On December 3, 2018, the U.S. Department of Homeland Security (DHS) issued a notice of proposed rulemaking that would establish a registration requirement for cap-subject H1B petitions (i.e., petitions filed in the H1B “lottery”). The proposed rule is intended to reduce the costs associated with the H1B lottery system both for employers and the U.S. Citizenship and Immigration Services (USCIS), and increase the percentage of foreign nationals selected in the lottery who have at least a U.S. master’s degree.
Comments for Proposed Rule and Impact for April 2019 H1B Cap Filings
The DHS is accepting comments from the public on the proposed rule through January 2, 2019. It is possible that the rule could be enacted in time for fiscal year 2020 H1B cap cases, which are scheduled to be filed in April 2019. However, the USCIS has acknowledged the possibility of technical glitches arising with the electronic registration system that could prevent it from being implemented this year. Plus, the rule may face legal challenges that could delay its implementation. So, there is still a reasonable chance that the USCIS may still proceed with the standard H1B lottery for the April 2019 filings.
Proposed Registration Program
If implemented, the new rule would require any U.S. employer planning to file a cap-subject H1B petition first to register electronically with the U.S. Citizenship and Immigration Services (USCIS) during a designated registration period. The registration period would begin at least 14 calendar days before the first day of H1B cap filings for the next fiscal year, and then would remain open for at least 14 calendar days. The registration period could be extended if there are insufficient registrations to fill the H1B cap, or if the USCIS determines that it should be extended for some other reason (e.g., technical problems with the registration system).
The employer would need to submit a separate registration for each foreign national it wishes to sponsor for an H1B position. For each registration, the petitioning employer would need to provide certain basic information on both the employer and the foreign national being sponsored, including whether the individual qualifies for the advanced degree exemption (i.e. the “master’s cap”).
Once the registration period is closed, assuming the number of registrations exceeds the H1B cap, a random lottery would be conducted. The USCIS then would notify all the petitioners with selected registrations. Any employer with a registration that is selected would then be given at least 60 days to file an H1B petition on behalf of the selected individual.
Proposed Random Selection Process to Favor Advanced Degree Holders
Another significant change that the DHS proposes is to conduct the master’s cap lottery after the general H1B lottery. Under the current H1B lottery system, the USCIS first randomly selects 20,000 H1B petitions for beneficiaries who qualify for the master’s cap. Then, a separate lottery is conducted, randomly selecting approximately 65,000 petitions from those that were not selected in the master’s cap, along with the cap-subject H1B petitions that did not qualify for the master’s cap.
Under the proposed rule, the order of the lottery would be reversed. First, the USCIS would select approximately 65,000 registrations from all submitted during the registration period. Then, a lottery would be conducted from the remaining registrations eligible for the master’s cap. The USCIS predicts that this would result in a 16 percent increase in the number of H1B beneficiaries who hold at least the eligible U.S. master’s degree.
Attestation Requirements, Ongoing Monitoring of Registration System to Prevent Abuse
For each registration, the employer would be required to attest that the registration is connected with a bona fide job offer and that, if the registration is selected, the employer intends to file an H1B petition for the individual. The USCIS next would monitor the H1B filings after the registration period concluded, to ferret out fraud and abuse. As indicated in the proposed rule, “If USCIS finds that petitioners are registering numerous beneficiaries but are not filing petitions for selected beneficiaries at a rate indicative of a pattern and practice of abuse of the registration system, USCIS would investigate those practices and could hold petitioners accountable for not complying with the attestations…”