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In this week’s episode, BAL’s Steve Plastrik highlights the immigration trends for Fiscal Year 2024 that impacted employers including H-1B selection rates.
View the links below for visualized data of the trends mentioned in his analysis:
Have you started preparing for the upcoming H-1B cap season? Let us help you with your planning Register for the BAL Community Benchmarking webinar: H-1B Cap Planning on Oct. 16 with special guest Catalina Komin, Immigration & Mobility Specialist for Analysis Group.
All in-house immigration professionals can join the BAL Community and access all webinars and employer resources for free.
Explore more episodes of the BAL Immigration Report podcast, available on Apple, Spotify and the BAL immigration news page.
This alert has been provided by the BAL U.S. Practice Group.
Copyright © 2024 Berry Appleman & Leiden LLP. All rights reserved. Reprinting or digital redistribution to the public is permitted only with the express written permission of Berry Appleman & Leiden LLP. For inquiries, please contact copyright@bal.com.
In this election cycle, the issue of immigration is not just about what is happening at the border. The direction of the H-1B visa program is also on the line.
The H-1B nonimmigrant visa program allows U.S. employers to hire foreign workers in specialty occupations to work temporarily in the United States. This in-demand program is the primary pathway by which employers can recruit and hire foreign workers with expertise in specialized fields such as technology, engineering and healthcare — often filling crucial skills gaps.
Since many immigration policy changes are made through the executive branch, the winner of the election will heavily influence the future of employment-based immigration. We can already predict what both potential futures might look like, assuming a Harris administration would likely continue the modernization initiatives started by President Biden and a Trump administration would bring back policies similar to those it attempted to issue at the end of its first term.
As a reminder, here is a look at the H-1B visa regulations the former president had in the pipeline before the 2020 election and what they could mean for a potential second Trump administration.
In its final days in office, the Trump administration issued a series of regulations aimed at restricting the use of the H-1B program as part of its implementation of Trump’s April 2017 “Buy American and Hire American” executive order. The order laid the foundation for many of the policies Trump’s administration pursued to restrict employment-based immigration programs. In a second Trump term, we would expect to see similar policy priorities.
The first of Trump’s H-1B regulations was the October 2020 Department of Labor wage rule, an Interim Final Rule (IFR) that — effective immediately — significantly increased wage obligations for H-1B, H-1B1, E-3 and PERM programs. The rule required that minimum salaries for foreign-born professionals be set far higher than what was typically paid to similar U.S. employees. No advance notice was given to employers, who were left scrambling to adapt.
The rule was blocked in federal court in December 2020, but had it not been, it likely would have had the effect of pricing H-1B visa holders and other employment-based immigrants out of the U.S. labor market.
The DOL published a similar final rule to amend H-1B wage obligations on Jan. 14, 2021, just days before the end of Trump’s presidency. The rule was scheduled to take effect on March 15, 2021 — during H-1B cap registration. After taking office on Jan. 20, 2021, the Biden administration delayed the final rule’s effective date and issued a public request for information to determine how to best approach the issue. A court vacated the Trump-era rule, and the Biden administration has not taken further action on the issue.
While it is unlikely that the same wage rule would be issued in a second Trump administration, as it was vacated in court, we expect that a second Trump administration would resume efforts to increase wage obligations by a significant margin.
The Department of Homeland Security under the Trump administration also issued a second rule, “Strengthening the H-1B Nonimmigrant Visa Classification Program,” on Oct. 8, 2020 — the same day DOL issued the wage rule. This IFR had a 60-day delayed effective date, and therefore did not ignite the kind of chaos we saw following the wage rule. Although this rule was also blocked in court, the Trump administration still attempted to issue a final rule by posting the text of it online a week before President Biden’s inauguration.
Had the rule gone into effect, it would have narrowed eligibility for the H-1B visa, including by providing that a position must always require a degree in a directly related specific specialty to qualify as a “specialty occupation.” In addition, the rule would have heightened evidentiary requirements for positions involving third-party placements and shortened the validity period for those cases.
Finalized in January 2021, the H-1B wage-prioritization regulation would have reshaped the H-1B cap selection process and limited opportunities for early career professionals. The rule was scheduled to take effect March 9, 2021, just before cap registration, but the Biden administration issued a notice on Feb. 8 delaying the effective date. Although it never took effect, the U.S. Citizenship and Immigration Services regulation would have replaced the annual H-1B lottery with a new selection process that prioritized H-1B registrations based on the wage level the petitioning employer would pay the beneficiary.
The proposed prioritization system would likely have eliminated eligibility for Level 1 and many Level 2 positions. Newly graduated international students would have been most impacted, as they are more likely to be hired into entry-level positions that offer Level 1 and 2 wages. In September 2021, a federal court vacated the rule and the Biden administration later withdrew it. Though President Biden did signal support for a wage-based allocation process, USCIS did not take any action to pursue this policy during his administration.
The transition between the Trump and Biden administrations brought about great uncertainty for employers because it was not clear if any of Trump’s rules were going to be in place for the 2021 H-1B cap season, for which companies had already spent months planning. We watched, in real time, as all three Trump rules went through litigation, were revisited by the Biden administration and were ultimately vacated in court.
Along with the restrictive H-1B policies Trump attempted during his first term, another change we would expect to see again in a potential second term is the rescission of the longstanding “deference policy.”
In October 2017, USCIS issued a policy memorandum that took effect immediately, directing USCIS officers to no longer give deference to prior agency determinations in extension of status cases. USCIS officers began reviewing extension cases as if they were completely new petitions. As a result, the agency issued requests for evidence and denials at higher rates than ever before. This led to a great deal of confusion and anxiety among foreign national employees and created challenges and business disruptions for employers.
The Biden administration reinstated the deference policy in April 2021 via policy memorandum. In October 2023, USCIS proposed to codify the policy into the regulations as part of the H-1B modernization proposal, which is currently moving through the regulatory process. Though the Biden administration has moved to make the policy permanent, it is currently only a policy memorandum. If the policy is not codified before Biden leaves office, a second Trump administration would be able to once again rescind the deference policy by simply issuing a policy memorandum — and create the same unpredictable, inconsistent adjudication environment we saw during the first Trump term.
If Trump is elected for a second term, it is highly likely that the administration would pursue similar policies. Here are three ways you can be prepared for that potential scenario:
BAL’s Government Strategies team is well-versed in these regulations and can consult your organization on the best path forward. Schedule a consultation with our team to get started.
This article was originally published on Law360.com.
It’s that time of year again for employers planning to secure nonimmigrant talent.
U.S. Citizenship and Immigration Services conducted the H-1B lottery last week to determine which registrations will be eligible to file petitions. Although the data on this year’s lottery selection rates is not yet available, the good news is that the current trend in low H-1B denial rates means a high probability of approval for those who have been selected. This hasn’t always been the case.
Despite significant improvements in recent years, H-1B denial rates have fluctuated wildly under the different administrations. From 2013 to 2015, during the Obama administration, the H-1B denial rates for initial employment were 7%, 8% and 6%, according to analysis of USCIS data by the National Foundation for American Policy. They rose substantially to 10% in 2016, the first year of the Trump administration.
With that administration’s more restrictive policies — including the “Buy American and Hire America Executive Order” of 2017 and the “Recission of the December 22, 2000 Guidance memo on H-1B computer-related positions,” which instructed adjudicators to deny petitions for many occupations interpreted as not requiring a bachelor’s degree — denial rates surged from prior years, peaking at 24% in 2018.
Source: National Foundation for American Policy
During the last year of the Trump administration, denial rates dropped to 13% in 2020 due in part to adverse judicial rulings. Denial rates continued to drop under the Biden administration, hitting their lowest point in 2022.
There was a slight bump in denial rates from fiscal year 2022 (2.2%) to fiscal year 2023 (3.5%), the NFAP analysis showed. The NFAP reported that about 200 medium-sized businesses accounted for two-thirds of these denials, possibly because smaller and medium-sized companies may not have expert counsel or structured immigration programs that can help ensure the right legal requirements are met. For larger companies — which typically utilize dedicated immigration counsel — denial rates are nearer to zero percent. This low denial rate trend is not likely to reverse itself for the remainder of 2024.
Whether the trend will continue beyond that is up in the air. After all, this is an election year. Under a Biden administration, denial rates could hover near the current status quo. However, a Trump administration could be less predictable and return to more restrictive policies.
The decline in H-1B denials has brought predictability that didn’t exist for employers just a few years ago. For larger employers who utilize immigration counsel, the H-1B denial rate is near zero, compared to nearly 25% in 2018.
This year’s changes to the H-1B selection process do add a bit of unpredictability because beneficiaries selected in the lottery will get to choose among employers if more than one employer submitted a registration on their behalf.
And in the broader picture, the overwhelming demand for a limited supply of H-1B cap-subject visas (just 85,000 per year) still makes planning a challenge. The new selection process may eventually lead to an improved lottery selection rate; however, legislative action is needed to address the perpetual H-1B visa shortfall.
Michelle Funk, Delya Ghosh, Tiffany Derentz, Martin Robles-Avila, Eileen Lohmann and Matt Dillinger contributed to this article.
If the first few weeks of the year are an indication, it will be hard to miss immigration in the headlines in 2024. Already, it has emerged as a key issue in congressional spending fights and the 2024 presidential campaign, which is beginning to kick into a higher gear. Border policy and campaign rhetoric may drive the news cycle, but federal agencies will continue to work out of the spotlight on regulations that will have a huge impact on business immigration programs. On top of that, the U.S. Supreme Court will decide three cases that could upend current immigration litigation procedures. Here are five questions we are watching:
Big changes are in store for the H-1B program this year after the Department of Homeland Security published a 227-page H-1B “modernization” proposal in October 2023. One immediate question is whether changes to the H-1B lottery will be in place for this year’s cap season. Under U.S. Citizenship and Immigration Services’ proposal, the agency would shift to a one-beneficiary, one-selection system rather than the current employer-focused process. This proposed change is designed to eliminate incentives for bad actors to submit multiple H-1B registrations for the same individual — and has the potential to reduce the overall number of registrations and boost H-1B selection rates for employers. Business and immigration coalitions have called on USCIS to make immediate changes to the lottery. The agency has indicated that it may finalize the lottery provisions before the rest of the proposed rule and has submitted a final rule for White House review. With H-1B registration expected to open in March, however, the timeline is tight.
The State Department took a big step last month in announcing the launch of a domestic visa renewal pilot program, scheduled to begin Jan. 29. Domestic visa renewal has not been widely available since 2004, and advocates for its revival see it not only as a way to make visa renewal easier for certain individuals but also as a means to reduce the workload at embassies and consulates abroad. The pilot is limited in scope, open to approximately 20,000 H-1B holders whose prior visas were approved during certain time frames at U.S. visa processing posts in Canada and India. No one knows for sure what comes next, but the State Department has indicated that once the pilot concludes on May 1, it will evaluate its success before potentially resuming domestic visa renewals more broadly.
USCIS is poised to finalize increases to immigration filing fees in 2024 — the big question is by how much. In January 2023, the agency proposed a new fee schedule that would see fees increase by a weighted average of 40% — and more for most high-skilled classifications. Among the biggest increases would be a jump from $10 to $215 in the H-1B registration fee. Business and trade organizations responded to the proposal by saying that while USCIS must adjust fees to cover its costs, the agency should take steps to improve services and reduce fee increases where possible. According to its regulatory agenda, USCIS is targeting April 2024 to publish a final regulation. USCIS submitted the rule for White House review in early January, suggesting the agency may be accelerating its timeline. There will likely be a delayed effective date and litigation could further slow implementation, but employers should have an idea of how dramatic the fee increases will be within a matter of months.
In October, President Biden issued an executive order on artificial intelligence that included a call for streamlined immigration processes to help keep the U.S. competitive in AI and related fields. Among other measures, Biden called on the Department of Labor to consider updates to the “Schedule A” shortage occupation list. Employers seeking to sponsor foreign nationals for Schedule A jobs do not require permanent labor certification (PERM) to begin the green card process. The DOL is currently seeking public input on STEM and non-STEM jobs that should be added to the list and recommendations about how to establish a methodology for future updates. Employers will be watching this development carefully: Schedule A has not been updated since 2004, and the ability to bypass PERM for these shortage occupations can save months or even up to a year in the green card process.
In the immigration community, all eyes will be on the Fifth Circuit Court of Appeals this year, as it is expected to rule on the legality of the Biden administration’s regulation designed to “preserve and fortify” Deferred Action for Childhood Arrivals, or DACA. The ruling will almost surely be appealed to the U.S. Supreme Court, though the Court likely won’t hear the case during its current term.
The Supreme Court is poised to decide a trio of cases that do not facially involve immigration but could upend immigration-related policy and procedures. The justices heard arguments in November in Securities and Exchange Commission v. Jarkesy, a case questioning the scope and authority of administrative law judges to decide disputes over federal matters, including immigration violations. They heard two other cases on Jan. 17 — Relentless, Inc. v. Department of Commerce and Loper Bright Enterprises v. Raimondo — that challenge the decades-old Chevron doctrine, which requires courts to defer to federal agencies’ interpretations of statutes that are not clear or are silent on the question at issue. Taken together, the cases could have a revolutionary impact on immigration litigation, including the power that immigration judges have over noncitizens and the standard of review used by federal judges in reviewing immigration decisions.
What does all this mean for employers? The business community has shown support for reforming the H-1B lottery, piloting domestic visa renewal and updating the Schedule A list of occupations, all of which, in one way or another, make it easier to obtain a nonimmigrant visa or green card. Employers are understandably less enthused about the fee increases, which could dramatically increase costs amid continued frustration with USCIS delays and inefficiencies. The potential impact of the Supreme Court cases on business is difficult to determine.
The presidential election will also have major consequences for immigration programs. President Joe Biden has generally, though not always, pursued business-friendly policies on high-skilled immigration, while the Republican frontrunner, Donald Trump, took a much more restrictionist tack in his term as president and continues to use inflammatory rhetoric on the campaign trail. What seems clear is that the coming months will determine not only how immigration programs operate in this year but potentially for years to come.
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Israeli nationals are now eligible for visa-free travel to the United States. Europe officially postpones its travel authorization program. And U.S. Citizenship and Immigration Services proposes big changes to the H-1B lottery.
Get this news and more in the new episode of BAL’s podcast, the BAL Immigration Report, available on Apple, Spotify and Google Podcasts or on the BAL news site.
This alert has been provided by the BAL US Practice Group.
Copyright © 2023 Berry Appleman & Leiden LLP. All rights reserved. Reprinting or digital redistribution to the public is permitted only with the express written permission of Berry Appleman & Leiden LLP. For inquiries, please contact copyright@bal.com.
In late April, U.S. Citizenship and Immigration Services released data showing what the U.S. immigration law community already knew: The H-1B registration system is broken.
This year, USCIS received 780,884 total registrations for just 85,000 visas available under congressionally mandated caps. The data also revealed that more than half of the registrations were submitted on behalf of beneficiaries with multiple registrations — i.e., multiple companies submitted registrations for the same individual. In April, the Wall Street Journal reported that roughly 408,000 registrations were submitted on behalf of just 96,000 individuals.
Employers are required to state that they actually intend to hire individuals they put in the lottery. USCIS raised allegations of abuse of the registration process, saying the large number of individuals with multiple registrations “raised serious concerns that some may have tried to gain an unfair advantage by working together to submit multiple registrations on behalf of the same beneficiary.”
Many of the problems were predicted when the registration system was implemented in 2020 and, if anything, it is surprising that the system wasn’t flooded to this extent sooner.
Before 2020, employers had to file full H-1B petitions the first week of April for H-1B-elgible foreign workers they hoped to hire. USCIS would then conduct a lottery to determine which petitions it would adjudicate.
USCIS designed the new registration system to reduce costs for employers and the administrative burden on the agency. Under the system, employers submit registrations in March on behalf of individuals they intend to sponsor, and then are invited to submit full petitions for those who are selected.
The problem is the registration system created a low barrier to entry. The registration fee of just $10 and minimal required information provide little incentive not to place foreign workers in the lottery. When it proposed the registration system, USCIS mentioned the risk of companies “flooding the system with non-meritorious registrations.”
This problem now appears to be a reality. So how can it be fixed?
Let’s start by giving USCIS some credit. The agency’s decision to release more detailed data than in the past has given stakeholders a peek behind the curtain and provided them a better opportunity to suggest solutions. In its April announcement, USCIS also said it had “already undertaken extensive fraud investigations.”
Furthermore, as the agency works on a proposed regulation to modernize the H-1B program, it has committed to “bolstering the H-1B registration process to reduce the possibility of misuse and fraud in the H-1B registration system.” USCIS has not yet indicated what specific measures it will propose, but these actions show the agency recognizes the gravity of the problem and is working on solutions.
However, the rulemaking process takes time, and according to the most recent regulatory agenda, the proposed H-1B rule is not expected until the end of the year. USCIS has also proposed increasing the registration fee from $10 to $215 as part of a broader proposal to dramatically increase fees to cover costs. The final increase could be smaller, but even a $215 fee might have a limited impact on the number of registrations companies submit.
In addition, uncertain timetables and the possibility of litigation for both the not-yet- proposed H-1B modernization rule and the fee rule — which has been proposed but not targeted to be finalized until March 2024 — make it impossible to know whether changes could be implemented before next March’s registration window.
The future of the H-1B registration process is of paramount concern. In the near term, USCIS should continue to provide as much transparency as possible to the public, including regarding the number of petitions it receives and its actions to address potential misuse of the system. Additional information about whether the agency plans to conduct a second registration lottery would enable employers to plan and set expectations with their employees.
While there is no silver bullet, some possibilities the agency could consider include selecting registrations by unique beneficiary, such that eligibility for H-1B sponsorship does not hinge on the number of registrations filed on a beneficiary’s behalf, and transitioning to online filing in conjunction with a “Known Employer” program.
The agency should continue to seek input from stakeholders and approach this issue thoughtfully but with urgency.
Employers can ill afford another lottery like this year’s, where just 14.6% of registrations were selected. In the absence of congressional action to raise the H-1B cap, which has remained at 85,000 since 2006, more transparency and a well-crafted regulation could help ensure this in-demand resource remains viable.
For all its limitations, the H-1B program remains the primary pathway for high-skilled foreign nationals to remain in or come to the U.S. to pursue a career. The program is crucial to helping large and small employers hire and retain needed talent in industries ranging from tech to health care to engineering. The importance of getting the registration system right cannot be understated.
The government is open—for now. The Supreme Court declines to hear a case challenging Optional Practical Training. And employers turn an eye toward the upcoming H-1B cap season.
Get this news and more in the new episode of BAL’s podcast, the BAL Immigration Report, available on Apple, Spotify and Google Podcasts or on the BAL news site.
This alert has been provided by the BAL U.S. Practice group.
Copyright ©2023 Berry Appleman & Leiden LLP. All rights reserved. Reprinting or digital redistribution to the public is permitted only with the express written permission of Berry Appleman & Leiden LLP. For inquiries, please contact copyright@bal.com.
Lawmakers introduce a Name, Image and Likeness bill with new provisions for F-1 student athletes. The U.S. curtails consular services in Niger. And a closer look at USCIS’ second H-1B lottery.