USCIS Publishes Regulation Implementing Wage-Based H-1B Visa Allocation System

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Yesterday, USCIS published a regulation changing the manner new H-1B visas or “Cap Subject H-1B” visas are allocated.  Federal law limits the number of new H-1B temporary worker visas issued every year to 85,000 with 65,000 going to employers seeking to employ foreign nationals in specialty occupations that require at least a bachelor’s degree in a particular field and 20,000 visas going to workers that hold graduate degrees from US universities.  

Since demand for these visas usually far outstrips supply, on April 1st, USCIS conducts a lottery and distributes the visas to employers picked at random.  The regulations published change the distribution of visas from a random draw to a rank order list based on wage.  Under the new regulations, instead of picking petitions at random, employers offering the highest wages will be preferred over those offering lower wages.

To prevent foreign workers from undercutting the wages of US workers, the US Department of Labor regulates the wages offered to H-1 workers.  Employers must pay H-1B workers the prevailing wage as determined by salary surveys that comport with the DOL’s guidelines.  Industry groups, private compensation analysts, and the DOL publish acceptable salary surveys.  While employers are free to pick the salary survey they use, the vast majority of H-1B employers use DOL’s surveys as their source of the prevailing wage.  

DOL’s surveys classify wages using a four-tier level system with level 1 wages at the bottom and level 4 wages at the top.  The regulation published today will assign new H-1B visas to employers offering level 4 wages first and then the lower wage levels until the 85,000 visas are exhausted.  Employers who choose not to use the DOL’s survey will be classified in level 1 no matter what wage is offered. This allocation system de facto requires the use of DOL’s wage survey and favors employers hiring mid-career professionals over less experienced workers.  Employers hiring a newly graduated F-1 student seeking to change their status to H-1B may be shut out by this new allocation system. 

Like most everything the Trump Administration does in immigration policy, litigation is expected.  Also, Congress may attempt to nullify this regulation using the Congressional Review Act, and the Biden Administration may withdraw this regulation.  All these processes take time.  US Citizenship and Immigration Services begin accepting electronic lottery entries in mid-February for an April 1 visa distribution.  It is not certain if the fate of the new regulation will be resolved by then.

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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