DHS published a proposed rule to change how the H1B Visa Lottery process would work during the H1B Registration Process on Nov 2, 2020. They gave 30 days comment period for the rule and today they have published the final rule on the same. In this article, we will review the final rule details, changes, DHS feedback to comments, FAQs and next steps.
Background – H1B Lottery Wage Levels Rule
DHS published a regulation in proposed rule stage on Nov 2, 2020 to change the H1B lottery selection process. As of today, the H1B lottery is based on random selection and there is no preference given to anyone or any criteria. DHS published the proposed rule to change lottery selection process based on priorities of Trump administration as per Buy American, Hire American Executive Order and Proclamation to suspend H1B, L1 workers to enter US to protect US workers.
The proposed rule had 30 days comment period and received 1103 comments during that period. They also received 388 comments on the rule’s information collection before comment period ended. The final rule document is about 184 pages. More than 120 pages of the same are comments summary and responses to the same by DHS.
If you are new to the Wage Levels concept and LCA, you should read What are H1B Wage Levels, How to Find ? and What is H1B LCA, what does it have ?. These articles have all the details you need to know on wage levels and LCA.
Why Wage Levels (Salary) for H1B Lottery Selection : The overall premise of the proposed rule is to have the H1B lottery selections based on wage levels offered for the H1B position. DHS logic is that salary or wage level is a good indicator for the skill. If they select people with higher salaries or in higher wage levels, they are hiring the best of the high skilled workers available in the pool.
For more background information, you can read H1B Lottery to be based on Wage Levels – 163,000 Impacted to know more the proposed rule and details on the impact.
Now that you have background, let’s dive into the details.
Changes to H1B Lottery based on Wage Levels rule after Comments
DHS has decided not to change any of the original regulatory text that was part of the proposed rule during public comments or Notice of Proposed Rule Making (NPRM) Stage. In short, DHS just responded to the 1103 + 388 public comments saying that they do not plan to change their stance or take public feedback to enhance or modify the rule. Below is the actual confirmation from them indicating the same from the final regulation document
Final Rule : H1B Lottery based on Wage Levels – Summary
Below is the summary of the final regulation that was published by DHS in federal register.
- Ranking of the H1B Registrations: USCIS will rank the entire pool of H1B registrations submitted based on the OES Wage levels that were selected by the employer in the registration. Essentially, the ranking process is nothing where they will sort the H1B registrations in descending order from Wage Level IV, followed by Level III, Level II and Level I.
- Selection of Highest Wage Level Registrations: After the ranking/sorting is done, they will select the highest wage level registrations first, then followed by lower wage level registrations, then further lower wage level registrations. Basically, they will select Wage Level IV registrations first, then followed by Wage Level III, then Wage Level II and then finally Wage Level I registrations. USCIS will select enough registrations to meet the 85,000 H1B visa cap quota. You may read What are H1B Wage Levels, if you are not sure.
- Multiple H1B Registrations at Same Level: During selection process, if there are multiple H1B registrations on the same wage level, then DHS will conduct random selection or lottery for selecting the required H1B registrations in that wage level. This will only be applied to the wage level that has more registrations.
- Example: Let’s say in the first run, DHS have selected Level IV and Level III to meet about 60K slots out of 85K cap. Now, they are left with 25K slots open to meet the cap. Now, imagine they have about 100K registrations with Level II wage in the pool, then DHS would run lottery to pick the 25K slots from the 100K Level II wage registrations. They will ignore the Level I registrations as they are not required to be considered as pe the change.
- Multiple Locations in H1B LCA – Multiple Wage Levels : In the LCA, an employer can specify multiple locations of work for the H1B worker. In such cases, there will be multiple prevailing wage levels by location. In such cases, DHS would use the lowest corresponding wage level from the list of locations, wage levels during the lottery selection.
- Example: If let’s say the LCA has a job that has wage levels of Level 1 in Atlanta with Salary of $75K and Level 1 San Francisco with a Salary of $90K. Though the wage offered in SFO is high and may fall under Wage Level 2 in Atlanta, they cannot use Level 2 for the purpose of lottery or registration. The employer need to use Wage Level 1 only as that is what is the lowest in both places.
- H1B Amendments and Extensions after Lottery: DHS also says that, after the H1B lottery is done based on the Wage Levels, the employer cannot amend the petition for the same beneficiary to a lower wage level. If they do so, they will be revoked. This is to avoid employers from gaming the system by putting higher wage levels during lottery and then change them to lower wage levels.
- Wage Levels only during Lottery Situation: DHS says that they will apply all of the rules for selection, only when there is a lottery situation and there are more registration or petitions that are filed in that year. If there are lower number of petitions than 85,000 cap quota then these will not apply.
- No Changes to Lottery Order: There will not be any changes to the H1B Lottery order. First the new lottery selection process would be applied to meet the 65,000 regular quota cap then the same process would be applied to meet the 20,000 US Masters quota cap.
Summary of DHS Response to Public Comments
There were over 100 pages of comments summary and replies by DHS. We have picked the key ones for your review. Below is the summary of the DHS responses to most of the public comments.
- Wage Level = Skill Level : DHS says that salary & wage levels are a good indicator of skill level and their goal is to attract most skilled applicants in lottery situation. They say the random selection is not fair and wage level based selection is the right approach to select more skilled workers
- Health Care Workers Concerns : For questions around doctors and health care workers, they say there are many federal programs like “Physician National Interest Waiver” that provide opportunities to file their petitions as cap exempt and doctors or medical professionals should not be impacted with this. They also say that doctors from foreign countries with entry level wages are displacing US medical graduates in US. No data provided though.
- Universities, Research Entities Concerns: DHS says that higher education & non-profit research or government entities are not subject to annual cap as per congress. There were about 41,000 H1B petitions that were approved under cap exempt categories in FY 2020 along and this change will not impact.
- New Foreign Graduates from US Schools Concerns : DHS says that new graduates get OPT and STEM OPT and they can work for few years to get more skill and experience. It should help them get higher wage level when they file for H1B after 2 to 3 years . Also, they say, even for many graduates, companies are willing to pay higher wage level, if their skill is of high demand in the market. They say, employers should hire US Workers, if they are entry level positions.
- Abuse of H1B Program : DHS says that the wage level based H1B selection will stop the abuse of H1B program by companies that hire foreign workers for less wage and create an unfair market for US workers.
- Moving Companies to Other Countries, US Economy Impact : DHS says that these changes will not really impact the overall market conditions or US Economy as they are making sure to hire the more skilled workers in lottery situation. They want to protect US workers and their wages. The goal is to stop abuse of low paid workers. Such employers can hire US workers for entry level positions.
- Legal Authority Concern : DHS says that they have the legal authority to implement these changes as Congress gave them the freedom. Even though, they do not explicitly say that they implement something like this, it is discretion of USCIS to implement such rules to protect US workers and attract better skilled workers.
- Impact to Small Businesses : for questions where some said small businesses cannot pay high wages, DHS say that the impact of this change is not going to be big for small businesses as per their survey of 300+ small businesses. They say small business can hire US workers for entry level positions for the same salaries.
Now that we know the rule and DHS explanation, let’s look at today’s reality with current comapnies.
Check H1B Wage Levels by Distribution by Company
It is important for you to understand the H1B LCA wage Levels distribution for your or new company that you plan to join. This will help you assess and plan ahead when you are Finding a H1B Sponsor for H1B 2022 fiscal year. H1BGrader.com has built up a feature that lets you find wage levels distribution by year for a company. You can check: Find H1B Wage Levels Distribution by Company
Below are few examples by Company Type, sample screenshot.
- H1B Wage Levels Distribution for: Microsoft, Google, Facebook , LinkedIn, Uber, AWS.
- H1B Wage Levels Distribution for : Cognizant, Infosys, TCS , Accenture, HCL , Capgemini
Next Steps – Implementation, Effective Date, Lawsuits
DHS has published the final rule in Federal Register on January 8th, 2021. As per the publication update, it will be effective 60 days from the day it is published in Federal register. It will be effective from March 9th, 2021. See below screenshot for details.
Lawsuits Potential : The replies provided in the final regulation for some of the questions are not really compelling enough. There is no proper evidence that is provided to back the statements provided by DHS. There is very high potential for lawsuits on this one. Also, this rule is one of the Trump Administration’s agenda item and this will change with Biden taking office end of this month. We will keep you posted on the updates on the lawsuits.
Frequently Asked Questions
Below are some of the frequently asked questions.
As per DHS replies to comments in regulation document, they say it would be applicable to H1B Visa FY 2022 season. But, it is not clear as the timelines for this to be effective are March 9th, 2021. So, we need to see, if they shift the other timelines for registration. See below screenshot.
No, this will be only applicable to new H1B Cap subject petitions that are filed with DHS going forward after the rule is effective.
No. USCIS clearly says that such things will not be allowed. They will review the previous wage levels and verify, if they are in line with original filing. Anything done to game the system will result in revocation.
DHS says that employers are free to use Private Wage Surveys as along as they are on par with OES wage levels. They would need to select appropriate wage level based on relative OES wage level and the Salary offered. If the wage is lower than Wage Level 1, then they should select “Wage Leve 1 and below”. The employer has the burden to prove that the wage levels are on par with equivalent OES wage level.
What do you think of the change in the H1B Lottery system ? Is it fair a system now ? Share your thoughts in comments.
You may also read USCIS Official annoucement on the changes