Federal Register, Volume 85 Issue 212 (Monday, November 2, 2020)

[Federal Register Volume 85, Number 212 (Monday, November 2, 2020)]
[Proposed Rules]
[Pages 69236-69265]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-24259]

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Proposed Rules
Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.

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Federal Register / Vol. 85, No. 212 / Monday, November 2, 2020 /
Proposed Rules

[[Page 69236]]

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DEPARTMENT OF HOMELAND SECURITY

8 CFR Part 214

[CIS No. 2674-20; DHS Docket No. USCIS-2020-0019]
RIN 1615-AC61

Modification of Registration Requirement for Petitioners Seeking
To File Cap-Subject H-1B Petitions

AGENCY: U.S. Citizenship and Immigration Services, Department of
Homeland Security.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Department of Homeland Security (DHS or the Department)
proposes to amend its regulations governing the process by which U.S.
Citizenship and Immigration Services (USCIS) selects H-1B registrations
for filing of H-1B cap-subject petitions (or H-1B petitions for any
year in which the registration requirement will be suspended), by
generally first selecting registrations based on the highest
Occupational Employment Statistics (OES) prevailing wage level that the
proffered wage equals or exceeds for the relevant Standard Occupational
Classification (SOC) code and area(s) of intended employment. This
proposed rule would not affect the order of selection as between the
regular cap and the advanced degree exemption. The wage level ranking
would occur first for the regular cap selection and then for the
advanced degree exemption. Rote ordering of petitions leads to
impossible results because petitions are submitted simultaneously. A
random lottery system is reasonable, but inconsiderate of Congress's
statutory purposes for the H-1B program and its administration.
Instead, a registration system that faithfully implements the INA while
prioritizing registrations based on wage level within each cap would
increase the average and median wage levels of H-1B beneficiaries who
would be selected for further processing under the H-1B allocations.
Moreover, it would maximize H-1B cap allocations, so that they more
likely would go to the best and brightest workers.

DATES: Written comments must be submitted on this proposed rule on or
before December 2, 2020. Comments on the collection of information (see
Paperwork Reduction Act section) must be received on or before January
4, 2021. Comments on both the proposed rule and the collection of
information received on or before December 2, 2020 will be considered
by DHS and USCIS. Only comments on the collection of information
received between December 3, 2020 and January 4, 2021 will be
considered by DHS and USCIS. Comments received after December 2, 2020
on the proposed rule other than those specific to the collection of
information will not be considered by DHS and USCIS.

ADDRESSES: You may submit comments on the entirety of this proposed
rule package, identified by DHS Docket No. USCIS-2020-0019, through the
Federal eRulemaking Portal: http://www.regulations.gov. Follow the
website instructions for submitting comments. Comments submitted in a
manner other than the one listed above, including emails or letters
sent to DHS or USCIS officials, will not be considered comments on the
proposed rule and may not receive a response from DHS. Please note that
DHS and USCIS cannot accept any comments that are hand delivered or
couriered. In addition, USCIS cannot accept comments contained on any
form of digital media storage devices, such as CDs/DVDs and USB drives.
Due to COVID-19, USCIS is also not accepting mailed comments at this
time. If you cannot submit your comment by using http://www.regulations.gov, please contact Samantha Deshommes, Chief,
Regulatory Coordination Division, Office of Policy and Strategy, U.S.
Citizenship and Immigration Services, Department of Homeland Security,
by telephone at (202) 658-9621 for alternate instructions.

FOR FURTHER INFORMATION CONTACT: Charles L. Nimick, Chief, Business and
Foreign Workers Division, Office of Policy and Strategy, U.S.
Citizenship and Immigration Services, Department of Homeland Security,
20 Massachusetts Ave. NW, Suite 1100, Washington, DC 20529-2120.
Telephone Number (202) 658-9621 (not a toll-free call). Individuals
with hearing or speech impairments may access the telephone numbers
above via TTY by calling the toll-free Federal Information Relay
Service at 1-877-889-5627 (TTY/TDD).

SUPPLEMENTARY INFORMATION:

I. Table of Contents

II. Public Participation
III. Background
A. Purpose and Summary of the Regulatory Action
B. Legal Authority
C. The H-1B Visa Program's Numerical Cap and Exemptions
D. Current Selection Process
E. Wage Requirement
F. Proposed Rule
IV. Statutory and Regulatory Requirements
A. Executive Orders 12866 (Regulatory Planning and Review),
Executive Order 13563 (Improving Regulation and Regulatory Review),
and Executive Order 13771 (Reducing Regulation and Controlling
Regulatory Costs)
1. Summary of Economic Effects
2. Background and Purpose of the Proposed Rule
3. Historic Population
4. Cost-Benefit Analysis
i. Costs and Cost Savings of Regulatory Changes to Petitioners
a. Methodology Based on Historic FYs 2019-2020
b. FY 2021 Data
c. Unquantified Costs & Benefits
d. Costs of Filing Form I-129H1 Petitions
e. Costs of Submitting Registrations as Modified by This
Proposed Rule
f. Familiarization Cost
ii. Total Estimated Costs of Regulatory Changes
iii. Costs to the Federal Government
5. Regulatory Alternatives
B. Regulatory Flexibility Act
1. Initial Regulatory Flexibility Analysis
i. A Description of the Reasons Why the Action by the Agency Is
Being Considered
ii. A Statement of the Objectives of, and Legal Basis for, the
Proposed Rule
iii. A Description and, Where Feasible, an Estimate of the
Number of Small Entities to Which the Proposed Changes Would Apply
iv. A Description of the Projected Reporting, Recordkeeping, and
Other Compliance Requirements of the Proposed Rule, Including an
Estimate of the Classes of Small Entities That Will Be Subject to
the Requirement and the Types of Professional Skills
v. An Identification of All Relevant Federal Rules, to the
Extent Practical, That May Duplicate, Overlap, or Conflict With the
Proposed Rule
vi. Description of Any Significant Alternatives to the Proposed
Rule That Accomplish the Stated Objectives of Applicable Statutes
and That Minimize Any

[[Page 69237]]

Significant Economic Impact of the Proposed Rule on Small Entities
C. Unfunded Mandates Reform Act
D. Executive Order 13132 (Federalism)
E. Executive Order 12988 (Civil Justice Reform)
F. Executive Order 13175 (Consultation and Coordination With
Indian Tribal Governments)
G. National Environmental Policy Act
H. Paperwork Reduction Act
1. USCIS H-1B Registration Tool
2. USCIS Form I-129
I. Signature

II. Public Participation

DHS invites all interested parties to participate in this
rulemaking by submitting written data, views, comments, and arguments
on all aspects of this proposed rule. DHS also invites comments that
relate to the economic, environmental, or federalism effects that might
result from this proposed rule. Comments must be submitted in English,
or an English translation must be provided. Comments that will provide
the most assistance to DHS in implementing these changes will:
Reference a specific portion of the proposed rule; explain the reason
for any recommended change; and include data, information, or authority
that supports such a recommended change. Comments submitted in a manner
other than those listed in the ADDRESSES section, including emails or
letters sent to DHS or USCIS officials, will not be considered comments
on the proposed rule. Please note that DHS and USCIS cannot accept any
comments that are hand delivered or couriered. In addition, USCIS
cannot accept mailed comments contained on any form of digital media
storage devices, such as CDs/DVDs and USB drives.
Instructions: If you submit a comment, you must include the agency
name (U.S. Citizenship and Immigration Services) and the DHS Docket No.
USCIS-2020-0019 for this proposed rule. Regardless of the method used
for submitting comments or material, all submissions will be posted,
without change, to the Federal eRulemaking Portal at http://www.regulations.gov, and will include any personal information you
provide. Therefore, submitting this information makes it public. You
may wish to consider limiting the amount of personal information that
you provide in any voluntary public comment submission you make to DHS.
DHS may withhold information provided in comments from public viewing
that it determines may impact the privacy of an individual or is
offensive. For additional information, please read the Privacy and
Security Notice available at http://www.regulations.gov.
Docket: For access to the docket and to read background documents
or comments received, go to http://www.regulations.gov, referencing DHS
Docket No. USCIS-2020-0019. You may also sign up for email alerts on
the online docket to be notified when comments are posted or a final
rule is published.

III. Background

A. Purpose and Summary of the Regulatory Action

On April 18, 2017, the President issued an Executive order that
instructed DHS to ``propose new rules and issue new guidance, to
supersede or revise previous rules and guidance if appropriate, to
protect the interests of United States workers in the administration of
our immigration system.'' \1\ E.O. 13788 specifically mentioned the H-
1B program and directed DHS and other agencies to ``suggest reforms to
help ensure that H-1B visas are awarded to the most-skilled or highest-
paid petition beneficiaries.'' \2\ On June 22, 2020, the President
issued a Proclamation, Suspension of Entry of Immigrants and
Nonimmigrants Who Present a Risk to the United States Labor Market
During the Economic Recovery Following the 2019 Novel Coronavirus
Outbreak (Proclamation).\3\ Section 5 of the Proclamation directs the
Secretary of Homeland Security to, ``as soon as practicable, and
consistent with applicable law, consider promulgating regulations or
take other appropriate action regarding the efficient allocation of
visas pursuant to section 214(g)(3) of the INA (8 U.S.C. 1184(g)(3))
and ensuring that the presence in the United States of H-1B
nonimmigrants does not disadvantage United States workers.'' \4\
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\1\ See Executive Order 13788, Buy American and Hire American,
82 FR 18837, sec. 5 (Apr. 18, 2017).
\2\ See id. at sec. 5(b).
\3\ See Proclamation 10052 of June 22, 2020, Suspension of Entry
of Immigrants and Nonimmigrants Who Present a Risk to the United
States Labor Market During the Economic Recovery Following the 2019
Novel Coronavirus Outbreak, 85 FR 38263 (June 25, 2020).
\4\ See id.
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DHS proposes to amend its regulations governing the selection of
registrations submitted by prospective petitioners eventually seeking
to file H-1B cap-subject petitions (or the selection of petitions, if
the registration process were suspended), which includes petitions
subject to the regular cap and those asserting eligibility for the
advanced degree exemption, to allow for ranking and selection based on
wage levels. When applicable, USCIS would rank and select the
registrations received generally on the basis of the highest OES wage
level that the proffered wage would equal or exceed for the relevant
SOC code and in the area of intended employment, beginning with OES
wage level IV and proceeding in descending order with OES wage levels
III, II, and I. The proffered wage is the wage that the employer
intends to pay the beneficiary. As explained in greater detail below,
this ranking process would not alter the prevailing wage level
associated with a given position for U.S. Department of Labor (DOL)
purposes, which is informed by a comparison of the requirements for the
proffered position to the normal requirements for the occupational
classification.
Prioritizing wage levels in the registration selection process
incentivizes employers to offer higher wages, or to petition for
positions requiring higher skills and higher-skilled aliens that are
commensurate with higher wage levels, to increase the likelihood of
selection for an eventual petition. Similarly, it disincentivizes abuse
of the H-1B program to fill lower-paid, lower-skilled positions, which
is a significant problem under the present selection system.\5\ With
limited exceptions, H-1B petitioners are not required to demonstrate a
labor shortage as a prerequisite for obtaining H-1B workers.
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\5\ See U.S. Department of Homeland Security, U.S. Citizenship
and Immigration. Services, Office of Policy and Strategy, Policy
Research Division, I-129 Petition for H-1B Nonimmigrant Worker (Cap
Subject) Wage Levels for H-1B Petitions filed in FY2018, Database
Queried: Aug. 17, 2020, Report Created: Aug. 17, 2020, Systems: C3
via SASPME, DOL OFLC Performance DATA H1B for 2018, 2019 (showing
that, for petitions with identifiable certified labor condition
applications, 161,432 of the 189,963 (or approximately 85%) H-1B
petitions for which wage levels were reported were for level I and
II wages); I-129 Petition for H-1B Nonimmigrant Worker (Cap Subject)
Wage Levels for H-1B Petitions filed in FY2019, Database Queried:
Aug. 17, 2020, Report Created: Aug. 17, 2020, Systems: C3 via
SASPME, DOL OFLC Performance DATA H1B for 2018, 2019 (showing that,
for petitions with identifiable certified labor condition
applications, 87,589 of the 103,067 (or approximately 85%) H-1B
petitions for which wage levels were reported were for level I and
II wages).
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The number of H-1B cap-subject petitions, including those filed for
the advanced degree exemption, has frequently exceeded the annual H-1B
numerical allocations. For at least the last decade, USCIS has received
more H-1B petitions than the annual H-1B numerical allocation in those
respective years. Since the FY2014 cap season (April 2013), USCIS has
received more H-1B petitions (or registrations) in the first five days
of filing (or the initial registration period) than the annual H-

[[Page 69238]]

1B numerical allocations. But the INA states that ``aliens who are
subject to the numerical limitations . . . shall be issued visas (or
otherwise provided nonimmigrant status) in the order in which petitions
are filed for such visas or status.'' \6\ A rote interpretation of this
provision is impossible.\7\ ``365 days in a year and 85,000 available
visas'' means many submissions are received on the same day.\8\ For
example, under the prior petition selection process (which remains in
effect in any year in which registration is suspended), USCIS received
hundreds of thousands of full H-1B petitions in the mail on the same
day and had no legitimate way to determine which petition was ``filed''
first. Therefore, DHS promulgated a regulation describing a random
registration selection process before any petitions are filed.\9\ A
passive interpretation of the statutory requirement is similarly
impossible to apply under the current electronic registration system
because it would result in hundreds of thousands of registrants
uploading registration information online at the exact same moment, at
best leaving computer speed as the determinant as to who registered
first.
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\6\ See INA section 214(g)(3).
\7\ See Registration Requirement for Petitioners Seeking To File
H-1B Petitions on Behalf of Cap-Subject Aliens, 84 FR 888, 896 (Jan.
31, 2019).
\8\ See Walker Macy LLC v. United States Citizenship &
Immigration Servs., 243 F. Supp. 3d 1156, 1170 (D. Or. 2017).
\9\ See Registration Final Rule, supra note 7.
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The current random lottery selection process is reasonable, but not
optimal. It has caused results that contradict the purpose of the
statute. However, ``[i]t is a cardinal canon of statutory construction
that statutes should be interpreted harmoniously with their dominant
legislative purpose.'' \10\ Yet, under the current registration system
the majority of H-1B cap-subject petitions have been filed for
positions certified at the two lowest wage levels: level I or level II
prevailing wages.\11\ This contradicts the dominant legislative purpose
of the statute because the intent of the H-1B program is to help U.S.
employers fill labor shortages in positions requiring highly skilled or
highly educated workers.\12\ So, by changing the selection process, for
these years of excess demand, from a random lottery selection to a
wage-level-based selection process, DHS would implement the statute
more faithfully to its dominant legislative purpose, increasing the
chance of selection for registrations or petitions seeking to employ
beneficiaries at wages that would equal or exceed the level IV or level
III prevailing wage for the applicable occupational classification. A
wage-level-based selection also is consistent with the administration's
goal of improving policies such that H-1B classification is more likely
to be awarded to petitioners seeking to employ higher-skilled and
higher-paid beneficiaries.\13\
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\10\ See Spilker v. Shayne Labs., Inc., 520 F.2d 523, 525 (9th
Cir. 1975) (citing F.T.C. v. Fred Meyer, Inc., 390 U.S. 341, 349
(1968) (``[W]e cannot, in the absence of an unmistakable directive,
construe the Act in a manner which runs counter to the broad goals
which Congress intended it to effectuate.'')).
\11\ See U.S. Department of Homeland Security, U.S. Citizenship
and Immigration. Services, Office of Policy and Strategy, Policy
Research Division, H-1B Wage Level by Top 25 Metro, Database
Queried: July 10, 2020, Report Created: July 14, 2020, Systems: C3
via SASPME, DOL OFLC Performance DATA H1B for 2018, 2019, Bureau of
Labor Statistics: Occupational Employment Statistics for 2018, 2019
(establishing that, for the top 25 metropolitan service areas for
which H-1B beneficiaries were sought in FYs 2018 and 2019, all level
I wages, 84% of level II wages, and 76% of ``No Wage Level'' wages
fell below the Bureau of Labor Statistics median wages); Daniel
Costa and Ron Hira, Economic Policy Institute, H-1B Visas and
Prevailing Wage Level (May 4, 2020), https://www.epi.org/publication/h-1b-visas-and-prevailing-wage-levels/ (explaining that
``three-fifths of all H-1B jobs were certified at the two lowest
prevailing wages in 2019...., and, ``[i]n fiscal year (FY) 2019, a
total of 60% of H-1B positions certified by Department of Labor
(DOL) had been assigned wage levels [I and II]: 14% were at H-1B
Level 1 (the 17th percentile) and 46% per at H-1B Level 2 (34th
percentile)''). Data concerning FY 2018 and 2019 petition filings
pre-dates the publication of DOL, ETA, Strengthening Wage
Protections for the Temporary and Permanent Employment of Certain
Aliens in the United States, 85 FR 63872 (Oct. 8, 2020).
\12\ See H.R. Rep. 101-723(I) (1990), as reprinted in 1990
U.S.C.C.A.N. 6710, 6721 (stating ``The U.S. labor market is now
faced with two problems that immigration policy can help to correct.
The first is the need of American business for highly skilled,
specially trained personnel to fill increasingly sophisticated jobs
for which domestic personnel cannot be found and the need for other
workers to meet specific labor shortages'').
\13\ See Kirk Doran et al., University of Notre Dame, The
Effects of High-Skilled Immigration Policy on Firms: Evidence from
Visa Lotteries (Feb. 2016), https://gspp.berkeley.edu/assets/uploads/research/pdf/h1b.pdf (noting that ``additional H-1Bs lead to
lower average employee earnings and higher firm profits'' and the
authors' ``results are more supportive of the narrative about the
effects of H-1Bs on firms in which H-1Bs crowd out alternative
workers, are paid less than the alternative workers whom they crowd
out, and thus increase the firm's profits despite no measurable
effect on innovation''); John Bound et al., National Bureau of
Economic Research, Understanding the Economic Impact of the H-1B
Program on the U.S., Working Paper 23153 (Feb. 2017), http://www.nber.org/papers/w23153 (``In the absence of immigration, wages
for US computer scientists would have been 2.6% to 5.1% higher and
employment in computer science for US workers would have been 6.1%
to 10.8% higher in 2001.'').
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B. Legal Authority

The Secretary of Homeland Security's authority for these regulatory
amendments is found in various sections of the Immigration and
Nationality Act (INA), 8 U.S.C. 1101 et seq., and the Homeland Security
Act of 2002 (HSA), Public Law 107-296, 116 Stat. 2135, 6 U.S.C. 101 et
seq. General authority for issuing this proposed rule is found in INA
section 103(a), 8 U.S.C. 1103(a), which authorizes the Secretary to
administer and enforce the immigration and nationality laws, as well as
HSA section 102, 6 U.S.C. 112, which vests all of the functions of DHS
in the Secretary and authorizes the Secretary to issue regulations. See
also 6 U.S.C. 202(4) (charging the Secretary with ``[e]stablishing and
administering rules . . . governing the granting of visas or other
forms of permission . . . to enter the United States to individuals who
are not a citizen or an alien lawfully admitted for permanent residence
in the United States''). Further authority for these regulatory
amendments is found in:
INA section 101(a)(15)(H)(i)(b), 8 U.S.C.
1101(a)(15)(H)(i)(b), which classifies as nonimmigrants aliens coming
temporarily to the United States to perform services in a specialty
occupation or as a fashion model with distinguished merit and ability;
INA section 214(a)(1), 8 U.S.C. 1184(a)(1), which
authorizes the Secretary to prescribe by regulation the terms and
conditions of the admission of nonimmigrants;
INA section 214(c), 8 U.S.C. 1184(c), which, among other
things, authorizes the Secretary to prescribe how an importing employer
may petition for an H nonimmigrant worker, and the information that an
importing employer must provide in the petition; and
INA section 214(g), 8 U.S.C. 1184(g), which, among other
things, prescribes the H-1B numerical limitations, various exceptions
to those limitations, and criteria concerning the order of processing
H-1B petitions.
Further, under HSA section 101, 6 U.S.C. 111(b)(1)(F), a primary
mission of DHS is to ``ensure that the overall economic security of the
United States is not diminished by efforts, activities, and programs
aimed at securing the homeland.''
Finally, as explained above, ``Congress left to the discretion of
USCIS how to handle simultaneous submissions.'' \14\ Accordingly,
``USCIS has discretion to decide how best to order those petitions'' in
furtherance of Congress' legislative purpose.\15\
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\14\ See Walker Macy v. USCIS, 243 F.Supp.3d at 1176 (finding
that USCIS' rule establishing the random-selection process was a
reasonable interpretation of the INA).
\15\ Id.

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[[Page 69239]]

C. The H-1B Visa Program's Numerical Cap and Exemptions

The H-1B visa program allows U.S. employers to temporarily hire
foreign workers to perform services in a specialty occupation, services
related to a Department of Defense (DoD) cooperative research and
development project or coproduction project, or services of
distinguished merit and ability in the field of fashion modeling. See
INA 101(a)(15)(H)(i)(b), 8 U.S.C. 1101(a)(15)(H)(i)(b); Public Law 101-
649, section 222(a)(2), 104 Stat. 4978 (Nov. 29, 1990); 8 CFR 214.2(h).
A specialty occupation is defined as an occupation that requires the
(1) theoretical and practical application of a body of highly
specialized knowledge and (2) attainment of a bachelor's or higher
degree in the specific specialty (or its equivalent) as a minimum
qualification for entry into the occupation in the United States. See
INA 214(i)(l), 8 U.S.C. 1184(i)(l).
Congress has established limits on the number of foreign workers
who may be granted initial H-1B nonimmigrant visas or status each
fiscal year (FY) (commonly known as the ``cap''). See INA section
214(g), 8 U.S.C. 1184(g). The total number of foreign workers who may
be granted initial H-1B nonimmigrant status during any FY currently may
not exceed 65,000. See INA section 214(g), 8 U.S.C. 1184(g). Certain
petitions are exempt from the 65,000 numerical limitation. See INA
section 214(g)(5) and (7), 8 U.S.C. 1184(g)(5) and (7). The annual
exemption from the 65,000 cap for H-1B workers for those who have
earned a qualifying U.S. master's or higher degree may not exceed
20,000 foreign workers. See INA section 214(g)(5)(C), 8 U.S.C.
1184(g)(5)(C).
Congressional intent behind creating the H-1B program was, in part,
to help U.S. employers fill labor shortages in positions requiring
highly skilled or highly educated workers.\16\ A key goal of the
program at its inception was to help U.S. employers obtain the
temporary employees they need to meet their business needs to remain
competitive in the global economy.\17\ To address legitimate
countervailing concerns of the adverse impact foreign workers could
have on U.S. workers, Congress put in place a number of measures
intended to protect U.S. workers, including the annual numerical cap.
Congress was concerned that a surplus of foreign labor could depress
wages for all workers in the long run and recognized the cap as a means
of ``continuous monitoring of all admissions.'' \18\
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\16\ See H.R. Rep. 101-723(I), supra note 12 at 6721.
\17\ See Bipartisan Policy Council, Immigration in Two Acts,
Nov. 2015, at 7, https://bipartisanpolicy.org/wp-content/uploads/2019/03/BPC-Immigration-Legislation-Brief.pdf, citing H.R. Rep. 101-
723(I) supra note 12 at 6721 (``At the time [1990], members of
Congress were also concerned about U.S. competitiveness in the
global economy and sought to use legal immigration as a tool in a
larger economic plan, stating that `it is unlikely that enough U.S.
workers will be trained quickly enough to meet legitimate employment
needs, and immigration can and should be incorporated into an
overall strategy that promotes the creation of the type of workforce
needed in an increasingly global economy.' '').
\18\ See H.R. Conf. Rep. 101-955, at 126 (1990), as reprinted in
1990 U.S.C.C.A.N. 6784, 6790-91.
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The demand for H-1B workers subject to the annual numerical cap has
exceeded the cap every year for more than a decade. This high demand
created a rush of simultaneous submissions at the beginning of the H-1B
petition period, preventing a straightforward application of the
statutory provision that these H-1B cap numbers be awarded on a first-
come, first served basis, i.e., ``in the order in which the petitions
are filed,'' as described above. ``It is not difficult to envision a
scenario where many more petitions arrive on the final receipt date
than are needed to fill the statutory cap, and processing them `in
order' . . . may also be random and arbitrary.'' \19\ To that end, DHS
has implemented regulations over the years that provide for a random
selection from all filings or registrations that occur within a certain
timeframe.
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\19\ See Walker Macy, 243 F.Supp.3d at 1174.
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However, while the random selection of petitions or registrations
is reasonable, DHS believes it is neither the optimal, nor the
exclusive, method of selecting petitions or registrations toward the
numerical allocations when more registrations or petitions, as
applicable, are submitted than projected as needed to reach the
numerical allocations. Pure randomization does not serve the ends of
the H-1B program or Congressional intent. Further, as one court has
importantly held, ``Congress left to the discretion of USCIS how to
handle simultaneous submissions'' and ``USCIS has discretion to decide
how best to order those petitions.'' \20\ In recognition of this clear
discretion, DHS has it within its authority to further revise and
refine how it believes USCIS can best order H-1B petitions or
registrations. Therefore, DHS believes it is necessary and consistent
with the intent of the H-1B statutory scheme to utilize the numerical
cap in a way that incentivizes a U.S. employer's recruitment of
beneficiaries for positions requiring the highest skill levels within
the visa classification or otherwise earning the highest wages in an
occupational classification and area of intended employment, which
correlates with higher skill levels. Put simply, because demand for H-
1B visas has exceeded the annual supply for more than a decade,\21\ DHS
prefers that cap-subject H-1B visas go to beneficiaries earning the
highest wages relative to their SOC codes and area(s) of intended
employment. DHS believes that salary generally is a reasonable proxy
for skill level.\22\ In every fiscal year since FY 2011, the number of
H-1B cap-subject petitions, including those filed for the advanced
degree exemption, has exceeded the annual H-1B numerical
allocations.\23\ By engaging in a wage-level-based prioritization of
registrations, DHS is better ensuring that new H-1B visas will go to
the highest skilled or highest paid beneficiaries. Facilitating the
admission of higher-skilled workers ``would benefit the economy and
increase the United States' competitive edge in attracting the `best
and the brightest' in the global labor market,'' consistent with the
goals of the H-1B program.\24\
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\20\ Id. at 1176.
\21\ Total Number of H-1B Cap-Subject Petitions Submitted FYs
2016-2020, USCIS Service Center Operations (SCOPS), June 2019. Total
Number of Selected Petitions data, USCIS Office of Performance and
Qualify (OPQ), Performance Analysis and External Reporting (PAER),
July 2020.
\22\ See U.S. Department of Labor, Employment and Training
Administration, Strengthening Wage Protections for the Temporary and
Permanent Employment of Certain Aliens in the United States, 85 FR
63872, 63874 (Oct. 8, 2020) (it is a ``largely self-evident
proposition that workers in occupations that require sophisticated
skills and training receive higher wages based on those skills.'').
\23\ Total Number of H-1B Cap-Subject Petitions Submitted FYs
2016-2020, USCIS Service Center Operations (SCOPS), June 2019. Total
Number of Selected Petitions data, USCIS Office of Performance and
Qualify (OPQ), Performance Analysis and External Reporting (PAER),
July 2020.
\24\ See Muzaffar Chrishti and Stephen Yale-Loehr, Migration
Policy Institute, The Immigration Act of 1990: Unfinished Business a
Quarter-Century Later (July 2016), https://www.migrationpolicy.org/sites/default/files/publications/1990-Act_2016_FINAL.pdf (``Sponsors
of [the Immigration Act of 1990 which created the H-1B program as it
exists today] believed that facilitating the admission of higher-
skilled immigrants would benefit the economy and increase the United
States' competitive edge in attracting the `best and the brightest'
in the global labor market.'').
---------------------------------------------------------------------------

DHS data shows a correlation between higher salaries and higher
wage levels.\25\ As a position's required skill level increases
relative to the occupation, so,

[[Page 69240]]

too, may the wage level, and necessarily, the corresponding prevailing
wage.\26\ In most cases where the proffered wage equals or exceeds the
prevailing wage, a prevailing wage rate reflecting a higher wage level
is a reasonable proxy for the higher level of skill required for the
position, based on the way prevailing wage determinations are made. DHS
recognizes, however, that some employers may choose to offer a higher
proffered wage to a certain beneficiary, beyond the required prevailing
wage, to be more competitive in the H-1B selection process. In that
situation, while the proffered wage may not necessarily reflect the
skill level required for the position in the strict sense of DOL's
prevailing wage determination, the proffered wage still is a reasonable
reflection of the value the employer has placed on that specific
beneficiary. DHS believes that an employer who offers a higher wage
than required by the prevailing wage level does so because that higher
wage is a clear reflection of the beneficiary's value to the employer,
which, even if not related to the position's skill level per se,
reflects the unique qualities the beneficiary possesses. Accordingly,
the changes made by this proposed rule would better ensure that the H-
1B cap prioritizes relatively higher-skilled, higher-valued, or higher-
paid foreign workers rather than continuing to allow limited cap
numbers to be allocated to workers in lower-skilled or lower-paid
positions.\27\ Ultimately, prioritizing in the above-described manner
incentivizes employers to offer higher wages or higher skilled
positions to H-1B workers and disincentivizes the existing widespread
use of the H-1B program to fill lower paid or lower-skilled positions,
for which there may be available and qualified U.S. workers.\28\
---------------------------------------------------------------------------

\25\ For example, in Computer and Mathematical Occupations, the
2019 national median salary for Level I was $78,000; for Level II
was $90,000; for Level III was $115,000; and for Level IV was
$136,000. Department of Homeland Security, USCIS, Office of
Performance and Quality, SAS PME C3 Consolidated, VIBE, DOL OFLC TLC
Disclosure Data queried 9/2020 TRK 6446.
\26\ U.S. Department of Labor, Employment and Training
Administration, Prevailing Wage Determination Policy Guidance,
Nonagricultural Immigration Programs (Revised Nov. 2009), available
at https://www.dol.gov/sites/dolgov/files/ETA/oflc/pdfs/NPWHC_Guidance_Revised_11_2009.pdf (noting that a wage level
increase may be warranted if a position's requirements indicate
skills that are beyond those of an entry level worker).
\27\ See Costa and Hira, supra note 11 (pointing to data that
``all H-1B employers, but especially the largest employers, use the
H-1B program either to hire relatively lower-wage workers (relative
to the wages paid to other workers in their occupation) who possess
ordinary skills or to hire skilled workers and pay them less than
the true market value''); Norman Matloff, Barron's, ``Where are the
`Best and Brightest?' '' (June 8, 2013) https://www.barrons.com/articles/SB50001424052748703578204578523472393388746 (``The data
show that most of the foreign tech workers are ordinary folks doing
ordinary work.''); Norman Matloff, Center for Immigration Studies,
H-1Bs: Still Not the Best and the Brightest (May 12, 2008), https://cis.org/Report/H1Bs-Still-Not-Best-and-Brightest (presenting ``data
analysis showing that the vast majority of the foreign workers--
including those at most major tech firms--are people of just
ordinary talent, doing ordinary work.'').
\28\ See id.
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D. Current Selection Process

DHS implemented the current H-1B registration process after
determining that it could introduce a cost-saving, innovative solution
to facilitate the selection of H-1B cap-subject petitions toward the
annual numerical allocations. Under the current regulation, all
petitioners seeking to file an H-1B cap-subject petition must first
electronically submit a registration for each beneficiary on whose
behalf they seek to file an H-1B cap-subject petition, unless USCIS
suspends the registration requirement. A prospective petitioner whose
registration is selected is eligible to file an H-1B cap-subject
petition for the selected registration during the associated filing
period.
USCIS monitors the number of H-1B registrations it receives during
the announced registration period and, at the conclusion of that
period, if more registrations are submitted than projected as needed to
reach the numerical allocations, randomly selects from among properly
submitted registrations the number of registrations projected as needed
to reach the H-1B numerical allocations. Under this random H-1B
registration selection process, USCIS first selects registrations
submitted on behalf of all beneficiaries, including those eligible for
the advanced degree exemption. USCIS then selects from the remaining
registrations a sufficient number projected as needed to reach the
advanced degree exemption.
A prospective petitioner whose registration is selected is notified
of the selection and instructed that the petitioner is eligible to file
an H-1B cap-subject petition for the beneficiary named in the selected
registration within a filing period that is at least 90 days in
duration and begins no earlier than 6 months ahead of the actual date
of need (commonly referred to as the employment start date).\29\ See 8
CFR 214.2(h)(8)(iii)(D)(2). When registration is required, a petitioner
seeking to file an H-1B cap-subject petition is not eligible to file
the petition unless the petition is based on a valid, selected
registration for the beneficiary named in the petition.\30\
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\29\ If the petition is based on a registration that was
submitted during the initial registration period, then the
beneficiary's employment start date on the petition must be October
1 of the associated FY, consistent with the registration, regardless
of when the petition is filed. See 8 CFR 214.2(h)(8)(iii)(A)(4).
\30\ During the initial filing period, if USCIS does not receive
a sufficient number of petitions projected as needed to reach the
numerical allocations, USCIS will select additional registrations,
or reopen the registration process, as applicable, to receive the
number of petitions projected as needed to reach the numerical
allocations. See 8 CFR 214.2(h)(8)(iii)(A)(7).
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In the event that an insufficient number of registrations are
received during the annual initial registration period to meet the
number projected as needed to reach the numerical limitation, USCIS
would select all of the registrations properly submitted during the
initial registration period and notify all of the registrants that they
may proceed with the filing of an H-1B cap-subject petition based on
their selected registration(s). USCIS would keep the registration
period open beyond the initial registration period, allowing for the
submission of additional registrations, until it determined that it had
received a sufficient number of registrations to reach the applicable
numerical limitations.
The current selection process also allows for selection based
solely on the submission of petitions in any year in which the
registration process is suspended due to technical or other issues.
That process also allows for random selection in any year in which the
number of petitions received on the final receipt date exceeds the
number projected to meet the applicable numerical limitation.

E. Wage Requirement

An H-1B petitioner must file with the Department of Labor (DOL) a
Labor Condition Application for Nonimmigrant Workers (LCA) attesting,
among other things, that it will pay the beneficiary a wage that is the
higher of the actual wage level that it pays to all other individuals
with similar experience and qualifications for the specific employment
in question or the prevailing wage level for the occupational
classification in the area of intended employment, and that it will
provide working conditions for the beneficiary that will not adversely
affect the working conditions of workers similarly employed. See INA
section 212(n)(1)(A)(i)-(ii), 8 U.S.C. 1182(n)(1)(A)(i)-(ii), 20 CFR
655.700 through 655.760. DOL regulations state that the wage
requirement includes the employer's obligation to offer benefits and
eligibility for benefits provided as compensation for services to the
H-1B nonimmigrant on the same basis, and in accordance with the same
criteria, as the employer offers to similarly employed

[[Page 69241]]

U.S. workers. See 20 CFR 655.731(c)(3). DOL regulations additionally
provide that the employer must afford working conditions to the H-1B
beneficiary on the same basis and in accordance with the same criteria
as it affords to its U.S. workers who are similarly employed, and
without adverse effect upon the working conditions of such U.S.
workers. See 20 CFR 655.732(a).
The LCA, certified by DOL, requires that the petitioner specify,
among other information: The SOC code, the wage that an employer will
pay the nonimmigrant worker, the prevailing wage rate for the job
opportunity, and the source of the prevailing wage rate, including the
applicable prevailing wage level for the job opportunity if the OES
survey is the source of the prevailing wage rate. If there is an
applicable collective bargaining agreement (CBA) that was negotiated at
arms-length between a union and the employer that contains a wage rate
applicable to the occupation, then the CBA must be used to determine
the prevailing wage for a petitioner's job opportunity. 20 CFR
655.731(a)(2). In the absence of an applicable CBA, the petitioner
generally has the option of determining the prevailing wage by one of
three avenues: (1) Obtaining a Prevailing Wage Determination (PWD)
issued by DOL; \31\ (2) obtaining the prevailing wage from an
independent authoritative source that satisfies the requirements set
forth in 20 CFR 655.731(b)(3)(iii)(B); or (3) obtaining the prevailing
wage from another legitimate source of wage information that satisfies
the requirements set forth in 20 CFR 655.731(b)(3)(iii)(C). 20 CFR
655.731(a)(2)(ii)(A)-(C). An employer may also elect to rely on a wage
determination issued pursuant to the provisions of the Davis Bacon Act
(DBA), 40 U.S.C. 276a et seq., or the McNamara O'Hara Service Contract
Act (SCA), 41 U.S.C. 351 et seq., if applicable. 20 CFR
655.731(b)(3)(i). When using the OES survey to determine the prevailing
wage for a particular job opportunity, the first step is to select the
most relevant occupational classification by examining the employer's
job opportunity and comparing it to the tasks, knowledge, and work
activities generally associated with relevant occupations to ensure
that the most relevant occupational code has been selected.\32\ Then,
the relevant prevailing wage level is selected by comparing the
requirements for the job opportunity to the occupational requirements,
that is, the tasks, knowledge, skills, and specific vocational
preparation (education, training, and experience) generally required
for acceptable performance in that occupation.\33\ DOL classifies the
four prevailing wage levels as ``entry[,]'' ``qualified[,]''
``experienced[,]'' and ``fully competent[,]'' respectively, relative to
the occupation.\34\
---------------------------------------------------------------------------

\31\ U.S. Department of Labor Policy Guidance, supra note 26.
\32\ See id.
\33\ See id.
\34\ See id.
---------------------------------------------------------------------------

Each registration submitted by a prospective petitioner must be
based on a legitimate job offer and must list the prevailing wage level
that the proffered wage equals or exceeds for the relevant SOC code and
area(s) of intended employment. It is important to note that an LCA is
not a requirement for registration. Each prospective petitioner must
attest, when submitting a registration, that the registration is based
on a legitimate job offer and that they intend to file an H-1B petition
on behalf of the beneficiary named in the registration if the
registration is selected. Therefore, DHS expects each prospective
petitioner to know and be able to provide the relevant wage level when
submitting a registration, regardless of whether they have a certified
LCA at that time.

F. Proposed Rule

DHS proposes to amend the way registrations for H-1B cap-subject
petitions (or petitions, if the registration process is suspended),
including those eligible for the advanced degree exemption, are
selected.
Specifically, DHS proposes that, if more registrations were
received during the annual initial registration period (or petition
filing period, if applicable) than necessary to reach the applicable
numerical allocation, USCIS would rank and select the registrations (or
petitions, if the registration process were suspended) received
generally on the basis of the highest OES wage level that the proffered
wage were to equal or exceed for the relevant SOC code and in the area
of intended employment, beginning with OES wage level IV and proceeding
in descending order with OES wage levels III, II, and I.\35\ If the
proffered wage were to fall below an OES wage level I, because the
proffered wage were based on a prevailing wage from another legitimate
source (other than OES) or an independent authoritative source, USCIS
would rank the registration in the same category as OES wage level
I.\36\ During an annual initial registration period of at least 14
days, if fewer registrations than necessary to reach the regular cap
were submitted, USCIS would select all registrations properly submitted
during the annual initial registration period, regardless of wage
level, and would continue to accept registrations until USCIS were to
determine a final registration date based on the submission of a
sufficient number of registrations to reach the regular cap. If more
registrations were submitted on the final registration date than
necessary to reach the regular cap, USCIS would rank and select
registrations from among those submitted on the final registration date
generally based on the highest corresponding OES wage level that the
proffered wage equals or exceeds for the relevant SOC code and in the
area of intended employment.
---------------------------------------------------------------------------

\35\ During the initial filing period, if USCIS were to receive
an insufficient number of petitions projected as needed to reach the
numerical allocations, USCIS would select additional registrations,
or reopen the registration process, as applicable, to receive the
number of petitions projected as needed to reach the numerical
allocations. See 8 CFR 214.2(h)(8)(iii)(A)(7).
\36\ If the proffered wage were expressed as a range, USCIS
would make the comparison using the lowest wage in the range.
---------------------------------------------------------------------------

Thereafter, USCIS would complete the same ranking and selection
process to meet the advanced-degree exemption. If a sufficient number
of registrations were submitted during the annual initial registration
period to reach the advanced-degree exemption, USCIS would rank and
select registrations for beneficiaries who are eligible for the
advanced-degree exemption generally on the basis of the highest OES
wage level that the proffered wage equals or exceeds for the relevant
SOC code and in the area of intended employment, beginning with OES
wage level IV and proceeding in descending order with OES wage levels
III, II, and I. During the annual initial registration period, if fewer
registrations than necessary to reach the advanced-degree exemption
were submitted, USCIS would select all registrations properly submitted
during the annual initial registration period, regardless of wage
level, and would continue to accept registrations until it were to
determine a final registration date based on the submission of a
sufficient number of registrations to reach the advanced-degree
exemption. If more registrations were submitted on the final
registration date than are needed to reach the advanced-degree
exemption, USCIS would rank and select registrations from among those
submitted on the final registration date generally based on the highest
corresponding OES wage level that the proffered wage equals or exceeds
for the

[[Page 69242]]

relevant SOC code and in the area of intended employment.
If USCIS were to receive and rank more registrations at a
particular wage level than the projected number needed to meet the
applicable numerical allocation, USCIS would randomly select from all
registrations within that particular wage level a sufficient number of
registrations needed to reach the applicable numerical limitation.
In addition to the information required on the current electronic
registration form (and on the H-1B petition) and for purposes of this
selection process and to establish the ranking order, a registrant (or
a petitioner if registration is suspended) would be required to provide
the highest OES wage level that the proffered wage equals or exceeds
for the relevant SOC code in the area of intended employment.\37\ The
proffered wage is the wage that the employer intends to pay the
beneficiary. The SOC code and area of intended employment would be
indicated on the LCA filed with the petition. For registrants relying
on a prevailing wage that is not based on the OES survey, if the
proffered wage were less than the corresponding level I OES wage, the
registrant would select the ``Wage Level I and below'' box on the
registration form. If the H-1B beneficiary would work in multiple
locations, or in multiple positions if the registrant is an agent,
USCIS would rank and select the registration based on the lowest
corresponding OES wage level that the proffered wage will equal or
exceed. Therefore, the registrant would be required to specify on the
registration the lowest corresponding OES wage level that the proffered
wage would equal or exceed.
---------------------------------------------------------------------------

\37\ While the OES wage level assessment would be based on the
SOC code, area of intended employment, and proffered wage, the
registrant would not need to supply the SOC code, area of intended
employment, and proffered wage at the registration stage.
---------------------------------------------------------------------------

DHS recognizes that some occupations do not have current OES
prevailing wage information available on DOL's Online Wage Library
(OWL).\38\ In the limited instance where there is no current OES
prevailing wage information for the proffered position, the registrant
would follow DOL guidance on prevailing wage determinations to
determine which OES wage level to select on the registration. DOL has
provided guidance on its website, and through the Foreign Labor
Certification Data Center.\39\ DHS expects each registrant would be
able to identify the appropriate SOC code for the proffered position
because all petitioners are required to identify the appropriate SOC
code for the proffered position on the LCA, even when there is no
applicable wage level on the LCA. Using the SOC code and the above-
mentioned DOL guidance, all registrants would be able to determine the
appropriate OES wage level for purposes of completing the registration,
regardless of whether they were to specify an OES wage level or utilize
the OES program as the prevailing wage source on an LCA.
---------------------------------------------------------------------------

\38\ The Foreign Labor Certification Data Center, a component of
the U.S. Department of Labor Office of Foreign Labor Certification,
is the location of the Online Wage Library for prevailing wage
determinations. U.S. Department of Labor, Foreign Labor
Certification Data Center, Online Wage Library (last visited Oct.
27, 2020).
\39\ See U.S. Department of Labor Policy Guidance, supra note
26. In general, this guidance requires an increase to a wage level
whenever the employer's job offer has a requirement for education,
experience (including special skills and other requirements), or
supervisory duties greater than what is normally required for the
occupation. This guidance also contains a worksheet (Appendix C)
that registrants may use in determining the appropriate OES wage
level.
---------------------------------------------------------------------------

DHS requests comments on, including potential alternatives to, the
proposed ranking and selection of registrations based on the OES
prevailing wage level that corresponds to the requirements of the
proffered position in situations where there is no current OES
prevailing wage information. More generally, DHS requests comments and
seeks alternatives for selecting from among all H-1B registrations or
petitions, such as ranking and selecting all registrations or petitions
according to the actual OES prevailing wage level that the position
would be rated at rather than the wage level that the proffered wage
equals or exceeds. Another alternative for which DHS seeks public
comment is a process where all registrations or petitions, while still
randomly selected, would be weighted according to their OES prevailing
wage level, such that, for example, a level IV position would have four
times greater chance of selection than a level I position, a level III
position would have three times greater chance of selection than a
level I position, and a level II position would have two times greater
chance of selection than a level I position.
As is currently required, the registrant would be required to
attest to the veracity of the contents of the registration and
petition. If USCIS were to determine that the statement of facts
contained on the registration submission was inaccurate, fraudulent,
materially misrepresents any fact, or was not true and correct, USCIS
would reject or deny the petition or, if approved, would revoke the
petition approval. USCIS also would deny a subsequent new or amended
petition filed by the petitioner, or a related entity, on behalf of the
same beneficiary for a lower wage level if USCIS were to determine that
the filing of the new or amended petition was part of the petitioner's
attempt to unfairly increase the odds of selection during the
registration (or petition, if applicable) selection process.
Currently, 8 CFR 214.2(h)(8)(v) contains a severability clause
explaining that the requirement to submit a registration for an H-1B
cap-subject petition and the selection process based on properly
submitted registrations under paragraphs (h)(8)(iii) of this section
are intended to be severable from paragraph (h)(8)(iv) of this section.
DHS proposes to move the content of the severability clause, without
substantive change, to a new paragraph at 8 CFR 214.2(h)(24)(i).
This proposed rule would not affect the order of selection between
the regular cap and the advanced degree exemption. If more
registrations (or petitions, if registration were suspended) were
submitted during the annual initial registration or cap-filing period
than needed to reach the annual numerical allocations, the wage level
ranking would occur first for the regular cap selection and then for
the advanced degree exemption. See 8 CFR 214.2(h)(8)(iii)(A)(6)
(establishing the order in which beneficiaries of the advanced degree
exemption are selected relative to beneficiaries of the regular cap).
This proposed rule is consistent with and permissible under DHS's
general statutory authority provided in INA sections 103(a), 214(a) and
(c), 8 U.S.C. 1103(a), 1184(a) and (c), and HSA section 102, 6 U.S.C.
112. Congress expressly authorized DHS to determine eligibility for H-
1B classification upon petition by the importing employer, and to
determine the form and information required to establish eligibility.
See INA section 214(c)(1), 8 U.S.C. 1184(c)(1). ``Moreover, INA section
214(g)(3) does not provide that petitions must be processed in the
order `received,' `submitted,' or `delivered.' Instead, they must be
processed in the order `filed.' What it means to `file' a petition and
how to handle simultaneously received petitions are ambiguous and were
not dictated by Congress in the INA.'' \40\ Rather, these
implementation details are entrusted for DHS to administer. So while
the statute provides annual limitations on the number of aliens who may
be issued initial H-1B visas or

[[Page 69243]]

otherwise provided H-1B nonimmigrant status, the statute does not
specify how petitions must be selected and counted toward the numerical
allocations when USCIS receives more petitions on the first day than
are projected as needed to reach the H-1B numerical allocations.
Consequently, ``Congress left to the discretion of USCIS how to handle
simultaneous submissions'' and ``USCIS has discretion to decide how
best to order those petitions.'' \41\ In recognition of this clear
discretion, DHS bears the statutory responsibility to continuously
evaluate how it could best order H-1B petitions. As noted above, the
current scheme of pure randomization of selectees does not optimally
serve Congress' purpose for the H-1B program. Therefore, DHS proposes
this rule to revise the process to better align with the purpose of the
H-1B program and Congressional intent, taking into account the
pervasive oversubscription of demand for registrations and petitions.
---------------------------------------------------------------------------

\40\ See Walker Macy, 243 F.Supp.3d at 1175.
\41\ Id. at 1176.
---------------------------------------------------------------------------

DHS acknowledges that INA section 214(g)(3), 8 U.S.C. 1184(g)(3),
states that aliens subject to the H-1B numerical limitation in INA
section 214(g)(1), 8 U.S.C. 1184(g)(1), shall be issued H-1B visas or
otherwise provided H-1B nonimmigrant status ``in the order in which
petitions are filed for such visas or status.'' Of course, this
statutory provision, and more specifically the term ``filed'' as used
in INA 214(g)(3), 8 U.S.C. 1184(g)(3), is ambiguous.\42\ As discussed
in the preamble to the Registration Requirement for Petitioners Seeking
to File H-1B Petitions on Behalf of Cap-Subject Aliens Final Rule (H-1B
Registration Final Rule), an indiscriminate application of this
statutory language would lead to absurd or arbitrary results; the
longstanding approach has been to project the number of petitions
needed to reach the numerical allocations.\43\
---------------------------------------------------------------------------

\42\ Id. at 1167-68 (finding that USCIS's rule establishing the
random-selection process was a reasonable interpretation of the INA
that was entitled at least to Skidmore deference because what it
means to ``file'' a petition is ambiguous and undefined under the
INA and that Congress left to the discretion of USCIS how to handle
simultaneous submissions. Specifically, the court said:
``Additionally, because Sec. 1184(g)(3) was passed by Congress in
1990 when there was not widespread public use of electronic
submissions, it is logical that Congress anticipated H-1B petitions
would be submitted either by U.S. mail or other carriers. Thus, it
was reasonable to anticipate multiple petitions would arrive on the
same day. It is therefore a reasonable interpretation of `filed' to
include some further administrative step beyond mere receipt at a
USCIS office to `order' multiple petitions that arrived in such a
manner on the same day.'') (emphasis added). The availability of
electronic submission of H-1B registrations has not alleviated this
issue as multiple registrations can still be submitted
simultaneously.
\43\ See 84 FR 888, 896.
---------------------------------------------------------------------------

DHS created the registration requirement, based on its general
statutory authority and its discretion to determine how best to handle
simultaneous submissions in excess of the numerical allocations, to
effectively and efficiently administer the H-1B cap selection process.
As provided in the H-1B Registration Final Rule, unless suspended by
USCIS, registration is an antecedent procedural step that must be
completed by prospective petitioners before they are eligible to file
an H-1B cap-subject petition. As with the filing of petitions, and as
explained above, a first-come, first-served basis for submitting
electronic registrations is unreasonable and practically impossible.
DHS, therefore, implemented a random selection process as that was
considered a reasonable and operationally efficient way to select
registrations when more registrations were submitted than projected as
needed to reach the numerical allocations.
While the random selection of petitions or registrations is
reasonable, it is neither the optimal nor the exclusive method of
selecting petitions or registrations toward the numerical allocations
when more registrations or petitions, as applicable, are submitted than
projected as needed to reach the numerical allocations.
In that vein, prioritization and selection based on wage levels
``is a reasonable and rational interpretation of USCIS's obligations
under the INA to resolve the issues of processing H-1B petitions'' \44\
in years of excess demand. The changes proposed by this rule would aid
petitioners by maintaining the effective and efficient administration
of the cap selection process while providing prospective petitioners
the ability to potentially improve their chance of selection by
agreeing to pay H-1B beneficiaries higher wages that equal or exceed
higher prevailing wage levels. Further, while nothing in the proposed
rule would prohibit an employer from offering from offering a wage
commensurate with a lower wage level with a reduced chance of
selection, these proposed changes would incentivize petitioners to
offer higher wages to H-1B workers or petition for positions requiring
higher skills and higher-skilled aliens that are commensurate with
higher wage levels.\45\ Specifically, data reflects that, during FYs
2018 and 2019, 59.43 percent of H-1B petitions received were filed for
level II and I wages.\46\ Conversely, the data shows that only 28.53
percent of H-1B petitions received in FYs 2018 and 2019 were filed for
level IV and III wages.\47\ As registrations now would be selected in
descending order from level IV to level I and below, as indicated by
the highest wage level that the proffered wage equals or exceeds for
the relevant SOC code and in the area of intended employment, the
selection of registrations with proffered wages that correspond to
higher wage levels is expected to incentivize higher wages, reduce the
adverse effect on similarly employed U.S. workers, and prevent further
stagnation of wages for U.S. information technology (IT) workers
generally.\48\ DHS further believes that prioritizing according to wage
level would better meet the directive of the Buy American and Hire
American Executive order to ``help ensure that H-1B visas are awarded
to the most-skilled or highest-paid petition beneficiaries.'' \49\
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\44\ Id. at 1175.
\45\ See supra notes 5 and 13. See also U.S. Department of
Homeland Security, U.S. Citizenship and Immigration. Services,
Office of Policy and Strategy, Policy Research Division, H-1B
Petitions for Nonimmigrant Worker (I-129) DOL H-1B Cases broken down
by Fiscal Year and Wage Level As of July 31, 2020, Database Queried:
Aug. 17, 2020, Report Created: Aug. 17, 2020, Systems: DOL OFLC
Performance DATA H1B for 2015, 2017 (showing that, for FYs 2015 and
2017, respectively, 79% and 64% of certified LCAs were for level I
and II wages).
\46\ See U.S. Department of Homeland Security, U.S. Citizenship
and Immigration. Services, Office of Policy and Strategy, Policy
Research Division, H1B Petitions for Non Immigrant Worker (I-129)
Summarized by IT (SOC code 15) and Other by Wage Level As of August
28, 2020, Database Queried: Aug. 28, 2020, Report Created: Aug. 28,
2020, Systems: C3 via SASPME, DOL OFLC Performance DATA H1B for
2018, 2019 (reflecting total received H-1B petitions categorized by
wage levels as follows: 13.2% for level I, 46.23% for level II,
17.85% for level III, 10.68% for level IV, and a combined 12.03% for
N/A and blank wage levels).
\47\ See id.
\48\ Hal Salzman, Daniel Kuehn, and B. Lindsay Lowell, Economic
Policy Institute, Guestworkers in the High-Skill U.S. Labor Market:
An analysis of supply, employment, and wage trends, (Apr. 24, 2013),
at 27, https://files.epi.org/2013/bp359-guestworkers-high-skill-labor-market-analysis.pdf. (``In other words, the data suggest that
current U.S. immigration policies that facilitate large flows of
guestworkers appear to provide firms with access to labor that will
be in plentiful supply at wages that are too low to induce a
significantly increased supply from the domestic workforce.'').
\49\ See Executive Order 13788, supra note 1.
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Beyond negatively impacting U.S. workers' wages, in some
circumstances, U.S. employers are replacing qualified and skilled U.S.
workers with relatively lower-skilled H-1B workers. U.S. companies such
as The Walt Disney Company, Hewlett-Packard, University

[[Page 69244]]

of California San Francisco, Southern California Edison, Qualcomm, and
Toys ``R'' Us have reportedly laid off their qualified U.S. workers and
replaced them with H-1B workers provided by H-1B dependent outsourcing
companies.\50\ As one longtime IT worker said, ``They are bringing in
people with a couple of years' experience to replace us and then we
have to train them.'' \51\ The change in the selection process is
expected to help militate against this kind of practice by reducing the
influx of cap-subject H-1B workers for lower-paid positions.
---------------------------------------------------------------------------

\50\ See Sarah Pierce and Julia Gelatt, Migration Policy
Institute, Evolution of the H-1B: Latest Trends in a Program on the
Brink of Reform (Mar. 2018), at 24, https://www.migrationpolicy.org/research/evolution-h-1b-latest-trends-program-brink-reform; Ron Hira
and Bharath Gopalaswamy, Atlantic Council, Reforming US' High-
Skilled Guestworker Program (2019), available at https://www.atlanticcouncil.org/in-depth-research-reports/report/reforming-us-high-skilled-immigrationprogram/; Patrick Thibodeau, Southern
California Edison IT Workers ``Beyond Furious'' Over H-1B
Replacements, Computerworld, Feb. 4, 2015, available at https://www.computerworld.com/article/2879083/southern-california-edison-it-workers-beyond-furious-over-h-1b-replacements.html.
\51\ Thibodeau, supra note 50.
---------------------------------------------------------------------------

DHS acknowledges that the preamble to the H-1B Registration Final
Rule states that prioritization of registration selection on factors
other than degree level, such as salary, would require statutory
changes.\52\ However, DHS did not provide further analysis regarding
that conclusion. Upon further review and consideration of the issue
initially raised in comments to the H-1B Registration Proposed Rule (83
FR 62406, December 3, 2018), DHS concludes that the statute is silent
as to how USCIS must select H-1B petitions, or registrations, to be
filed toward the numerical allocations in years of excess demand. DHS,
therefore, is relying on its general statutory authority to implement
the statute and proposes to revise the regulations to design a
selection system that realistically, effectively, efficiently, and more
faithfully administers the cap selection process. See INA section
103(a), 214(a) and (c)(1), 8 U.S.C. 1103(a), 1184(a) and (c)(1).
---------------------------------------------------------------------------

\52\ See Registration Final Rule, supra note 7.
---------------------------------------------------------------------------

DHS understands that some petitioners have adjusted their
recruitment and filing practices to file a high number of petitions or
registrations, for varied beneficiaries, based on a concern that only a
random selection of the H-1B cap-subject petitions or registrations
that they have submitted would be selected and accepted for processing
in years of excess demand. While some petitioners might prefer to
continue to rely on a random selection process, DHS believes that the
importance of prioritizing selection generally based on the highest
prevailing wage level that a proffered wage equals or exceeds outweighs
any reliance interests of petitioners in a random H-1B cap selection
process. A random selection process may seem fair to petitioners
seeking to obtain H-1B classification for relatively lower-paid H-1B
workers, as the chance for selection of an H-1B worker who will be paid
an entry level wage is the same as the chance of selection for an H-1B
worker who will be paid at the highest wage level for the occupational
classification, but this system is neither optimally consistent with
the statute passed by Congress nor fair to U.S. workers whose wages may
be adversely impacted by an influx of relatively lower-paid H-1B
workers. Similarly, it is not fair to U.S. employers that are seeking
to petition for foreign workers at higher OES prevailing wage levels
and are not selected due to the random lottery process. Further, it is
not fair to an employer who has petitioned for a foreign worker at the
top of the prevailing wage level for many years and has never obtained
a visa, while another employer who petitioned for an entry-level worker
for the first time and, due to randomness or luck, obtained a visa.\53\
Selecting registrations (or petitions, if registration were suspended)
generally based on the highest prevailing wage level that a proffered
wage equals or exceeds would give petitioners greater ability to
control the chance of selection in years of excess demand for H-1B visa
numbers by agreeing to pay the H-1B beneficiary a higher wage, further
protecting the economic interests of U.S. workers.
---------------------------------------------------------------------------

\53\ See Walker Macy, 243 F.Supp.3d at 1170.
---------------------------------------------------------------------------

While DHS proposes to move away from a random selection process in
order to better align with the intent of Congress to protect the
interests of U.S. workers, H-1B workers, and petitioners, DHS
nonetheless proposes to preserve an aspect of random selection within
the applicable prevailing wage level--as discussed elsewhere in this
rule. Namely, if USCIS were to receive and rank more registrations (or
petitions in any year in which the registration process is suspended)
at a particular prevailing wage level than the projected number needed
to meet the numerical limitation, USCIS would randomly select from all
registrations (or petitions, if applicable) within that particular
prevailing wage level a sufficient number of registrations necessary to
reach the H-1B numerical limitation. DHS believes that the interests of
those relying on the current random selection process do not outweigh
the need to establish a selection process that is efficient and
effective, but also fair to U.S. workers, H-1B workers, and
petitioners.

IV. Statutory and Regulatory Requirements

A. Executive Orders 12866 (Regulatory Planning and Review), Executive
Order 13563 (Improving Regulation and Regulatory Review), and Executive
Order 13771 (Reducing Regulation and Controlling Regulatory Costs)

Executive Orders (E.O.) 12866 and 13563 direct agencies to assess
the costs, benefits, and transfers of available alternatives, and if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). E.O.
13563 emphasizes the importance of quantifying both costs and benefits,
of reducing costs, of harmonizing rules, and of promoting flexibility.
This proposed rule is an ``economically significant regulatory
action'' under section 3(f)(1) of Executive Order 12866. Accordingly,
the Office of Management and Budget (OMB) has reviewed this regulation.
1. Summary of Economic Effects
DHS is proposing to amend its regulations governing the selection
of registrants eligible to file H-1B cap-subject petitions, which
includes petitions subject to the regular cap and those asserting
eligibility for the advanced degree exemption, to allow for ranking
based on OES wage levels corresponding to their SOC codes. USCIS would
rank and select the registrations received (or petitions in any year in
which the registration process is suspended) generally on the basis of
the highest OES wage level that the proffered wage were to equal or
exceed for the relevant SOC code and in the area of intended
employment.

[[Page 69245]]

USCIS would begin with OES wage level IV and proceed in descending
order with OES wage levels III, II, and I. DHS proposes to amend the
relevant sections of DHS regulations to reflect these changes.
The described change in selection is expected to result in a
different allocation of H-1B visas favoring petitioners that proffer
relatively higher wages. In the analysis that follows, DHS presents its
best estimate for how H-1B petitioners would be affected by and would
respond to the increased probability of selection of petitioners
proffering the highest wages for a given occupation and area of
employment. Because of the uncertainty and difficulty of quantifying
the aggregate costs that each employer may incur as a result of the
provisions of the proposed rule discussed in the sections that follow,
OMB has designated the proposed rule as ``economically significant.''
DHS estimates the net costs that would result from this proposed rule
compared to the baseline of the H-1B visa program. For the 10-year
implementation period of the rule, DHS estimates the annualized costs
to the public would be $15,970,315 annualized at 3-percent, and
$16,091,293 annualized at 7-percent.
Table 1 provides a more detailed summary of the proposed rule
provisions and their impacts.

Table 1--Summary of Provisions and Economic Impacts of the Proposed Rule
----------------------------------------------------------------------------------------------------------------
Description of changes Estimated costs of Estimated benefits of
Provision to provision provisions provisions
----------------------------------------------------------------------------------------------------------------
Currently USCIS randomly selects H- USCIS proposes to rank Quantitative: Quantitative:
1B registrations or cap-subject and select H-1B Petitioners-- Petitioners--
petitions, as applicable. USCIS registrations (or H-1B $3,457,401 None.
proposes to change the selection petitions if the costs annually for DHS/USCIS--
process to prioritize selection of registration petitioners completing None.
registrations or cap-subject requirement were and filing Form I- Qualitative: U.S.
petitions, as applicable, based on suspended) generally 129H1 petitions with Workers--
corresponding OES wage level.. based on the highest an additional time A possible
DHS regulations currently address H- OES wage level that the burden of 15 minutes. increase in employment
1B cap allocation in various proffered wage were to $11,797,520 opportunities for
contexts:. equal or exceed for the costs annually for lower-skilled
1. Fewer registrations than needed relevant SOC code and prospective unemployed or
to meet the H-1B regular cap. area(s) of intended petitioners submitting underemployed U.S.
2. Sufficient registrations to meet employment. This electronic workers seeking
the H-1B regular cap during the proposed rule would add registrations with an employment in
initial registration period. instructions and a additional time burden positions otherwise
3. Fewer registrations than needed question to the of 20 minutes. offered to H-1B cap-
to meet the H-1B advanced degree registration form to DHS/USCIS-- subject beneficiaries
exemption numerical limitation. select the appropriate None. at wage levels
4. Sufficient registrations to meet wage level. This Qualitative: corresponding to lower
the H-1B advanced degree exemption proposed rule also Petitioners-- wage positions.
numerical limitation during the would add instructions Petitioners H-1B Workers--
initial registration period. and questions to the H- may incur costs to A possible
5. Increase to the number of 1B petition seeking the seek out and train increase in
registrations projected to meet the same wage level other workers, or to productivity, measured
H-1B regular cap or advanced degree information and other induce workers with in increased H-1B
exemption allocations in a FY. information concerning similar qualifications wages, resulting from
6. H-1B cap-subject petition filing the proffered position to consider changing the reallocation of a
following registration--(1) Filing to assess the industry or fixed number of visas
procedures. prevailing wage level. occupation. from positions
7. Petition-based cap-subject This proposed rule Petitioners classified as lower-
selections in event of suspended would not affect the that would have hired level work to
registration process. order of selection as relatively low-paid H- employers able to pay
8. Denial of petition............... between the regular cap 1B workers, but were the highest wages for
9. Revocation of approval of and the advanced degree unable to do so the most highly
petition. exemption. because of non- skilled workers.
If USCIS were to receive selection (and A possible
and rank more ineligibility to file increase in wages for
registrations at a petitions), may incur positions offered to H-
particular wage level reduced labor 1B cap-subject
than the projected productivity and beneficiaries for the
number needed to meet revenue. same work to improve
the numerical Petitioners the prospective
limitation, USCIS would may incur costs from petitioner's chance of
randomly select from offering beneficiaries selection.
all registrations higher wages for the Petitioners--
within that particular same work to achieve Level I and
wage level a sufficient greater chances of level II beneficiaries
number of registrations selection. may see increased
needed to reach the DHS/USCIS-- wages. Companies who
numerical limitation. None. have historically paid
USCIS would be level I wages may be
authorized to deny a incentivized to offer
subsequent new or their H-1B employees
amended petition filed higher wages, so that
by the petitioner, or a they could have a
related entity, on greater chance of
behalf of the same selection at a level
beneficiary for a lower II or higher.
wage level if USCIS Employers who
were to determine that offer H-1B workers
the new or amended wages that corresponds
petition was filed to with level III or
reduce the wage level level IV OES wages may
listed on the original have higher chances of
petition to unfairly selection.
increase the odds of DHS/USCIS--
selection during the Submitting
registration selection additional wage level
process. information on both an
In any year in which electronic
USCIS were to suspend registration and on
the H-1B registration Form I-129H1 would
process for cap-subject allow USCIS to
petitions, USCIS would, maintain the integrity
instead, allow for the of the H-1B cap
submission of H-1B cap- selection and
subject petitions. adjudication
After USCIS were to processes.
receive a sufficient Registrations
number of petitions to or petitions, as
meet the H-1B regular applicable, would be
cap and were to more likely to be
complete the selection selected under the
process of petitions numerical allocations
for the H-1B regular for the highest paid,
cap following the same and presumably highest
method of ranking and skilled or highest-
selection based on valued, beneficiaries.
corresponding OES wage
level, USCIS would
determine whether there
was a sufficient number
of remaining petitions
to meet the H-1B
advanced degree
exemption numerical
limitation.
Familiarization Cost................ Familiarization costs Quantitative: Quantitative:
comprise the Petitioners-- Petitioners--
opportunity cost of the One-time cost None.
time spent reading and of $6,285,527 in DHS/USCIS--
understanding the FY2022. None.
details of a rule to DHS/USCIS-- Qualitative:
fully comply with the None. Petitioners--
new regulation(s). Qualitative: None.
Petitioners-- DHS/USCIS--
None. None.
DHS/USCIS--
None.
----------------------------------------------------------------------------------------------------------------

[[Page 69246]]

In addition to the impacts summarized here, Table 2 presents the
accounting statement as required by OMB Circular A-4.\54\
---------------------------------------------------------------------------

\54\ White House, Office of Management and Budget, Circular A-4
(Sept. 17, 2003), available at https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/circulars/A4/a-4.pdf (last visited Aug. 11,
2020).

Table 2--OMB A-4 Accounting Statement
[$, 2019 for FY 2022-FY 2032]
----------------------------------------------------------------------------------------------------------------
Category Primary estimate Minimum estimate Maximum estimate Source citation
----------------------------------------------------------------------------------------------------------------
Benefits
----------------------------------------------------------------------------------------------------------------
Annualized Monetized Benefits N/A N/A N/A ..................
over 10 years (discount rate
in parenthesis).
----------------------------------------------------------------------------------------------------------------
N/A N/A N/A ..................
----------------------------------------------------------------------------------------------------------------
Annualized quantified, but un- 0 0 0 ..................
monetized, benefits.
----------------------------------------------------------------------------------------------------------------
Unquantified Benefits.......... This proposed rule would benefit petitioners agreeing to RIA.
pay H-1B workers a proffered wage corresponding to OES
wage level III or IV, by increasing their chance of
selection in the H-1B cap selection process. These
proposed changes align with the Administration's goals of
improving policies such that the H-1B classification would
more likely be awarded to the highest paid or highest
skilled beneficiaries.
This proposed rule may provide increased opportunities for ..................
lower-skilled U.S. workers in the labor market to compete
for work as there would be fewer H-1B workers paid at the
lower wage levels to compete with U.S. workers.\55\
Further, assuming demand outpaces the 85,000 visas ..................
currently available for annual allocation, DHS believes
that the potential reallocation of visas to favor those
petitioners able to offer the highest wages to recruit the
most highly skilled workers would result in increased
marginal productivity of all H-1B workers.
This proposed rule may provide increased wages for
positions offered to H-1B cap-subject beneficiaries.
----------------------------------------------------------------------------------------------------------------
Costs
----------------------------------------------------------------------------------------------------------------
Annualized monetized costs over (3 percent) N/A N/A RIA.
10 years (discount rate in $15,970,315
parenthesis).
----------------------------------------------------------------------------------------------------------------
(7 percent) N/A N/A ..................
$16,091,293
----------------------------------------------------------------------------------------------------------------
Annualized quantified, but un- N/A ..................
monetized, costs.
----------------------------------------------------------------------------------------------------------------
Qualitative (unquantified) This proposed rule is expected to reduce the number of RIA.
costs. petitions for lower wage H-1B workers. This may result in
increased recruitment or training costs for petitioners
that seek new pools of talent. Additionally, petitioners'
labor costs or training costs for substitute workers may
increase. DHS also acknowledges that some petitioners
might be impacted in terms of the employment, productivity
loss, search and hire cost per employer of $4,398, and
profits resulting from labor turnover. In cases where
companies cannot find reasonable substitutions for the
labor the H-1B beneficiary would have provided, affected
petitioners would also lose profits from the lost
productivity. In such cases, employers would incur
opportunity costs by having to choose the next best
alternative to immediately filling the job the prospective
H-1B worker would have filled. There may be additional
opportunity costs to employers such as search costs and
training.
Such possible disruptions to companies would depend on the ..................
interaction of a number of complex variables that are
constantly in flux, including national, state, and local
labor market conditions, economic and business factors,
the type of occupations and skills involved, and the
substitutability between H-1B workers and U.S. workers.
Petitioners that would have hired relatively lower-paid H- ..................
1B workers, but were unable to do so because of non-
selection (and ineligibility to file a petition), may
incur reduced labor productivity and revenue.
----------------------------------------------------------------------------------------------------------------
Transfers
----------------------------------------------------------------------------------------------------------------
Annualized monetized transfers: N/A N/A N/A ..................
``on budget''.
----------------------------------------------------------------------------------------------------------------
From whom to whom?............. ..................
Annualized monetized transfers: N/A N/A N/A ..................
``off-budget''.
----------------------------------------------------------------------------------------------------------------
From whom to whom?............. N/A N/A N/A ..................
----------------------------------------------------------------------------------------------------------------
Miscellaneous analyses/category Effects Source citation
----------------------------------------------------------------------------------------------------------------
Effects on state, local, and/or N/A RFA.
tribal governments.
----------------------------------------------------------------------------------------------------------------
Effects on small businesses.... N/A RFA.
----------------------------------------------------------------------------------------------------------------
Effects on wages............... N/A None.
----------------------------------------------------------------------------------------------------------------
Effects on growth.............. N/A None
----------------------------------------------------------------------------------------------------------------

[[Page 69247]]

2. Background and Purpose of the Proposed Rule
The H-1B visa program allows U.S. employers to temporarily hire
foreign workers to perform services in a specialty occupation, services
related to a Department of Defense (DOD) cooperative research and
development project or coproduction project, or services of
distinguished merit and ability in the field of fashion modeling. See
INA section 101(a)(15)(H)(i)(b), 8 U.S.C. 1101(a)(15)(H)(i)(b); Public
Law 101-649, section 222(a)(2), 104 Stat. 4978 (Nov. 29, 1990); 8 CFR
214.2(h). A specialty occupation is defined as an occupation that
requires the (1) theoretical and practical application of a body of
highly specialized knowledge and (2) attainment of a bachelor's or
higher degree in the specific specialty (or its equivalent) as a
minimum qualification for entry into the occupation in the United
States. See INA section 214(i)(1), 8 U.S.C. 1184(i)(1).
---------------------------------------------------------------------------

\55\ DHS acknowledges, however, that some employers may increase
the wages of existing H-1B workers without changing job requirements
or requiring higher levels of education, skills, training, and
experience. In those cases, there may not be anticipated vacancies
at wage levels I and II for U.S. workers to fill.
---------------------------------------------------------------------------

The number of aliens who may be issued initial H-1B visas or
otherwise provided initial H-1B nonimmigrant status during any FY has
been capped at various levels by Congress over time, with the current
numerical limit generally being 65,000 per FY. See INA section
214(g)(1)(A); 8 U.S.C. 1184(g)(1)(A). Congress has also provided for
various exemptions from the annual numerical allocations, including an
exemption for 20,000 aliens who have earned a master's or higher degree
from a U.S. institution of higher education. See INA section 214(g)(5)
and (7); 8 U.S.C. 1184(g)(5) and (7).
Under the current regulation, all petitioners seeking to file an H-
1B cap-subject petition must first electronically submit a registration
for each beneficiary on whose behalf they seek to file an H-1B cap-
subject petition, unless USCIS suspends the registration
requirement.\56\ USCIS monitors the number of H-1B registrations
submitted during the announced registration period of at least 14 days
and, at the conclusion of that period, if more registrations are
submitted than projected as needed to reach the numerical allocations,
randomly selects from among properly submitted registrations the number
of registrations projected as needed to reach the H-1B numerical
allocations.\57\ Under this random H-1B registration selection process,
USCIS first selects registrations submitted on behalf of all
beneficiaries, including those eligible for the advanced degree
exemption. USCIS then selects from the remaining registrations a
sufficient number projected as needed to reach the advanced degree
exemption. A prospective petitioner whose registration is selected is
notified of the selection and instructed that the petitioner is
eligible to file an H-1B cap-subject petition for the beneficiary named
in the selected registration within a filing period that is at least 90
days in duration and begins no earlier than 6 months ahead of the
actual date of need (commonly referred to as the employment start
date).\58\ When registration is required, a petitioner seeking to file
an H-1B cap-subject petition is not eligible to file the petition
unless the petition is based on a valid, selected registration for the
beneficiary named in the petition.\59\
---------------------------------------------------------------------------

\56\ See 8 CFR 214.2(h)(8)(iii)(A).
\57\ See id. at Sec. 214.2(h)(8)(iii)(A)(5)-(6).
\58\ See 8 CFR 214.2(h)(8)(iii)(D)(2).
\59\ See id. at Sec. 214.2(h)(8)(iii)(A)(1).
---------------------------------------------------------------------------

Prior to filing an H-1B petition, the employer is required to
obtain a certified Labor Condition Application (LCA) from the
Department of Labor (DOL).\60\ The LCA form collects information about
the employer and the occupation for the H-1B worker(s). The LCA
requires certain attestations from the employer, including, among
others, that the employer will pay the H-1B worker(s) at least the
required wage.\61\ This proposed rule amends DHS regulations concerning
the selection of registrations submitted by or on behalf of prospective
petitioners seeking to file H-1B cap-subject petitions (or the
selection of petitions, if the registration process is suspended),
which includes petitions subject to the regular cap and those asserting
eligibility for the advanced degree exemption, to allow for ranking and
selection based on OES wage levels. When applicable, USCIS would rank
and select the registrations received generally on the basis of the
highest OES wage level that the proffered wage were to equal or exceed
for the relevant SOC code and in the area(s) of intended employment,
beginning with OES wage level IV and proceeding in descending order
with OES wage levels III, II, and I.\62\ For registrants relying on a
private wage survey, if the proffered wage were less than the
corresponding level I OES wage, the registrant would select the ``Wage
Level I and below'' box on the registration form.\63\ If USCIS were to
receive and rank more registrations at a particular wage level than the
projected number needed to meet the applicable numerical allocation,
USCIS would randomly select from all registrations within that wage
level a sufficient number of registrations needed to reach the
applicable numerical limitation.\64\
---------------------------------------------------------------------------

\60\ See 8 CFR 214.2(h)(4)(i)(B).
\61\ See 20 CFR 655.731 through 655.735.
\62\ See new 8 CFR 214.2(h)(8)(iii)(A)(1)(i).
\63\ Id.
\64\ See 8 CFR 214.2(h)(8)(iii)(A)(5)-(6).
---------------------------------------------------------------------------

3. Historic Population
The historic population consists of petitioners who file on behalf
of H-1B cap-subject beneficiaries (in other words, beneficiaries who
are subject to the annual numerical limitation, including those
eligible for the advanced degree exemption). DHS uses the 5-year
average of H-1B cap-subject petitions received for FYs 2016 to 2020
(211,797) as the historic estimate of H-1B cap-subject petitions that
were submitted annually.\65\ Prior to publication of U.S. Citizenship
and Immigration Services Fee Schedule and Changes to Certain Other
Immigration Benefit Request Requirements (Fee Schedule Final Rule),\66\
H-1B petitioners submit Form I-129 with applicable supplements for H-1B

[[Page 69248]]

petitions. Through the Fee Schedule Final Rule, DHS created a new Form
I-129H1 for H-1B petitioners.\67\ Form I-129H1 does not include
separate supplements as relevant data collection fields have been
incorporated into Form I-129H1. DHS assumes that the number of
petitioners who previously filled out the Form I-129 and H-1B
supplements is the same as the number of petitioners who would complete
the new Form I-129H1.
---------------------------------------------------------------------------

\65\ In FY 2018, 198,460 H-1B petitions were submitted in the
first five days that cap-subject petitions could be submitted, a 16
percent decline in H-1B cap-subject petitions from FY 2017. Though
the receipt of H-1B cap-subject petitions fell in FY 2018, the
petitions received still far exceeded the numerical limitations,
continuing a trend of excess demand since FY 2011. For H-1B filing
petitions data prior to FY 2014, see U.S. Department of Homeland
Security, U.S. Citizenship and Immigration Services, Reports and
Studies, https://www.uscis.gov/tools/reports-studies/reports-and-studies (last visited Sept. 2, 2020).
\66\ DHS estimates the costs and benefits of this proposed rule
using the newly published U.S. Citizenship and Immigration Services
Fee Schedule and Changes to Certain Other Immigration Benefit
Request Requirements, final rule (Fee Schedule Final Rule), and
associated form changes, as the baseline. 85 FR 46788 (Aug. 3,
2020). The Fee Schedule Final Rule was scheduled to go into effect
on October 2, 2020. On September 29, 2020, the U.S. District Court
for the Northern District of California issued a nationwide
injunction, which prevents DHS from implementing the Fee Schedule
Final Rule. See, Immigrant Legal Resource Center v. Wolf, No. 4:20-
cv-5883 (N.D. Cal. Sept. 29, 2020). In addition, on October 8, 2020,
DHS was also preliminarily enjoined from implementing and enforcing
the Fee Schedule Final Rule by the U.S. District Court for the
District of Columbia, including by adopting any form changes
associated with the rule. See, Northwest Immigrant Rights Project v.
U.S. Citizenship and Immigration Servs., 1:19-cv-03283-RDM (D.D.C.
Oct. 8, 2020). DHS intends to vigorously defend these lawsuits and
is not changing the baseline for this proposed rule as a result of
the litigation. Should DHS not prevail in the Fee Schedule Final
Rule litigation, this proposed rule may reflect overstated
transfers, costs, and opportunity costs associated with the filing
of the Form I-129.
\67\ See Fee Schedule Final Rule, supra note 66.

Table 3H-1B Cap-Subject Petitions Submitted to USCIS for FY 2016--FY 2020
----------------------------------------------------------------------------------------------------------------
Total number of
H-1B cap-subject Total number of Number of
Fiscal year petitions H-1B petitions petitions filed
submitted selected with Form G-28
----------------------------------------------------------------------------------------------------------------
2016................................................... 232,973 97,711 72,292
2017................................................... 236,444 95,818 68,743
2018................................................... 198,460 95,923 78,900
2019................................................... 190,098 110,376 93,495
2020................................................... 201,011 109,283 92,396
--------------------------------------------------------
Total.............................................. 1,058,986 509,111 405,826
5-year average..................................... 211,797 101,822 81,165
----------------------------------------------------------------------------------------------------------------
Source: Total Number of H-1B Cap-Subject Petitions Submitted FYs 2016-2020, USCIS Service Center Operations
(SCOPS), June 2019. Total Number of Selected Petitions data, USCIS Office of Performance and Qualify (OPQ),
Performance Analysis and External Reporting (PAER), July 2020.

Table 3 also shows historical Form G-28 filings by attorneys or
accredited representatives accompanying selected H-1B cap-subject
petitions. DHS notes that these forms are not mutually exclusive. Based
on the 5-year average, DHS estimates 79.7 percent \68\ of selected
petitions will be filed with a Form G-28. Table 3 does not include data
for FY 2021 as the registration requirement was first implemented for
the FY 2021 H-1B cap selection process, and petition submission remains
ongoing as of the publication of this proposed rule.
---------------------------------------------------------------------------

\68\ Calculation: 81,165 Forms G-28/101,822 Form I-129 petitions
= 79.7 percent.
---------------------------------------------------------------------------

The H-1B selection process changed significantly after the
publication of the H-1B Registration Final Rule.\69\ That rule
established a mandatory electronic registration requirement that
requires petitioners seeking to file cap-subject H-1B petitions,
including those eligible for the advanced degree exemption, to first
electronically register with USCIS during a designated registration
period. That rule also reversed the order by which USCIS counts H-1B
registrations (or petitions, for any year in which the registration
requirement is suspended) toward the number projected to meet the H-1B
numerical allocations, such that USCIS first selects registrations
submitted on behalf of all beneficiaries, including those eligible for
the advanced degree exemption. USCIS then selects from the remaining
registrations a sufficient number projected as needed to reach the
advanced degree exemption. The registration requirement was first
implemented for the FY 2021 H-1B cap. During the initial registration
period for the FY 2021 H-1B cap selection process, DHS received 274,273
registrations.
---------------------------------------------------------------------------

\69\ See Registration Final Rule, supra note 7.
---------------------------------------------------------------------------

4. Cost-Benefit Analysis
Through these proposed changes, petitioners would incur costs
associated with additional time burden in completing the registration
process and, if selected for filing, the petition process. In this
analysis, DHS estimates the opportunity cost of time for these
occupations using average hourly wage rates of $32.58 for HR
specialists and $69.86 for lawyers.\70\ However, average hourly wage
rates do not account for worker benefits such as paid leave, insurance,
and retirement. DHS accounts for worker benefits when estimating the
opportunity cost of time by calculating a benefits-to-wage multiplier
using the most recent DOL, BLS report detailing average compensation
for all civilian workers in major occupational groups and industries.
DHS estimates the benefits-to-wage multiplier is 1.46.\71\ For purposes
of this proposed rule, DHS calculates the average total rate of
compensation as $47.57 per hour for an HR specialist, where the average
hourly wage is $32.58 per hour worked and average benefits are $14.99
per hour.\72\ Additionally, DHS calculates the average total rate of
compensation as $102.00 per hour for an in-house lawyer, where the
average hourly wage is $69.86 per hour worked and average benefits are
$32.14 per hour.\73\ Moreover, DHS recognizes that a firm may choose,
but is not required, to outsource the preparation and submission of
registrations and filing of H-1B petitions to outsourced lawyers.\74\
Therefore, DHS calculates the average total rate of compensation as
$174.65, which is the average hourly U.S. wage rate for lawyers
multiplied by 2.5 to approximate an hourly billing rate for an
outsourced lawyer.\75\
---------------------------------------------------------------------------

\70\ See U.S. Department of Labor, Bureau of Labor Statistics,
Occupational Employment Statistics, May 2019 National Occupational
Employment and Wage Estimates-National, SOC 13-1071--Human Resources
Specialist and SOC 23-1011--Lawyers, https://www.bls.gov/oes/2019/may/oes_nat.htm (last visited Sept. 2, 2020).
\71\ The benefits-to-wage multiplier is calculated as follows:
($37.10 Total Employee Compensation per hour) / ($25.47 Wages and
Salaries per hour) = 1.457 = 1.46 (rounded). See U.S. Department of
Labor, Bureau of Labor Statistics, Economic News Release, Employer
Cost for Employee Compensation (December 2019), Table 1. Employer
Costs for Employee Compensation by ownership (Dec. 2019), https://www.bls.gov/news.release/archives/ecec_03192020.pdf (last visited
Sept. 2, 2020).
\72\ Calculation of the weighted mean hourly wage for HR
specialists: $32.58 per hour x 1.46 = $47.5668 = $47.57 (rounded)
per hour.
\73\ Calculation of weighted mean hourly wage for in-house
lawyers: $102.00 average hourly total rate of compensation for in-
house lawyer = $69.86 average hourly wage rate for lawyer (in-house)
x 1.46 benefits-to-wage multiplier.
\74\ DHS uses the terms ``in-house lawyer'' and ``outsourced
lawyer'' to differentiate between the types of lawyers that may file
Form I-129H1 on behalf of an employer petitioning for an H-1B
beneficiary.
\75\ Calculation of weighted mean hourly wage for outside
counsel: $174.65 average hourly total rate of compensation for
outsourced lawyer = $69.86 average hourly wage rate for lawyer (in-
house) x 2.5 conversion multiplier. DHS uses a conversion multiplier
of 2.5 to estimate the average hourly wage rate for outsourced
lawyer based on the hourly wage rate for an in-house lawyer. DHS has
used this conversion multiplier in various previous rulemakings. The
DHS analysis in Exercise of Time-Limited Authority to Increase the
Fiscal Year 2018 Numerical Limitation for the H-2B Temporary
Nonagricultural Worker Program, 83 FR 24905 (May 31, 2018), used a
multiplier of 2.5 to convert in-house attorney wages to the cost of
outsourced attorney wages.

---------------------------------------------------------------------------

[[Page 69249]]

Table 4 summarizes the compensation rates used in this analysis.

Table 4--Summary of Estimated Wages for Form I-129H1 Filers by Type of
Filer
------------------------------------------------------------------------
Hourly
compensation
rate
------------------------------------------------------------------------
Human Resources (HR) Specialist......................... $47.57
In-house lawyer......................................... 102.00
Outsourced lawyer....................................... 174.65
------------------------------------------------------------------------
Source: USCIS analysis.

i. Costs and Cost Savings of Regulatory Changes to Petitioners
a. Methodology Based on Historic FYs 2019-2020
This proposed rule primarily would change the manner in which USCIS
selects H-1B registrations (or H-1B petitions for any year in which the
registration requirement were suspended), by first selecting
registrations generally based on the highest OES wage level that the
proffered wage were to equal or exceed for the relevant SOC code and
area(s) of intended employment. In April 2019, DHS added a registration
requirement for petitioners seeking to file H-1B petitions on behalf of
cap-subject aliens.\76\ Under the current regulation, all petitioners
seeking to file an H-1B cap-subject petition must first electronically
submit a registration for each beneficiary on whose behalf they seek to
file an H-1B cap-subject petition, unless the registration requirement
is suspended. If the registration is selected, the petitioner is
eligible to file an H-1B cap-subject petition for the beneficiary named
in the selected registration during the associated filing period. The
registration requirement was suspended for the FY 2020 H-1B cap and
first implemented for the FY 2021 H-1B cap. The initial H-1B
registration period for the FY 2021 H-1B cap was March 1, 2020, through
March 20, 2020. A total of 274,273 registrations were submitted during
the initial registration period, of which 123,244 \77\ registrations
were for beneficiaries eligible for the advanced degree exemption and
145,950 were for beneficiaries under the regular cap.\78\
---------------------------------------------------------------------------

\76\ See Registration Final Rule, supra note 7.
\77\ The total number of registrations for the advanced degree
exemption and the regular cap do not equal the total 274,273
submitted registrations because the remaining 5,043 submitted
registrations were invalid (e.g., as prohibited duplicate
registrations).
\78\ U.S. Department of Homeland Security, U.S. Citizenship and
Immigration Services, Office of Policy and Strategy, Policy Research
Division (PRD), Claims 3, Aug. 31, 2020, USCIS Analysis.
---------------------------------------------------------------------------

Prior to implementing the registration requirement, USCIS
administered the H-1B cap by projecting the number of petitions needed
to reach the numerical allocations. H-1B cap-subject petitions were
randomly selected when the number of petitions received on the final
receipt date exceeded the number projected as needed to reach the
numerical allocations. All petitions eligible for the advanced degree
exemption had an equal chance of being selected toward the advanced
degree exemption, and all remaining petitions had an equal chance of
being selected toward the regular cap. In FY 2019, USCIS first selected
petitions toward the number of petitions projected as needed to reach
advanced degree exemption. If the petition was not selected under the
advanced degree exemption, those cases were then added back to the pool
and had a second chance for selection under the regular cap. In FY
2020, the selection order was reversed, such that USCIS first selected
petitions toward the number projected as needed to reach the regular
cap from among all petitions received. USCIS then selected toward the
number of petitions projected as needed to reach the advanced degree
exemption from among those petitions eligible for the advanced degree
exemption, but that were not selected under the regular cap.
Table 5 shows the number of petitions submitted and selected in FYs
2019 and 2020. It also displays the approximated 2-year averages of the
petitions that were submitted and selected for the H-1B regular cap or
advanced degree exemption. On average, DHS selected 56 percent \79\ of
the H-1B cap-subject petitions submitted, with 82,900 toward the
regular cap and 26,930 toward the advanced degree exemption.
---------------------------------------------------------------------------

\79\ Calculation: 109,830 2-year average of Petitions Randomly
Selected in FYs 2019-2020/195,555 2- year average of Total Number of
H-1B Cap-Subject Petitions Filed in FYs 2019-2020 = 56%.

Table 5--H-1B Cap-Subject Petitions Submitted to USCIS, for FY 2019--FY 2020.
----------------------------------------------------------------------------------------------------------------
Total number of H-
1B cap-subject Total petitions Advanced degree
Fiscal year petitions selected Regular cap exemption
submitted
----------------------------------------------------------------------------------------------------------------
2019................................ 190,098 110,376 82,956 27,420
2020................................ 201,011 109,283 82,843 26,440
---------------------------------------------------------------------------
Total........................... 391,109 219,659 165,799 53,860
2-Year Average.................. 195,555 109,830 82,900 26,930
----------------------------------------------------------------------------------------------------------------
Source: USCIS, Office of Policy and Strategy, Policy Research Division (PRD), Claims 3. July 21, 2020 & USCIS
Analysis.

DHS does not have data on the OES wage levels for selected
petitions prior to FY 2019.\80\ While there are some challenges to
using OES wage data as a timeseries, DHS uses the wage data to provide
some insight.\81\ Table 6 shows the petitions that were selected for
FYs 2019 and 2020, categorized by OES wage level. The main difference
between the FY 2019 and FY 2020 data sets is that there are more
petitions classified as not applicable (N/A) in the FY 2019 data
compared to the FY 2020 data. Since DOL's Standard Occupational
Classification (SOC) \82\ structure was modified in 2018, some
petitions were categorized as N/A in FY 2019. In 2019, DOL started to
use a

[[Page 69250]]

hybrid OES \83\ occupational structure for classifying the petitions
for FY 2020.
---------------------------------------------------------------------------

\80\ USCIS created the tool to link USCIS H-1B data to the DOL
data for FY 2019.
\81\ U.S. Department of Labor, Bureau of Labor Statistics,
Occupational Employment Statistics, Frequently Asked Questions,
https://www.bls.gov/oes/oes_ques.htm (last visited Sept. 2, 2020)
(Can OES data be used to compare changes in employment or wages over
time? Although the OES survey methodology is designed to create
detailed cross-sectional employment and wage estimates for the U.S.,
States, metropolitan and nonmetropolitan areas, across industry and
by industry, it is less useful for comparisons of two or more points
in time. Challenges in using OES data as a time series include
changes in the occupational, industrial, and geographical
classification systems, changes in the way data are collected,
changes in the survey reference period, and changes in mean wage
estimation methodology, as well as permanent features of the
methodology).
\82\ U.S. Department of Labor, Bureau of Labor Statistics,
Standard Occupational Classification https://www.bls.gov/soc/2018/home.htm (last visited Oct. 27, 2020).
\83\ U.S. Department of Labor, Bureau of Labor Statistics,
Occupational Employment Statistics, Implementing the 2018 SOC in the
OES program--May 2019 and May 2020 Hybrid Occupations, https://www.bls.gov/oes/soc_2018.htm (last visited Sept. 2, 2020).
---------------------------------------------------------------------------

Another data limitation was that some of the FY 2020 data was
incomplete with missing fields, and could not be classified into the
specific wage levels; therefore, the petitions were categorized as N/A.
DHS expects each registrant that is classified as N/A would be able to
identify the appropriate SOC code for the proffered position because
all petitioners are required to identify the appropriate SOC code for
the proffered position on the LCA, even when there is no applicable
wage level on the LCA. Using the SOC code and the above-mentioned DOL
guidance, all registrants would be able to determine the appropriate
OES wage level for purposes of completing the registration, regardless
of whether they were to specify an OES wage level or utilize the OES
program as the prevailing wage source on an LCA. While there are
limitations to the data used, DHS believes that the estimates are
helpful to see the current wage levels and estimate the future
populations in each wage level.

Table 6--Selected Petitions by Wage Level FY 2019-FY 2020
--------------------------------------------------------------------------------------------------------------------------------------------------------
Level I Level II Level III Level IV N/A Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
Advanced Degree Exemption:
FY 2019............................................. 7,363 13,895 2,016 553 3,593 27,420
FY 2020............................................. 7,453 14,467 2,311 694 1,515 26,440
-----------------------------------------------------------------------------------------------
Total........................................... 14,816 28,362 4,327 1,247 5,108 53,860
2-Year Average.................................. 7,408 14,181 2,164 623 2,554 26,930
Regular Cap:
FY 2019............................................. 18,557 42,621 8,447 3,540 9,791 82,956
FY 2020............................................. 19,232 46,439 8,796 3,677 4,699 82,843
-----------------------------------------------------------------------------------------------
Total........................................... 37,789 89,060 17,243 7,217 14,490 165,799
2-Year Average.................................. 18,895 44,530 8,622 3,608 7,245 82,900
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: USCIS, Office of Policy and Strategy, Policy Research Division (PRD), Claims 3. July 21, 2020 & USCIS Analysis.

DHS only has OES wage level data on the petitions that were
selected toward the numerical allocations and does not have the wage
level break down for the 85,725 \84\ (44 percent) of petitions that
were not selected since those petitions were returned to petitioners
without entering data into DHS databases. Due to data limitations, DHS
estimated the wage level break down for the 44 percent of petitions
that were not selected because wage levels vary significantly between
occupations and localities. Table 7 shows the 2-year approximated
average of H-1B cap-subject petitions that were selected, separated by
OES wage level, and percentages of accepted petitions by each wage
category. The wage category with the most petitions as estimated is OES
wage level II.
---------------------------------------------------------------------------

\84\ Calculation: 195,555 2-year average of Total Number of H-1B
Cap-Subject Petitions received in FYs 2019-2020 -109,830 2-year
average of Petitions Randomly Selected in FYs 2019-2020 = 85,725.

Table 7--Current Estimated Number of Selected Petitions by Wage Level and Cap Type FY 2019-FY 2020
----------------------------------------------------------------------------------------------------------------
Regular cap Advanced degree exemption
Level ---------------------------------------------------------------
Selected % of total Selected % of total
----------------------------------------------------------------------------------------------------------------
Level I & N/A................................... 26,140 31.50 9,962 36.99
Level II........................................ 44,530 53.70 14,181 52.66
Level III....................................... 8,622 10.40 2,164 8.04
Level IV........................................ 3,608 4.40 623 2.31
---------------------------------------------------------------
Total....................................... 82,900 100 26,930 100
----------------------------------------------------------------------------------------------------------------
Source: USCIS, Office of Policy and Strategy, Policy Research Division (PRD), Claims 3. July 21, 2020 & USCIS
Analysis.

b. FY 2021 Data \85\
---------------------------------------------------------------------------

\85\ FY 2021 data pertains to the registrations received during
FY 2020 for the FY 2021 H-1B cap season.
---------------------------------------------------------------------------

The population affected by this proposed rule consists of
prospective petitioners seeking to file H-1B cap-subject petitions,
including those eligible for the advanced degree exemption. DHS
regulations require all petitioners seeking to file H-1B cap-subject
petitions to first electronically submit a registration for each
beneficiary on whose behalf they seek to file an H-1B cap-subject
petition, unless USCIS suspends the registration requirement.\86\ A
prospective petitioner whose registration is selected is eligible to
file an H-1B cap-subject petition for the beneficiary named in the
selected registration during the associated filing period.\87\ Under
the current H-1B registration selection process, USCIS first randomly
selects registrations submitted on behalf of all beneficiaries,
including those eligible for the advanced degree exemption.\88\ USCIS
then randomly selects from the remaining registrations a sufficient
number projected as needed to reach the advanced degree exemption.\89\
Prior to the implementation of the H-1B registration requirement for
the FY 2021 H-1B cap selection process, petitioners submitted an annual
average of 211,797

[[Page 69251]]

cap-subject H-1B petitions over FYs 2016 through 2020. The number of
registrations submitted for the FY 2021 H-1B cap selection process,
however, was 274,273. Because the number of registrations submitted for
the FY 2021 H-1B cap selection process was significantly higher than
the number of petitions submitted in prior years, DHS will use the
total number of registrations submitted for the FY 2021 H-1B cap
selection process as the population to estimate certain costs for this
proposed rule.\90\
---------------------------------------------------------------------------

\86\ See 8 CFR 214.2(h)(8)(iii)(A).
\87\ See id. at Sec. 214.2(h)(8)(iii)(D).
\88\ See id. at Sec. 214.2(h)(8)(iii)(A)(5).
\89\ See id. at Sec. 214.2(h)(8)(iii)(A)(6).
\90\ DHS uses FY 2021 H-1B cap selection data as the population
to estimate certain costs for this proposed rule because FY 2021 is
the first year that registration was required. As explained above,
DHS added the registration requirement on April 19, 2019, but the
registration requirement was suspended for the FY 2020 H-1B cap.
---------------------------------------------------------------------------

For the FY 2021 H-1B cap selection process, initially 106,100
registrations were selected to submit a petition. Prospective
petitioners with selected registrations only were eligible to file H-1B
petitions based on the selected registrations during a 90-day filing
window. USCIS did not receive enough Form I-129 petitions during the
initial filing period to meet the number of petitions projected as
needed to reach the H-1B numerical allocations, so the selection
process was run again in August 2020. An additional 18,315
registrations were selected in August 2020 for a total of 124,415
selected registrations for FY 2021. While the current number of
registrations selected toward the FY 2021 numerical allocations is
124,415, DHS estimates certain costs for this proposed rule using the
number of registrations initially selected (106,100) as the best
estimate of the number of petitions needed to reach the numerical
allocations.

Table 8--H-1B Cap-Subject Registrations Submitted, for FY 2021
----------------------------------------------------------------------------------------------------------------
Total number Round 1 number Round 2 number Total number Number of
of H-1B of H-1B of H-1B of H-1B registrations
Fiscal year registrations registrations registrations registrations submitted with
submitted selected selected selected * Form G-28 **
----------------------------------------------------------------------------------------------------------------
2021........................ 274,273 106,100 18,315 124,415 N/A
-----------------------------------------------------------------------------------
Total................... 274,273 106,100 18,315 124,415 N/A
----------------------------------------------------------------------------------------------------------------
Source: USCIS, Office of Policy and Strategy, Policy Research Division (PRD), Claims 3. August 31, 2020 USCIS
Analysis.
* Note: USCIS administered the selection process twice because an insufficient number of petitions were filed
following initial registration selection to reach the number of petitions projected as needed to reach the
numerical allocations. USCIS has not finished receiving H-1B cap-subject petitions for FY 2021. Additional
registrations may be selected if the number of petitions filed after the second round of registration
selection does not reach the number projected as needed to reach the numerical allocations.
** Note: Data is still unavailable for FY 2021. USCIS used FYs 2019-2020 from Table 3 to estimate the percentage
of submitted G-28s below.

Table 3 shows historical Form G-28 filings by attorneys or
accredited representatives accompanying selected H-1B cap-subject
petitions. DHS notes that these forms are not mutually exclusive. Based
on the historical 5-year average from earlier in this analysis, DHS
estimates 79.7 percent \91\ of selected registrations will include Form
G-28. DHS applies those percentages to the number of total
registrations and estimates 219,418 \92\ Form G-28 were submitted with
total registrations received. DHS uses the total registrations received
for the FY 2021 H-1B cap selection process (274,273) as the estimate of
registrations that will be received annually.
---------------------------------------------------------------------------

\91\ Calculation: 81,165 Forms G-28/101,822 Form I-129 petitions
= 79.7 percent = 80 percent (rounded)
\92\ Calculation: 274,273* 79.7 percent = 219,418 Form G-28.
---------------------------------------------------------------------------

Additionally, DHS assumes that petitioners may use human resources
(HR) specialists (or entities that provide equivalent services)
(hereafter HR specialist) or use lawyers or accredited representatives
\93\ to complete and file H-1B petitions. A lawyer or accredited
representative appearing before DHS must file Form G-28 to establish
their eligibility and authorization to represent a client (applicant,
petitioner, requestor, beneficiary or derivative, or respondent) in an
immigration matter before DHS. DHS estimates that about 80 percent \94\
of H-1B petitions typically would be completed and filed by a lawyer or
other accredited representative (hereafter lawyer). DHS assumes the
remaining 20 percent of H-1B petitions would be completed and filed by
HR specialists.
---------------------------------------------------------------------------

\93\ 8 CFR 292.1(a)(4) (defining an accredited representative as
``a person representing an organization described in Sec. 292.2 of
this chapter who has been accredited by the Board'').
\94\ Calculation: 81,165 petitions filed with Form G-28/101,822
average petitions selected = 79.7 percent petitions completed and
filed by a lawyer or other accredited representative (hereafter
lawyer).
---------------------------------------------------------------------------

Petitioners who use lawyers to complete and file H-1B petitions may
either use an in-house lawyer or hire an outsourced lawyer. Of the
total number of H-1B petitions filed in FY 2021, DHS estimates that 26
percent were filed by in-house lawyers while the remaining 54 percent
were filed by outsourced lawyers.\95\
---------------------------------------------------------------------------

\95\ DHS uses data from the longitudinal study conducted in 2003
and 2007 on legal career and placement of lawyers, which found that
18.6, 55, and 26.2 percent of lawyers practice law at government
(federal and local) institutions, private law firms, and private
businesses (as inside counsel), respectively. See Dinovitzer et al,
After the JD II: Second Results from a National Study of Legal
Careers (2009), The American Bar Foundation and the National
Association for Law Placemen (NALP) Foundation for Law Career
Research and Education, Table 3.1, p. 27, https://www.law.du.edu/documents/directory/publications/sterling/AJD2.pdf. Among those
working in private law firms and private businesses (54 and 26
percent, respectively), DHS estimates that, while 67.7 percent of
lawyers practice law in private law firms, the remaining 32.3
percent practice in private businesses (54 percent + 25.7 percent =
79.7 percent, 67.7 percent = 54/79.7*100, 32.2 percent = 25.7/
79.7*100). Because 79.7 percent of the H-1B petitions are filed by
lawyers or accredited representatives, DHS multiplies 79.7 percent
by 32.3 and 67.7 percent to estimate the proportion of petitions
filed by in-house lawyers (working in private businesses) and
outsourced lawyer (working in private law firms), respectively.
26 (rounded) percent of petitions filed by in-house lawyers = 80
percent of petitions filed by lawyers or accredited representatives
x 32.3 percent of lawyers work in private businesses.
54 (rounded) percent of petitions filed by outsourced lawyer =
80 percent of petitions filed by lawyers or accredited
representatives x 67.7 percent of lawyers work in private law firms.

[[Page 69252]]

Table 9--Summary of Estimated Average Number of Petitions/Registrations Submitted Annually by Type of Filer
--------------------------------------------------------------------------------------------------------------------------------------------------------
Number of petitions/ Number of petitions/ Number of petitions/
Estimated average registrations registrations registrations
Affected population population affected submitted by HR submitted by in- submitted by
specialists house lawyers outsourced lawyers
A B = A x 20% C = A x 26% D = A x 54%
--------------------------------------------------------------------------------------------------------------------------------------------------------
Estimated number of H-1B registrations submitted annually....... 274,273 54,855 71,311 148,107
Estimated number of H-1B registrations selected to file H-1B cap 106,100 21,220 27,586 57,294
petitions annually.............................................
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: USCIS analysis.

Based on the total estimated number of affected populations shown
in Table 9, DHS further estimates the number of entities that would be
affected by each requirement of this proposed rule to estimate the
costs arising from the regulatory changes in the cost-benefit analysis
section. Additionally, DHS uses the same proportion of HR specialists,
in-house lawyers, and outsourced lawyers (20, 26, and 54 percent,
respectively) to estimate the population that would be affected by the
various requirements of this proposed rule.
c. Unquantified Costs & Benefits
Given that the demand for H-1B cap-subject visas, including those
filed for the advanced degree exemption, has frequently exceeded the
annual H-1B numerical allocations, this proposed rule would increase
the chance of selection for registrations (or petitions, if
registration were suspended) seeking to employ beneficiaries at level
IV or level III wages. DHS believes this incentive for petitioners to
offer wages that maximize their probability of selection is necessary
to address the risk that greater numbers of U.S. employers could rely
on the program to access relatively lower-cost labor, precluding other
employers from benefitting from the H-1B program's intended purpose of
providing high-skilled nonimmigrant labor to supplement domestic labor.
The proposed rule could result in higher proffered wages or a reduction
in the downward pressure on wages in industries and occupations with
concentrations of relatively lower-paid H-1B workers. Additionally,
this proposed rule may lead to an increase in employment opportunities
for unemployed or underemployed U.S. workers seeking employment in
positions otherwise offered to H-1B cap-subject beneficiaries at wage
levels corresponding to lower wage positions. Employers which were to
offer H-1B workers wages that correspond with level IV or level III OES
wages would have higher chances of selection.
For the FY 2021 H-1B cap selection process, USCIS initially
selected 106,100 (39 percent) \96\ of H-1B registrations submitted
toward the numerical allocations; of those 80,600 were selected toward
the number projected as needed to reach the regular cap, and 25,500
were selected toward the number projected as needed to reach the
advanced degree exemption. The total number of H-1B registrations
submitted was 274,237, however 5,043 were invalid. Of the 269,194 valid
registrations, 145,950 were submitted toward the regular cap and
123,244 were eligible for selection under the advanced degree
exemption.
---------------------------------------------------------------------------

\96\ Calculation: 106,100 Registrations Randomly Selected/
274,273 Total Number of H-1B Cap-Subject registrations Filed in 2020
= 39%.

Table 10--H-1B Cap-Subject Registrations Submitted for FY 2021
----------------------------------------------------------------------------------------------------------------
Total number of
valid H-1B Advanced degree
Fiscal year registrations Regular cap exemption
submitted
----------------------------------------------------------------------------------------------------------------
2021................................................... 269,194 145,950 123,244
--------------------------------------------------------
Total.............................................. 269,194 145,950 123,244
----------------------------------------------------------------------------------------------------------------
Source: USCIS, Office of Policy and Strategy, Policy Research Division (PRD), Claims 3. August 31, 2020 & USCIS
& Analysis.
*Note: The total number of registrations in this table does not equal 274,273 because 5,043 of the registrations
were invalid.

DHS estimated the wage level distribution for FY 2021 based on the
average distribution observed in FYs 2019 and 2020. As of September
2020, the wage level data is unavailable for FY 2021 because the
petition filing process is ongoing. Table 11 displays the historic 2-
year (FY 2019 and FY 2020) approximated average of H-1B cap-subject
petitions that were selected, separated by OES wage level, and
percentages of selected petitions by each wage category.

[[Page 69253]]

Table 11--Historic Number of Selected Petitions by Wage Level and Cap Type
----------------------------------------------------------------------------------------------------------------
Regular cap Advanced degree exemption
Level ---------------------------------------------------------------------------
Selected % of total Selected % of total
----------------------------------------------------------------------------------------------------------------
Level I & Below..................... 26,140 31.50 9,962 36.99
Level II............................ 44,530 53.70 14,181 52.66
Level III........................... 8,622 10.40 2,164 8.04
Level IV............................ 3,608 4.40 623 2.31
---------------------------------------------------------------------------
Total........................... 82,900 100 26,930 100
----------------------------------------------------------------------------------------------------------------
Source: USCIS, Office of Policy and Strategy, Policy Research Division (PRD), Claims 3. July 21, 2020 & USCIS
Analysis.
*Note: Totals are based on 2-year averages of petitions randomly selected in FYs 2019-2020, Table 11 is
replicated from Table 7.

DHS assumes that FY 2021 wage level distribution of registrations
would equal the wage level distribution observed in FYs 2019 through
2020 data. DHS multiplied the percentage of selected petitions by level
from Table 11 to estimate the breakdown of registrations by wage level.
For example, DHS multiplied 145,950 by 4.4 percent to estimate that a
total of 6,422 registrations would have been categorized as wage level
IV under the regular cap.

Table 12--Current Estimated Number of Registrations by Wage Level and Cap Type
----------------------------------------------------------------------------------------------------------------
Regular cap Advanced degree exemption
---------------------------------------------------------------------------
Level Estimated % of Estimated % of
registrations registrations registrations registrations
----------------------------------------------------------------------------------------------------------------
Level I & Below..................... 45,974 31.50 45,588 36.99
Level II............................ 78,375 53.70 64,900 52.66
Level III........................... 15,179 10.40 9,909 8.04
Level IV............................ 6,422 4.40 2,847 2.31
---------------------------------------------------------------------------
Total........................... 145,950 100 123,244 100
----------------------------------------------------------------------------------------------------------------
Source: USCIS, Office of Policy and Strategy, Policy Research Division (PRD), Claims 3. August 31, 2020 & USCIS
Analysis.
* Note: Totals are based on 2021 data.

This proposed rule would change the H-1B cap selection process.
USCIS now would rank and select the registrations received (or
petitions, as applicable) generally on the basis of the highest OES
wage level that the proffered wage were to equal or exceed for the
relevant SOC code and in the area of intended employment, beginning
with OES wage level IV and proceeding in descending order with OES wage
levels III, II, and I. As a result of the approximated 2-year average
from above, DHS displays the projected selection percentages for
registrations under the regular cap and advanced degree exemption in
Table 13. With the revised selection method based on corresponding OES
wage level and ranking, the approximated average indicates that all
registrations with a proffered wage that corresponds to OES wage level
IV or level III would be selected and 58,999, or 75 percent, of the
registrations with a proffered wage that corresponds to OES wage level
II would be selected toward the regular cap projections. None of the
registrations with a proffered wage that corresponds to OES wage level
I or below would be selected toward the regular cap projections. For
the advanced degree exemption, DHS estimates all registrations with a
proffered wage that corresponds to OES wage levels IV and III would be
selected and 12,744, or 20 percent, of the registrations with a
proffered wage that corresponds to OES wage level II would be selected.
DHS estimates that none of the registrations with a proffered wage that
corresponds to OES wage level I or below would be selected.
DHS is using the approximated 2-year average from above to
illustrate the expected distribution of future selected registration
percentages by corresponding wage level. However, DHS is unable to
quantify the actual outcome because DHS cannot predict the actual
number of registrations that would be received at each wage level
because employers may change the number of registrations they choose to
submit and the wages they offer in response to the changes proposed in
this rule.

Table 13--New Estimated Number of Selected Registrations by Wage Level and Cap Type
--------------------------------------------------------------------------------------------------------------------------------------------------------
Regular cap Advanced degree exemption
-----------------------------------------------------------------------------------------------------------------
Level Total Selected Total Selected
registrations registrations % Selected registrations registrations % Selected
--------------------------------------------------------------------------------------------------------------------------------------------------------
Level I & Below....................... 45,974 0 0 45,588 0 0
Level II.............................. 78,375 58,999 75 64,900 12,744 20
Level III............................. 15,179 15,179 100 9,909 9,909 100
Level IV.............................. 6,422 6,422 100 2,847 2,847 100
-----------------------------------------------------------------------------------------------------------------

[[Page 69254]]

Total............................. 145,950 80,600 ................. 123,244 25,500 .................
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: USCIS, Office of Policy and Strategy, Policy Research Division (PRD), Claims 3. August 31, 2020 & USCIS Analysis.
*Note: Totals are based on FY 2021 data.

This proposed rule may primarily affect prospective petitioners
seeking to file H-1B cap-subject petitions with a proffered wage that
corresponds to OES wage level I and level II.\97\ As Table 13 shows,
this proposed rule is expected to result in a reduced likelihood that
registrations for level II would be selected, as well as the likelihood
that registrations for level I and below wages would not be selected. A
prospective petitioner, however, could choose to increase the proffered
wage so that it corresponds to a higher wage level. Another possible
effect is that employers would not fill vacant positions that would
have been filled by H-1B workers. These employers may be unable to find
qualified U.S. workers, or may leave those positions vacant because
they cannot justify raising the wage to stand greater chances of
selection in the H-1B cap selection process. That, in turn, could
result in fewer registrations and H-1B cap-subject petitions with a
proffered wage that corresponds to OES wage level II and below.
---------------------------------------------------------------------------

\97\ DOL uses wage levels to determine the prevailing wage based
on the level of education, experience (including special skills and
other requirements), or supervisory duties required for a position;
however, USCIS would use wage levels to rank and select
registrations (or petitions, as applicable) based on the rate of pay
for the wage level that the proffered wage were to equal or exceed.
More information about DOL wage level determinations can be found
supra notes 26 and 38. DHS acknowledges that varying wage levels
correspond to varying skill levels. In analyzing the economic
effects of this proposed rule, DHS recognizes that prospective
petitioners may offer wages exceeding the wage levels associated
with the skills required for given positions to increase their
chances of selection under the ranked selection process.
---------------------------------------------------------------------------

DHS acknowledges that this proposed rule might result in more
registrations (or petitions, if registration is suspended) with a
proffered wage that would correspond to level IV and level III OES
wages for H-1B cap-subject beneficiaries. DHS believes a benefit of
this proposed rule may be that some petitioners may choose to increase
proffered wages for H-1B cap-subject beneficiaries, so that the
petitioner may have a greater chance of selection. This change would in
turn benefit H-1B beneficiaries who ultimately would receive a higher
rate of pay that they otherwise would have in the absence of this rule.
However, DHS is not able to estimate the magnitude of such benefits.
DHS acknowledges the change in the selection procedure resulting from
this proposed rule would create distributional effects and costs. DHS
is unable to quantify the extent or determine the probability of H-1B
petitioner behavioral changes. Therefore, DHS does not know the portion
of overall impacts of this rule that would be benefits or costs.
As a result of this proposed rule, costs would be borne by
prospective petitioners that would have hired lower wage level H-1B
cap-subject beneficiaries, but were unable to do so because of a
reduced chance of selection in the H-1B selection process. Such
employers may also incur additional costs to find available replacement
workers. DHS estimates costs incurred associated with loss of
productivity from not being able to hire H-1B workers, or the need to
search for and hire U.S. workers to replace the H-1B workers. Although
DHS does not have data to estimate the costs resulting from
productivity loss for these employers, DHS provides an estimate of the
search and hiring costs for the replacement workers. Accordingly, based
on the result of the study conducted by the Society for Human Resource
Management (SHRM) in 2016, DHS assumes that an entity whose H-1B
petition was denied would incur an average cost of $4,398 per worker
(in 2019 dollars) \98\ to search for and hire a U.S. worker in place of
an H-1B nonimmigrant worker during the period of this economic
analysis. If petitioners cannot find suitable replacements for the
labor H-1B cap-subject beneficiaries would have provided if selected
and ultimately granted H-1B status, this proposed rule would primarily
be a cost to these petitioners through lost productivity and profits.
---------------------------------------------------------------------------

\98\ Society for Human Resource Management (SHRM), 2016 Human
Capital Benchmarking Report, at 16, https://www.shrm.org/hr-today/trends-and-forecasting/research-and-surveys/Documents/2016-Human-Capital-Report.pdf (last visited Oct. 21, 2020). The study was based
on data collected from 2,048 randomly selected human resource
professionals who participated in the 2016 SHRM Human Capital
Benchmarking Survey. The hiring cost is reported as $4,129 per
worker in 2016 dollars and converted to 2019 dollars in this
analysis. The hiring cost includes third-party agency fees,
advertising agency fees, job fairs, online job board fees, employee
referrals, travel costs of applicants and staff, relocation costs,
recruiter pay and benefits, and talent acquisition system costs.
---------------------------------------------------------------------------

DHS also acknowledges that some petitioners might be impacted in
terms of the employment, productivity loss, search and hire costs, and
profits resulting from labor turnover. In cases where companies cannot
find reasonable substitutes for the labor the H-1B beneficiaries would
have provided, affected petitioners also would lose profits from the
lost productivity. In such cases, employers would incur opportunity
costs by having to choose the next best alternative to immediately fill
the job the prospective H-1B worker would have filled. There may be
additional opportunity of costs to employers such as search costs and
training.
Such possible disruptions to companies would depend on the
interaction of a number of complex variables that are constantly in
flux, including national, state, and local labor market conditions,
economic and business factors, the type of occupations and skills
involved, and the substitutability between H-1B workers and U.S.
workers. These costs to petitioners are expected to be offset by
increased productivity and reduced costs to find available workers for
petitioners of higher wage level H-1B beneficiaries.
DHS uses the compensation to H-1B employees as a measure of the
overall impact of the provisions. While DHS would expect wages paid to
H-1B beneficiaries to be higher if the rule is finalized as proposed,
DHS is unable to quantify the benefit of increased compensation because
not all of the wage increases would correspond with productivity
increases. This proposed rule may indirectly benefit prospective
petitioners submitting registrations with a proffered wage that
corresponds to OES wage Level I and II registrations. The indirect
benefit would be present during the COVID-19 pandemic and the

[[Page 69255]]

ensuing economic recovery if the prospective petitioners were able to
find replacement workers accepting a lower wage and factoring in the
replacement cost of $4,398 per worker in the United States. Similarly,
prospective petitioners that would be submitting registrations with a
proffered wage that would correspond to OES wage level I and II and
that substitute toward unemployed or underemployed individuals in the
U.S. labor force would create an additional indirect benefit from this
rule. This would benefit those in the U.S. labor force if petitioners
were to decide to select a U.S. worker rather than a prevailing wage
level I or II H-1B worker. DHS notes that, although the pandemic is
widespread, the severity of its impacts varies by locality and
industry, and there may be structural impediments to the national and
local labor market. Accordingly, DHS cannot quantify with confidence,
the net benefit of the redistribution of H-1B cap selections detailed
in this analysis.
DHS also proposes to change the filing procedures to allow USCIS to
deny or revoke approval of a subsequent new or amended petition filed
by the petitioner, or a related entity, on behalf of the same
beneficiary, if USCIS were to determine that the filing of the new or
amended petition is part of the petitioner's attempt to unfairly
decrease the proffered wage to an amount that would be equivalent to a
lower wage level, after listing a higher wage level on the registration
(or petition, if registration is suspended) to increase the odds of
selection. DHS is unable to quantify the cost of these proposed changes
to petitioners. DHS seeks public comments on any anticipated costs and
data relevant for estimation of the impacts of the changes proposed by
this rule.
d. Costs of Filing Form I-129H1 Petitions
DHS is proposing to amend Form I-129H1, which must be filed by
petitioners on behalf of H-1B beneficiaries, to align with the
regulatory changes DHS would make in this proposed rule. The changes to
Form I-129H1 would result in an increased time burden to complete and
submit the form.
Absent the changes implemented through this proposed rule, the
current estimated time burden to complete and file Form I-129H1 is 4.0
hours per petition.\99\ As a result of the changes in this proposed
rule, DHS estimates the total time burden to complete and file Form I-
129H1 would be 4.25 hours per petition, to account for the additional
time petitioners would spend reviewing instructions, gathering the
required documentation and information, completing the petition,
preparing statements, attaching necessary documentation, and submitting
the petition. DHS estimates the time burden would increase by a total
of 15 minutes (0.25 hours) per petition for completing a Form I-129H1
petition.\100\
---------------------------------------------------------------------------

\99\ DHS estimates the costs and benefits of this rule using the
newly published Fee Schedule Final Rule, and related form changes,
as the baseline. See supra note 66. The Fee Schedule Final Rule was
scheduled to go into effect on October 2, 2020. On September 29,
2020, the U.S. District Court for the Northern District of
California issued a nationwide injunction, which prevents DHS from
implementing the Fee Schedule Final Rule. See, Immigrant Legal
Resource Center v. Wolf, No. 4:20-cv-5883 (N.D. Cal. Sept. 29,
2020). In addition, on October 8, 2020, DHS was also preliminarily
enjoined from implementing and enforcing the Fee Schedule Final Rule
by the U.S. District Court for the District of Columbia, including
by adopting any form changes associated with the rule. See,
Northwest Immigrant Rights Project v. U.S. Citizenship and
Immigration Servs., 1:19-cv-03283-RDM (D.D.C. Oct. 8, 2020). While
DHS intends to vigorously defend these lawsuits and is not changing
the economic baseline for this rule as a result of the litigation,
it is using the currently approved Form I-129, and not the form
version associated with the enjoined Fee Schedule Final Rule for the
purpose of seeking OMB approval of form changes associated with this
rule. Should DHS prevail in the Fee Schedule Final Rule litigation
and be able to implement the form changes associated with that rule,
DHS will comply with the Paperwork Reduction Act and seek approval
of the information collection changes associated with this rule,
based on the version of the Form I-129 that is in effect at that
time.
\100\ 0.25 hours additional time to complete and file Form I-
129H1 = (4.25 hours to complete and file the new Form I-129H1)-(4
hours to complete and file the current Form I-129 and its
supplements).
---------------------------------------------------------------------------

To estimate the additional cost of filing Form I-129H1, DHS applies
the additional estimated time burden to complete and file Form 1-129H1
(0.25 hours) to the respective total population and compensation rate
of who may file, including an HR specialist, in-house lawyer, or
outsourced lawyer. As shown in Table 14, DHS estimates, the total
additional annual opportunity cost of time to petitioners completing
and filing Form I-129H1 petitions would be approximately $3,457,401.
DHS requests public comments on the estimate of additional time
petitioners will spend reviewing instructions, gathering the required
documentation and information, completing the petition, preparing
statements, attaching necessary documentation, and submitting the
petition.

Table 14--Additional Opportunity Costs of Time to Petitioners for Filing Form I-129H1 Petitions From an Increase in Time Burden
--------------------------------------------------------------------------------------------------------------------------------------------------------
Additional time
Total affected burden to complete
Cost items population Form I-129H1 Compensation rate Total cost
(hours)
A B C D = A x B x C
--------------------------------------------------------------------------------------------------------------------------------------------------------
Opportunity cost of time to complete Form I-129H1 for H-1B
petitions by:
HR specialist............................................... 21,220 0.25 $47.57 $252,359
In-house lawyer............................................. 27,586 0.25 102.00 703,443
Outsourced lawyer........................................... 57,294 0.25 174.65 2,501,599
---------------------------------------------------------------------------------------
Total................................................... 106,100 .................... .................... 3,457,401
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: USCIS analysis.

e. Costs of Submitting Registrations as Modified by This Proposed Rule
DHS is proposing to amend the required information on the H-1B
Registration Tool. In addition to the information required on the
current registration tool, a registrant would be required to provide
the highest OES wage level that the proffered wage would equal or
exceed for the relevant SOC code in the area of intended employment, if
such data is available.

[[Page 69256]]

The proffered wage is the wage that the employer intends to pay the
beneficiary. The SOC code and area of intended employment would be
indicated on the LCA filed with the petition. For registrants relying
on a private wage survey, if the proffered wage were less than the
corresponding level I OES wage, the registrant would select the ``Wage
Level I and below'' box on the registration tool. If the registration
indicates that the H-1B beneficiary would work in multiple locations,
or in multiple positions if the prospective petitioner is an agent,
USCIS would rank and select the registration based on the lowest
corresponding OES wage level that the proffered wage would equal or
exceed. In the limited instance where there is no current OES
prevailing wage information for the proffered position, the registrant
would follow DOL guidance on prevailing wage determinations to
determine which OES wage level to select on the registration and USCIS
would rank and select based on the highest OES wage level. The proposed
change to this registration requirement would impose increased
opportunity costs of time to registrants, by adding additional
information to their registration.
The current estimated time burden to complete and file an
electronic registration is 30 minutes (0.5 hours) per
registration.\101\ DHS estimates the total time burden to complete and
file a registration, if this rule is finalized as proposed, would be 50
minutes (0.83 hours) per registration, which amounts to an additional
time burden of 20 minutes (0.33 hours) per registration. The additional
time burden accounts for the additional time a registrant would spend
reviewing instructions, completing the registration, and submitting the
registration.
---------------------------------------------------------------------------

\101\ Agency Information Collection Activities; Revision of a
Currently Approved Collection: H-1B Registration Tool, 84 FR 54159
(Oct. 9, 2019).
---------------------------------------------------------------------------

To estimate the additional cost of submitting a registration, DHS
applies the additional estimated time burden to complete and submit the
registration (0.33 hours) to the respective total population and total
rate of compensation of who may file, including HR specialists, in-
house lawyers, or outsourced lawyers. As shown in Table 15, DHS
estimates the total additional annual opportunity cost of time to the
prospective petitioners of completing and submitting registrations
would be approximately $11,797,520. DHS requests public comments on the
estimate of additional time petitioners will spend reviewing
instructions, gathering the required documentation and information,
completing the petition, preparing statements, attaching necessary
documentation, and submitting a registration.

Table 15--Additional Cost of Submitting Registrations
--------------------------------------------------------------------------------------------------------------------------------------------------------
Additional time
Total affected burden to submit
Cost items population registrations Compensation rate Total cost
(hours)
A B C D = A x B x C
--------------------------------------------------------------------------------------------------------------------------------------------------------
Opportunity cost of time to complete registrations by:
HR specialist............................................... 54,855 0.33 $47.57 $861,119
In-house lawyer............................................. 71,311 0.33 102.00 2,400,328
Outsourced lawyer........................................... 148,107 0.33 174.65 8,536,073
---------------------------------------------------------------------------------------
Total................................................... 274,273 .................... .................... 11,797,520
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: USCIS analysis.

While the expectation is that the registration process will be run
on an annual basis, USCIS may suspend the H-1B registration
requirement, in its discretion, if it determines that the registration
process is inoperable for any reason. The selection process also allows
for selection based solely on the submission of petitions in any year
in which the registration process is suspended due to technical or
other issues. In years when registration is suspended, DHS estimates,
based on the 5-year average of H-1B cap-subject petitions received for
FYs 2016 to 2020, that 211,797 H-1B cap-subject petitions would be
submitted annually. In the event registration is suspended and 211,797
H-1B cap-subject petitions are submitted, DHS estimates that 106,100
petitions would be selected for adjudication to meet the numerical
allocations and 105,697 petitions would be rejected. For FY 2021, DHS
selected 124,415 registrations to generate the 106,100 petitions
projected to meet the numerical allocations. Therefore, DHS estimates
that the additional cost to petitioners for preparing and submitting H-
1B cap-subject petitions, if this rule is finalized as proposed, would
be higher in the event registration were suspended because more
petitions would be prepared and submitted in this scenario. However, if
registration were suspended there would be no costs associated with
registration so the overall additional cost of this proposed rule to
petitioners would be less (stated another way, the estimated added cost
for submitting approximately 212,000 petitions if registration were
suspended would be less than the added costs based on approximately
274,000 registrations and 106,000 petitions for those with selected
registrations). Since the expectation is that registration will be run
on an annual basis and because the estimated additional costs resulting
from this proposed rule would be less if registration were suspended,
DHS is not separately estimating the costs for years when registration
would be suspended and is instead relying on the additional costs
created by this proposed rule when registration would be required to
estimate total costs of this proposed rule to petitioners seeking to
file H-1B cap-subject petitions.
f. Familiarization Cost
Familiarization costs comprise the opportunity cost of the time
spent reading and understanding the details of a rule in order to fully
comply with the new regulation(s). To the extent that an individual or
entity directly regulated by the rule incurs familiarization costs,
those familiarization costs are a direct

[[Page 69257]]

cost of the rule. The entities directly regulated by this rule are the
employers who file H-1B petitions. Using FY 2020 internal data on
actual filings of Form I-129 H-1B petitions, DHS identified 24,111
\102\ unique entities. DHS assumes that the petitioners require
approximately two hours to familiarize themselves with the rule. Using
the average total rate of compensation of HR specialists, In-house
lawyer, and Outsourced lawyer from Table 4 and assuming one person at
each entity familiarizes his or herself with the rule, DHS estimates a
one-time total familiarization cost of $6,285,527 in FY2022.
---------------------------------------------------------------------------

\102\ Source: USCIS, Office of Policy and Strategy, Policy
Research Division (PRD), Claims 3. August 18, 2020 & USCIS Analysis.

Table 16--Familiarization Costs to the Petitioners
----------------------------------------------------------------------------------------------------------------
Additional time
Total affected burden to
Cost items population familiarize Compensation rate Total cost
(hours)
A B C D = A x B x C
----------------------------------------------------------------------------------------------------------------
Opportunity cost of time to
familiarize the rule by:
HR specialist................... 4,822 2 $47.57 $458,765
In-house lawyer................. 6,269 2 102.00 1,278,876
Outsourced lawyer............... 13,020 2 174.65 4,547,886
---------------------------------------------------------------------------
Total....................... 24,111 ................. ................. 6,285,527
----------------------------------------------------------------------------------------------------------------
Source: USCIS analysis.

ii. Total Estimated Costs of Regulatory Changes
In this section, DHS presents the total annual costs annualized
over a 10-year implementation period if the regulatory changes in the
proposed rule are finalized as proposed. Table 17 details the total
annual costs of the proposed rule to petitioners would be $21,540,448
in FY 2022 and $15,254,921 in FY 2023-2032.

Table 17--Summary of Estimated Annual Costs to Petitioners in the
Proposed Rule
------------------------------------------------------------------------
Total estimated
Costs annual cost
------------------------------------------------------------------------
Petitioners' additional opportunity cost of time in $3,457,401
filing Form I-129H1 petitions.......................
Petitioners' additional opportunity cost of time in 11,797,520
submitting information on the registration..........
Familiarization Cost (Year 1 only FY 2022)........... 6,285,527
------------------
Total Annual Costs (undiscounted) = FY 2022...... 21,540,448
Total Annual Cost (undiscounted) = FY 2023-FY 15,254,921
2032............................................
------------------------------------------------------------------------

Table 18 shows costs over the 10-year implementation period of this
proposed rule. DHS estimates the 10-year total net cost of the rule to
petitioners to be approximately $158,834,737 undiscounted, $136,230,024
discounted at 3-percent, and $113,018,506 discounted at 7-percent. Over
the 10-year implementation period of the rule, DHS estimates the
annualized costs of the rule to be $15,970,315 annualized at 3-percent,
$16,091,293 annualized at 7-percent.

Table 18--Total Costs of This Proposed Rule
------------------------------------------------------------------------
Total estimated costs $21,540,448
(year 1); $15,254,921 (year 2-10)
Year ---------------------------------------
Discounted at 3- Discounted at 7-
percent percent
------------------------------------------------------------------------
1............................... $20,913,056 $20,131,260
2............................... 14,379,226 13,324,239
3............................... 13,960,414 12,452,560
4............................... 13,553,800 11,637,906
5............................... 13,159,029 10,876,548
6............................... 12,775,756 10,164,998
7............................... 12,403,647 9,499,998
8............................... 12,042,376 8,878,503
9............................... 11,691,627 8,297,666
10.............................. 11,351,094 7,754,828
---------------------------------------
Total....................... 136,230,024 113,018,506
Annualized.................. 15,970,315 16,091,293
------------------------------------------------------------------------

[[Page 69258]]

E.O. 13771 directs agencies to reduced regulation and control
regulatory costs. This proposed rule is expected to be an E.O. 13771
regulatory action. DHS estimates the total cost of this rule would be
$10,515,740 annualized using a 7-percent discount rate over a perpetual
time horizon, in 2016 dollars, and discounted back to 2016.
iii. Costs to the Federal Government
DHS proposes to revise the process and system by which H-1B
registrations or petitions, as applicable, would be selected toward the
annual numerical allocations. This proposed rule would require updates
to USCIS information technology (IT) systems and additional time spent
by USCIS on H-1B registrations or petitions.
The INA provides for the collection of fees at a level that will
ensure recovery of the full costs of providing adjudication and
naturalization services by DHS, including administrative costs and
services provided without charge to certain applicants and
petitioners.\103\ DHS notes USCIS establishes its fees by assigning
costs to an adjudication based on its relative adjudication burden and
use of USCIS resources. Fees are established at an amount that is
necessary to recover these assigned costs such as salaries and benefits
of clerical staff, officers, and managers, plus an amount to recover
unassigned overhead (such as facility rent, IT equipment and systems,
or other expenses) and immigration services provided without charge.
Consequently, since USCIS immigration fees are based on resource
expenditures related to the benefit in question, USCIS uses the fee
associated with an information collection as a reasonable measure of
the collection's costs to USCIS. DHS notes the time necessary for USCIS
to review the information submitted with the forms relevant to this
proposed rule includes the time to adjudicate the benefit request.
These costs are captured in the fees collected for the benefit request
from petitioners.
---------------------------------------------------------------------------

\103\ See INA section 286(m), 8 U.S.C. 1356(m).
---------------------------------------------------------------------------

5. Regulatory Alternatives
DHS considered various regulatory alternatives to a number of the
provisions of the proposed rule. Recognizing that a rote or
indiscriminate interpretation of the statute would create an absurd or
impossible result, DHS requests comments on, including potential
alternatives to, the proposed ranking and selection of registrations
based on the OES prevailing wage level that corresponds to the
requirements of the proffered position in situations where there is no
current OES prevailing wage information. More generally, DHS requests
comments and seeks alternatives for selecting from among all H-1B
registrations or petitions to ensure that H-1B visas are given to
workers who will provide the highest valued use to the U.S. economy,
such as ranking and selecting all registrations or petitions according
to the actual OES prevailing wage level that the position would be
rated at rather than the wage level that the proffered wage equals or
exceeds.
Another alternative for which DHS seeks public comment is a process
where all registrations or petitions, while still randomly selected,
would be weighted according to their OES prevailing wage level, such
that, for example, a level IV position would have four times greater
chance of selection than a level I position, a level III position would
have three times greater chance of selection than a level I position,
and a level II position would have two times greater chance of
selection than a level I position.

B. Regulatory Flexibility Act

The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, as
amended by the Small Business Regulatory Enforcement Fairness Act of
1996, Public Law 104-121 (March 29, 1996), requires Federal agencies to
consider the potential impact of regulations on small entities during
the development of their rules. ``Small entities'' are small
businesses, not-for-profit organizations that are not dominant in their
fields, and governmental jurisdictions with populations of less than
50,000. An ``individual'' is not considered a small entity and costs to
an individual from a rule are not considered for RFA purposes. In
addition, the courts have held that the RFA requires an agency to
perform an initial regulatory flexibility analysis (IRFA) of small
entity impacts only when a rule directly regulates small entities.
Consequently, any indirect impacts from a rule to a small entity are
not considered as costs for RFA purposes.
Although individuals, rather than small entities, submit the
majority of immigration and naturalization benefit applications and
petitions, this proposed rule would affect entities that file and pay
fees for H-1B immigration benefit requests. The USCIS forms that are
subject to an RFA analysis for this proposed rule are Form I-129H1,
Petition for a Nonimmigrant Worker and the Registration H-1B Tool.
DHS does not believe that the changes in this proposed rule would
have a significant economic impact on a substantial number of small
entities that would file Form I-129H1 for H-1B petitions.
1. Initial Regulatory Flexibility Analysis
i. A Description of the Reasons Why the Action by the Agency Is Being
Considered
DHS is proposing to amend its regulations governing H-1B specialty
occupation workers. The purpose of the proposed changes is to better
ensure that H-1B classification is more likely to be awarded to
petitioners seeking to employ higher-skilled and higher-paid
beneficiaries. DHS believes these changes would disincentivize use of
the H-1B program to fill relatively lower-paid, lower-skilled
positions.
ii. A Statement of the Objectives of, and Legal Basis for, the Proposed
Rule
DHS's objectives and legal authority for this proposed rule are
discussed earlier in the preamble.
iii. A Description and, Where Feasible, an Estimate of the Number of
Small Entities to Which the Proposed Changes Would Apply
For this analysis, DHS conducted a sample analysis of historical
Form I-129 H-1B petitions to estimate the number of small entities
impacted by this proposed rule. DHS utilized a subscription-based
online database of U.S. entities, ReferenceUSA, as well as three other
open-access, free databases of public and private entities, Manta,
Cortera, and Guidestar to determine the North American Industry
Classification System (NAICS) code,\104\ revenue, and employee count
for each entity in the sample. To determine whether an entity is small
for purposes of RFA, DHS first classified the entity by its NAICS code
and then used SBA size standards guidelines \105\ to classify the
revenue or

[[Page 69259]]

employee count threshold for each entity. Based on the NAICS codes,
some entities were classified as small based on their annual revenue,
and some by their numbers of employees. Once as many entities as
possible were matched, those that had relevant data were compared to
the size standards provided by the SBA to determine whether they were
small or not. Those that could not be matched or compared were assumed
to be small under the presumption that non-small entities would have
been identified by one of the databases at some point in their
existence.
---------------------------------------------------------------------------

\104\ U.S. Census Bureau, North American Industry Classification
System, http://www.census.gov/eos/www/naics/ (last visited Oct. 21,
2020).
\105\ DHS utilized a subscription-based online database of U.S.
entities, ReferenceUSA, as well as three other open-access, free
databases of public and private entities, Manta, Cortera, and
Guidestar, to determine the North American Industry Classification
System (NAICS) code, revenue, and employee count for each entity.
Guidelines suggested by the SBA Office of Advocacy indicate that the
impact of a rule could be significant if the cost of the regulation
exceeds 5 percent of the labor costs of the entities in the sector.
Office of Advocacy, Small Business Administration, ``A Guide for
Government Agencies, How to Comply with the Regulatory Flexibility
Act'', at 19, https://www.sba.gov/sites/default/files/advocacy/How-to-Comply-with-the-RFA-WEB.pdf (last visited Oct. 21, 2020).
---------------------------------------------------------------------------

Using FY 2020 internal data on actual filings of Form I-129 H-1B
petitions, DHS identified 24,111 \106\ unique entities. DHS devised a
methodology to conduct the small entity analysis based on a
representative, random sample of the potentially impacted population.
DHS first determined the minimum sample size necessary to achieve a 95
percent confidence level confidence interval estimation for the
impacted population of entities using the standard statistical formula
at a 5 percent margin of error. DHS then created a sample size greater
than the minimum necessary to increase the likelihood that our matches
would meet or exceed the minimum required sample.
---------------------------------------------------------------------------

\106\ Source: USCIS, Office of Policy and Strategy, Policy
Research Division (PRD), Claims 3. Aug. 18, 2020, & USCIS Analysis.
---------------------------------------------------------------------------

DHS randomly selected a sample of 473 entities from the population
of 24,111 entities that filed Form I-129 for H-1B petitions in FY 2020.
Of the 473 entities, 406 entities returned a successful match of a
filing entity in the ReferenceUSA, Manta, Cortera, and Guidestar
databases; 67 entities did not return a match. Using these databases'
revenue or employee count and their assigned North American Industry
Classification System (NAICS) code, DHS determined 312 of the 406
matches to be small entities, 94 to be non-small entities. Based on
previous experience conducting regulatory flexibility analyses, DHS
assumes filing entities without database matches or missing revenue/
employee count data are likely to be small entities. As a result, in
order to prevent underestimating the number of small entities this rule
would affect, DHS conservatively considers all the non-matched and
missing entities as small entities for the purpose of this analysis.
Therefore, DHS conservatively classifies 379 of 473 entities as small
entities, including combined non-matches (67), and small entity matches
(312). Thus, DHS estimates that 80.1% (379 of 473) of the entities
filing Form I-129 H-1B petitions are small entities.
In this analysis DHS assumes that the distribution of firm size for
our sample is the same as the entire population of Form I-129H1. Thus,
DHS estimates the number of small entities to be 80.1% of the
population of 24,111 entities that filed Form I-129 under the H-1B
classification, as summarized in Table 18 below. The annual numeric
estimate of the small entities impacted by this proposed rule is 19,319
entities.\107\
---------------------------------------------------------------------------

\107\ The annual numeric estimate of the small entities (19,319)
= Population (24,111) * Percentage of small entities (80.1%).

Table 18--Number of Small Entities for Form I-129 for H-1B, FY 2020
------------------------------------------------------------------------
Proportion of
Population Number of small population
entities (percent)
------------------------------------------------------------------------
24,111.......................... 19,319 80.1
------------------------------------------------------------------------

Following the distributional assumptions above, DHS uses the set of
312 small entities with matched revenue data to estimate the economic
impact of the proposed rule on each small entity. The economic impact,
in percent, for each small entity is the sum of the impacts of the
proposed changes divided by the entity's sales revenue.\108\ DHS
constructed the distribution of economic impact of the proposed rule
based on the sample of 312 small entities. Across all 312 small
entities, the proposed increase in cost to a small entity would range
from 0.00000026 percent to 2.5 percent of that entity's FY 2020
revenue. Of the 312 small entities, 0 percent (0 small entities) would
experience a cost increase that is greater than 5 percent of revenues.
Extrapolating to the population of 19,319 small entities and assuming
an economic impact significance threshold of 5 percent of annual
revenues, DHS estimates no small entities would be significantly
affected by the proposed rule.
---------------------------------------------------------------------------

\108\ The economic impact, in percent, for each small entity i =
(Cost of one petition for entity i x Number of petitions for entity
i) x 100. The cost of one petition for entity i ($75.60) is
estimated by adding the two cost components per petition of the
proposed rule ($75.60 = $32.59 + $43.01). The first component
($32.59) is the weighted average additional cost of filing a
petition, and is calculated by dividing total cost by the number of
petitions ($32.59 = $3,457,401/106,100) from Table 14. The second
component ($43.01) is the weighted average cost of submitting
information on the registration and is calculated by dividing total
cost by the number of baseline petitions ($43.01 = $11,797,520/
274,273) from Table 15. The number of petitions for entity i is
taken from USCIS internal data on actual filings of I-129 H-1B
petition. The entity's sales revenue is taken from ReferenceUSA,
Manta, Cortera, and Guidestar databases.
---------------------------------------------------------------------------

Based on this analysis, DHS does not believe that the proposed
changes in this proposed rule would have a significant economic impact
on a substantial number of small entities that file I-129H1.
iv. A Description of the Projected Reporting, Recordkeeping, and Other
Compliance Requirements of the Proposed Rule, Including an Estimate of
the Classes of Small Entities That Will Be Subject to the Requirement
and the Types of Professional Skills
As stated above in the preamble, the proposed rule would impose
additional reporting, recordkeeping, or other compliance requirements
on entities that could be small entities.
v. An Identification of All Relevant Federal Rules, to the Extent
Practical, That May Duplicate, Overlap, or Conflict With the Proposed
Rule
DHS is unaware of any duplicative, overlapping, or conflicting
Federal rules, but invites any comment and information regarding any
such rules.
vi. Description of Any Significant Alternatives to the Proposed Rule
That Accomplish the Stated Objectives of Applicable Statutes and That
Minimize Any Significant Economic Impact of the Proposed Rule on Small
Entities
DHS requests comments on, including potential alternatives to, the
proposed ranking and selection of registrations based on the OES
prevailing wage level that corresponds to the requirements of the
proffered position in situations where there is no current OES
prevailing wage information. In the RFA context, DHS seeks comments on
alternatives that would accomplish the

[[Page 69260]]

objectives of this proposed rule without unduly burdening small
entities. DHS also welcomes any public comments or data on the number
of small entities that would be petitioning for an H-1B employee and
any direct impacts on those small entities.

C. Unfunded Mandates Reform Act

The Unfunded Mandates Reform Act of 1995 (UMRA) is intended, among
other things, to curb the practice of imposing unfunded federal
mandates on State, local, and tribal governments. Title II of the UMRA
requires each federal agency to prepare a written statement assessing
the effects of any federal mandate in a proposed or final agency rule
that may result in a $100 million or more expenditure (adjusted
annually for inflation) in any one year by State, local, and tribal
governments, in the aggregate, or by the private sector. Based on the
Consumer Price Index for All Urban Consumers (CPI-U), the value
equivalent of $100 million in 1995 adjusted for inflation to 2019
levels is approximately $168 million.\109\
---------------------------------------------------------------------------

\109\ See U.S. Department of Labor, Bureau of Labor Statistics,
Historical Consumer Price Index for All Urban Consumers (CPI-U):
U.S. city average, all items, by month, https://www.bls.gov/cpi/tables/supplemental-files/historical-cpi-u-202003.pdf (last visited
Sept. 2, 2020).
Calculation of inflation: 1) Calculate the average monthly CPI-U
for the reference year (1995) and the current year (2019); 2)
Subtract reference year CPI-U from current year CPI-U; 3) Divide the
difference of the reference year CPI-U and current year CPI-U by the
reference year CPI-U; 4) Multiply by 100 = [(Average monthly CPI-U
for 2019--Average monthly CPI-U for 1995)/(Average monthly CPI-U for
1995)] * 100 = [(255.657--152.383)/152.383] * 100 = (103.274/
152.383) *100 = 0.6777 * 100 = 67.77 percent = 68 percent (rounded).
Calculation of inflation-adjusted value: $100 million in 1995
dollars * 1.68 = $168 million in 2019 dollars.
---------------------------------------------------------------------------

Given the uncertainties discussed previously, DHS acknowledges the
possibility that this proposed rule could result in private sector
expenditures exceeding $100 million, adjusted for inflation to $168
million in 2019 dollars, in any 1 year. While DHS has explored
opportunities to minimize these potential costs as directed by Title II
of the Act, the agency invites input from the public on reducing these
potential costs in the final rule.
Congressional Review Act
For reasons described in the Summary of Economic Effects, this
proposed rule is a major rule as defined by 5 U.S.C. 804, also known as
the ``Congressional Review Act,'' as enacted in section 251 of the
Small Business Regulatory Enforcement Fairness Act of 1996, Public Law
104-121, 110 Stat. 847, 868 et seq., and thus a final rule resulting
from this proposed rule would not be subject to a 60-day delay in the
rule becoming effective. If this proposed rule is finalized, DHS will
send it to Congress and to the Comptroller General under the
Congressional Review Act, 5 U.S.C. 801 et seq.

D. Executive Order 13132 (Federalism)

This proposed rule would not have substantial direct effects on the
states, on the relationship between the national government and the
states, or on the distribution of power and responsibilities among the
various levels of government. Therefore, in accordance with section 6
of Executive Order 13132, DHS determined that this proposed rule does
not have sufficient federalism implications to warrant the preparation
of a federalism summary impact statement.

E. Executive Order 12988 (Civil Justice Reform)

This proposed rule meets the applicable standards set forth in
sections 3(a) and 3(b)(2) of Executive Order 12988.

F. Executive Order 13175 (Consultation and Coordination With Indian
Tribal Governments)

This proposed rule does not have ``tribal implications'' because it
does not have substantial direct effects on one or more Indian tribes,
on the relationship between the Federal Government and Indian tribes,
or on the distribution of power and responsibilities between the
Federal Government and Indian tribes. Accordingly, E.O. 13175,
Consultation and Coordination with Indian Tribal Governments, requires
no further agency action or analysis.

G. National Environmental Policy Act

DHS analyzes actions to determine whether the National
Environmental Policy Act, Public Law 91-190, 42 U.S.C. 4321 through
4347 (NEPA), applies to them and, if so, what degree of analysis is
required. DHS Directive 023-01 Rev. 01 (Directive) and Instruction
Manual 023-01-001-01 Rev. 01, Implementation of the National
Environmental Policy Act (Instruction Manual) establish the policies
and procedures that DHS and its components use to comply with NEPA and
the Council on Environmental Quality (CEQ) regulations for implementing
NEPA, 40 CFR parts 1500-1508.
The CEQ regulations allow federal agencies to establish, with CEQ
review and concurrence, categories of actions (``categorical
exclusions'') that experience has shown do not individually or
cumulatively have a significant effect on the human environment and,
therefore, do not require an Environmental Assessment (EA) or
Environmental Impact Statement (EIS). 40 CFR 1507.3(b)(2)(ii), 1508.4.
Categorical exclusions established by DHS are set forth in Appendix A
of the Instruction Manual. Under DHS NEPA implementing procedures, for
an action to be categorically excluded, it must satisfy each of the
following three conditions: (1) The entire action clearly fits within
one or more of the categorical exclusions; (2) the action is not a
piece of a larger action; and (3) no extraordinary circumstances exist
that create the potential for a significant environmental effect.
Instruction Manual section V.B(2)(a)-(c).
As discussed in more detail throughout this proposed rule, DHS is
proposing to amend regulations governing the selection of registrations
or petitions, as applicable, toward the annual H-1B numerical
allocations. This proposed rule establishes that, if more registrations
were to be received during the annual initial registration period (or
petition filing period, if applicable) than necessary to reach the
applicable numerical allocation, USCIS would rank and select the
registrations (or petitions, if the registration process were
suspended) received on the basis of the highest OES wage levels that
the proffered wages were to equal or exceed for the relevant SOC code
and in the area of intended employment, beginning with OES wage level
IV and proceeding in descending order with OES wage levels III, II, and
I. If a proffered wage were to fall below an OES wage level I, because
the proffered wage were based on a prevailing wage from another
legitimate source (other than OES) or an independent authoritative
source, USCIS would rank the registration in the same category as OES
wage level I.\110\
---------------------------------------------------------------------------

\110\ If the proffered wage is expressed as a range, USCIS would
make the comparison using the lowest wage in the range.
---------------------------------------------------------------------------

Generally, DHS believes NEPA does not apply to a rule intended to
change a discrete aspect of a visa program because any attempt to
analyze its potential impacts would be largely speculative, if not
completely so. This rule does not propose to alter the statutory
limitations on the numbers of nonimmigrants who: May be issued initial
H-1B visas or granted initial H-1B nonimmigrant status, will
consequently be admitted into the United States as H-1B nonimmigrants,
will be allowed to change their status to H-1B, or will extend their
stay in H-1B

[[Page 69261]]

status. DHS cannot reasonably estimate whether the wage level-based
ranking approach to select H-1B registrations (or petitions in any year
in which the registration requirement were suspended) that DHS proposes
would affect how many petitions would be filed for workers to be
employed in specialty occupations or whether the regulatory amendments
herein would result in an overall change in the number of H-1B
petitions that would ultimately be approved, and the number of H-1B
workers who would be employed in the United States in any FY. DHS has
no reason to believe that these proposed amendments to H-1B regulations
would change the environmental effect, if any, of the existing
regulations. Therefore, DHS has determined that even if NEPA were to
apply to this action, this proposed rule clearly fits within
categorical exclusion A3(d) in the Instruction Manual, which provides
an exclusion for ``promulgation of rules . . . that amend an existing
regulation without changing its environmental effect.'' This proposed
rule would maintain the current human environment by proposing
improvements to the H-1B program that would take effect during the
economic crisis caused by COVID-19 in a way that would more effectively
prevent an adverse impact from the employment of H-1B workers on the
wages and working conditions of U.S. workers who would be similarly
employed. This proposed rule is not a part of a larger action and
presents no extraordinary circumstances creating the potential for
significant environmental effects. Therefore, this action is
categorically excluded and no further NEPA analysis is required.

H. Paperwork Reduction Act

1. USCIS H-1B Registration Tool
Under the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13,
all agencies are required to submit to OMB, for review and approval,
any reporting requirements inherent in a rule. DHS and USCIS invite
comments on the impact to the collection of information. In accordance
with the PRA, the information collection notice is published in the
Federal Register to obtain comments regarding the proposed edits to the
information collection instrument.
Comments are encouraged and will be accepted for January 4, 2021.
All submissions received must include the agency name and OMB Control
Number 1615-0144 in the body of the submission. Comments on this
information collection should address one or more of the following four
points:
(1) Evaluate whether the collection of information is necessary for
the proper performance of the functions of the agency, including
whether the information will have practical utility;
(2) Evaluate the accuracy of the agency's estimate of the burden of
the collection of information, including the validity of the
methodology and assumptions used;
(3) Enhance the quality, utility, and clarity of the information to
be collected; and
(4) Minimize the burden of the collection of information on those
who are to respond, including through the use of appropriate automated,
electronic, mechanical, or other technological collection techniques or
other forms of information technology, e.g.., permitting electronic
submission of responses.
Overview of Information Collection
(1) Type of Information Collection: Revision of a Currently
Approved Collection.
(2) Title of the Form/Collection: H-1B Registration Tool.
(3) Agency form number, if any, and the applicable component of the
DHS sponsoring the collection: OMB-64; USCIS.
(4) Affected public who will be asked or required to respond, as
well as a brief abstract: Primary: Business or other for-profit. USCIS
will use the data collected through the H-1B Registration Tool to
select a sufficient number of registrations projected as needed to meet
the applicable H-1B cap allocations and to notify registrants whether
their registrations were selected.
(5) An estimate of the total number of respondents and the amount
of time estimated for an average respondent to respond: The estimated
total number of respondents for the information collection H-1B
Registration Tool is 275,000 and the estimated hour burden per response
is 0.833 hours.
(6) An estimate of the total public burden (in hours) associated
with the collection: The total estimated annual hour burden associated
with this collection of information is 229,075 hours.
(7) An estimate of the total public burden (in cost) associated
with the collection: The estimated total annual cost burden associated
with this collection of information is $0.
2. USCIS Form I-129 \111\
---------------------------------------------------------------------------

\111\ As indicated elsewhere in this rule, DHS estimates the
costs and benefits of this proposed rule using the newly published
Fee Schedule Final Rule, and related form changes, as the baseline.
See supra note 66. The Fee Schedule Final Rule was scheduled to go
into effect on October 2, 2020. On September 29, 2020, the U.S.
District Court for the Northern District of California issued a
nationwide injunction, which prevents DHS from implementing the Fee
Schedule Final Rule. See, Immigrant Legal Resource Center v. Wolf,
No. 4:20-cv-5883 (N.D. Cal. Sept. 29, 2020). In addition, on October
8, 2020, DHS was also preliminarily enjoined from implementing and
enforcing the Fee Schedule Final Rule by the U.S. District Court for
the District of Columbia, including by adopting any form changes
associated with the rule. See, Northwest Immigrant Rights Project v.
U.S. Citizenship and Immigration Servs., 1:19-cv-03283-RDM (D.D.C.
Oct. 8, 2020). While DHS intends to vigorously defend these lawsuits
and is not changing the economic baseline for this proposed rule as
a result of the litigation, it is using the currently approved Form
I-129, and not the form version associated with the enjoined Fee
Schedule Final Rule for the purpose of seeking OMB approval of form
changes associated with this proposed rule. Should DHS prevail in
the Fee Schedule Final Rule litigation and be able to implement the
form changes associated with that rule, DHS will comply with the
Paperwork Reduction Act and seek approval of the information
collection changes associated with this proposed rule, based on the
version of the Form I-129 that is in effect at that time.
---------------------------------------------------------------------------

Under the PRA all agencies are required to submit to OMB, for
review and approval, any reporting requirements inherent in a rule. DHS
and USCIS invite comments on the impact to the collection of
information. In accordance with the PRA, the information collection
notice is published in the Federal Register to obtain comments
regarding the proposed edits to the information collection instrument.
Comments are encouraged and will be accepted until January 4, 2021.
All submissions received must include the agency name and OMB Control
Number 1615-0009 in the body of the submission. Comments on this
information collection should address one or more of the following four
points:
(1) Evaluate whether the collection of information is necessary for
the proper performance of the functions of the agency, including
whether the information will have practical utility;
(2) Evaluate the accuracy of the agency's estimate of the burden of
the collection of information, including the validity of the
methodology and assumptions used;
(3) Enhance the quality, utility, and clarity of the information to
be collected; and
(4) Minimize the burden of the collection of information on those
who are to respond, including through the use of appropriate automated,
electronic, mechanical, or other technological collection techniques or

[[Page 69262]]

other forms of information technology, for example, permitting
electronic submission of responses.
Overview of Information Collection
(1) Type of Information Collection: Revision of a Currently
Approved Collection.
(2) Title of the Form/Collection: Petition for a Nonimmigrant
Worker.
(3) Agency form number, if any, and the applicable component of the
DHS sponsoring the collection: I-129; USCIS.
(4) Affected public who will be asked or required to respond, as
well as a brief abstract: Primary: Business or other for-profit. USCIS
uses the data collected on this form to determine eligibility for the
requested nonimmigrant petition and/or requests to extend or change
nonimmigrant status. An employer (or agent, where applicable) uses this
form to petition USCIS for an alien to temporarily enter as a
nonimmigrant. An employer (or agent, where applicable) also uses this
form to request an extension of stay or change of status on behalf of
the alien worker. The form serves the purpose of standardizing requests
for nonimmigrant workers and ensuring that basic information required
for assessing eligibility is provided by the petitioner while
requesting that beneficiaries be classified under certain nonimmigrant
employment categories. It also assists USCIS in compiling information
required by Congress annually to assess effectiveness and utilization
of certain nonimmigrant classifications.
USCIS also uses the data to determine continued eligibility. For
example, the data collected is used in compliance reviews and other
inspections to ensure that all program requirements are being met.
(5) An estimate of the total number of respondents and the amount
of time estimated for an average respondent to respond: I-129 is
294,751 and the estimated hour burden per response is 3.09 hours; the
estimated total number of respondents for the information collection E-
1/E-2 Classification Supplement to Form I-129 is 4,760 and the
estimated hour burden per response is 0.67 hours; the estimated total
number of respondents for the information collection Trade Agreement
Supplement to Form I-129 is 3,057 and the estimated hour burden per
response is 0.67 hours; the estimated total number of respondents for
the information collection H Classification Supplement to Form I-129 is
96,291 and the estimated hour burden per response is 2 hours; the
estimated total number of respondents for the information collection H-
1B and H-1B1 Data Collection and Filing Fee Exemption Supplement is
96,291 and the estimated hour burden per response is 1 hour; the
estimated total number of respondents for the information collection L
Classification Supplement to Form I-129 is 37,831 and the estimated
hour burden per response is 1.34 hours; the estimated total number of
respondents for the information collection O and P Classifications
Supplement to Form I-129 is 22,710 and the estimated hour burden per
response is 1 hour; the estimated total number of respondents for the
information collection Q-1 Classification Supplement to Form I-129 is
155 and the estimated hour burden per response is 0.34 hours; the
estimated total number of respondents for the information collection R-
1 Classification Supplement to Form I-129 is 6,635 and the estimated
hour burden per response is 2.34 hours.
(6) An estimate of the total public burden (in hours) associated
with the collection: The total estimated annual hour burden associated
with this collection of information is 1,293,873 hours.
(7) An estimate of the total public burden (in cost) associated
with the collection: The estimated total annual cost burden associated
with this collection of information is $70,681,290.

I. Signature

The Acting Secretary of Homeland Security, Chad F. Wolf, having
reviewed and approved this document, is delegating the authority to
electronically sign this document to Chad R. Mizelle, who is the Senior
Official Performing the Duties of the General Counsel for DHS, for
purposes of publication in the Federal Register.

List of Subjects in 8 CFR Part 214

Administrative practice and procedure, Aliens, Cultural exchange
programs, Employment, Foreign officials, Health professions, Reporting
and recordkeeping requirements, Students.

Accordingly, DHS proposes to amend part 214 of chapter I of title 8
of the Code of Federal Regulations as follows:

PART 214--NONIMMIGRANT CLASSES

0
1. The authority citation for part 214 continues to read as follows:

Authority: 6 U.S.C. 202, 236; 8 U.S.C. 1101, 1102, 1103, 1182,
1184, 1186a, 1187, 1221, 1281, 1282, 1301-1305 and 1372; sec. 643,
Pub. L. 104-208, 110 Stat. 3009-708; Pub. L. 106-386, 114 Stat.
1477-1480; section 141 of the Compacts of Free Association with the
Federated States of Micronesia and the Republic of the Marshall
Islands, and with the Government of Palau, 48 U.S.C. 1901 note and
1931 note, respectively; 48 U.S.C. 1806; 8 CFR part 2; Pub. L. 115-
218.

0
2. Section 214.2 is amended by:
0
a. Revising the first sentence of paragraph (h)(8)(iii)(A)(1);
0
b. Adding paragraph (h)(8)(iii)(A)(1)(i) and reserved paragraph
(h)(8)(iii)(A)(1)(ii);
0
c. In paragraph (h)(8)(iii)(A)(5)(i), revising the last two sentences
and adding a sentence at the end;
0
d. In paragraph (h)(8)(iii)(A)(5)(ii), revising the last two sentences
and adding a sentence at the end;
0
e. In paragraph (h)(8)(iii)(A)(6)(i), revising the last two sentences
and adding a sentence at the end;
0
f. In paragraph (h)(8)(iii)(A)(6)(ii), revising the last two sentences
and adding a sentence at the end;
0
g. Revising paragraphs (h)(8)(iii)(A)(7) and (h)(8)(iii)(D)(1);
0
h. In paragraph (h)(8)(iv)(B)(1), revising the last three sentences and
adding three sentences at the end;
0
i. Revising paragraph (h)(8)(iv)(B)(2);
0
j. Removing and reserving paragraph (h)(8)(v);
0
k. In paragraph (h)(10)(ii), revising the second sentence and adding
five sentences immediately following the second sentence;
0
l. Revising paragraph (h)(11)(iii)(A)(2);
0
m. Redesignating paragraphs (h)(11)(iii)(A)(3) through (5) as
(h)(11)(iii)(A)(4) through (6); and
0
n. Adding a new paragraph (h)(11)(iii)(A)(3) and paragraph (h)(24)(i).
The revisions and additions read as follows:

Sec. 214.2 Special requirements for admission, extension, and
maintenance of status.

* * * * *
(h) * * *
(8) * * *
(iii) * * *
(A)
(1) * * * Except as provided in paragraph (h)(8)(iv) of this
section, before a petitioner is eligible to file an H-1B cap-subject
petition for a beneficiary who may be counted under section
214(g)(1)(A) of the Act (``H-1B regular cap'') or eligible for
exemption under section 214(g)(5)(C) of the Act (``H-1B advanced degree
exemption''), the prospective petitioner or its attorney or accredited
representative must register to file a petition on behalf of an alien
beneficiary electronically through the USCIS website (www.uscis.gov). *
* *

[[Page 69263]]

(i) Ranking by wage levels. USCIS will rank and select
registrations as set forth in paragraphs (h)(8)(iii)(A)(5) and (6) of
this section. For purposes of the ranking and selection process, USCIS
will use the highest corresponding Occupational Employment Statistics
(OES) wage level that the proffered wage will equal or exceed for the
relevant Standard Occupational Classification (SOC) code and area(s) of
intended employment. If the proffered wage is lower than the OES wage
level I, because it is based on a prevailing wage from another
legitimate source (other than OES) or an independent authoritative
source, USCIS will rank the registration in the same category as OES
wage level I. If the H-1B beneficiary will work in multiple locations,
or in multiple positions if the registrant is an agent, USCIS will rank
and select the registration based on the lowest corresponding OES wage
level that the proffered wage will equal or exceed. Where there is no
current OES prevailing wage information for the proffered position,
USCIS will rank and select the registration based on the OES wage level
that corresponds to the requirements of the proffered position.
(ii) [Reserved]
* * * * *
(5) * * *
(i) * * * If USCIS has received more registrations on the final
registration date than necessary to meet the H-1B regular cap under
Section 214(g)(1)(A) of the Act, USCIS will rank and select from among
all registrations properly submitted on the final registration date on
the basis of the highest OES wage level that the proffered wage equals
or exceeds for the relevant SOC code and area of intended employment,
beginning with OES wage level IV and proceeding in descending order
with OES wage levels III, II, and I. Where there is no current OES
prevailing wage information for the proffered position, USCIS will rank
and select petitions based on the appropriate wage level that
corresponds to the requirements of the proffered position. If USCIS
receives and ranks more registrations at a particular wage level than
the projected number needed to meet the numerical limitation, USCIS
will randomly select from all registrations within that particular wage
level a sufficient number of registrations needed to reach the
numerical limitation.
(ii) * * * If USCIS has received more than a sufficient number of
registrations to meet the H-1B regular cap under Section 214(g)(1)(A)
of the Act, USCIS will rank and select from among all registrations
properly submitted during the initial registration period on the basis
of the highest OES wage level that the proffered wage equals or exceeds
for the relevant SOC code and area of intended employment, beginning
with OES wage level IV and proceeding in descending order with OES wage
levels III, II, and I. Where there is no current OES prevailing wage
information for the proffered position, USCIS will rank and select
petitions based on the appropriate wage level that corresponds to the
requirements of the proffered position. If USCIS receives and ranks
more registrations at a particular wage level than the projected number
needed to meet the numerical limitation, USCIS will randomly select
from all registrations within that particular wage level a sufficient
number of registrations needed to reach the numerical limitation.
(6) * * *
(i) * * * If on the final registration date, USCIS has received
more registrations than necessary to meet the H-1B advanced degree
exemption limitation under Section 214(g)(5)(C) of the Act, USCIS will
rank and select, from among the registrations properly submitted on the
final registration date that may be counted against the advanced degree
exemption, the number of registrations necessary to reach the H-1B
advanced degree exemption on the basis of the highest OES wage level
that the proffered wage equals or exceeds for the relevant SOC code and
in the area of intended employment, beginning with OES wage level IV
and proceeding in descending order with OES wage levels III, II, and I.
Where there is no current OES prevailing wage information for the
proffered position, USCIS will rank and select petitions based on the
appropriate wage level that corresponds to the requirements of the
proffered position. If USCIS receives and ranks more registrations at a
particular wage level than the projected number needed to meet the
numerical limitation, USCIS will randomly select from all registrations
within that particular wage level a sufficient number of registrations
necessary to reach the H-1B advanced degree exemption.
(ii) * * * USCIS will rank and select, from among the remaining
registrations properly submitted during the initial registration period
that may be counted against the advanced degree exemption numerical
limitation, the number of registrations necessary to reach the H-1B
advanced degree exemption on the basis of the highest OES wage level
that the proffered wage equals or exceeds for the relevant SOC code and
in the area of intended employment, beginning with OES wage level IV
and proceeding in descending order with OES wage levels III, II, and I.
Where there is no current OES prevailing wage information for the
proffered position, USCIS will rank and select petitions based on the
appropriate wage level that corresponds to the requirements of the
proffered position. If USCIS receives and ranks more registrations at a
particular wage level than the projected number needed to meet the
numerical limitation, USCIS will randomly select from all registrations
within that particular wage level a sufficient number of registrations
necessary to reach the H-1B advanced degree exemption.
(7) Increase to the number of registrations projected to meet the
H-1B regular cap or advanced degree exemption allocations in a fiscal
year. Unselected registrations will remain on reserve for the
applicable fiscal year. If USCIS determines that it needs to select
additional registrations to receive the number of petitions projected
to meet the numerical limitations, USCIS will select from among the
registrations that are on reserve a sufficient number to meet the H-1B
regular cap or advanced degree exemption numerical limitation, as
applicable. If all of the registrations on reserve are selected and
there are still fewer registrations than needed to reach the H-1B
regular cap or advanced degree exemption numerical limitation, as
applicable, USCIS may reopen the applicable registration period until
USCIS determines that it has received a sufficient number of
registrations projected to meet the H-1B regular cap or advanced degree
exemption numerical limitation. USCIS will monitor the number of
registrations received and will notify the public of the date that
USCIS has received the necessary number of registrations (the new
``final registration date''). The day the public is notified will not
control the applicable final registration date. When selecting
additional registrations under this paragraph, USCIS will rank and
select properly submitted registrations in accordance with paragraphs
(h)(8)(iii)(A)(1), (5), and (6) of this section. If the registration
period will be re-opened, USCIS will announce the start of the re-
opened registration period on the USCIS website at www.uscis.gov.
* * * * *
(D) * * *
(1) Filing procedures. In addition to any other applicable
requirements, a petitioner may file an H-1B petition for a beneficiary
that may be counted under section 214(g)(1)(A) or eligible for
exemption under section 214(g)(5)(C) of

[[Page 69264]]

the Act only if the petition is based on a valid registration submitted
by the petitioner, or its designated representative, on behalf of the
beneficiary that was selected beforehand by USCIS. The petition must be
filed within the filing period indicated in the selection notice. A
petitioner may not substitute the beneficiary named in the original
registration or transfer the registration to another petitioner.
(i) If a petitioner files an H-1B cap-subject petition based on a
registration that was not selected beforehand by USCIS, based on a
registration for a different beneficiary than the beneficiary named in
the petition, or based on a registration considered by USCIS to be
invalid, the H-1B cap-subject petition will be rejected or denied.
USCIS will consider a registration to be invalid if the registration
fee associated with the registration is declined, rejected, or canceled
after submission as the registration fee is non-refundable and due at
the time the registration is submitted.
(ii) If USCIS determines that the statement of facts contained on
the registration form is inaccurate, fraudulent, misrepresents any
material fact, or is not true and correct, USCIS may reject or deny the
petition or, if approved, may revoke the approval of a petition that
was filed based on that registration.
(iii) USCIS also may deny or revoke approval of a subsequent new or
amended petition filed by the petitioner, or a related entity, on
behalf of the same beneficiary, if USCIS determines that the filing of
the new or amended petition is part of the petitioner's attempt to
unfairly decrease the proffered wage to an amount that would be
equivalent to a lower wage level, after listing a higher wage level on
the registration to increase the odds of selection. USCIS will not deny
or revoke approval of such an amended or new petition solely on the
basis of a different proffered wage if that wage does not correspond to
a lower OES wage level than the wage level on which the registration
selection was based.
* * * * *
(iv) * * *
(B) * * *
(1) * * * If the final receipt date is any of the first five
business days on which petitions subject to the H-1B regular cap may be
received, USCIS will select from among all the petitions properly
submitted during the first five business days the number of petitions
deemed necessary to meet the H-1B regular cap. If USCIS has received
more petitions than necessary to meet the numerical limitation for the
H-1B regular cap, USCIS will rank and select the petitions received on
the basis of the highest Occupational Employment Statistics (OES) wage
level that the proffered wage equals or exceeds for the relevant
Standard Occupational Classification (SOC) code in the area of intended
employment, beginning with OES wage level IV and proceeding in
descending order with OES wage levels III, II, and I. Where there is no
current OES prevailing wage information for the proffered position,
USCIS will rank and select petitions based on the appropriate wage
level that corresponds to the requirements of the proffered position.
If the wage falls below an OES wage level I, USCIS will rank the
petition in the same category as OES wage level I. USCIS will rank the
petition in the same manner even if, instead of obtaining an OES
prevailing wage, a petitioner elects to obtain a prevailing wage using
another legitimate source (other than OES) or an independent
authoritative source. If USCIS receives and ranks more petitions at a
particular wage level than the projected number needed to meet the
numerical limitation, USCIS will randomly select from among all
eligible petitions within that particular wage level a sufficient
number of petitions needed to reach the numerical limitation.
(2) Advanced degree exemption selection in event of suspended
registration process. After USCIS has received a sufficient number of
petitions to meet the H-1B regular cap and, as applicable, completed
the selection process of petitions for the H-1B regular cap, USCIS will
determine whether there is a sufficient number of remaining petitions
to meet the H-1B advanced degree exemption numerical limitation. When
calculating the number of petitions needed to meet the H-1B advanced
degree exemption numerical limitation USCIS will take into account
historical data related to approvals, denials, revocations, and other
relevant factors. USCIS will monitor the number of petitions received
and will announce on its website the date that it receives the number
of petitions projected as needed to meet the H-1B advanced degree
exemption numerical limitation (the ``final receipt date''). The date
the announcement is posted will not control the final receipt date. If
the final receipt date is any of the first five business days on which
petitions subject to the H-1B advanced degree exemption may be received
(in other words, if the numerical limitation is reached on any one of
the first five business days that filings can be made), USCIS will
select from among all the petitions properly submitted during the first
five business days the number of petitions deemed necessary to meet the
H-1B advanced degree exemption numerical limitation. If USCIS has
received more petitions than necessary to meet the numerical limitation
for the H-1B advanced degree exemption, USCIS will rank and select the
petitions received on the basis of the highest Occupational Employment
Statistics (OES) wage level that the proffered wage equals or exceeds
for the relevant Standard Occupational Classification (SOC) code in the
area of intended employment, beginning with OES wage level IV and
proceeding with OES wage levels III, II, and I. Where there is no
current OES prevailing wage information for the proffered position,
USCIS will rank and select petitions based on the appropriate wage
level that corresponds to the requirements of the proffered position.
If the proffered wage is below an OES wage level I, USCIS will rank the
petition in the same category as OES wage level I. USCIS will rank the
petition in the same manner even if, instead of obtaining an OES
prevailing wage, a petitioner elects to obtain a prevailing wage using
another legitimate source (other than OES) or an independent
authoritative source. If USCIS receives and ranks more petitions at a
particular wage level than necessary to meet the numerical limitation
for the H-1B advanced degree exemption, USCIS will randomly select from
among all eligible petitions within that particular wage level a
sufficient number of petitions needed to reach the numerical
limitation.
* * * * *
(10) * * *
(ii) * * * The petition may be denied if it is determined that the
statements on the registration or petition were inaccurate. The
petition will be denied if it is determined that the statements on the
registration or petition were fraudulent or misrepresented a material
fact. A petition also may be denied if it is not based on a valid
registration submitted by the petitioner (or its designated
representative), or a successor in interest, for the beneficiary named
in the petition. A valid registration must represent a legitimate job
offer. USCIS also may deny a subsequent new or amended petition filed
by the petitioner, or a related entity, on behalf of the same
beneficiary, if USCIS determines that the filing of the new or amended
petition is part of the petitioner's attempt to unfairly increase the
odds of selection during the

[[Page 69265]]

registration or petition selection process, as applicable, such as by
reducing the proffered wage to an amount that would be equivalent to a
lower wage level than that indicated on the original petition. USCIS
will not deny such an amended or new petition solely on the basis of a
different proffered wage if that wage does not correspond to a lower
OES wage level than the wage level on which the registration or
petition selection, as applicable, was based. * * *
(11) * * *
(iii) * * *
(A) * * *
(2) The statement of facts contained in the petition; the
registration, if applicable; or on the temporary labor certification or
labor condition application; was not true and correct, inaccurate,
fraudulent, or misrepresented a material fact; or
(3) The petitioner, or a related entity, filed a new or amended
petition on behalf of the same beneficiary, if USCIS determines that
the filing of the new or amended petition is part of the petitioner's
attempt to unfairly increase the odds of selection during the
registration or petition selection process, as applicable, such as by
reducing the proffered wage to an amount that would be equivalent to a
lower wage level than that indicated on the registration, or the
original petition if the registration process was suspended. USCIS will
not revoke approval of such an amended or new petition solely on the
basis of a different proffered wage if that wage does not correspond to
a lower OES wage level than the wage level on which the registration or
petition selection, as applicable, was based; or
* * * * *
(24) * * *
(i) The requirement to submit a registration for an H-1B cap-
subject petition and the selection process based on properly submitted
registrations under paragraph (h)(8)(iii) of this section are intended
to be severable from paragraph (h)(8)(iv) of this section. In the event
paragraph (h)(8)(iii) is not implemented, or in the event that
paragraph (h)(8)(iv) is not implemented, DHS intends that either of
those provisions be implemented as an independent rule, without
prejudice to petitioners in the United States under this section, as
consistent with law.
* * * * *

Chad R. Mizelle,
Senior Official Performing the Duties of the General Counsel, U.S.
Department of Homeland Security.
[FR Doc. 2020-24259 Filed 10-29-20; 12:15 pm]
BILLING CODE 9111-97-P