Homeland Security Proposes Ending H-1B Lottery for Wage-Based Selection Criteria

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The Department of Homeland Security (DHS) has proposed abandoning its long-standing practice of allocating H-1B visas for highly skilled workers through a random lottery in favor of a system that would give preference to applications associated with higher-paying positions. Demand for H-1B visas—most of which are capped at 65,000, with an additional 20,000 reserved for highly educated foreign workers—routinely outpaces availability. According to the US Citizenship and Immigration Services (USCIS), the component of DHS that administers the visa program, it received nearly 270,000 valid registrations for this year’s H-1B lottery. Moreover, according to USCIS, it has received more applications for H-1B visas than were available each year for at least the past decade, with total requests surpassing the number of available visas within five days of the start of the lottery registration every year since 2013. 

Under the current lottery system, only applicants, known as “registrants,” chosen at random are eligible to file H-1B cap-subject petitions. DHS has concluded, however, that the random lottery has failed to further the intent of the H-1B program, which is “to help US employers fill labor shortages in positions requiring highly skilled or highly educated workers,” as most of the registrants allowed to file H-1B petitions do so for positions at the program’s lowest prevailing wage levels. Under the proposed system, registrants would be given preference based on their applications equaling or exceeding the prevailing wage for the type and location of their intended employment. Preference would be given in descending order to registrants whose positions are associated with the highest to lowest of the program’s four prevailing wage levels. According to DHS’s proposal: 

Prioritizing wage levels in the registration selection process incentivizes employers to offer higher wages, or to petition for positions requiring higher skills and higher-skilled aliens that are commensurate with higher wage levels, to increase the likelihood of selection for an eventual petition. Similarly, it disincentivizes abuse of the H-1B program to fill lower-paid, lower-skilled positions, which is a significant problem under the present selection system.

While “DHS believes that salary generally is a reasonable proxy for skill level,” it also stated it recognizes that “some employers may choose to offer a higher proffered wage to a certain [employee], beyond the required prevailing wage, to be more competitive in the H-1B selection process.” DHS stated that while such wages “may not necessarily reflect the skill level required for the position in the strict sense,” it would demonstrate an employer’s estimation of a particular employee. According to DHS, “an employer who offers a higher wage than required by the prevailing wage level does so because that higher wage is a clear reflection of the [employee’s] value to the employer, which, even if not related to the position’s skill level per se, reflects the unique qualities the [employee] possesses.” 

DHS also stated that its proposal would further the Trump Administration’s Executive Order 13788, Buy American and Hire American, see 82 FR 18837 (April 21, 2017), as the order “specifically mentioned the H-1B program and directed DHS and other agencies to ‘suggest reforms to help ensure that H-1B visas are awarded to the most-skilled or highest-paid petition beneficiaries.’” Moreover, President Trump’s June 22, 2020 “Proclamation Suspending Entry of Aliens Who Present a Risk to the US Labor Market Following the Coronavirus Outbreak” directed DHS to promulgate regulatory changes to the H-1B visa program. It had been anticipated that those changes would involve replacing the current H-1B lottery process with a selection system prioritizing applicants who would be paid the highest wages.

The acting secretary of DHS approved the proposal on October 28, 2020, though the proposal has not yet been published in the Federal Register. Once the proposal is published in the Federal Register, it will be subject to a 60-day comment period.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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