On January 30, 2019, the Department of Homeland Security announced a final rule amending regulations governing H-1B cap-subject petitions. The final rule reverses the order by which U.S. Citizenship and Immigration Services (USCIS) selects H-1B petitions under the H-1B regular cap and the advanced degree exemption, and it also introduces an electronic registration requirement for petitioners seeking to file H-1B cap-subject petitions. The reverse selection order will apply to petitions filed for the fiscal year (FY) 2020 H-1B cap season (starting on April 1, 2019) and the electronic registration requirement will be suspended for this upcoming cap season.

Under the new rule, USCIS will reverse the order in which it selects petitions for adjudication. USCIS will first select H-1B petitions submitted on behalf of all beneficiaries, including those that may be eligible for the advanced degree exemption. USCIS will then select out of the remaining eligible petitions, a number projected to reach the advanced degree exemption. USCIS estimates that conducting the lottery in this order will increase the number of selected petitions for H-1B beneficiaries with a Master's or higher a U.S. university by up to 16 percent, or 5,340 beneficiaries per year.

The final rule also introduces an electronic registration system for H-1B cap-subject petitions. The new system, however, will not be used this year. USCIS will suspend the electronic registration requirement for the FY 2020 cap season to complete user testing and ensure the system and process are fully functional. Beginning with FY 2021, employers seeking to file H-1B cap petitions will need to first electronically register sponsored foreign workers during a designated registration period. USCIS will select registrants in a random lottery and then notify employers which foreign workers have been selected. Employers will then have a 90-day period to file a complete H-1B petition for its selected workers. The new system will likely reduce the time and costs associated with H-1B cap petitions, although it may also reduce the chances of selection due to increased participation.

Under this final rule, employers will not notice much difference in this year’s H-1B lottery process. Next year, however, the new online registration system will dramatically change how H-1B cap petitions are selected and filed. Employers will need to work closely with their immigration counsel to ensure that the deadlines and registration requirements are met.

Opinions and conclusions in this post are solely those of the author unless otherwise indicated. The information contained in this blog is general in nature and is not offered and cannot be considered as legal advice for any particular situation. The author has provided the links referenced above for information purposes only and by doing so, does not adopt or incorporate the contents. Any federal tax advice provided in this communication is not intended or written by the author to be used, and cannot be used by the recipient, for the purpose of avoiding penalties which may be imposed on the recipient by the IRS. Please contact the author if you would like to receive written advice in a format which complies with IRS rules and may be relied upon to avoid penalties.