The Department of Homeland Security (DHS) has published its controversial regulation to end the H-1B visa lottery as a “final rule,” leaving it to the Biden administration or a lawsuit to stop a significant change in U.S. immigration policy. The rule, published January 8, 2021, goes into effect in 60 days.
The regulation would authorize U.S. Citizenship and Immigration Services (USCIS) to end the H-1B lottery and instead grant petitions based on registrations starting with the highest salary level and working down. The Trump administration rejected all comments to the rule. Attorneys and businesses argue the regulation violates the statute and makes it difficult to obtain new H-1B petitions for younger workers, particularly international students and information technology professionals.
What Would the Rule Do and Who Would It Exclude?: In place of the H-1B lottery, USCIS would receive registrations before the start of a fiscal year (likely before April 1) and if more are received than the H-1B limit allows, the agency would award the petitions from highest to lowest salary. This process would be used for the 65,000 petitions under the annual limit and 20,000 petitions for individuals with an advanced degree from a U.S. university.
“USCIS will rank and select the petitions received on the basis of the highest Occupational Employment Statistics (OES) wage level that the proffered wage equals or exceeds for the relevant Standard Occupational Classification (SOC) code 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,” according to the regulation.
In the proposed rule, DHS predicted no individuals paid Level 1 wages would be selected for H-1B petitions, and about 25% of individuals who would receive Level 2 wages also would not be chosen. DHS asserted everyone at Level 3 and Level 4 would be selected but concedes a lot more individuals at Level 2 wages may be shut out of petitions if there are more registrations than in the past for H-1B visa holders at Level 3 and Level 4 wages.
Favoring Senior Professionals Over International Students: The rule would make it a U.S. priority to recruit primarily individuals who are already senior professionals, according to Bo Cooper of the Fragomen law firm and a former general counsel at USCIS, even though other nations focus on attracting young talent, particularly recent university graduates.
DHS said in its response to comments that universities and international students probably won’t be affected by the new regulation, but representatives of students and schools don’t believe that is true.
“The proposed rule is unsound policy, not supported by statute, and will serve only to further undermine the ability of our colleges and universities to recruit and retain international students,” said Miriam Feldblum, executive director of the Presidents’ Alliance on Higher Education and Immigration. “H-1B visas serve as a critical pathway for these students. The proposed rule will block these opportunities by imposing a system that grants H-1B petitions based on the highest salary first, locking out many new international graduates of U.S. colleges and universities. Our communities, economy, and country will lose, while other countries that facilitate policies for international students to stay and work will benefit.”
Startup companies, public schools, younger information technology professionals and health professionals working in rural areas will also be disadvantaged under the rule, according to companies and attorneys.
USCIS Changed Nothing from the Proposed Rule: Despite receiving almost 1,500 comments in response to the proposed rule, DHS did not change anything in the final rule. “Following careful consideration of public comments received, including relevant data provided, DHS has declined to modify the regulatory text proposed in the Notice of Proposed Rulemaking (NPRM) published in the Federal Register on November 2, 2020,” according to DHS. “Therefore, DHS is publishing this final rule as proposed in the NPRM.”
“Under the Administrative Procedure Act, an agency must meaningfully address comments raised by the public in response to the proposed rulemaking,” said William Stock of Klasko Immigration Law Partners in an interview. “DHS needed to address a significant number of comments regarding whether the rule was lawfully promulgated, and did little more than repeat legal arguments that have been rejected by numerous federal courts about the lawfulness of the DHS secretary’s appointment.” Expected litigation may target the lawfulness of the appointment and other aspects of the regulation.
Questions About the Legality of the Rule: The statute mandates visas be issued in the order in which they are received,” said Brad Banias of Wasden Banias in an interview. “While a lottery may be a fair interpretation of that mandate when 250,000 applications show up on the same day, the same cannot be said of prioritizing those applications based on wages. A regulation is an interpretation of an ambiguous statutory provision. This interpretation is wholly unmoored from the statute and likely ultra vires (beyond one’s legal authority). The statute provides interpretive jumping off point for this final rule. It will be interesting to see if the new administration even defends it.”
In the proposed rule, DHS tried to make it seem unimportant that the Trump administration had earlier argued it “would require statutory changes” to prioritize H-1B selection based on salary: “DHS acknowledges that the preamble to the H-1B Registration Final Rule states that prioritization of registration selection on factors other than degree level, such as salary, would require statutory changes.”
What Will the Biden Administration Do with the Rule?: “It is important to note that the 60-day delay of the rule only buys time to revoke the rule, which would have to be done by notice and comment or via a court decision striking it down,” said William Stock. He cited the International Entrepreneur Rule, which the Trump administration refused to use, to argue the Biden administration could not simply indefinitely suspend the rule.
Geoff Forney of Wasden Banias agrees with Stock. “The delayed effective date, as required under the Administrative Procedure Act, is simply intended to provide the regulated public an opportunity to prepare for the rule,” said Forney in an interview. “The new administration unfortunately cannot simply suspend the rule from coming into operation. Rather, the new administration must rescind the rule through notice and comment because courts have held that suspending a rule is itself a rule and putting a rule into effect requires notice and comment.”
“I am less certain that you must withdraw the rule by notice and comment rather than deferring any decision on it,” said Ira Kurzban, author of Kurzban’s Immigration Law Sourcebook, in an interview. “Remember, the notice and comment issue arose from the International Entrepreneur Rule because an entrepreneur was harmed. The fact that someone may sue on some theory does not mean that they will win or that it would necessarily stop a new administration from putting it on hold.” He argues the International Entrepreneur Rule was not just a simple pause but that the Trump administration “expressly put it off for 6 months and said it was going to end it.”
Kurzban believes the most important issue is whether the Biden administration might want to keep the rule. A Biden policy document indicates support for issuing H-1B visas based on salary, though given how little attention had been given to the issue, it is not clear those putting together that document understood the negative implications for international students, health care professionals and others. Moreover, the Biden document mentions this in the context of legislation.
“Biden will work with Congress to first reform temporary visas to establish a wage-based allocation process and establish enforcement mechanisms to ensure they are aligned with the labor market and not used to undermine wages,” according to the document. “Then, Biden will support expanding the number of high-skilled visas and eliminating the limits on employment-based visas by country, which create unacceptably long backlogs.”
The incoming Biden team will need to decide what to do with a regulation of questionable legality that would eliminate the H-1B visa lottery. It is one more item to add to the Biden administration’s growing immigration “to do” list.