DHS Delays Rule That Replaces Random H-1B Cap Lottery with Wage Level Selection Process

The issue

The Department of Homeland Security (DHS) will delay the effective date of its H-1B cap allocation rule to December 31, 2021 in order to provide more time for development, testing, training and public outreach, according to a forthcoming announcement in the Federal Register.  The final rule, which was to take effect on March 9, 2021, would largely replace the U.S. Citizenship and Immigration Services (USCIS) random, computerized H-1B cap lottery with a system that allocates H-1B visa numbers according to the Department of Labor’s Occupational Employment Statistics (OES) four-level wage system. It would give priority in the H-1B selection process to foreign nationals whose offered salary falls in the highest wage level for their occupation and geographic area.

The delay announcement follows a January 21 regulatory freeze request from the White House in which the Biden Administration asked federal agencies to consider delaying published rules that had not already taken effect. 

During the delay, DHS says it will work through the technical, training and outreach issues associated with implementation of the final rule, but at the same time, will evaluate the rule and its associated policies from a substantive perspective.

Fiscal Year 2022 (FY 22) H-1B Cap Season

The rule’s delay to December 31, 2021 means that the existing random, computerized H-1B cap selection system will remain in place for this year’s cap season. The H-1B cap lottery will follow a cap registration period this March. 

As it did last year, USCIS will conduct two random lotteries to select enough beneficiaries to meet the 85,000 annual cap. The first lottery will include all registered beneficiaries and will select enough registrations to meet the regular cap of 65,000. The second lottery would include registered U.S. advanced-degree holders who were not chosen in the first lottery, and would select enough registrations to meet the advanced-degree cap exemption of 20,000. USCIS is expected to receive far more H-1B cap registrations than needed to meet the annual quota of 85,000. 

USCIS has not yet released the start and end dates for the FY 22 H-1B cap registration period.

What’s next for the rule

The H-1B cap wage allocation rule is currently scheduled to take effect on December 31, 2021. DHS has committed to further substantive review of the Trump-era regulation, but the Biden Administration has expressed support for the concept of H-1B cap allocation based on wage level. It is possible that prior to its effective date, the allocation regulation will be challenged in federal court as contrary to the H-1B statute.

This alert is for informational purposes only. If you have any questions, please contact the immigration professional with whom you work at Fragomen.