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Debate Over H-1B Lottery Revamp Heats Up as Cases Go Forward

June 1, 2021, 9:30 AM

Litigants have targeted a Trump-era regulation that would change the H-1B specialty occupation visa selection process from a random lottery to a wage-based system, fearing President Joe Biden’s administration may be inclined to let that policy shift stand.

Released by the Trump administration in January, the rule created a new selection system meant to incentivize H-1B employers to offer higher wages, or to petition for positions requiring higher skills, to increase the likelihood of their selection and eligibility to file an H-1B cap-subject petition. It also prevented them from paying foreign workers lower wages than they would likely need to pay to fill the position with a comparably skilled American worker. Each year, 85,000 such visas are available.

Though implementation of that measure has since been delayed until the end of the year by the Biden Department of Homeland Security, it could still affect next year’s selection process, and employers say they need to start preparing for those changes now in their worker recruitment strategies.

A provision included in the current administration’s proposal for immigration legislation—the U.S. Citizenship Act of 2021—would give the secretaries of Homeland Security and Labor the authority to determine the order in which visas should be distributed among H-1B workers, including through regulations “to establish procedures for prioritizing such visas based on the wages offered by employers.”

The apparent agreement on reforming the H-1B lottery between two administrations that are otherwise diametrically opposed on the immigration front has also made strange bedfellows of opponents and supporters of the rule. Business sectors and nonprofits oppose it because it could price them out of hiring H-1B workers, while some immigrant rights advocates see it as a potential remedy for some of the problems of the H-1B program.

“It’s easy to blame Trump on this one, but at the same time President Biden included a similar provision in his immigration bill,” said Jesse Bless, director of federal litigation for the American Immigration Lawyers Association. “Both administrations don’t understand that H-1B employees help the economy and they don’t hurt it.”

“They aren’t the same political interests on both sides, but the narrative is basically the same,” Bless said.

Lawsuits in D.C., Oakland

The most recent lawsuit, filed in the U.S. District Court for the District of Columbia, was brought by the Humane Society of New York and several medical groups that say the change would eliminate a large group of entry level H-1B workers that are vital to several industries.

The D.C. case, filed May 17, follows a California suit brought by the U.S. Chamber of Commerce and other business groups and universities challenging the lottery rule as part of a broader lawsuit seeking to vacate multiple Trump administration regulations targeting the H-1B visa program.

“The Trump administration engaged in a laser-focused effort to use all executive branch tools to restrict legal immigration, no matter what Congress authorized,” said Jill Family, director of the Law and Government Institute at Widener University Commonwealth Law School. “Immigration lawyers filed record numbers of complaints in federal court seeking relief from these maneuvers around the statute.”

According to Bless, who’s involved in the Humane Society case in D.C., the H-1B lottery rule suffers from two “buckets of problems.” For one, the measure was promulgated by former acting head of DHS Chad Wolf, who courts and the Office of Inspector General have found was not lawfully appointed, and second, federal immigration law doesn’t support a wage-based selection system, he said.

Lawsuits are being filed now, as opposed to when the rule was first released, because attorneys wanted to ensure plaintiffs in the case could demonstrate the harm of the regulation, while leaving time for the case to move forward without forcing a judge to rule on an injunction, Bless added.

Nevertheless, adding a second challenge to the rule should raise the issue on the agency, and the administration’s, regulatory priority list. “Are we putting pressure on him? Yeah I think we are,” Bless said.

In the California case, the government asked for a stay earlier this month to allow DHS to consider how to proceed with respect to the lottery rule.

But Judge Jeffrey S. White of the U.S. District Court for the Northern District of California denied that request on May 14, finding that the agency failed to demonstrate it would suffer any hardship or prejudice if the case proceeds, whereas the plaintiffs “have demonstrated they would suffer hardship if they do not have certainty about the rule by the fall of this year.”

Additional lawsuits show frustration at the pace of the Biden’s administration’s rollback of Trump’s executive actions on immigration, law professor Family said.

“Some of the delay may be due to the Biden administration’s commitment to good government process. But given that the Trump administration was so expedient in imploding immigration law, there should be a similarly forceful effort to repair it,” she said.

VIDEO: The history of the H-1B visa from its origins, in 1952, when Harry S. Truman was president.

Support for New System

Despite the potential upheaval for employers of H-1B workers, some worker advocates applaud the potential for a new visa selection system.

Currently, H-1B employers must pay one of four prevailing wage levels, which are determined by the specific job, region, seniority of the worker, education, and other factors. Demand for H-1Bs has so far outpaced availability that under the new system, the lower wages likely wouldn’t be selected.

“There is nothing sacrosanct, or even formal or legitimate, about the current lottery allocation process,” said Daniel Costa, director of immigration law and policy research at the Economic Policy Institute. “There was no regulation and no transparency or public comment to inform the process.”

Costa expressed skepticism that the Biden administration would implement a measure devised by the Trump administration, but thought the changes would help improve the H-1B program.

According to Costa’s research, outsourcing IT staffing firms continue to get the majority of the 85,000 visas available in the lottery, petitioning for workers receiving a level one or two wage that are marked at the 17th and 33rd percentile wages of a specific job and region, and below the median pay.

If the program is meant to fill specialty occupation shortages, having so many visas go to entry level jobs may be counter to that purpose, Costa said. “The average age is around 30 years old for H-1B. I don’t think those people are fresh out of college getting an entry level job. That alone should tell you that the share of jobs shouldn’t be so tilted to level one and two.”

The lottery rule, or at least the idea behind it, presents “an opportunity to fix the biggest work visa program just with a couple of regulations,” he said. That would “make it a program where critics like me will have nothing bad to say about it.”

To contact the reporter on this story: Genevieve Douglas in Washington at gdouglas@bloomberglaw.com

To contact the editors responsible for this story: Andrew Harris at aharris@bloomberglaw.com; Jay-Anne B. Casuga at jcasuga@bloomberglaw.com

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