By David Berry and Eileen Lohmann

Law360 (February 5, 2019, 1:34 PM EST) ‒ While Washington continues to look for a long-term solution on the budget, it has already created a potential long-term problem on immigration.

On Jan. 31, 2019, the Trump administration issued a regulation to reform the H-1B lottery. Despite receiving hundreds of comments urging slower, more thoughtful action. This new rule will only make the challenge of regulating high-skilled immigration worse.

Here is the issue: American companies representing a wide range of industries rely on the H-1B visa to secure desperately needed talent. International students are frequently the most promising individuals studying in science, technology, engineering and math, or STEM, fields at U.S. universities, and they need visa sponsorship to work here. At a time when unemployment is low and key positions remain unfilled, a U.S. company that identifies a talented individual at a U.S. university, and has promised to pay the prevailing wage for the position, should be able to hire that person regardless of country of origin.

Only Congress can increase the number of H-1B visas, but U.S. Citizenship and Immigration Services has introduced changes to the visa program intended to reduce bureaucratic obstacles. Instead, the new regulation threatens the entire program’s integrity.

Because the H-1B program is so important to the U.S. economy, the government has built in multiple safeguards to protect it from fraud and abuse. A company seeking to hire an H-1B professional must make attestations under oath to the U.S. Departments of Labor and Homeland Security about the intended job location, salary, position and the employee’s qualifications. Wages must be prevailing to the local labor market. And employers must provide notice to U.S. workers before filing H-1B petitions. Compliance is assured by frequent government visits to confirm that employees are doing what the employer said they would be doing, and that they are paid the proper wage. The government prosecutes companies for misrepresentations and violations.

Despite the administrative hurdles a company must clear to apply for an H-1B visa, USCIS receives upwards of 200,000 applications each year for 85,000 total visas. To manage the outsized demand, USCIS conducts a random lottery, accepts about 85,000 applications and returns the rest.

The government proposed to reform the lottery process to achieve important goals that companies share: reducing costs for employers, alleviating administrative burdens on USCIS, and bringing the process into the 21st century. The regulation creates a new method of allocating the limited supply of H-1B visas that sounds effective in theory: companies submit online “registrations” containing basic information about the company and each person they seek to sponsor. Then the government selects 85,000 registrations, enabling those companies to file complete applications for each “winner” of the registration lottery.

Good idea, yes. But terrible execution. The regulation changes how the agency distributes visas without putting up a single safeguard to prevent bad actors from manipulating the system. Existing controls would no longer be effective because employers could game the new online lottery before those controls kick in. USCIS even mentioned in its proposal the risk of companies “flooding the system with non-meritorious registrations,” but acknowledged that it does not have a solution.

The community that this rule would affect voiced this concern during the comment period and resoundingly urged the agency to wait to make changes until it is confident it can protect the H-1B program’s integrity. Microsoft Corporation wrote, “One of the primary concerns with the proposed rule’s registration process is the ease with which unscrupulous users would be able to inflate artificially their H-1B lottery selection outcomes by ‘flooding the system’ with as many registrations as possible. The shift of H-1B lottery outcomes would reward — and potentially even incentivize — bad behavior, while suppressing legitimate successful outcomes for good faith users of the system.” The U.S. Small Business Administration expressed the same worry, noting that “[t]his increase of registrations would ‘flood’ the registration pool and it more difficult for small businesses to obtain vital H-1B workers.”

Our firm works with hundreds of companies in addressing employment shortages and securing authorization for exceptional talent to work in the United States. We and our clients, along with all Americans, welcome the government’s efforts to modernize the lottery process and thereby reduce the burdens of administering and participating in the H-1B program. The system can be improved in a thoughtful way that preserves the integrity of this vital program. However, the government’s attempt at reform creates a greater problem than it aimed to solve.

To read the full, original article on Law360’s website, please click here.

David Berry is a founding partner and Eileen Lohmann is an associate at Berry Appleman & Leiden LLP.

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