U.S. to Move to Wage-Based H1B Lottery Cap Selection

On January 8, 2021, the United States Citizenship and Immigration Services issued a final rule that replaced H1B lottery visas with a selection process based on the wages in which they are placed. So if you’ve been looking forward to the H1B lottery results, then you must learn about these changes that are about to go into effect.

What Is The H1B Lottery?

 To understand the changes made, you must get the basics right. H1B lottery visas are randomly selected from applicants who apply each year for the visa. This is done to meet the quotas for both Regular and Masters H1B visa.

Random selection is a computer-generated process, and the officials have no involvement in it.

The H1B visa lottery doesn’t happen every year. It’s only when the number of applicants exceeds the number of H1B visas does the lottery system come into the picture.

Why Did the H1B Selection Process Change?

 On January 8, 2021, the US Department of State changed the random H1B selection process to a wage-based selection. According to this change, the visas will be awarded to those who are offered the highest salary on that wage level.

The Trump administration announced the proposal to make changes to the H1B selection process in October of 2020.

Then the DHS published the new rules on how the entire H1B lottery process would work on November 2, 2020.

In both cases, the reason cited for the change was misconduct and misuse of the H1B lottery visa by the corporations.

As per USICS’s statement, the existing selection process allowed companies to fill out entry-level positions while ignoring the high-paying ones. This was done deliberately to reduce cost.

By adopting a wage-based selection process, the companies will be forced to hire people who demand the highest salary. This, as per the statement, would also force hiring managers to compete with the best international workforce available.

The change would also protect the economic interest of the US-based workers. They do not have to settle for low-paying jobs just because companies can source cheaper talent from overseas.

Who Does the Change Impact?

The change will impact H1B cap-subject petitioners who have already submitted the H1B registration. The new selection will also impact the H1B advanced degree exemptions.

In the coming years, other H1B petitioners may also get affected by the new rule.

Petitioners for Level-1 entry-level jobs will not be receiving the visas under this change. Only 75% of the Level 2 petitioners are likely to go through. Level 3 and Level 4 petitioners will receive the full benefits and approval rates.

This is unless the Biden administration and Congress intervenes and freezes the rule. After the announcement of the rule change, the Biden Administration promised to take action and issue a regulatory freeze. This would put the changes in the open for reconsideration. But President Biden can delay the implementation too.

When Will The Change Go Into Effect?

 The final rule will be in effect for 60 days after it gets published in the Federal Registrar. DHS had already published a proposal notice on November 2 only to be challenged later in the US courts.

What’s Expected Next?

 If the proposed rule does go into effect in the next 60 days period, the following things can happen:

• H1B petitioners apply for the Level 1 position will never receive an H1B visa. Only Level 3 and 4, and rarely Level 3 petitioners, will be selected for the visa.
• The increased wages will put financial pressure on employers. This may even discourage them from sponsoring skilled foreign laborers because of the steep cost.
• Petitioners who rely on a prevailing wage that is lower than OES’s surveyed Level 1 Salary, then they will be automatically rejected.
• If the petitioner is supposed to work from a client site, then USCIS will only account for the lowest OES corresponding salary in that region.

Will the Changes be Challenged and Overturned?

 The changes made are already being challenged in the federal courts. The counter-argument is that there are flaws in the proposed rule. It will negatively impact small and mid-sized businesses’ ability to source quality talent from overseas who couldn’t afford to pay the higher wages. Secondly, the proposed rule equates salary with value, which is inaccurate.

 The overturning of the rule might also come from President Joe Biden. In the 184 pages final document, a clause states that an in-coming President will have the power and authority to halt the changes by 60 days. If that does happen, then the changes will not be applicable for this year’s H1B lotteries. 

Conclusion

The coming few months will be vital for H1B applicants as both parties debate the proposed rule’s viability. But if it does go into effect, then the random selection process will be a thing of the past, and Level 1 applicants are less likely to make it to the US.

Frank Gogol

I’m a firm believer that information is the key to financial freedom. On the Stilt Blog, I write about the complex topics — like finance, immigration, and technology — to help immigrants make the most of their lives in the U.S. Our content and brand have been featured in Forbes, TechCrunch, VentureBeat, and more.

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