DHS Publishes Final Rule Creating Wage-Based Selection System for Cap-Subject H-1B Petitions

On January 8, 2021, the Department of Homeland Security (DHS) published a final rule which will replace the current random selection process by which USCIS selects H-1B registrations for filing of H-1B cap-subject petitions with a wage-based selection process. The new system will select registrations based on the highest Occupational Employment Statistics (OES) prevailing wage level that the offered wage equals or exceeds for the relevant Standard Occupational Classification (SOC) code and area(s) of intended employment. This ranking process will not affect the order of selection as between the regular cap and the advanced degree exemption; the wage level ranking will occur first for the regular cap selection and then for the advanced degree exemption.

The following summary provides an overview of the main provisions of the rule and how it will change the H-1B registration process:

• If more registrations are received during the annual initial registration period than necessary to reach the applicable numerical allocation, USCIS will rank and select the registrations received on the basis of the highest OES wage level that the proffered wage equaled or exceeded for the relevant SOC code and 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.
• If the proffered wage falls below an OES wage level I, because the proffered wage is based on a prevailing wage from another legitimate source (other than OES) or an independent authoritative source, USCIS will rank the registration as OES level I.
• After completion of the selection process for the regular 65,000 H-1B cap, USCIS will utilize the same ranking and selection process to meet the advanced-degree exemption if a sufficient number of registrations were submitted during the annual initial registration period to reach the advanced-degree exemption.
• If USCIS receives and ranks more registrations at a particular wage level than the projected number needed to meet the applicable numerical allocation, USCIS will randomly select from all registrations within that particular wage level to reach the applicable numerical limitation.
• If the H-1B beneficiary will work in multiple locations, USCIS will rank and select the registration based on the lowest corresponding OES wage level that the proffered wage will equal or exceed.
• Where there is no current OES prevailing wage information for the proffered position, USCIS will rank and select the registration based on the OES wage level that corresponds to the requirements of the proffered position.
• DHS has proposed changes to the H-1B electronic registration tool and Form I-129 to require petitioners to indicate the highest OES wage level that the beneficiary’s proffered wage equals or exceeds for the relevant SOC code in the area of intended employment.
• USCIS may deny or revoke approval of a subsequent new or amended petition filed by the petitioner, or a related entity, on behalf of the same beneficiary, if USCIS determines that the filing of the new or amended petition is part of the petitioner’s attempt to unfairly 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 will not deny an amended or new petition solely based on a different proffered wage if that wage does not correspond to a lower OES wage level than the wage level on which the registration was based.
• Notably, DHS estimates in its final rule that under the new wage-based selection process, no registrations for individuals who are paid a Level 1 wage will be selected to submit an H-1B cap-subject petition.

The rule is scheduled to take effect on March 9, 2021. However, the President-Elect’s transition team has indicated that the Biden Administration will issue a memorandum on January 20 delaying implementation of “midnight regulations” (i.e., those issued since the election but not yet effective). It is anticipated that the Biden Administration will adopt a 60-day delayed effective date for such midnight regulations. Depending on how the memorandum is worded, the effective date of this DHS final rule could be delayed either to March 21, 2021 (sixty days from the date of the Presidential memorandum) or May 8, 2021 (sixty days from the regulation’s effective date as published in the Federal Register).