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DHS Proposes Allocation of H-1B Visa Quota to Highest Wage Level Jobs

3 Nov

On November 2, 2020, the U.S. Department of Homeland Security (DHS) published in the Federal Register a proposed rule that would prioritize allocation of H-1B visas under the next Fiscal Year H-1B Quota based on the wage level of the offered position. The stated goal of the regulation is to fulfill President Trump’s order for DHS to take action to ensure that H-1B visas are allocated to “the best and brightest workers.”  DHS will accept comments on the proposed rule for 30 days. 

An H-1B visa is a temporary work visa for foreign nationals to work in a specialty occupation that requires the theoretical and practical application of a body of highly specialized knowledge and requires a bachelor’s degree or higher in the specific specialty, or its equivalent.  The H-1B employer must treat H-1B workers similarly to U.S. workers, including as to payment of wages.  

The proposed rule would rank and select petitions based on wage levels rather than using the current random lottery system. Petitions offering a Level IV wage (highest level) for the offered position would be ranked highest for allocation of H-1B work visas. Those positions with Level III wages would be ranked next, followed by those with Level II and lastly Level I wages (entry-level positions).  Prioritizing highest wage-earning positions could lead to situations where large companies that are able to dip into a deeper budget are able to effectively “outbid” smaller and medium-sized companies in the H-1B lottery. 

The new rule would apply only to the allocation of H-1B visa numbers under the annual quota and would not affect H-1B extension or change of employer petitions. It also would not impact those petitions that are not subject to the annual H-1B quota. 

The proposed rule would not combine or alter the order of the “Regular H-1B Cap” and “Master’s Cap” selections. Rather, registrations within each category would be ranked and selected based on prioritization of wage level relative to other positions within their occupational classification within each category. Level IV in all occupational classifications within the Regular Cap would be prioritized and selected first, and then Levels III, II and I, in descending order until the full Regular Cap is exhausted. Remaining petitions qualifying under the Master’s Cap (advanced degree from accredited U.S. institution of higher education) would then be ranked among the Master’s Cap registrations and prioritized for selection of Level IV first, and then Levels III, II and I in descending order of priority within the Master’s Cap. 

During the H-1B registration process, employers would be required to specify the occupational classification, the area of intended employment, and the highest wage level that the offered wage meets or exceeds for that geographic area. If petition registrations are selected, petitioners would not be permitted to offer a wage that is lower than the wage level specified in the registration. A similar type of requirement was anticipated in the registration process for Fiscal Year 2021, for which registrations were accepted beginning March 1, 2020, but U.S. Citizenship and Immigration Services (USCIS) did not implement the requirement at that time. USCIS is now preparing to implement the requirement for 2021, which means that much of the work associated with an H-1B, including the strategy development and prevailing wage research, must occur before registration can be submitted in March 2021. 

Foster will continue to monitor proposed regulatory action that would impact the allocation of H-1B visas and will make additional updates available as appropriate via future bulletins and on our firm’s website at