Overview
Two important actions by US Citizenship and Immigration Services (USCIS) have provided clarity on the process and time frame for employers to register for the Fiscal Year 2022 (FY 22) "cap" lottery on H-1B temporary work visas. The H-1B visa classification is familiar to many US employers, as it is used for a multitude of professional positions across many industries, most notably IT and other STEM-based positions.
Employers who need to sponsor recent college graduates or other foreign nationals under the H-1B cap must prepare now for the March 2021 limited registration period. The demand in the H-1B, temporary professional worker category, greatly outpaces annual limits. Thus, the USCIS conducts an annual "lottery" selection as the initial part of the process. This process was revamped last year as a registration and selection process was viewed as considerably more employer-friendly than prior procedures.
Other than the applicable dates, this system will continue, without change, with registration opening on March 9, 2021.
As explained in this article, the key items of importance to employers and foreign nationals who are potential H-1B applicants are:
- The registration and selection process implemented in Fiscal Year 2021 (FY 21) will remain in place;
- The registration for FY 22 begins on March 9, 2021 and ends on March 25, 2021;
- Changes made during the Trump administration, which would have given preference based on wage levels in the H-1B cap selection process, have been postponed beyond the FY 22 registration and selection process (other Trump-era H-1B restrictions have been withdrawn); and
- H-1B filing volume tends to decrease in times of economic downturn, increasing the chances of lottery selection.
Background: H-1B Cap and Lottery System Overhauled in Fiscal Year 2021
There are annual numerical limits, commonly referred to as the "H-1B cap," that are applicable the first time a foreign national is sponsored for this category. (Note: the cap can also apply to individuals who hold or have held H-1B status through cap exempt organizations, such as universities and their non-profit affiliates and are now sponsored for a position with an employer that is subject to the cap.)
As explained in our January 28, 2020 Alert, H-1B Cap Visa Electronic Registration: Changes to Process, Deadline, Best Practices, the USCIS revised the way in which they select the petitions eligible for the 65,000 "regular" H-1B cap numbers as well as the 20,000 additional "advanced degree" cap exemptions. Under the old system, employers had to prepare and submit complete H-1B petitions as lottery entries. Under the current online registration system, employers submit a far less burdensome registration for each desired H-1B employee sponsorship. Only those registrations selected in the lottery move forward to the next steps of preparing and submitting an H-1B petition.
Prior Administration Changes Postponed or Rolled Back
The Biden administration has quickly engaged in a series of actions which undo the Trump administration's efforts to further restrict the H-1B category. As it relates to the lottery selection process, the Biden administration has postponed the effective date of a Trump administration regulation which would have created a wage-level based lottery selection preference. The postponement of this change pushes it back beyond the upcoming registration period.
Other important developments which inure to the benefit of employers who sponsor H-1B cases include the rescission of a restrictive 2017 Policy Memo which targeted H-1B computer-related positions, as well as the withdrawal of a regulation imposing significant additional requirements on the use of H-1B employees in the IT consulting industry.
While the H-1B category remains a highly-regulated area with many technicalities, the Biden administration has taken important and swift steps to restore the category, which had been heavily targeted by the prior administration.
Next Steps and Best Practices
The following are steps employers may take to facilitate the H-1B application process:
- Employers must identify those within their workforce or potential workforce who (a) qualify for H-1B sponsorship and (b) fall under the H-1B cap. Given the limited registration timetables, questions should be resolved quickly and through reliable sources of legal advice.
- The registration process is fairly straightforward, and requires only a US $10 fee per foreign national, as well as basic information about the company and foreign national. However, registration should only be undertaken for those employees (or perspective employees) the employer genuinely intends to sponsor. Applications are attested to under penalty of perjury; abusing the registration system could lead to penalties.
- Employers should engage in an initial assessment of H-1B eligibility and make themselves aware of issues of note relating to the offered position and/or foreign national beneficiary. Consideration should be given to H-1B factors including: degree requirements and the foreign national’s qualifications; status and work authorization expiration dates; and wage requirements. This initial groundwork will save time and effort from an HR and legal perspective, set appropriate expectations for all, and avoid conflict and workforce disruption. It will also reduce instances of non-filing, which could be flagged as a fraud indicator.
- Registrations are for a specific, named individual for a position with a specific employer. Employers cannot register for unknown individuals, even if the employer genuinely has open positions. Changes and substitutions are not permitted by either the employer or the named foreign national.
Timetables: Filing Timelines and FY 2022 Start Date
As explained above, registration runs from March 9, 2021 at noon EST to March 25, 2021 at noon EST. Thereafter:
- The USCIS will conduct the lottery selection and post the results in the registrant’s online account by March 31, 2021.
- The USCIS will permit at least 90 days for selected applicants to file an H-1B petition for the listed beneficiary. Applications cannot be submitted prior to April 1, 2021.
- The registration is for FY 22, which begins October 1, 2021. The petitions cannot request a validity date prior to October 1, 2021.
Potential Benefits of Registering for the FY 2022 H-1B Cap Lottery
Like all lotteries, the odds of selection depend upon the ratio of participants to the particular prize or benefit sought. The prior registration season, FY 21, generated approximately 275,000 registrations, competing for the 65,000 "regular" cap numbers and 20,000 "advanced degree" cap exemptions. This was an increase from the prior year, which generated just over 200,000 H-1B cap filings. The increase is likely attributable to the change over to the registration system.
While no one can predict the number of registrations in 2022, it is generally tied to the economy and hiring needs. Thus, the odds of selection may improve this year, given the impact of the COVID-19 pandemic.
While many employers laid off employees in 2020, the increase in remote work, remote learning, on-line ordering and telehealth, has generated opportunities within technology and related areas. Similarly, demands within the pharmaceutical, medical testing laboratories, and related industries have increased due to the pandemic. All employers have had to adapt – including changing their product or service mix to meet the changing demands. This, in turn, generates a need for appropriate skill sets within the employer's workforce in order to remain competitive.
The Biden administration has gone beyond mere signaling the intention to restore a more favorable immigration environment. They have taken important steps in this direction, including actions benefiting employers who require the skills of the H-1B workforce. These steps, and a recognition of the need for in-demand skills to rebuild the US economy, bode well for employers considering H-1B sponsorship.
Employers and others interested in H-1B immigration options may contact Steptoe's immigration practice.