November 9, 2020
The Department of Homeland Security released yet another proposal to modify the H-1B program under the guise of curbing the rising unemployment rate amid the COVID-19 pandemic. On November 2, 2020 the DHS released its proposed rule to amend regulations for filing H-1B cap-subject petitions from random lottery selection to a wage-level-based selection process by generally first selecting registrations based on the highest Occupational Employment Statistics (OES) prevailing wage level that the proffered wage equals or exceeds for the relevant Standard Occupational Classification (SOC) code and area(s) of intended employment. The proposed rule is open for comment until December 2, 2020.
According to DHS, it prefers that cap-subject H-1B visas go to beneficiaries earning the highest wages relative to their SOC codes and area(s) of intended employment and DHS believes that salary is a reasonable indication of skill level. In cases where employers offer a higher wage to an employee beyond the prevailing wage, DHS believes while the wage may not necessarily reflect the skill level for the position, it reflects the value the employer places on that specific employee.
DHS believes this change will disincentivize the use of the H-1B program to fill lower paid or lower-skilled positions, for which there may be available and qualified U.S. workers.
H-1B CAP
Under DHS’ proposal, where H-1B applications exceed the cap, United States Citizenship and Immigration Services (USCIS) would rank and select H-1B registrations/petitions on the basis of the highest OES wage level that the proffered wage were to equal or exceed for the relevant SOC code and in the area of intended employment, beginning with OES wage level IV and proceeding in descending order with OES wage levels III, II, and I.
Where there is no current OES prevailing wage information for a proffered position, USCIS will rank and select petitions based on the appropriate wage level that corresponds to the requirements of the proffered position. If the wage falls below an OES wage level I, USCIS will rank the petition in the same category as OES wage level I. USCIS will rank the petition in the same manner even if, a petitioner elects to obtain a prevailing wage using another legitimate/independent authoritative source (other than OES).
Alternatively, if there are fewer registrations than necessary to reach the regular cap, USCIS would select all registrations properly submitted during the annual initial registration period, regardless of wage level, and would continue to accept registrations until the regular cap is reached.
H-1B ADVANCED DEGREE EXEMPTION
USCIS would complete the same ranking and selection process to meet the advanced-degree exemption. If a sufficient number of registrations/petitions were submitted to reach the advanced-degree exemption, USCIS would rank and select registrations for beneficiaries who are eligible for the advanced-degree exemption generally on the basis of the highest OES wage level that the proffered wage equals or exceeds for the relevant SOC code and in the area of intended employment, beginning with OES wage level IV and proceeding in descending order with OES wage levels III, II, and I.
Where there is no current OES prevailing wage information for a proffered position, USCIS will rank and select petitions based on the appropriate wage level that corresponds to the requirements of the proffered position. If the wage falls below an OES wage level I, USCIS will rank the petition in the same category as OES wage level I. USCIS will rank the petition in the same manner even if, a petitioner elects to obtain a prevailing wage using another legitimate/independent authoritative source (other than OES).
Alternatively, if fewer registrations than necessary to reach the advanced-degree exemption are submitted, USCIS would select all registrations properly submitted during the annual initial registration period, regardless of wage level, and would continue to accept registrations until it reaches the sufficient number of registrations to reach the advanced-degree exemption.
If USCIS were to receive and rank more registrations at a particular wage level than the projected number needed to meet the applicable numerical allocation, USCIS would randomly select from all registrations within that particular wage level a number of registrations needed to reach the numerical limitation.
CHANGES TO FILING
In addition to the information required on the current electronic registration form (and on the H-1B petition) Petitioners would be required to provide the highest OES wage level that the proffered wage equals or exceeds for the relevant SOC code in the area of intended employment. The proffered wage is the wage that the employer intends to pay the beneficiary. The SOC code and area of intended employment would be indicated on the LCA filed with the petition. Petitioners relying on a prevailing wage that is not based on the OES survey, if the proffered wage were less than the corresponding level I OES wage, the registrant would select the “Wage Level I and below” box on the registration form. If the H-1B beneficiary would work in multiple locations, or in multiple position, USCIS would rank and select the registration based on the lowest corresponding OES wage level that the proffered wage will equal or exceed. The Petitioner would be required to specify on the registration the lowest corresponding OES wage level that the proffered wage would equal or exceed.
Where there is no current OES prevailing wage information for a proffered position, DHS provides limited information conveying to follow DOL’s guidance on prevailing wage determinations to determine which OES wage level to select on the registration. However, in these cases, most occupations default to $200,000.00.
EFFECTS
The H-1B visa system has long been criticized, unfairly, as a vehicle for companies to import low-wage foreign labor at the expense of U.S. workers. Many studies and anecdotal evidence suggest the opposite is true; H-1B workers actually cost more than U.S. workers when costs associated with H-1B workers (legal fees, extortionate U.S. government filing fees, etc.) are also factored in. Nevertheless, the current prevailing wage system is prone to abuse and gaming by unscrupulous companies and their “yes men” legal counsel by allowing companies to self-select which of the current four wage levels is most appropriate for a particular H-1B filing.
DHS’ proposal is not necessarily the brainchild of the Trump administration but rather of Democratic congresswoman Zoe Lofgren, a former immigration attorney, who proposed a similar bill in 2017. Although her proposed bill and DHS’ efforts, to curb exploitation of the H-1B program is laudable, this proposal will prove difficult to implement. Such a ranking system would be a huge administrative nightmare for USCIS, which would have to sort through all of these H-1B filings and categorize based on salaries before it can adjudicate any filings. USCIS has enough trouble randomly selecting 20,000 U.S. master’s and 65,000 regular H-1B cap cases every year from the 200,000-plus that have been filed during the last few H-1B cap seasons. Imagine if USCIS had to actually open all 200,000-plus, and sort by wage before being able to adjudicate any of them? Moreover, where Petitioners elect to utilize alternate, legitimate wage sources, USCIS will rank the prevailing wage in the same manner as OES, even where the various wage sources utilize entirely different systems. The entire H-1B system would break down.
More importantly, this proposal would essentially allow the H-1B program to become a visa category reserved exclusively for the big corporations of Silicon Valley. The top tech aristocracy will hardly bat an eye at this change, merely seeing this as a cost of doing business that would give them greater access to scarce H-1B numbers. While there is legitimate concern that a handful of IT consulting and outsourcing companies misusing the H-1B program by paying low-end wages and also using a disproportionate number of scarce H-1Bs, this proposal would merely create an administrative nightmare at USCIS and render the H-1B program as the exclusive club of many of the tech giants of Silicon Valley.
As with the other recent changes to the H-1B program, this proposal will make obtaining an H-1B visa increasingly difficult and make it more expensive for employers to petition H-1B employees. However, these changes will undoubtedly face challenges in Federal court. Moreover, the future of these recent H-1B changes remain to be seen, especially in the face of the changeover to the Biden administration. Nevertheless, those affected shouldn’t necessarily keep their hopes up that all of these recent changes will be reversed immediately (or reversed at all) when President-Elect Joe Biden takes office. Although, these changes were enacted under the Trump administration, it does not necessarily follow that these actions will all be reversed once he leaves office.
Meyer Law Group will ensure that clients are informed of any new developments. Please contact Meyer Law Group if you have any questions or concerns regarding this policy update.
Brandon Meyer
Managing Partner
Paul Chen
Partner
Jennielyn Alcarion
Senior Attorney