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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.
H-1B registration has closed and petition filing begins next week.
The government opens an H-2B cap for returning workers.
And a look at how employers have been preparing for major USCIS filing fee increases.
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 © 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.
Earlier this month, the Department of Homeland Security published a regulation to overhaul the H-1B lottery and move to a one-beneficiary, one-selection system rather than the current employer-focused process. This change has the backing of the business community and is designed to reduce incentives for bad actors to submit multiple registrations for the same individual.
It also has the potential to reduce the overall number of H-1B registrations and improve H-1B selection rates.
Still, we expect H-1B demand to outpace supply once again this year. Under federal law, 85,000 cap-subject visas are available each year, including 20,000 set aside exclusively for advanced degree holders. In recent years, we’ve seen demand for H-1Bs skyrocket — even through a global pandemic and an uncertain economy.
As we discussed in a recent webinar, H-1B contingency planning is as important as ever. It is particularly important to have a backup plan for employees whose current work authorization will expire this year or next year, though it doesn’t hurt to begin planning even earlier.
Some of the more common H-1B alternatives include:
Every cap season has its own flavor, and we don’t always know how economic trends and regulatory changes will impact H-1B demand.
We do know the H-1B program continues to be oversubscribed. Given the low selection rate in recent years, we know many employees will be back in the lottery this year. On top of that, the H-1B registration fee is set to jump from $10 to $215 next year, providing another incentive for employers to submit registrations now.
As we said in our webinar: Plan early and often. A good H-1B contingency plan for valued employees can set you up for success this year and well into the future.
Michelle Funk is a partner and the head of BAL’s office in Tysons, Virginia. Gabriel Castro is a senior associate and head of BAL’s office in Los Angeles. Michelle and Gabriel’s recent webinar “Plan early and often: H-1B alternatives in a tight labor market,” is available on-demand here.
U.S. Citizenship and Immigration Services announces that H-1B registration will open March 6.
The State Department kicks off its domestic visa renewal pilot. And the government publishes two regulations with big implications for immigration programs.
A new USCIS fee schedule clears White House review. Companies are in the midst of H-1B contingency planning. And Bloomberg Law’s Andrew Kreighbaum joins us to discuss the calls for increased work permit options for migrants.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.
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A final H-1B rule is under White House review. The Supreme Court hears a pair of cases that could significantly affect immigration. And a look at the impact of immigration filing fee increases on touring artists and musicians.
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.
Subscribe to the BAL newsletter to get the latest in daily immigration news and expert analysis.
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.
A proposal to modify the H-1B and F-1 visa programs clears White House review. The U.S. halts visa services in Israel. And an interview with BAL CEO Jeremy Fudge.
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.
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.