DHS Proposes Wage-Based Selection Process for H-1B Visas

We’re back with another tip on another newly proposed change to the H-1B visa program! On October 28, 2020, The Department of Homeland Security (DHS) announced a proposed rule which would replace the random lottery system with a system that favors applications with higher wages.

The Current System

Employers use the H-1B visa program to hire noncitizen workers in high-skilled jobs. However, the availability of H-1B visas is not guaranteed. DHS makes only 85,000 new H-1B visas available each year, and to determine which applicants can petition for an H-1B visa, DHS uses a random lottery system. In 2020, only about 30% of all applicants for the lottery system were selected to file new H-1B visas. Further, employers must pay H-1B workers a required wage, which is the higher of either the salary paid to other US workers in the same role and location or the prevailing wage for the job in that location. The wages are broken down into four “Wage Levels,” with primarily entry-level workers making up Level I, up to Level IV, consisting of primarily leaders and experts.  Earlier this month the Department of Labor increased the wages associated with those Wage Levels significantly.  The result being that employers will need to likely increase the wages they pay to H-1B employees when applying for future H-1B visas.

New Rule

The new rule would eliminate the lottery system and replace it with a system that prioritizes registrants with the highest wages. Under the proposed system, DHS would first consider all the Level IV registrants, and then move on to Level III, and so on. When DHS gets to a wage level with more registrants than available visas, it will conduct a lottery within the wage level to determine which registrants can submit petitions.

Timing

The next H-1B lottery is expected to take place in March of 2021. Whether this rule will be in place by then may depend on a variety of factors, such as legal challenges and a change in presidential administrations. Regardless, the rule will not go into effect until after a notice and comment period of at least 60 days from the date of official publication.

Effects

As you can imagine, if the proposed rule becomes effective, workers at lower wage levels will have even less of a chance of selection for a new H-1B visa. Despite the current wage requirements, the stated purpose of the change is to prevent employers from exploiting the program to fill lower-paid job vacancies with foreign workers at lower wage rates. It is also intended to help employers better plan for their hiring needs.

Thompson Coe and myHRgenius Tip of the Week is not intended as a solicitation, does not constitute legal advice, and does not establish an attorney-client relationship.