Washington, D.C. – December 13, 2018: U.S. Citizenship and Immigration Services (USCIS) proposed new regulations on December 3, 2018 to change the skilled worker visa program known as the H-1B temporary work visa program (“Proposed H-1B Rules”).

Traditionally, H-1B visas are used by high skilled workers in specialty occupations such as engineering, architecture, economics and chemistry. Over the course of many years, critics accuse the program of opening the door to skilled foreign workers who compete for jobs with local workers. Under the Buy American Hire American Executive Order of April 18, 2017, the Trump Administration expressly sought to develop “reforms to help ensure that H-1B visas are awarded to the most-skilled or highest-paid petition beneficiaries.” The Proposed H-1B Rules are the culmination of several previous initiatives from USCIS to restrict access to the H-1B visa program.

In this report, we summarize the top 5 questions we are receiving from employers and employees regarding the Proposed H-1B Rules:

1. How will the Annual H-1B Lottery Change?

Presently, the H-1B visa program makes available a maximum of 65,000 new H-1B visas each federal fiscal year, and offers an additional 20,000 H-1B visa for beneficiaries who have a Master’s or Ph.D. degree from an accredited U.S. college or university. The maximum number of visas available each year is referred to as the H-1B visa “cap”. Each year, USCIS receives approximately 190,000 completed H-1B applications for the 85,000 visas available in total. To allocate visas among applicants, USCIS holds an annual lottery after the first week of April. Applicants with a Master’s Degree or higher are able to apply for the 20,000 visas under the Master’s cap, and if not selected, they get another chance in the 65,000 general H-1B cap.

The Proposed H-1B Rules would inverse the order of the annual H-1B lottery to favor beneficiaries with a US Master’s Degree or US Ph.D. Degree. USCIS plans to first run the lottery for 65,000 visas with all advanced-degree earners included. Then, beneficiaries with US Master’s Degrees or US Ph.D. Degrees will get a second chance by having their registration submitted through the separate lottery for the additional 20,000 H-1B visas for advanced US degree beneficiaries.

The impact of this change is significant. The general cap of 65,000 new H-1B visas will now include a pool of 20,000 employer registrations for beneficiaries with a US Master’s Degree or US Ph.D. Degree. Beneficiaries with a Bachelor’s Degree or equivalent will have an even lower chance of being selected in the H-1B lottery.

2. How does the Proposed H-1B Rule Impact Employers?

Presently, all employers seeking new H-1B visas under the annual cap file a complete H-1B visa petition. The proposed rule dramatically changes the system. Employers would submit short registrations online and the annual H-1B lottery would be based on employer registrations rather than completed H-1B visa petitions. Only those employers with selected registrations would need to prepare and submit full petitions. Details are provided below.

Pre-Registration. Employers are required to register with USCIS before filing a new H-1B visa petition under the 2020 H-1B cap which opens on April 1, 2019. USCIS will create a 2-week period prior to April 1, 2019 during which employers must register using a new internet-based platform to file a new cap-subject H-1B visa petition. USCIS would give the public 30-days prior notice of the start-date of the employer registration period. USCIS would run the annual lottery for new cap-subject H-1B visas at the end of the registration period based on employer registrations rather than upon filed H-1B petitions. Employers whose registration is selected in H-1B lottery would subsequently have to complete the Labor Condition Application before the US Department of Labor, and file the H-1B visa petition with USCIS. The Proposed H-1B Rules do not require a fee for the employer registration. All registrations must state a start-date of employment on the first business day on or after October 1, 2019.

One Registration Per Beneficiary. USCIS requires employers to register and file only one new H-1B visa registration for one new beneficiary. The prohibition extends to related companies of the same group, such as parent companies, subsidiaries or affiliated companies. This prohibits flooding the system with repeat registrations by the same employer for the same beneficiary. Any violation of this rule will authorize USCIS to cancel all registrations by the employer for that particular beneficiary. USCIS would provide employers with a unique identification number for their registration. USCIS intends to prohibit amendment of a registration once it is filed.

Selected Employers Have 60 Days to File the H-1B Petition. Employers selected in the lottery will have at least 60 days to file the certified Labor Condition Application and Form I-129H and supporting evidence with USCIS. USCIS proposes to create several filing windows of 60 days over the course of the fiscal year. Early-filed or late-filed H-1B petitions will be rejected.

Direct Hires. USCIS proposes to only accept an actual H-1B petition for the beneficiary named in the registration. No substitution of beneficiaries will be allowed.

3. Do Employers Still Need to Prepare a Complete H-1B Petition for Filing April 1, 2019?

No. All employers will be required to register for the H-1B lottery, but they only need to prepare a complete H-1B visa petition (with forms, fees, Labor Condition Application and supporting evidence) AFTER the employer’s registration was selected in the lottery. No fee is required for an employer’s registration.

4. Who Wins and Who Loses Under New Rules?

Winners: (1) Employers who reduce their up-front costs of participating in the H-1B lottery. (2) Employers who do not use third party consulting or services companies to hire H-1B workers. (3) Beneficiaries who earned a US Master’s Degree or Ph.D. Degree.

Losers: (1) Third party outsourcing or staffing companies that applied for thousands of H-1B visas each year and placed them with employers throughout the US — essentially dominating access to the H-1B visa program for the last decade. For example two companies in 2016 had over 32,000 new H-1B visas approved by USCIS (Cognizant Tech Solutions had approximately 20,000 new H-1B visas approved by USCIS and Infosys had approximately 12,000).

5 Does the Proposed H-1B Rule Change the Definition of Specialty Occupation?

No. The Proposed H-1B Rules do not change the definition of specialty occupation.

I.A. Donoso & Associates, LLC is a law firm based in Washington, D.C. and is recognized as a leading immigration law firm with expertise in visas for EB-5 investors, professionals, and academics.