners to file on the basis of expedited (premium) processing. The NPRM also did not address the problems that could be confronted by students whose work authorizations expire prior to the filing of their H-1B petition, since the current rule only affords protections to students after a petition has been filed.[4]

Finally, there is the issue of whether it is good for the process to favor advanced degree graduates from U.S. institutions:  To this point, AILA commented:  “. . . [S]imply possessing a master’s or higher degree from a U.S. institution cannot serve as the sole means by which the value of an individual might be measured, particularly given the varying needs and minimum educational requirements of the U.S. industries and job sectors that depend on H-1B professionals to drive growth and satisfy consumer demand.”

Because of the importance of the H-1B program to many sectors of the economy, we will continue to monitor the Government’s reform efforts and its reactions to the many comments its NPRM has likely generated.

Related articles:

What Are Potential Small Business Impacts of New Immigration Policies?

Hiring Foreign Nationals: What Should an Employer Do?

[1]Because many more petitions are filed than H-1B visas are available, the Immigration Service has conducted a lottery each year. The procedure has been for U.S. Citizenship and Immigration Services to accept H-1B petitions for the first five days of April, after which it would conduct an electronic lottery based on the petitions received. There would be two lotteries; the first would be conducted in relation to the 20,000 visas allocated to advanced degree beneficiaries, followed by a second lottery that would cover all H-1B visa petitioners, including those unselected from the Advanced degree lottery. 

[2]The U.S. Government’s fiscal year begins on October 1, and ends on September 30, so that the lottery conducted on April 1 is for the following government fiscal year; that is why the 2020 lotter is conducted on April 1, 2019, and why the earliest employment start date for the 2020 H-1B cycle is October 1, 2019. 

[3]American Immigration Lawyers Association: “Registration Requirements for Petitioners Seeking to File Petitions on Behalf of Cap-Subject Aliens” (January 2, 2019) [https://www.aila.org/infonet/aila-submits-comments-uscis-h-1b]

[4]Under the current filing system, H-1B petitions are, generally, filed prior to the expiration of students’ optional practical training (“OPT”) affording them an automatic student visa extension and extension of optional practical training through September 30. The staggered filing system, contemplated by the NPRM, could result in filings of H-1B petitions after the expiration of a student’s OPT and student status. This potential problem for students is not addressed in the NPRM.