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DHS Issues Final Rule Changing H-1B Cap Selection Process

04 February 2019 Labor & Employment Law Perspectives

The Department of Homeland Security (DHS) published a new rule on January 31, 2019 that makes significant changes to the way in which DHS will administer the annual H-1B allocation (the H-1B cap). Starting in April 2019, DHS will change the order in which the agency allocates the available slots under the H-1B cap. In 2020, DHS will implement an electronic registration system that employers must use when seeking permission to file H-1B cap-subject cases.

Background on H-1B Cap: The H-1B classification provides temporary permission for employers to hire qualified foreign nationals in specialty occupations. DHS may accept only a limited number of H-1B cases during each of the federal government’s fiscal years because of the annual cap. With some exceptions, the cap applies to cases in which the foreign national has not previously been in H-1B status within the last six years. There are 65,000 H-1B cap slots. There also are 20,000 additional H-1B slots that may be allocated only to cases involving advanced degrees from American colleges or universities. Because DHS usually receives many more cases than it may accept, DHS conducts a random, computerized selection process to allocate the H-1B cap. Historically, DHS first has allocated the 20,000 slots reserved for American advanced degree cases and then has allocated the 65,000 slots that cover the broader pool of cases.

Changes in 2019: Beginning in April 2019, DHS will reverse the order of its H-1B cap allocation. DHS first will run the random, computerized selection process to allocate the 65,000 slots against all cap-subject cases (i.e., cases involving American advanced degrees, other American degrees, foreign degrees, degree equivalencies, and so on). DHS next will allocate the 20,000 slots against the pool of remaining American advanced degree cases. DHS projects that this new method will result in selecting up to 5,340 more American advanced degree cases. This increase is one of the ways in which DHS is seeking to ensure that more H-1B slots are allocated to cases involving the most-skilled or highest-paid foreign nationals. DHS believes this will result in better administration of the H-1B program and protect United States workers as encouraged by the president’s Buy American, Hire American Executive Order.

Changes in 2020: In 2020, DHS will establish a portal through which employers will electronically submit a short questionnaire to request permission to file H-1B cap-subject cases. DHS will allocate H-1B slots against the electronic registrations using the new selection method first implemented in 2019. Employers then will prepare full H-1B cases only if DHS selects their registrations. This change should save employers and DHS significant time and expense.

Here are some highlights regarding the new electronic registration system:

  • DHS will announce the initial registration period at least 30 calendar days in advance of the start date.
  • After the electronic registration system is activated, employers must use the system to request permission to file an H-1B cap-subject case.
  • The registration period will begin at least 14 calendar days before DHS will allow H-1B cap cases to be filed for authorization that is effective in the new fiscal year.
  • Once commenced, the registration period will last at least 14 calendar days.
  • DHS will require employers to complete a separate registration for each H-1B cap-subject case.
  • DHS will prohibit employers from submitting multiple registrations naming the same foreign national in an effort to increase the chances of selection under the cap. Indeed, DHS will invalidate such registrations.
  • DHS will notify the employers whose registrations are selected under the cap, and only those employers will prepare and file fully documented H-1B cases.
  • Employers will have at least 90 days after receiving notice of selection to prepare and file their cases.
  • DHS will distribute further information on how to use the new system as the agency draws closer to the date of implementation.

Important Reminder: The electronic registration system will not be implemented until 2020. This year, employers still must prepare and submit their fully documented cases to DHS during the first five business days of April 2019. If a case is selected under the cap and DHS also grants H-1B authorization, the authorization should begin on or after October 1, 2019.