January 31, 2019

On January 31, 2019, DHS published a final rule in the Federal Register that amends the regulations governing petitions filed under the H-1B visa lottery. The final rule is effective April 1, 2019, though DHS will suspend the electronic registration requirement for this year’s H-1B cap. Details about the final regulation are outlined below under the January 30, 2019, update.

January 30, 2019

On January 30, 2019, DHS released a copy of a final rule that amends the regulations governing H-1B petitions that are filed under the H-1B cap (commonly known as the “H-1B visa lottery”) for beneficiaries counted towards the H-1B regular cap, as well as beneficiaries with advanced degrees from U.S. institutions of higher education who are eligible for an exemption from the regular cap (“advanced degree exemption”). The final rule reverses the order by which USCIS will select H-1B petitions under the H-1B regular cap and the advanced degree exemption, and adds an electronic registration requirement for petitioners seeking to file H-1B cap-subject petitions. The final rule is scheduled to be published in the Federal Register on January 31, 2019 and will become effective on April 1, 2019, though DHS is suspending the electronic registration requirement for the fiscal year (FY) 2020 H-1B cap filing season. This means that H-1B cap-subject petitions filed as part of the FY2020 H-1B cap filing season, which opens on April 1, 2019, will need to be filed using the same process as in prior years, with petitioners submitting a complete H-1B petition to USCIS, together with filing fees, in order to be eligible to be considered for selection in the FY2020 H-1B visa lottery.

Electronic Registration Requirement

• Under the final regulation, DHS is adding a registration requirement for petitioners seeking to file H-1B cap subject petitions on behalf of foreign workers, though DHS is suspending the electronic registration requirement for the upcoming FY2020 H-1B cap season to complete user testing of the registration system and to ensure the system and process are fully functional.
• Per the final regulation, DHS anticipates the registration requirement will be implemented starting with the FY2021 H-1B cap.
• In the future, once the electronic registration requirement is implemented, all petitioners who seek to file H-1B cap petitions which will required to first electronically register with USCIS during a designated registration period, unless the registration requirement is temporarily suspended.
• The registration period will last a minimum of 14 calendar days and will start at least 14 calendar days before the earliest date on which H-1B cap-subject petitions may be filed for a particular fiscal year.
• A petitioner must electronically submit a separate registration to file a petition for each beneficiary it seeks to register, and each beneficiary must be named.
• A petitioner may only submit one registration per beneficiary in any fiscal year. If a petitioner submits more than one registration per beneficiary in the same fiscal year, all registrations filed by that petitioner relating to that beneficiary for that fiscal year will be considered invalid.
• USCIS will notify petitioners whose registration has been selected into the visa lottery that the petitioner is eligible to file an H-1B cap-subject petition on behalf of the beneficiary named in the notice within the filing period indicated on the notice.
• Only those petitioners whose registrations are selected will be eligible to proceed to complete and file an H-1B cap-subject petition during the associated filing period, which will be at least 90 days.
• Note that although DHS initially proposed to stagger filing periods, such that the initial date after which petitions based on selected registrations could be filed would be spread out over time, DHS is not proceeding with staggered filing periods in its final rule.
• USCIS will announce the start of the initial registration period on the USCIS website at least 30 calendar days prior to the commencement of the registration period.
• In addition, DHS will publish a notice in the Federal Register to announce the implementation of the registration process in advance of the H-1B cap season in which the registration process will be implemented.
• USCIS has indicated that it will engage in stakeholder outreach and provide training to the public on the registration system in advance of its implementation to ensure petitioners understand how to access and use the system.
• USCIS expects that the electronic registration requirement, once implemented will reduce overall costs for petitioners and create a more efficient and cost-effective H-1B cap petition process for USCIS and petitioners.

Allocation of H-1B Cap Numbers

• Currently, in years when the H-1B cap and the advanced degree exemption are both reached within the first five days in which H-1B cap petitions may be filed, the advanced degree exemption beneficiaries are selected before the H-1B cap beneficiaries.
• The final rule will reverse the selection order and count all applicants towards the number projected as needed to reach the H-1B regular cap first. Once a sufficient number of applicants have been selected for the H-1B regular cap, USCIS would then select applicants towards the advanced degree exemption.
• USCIS predicts that changing the order in which USCIS counts these allocations will likely increase the number of beneficiaries with a master’s or higher degree from a U.S. institution of higher education to be selected under the H-1B numerical allocations.
• Specifically, USCIS estimates that the change will result in an increase of up to 16% (or 5,340 workers) in the number of selected petitions for H-1B beneficiaries with a master’s degree or higher from a U.S. institution of higher education.
• USCIS will proceed with implementing this change to the H-1B cap allocation selection process for the FY2020 cap season (beginning on April 1, 2019), notwithstanding the delayed implementation of the H-1B registration requirement

January 25, 2019

On January, 25, 2019, the Office of Management and Budget (OMB) completed review of the H-1B proposed regulation. Before the rule can go into effect, it must be published in the Federal Register.

January 11, 2019

On January 11, 2019, USCIS sent a final version of the proposed regulation to the OMB for review, which is the next step in the regulatory process.

January 2, 2019

On January 2, 2019, AILA submitted comments in response to the proposed regulation that would require petitioners seeking to file H-1B cap petitions to register electronically with USCIS and would reverse the order by which the agency selects H-1B petitions under the H-1B cap and advanced degree exemption (AILA Doc. No. 19010300). Among other things, AILA urged USCIS to suspend implementation of the H-1B registration process until at least the FY2021 H-1B cap season or until such time that a comprehensive, completely functional system that has been thoroughly beta-tested can be rolled-out. AILA also asked USCIS to immediately make an announcement to this effect, to provide U.S. employers with adequate clarity and assurances regarding the process that will commence in only a few short months.

December 3, 2018

On November 30, 2018, the Department of Homeland Security (DHS) announced a notice of proposed rulemaking that would require petitioners seeking to file H-1B cap-subject petitions to register electronically with the U.S. Citizenship and Immigration Services (USCIS) during a designated registration period. Under the proposed rule, USCIS would also reverse the order by which the agency selects H-1B petitions under the H-1B cap and the advanced degree exemption. The proposed regulation was published in the Federal Register on Monday, December 3, 2018. USCIS will accept public feedback on the proposed regulation until January 2, 2019.

Electronic Registration Process

Under the proposed regulation, petitioners seeking to file H-1B cap-subject petitions would be required to register electronically with USCIS during a designated registration period. The electronic registration period would begin at least 14 calendar days before the first date the H-1B filing window opens each fiscal year, commonly April 1, and would remain open for at least 14 calendar days. USCIS would give at least 30 calendar days’ notice of the registration period on the USCIS website.

USCIS would then conduct the annual H-1B lottery from the pool of timely-filed electronic registrants. The rule proposes that petitioners whose petitions are selected will be notified that they are eligible to file an H-1B petition within a designated filing period. The duration of the filing period for registrants who are selected would be at least 60 days. According to the proposal, a registrant therefore could wait until they have been notified of selection before submitting the corresponding H-1B petition on behalf of the beneficiary named in the selected registration. USCIS would hold some unselected H-1B registrations in reserve so that additional cases could be filed if the quota is not reached due to petition rejections, denials or withdrawals, or if an employer does not file an H-1B petition on behalf of selected beneficiary. USCIS could reopen registrations if more cases are needed to fulfill the annual quota.

The registration process would require basic information from both the employer and the beneficiary, including:

• the employer’s name, identification number (EIN), and address;
• the employer’s authorized representative’s name, job title, and contact information;
• the beneficiary’s name, date of birth, country of birth, country of citizenship, gender, and passport number, as well as whether the beneficiary has obtained a master’s or higher degree from a U.S. institution of higher education;
• the employer’s attorney or accredited representative, if applicable; and
• any additional basic information requested by the registration system or USCIS.

Employers would also be required to attest that they intend to file an H-1B petition for the beneficiary in the position for which the registration is filed, among other attestations.

Petitioners would need to file a separate registration for each beneficiary and would be limited to one registration per beneficiary for the same fiscal year. USCIS is not proposing to charge a fee for electronic registration at this time.

Allocation of H-1B Cap Numbers

The second major change proposed by DHS is to reverse the order by which the agency selects H-1B petitions under the H-1B cap and the advanced degree exemption. Currently, in years when the H-1B cap and the advanced degree exemption are both reached within the first five days in which H-1B cap petitions may be filed, the advanced degree exemption beneficiaries are selected before the H-1B cap beneficiaries.

The proposed rule would reverse the selection order and count all applicants towards the number projected as needed to reach the regular H-1B cap first. Once a sufficient number of applicants have been selected for the H-1B cap, USCIS would then select applicants towards the advanced degree exemption. USCIS projects that this change in the process would result in a 16% increase in the number of selected beneficiaries with a master’s degree or higher from a U.S. institution of higher education.

Severability Clause

The proposed rule contains a severability clause which provides that DHS could continue to implement either the electronic registration system or the allocation process by which the agency would select H-1B petitions under the H-1B cap and the advance degree exemption independently in the event it cannot implement the both together, for example, if one of the processes is enjoined or invalidated by a court.

Timeline for Finalizing the Regulation

USCIS has indicated it would like to finalize and implement the regulation and the electronic registration system in time for the opening of the upcoming Fiscal Year (FY) 2020 H-1B cap filing season on April 1, 2019. However, the likelihood that USCIS will finalize both by April 1, 2019 is slim, given the tight timeframe by which the agency must complete the regulatory process.

The 30-day notice and comment period opened on December 3, and will remain open until January 2, 2019. USCIS must then review the comments and any final version of the regulation must address concerns raised by the public. Before a final rule can be published, it would first be reviewed by the Office of Management and Budget (OMB). Once the rule is finalized, the government would identify a date for the rule to go into effect.

In the notice of proposed rulemaking, USCIS acknowledges that it might not be possible to implement the electronic registration process in time for FY2020 H-1B cap filing season, particularly if additional user testing and vetting of the new system is required. Thus, if the rule is finalized as proposed, but there is insufficient time to implement the registration system in time for the FY2020 cap selection process, USCIS could suspend the electronic registration system for the upcoming H-1B filing season, and continue to accept complete H-1B petitions with supporting documents as it has done in the past.

How Should Petitioners and Beneficiaries Prepare for the Upcoming H-1B Cap Season?

AILA members should advise their clients regarding the uncertainty of the timing in which the agency could finalize and implement the proposed regulation, and plan to prepare H-1B cap subject petitions for FY2020 as they have in the past.

November 16, 2018

On October 17, 2018, DHS released its Fall 2018 Unified Agenda of Regulatory and Deregulatory Actions and Regulatory Plan, which provides the public with an overview of anticipated federal regulatory activity. The regulations featured in the Unified Agenda and the timelines stated are aspirational and are not strictly adhered to.

One DHS proposed regulation, entitled “Registration Requirement for Petitioners Seeking to File H-1B Petitions on Behalf of Cap Subject Aliens” (commonly known as the H-1B registration regulation) is featured in the Fall 2018 Unified Agenda and is described as follows:

The Department of Homeland Security proposes to amend its regulations governing petitions filed on behalf of H-1B beneficiaries who may be counted under section 214(g)(1)(A) of the Immigration and Nationality Act (INA) (“H-1B regular cap”) or under section 214(g)(5)(C) of the INA (“H-1B master’s cap”). This rule proposes to establish an electronic registration program for petitions subject to numerical limitations for the H-1B nonimmigrant classification. This action is being considered because the demand for H-1B specialty occupation workers by U.S. employers has often exceeded the numerical limitation. This rule is intended to allow U.S. Citizenship and Immigration Services (USCIS) to more efficiently manage the intake and selection process for these H-1B petitions.

Although the Fall 2018 Unified Agenda indicates an October 2018 time frame for publication of this proposed rule, the rule has not yet been published. The rule was sent to the OMB on October 17, 2018 is currently pending review. Once OMB completes its review, a notice of proposed rulemaking will be published in the Federal Register and will be open to the public for notice and comment.

Although the text of the proposed rule has not been made public, it is expected that the rule will closely mirror the 2011 proposed rule on this topic, which was never finalized. AILA submitted comments on that proposed rule in 2011 during the notice and comment period.

On November 16, 2018, during the Office of the Citizenship and Immigration Services (CIS) Ombudsman Annual Conference, USCIS Director Francis Cissna indicated that DHS is actively working on the regulation with the aim of finalizing it in time for the opening of the Fiscal Year (FY) 2020 H-1B cap filing season. He acknowledged that in order to accomplish this, the regulation would need to be published soon and the agency would need to respond to comments provided by the public and finalize and publish the regulation well before April 1, 2019.