H1-B Petitions Under Pressure

Sheak & Korzun Logo H1-B Petitions Under Pressure

H1-B petitions are under pressure from a Whitehouse executive order. But first some background.

The H-1B visa program, first launched in 1990, when President George H.W. Bush signed the “Immigration Act of 1990”, allows American firms to recruit workers with specialized and hard to find skills from abroad.

There are several steps to the process, involving different federal agencies. Employers must electronically submit a Labor Condition Application (LCA/ ETA Form 9035E/ 9035) to the Department of Labor attesting to compliance with the requirements of the H-1B, H-1B1 or E-3 program.

For LCA processing, the Department receives only the information entered on the LCA. The employer attests to the truthfulness and accuracy of the information entered on the LCA. The burden of proof is on the employer to establish the truthfulness of the information contained on the LCA.

After approval of the LCA by the Department of Labor, the employer must then submit a petition on behalf of a candidate it seeks to employ. The program caps the number of visa’s granted, with a separate cap for those with masters or higher degrees. If the number of applications exceeds the cap, the government conducts a “lottery” to decide who gets to stay. The program also has a “prevailing wage” component, under which the federal government assigns a category and typical wage for the occupation. If an employer succeeds in obtaining approval of the LCA, the petition and lottery, the employer must pay the foreign employee at least as much as the set prevailing wage or as much as the employer pays it other employees in that category. These calculations distinguish between entry level positions and advanced career positions. The obvious purpose of these prevailing wage and classification rules is to prevent employers from ignoring available American workers in favor of cheaper foreign workers who would take lower wages in return for the opportunity to come to the United States.

In the final step, the foreign employee must then obtain an actual visa from the Department of State, generally through the embassy in it the employee’s own company.

The Trump administration did not believe the prevailing wage and limited number of H-1B visas sufficiently protected American workers.

On April 18, 2017, President Trump issued a “Buy American, Hire American” executive order which explicitly mandated the H-1B program be tightened so as to prevent “discrimination” against U.S. citizens. The Buy American, Hire American executive order also directed “the Secretary of State, the Attorney General, the Secretary of Labor, and the Secretary of Homeland Security shall, as soon as practicable, suggest reforms to help ensure that H-1B visas are awarded to the most-skilled or highest-paid petition beneficiaries.” This directive has become manifest in numerous changes which both restrict the program and have placed its operation in a state of flux. Since April 18, 2017, the Executive Order has been explicitly and implicitly implemented in substantive revisions to the program itself; in increased scrutiny of the petitions, and through repeated procedural revisions which make it more difficult to plan and file petitions.

New Rule, New Priorities

On January 31, 2019, DHS issued a final rule amending its H-1B regulations, which became effective in April 19, 2019. The final rule reversed the order by which U.S. Citizenship and Immigration Services (USCIS) selects H-1B petitions under the H-1B regular cap and the advanced degree exemption, and it introduced an intended electronic registration requirement for petitioners seeking to file H-1B cap-subject petitions. The electronic registration requirement however, was suspended for the fiscal year (FY) 2020 cap season.

The changes were intended to increase the odds of hiring the “best” foreign workers. The new process is intended to give U.S. employers seeking to employ foreign workers with a U.S. master’s or higher degree a greater chance of selection in the H-1B lottery in years of excess demand for new H-1B visas. Executive Summary to Final Rule, 8 CFR Part 214 at Vol. 84 Fed. Reg. No. 21, p. 888 (January 31, 2019).

Under the new rule, USCIS first selects H-1B petitions (or registrations, once the registration requirement is implemented) submitted on behalf of all beneficiaries, including those that may be eligible for the advanced degree exemption. USCIS then selects from the remaining eligible petitions, a number projected to reach the advanced degree exemption. By changing the order in which USCIS counts these allocations, the new Rule is expected to result in an estimated increase of up to 16% (or 5,340 workers) in the number of selected petitions for H-1B beneficiaries with a master’s degree or higher from a U.S. institution of higher education.

Computer Programing No Longer Favored

In March 2017, even before the Buy American, Hire American Executive Order, the USCIS revoked a guideline that has been in place since 2000 that designates the position of computer programmer as a protected occupation under the H-1B visa program. The new guidance directed USCIC officers instead to presume “absent evidence to the contrary” that an entry level computer programming job, was not a specialty skill justifying the hiring of an alien instead of a U.S. citizen, a move to promote the hiring of U.S. citizen engineers and programmers.

Increasing “Requests for Evidence”

In the first quarter of 2019, USCIS issued Requests for Evidence (“RFE”s) for 60% of the H-1B petitions received. The most common demand was based upon USCIS’s view that the “the petitioner did not establish that the position qualifies as a ‘specialty occupation’ justifying the hiring of an alien under the H-1B program. These RFEs appear to be further efforts to implement the Buy American, Hire American Executive Order since the most common basis for RFE’s is that “The petitioner did not establish that the position qualifies as a specialty occupation” and often because the position was classified as an entry level position.

Although the law allows H-1B visas to be issued for entry level positions, the USCIS’s policy is to scrutinize such petitions much more carefully. The USCIS questioned petitions for entry level H-1B visas as describing duties for the position that are beyond entry level work and therefore failing to correctly identify and establish the position for which a foreign worker is sought, petitions as not establishing that the “entry level” position is truly a “specialty occupation” All these RFEs, in a sense, go back to the Buy American, Hire American Executive Order directive that the H-1B program serve primarily for the most highly skilled workers with advanced degrees.

USCIS also is issuing RFEs when it questions whether a true employment relationship will exist (including when the proposed employee is also an owner of the sponsoring company), and whether the petitioning company has truly demonstrated the need for a full time employee in the position.

An RFE, by its very nature, is an opportunity for the employer (or other USCIS applicant) to present additional evidence in support of the application. A petition can be strengthened through greater detail and reliance upon specific government labor studies, as well as to citations to prior examples of successful petitions.

Changing Procedural Hurdles

Both the Department of Labor and the USCIS have announced changes in the systems employers must use to obtain approval to hire a foreign H-1B worker.

“Beginning on 12:00 p.m. October 1, 2019 the Department of Labor’s Office of Foreign Labor Certification (“OFLAC”) will commence operating a new “LCA Program Module” for applicants to prepare their H-1B, H-1B1 and E3 applications through this system. OFLAC will process all LCA applications previously submitted through the current system, the iCERT System, and stakeholders will be able to access their iCERT System accounts to check the status of applications submitted through the iCERT System.”

The H-1B regulations also require petitioners seeking to file H-1B petitions on behalf of cap-subject H-1B workers, including those eligible for the advanced degree exemption, to first electronically register with USCIS during a designated registration period, unless the registration requirement is temporarily suspended. When registration is required, only those petitioners whose registrations are selected will be eligible to file an H-1B cap-subject petition. 8 CFR 214.2(h)(8)(iii)(A)(1) and (h)(8)(iii)(D).

Although the rule took effect on April 1, 2019, USCIS suspended the electronic registration requirement for the FY2020 H-1B cap filing season. USCIS has not yet announced whether it intends to implement the H-1B registration tool for the upcoming FY2021 H-1B cap filing season which begins on April 1, 2020.

Furthermore, in January 2019, USCIS published a new form to petition to bring non-immigrant workers to the country (the “I-29”), including H-1B workers However, by August 21, 2019, the USCIS announced that it would not accept the January 2019 version on applications post marked after October 14, 2019. The new form has yet to be published.

On September 1, 2019, the USCIS announced new direct filing instructions, for some but not all 1-129 petitions:

  1. Continuing previously approved employment from the same employer;
  2. Changing previously approved employment;
  3. New concurrent employment;
  4. Changing an employer;
  5. Changing status to H-18;
  6. Notifying a U.S. consulate, port of entry, or preflight inspection; or
  7. Amending a petition.

As of now, the new instructions do not apply to filings:

  1. Filed by cap-exempt petitioners or for cap-exempt entities;
  2. That are cap-exempt based on a Conrad/Interested Government Agency waiver; and\
  3. Where the employer is located in Guam or the beneficiary will be performing services in Guam. This also excludes all H-181, H-182, and H-183 petitions.

Beginning October 1, 2019, the USCIS may reject forms that are sent to the wrong service center.

On September 4, 2019, the USCIS formally proposed a fee of $10.00 for registration. While the fee is relatively small, compared to many other USCIS fees, the proposal confirmed that the registration system itself remains to be developed. The proposal acknowledges:

USCIS will, however, have to expend a total of about $1.5 million on the initial development of the registration website. This cost to the government is considered a one-time cost. At the time, DHS recognized that there may be a need to recover the costs of processing registrations (as well as recover costs of building, operating, and maintaining the registration system or costs from refining the registration system in the future. DHS was not able to estimate these additional maintenance costs.)

In short, the applicable forms, registration systems, filing instructions and even fees for the H-1B and many other non-immigrant employment related visas are in states of rapid flux. Anyone filing or preparing to file should repeatedly check with the USCIS to determine the most current requirements. More generally, the new regulations, changes in the formal guidance under which the government will review applications and the increase in RFEs all slow down the H-1B process and considerably increase the costs and efforts to prepare a successful petition. Employers, of course, seek to reduce recruitment time and costs. Those employers willing to invest the time and effort to recruit foreign workers for skilled positions should seek advice on the most effective preparation of both their original petitions (or registrations once a registration is put in place) and in responding to any RFEs.