Overview
On December 6, 2019, US Citizenship and Immigration Services (USCIS) confirmed that it would implement a system-wide process overhaul aimed at addressing issues and inefficiencies with the H-1B cap season. At the foundation of these changes, effective as of this writing, is a new electronic registration process that has not yet been fully revealed. While many questions remain, the H-1B cap process has clearly changed, including the deadline. The upcoming Fiscal Year 2021 (FY21) H-1B registration window runs from March 1-20, 2020. The prior April 1 filing kick-off date is still relevant, but is not the deadline.
Employers stand to benefit from this change, as it is no longer necessary to fully prepare H-1B cap petitions as a prerequisite for entry in the annual lottery selection process. Foreign nationals, as a result, also face potential benefits if employers are more open to H-1B sponsorship in light of the reduced up-front requirements. However, as explained below, the new lottery registration process is deceptively simple. On the surface, it involves a few pieces of fairly standard data, however, below the surface, there are attestations under penalty of perjury and penalties for abuse of the new system. Employers must therefore understand their commitments and the related implications before hitting "submit" on H-1B registrations under this new system.
Background: H-1B Cap and Lottery System
The H-1B visa classification is a common, employment-based immigration category applicable to foreign nationals in temporary, professional positions which require at least a bachelor's degree, or equivalent, as a minimum qualification. The category is subject to annual numerical limits – the H-1B cap – which apply to first-time filings for a sponsored foreign national. The cap limits are 65,000 visa numbers for the "regular" cap and an additional 20,000 in the "advanced degree" cap for foreign nationals who have completed US master's or higher-level degrees.
For many years, the volume of H-1B filings submitted during the minimum five-day filing window in April has far exceeded the cap limits. As a result, each year, the USCIS has selected H-1B petitions for review based on a random lottery process. Cases selected in the lottery moved forward to adjudication. Cases not selected in the lottery were rejected and returned. Over 200,000 H-1B cap filings were made in FY20 and less than half of the filings were selected. Thus, over 100,000 cases were rejected entirely – without any substantive review – and mailed back to the sender. The electronic registration process aims to eliminate these inefficiencies through a more streamlined system.
Registration Process: Basics
As explained above, the new H-1B registration will be open from March 1-20, 2020. Employers must complete an online company registration and provide basic information about the employee(s) it intends to sponsor and remit a fee of $10 per foreign national. USCIS will conduct a lottery of the registrations if, as expected given previous years' patterns, the volume of registrations exceeds the H-1B cap limitations. This lottery selection then determines whether or not a company is eligible to file an H-1B cap-subject petition for specific employee(s).
USCIS plans to complete the lottery selection and transmit related notifications of selection by March 31, 2020 for FY21. Following selection, employers will have at least 90 days to complete the H-1B filing. The lottery selection is company-specific and employee-specific. Selection permits the registered company to file an H-1B petition for the particular employee designated in the registration. Substitutions of either employees or employers is not permitted.
The company registration information required for the new electronic process is expected to be very limited and general, such as the company's legal name, Employer Identification Number (EIN), address, signatory name, and contact information. Similarly, the beneficiary information is expected to be limited to items such as name, gender, date/country of birth, and passport number. A single degree-related question is anticipated to determine whether the beneficiary holds a US master's degree (or higher). This question relates to advanced degree cap exemption eligibility.
Registration Process: Considerations and Assessments
On the surface, the registration process appears to be fairly simple. There is an obvious benefit in reducing the upfront employer effort and expense in initial H-1B sponsorship. However, employers are cautioned against bypassing all up-front steps on the presumption that they simply need to register, list the intended beneficiaries, and wait for the lottery selection. Registration should be preceded by case assessment for both legal and practical reasons.
Assessment Prior to Registration: Attestations and Immigration Planning
Registration itself is a bare-bones process. It does not mandate completion of any H-1B case components nor does it require the employer to establish H-1B eligibility requirements. However, as a best practice, employers should conduct an internal H-1B eligibility assessment before case registration.
Practical Considerations
Agreeing to submit an H-1B electronic registration for an employee (or potential employee) establishes an expectation that, if selected, the H-1B case will be filed (and have a reasonable chance of success). Thus, from a human resources and employee relations perspective, registrations should be appropriately selective. Selectivity requires evaluation of the position(s) and the candidate(s) to be sponsored for the H-1B visa. Evaluation will provide early warning of problem areas to either address or avoid. This will limit the H-1B registrations to appropriate positions and beneficiaries, increase the likelihood of successful H-1B petitions, assist in immigration and workforce planning, and make the best use of employer resources.
Legal Considerations: Attestations and False Statements
In addition to practical considerations, as a legal matter, registrations should not be made blindly or arbitrarily. The process will require the employer to attest, under penalty of perjury, to their intent to file an H-1B petition on behalf of each beneficiary for whom they have registered. It is advisable to assess fundamental H-1B eligibility before making this attestation. The US Department of Homeland Security (DHS) plans to monitor the registration system for abuses. Excessive instances of non-filing may be flagged as potential abuse of the system. If a registrant is found to have engaged in a pattern and practice of failing to file H-1B petitions for selected registrations, they could face fines and criminal penalties for making false statements to the government. While valid business-related reasons may exist for opting not to move forward with a case after selection, the potential for appearance of system abuse is largely avoidable through proper pre-screening efforts. Electronic registration makes it possible for the government to more readily identify atypical or suspect filing patterns.
Preparation Considerations: Students and Timing Background
In some cases, employers will be able to simply wait for the selection results before initiating H-1B case preparation. H-1B cap cases are limited to a start date no earlier than October 1, the beginning of the government fiscal year. For many, this limits the advantages to be gained by preparing to file the H-1B petition immediately upon notification of selection. The 90-day minimum filing window following selection is typically sufficient for case preparation. However, there are situations in which it is necessary or advisable to engage in some degree of advance case preparation, as illustrated, below.
Students: Cap-Gap
Many H-1B cap filing beneficiaries hold F-1 Student status, often as recent graduates of US colleges and universities. These students typically have a period of Optional Practical Training (OPT) work authorization. Provisions known as "cap-gap" provide a mechanism to bridge the gap in status and/or work authorization that would otherwise occur prior to October 1 – the earliest day possible for H-1B status. Eligibility for cap-gap benefits requires the filing of an H-1B petition by deadlines dictated by student-specific expiration dates. Registration alone does not meet these deadlines. Thus, employers sponsoring H-1B petitions for F-1 students may need to file within less than the minimum 90-day window after notification, which will be on March 31. These shortened deadlines may necessitate case preparation steps prior to the selection. The identification of these instances and appropriate calendaring should be part of the initial, pre-registration process.
Premium Processing
Under standard processing, H-1B adjudications take many months – potentially beyond the October 1 start date of most petitions. USCIS has intermittently suspended the expedited, 15-calendar day review guarantee, premium processing option for H-1B cap cases. When available, premium processing carries a filing fee of $1,440. Thus, employers will need to weigh the costs and benefits of engaging in any portion of the case preparation prior to completion of the electronic registration selection process.
Where needed, employers should consider whether to obtain, or at a minimum, confirm options for credentials evaluations and expert opinions. This helps avoid the inevitable rush-related expedite fees for such needs and allows time for strategy changes. The same holds true for the Labor Condition Application (LCA), certified by the US Department of Labor (DOL), which must accompany all H-1B filings. The LCA process is aimed to safeguard US workers and US wage levels. Even if the employer does not opt to complete the LCA process before registration selection, they should be poised to file shortly after selection.
What Should Employers Do Now?
With registration slated to begin on March 1, 2020, employers need to identify their H-1B cap registration needs. They must consider which of their current employees they hope to sponsor for first-time H-1B status and whether they will need to make registrations for any prospective employees. As the electronic registration process is new, there is a learning curve on all sides and more information will become available over time. Historically, online system roll-outs involve technical challenges, including system outages. Thus, while there is still time to gather what is needed, it is best to be prepared for registration early in the process and to factor in the time needed to engage in case evaluation and selection. Steptoe's immigration practice is well-positioned to assist companies sponsoring employees for H1-B visas and help them to navigate the new H1-B electronic registration system.