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DHS Announces Final Rule Creating Wage-Based Selection System for New H-1B Petitions

Pursuant to a final rule published by the Department of Homeland Security (DHS), U.S. Citizenship and Immigration Services (USCIS) will use a wage-based selection process to select H-1B registrations for filing H-1B cap-subject petitions. The new selection system replaces the current random selection process, which does not consider the wage amount offered to the H-1B beneficiary. Under the new system, USCIS will determine which H-1B petitions can be filed using a ranking system that prioritizes the selection of registrations whose offered wage meets or exceeds the highest Occupational Employment Statistics (OES) prevailing wage level for the relevant Standard Occupational Classification (SOC) code and area of intended employment. The wage level ranking will be made first for petitions under the 65,000 regular cap and then for petitions qualifying under the 20,000 advanced degree exemption, but it will not affect the order of selection as between the two categories.

Here is a summary of some of the main provisions of the new H-1B registration process, according to a recent Practice Alert published by the American Immigration Lawyers Association (AILA) (See “DHS Publishes Final Rule Creating Wage-Based Selection System for Cap-Subject H-1B Petitions,” AILA Doc. No. 21011230, January 11, 2021):

  • If USCIS receives more registrations than needed during the initial registration period to reach the applicable numerical cap, then registrations will be grouped according to their relevant SOC code and area of intended employment, then ranked with those offering the highest wages starting at or above OES wage level IV being selected first, then proceeding in descending order to registrations with offered wages below OES level IV but equal to or exceeding OES wage levels III, II, and I.
  • Registrations which rely upon an alternative wage source (e.g, a legitimate non-OES source or an independent authoritative source) that is below OES wage level 1, will be ranked as OES level 1.
  • USCIS will first rank and select registrations for regular cap subject H-1B petitions, then after completion of this process, will rank and select registrations for advanced degree exemption petitions - if USCIS projects that a sufficient number of advanced degree petitions were received during the initial registration window to meet the advanced degree cap.
  • If more registrations at a particular wage level are submitted than USCIS projects will be needed to reach the applicable annual numerical allocation, then USCIS will resort to a random process to identify and select registrations within that wage level to meet the applicable numerical allocation.
  • For H-1B beneficiaries who will work in multiple locations, USCIS will use the lowest corresponding OES wage level that the offered salary equals or exceeds for ranking and selection purposes.
  • For positions that have no current OES prevailing wage data, USCIS will rank and select registrations based on the OES wage level that matches the requirements for the offered position.
  • Changes are expected to be made to the H-1B electronic registration tool and to Form I-129 which will require employers to indicate the highest OES wage level that the offered salary meets or exceeds based on the SOC corresponding to the offered position and the geographic area where the beneficiary will work.
  • USCIS may deny or revoke approvals of a new or amended H-1B petition where USCIS determines that the petitioner, or a related entity, sought by filing the new or amended petition, to unfairly decrease the wage offered to the beneficiary below the prevailing rate, and that the higher wage indicated in the registration was listed for the purpose of increasing the chances for selection.
  • New or amended H-1B petitions are not subject to a USCIS denial solely because the petitioner is offering the beneficiary a different wage, so long as the new wage is at or above the OES wage level that the approved registration was based upon.
  • DHS anticipates that the new wage-based selection process would effectively rule out selection of H-1B registrations submitted on behalf of beneficiaries who will be paid an OES Level 1 wage.

The new rule is scheduled to take effect on March 9, 2021; however, implementation of the rule may be delayed by the incoming Biden Administration to either March 21, 2021 or May 8, 2021. A May 8, 2021 effective date would make it too late for USCIS to implement the wage-based registration process for the FY 2022 cap filing season. An effective date of March 21, 2021, meanwhile, could prevent the initial registration period from opening in time, since USCIS regulations require the window for filing cap subject petitions to commence at least 14 calendar days before the start of the new fiscal year, or March 18, 2021, and to end at least 14 calendar days thereafter. It is also possible that the DHS final rule will be challenged in the courts on substantive and/or procedural grounds, which might lead to the possibility of a court enjoining enforcement of the rule.

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