The USCIS has confirmed that the FY 2022 H-1B cap initial registration period will be open from March 9, 2021, 12:00 p.m. EST to March 25, 2021, 12:00 p.m. EST.

The USCIS has further confirmed that the H-1B registration process and, if needed, a subsequent lottery will follow the same process as instituted for FY 2021. This means that H-1B cap-subject petitioners and their representatives are required to create and use a myUSCIS online account to register and pay the required $10 registration fee for each beneficiary. Each organization must have a myUSCIS online account for each entity that will sponsor beneficiaries.

The USCIS has also indicated that if it receives more than the requisite amount of registrations by March 25, it will hold a random selection and plans to notify myUSCIS account holders by March 31. USCIS has delayed the implementation of a final rule, which would base the H-1B selection process on wage levels.

As a reminder, the following information is required for each proposed beneficiary to submit the registration:

  • Beneficiary’s full name, as it appears on their passport
  • Beneficiary’s date of birth and country of birth
  • Beneficiary’s passport number and country of citizenship
  • Confirmation whether the beneficiary is eligible for the U.S. advanced degree cap. A beneficiary is eligible for the U.S. advanced degree cap if they will obtain the advanced degree by the time the H-1B petition is filed with USCIS.

The earliest day a selected FY 2022 H-1B petition will be accepted by the USCIS is April 1, 2021. Petitioners will have a 90-day period to submit petitions. It is recommended to prepare and file supporting Labor Condition Applications with the Department of Labor as soon as possible to ensure that selected FY 2022 H-1B petitions can be filed with USCIS timely.

The USCIS has yet to confirm if and when it will accept Premium Processing requests for FY 2022 H-1B petitions.

The USCIS notice regarding the FY 2022 H-1B cap initial registration period can be found here: H-1B Electronic Registration Process

On Jan. 8, 2021 the Department of Homeland Security (DHS) published a final rule, effective March 9, 2021, amending the regulations governing the process by which U.S. Citizenship and Immigration Services (USCIS) selects H-1B registrations for the filing of H-1B cap-subject petitions. Pursuant to the final rule, USCIS will deviate from the current process of random lottery selection where registrations exceed numerical visa allocations and will instead prioritize the selection of H-1B registrations with higher offered wages based on a wage level ranking.

The wage level ranking will follow the current process of first selecting regular cap cases then advanced degree cases. USCIS will rank and select registrations filed using a revised H-1B cap registration form based on the highest Occupational Employment Statistics (OES) wage level that the proffered wage equals or exceeds for the relevant SOC code in the area of intended employment, beginning with OES wage level IV and proceeding in descending order with OES wage levels III, II, and I. This will result in USCIS first selecting petitions for the highest paid workers, then selecting petitions in descending order through the remaining wage levels until the cap has been reached. This may lead to no petitions for entry-level wages being selected given recent historical filing numbers.

The revised H-1B cap registration form will request the highest OES wage level that the proffered wage equals or exceeds for the relevant SOC code in the area of intended employment as the basis for USCIS’ wage level ranking. In the event that there is no current OES prevailing wage information for the proffered position, USCIS will assign the registration an OES wage level which it believes corresponds to the requirements of the proffered position. If the registration states that the H-1B beneficiary will work in multiple locations, USCIS will assign the registration the lowest corresponding OES wage level that the proffered wage will equal or exceed. Registrations purporting to use other legitimate private wage sources aside from OES to assign a wage below level I will be deemed a level I wage petition and ranked in the lowest tier of priority. Subsequent to selection, USCIS will deny a petition if the offered wage is lower than that initially presented in the registration, although wages may be increased subsequent to selection. Similarly, subsequent new or amended petitions may be denied or have their approval revoked if USCIS determines they were filed in an effort to decrease the proffered wage to an amount that would be equivalent to a lower wage level, after listing a higher wage level on the registration to increase the odds of selection.

USCIS aims to have the new selection process in place by the coming Fiscal Year 2022 cap filing season. However, the final rule is expected to be challenged by the new Biden administration, in court and potentially through legislation. USCIS will most likely continue to use the current regulations during the coming Fiscal Year 2022 cap filing season.

The U.S. District Court for the Northern District of California has granted class certification in MadKudu Inc. v. USCIS, et al., to a group of employers who claim that the U.S. Citizenship and Immigration Services (USCIS) is systematically denying H-1B visa petitions filed for market research analyst occupations. The employers argue that USCIS has a pattern and practice of erroneously denying H-1B petitions for market research analysts based on its misapplication of the first regulatory test for a “specialty occupation” (i.e., a position qualifies as a specialty occupation if “[a] baccalaureate or higher degree or its equivalent is normally the minimum requirement for entry into the particular position”), as well as misreading the Department of Labor’s Occupational Outlook Handbook (OOH) profile for market research analysts. In the lawsuit, the employers identified at least 60 H-1B denials for market research analysts over the past three years and alleged that if USCIS had properly interpreted and applied the statute, the regulations, and the OOH profile, it would have approved the H-1B petitions. While the certification does not render a decision on the substance of the issue, it allows the parties to seek a remedy for all businesses that employ market research analysts and indicates a path forward for employers.

On Oct. 6, 2020, the Department of Homeland Security (DHS) announced the Interim Final Rule (IFR), “Strengthening the H-1B Nonimmigrant Visa Classification Program.” This rule will be effective 60 days after publication in the Federal Register, with stakeholders given a 60-day comment period on the substance, then another 30-day comment period on new information collections proposed in the rule.

The rule largely focuses on “revamping” two large components of the H-1B program: 1) the definition of specialty occupation; and 2) third part worksites.

The term “specialty occupation” in the current regulations is defined in 8 C.F.R. 214.2: “Specialty occupation means an occupation which requires theoretical and practical application of a body of highly specialized knowledge in fields of human endeavor including, but not limited to, architecture, engineering, mathematics, physical sciences, social sciences, medicine and health, education, business specialties, accounting, law, theology, and the arts, and which requires the attainment of a bachelor’s degree or higher in a specific specialty, or its equivalent, as a minimum for entry into the occupation in the United States.” In addition, the criteria as currently listed are:

  1. A baccalaureate or higher degree or its equivalent is normally the minimum requirement for entry into the particular position;
  2. The degree requirement is common to the industry in parallel positions among similar organizations or, in the alternative, an employer may show that its particular position is so complex or unique that it can be performed only by an individual with a degree;
  3. The employer normally requires a degree or its equivalent for the position; or
  4. The nature of the specific duties are so specialized and complex that knowledge required to perform the duties is usually associated with the attainment of a baccalaureate or higher degree.

8 C.F.R. 214.2(h). In the IFR, DHS is dropping the words “usually” or “normally required,” or “common to the industry” and will require the petitioner to establish that a bachelor’s degree is a specific specialty or its equivalent is a minimum requirement for entry into the occupation by showing that this is ALWAYS the requirement for the occupation as a whole.

Another large area of proposed change is with Third Party Placements. There will be a new employer-employee relationship definition, as described below. In addition, if the H-1B beneficiary’s worksite is a third-party site, that will be a factor in determining whether an employer relationship with that beneficiary exists. Employers will also need to review carefully whether there is a co-employment issue with the third-party placement firm. Third-party sites will now be subject to site inspections.

Below is a summary of the proposed changes, by topic:

  1. Site visits: USCIS may conduct on-site inspections and other compliance reviews any time after the filing of an H-1B petition. USCIS can also conduct a pre-approval inspection for an H-1B petition. The site inspection could be at the petitioner or the third-party worksite. Non-cooperation may result in the denial or revocation of the H-1B petition.
  2. Employer-employee relationship: The petitioner must establish that the offer of employment is based on a valid employer-employee relationship. The following are all the factors USCIS will weigh:
    1. Where the H-1B beneficiary does not have an ownership interest:
      1. Whether the petitioner supervises the beneficiary, and where the supervision takes place;
      2. If the supervision is not at the petitioner’s worksite, how the petitioner is able to maintain the supervision;
      3. Whether the petitioner has the right to control the work of the beneficiary on a day-to-day basis and assign projects;
      4. Petitioner provides the tools for the beneficiary to perform the duties;
      5. The petitioner hires, pays, and can fire the beneficiary;
      6. The petitioner evaluates the work product of the beneficiary;
      7. The petitioner claims the beneficiary as an employee for tax purposes;
      8. The petitioner provides employee benefits;
      9. Beneficiary uses proprietary information of the petitioner to perform work;
      10. Beneficiary produces an end product that is directly linked to the petitioner’s line of business;
      11. The petitioner has the ability to control the manner and means the work is performed.
    2. Where the H-1B beneficiary does have an ownership interest, there will be additional factors, including:
      1. Hiring, firing, and rule setting for the beneficiary and its work;
      2. Beneficiary reports to someone higher in the entity;
      3. If the beneficiary is able to influence the entity;
      4. Whether the contracts or agreements make it clear the beneficiary is an employee;
      5. Whether the beneficiary shares in the profits, losses, and liabilities of the entity.
  3. Specialty Occupation defined:
    1. Theoretical and practical application of highly specialized knowledge in fields of human endeavor, and
    2. The position requires a U.S. bachelor’s degree or higher in a directly related specific specialty. The studies must be directly related to the position, and the position is not considered specialty occupation if attainment of a general degree, such as business administration without a specialization, is sufficient. A position may allow a range of degrees, but each qualifying degree field must be directly related.
  4. Criteria for specialty occupation- must satisfy at least one of the following:
    1. U.S. bachelor’s degree or higher in a specific field is the minimum requirement for the position;
    2. U.S. bachelor’s degree or higher in a specific field is the minimum requirement for entry into parallel positions at similar organizations in the industry;
    3. Employer has a practice of requiring a U.S. bachelor’s degree or higher in a specific field for the petitioner. There must be proof that the job duties require such a degree;
    4. Specific duties are so specialized, complex, or unique that they can only be performed by one with a U.S. bachelor’s degree or higher in the specific field.
  5. Demonstrating sufficient work
    1. Petitioner must demonstrate there is sufficient work for the H-1B duration requested;
    2. If a third-party worksite, the petitioner must submit contracts, work orders, or other evidence that there is 1) sufficient specialty occupation work, and 2) a valid employer/employee relationship.
  6. Maximum validity period requested on an H-1B petition: three years for H-1B; one year for third-party worksite.

Redefined terms:

  • Third-party worksite: A worksite that is not the beneficiary’s residence in the U.S. that is not owned or leased, and not operated by the petitioner.
  • U.S. Employer: Engages the beneficiary to work; has an employer-employee relationship; has an IRS FEIN.
  • Worksite: Physical location where the work is actually performed. Each location must be on the LCA.

The U.S. Department of Labor (DOL) published an Interim Final Rule (IFR) that will become effective immediately. The new rule will apply to Permanent Employment Certification, H-1B, H-1B1, and E-3 Visa programs. DOL explains that the rule is necessary to curb actual and potential abuses of the visa programs and cites the COVID-19 public health emergency as a rationale for implementing this rule without public comment first. There is a 30-day window to comment post publication.

DOL has amended the existing wage methodology and has increased the wage levels for beneficiaries at all Occupational Employment Statistics (OES) levels – Levels 1 through 4. The current wage percentiles are set as follows:

OES Wage Level 1 – 17th Percentile

OES Wage Level 2 – 34th Percentile

OES Wage Level 3 – 50th Percentile

OES Wage Level 4 – 67th Percentile

The new percentiles are as follows:

OES Wage Level 1 – 45th Percentile

OES Wage Level 2 – 62nd Percentile

OES Wage Level 3 – 78th Percentile

OES Wage Level 4 – 95th Percentile

This may have a dramatic impact on wage determinations.

On June 17, 2020, United States Citizen and Immigration Services (USCIS) issued Policy Memorandum (PM-602-0114) rescinding the following Policy Memoranda, which was the basis of many challenges and denials against H-1B petitioners in the IT third party placement industry:

  1. Determining Employer-Employee Relationship for Adjudication of H-1B Petitions, Including Third-Party Site Placements, issued Jan. 8, 2010, and
  2. Contracts and Itineraries Requirements for H-1B Petitions Involving Third-Party Worksites, PM-602-0157, issued Feb. 22, 2018.

The rescission of the memoranda responds to a settlement between USCIS and a third-party IT employer, following the March 10, 2020, decision by the U.S. District Court for the District of Columbia rejecting USCIS policies against H-1B visa holders.

See GT’s May 2020 blog post on this matter.

The Policy Memorandum offers new guidance in place of the rescinded memoranda focusing on the following issues:

  • Employer-Employee Relationship:
    • The new Policy Memorandum clarifies that there is an employer-employee relationship if at least ONE of the “hire, pay, fire, supervise, or otherwise control the work of” factors under 8 CFR 214.2(h)(4)(ii) are present between H-1B petitioner and beneficiary. Petitioners need to submit copies of any written contracts between the petitioner and the beneficiary, or a summary of the terms of the oral agreement if a written contract does not exist, along with the Labor Condition Application (LCA).
    • The petitioner has the burden of proof to establish that employment exists at the time of filing and that it will employ the beneficiary in a specialty occupation.
  • Contracts:
    • The H-1B petitioner is not required to submit contracts or legal agreements between the petitioner and third parties. The petitioner, however, still must demonstrate the existence of an employer-employee relationship or non-speculative employment in a specialty occupation (work availability).
  • Non-Speculative Specialty Occupation Work:
    • While a petitioner is not required to identify and document the beneficiary’s specific day-to-day assignments, the petitioner must meet all statutory and regulatory requirements (excluding the itinerary requirement) as well as binding court precedent, Administrative Appeals Office (AAO) adopted and precedent decisions, and current USCIS policy guidance concerning H-1B nonimmigrant classification.
    • The guidance concerning benching remains unchanged. Being placed in non-productive status or training for an extended time period, even if paid, may qualify as being “no longer employed in the capacity specified in the petition.”
    • In assessing whether a beneficiary’s non-productive status constitutes a violation of the beneficiary’s H-1B nonimmigrant classification, the officer must determine if the time period of nonproductive status is more than that required for a reasonable transition between assignments.
  • Itinerary:
    • USCIS will abstain from requesting the itinerary under 8 CFR 214.2(h)(2)(i) until further guidance is issued on this requirement.
  • Limiting Validity Periods:
    • USCIS may issue approvals for H-1B petitions with validity periods shorter than the time period requested by the H-1B petitioner. However, the decision must be accompanied by a brief explanation as to why the validity period has been limited.

In a decision issued March 10, 2020, the U.S. District Court for the District of Columbia rejected U.S. Citizen and Immigration Services (USCIS) policies against H-1B visa holders. The issue was the sequence of memoranda and policy implementation by USCIS during the last 10 years the court considered unlawful as it has no basis in agency regulation or in the Immigration and Naturalization Act (INA).

Following the ITServe Alliance, Inc. v. Cissna decision, USCIS agreed to a settlement with ITServe Alliance reversing USCIS policy on two issues that previously resulted in H-1B denials:

  1. The Employer-Employee relationship: The court found the limited meaning of “employer-employee relationship” as announced and implemented by USCIS’ 2018 Policy Memorandum is inconsistent with the longstanding Immigration and Naturalization Service (INS) 1991 regulation. USCIS’ interpretation required the employer list the H-1B visa holder’s day-to-day tasks in such detail that few employers could satisfy this threshold. This interpretation mostly affected IT companies placing their H-1B workers at third-party worksites. The regulation specifies the employer may “hire, pay, fire, supervise, or otherwise control the work of any such employee…” (emphasis added). The court ruling clarifies the use of “or” in the regulation allows a single listed factor can establish the requisite “control” to demonstrate an employer-employee relationship.

In the settlement, USCIS agrees it will not apply its interpretation of the current regulatory language, see Neufeld Memo 2010 and 2018 Contract and Itinerary Memorandum, but rather, use common law in the required analysis of the employer-employee relationship.

  1. Proof of non-speculative work assignments, itineraries and short approvals: The court found USCIS’ application of the regulations is arbitrary and capricious, requiring contracts or other corroborated evidence of dates and locations of temporary work assignments for three future years. See 2018 Contract and Itinerary Memorandum. As a result of this policy, USCIS had increasingly been granting shorter validity periods than the three years requested in the H-1B petitions. In its ruling, the court recognizes under the American Competitiveness and Workforce Improvement Act of 1998 (ACWIA), employers could retain an H-1B employee during “nonproductive” periods as long as the company paid the H-1B visa holder.

In the settlement, USCIS is required to rescind “in its entirety within 90 days” the 2018 Contract and Itinerary Memorandum. The court’s decision stated this memorandum introduced a practice of granting visa petitions for IT consultants for less than three years, which represented a change after decades of past practice, making USCIS’s actions arbitrary and capricious. As such, per the settlement agreement, “USCIS will not issue approvals for H-1B petitions with validity periods shorter than the time period requested by the H-1B petitioner, unless such decisions include or are accompanied by a brief explanation as to why the validity period has been limited…”

Although the settlement does not require USCIS to review past H-1B decisions, it may make the preparation of H-1B petitions less burdensome for IT employers with third-party placements in the future.

In almost every state, companies have instituted temporary work from home policies—or have been instructed by government authorities to institute such policies—in response to the coronavirus (COVID-19), in an effort to “flatten the curve” and stop the spread of the virus.  In so doing, companies that regularly employ H-1B and E-3 visa holders may need to review and revise compliance strategies to help avoid possible fines and penalties. An H-1B or E-3 visa holder is permitted to work at an identified worksite that is listed on a labor condition application that is certified by the U.S. Department of Labor (DOL) and included in an H-1B or E-3 petition that is filed with U.S. immigration authorities. Working at the identified worksite location is part of the terms and conditions of employment for the H-1B or E-3 visa holder, and changes to this worksite location, even for reasons outside of the employing company’s control, may still lead to penalties for non-compliance.

  1. The new, unintended worksite location is in the same area of intended employment as the normal worksite location. In response to COVID-19, the DOL released a “frequently asked questions” on March 20, 2020, that sought to address certain compliance issues concerning H-1B and E-3 visa holders. Specifically, in this FAQ, the DOL confirmed that if an H-1B or E-3 visa holder and employee moves to a new, unintended worksite location (including the employee’s home address) that is within the same area of intended worksite location, then the company and employer are not required to file a new labor condition application with the DOL that lists the new, unintended worksite location. Instead of filing a new labor condition application with the DOL, the company and employer must provide an electronic or hard-copy posting notice at the new worksite location for 10-calendar days. Normally, the notice must be provided before the H-1B or E-3 visa holder begins working at the new worksite location, but because many companies sent their employees home suddenly and without notice because of COVID-19, the DOL said that the new notice may be provided “as soon as practical and no later than 30 calendar days after the worker begins work at the new worksite locations.”
  2. The new, unintended worksite location is not within the same area of intended employment as the normal worksite location. In situations where the new, unintended worksite location is not within the same area of intended worksite location, often meaning that the H-1B or E-3 visa holder is now working in a different county than his or her regular worksite location, then the company may take advantage of the short-term placement rule for up to 30 days, or possibly 60 days provided other conditions are met. According to the DOL’s FAQ, if the H-1B or E-3 visa holder will work at the new worksite location for more than 30 or 60 days, then the company must file a new labor condition application and a H-1B or E-3 amendment petition with USCIS before the 30 or 60-day period has elapsed. A company and employer’s failure to file the H-1B or E-3 amendment within the 30 or 60-day period may result in DOL investigations and/or penalties for failing to comply with the governing regulations.

Penalties may include civil penalties of up to $7,846 per violation, the award of back wages plus interest being paid to the H-1B or E-3 visa holder, and possibly debarment by the DOL from using the H-1B program for a temporary period or time or permanently.

The U.S. Citizenship and Immigration Service (USCIS), after publishing the final rule for a new H-1B lottery process in January 2019 has announced that the testing period is now over for the registration process in relation to the H-1B lottery and implementation will go into effect for the  fiscal year 2021 H-1B cap. See the USCIS press release here

Employers who wish to file H-1B cap-subject petitions for their employees must pay a $10 registration fee to register each employee it wishes to place in the lottery. This process is designed to streamline and reduce paper waste that had been the practice for so many years, and instead have the employer or their authorized representatives complete a registration process that will only need basic information about the company and the employee.

The initial registration period will open from March 1 through March 20, 2020. During this period, the electronic registration must be submitted by the employer or its authorized representative. If the number of registrations exceeds the H-1B numerical allocation, a lottery will be conducted between March 20 and March 31, 2020. Only those petitioners with the selected registration, with the specific prospective candidate, will be able to file a cap-subject petition for only that candidate. Note that the H-1B petition will still need to be adjudicated on its merits. Duplicate registrations by the same employer for the same employee will be discarded. 

The Department of Homeland Security plans to publish a notice in the Federal Register in the next few weeks to formally announce the implementation of this process. For more updates, please contact your GT attorney or subscribe to this blog.

U.S. Citizenship and Immigration Services announced it will require a $10 non-refundable fee for each H-1B registration, once it implements the electronic registration system. The final rule, Registration Fee Requirement for Petitioners Seeking to File H-1B Petitions on Behalf of Cap-Subject Aliens, will be effective Dec. 9, 2019. Upon implementation of the electronic registration system, petitioners seeking to file H-1B cap-subject petitions, including those eligible for the advanced degree exemption, will first have to electronically register with USCIS during a designated registration period, unless the requirement is suspended. The registration fee, which will be required when registrations are submitted, is part of an agency-wide effort to modernize and more efficiently process applications to live or work in the United States. This fee is non-refundable.

USCIS is planning to implement the registration process for the fiscal year 2021 H-1B cap selection process, pending completed testing of the system. The agency will announce the implementation timeframe and initial registration period in the Federal Register once a formal decision has been made.

For more on the H-1B program, click here.