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H-1B Lottery Proposal Floats Higher Wage-Based Selections (1)

Oct. 29, 2020, 1:41 PM; Updated: Oct. 29, 2020, 6:45 PM

The Department of Homeland Security has proposed changing next year’s lottery for H-1B specialty occupation visas from the current random selection process to one based on an individual’s wages.

The agency announced late Wednesday that a coming proposed rule would prioritize the selection of H-1B registrations or petitions based on the highest corresponding wage levels, which are divided into four tiers. The agency said the new selection process “is a better way to allocate H-1Bs when demand exceeds supply.” There’s an annual cap of 85,000 such visas.

Nearly 275,000 registrations were submitted for the FY 2021 H-1B lottery, the highest number yet for the popular employment visa program. And for the first time, employers this year paid a $10 fee per visa beneficiary to register through an online system from March 1 to March 20.

But in August, the agency said it had conducted a second lottery for the popular temporary visa for skilled workers. At the time, U.S. Citizenship and Immigration Services, the sub-agency responsible for conducting the lottery and adjudicating H-1B petitions, didn’t provide additional information on why the initial lottery hadn’t yielded enough petitions to meet the visa cap.

The proposed rule will be open for public comment for 30 days after its publication in the Federal Register, which is scheduled for Nov. 2.

Representatives for the DHS and the USCIS didn’t immediately respond to an emailed request for comment on how the USCIS would implement the new system by March of next year, when the lottery typically occurs.

Incentive for Higher Wages

The agency said that, if finalized, the proposed rule’s new selection process would give employers incentive to offer higher wages, or petition for positions requiring higher skills and higher-skilled workers instead of using the program to fill relatively lower-paid vacancies.

“With this proposed rule, the Trump administration is continuing to deliver on its promise to protect the American worker while strengthening the economy,” Ken Cuccinelli, the senior official performing the duties of the deputy DHS secretary, said in a statement. “The H-1B program is often exploited and abused by U.S. employers, and their U.S. clients, primarily seeking to hire foreign workers and pay lower wages.”

But immigration attorneys disagree.

“The current reform poses existential risks for the visa,” Eric Welsh, a partner with Reeves Immigration Law Group in Pasadena, Calif., said in emailed comments. “There is a legitimate interest in protecting jobs for American workers, but that is not served by cutting the number of visas available or raising the required wages and standards to unreasonable levels. Doing so may satisfy the short-term desire of incentivizing employers to stick to the domestic applicant pool, but long term, those businesses are not getting the ‘best and the brightest.’”

The proposal seems meant to “dramatically reduce the number of H-1B workers that employers can access across the board,” said Eleanor Pelta, a partner at Morgan Lewis who specializes in immigration and nationality law.

“There’s this notion that every time an employer can’t hire an H-1B worker, that position is available for a U.S. worker,” she said. “That seems to be the rationale that is put out there, but that has been so resoundingly debunked by all the studies.”

Senior administration officials told reporters in June that an overhaul of the lottery was possible this year, as part of a larger effort to change the program included in President Donald Trump’s June 22 proclamation barring certain visa holders from entering the U.S.

A pair of interim final rules were released Oct. 6 by the Departments of Homeland Security and Labor that would narrow the jobs that qualify for H-1B specialty occupation visas, change the definition of an H-1B employee/employer relationship, and increase how much those workers should be paid.

Impact on R&D, Sciences

The H-1B visa doesn’t only benefit big tech companies, Welsh said. “This helps employers of all sizes find and hire the best and most qualified workers, from anywhere in the world.”

The emphasis on higher wages as criteria for selection in the H-1B lottery means that entry level jobs won’t be viable any longer, which is likely to have a negative effect on foreign students staying and working in the U.S after graduation, Pelta said.

“That’s really an undermining of the entire H-1B program, because there are many specialty occupations where you can have a graduate being a fully qualified professional even in an entry level position and paid an entry level wage,” she said.

Pelta cited as an example an entry level astrophysicist, who enters the job market as a foreign student with a Ph.D. That individual is “fully qualified to work at any of our fine observatories or astronomy research institutions in the U.S. that keep us at the forefront of that kind of research,” she said, “and yet an employer is going to be hard-pressed to hire one of those workers because they’re going to be a level one position.”

Pelta predicted that biotechnology and pharmaceutical companies will feel this pinch as well, where research and development positions will likely be “hobbled by this rule.”

“That’s going to be very painful for U.S. employers in many different industries, and especially during a pandemic. We need as many brilliant, smart researchers at all levels of expertise as we can get,” she said.

(Updated with additional comments from immigration attorneys.)

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

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

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