Earlier this month, U.S. Citizenship & Immigration Services (USCIS) proposed a new rule that would impact the procedure for filing H-1B petitions under the annual Fiscal Year H-1B quota. While a seemingly insignificant procedural change, the rule would likely have a notably significant impact. According to USCIS, the rule will improve the odds of selection for U.S. advanced degree holders while reducing the odds of selection by those with only Bachelor’s degrees. Presumably, USCIS seeks to achieve the President’s stated purpose of ensuring that H-1B numbers are awarded with priority to the best and the brightest.

Under the proposed rule, USCIS would conduct the “Regular Cap” lottery first and the “Master’s Cap” lottery second. By inverting the order in which the lotteries are conducted, there is a greater chance that more U.S. advanced degree holders will be accepted under the “Regular Cap” lottery, leaving the remaining U.S. advanced degree holders to enter once more in the second lottery, which will naturally give advanced degree holders even preference over those with only Bachelor’s degree.

This proposed new rule is in opposition to Congress’s original plan which states U.S. advanced degree holders are to be exempt from the limitation (“Regular Cap” lottery) only “until the number of aliens who are exempted from such numerical limitation during the year exceeds 20,000.” The statutory language strongly suggests, if not requires, that the 20,000 advanced degree holders are to be selected first, meaning the “Master’s Cap” lottery should be conducted before the “Regular Cap” lottery. Only after the 20,000 advanced degree holders have been selected does the advanced degree exemption end, and advanced degree holders are subjected to the numerical limitation (“Regular Cap” lottery) along with everyone else.

Even if inverting the order of the lotteries were not problematic under the statute, there might still be unintended, though foreseeable, economic consequences of the proposed regulatory change.

1. Most professional jobs in the United States do not require an advanced degree, meaning there is no market-driven reason to prefer advanced degree holders over Bachelor’s degree holders. This is particularly difficult in an economy that currently struggles to fill professional positions that require only a Bachelor’s degree.

2. There is simply no economic advantage to having Master’s degree holders filling positions that require only a Bachelor’s degree. Increasing the preference for advanced degree holders will result in more H-1B workers with advanced degrees who, during an economic downturn, will prove stiff competition for those U.S. workers with only Bachelor’s degrees.

Given President Trump’s “Buy American, Hire American” initiative, this cannot have been what the Administration intended nor is it in line with Congress’s plan to conduct the Master’s Cap first. Before implementation, written comments can be received on or before January 2, 2019.