In a proposed rule published in today’s Federal Register, the U.S. Citizenship and Immigration Services (USCIS) is resurrecting and modifying a previous proposal from 2011 to implement an electronic pre-registration system for H-1B cap petitions. H-1B visas are for high-skilled “specialty workers” in positions that require at least a Bachelor’s degree in a specific related field. The proposed rule would also reverse the order by which USCIS selects H-1B petitions under the H-1B cap in order to increase the number of beneficiaries with a Master’s or higher degrees from a U.S. institution of higher education to be selected for an H-1B cap number.

Per existing law, new H-1B visas are subject to an annual cap of 65,000 visas (Regular cap) and an additional cap of 20,000 new H-1B visas are available for beneficiaries with advanced degrees from US colleges or universities (US Masters cap).

The new proposal would change the H-1B process in the following ways:

  • At least 30 calendar days before the usual opening day of H-1B cap filing season (typically on April 1st) USCIS would announce the establishment of the online registration process, which would remain active for at least 14 calendar days.
  • In lieu of submitting a full H-1B petition, Employers would file a short online form that solicits basic data about the company and the prospective H-1B employee/beneficiary (including whether he or she holds a qualifying advanced degree). The form may also seek information about the offered position and other data.
  • Employers would file a separate registration for each foreign beneficiary and, per current rules; employers would be prohibited from submitting more than one registration per H-1B worker. At the present, USCIS is not proposing to implement an associated fee for registration.
  • Employers would not be permitted to substitute beneficiaries for selected registrations.
  • If their cases are selected, employers would be notified and required to submit their complete H-1B cap petitions (via Form I-129 and all accompanying documentation including a certified Labor Condition Application on ETA Form 9035) within a specific period, expected to be at least 60 days. USCIS could have multiple filing periods and stagger them so that not all petitions are submitted within the same timeframe.
  • Employers would be required to attest that they intend to file a petition for the named beneficiary in the position for which the registration was filed. In the comments to the proposed rule, USCIS indicates it will closely monitor data on registrations and filed petitions and employers could be subject to investigation for abuse of the registration system if USCIS discerns a pattern or practice of failing to submit petitions for selected registrations.
  • If the number of registrations received during the initial registration period is fewer than the number of petitions USCIS projects are needed to meet the regular cap (65,000), USCIS would announce on its website that the registration period would remain open and all registrations received during that initial period would be selected.
  • At the end of the initial registration period, if USCIS determines that it has received enough registrations in the initial registration period to reach the projected number of petitions to meet the regular cap, USCIS would conduct a random selection of all of the registrations received during the initial registration period.
  • USCIS plans to change the order of the cap selection lotteries if the number of registrations exceed the cap. The agency would conduct the regular cap lottery first. Any advanced-degree filing not selected in the regular lottery would be placed into a second lottery (20,000), with the goal of maximizing the number of advanced degree graduates selected against the overall H-1B quota. Currently, the advanced-degree lottery is run first.

Exempt from the current H-1B cap system and this new registration proposal are 6,800 H-1B1 visas, set aside from the 65,000 regular cap, for Chile and Singapore nationals. Moreover, specialty workers who will be employed at an institution of higher education (as defined in section 101(a) of the Higher Education Act of 1965, as amended) or a related or affiliated nonprofit entity and workers who will be employed at a nonprofit or governmental research organization are exempt from the H-1B cap and this registration proposal.

Impact on the upcoming FY 2020 H-1B Cap Season

With the publication of the Proposed Rule on December 3, 2018, a 30-day comment period will run until January 2, 2019. USCIS must review and respond to those comments and obtain Office of Management and Budget (OMB) approval of a final regulation before it can implement any changes to the H-1B cap process. Therefore, it is unclear if USCIS will have enough time implement this rule prior to the opening of H-1B cap season on April 1, 2019.

If final implementation did occur before April 2019, the proposed rule includes a provision that enables USCIS to temporarily suspend the registration process during any fiscal year in which USCIS may experience technical challenges with the H-1B registration process and/or the new electronic system. This temporary suspension provision would also permit USCIS to up-front delay the implementation of the H-1B registration process past the fiscal year (FY) 2020 cap season, if necessary, to complete testing and vetting of the new H-1B registration system. In addition, USCIS indicates in the proposed rule that it could simply suspend the registration requirement for the FY 2020 cap season, altogether, and permit full filings as in previous years.

Squire Patton Boggs will continue to monitor this proposal and the timing of implementation. Because it is not yet clear when the rule will be finalized permitting USCIS to impose an online registration system, employers should plan for the possibility that they will need to submit full H-1B cap petitions with supporting evidence during the upcoming H-1B cap season commencing on April 1, 2019.