DHS Issues Final Rule to Replace Random H-1B Cap Lottery with Selection Process Based on Wage Level

On January 8, the Department of Homeland Security (DHS) published a final rule that would largely replace its random, computerized H-1B cap lottery with a system that allocates H-1B visa numbers according to the Department of Labor’s Occupational Employment Statistics (OES) four-level wage system. The final rule gives priority in the H-1B selection process to foreign nationals whose offered salary falls in the highest wage level for their occupation and geographic area. It will not change the order of selection between the regular cap and the advanced degree exemption. The agency made an advance copy of the final rule available.

The rule is scheduled to take effect 60 days from publication, and is intended to be in place for the Fiscal Year 2022 H-1B cap season this spring. It is possible that the Biden Administration may pause this and other recent and forthcoming rules in order to provide the new administration with time to review their contents and determine whether they will move forward. 

A closer look at the revised selection process

Under the final rule, DHS would largely discontinue the computerized H-1B cap lottery selection process and replace it with a wage-level-based allocation process. A first allocation would distribute H-1B numbers under the 65,000 standard cap, followed by a second allocation that would distribute H-1B numbers under the 20,000 advanced degree cap. Distribution would occur as follows:

• Allocation of H-1B quota numbers would be based on the highest OES prevailing wage level that the offered wage equals or exceeds, starting with level IV, and then continuing to select cases in descending order from OES wage levels III, II and I.
• Where an offered wage is lower than the OES wage level I because a private wage survey is used, USCIS will rank the registration in the same category as OES wage level I.
• If the beneficiary will work in multiple locations, USCIS will rank the filing according to the lowest corresponding OES wage level that the offered wage will equal or exceed.
• Where there is no available OES prevailing wage information for the offered position, USCIS will rank the filing based on the OES wage level that corresponds to the requirements of the position.
• A computerized lottery would be used if the number of registrations for a specific wage level exceeded the number of H-1B cap slots available.

In preparation for the rule, DHS is currently revising its online H-1B cap registration form to request information on the OES wage level associated with the offered wage and position. These changes would become effective upon implementation of the final rule. OES wage information provided in the H-1B registration would be compared to any H-1B petition filed in connection with that registration to ensure that the petitioning employer is adhering to the wage level it designated.

What is next for the rule

The Trump Administration intends the rule to take effect in time for the FY 2022 cap season beginning this spring, but it is not clear whether the rule will take effect at that time. The Biden Administration could place this rule (along with other recent/forthcoming regulations) on hold in order to review its contents and determine whether it should take effect. To date, the incoming Biden Administration has expressed support for the concept of H-1B cap allocation based on wage level. It is also possible that the allocation regulation will be challenged in federal court. If the rule is ultimately implemented for the FY 2022 cap season, USCIS is expected to publish instructions for stakeholders on how it will implement the rule in the H-1B registration system.