On January 8, 2021, the U.S. Department of Homeland Security published its final rule modifying the process by which cap-subject H-1B visas will be allotted. The H-1B is an employment-based nonimmigrant visa for workers in specialty occupations, which typically require the worker to have at least a bachelor’s degree (or equivalent work experience). H-1B visas are limited to 65,000 visas per fiscal year, plus an additional 20,000 visas for foreign nationals holding a master’s degree or higher from a U.S. university; certain employers, such as universities, non-profit research organizations, and government research organizations are exempt from this cap. H-1B visas have been in high demand, resulting in an annual lottery being held each April to determine which employers will be able to apply for these coveted visas.
In order to ensure that foreign workers are not displacing U.S. workers, the H-1B program requires employers to pay foreign workers at or above the prevailing wage for the subject position, as determined by the Department of Labor. The prevailing wage rates are divided into four levels for each occupation, ranging from Level I for entry-level positions to Level IV for experienced workers. Up to this point, the annual H-1B lottery has been based on a random selection of petitions, without any consideration of the underlying job. The new rule, however, changes this process. Rather than a lottery, petitions during the registration period will now be considered based on the wage level of the underlying position. Petitions promising a Level IV wage will be selected first, followed by Levels III, II, and I, in descending order.
The implications of this new rule are significant. Given the large demand for H-1B visas historically, it is unlikely that many – if any – visas will be available for Level I wage jobs. The result is that employers will struggle to obtain H-1B visas for entry-level positions, frustrating recent graduates looking to start careers in the U.S.
Employers seeking to hire foreign workers this year should carefully evaluate the proposed position to assess their likelihood of success under this new process. While the new rule is expected to become effective on March 9, 2021 – just in time for the Fiscal Year 2022 H-1B cap registration period – implementation may be delayed due to the change in administration and likely litigation over the new rule.