Alerts

The Game of H-1Bs: New Immigration Regulations Take Effect April 1

Alerts / March 7, 2019

This spring, fans of HBO’s “Game of Thrones” series will finally see who will win the Iron Throne in the last season of the popular show. At the same time, many U.S. employers and foreign national professionals will vie for another coveted prize – H-1B visas from the annual lottery. But going forward, major plot twists will change the H-1B lottery process.

On Jan. 31, 2019, U.S. Citizenship and Immigration Services (USCIS) published new regulations that implement two significant changes to the current H-1B process. First, the new regulations establish an electronic preregistration process for the annual H-1B lottery. Second, USCIS has changed the lottery selection order in an effort to benefit those with U.S. graduate degrees.

Since these proposals were announced in the fall of 2018, there has been uncertainty about whether the new regulations would affect the April 2019 H-1B cap lottery. We now know the selection order will change this year, but the new preregistration system will be postponed until 2020.

What does this mean for U.S. employers seeking to sponsor H-1B visa candidates in 2019? Whereas chaos still reigns over the Wall in Westeros … and, well, in the U.S., with the government shutting down over our version of the Wall … the new regulations provide some needed clarity as preparations begin in earnest for the April 2019 cap season.

How does the current H-1B lottery process work? In the current system, employers sponsor current or prospective employees for H-1B visas to work in “specialty occupation” positions that require a bachelor’s degree or higher in a specific field. There is a limit of 65,000 H-1Bs each year, plus 20,000 more for those with graduate degrees from U.S. institutions. Each year, during the first week of April and until the numerical limit is reached, USCIS begins accepting new H-1B petitions for employment starting Oct. 1. If too many H-1B petitions are filed during the first week of April – which has occurred in each of the past six years – then USCIS conducts a lottery to select the winners. Last year, more than 190,000 petitions were filed and less than 45 percent were selected.

What is new in 2019? Despite initial uncertainty, the filing process will remain the same for employers in 2019. Employers will still need to secure certified labor condition applications from the U.S. Department of Labor and then prepare and file complete I-129 petitions with USCIS between April 1 and April 5. After that filing, however, USCIS will change how it conducts the 2019 lottery. USCIS conducts two separate lotteries: a general lottery for 65,000 H-1Bs and an exclusive lottery for 20,000 H-1Bs with graduate degrees from U.S. institutions. USCIS has historically conducted the U.S. graduate degree lottery first, but the new regulations reverse the order. The switch to conduct the general lottery for 65,000 H-1Bs first is intended to benefit those with U.S. graduate degrees by increasing the overall selection rate. Previously, the percentage of U.S. graduate degree holders was diluted among the general lottery pool because the winners of the graduate lottery were removed. USCIS estimates reversing the order will increase the selection rate of H-1Bs with U.S. graduate degrees by about 16 percent. Conversely, this will hurt the chances of employers that sponsor applicants without U.S. graduate degrees.

How will the electronic preregistration process work in 2020? The preregistration process will be postponed until the April 2020 cap lottery. Next year, instead of filing complete H-1B petitions for each sponsored employee, employers will electronically preregister each desired H‑1B employee. Preregistration, which will be free, will require only basic information about the employer and each sponsored employee. USCIS will conduct the lottery electronically, and the winners will then have at least 90 days to prepare and file complete H-1B petitions. Employers will be limited to one registration per employee per year. The registration window will remain open for at least 14 days prior to April 1.

How will preregistration help my company? Preregistration will save employers the legal fees associated with preparing H-1B petitions that are not selected in the lottery. Employers will have to pay for preparation and filing of only those H-1B cases selected in the lottery. In theory, preregistration will also conserve government resources that USCIS can redirect to other matters, including, it is hoped, speeding up processing.

Ideally, the new regulations will result in more H-1Bs being approved. Historically, USCIS has not approved and issued the full allotment of 85,000 H-1Bs each year. When H-1B petitions were denied in the past, USCIS did not necessarily accept additional cases in their place; the agency just approved fewer H-1Bs. Under the new regulations, USCIS intends to hold extra H-1B registrations in reserve for cases that are ultimately denied, withdrawn or abandoned.

Sounds great. What could go wrong? Given the recent heightened scrutiny and increased denials of H-1Bs as well as the Trump administration’s express disfavoring of the H-1B program, it is fair to be skeptical about these changes. Free registration, while good in theory, may cause H-1B registrations to soar. Employers will be able to preregister unlimited H-1B registrations with minimal cost. There will be no disincentive to preregister cases with doubtful likelihood of success. The system may even be vulnerable to malfunctions, as we saw on Jan. 1, 2019, when more than 90,000 applications were electronically filed for 33,000 H-2B visa slots. The Department of Labor’s online system was overwhelmed and then shuttered for six days.

How should employers proceed? Prepare now: H-1B season is coming!

For 2019, U.S. employers will not have to make any changes in the process they have used in the past for H-1B cap filings. Employers should consider filing all eligible cases in 2019, however, as an increase in H-1B cap filings due to preregistration could reduce the overall odds of success in 2020. Employers may also have more confidence sponsoring candidates with U.S. graduate degrees due to the expected increase in the odds of success.

Authorship Credit: Alan C. deVries

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