[Federal Register Volume 73, Number 57 (Monday, March 24, 2008)]
[Rules and Regulations]
[Pages 15389-15395]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-5906]



[[Page 15389]]

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DEPARTMENT OF HOMELAND SECURITY

8 CFR Part 214

[CIS No. 2434-07; DHS Docket No. USCIS-2007-0060]
RIN 1615-AB68


Petitions Filed on Behalf of H-1B Temporary Workers Subject to or 
Exempt From the Annual Numerical Limitation

AGENCY: U.S. Citizenship and Immigration Services, DHS.

ACTION: Interim rule with request for comments.

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SUMMARY: The Department of Homeland Security is amending its 
regulations governing petitions filed on behalf of alien workers 
subject to the annual numerical limitations applicable to the H 
nonimmigrant classification. This rule precludes a petitioner from 
filing more than one petition based on the H-1B nonimmigrant 
classification on behalf of the same alien temporary worker in a given 
fiscal year if the alien is subject to a numerical limitation or is 
exempt from a numerical limitation by virtue of having earned a 
master's or higher degree from a U.S. institution of higher education. 
Additionally, this rule makes accommodations for petitioners seeking to 
file petitions on the first day on which filings will be accepted for 
the next fiscal year on behalf of alien workers subject to the annual 
numerical limitation or U.S. master's or higher degree holders exempt 
from this limitation. This rule also clarifies the treatment of H 
nonimmigrant petitions incorrectly claiming an exemption from the 
numerical limitations. Finally, the rule removes from the regulations 
unnecessary language regarding the annual numerical limitation 
applicable to the H-1B nonimmigrant classification. These changes are 
necessary to clarify the regulations and further ensure the fair and 
orderly adjudication of petitions subject to numerical limitations.

DATES: Effective date: This rule is effective March 24, 2008.
    Comment Date: Written comments must be submitted on or before May 
23, 2008.

ADDRESSES: You may submit comments, identified by DHS Docket No. USCIS-
2007-0060 by one of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     E-mail: You may submit comments directly to USCIS by e-
mail at [email protected]. Include DHS Docket No. USCIS-2007-0060 in the 
subject line of the message.
     Mail: Chief, Regulatory Management Division, U.S. 
Citizenship and Immigration Services, Department of Homeland Security, 
111 Massachusetts Avenue, NW., Suite 3008, Washington, DC 20529. To 
ensure proper handling, please reference DHS Docket No. USCIS-2007-0060 
on your correspondence. This mailing address may also be used for 
paper, disk, or CD-ROM submissions.
     Hand Delivery/Courier: U.S. Citizenship and Immigration 
Services, Department of Homeland Security, 111 Massachusetts Avenue, 
NW., 3rd Floor, Washington, DC 20529. Contact Telephone Number is (202) 
272-8377.

FOR FURTHER INFORMATION CONTACT: Patricia Jepsen, Adjudications 
Officer, Business and Trade Services, Office of Service Center 
Operations, U.S. Citizenship and Immigration Services, Department of 
Homeland Security, 111 Massachusetts Avenue, NW., 3rd Floor, 
Washington, DC 20529, telephone (202) 272-8410.

SUPPLEMENTARY INFORMATION:

I. Public Participation

    Interested persons are invited to participate in this rulemaking by 
submitting written data, views, or arguments on all aspects of this 
interim rule. The Department of Homeland Security (DHS) and U.S. 
Citizenship and Immigration Services (USCIS) also invite comments that 
relate to the economic, environmental, or federalism effects that might 
result from this interim rule. Comments that will provide the most 
assistance to USCIS in developing these procedures will reference a 
specific portion of the interim rule, explain the reason for any 
recommended change, and include data, information, or authority that 
support such recommended change.
    Instructions: All submissions received must include the agency name 
and DHS Docket No. USCIS-2007-0060. All comments received will be 
posted without change to http://www.regulations.gov, including any 
personal information provided.
    Docket: For access to the docket to read background documents or 
comments received go to http://www.regulations.gov. Submitted comments 
may also be inspected at the Regulatory Management Division, U.S. 
Citizenship and Immigration Services, Department of Homeland Security, 
111 Massachusetts Avenue, NW., 3rd Floor, Washington, DC 20529.

II. Background

    The ability of employers to fill available U.S. jobs on a timely 
basis with alien temporary workers otherwise eligible for the H-1B 
nonimmigrant classification generally depends on when they filed 
petitions for such workers and the number of such petitions that USCIS 
has approved with respect to the relevant fiscal year (i.e., October 1 
through September 30). With a few exceptions, the total number of 
aliens who may be accorded H-1B nonimmigrant status during any fiscal 
year currently may not exceed 65,000 (referred to as the ``cap'' or 
``numerical limitation''). See Immigration and Nationality Act (INA) 
sec. 214(g), 8 U.S.C. 1184(g). USCIS may only accord status to 
qualified aliens in the order in which the H-1B petitions are filed. 
See INA sec. 214(g)(3), 8 U.S.C. 1184(g)(3). This interim final rule 
will improve USCIS' ability to administer the cap by modifying the 
filing procedures for H-1B petitions submitted by employers on behalf 
of aliens.

A. The H-1B Petition Process

    An H-1B nonimmigrant is an alien employed to perform services in a 
specialty occupation, services related to a Department of Defense 
cooperative research and development project or coproduction project, 
or services of distinguished merit and ability in the field of fashion 
modeling. INA sec. 101(a)(15)(H), 8 U.S.C. 1101(a)(15)(H); 8 CFR 
214.2(h)(4). To qualify as a specialty occupation, the position must 
meet one of the following requirements: (1) The minimum entry 
requirement for the position normally is a bachelor's or higher degree 
or its equivalent; (2) the degree requirement is common to the industry 
or the position is so complex or unique that it can be performed only 
by an individual with a degree; (3) the employer normally requires a 
degree or its equivalent for the position; or (4) the nature of the 
specific duties is so specialized and complex that the knowledge 
required to perform the duties is usually associated with attainment of 
a bachelor's or higher degree. 8 CFR 214.2(h)(4)(iii)(A).
    Before employing an H-1B temporary worker, a U.S. employer first 
must file an H-1B petition with USCIS on behalf of the worker on Form 
I-129, ``Petition for a Nonimmigrant Worker'' together with the forms, 
``H Classification Supplement to Form I-129'' and ``H-1B Data 
Collection and Filing Fee Exemption Supplement.'' The worker must be 
named on the petition. 8 CFR 214.2(h)(2)(iii). For a petition filed on 
behalf of a temporary worker in a

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specialty occupation, the employer also must file a Labor Condition 
Application (LCA) that has been certified by the Department of Labor 
(DOL). 8 CFR 214.2(h)(4)(i)(B)(1). The LCA specifies the job, salary, 
length, and geographic location of employment. The petitioner must pay 
several different fees with the H-1B petition. The base filing fee is 
$320. 8 CFR 103.7(b)(1) (listing Form I-129 filing fee). In addition, a 
petition filed by an employer with 26 or more full-time employees must 
pay a $1,500 fee; a petition filed by an employer with 25 or fewer 
full-time employees must pay a $750 fee. INA 214(c)(9)(B), 8 U.S.C. 
1184(c)(9)(B). Most employers filing an initial H-1B petition, and H-1B 
employers filing a petition on behalf of an alien currently employed as 
an H-1B temporary worker by another employer, must pay a fraud 
prevention and detection fee of $500. INA 214(c)(12)(A) and (C). 
Finally, an employer requesting expedited processing of the H-1B 
petition must pay an extra $1,000 premium processing fee with the 
expedited processing request. INA 286(u), 8 U.S.C. 1356(u); 8 CFR 
103.2(f)(2). These fees are not refundable. 8 CFR 103.2(a)(1).
    Once USCIS accepts the H-1B petition, it adjudicates the petition 
and issues a written decision notifying the petitioner whether USCIS 
requires additional information before it can issue a decision or 
whether the petition is approved or denied. 8 CFR 103.2(a)(8) and 
214.2(h)(9) and (10). USCIS may revoke a petition that has been 
previously approved, even after expiration of the petition. 8 CFR 
214.2(h)(11). A petitioning employer, following receipt of the written 
decision, may appeal to USCIS the denial or revocation of a petition. 8 
CFR 214.2(h)(12). An approved H-1B petition is valid for a period of up 
to three years.\1\ See 8 CFR 214.2(h)(9)(iii)(A)(1). Prior to the 
expiration of the initial H-1B petition, the petitioning employer may 
apply for an extension of stay, or a different employer may petition on 
behalf of the temporary worker. 8 CFR 214.2(h)(2)(i)(D) and 
(15)(ii)(B). However, any such extension only may only be granted for a 
period of time such that the total period of the temporary worker's 
admission does not exceed six years.\2\ INA sec. 214(g)(4), 8 U.S.C. 
1184(g)(4); 8 CFR 214.2(h)(13)(iii)(A). At the end of the six-year 
period, such alien must either seek permanent resident status or depart 
the United States.\3\ See 8 CFR 214.2(h)(13)(iii)(A). The alien may be 
eligible for a new six-year period of admission in H-1B nonimmigrant 
status if he or she remains outside the United States for at least one 
year. Id.
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    \1\ Initial H-1B petitions involving a DOD research and 
development or co production project may be approved for a period of 
up to five years. 8 CFR 214.2(h)(9)(iii)(A)(2).
    \2\ Aliens entering the United States in H-1B status to perform 
services of an exceptional nature in a research, development and/or 
co production project administered by the Department of Defense may 
remain in the United States for a maximum period of ten years. 8 CFR 
214.2(h)(13)(iii)(B).
    \3\ Certain aliens are exempt from the six-year maximum period 
of admission under sections 104(c) and 106(a) and (b) of the 
American Competitiveness in the Twenty-First Century Act of 2000, 
Pub. L. No. 106-313, 114 Stat. 1251 (2000).
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B. H-1B Nonimmigrants Subject to the 65,000 Cap

    Most aliens seeking H-1B nonimmigrant classification are subject to 
the 65,000 cap. Exempt from the 65,000 cap are aliens who: (1) Are 
employed at, or have received offers of employment from, an institution 
of higher education, or a related or affiliated nonprofit entity; (2) 
are employed at, or have received offers of employment from, a 
nonprofit research organization or a governmental research 
organization; or (3) have earned a master's or higher degree from a 
U.S. institution of higher education. INA sec. 214(g)(5), 8 U.S.C. 
1184(g)(5). A cap of 20,000 applies to the exemption based on an 
alien's U.S. master's or higher degree (``20,000 cap on master's degree 
exemptions''). INA sec. 214(g)(5)(C), 8 U.S.C. 1184(g)(5)(C). Based on 
the employer's answers to the questions on the ``H-1B Data Collection 
and Filing Fee Exemption Supplement'' to Form I-129, USCIS determines 
whether the alien beneficiary qualifies for one of the exemptions.
    The spouses and children of H-1B aliens, classified as H-4 
nonimmigrants, are exempt from the 65,000 or 20,000 cap. See INA sec. 
214(g)(2); 8 U.S.C. 1184(g)(2); 8 CFR 214.2(h)(8)(ii)(A). In addition, 
USCIS does not apply the 65,000 or 20,000 cap in the following cases: 
requests for petition extensions or extensions of stay in the United 
States; and petitions filed on behalf of aliens who are currently in H-
1B nonimmigrant status but are seeking to change the terms of current 
employment, change employers, or work concurrently under a second H-1B 
petition. Such aliens have already been counted towards the cap(s). See 
INA sec. 214(g)(7), 8 U.S.C. 1184(g)(7); 8 CFR 214.2(h)(8)(ii)(A).

C. Random Selection Process

    In order to ensure that the 65,000 and 20,000 caps are not 
exceeded, USCIS monitors the number of H-1B petitions it receives. The 
first day on which petitioners may file H-1B petitions can be as early 
as six months ahead of the employment start date. 8 CFR 
214.2(h)(9)(i)(B). Therefore, a petitioner requesting an employment 
start date of October 1, the first day of the next fiscal year, may 
file the H-1B petition as early as April 1 of the current fiscal year. 
When USCIS determines, based on the number of H-1B petitions it has 
received, that the applicable cap will be reached, it announces to the 
public the final day on which it will accept such petitions for 
adjudication in that fiscal year. USCIS refers to this day as the 
``final receipt date.'' See 8 CFR 214.2(h)(8)(ii)(B). USCIS then 
randomly selects the number of petitions necessary to reach the cap 
from the petitions received on the final receipt date. Id. If USCIS 
receives sufficient H-1B petitions to reach the cap for the next fiscal 
year on the first day that filings may be made, that day is the final 
receipt date. USCIS then randomly applies all of the cap numbers among 
the H-1B petitions filed on that day and the following day. Id.
    Following the random selection process conducted for the 65,000 
cap, USCIS rejects any petitions that are not selected or that are 
received after the final receipt date (or the day following the final 
receipt date, if applicable). Id.; 8 CFR 214.2(h)(8)(ii)(D). With 
respect to the 20,000 cap, USCIS will count any non-selected or 
subsequently filed H-1B petitions towards the 65,000 cap. If the 65,000 
cap already has been reached, however, USCIS will reject such 
petitions.
    The procedures at 8 CFR 214.2(h)(8)(ii)(B) for assigning cap 
numbers also apply to other H nonimmigrant petitions that are subject 
to numerical limitations. See 8 CFR 214.2(h)(8)(i). However, because 
demand for other H categories has not been as great as for the H-1B 
classification, USCIS has only had to apply the random selection 
procedures to H-1B petitions subject to the overall 65,000 cap or the 
20,000 cap on master's degree exemptions.

D. Random Selection Process Under the 65,000 Cap for Fiscal Year 2008

    On Monday, April 2, 2007, the first available filing day for fiscal 
year (FY) 2008, USCIS received H-1B petitions totaling nearly twice the 
65,000 cap. See USCIS Update at http://www.uscis.gov/files/pressrelease/H1BFY08Cap040307.pdf. This was the first time since the 
random selection process regulations were promulgated that USCIS 
received more petitions than

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available cap numbers on the first available filing day. USCIS believes 
that petitioners rushed to file H-1B petitions for FY 2008 on the first 
available filing day because the cap had been reached very early in the 
previous fiscal years, and petitioners may have anticipated that a 
similar shortage of H-1B cap numbers would occur for FY 2008.\4\ In 
order to ensure receipt of a petition by USCIS on April 2, H-1B 
petitioners incurred significant costs to send their petitions via 
overnight courier. The huge volume of filings scheduled for delivery on 
April 2 caused logistical problems for overnight couriers and on the 
two USCIS service centers where filings could be made.
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    \4\ Each year, the cap has been reached earlier in the year. In 
FY07, the cap was reached on 5-26-06 (see http://www.uscis.gov/files/pressrelease/FY07H1Bcap_060106PR.pdf). In FY06, the cap was 
reached on 8-10-05 (http://www.uscis.gov/files/pressrelease/H-1Bcap_12Aug05pdf ). In FY05, the cap was reached on 10-1-04 (http://www.uscis.gov/files/pressrelease/H1B_05fnl100104.pdf).
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    Using the petitions received on April 2 and April 3, USCIS 
conducted the random selection process and thereafter rejected all 
petitions that were not randomly selected. When adjudicating the 
selected petitions, USCIS found approximately 500 instances where a 
single beneficiary had been named on at least two petitions filed by 
the same petitioner in what appears to have been an attempt to increase 
the chances of being selected in the random selection process. As a 
general practice, when USCIS approved a petition for a specifically-
named individual, it denied any duplicate petitions subsequently 
adjudicated. Under current procedures, because H-1B cap numbers are 
allotted per alien, and not per petition, no adverse consequences 
befall a petitioner that seeks to exploit the system through filing 
multiple petitions. By statute, USCIS may only allot one cap number per 
alien beneficiary, regardless of the number of petitions that were 
filed on the alien's behalf. INA section 214(g)(7), 8 U.S.C. 
1184(g)(7).
    Based on its experience administering the 65,000 cap, USCIS has 
determined that the current procedures applicable to petitions filed on 
behalf of cap-subject aliens pose three problems. First, USCIS has 
determined that accepting duplicate filings over the course of the 
fiscal year, as well as for the random selection process, undermines 
the fair and orderly administration of the cap. When USCIS receives 
enough H-1B petitions to meet the cap on the first filing day for the 
coming fiscal year, then conducts an early random selection process, 
the filing of duplicative petitions increases the odds that USCIS will 
select at least one of the duplicative petitions for adjudication. Such 
petitioners thereby gain an unfair advantage over other petitioners 
participating in the random selection process who filed a single 
petition for a given beneficiary and job offer. Moreover, the filing of 
duplicative petitions results in unnecessary adjudications. Such 
unnecessary adjudications slow the overall processing of H-1B 
petitions, creating disadvantages for employers and otherwise eligible 
alien beneficiaries who need to make advance arrangements for the 
beneficiaries' upcoming employment.
    Second, since the current regulations provide that the final 
receipt date is the first day on which filings will be accepted if the 
cap is reached on that day, and USCIS understands that petitioners 
anticipate the cap being reached on the first day for future fiscal 
years, petitioners feel pressured to file petitions on that day for 
fear of being excluded from the random selection process. USCIS faces 
significant logistical difficulties in order to handle such a large 
number of filings being made on the same day. While the current 
regulations at 8 CFR 214.2(h)(8)(ii)(B) provide some relief by 
authorizing USCIS to include in the random selection process petitions 
filed on the first day and the following day, this relief has proved to 
be insufficient to alleviate these difficulties.
    Third, the filing of duplicate or multiple petitions may result in 
USCIS making available more than one receipt number to the same 
beneficiary, making it more difficult for USCIS to achieve an accurate 
projection of the number of petitions needed to generate the required 
number of approvals to reach the cap. In turn, USCIS may prematurely 
determine that the cap has been reached and either subsequently reject 
timely-filed petitions or close the opportunity for other prospective 
H-1B employers to file petitions.

E. Cap on Master's Degree Exemptions

    Just as with the 65,000 cap, the 20,000 cap on master's degree 
exemptions has been exhausted earlier and earlier for each fiscal year 
since the cap exemption was added to the law. See Omnibus 
Appropriations Act for Fiscal Year 2005, Div. J, Tit. IV, section 425, 
Public Law 108-447, 118 Stat. 2809 (2004) (establishing the master's 
degree exemption). For FY 2006, the 20,000 cap was reached on January 
17, 2006. For FY 2007, the cap was reached on July 26, 2006, less than 
four months after petition filings began on April 1, 2006. For FY 2008, 
the cap was reached on May 4, 2007, just over one month after petition 
filings began on April 2, 2007. For each of these fiscal years, USCIS 
announced a final receipt date and conducted the random selection 
process. See USCIS Update at http://www.uscis.gov/files/pressrelease/H1Bfy08CapUpdate050407.pdf. USCIS rejected any non-selected or 
subsequently filed petitions since the 65,000 cap on H-1B petitions 
already had been reached by the time USCIS conducted the random 
selections.
    USCIS believes that the trend of exhausting the 20,000 cap on 
master's degree exemptions at an earlier date will continue. Should 
both the 20,000 and 65,000 caps be reached on the same day that numbers 
become available (e.g., April 1 of the preceding fiscal year), no 
regulatory mechanism is in place to facilitate administration of the 
20,000 cap in relation to the 65,000 cap. In addition, while USCIS is 
not aware of duplicative or multiple H-1B petitions being filed in past 
fiscal years on behalf of the same aliens eligible for the master's 
degree exemption, USCIS anticipates the possibility of such filings for 
future fiscal years as the H-1B classification becomes increasingly 
oversubscribed. In fact, USCIS believes that for FY 2009, it is likely 
that petitioners will rush to file H-1B petitions on behalf of aliens 
eligible for the master's degree exemption on the first available 
filing days, in anticipation that there will be a shortage of master's 
degree exemptions.
    The filing of duplicative or multiple H-1B petitions on behalf of 
an alien eligible for the master's degree exemption would place 
employers filing such petitions at an unfair advantage over employers 
filing only a single petition by increasing the chances that one of the 
duplicative or multiple petitions would be selected. This problem would 
be exacerbated were the 20,000 cap to be reached prior to or at the 
same time as the 65,000 cap, since all petitions not selected in the 
random selection process for the 20,000 cap would be considered twice--
at the time of the random selection for the 20,000 cap and, thereafter, 
for the 65,000 cap. This would reduce the availability of H-1B numbers 
for single petition filers. The same problem holds true if employers of 
aliens subject to the master's degree exemption seek to increase the 
chances of obtaining an H-1B number by filing concurrent petitions for 
the same aliens under both the master's degree exemption and the 65,000 
cap. In its administration of the 65,000 and 20,000 caps, USCIS must 
remove any potential for unfairness and ensure that the H-1B petitions 
filed on

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behalf of aliens subject to either or both caps have an equal chance of 
being selected.

 III. Changes in This Interim Rule

A. Final Receipt Date When Cap Numbers Are Used Up Quickly

    This rule provides that USCIS will include petitions filed on all 
of those first five business days in the random selection process if 
USCIS receives a sufficient number of petitions to reach the applicable 
numerical limit (including limits on exemptions) on any one of the five 
business days on which USCIS may accept petitions. This will eliminate 
filing problems resulting from a rush of filings made on the first day 
on which employers may file petitions for the upcoming fiscal year. See 
revised 8 CFR 214.2(h)(8)(ii)(B). USCIS has determined that a filing 
period of five business days is sufficient to account for a wider range 
of mail delivery times offered by the various mail delivery providers 
available to the public.
    This rule also provides that, if both the 65,000 and 20,000 caps 
are reached within the first five business days available for filing H-
1B petitions for a given fiscal year, USCIS must first conduct the 
random selection process for petitions subject to the 20,000 cap on 
master's degree exemptions before it may begin the random selection 
process of petitions to be counted towards the 65,000 cap. See revised 
8 CFR 214.2(h)(8)(ii)(B). After conducting the random selection for 
petitions subject to the 20,000 cap, USCIS then must add any non-
selected petitions to the pool of petitions subject to the 65,000 cap 
and conduct the random selection process for this combined group of 
petitions. Therefore, those petitions that otherwise would be eligible 
for the master's degree exemption that are not selected in the first 
random selection will have another opportunity to be selected for an H-
1B number in the second random selection process. This rule also 
clarifies that those petitions not selected in either random selection 
will be rejected. See id.

B. Elimination of Multiple Filings

    To ensure the fair and equitable distribution of cap numbers, this 
rule precludes a petitioner (or its authorized representative) from 
filing, during the course of any fiscal year, more than one H-1B 
petition on behalf of the same alien beneficiary if such alien is 
subject to the 65,000 cap or qualifies for the master's degree 
exemption. See new 8 CFR 214.2(h)(2)(i)(G). This preclusion applies 
even if the petitions are not duplicative.
    USCIS recognizes that, by statute, multiple filings of H-1B 
petitions are contemplated. See INA sec. 214(g)(7), 8 U.S.C. 
1184(g)(7). Nevertheless, USCIS finds that this rule's preclusion of 
duplicative H-1B filings is consistent with the statute. Section 
214(g)(7) of the INA, 8 U.S.C. 1184(g)(7), states that ``[w]here 
multiple petitions are approved for 1 alien, that alien shall be 
counted only once.'' USCIS interprets this statutory language as 
applying to an alien who has multiple petitions filed on his or her 
behalf by more than one employer. Therefore, an alien who will be 
performing H-1B duties on behalf of two separate petitioners will be 
counted only once against the cap. USCIS does not believe that the 
statutory language at section 214(g)(7) of the INA, 8 U.S.C. 
1184(g)(7), was intended to allow a single employer to file multiple H-
1B petitions on behalf of the same alien. Such a broad interpretation 
would undermine the purpose of the H-1B numerical cap since multiple 
filings can result in the misallocation of the total available cap 
numbers.
    USCIS recognizes that, on occasion, an employer may extend the same 
alien two or more job offers for distinct positions and therefore have 
a legitimate business need to file two or more separate H-1B petitions 
on behalf of the same alien. This rule precludes this practice if the 
alien beneficiary is subject to the numerical limitations or qualifies 
for the master's degree exemption. First, allowing multiple filings by 
one employer on behalf of the same alien could create a loophole for 
employers that seek to exploit the random selection process to the 
competitive disadvantage of other petitioners. Such employers could 
file multiple petitions on behalf of the same alien under the guise 
that the petitions are based on different job offers, when the 
employment positions are in fact the same or only very slightly 
different.
    Second, requiring USCIS adjudicators to distinguish between 
multiple petitions filed by one employer for one alien based on 
different job offers and duplicative petitions for one alien for the 
same, single position would require a significant expenditure of 
limited USCIS adjudicative resources. USCIS could not make such 
determinations on the face of the petition, but would need to 
substantively examine and compare the merits of the petition and any 
other petition filed by the same employer on behalf of the alien. This 
would defeat the purpose of the random selection process, which is not 
intended to be a decision on the merits, but instead, an expeditious 
way for USCIS to determine which petitions are eligible for 
consideration on the merits.
    Finally, prohibiting employers from filing multiple petitions on 
behalf of the same alien should have no impact on the unusual situation 
where an employer may have the same alien in mind for materially 
distinct employment positions. Once an alien is allocated an H-1B 
number based on one petition, the employer is able to file an amended 
petition or a petition for concurrent employment to reflect the 
different nature of the duties that are associated with the 
beneficiary's second employment position. Since the alien would have 
already been counted against the cap, such amended or additional 
petition would not be affected by the prohibition on multiple petition 
filings. See INA sec. 214(g)(7), 8 U.S.C. 1184(g)(7).
    For these reasons, USCIS believes that it must curtail both 
duplicative and multiple petition filings by the same employer in order 
to prevent future fairness problems similar to those USCIS experienced 
with its administration of the FY 2008 random selection process for the 
65,000 cap. Accordingly, this rule provides that USCIS will deny all 
the petitions filed by an employer (or authorized representative) for 
the same fiscal year with respect to the same alien subject to the 
65,000 or 20,000 caps. See new 8 CFR 214.2(h)(2)(i)(G). In cases where 
USCIS does not discover that duplicative or multiple petitions were 
filed until after approving them, this rule also provides that USCIS 
may revoke all such petitions if they were approved after this rule 
becomes effective. Id.
    This rule does not, however, preclude related employers from filing 
petitions on behalf of the same alien. USCIS recognizes that an 
employer and one or more related entities (such as a parent, subsidiary 
or affiliate) may extend the same alien two or more job offers for 
distinct positions and therefore have a legitimate business need to 
file two or more separate H-1B petitions on behalf of the same alien.
    For example, a Fortune 500 company may be the parent company of 
numerous U.S.-based subsidiaries whose business is to engage in either 
the food, beverage or snack industries. Each line of business may, in 
turn, be divided into several business units and operate distinct 
companies (restaurant, bottled beverage plant, cereal manufacturer, 
etc) with different EIN numbers, addresses, etc. Although all the 
subsidiaries are ultimately related to the parent company through 
corporate ownership, this rule does not prohibit different

[[Page 15393]]

subsidiaries from filing one H-1B petition each on behalf of the same 
alien so long as each employer/subsidiary has a legitimate business 
need to hire such alien for a position within that subsidiaries' 
corporate structure. Thus, in this example, if the bottled beverage 
plant owned by the Fortune 500 company and the cereal manufacturing 
company owned by the same Fortune 500 company are each in need of the 
services of a Chief Financial Officer, both may file one petition each 
on behalf of the same alien. A subsidiary should not file an H-1B 
petition for an alien just to increase the alien's chances of being 
selected for an H-1B number where that subsidiary has no legitimate 
need to employ the alien and is, instead, only filing a petition to 
facilitate the alien's hiring by a different, although related, 
subsidiary.
    USCIS may issue a request for additional evidence or notice of 
intent to deny, or notice of intent to revoke for any or each petition 
if it determines that the employer and related entity(ies) filed a 
duplicate petition as defined in this regulation. See 8 CFR parts 103 
and 214.2(h)(11). The burden rests with the employer to establish that 
it has a legitimate business need to file more than one H-1B petition 
on behalf of the same alien. If the employer does not meet its burden, 
USCIS may deny or revoke each petition, as appropriate. Without such 
authority, a loophole would exist for related employers to file 
multiple petitions on behalf of the same alien under the guise that the 
petitions are based on different job offers, when the true purpose of 
filing the petitions is to secure employment for the alien with a 
single employer seeking his or her services. As an example, one target 
of this provision is the unscrupulous employer that establishes or uses 
shell subsidiaries or affiliates to file additional petitions on behalf 
of the same alien in order to increase the alien's chances of being 
allotted an H-1B number. USCIS believes that these consequences are 
warranted in order to deter unfair filing practices and further ensure 
the integrity of the H-1B cap counting process.
    To date, USCIS has identified the problems resulting from multiple 
filings only in the context of H-1B petitions. For this reason, this 
rule limits the bar on multiple petition filings to H-1B petitions.

C. Denial of Petitions After Cap Numbers Are Used

    Over the past few years, USCIS has received a significant number of 
petitions that claim to be exempt from the 65,000 cap, but are 
determined after the final receipt date or after all cap numbers have 
been used to be subject to the cap. The current regulations do not 
specifically address treatment of such petitions. This rule amends the 
regulations to clarify that such petitions will be denied rather than 
rejected. See revised 8 CFR 214.2(h)(8)(ii)(B) and (D). USCIS has 
determined that denial of these petitions is appropriate because USCIS 
must adjudicate them in order to make a determination on whether the 
alien beneficiary is subject to the numerical cap. USCIS only rejects 
filings before an adjudication takes place. See 8 CFR 103.2(a)(7). 
Because USCIS must adjudicate these petitions, it will not return the 
petition and refund the filing fee.

D. Technical Changes

1. Removal of References To Cap Numbers
    This rule revises 8 CFR 214.2(h)(8)(i)(A) to remove specific 
references to the H-1B numerical cap. The revised paragraph now 
generally refers to the numerical limitations set forth in section 
214(g)(1) of the INA, 8 U.S.C. 1184(g)(1). USCIS has determined that 
specifying the cap numbers in the regulations is not necessary and may 
cause confusion in the future should Congress change the INA.
2. Inclusion of 20,000 Cap
    This rule revises 8 CFR 214.2(h)(8)(ii)(B) to clarify that the 
random selection process applies to the administration of the 20,000 
cap on master's degree exemptions. The current provision generally 
refers to ``numerical limitations,'' ``the numerical limit,'' or 
``cap.'' To maintain consistent terminology, this rule also replaces 
references in 8 CFR 214.2(h)(8)(ii)(B) and (D) to the ``cap'' with the 
statutory term, ``numerical limitations.''

IV. Regulatory Requirements

A. Administrative Procedure Act

    This final rule addresses requirements that are procedural in 
nature and does not alter the substantive rights of applicants or 
petitioners for immigration benefits. Accordingly, this final rule is 
exempt from the notice and comment requirements under the 
Administrative Procedure Act (APA) at 5 U.S.C. 553(b)(A). This rule 
does not change the eligibility rules governing any immigration 
benefit. It will not confer rights or obligations upon any party. This 
rule clarifies existing USCIS regulations and modifies the filing 
requirements for petitioners submitting H-1B petitions.
    In addition, USCIS believes that good cause exists to implement 
this change effective immediately upon publication in the Federal 
Register as an interim final rule without first providing notice and 
the opportunity for public comment. The APA provides that an agency may 
dispense with notice and comment rulemaking procedures when an agency, 
for ``good cause,'' finds that those procedures are ``impracticable, 
unnecessary, or contrary to the public interest.'' See 5 U.S.C. 
553(b)(B). The exception excuses notice and comment, in emergency 
situations, or where ``the delay created by the notice and comment 
requirements would result in serious damage to important interests.'' 
Woods Psychiatric Institute v. United States, 20 Cl. Ct. 324, 333 (Cl. 
Ct. 1990) aff'd 925 F.2d 1454 (Fed. Cir. 1991); also National Fed'n of 
Fed. Employees v. National Treasury Employees Union, 671 F.2d 607, 
611(D.C. Cir. 1982).
    This rule is necessary to preclude the potential for abuse by those 
petitioners who might seek an unfair advantage in obtaining one of the 
limited number of H-1B petition approvals. As discussed above, last 
year was the first year that the 65,000 H-1B cap was reached on the 
same day that petitioners could begin to file petitions. USCIS believes 
that the practice of filing multiple petitions in an effort to exploit 
the random selection process has become more wide-spread over the past 
year as fears are raised that the 65,000 H-1B cap and 20,000 cap on 
master's degree exemptions for FY 2009 will be reached on April 1, 
2008. Delay in issuing this regulation to consider public comment, 
would not allow USCIS to ameliorate the problem by removing this 
loophole in time for the April 1, 2008 filing start date. This would 
adversely impact a large number of companies, in particular smaller 
businesses that cannot afford to pay multiple petition fees to secure 
an H-1B visa for their employees.
    Accordingly, USCIS is implementing these amendments as an interim 
rule effective immediately upon publication in the Federal Register. 
USCIS nevertheless invites comments on this rule and will consider all 
timely comments in the preparation of a final rule.

B. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) (5 U.S.C. 603(b)), as amended 
by the Small Business Regulatory Enforcement and Fairness Act of 1996 
(SBREFA), requires an agency to prepare and make available to the 
public a regulatory flexibility analysis that describes the effect of a 
proposed rule on small entities (i.e., small businesses, small

[[Page 15394]]

organizations, and small governmental jurisdictions) when the agency is 
required ``to publish a general notice of proposed rulemaking for any 
proposed rule.'' Because this rule is being issued as an interim rule, 
on the grounds set forth above, a regulatory flexibility analysis is 
not required under the RFA.

C. Unfunded Mandates Reform Act of 1995

    This rule will not result in the expenditure by State, local, and 
tribal governments, in the aggregate, or by the private sector, of $100 
million or more in any one year, and it will not significantly or 
uniquely affect small governments. Therefore, no actions were deemed 
necessary under the provisions of the Unfunded Mandates Reform Act of 
1995.

D. Small Business Regulatory Enforcement Fairness Act of 1996

    This rule is not a major rule as defined by section 804 of the 
Small Business Regulatory Enforcement Act of 1996. This rule will not 
result in an annual effect on the economy of $100 million or more; a 
major increase in costs or prices; or significant adverse effects on 
competition, employment, investment, productivity, innovation, or on 
the ability of United States-based companies to compete with foreign-
based companies in domestic and export markets.

E. Executive Order 12866 (Regulatory Planning and Review)

    This rule has been designated as a ``significant regulatory 
action'' by the Office of Management and Budget (OMB) under Executive 
Order 12866, section 3(f), Regulatory Planning and Review. Accordingly, 
an analysis of the economic impacts of this rule has been prepared and 
submitted to the Office of Management and Budget (OMB) for review. This 
rule imposes no additional costs on the public, or any regulated entity 
that is subject to its provisions. This rule does not preclude any 
petitioner from filing a legitimate petition, only the filing of the 
same petition more than once. The race to meet the filing date of each 
fiscal year has become a ritual for H-1B petitioners and USCIS expects 
the 65,000 and 20,000 maximums to be met easily every year. Thus, the 
volume of applications and fee income are not expected to change from 
current levels. This rule may result in a fee being collected instead 
of returned if the prohibition against duplicate petitions is violated, 
because while in 2007 only the duplicate petition was denied if the 
first one adjudicated was approved, this rule provides that both 
petitions will be denied. Nonetheless, all employers and employees that 
are the subject of a timely filing will have the same chance as all 
others for their petition to be selected for processing. This rule does 
not change that. Hence, this rule will benefit both petitioners and 
alien beneficiaries by making sure that all petitioners have an equal 
chance to have their petition considered. A copy of the complete 
analysis is available in the rulemaking docket for this rule at 
www.regulations.gov, under Docket No. USCIS-2007-0060, or by calling 
the information contact listed above.

F. Executive Order 13132 (Federalism)

    This rule would have no 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, this rule does not have sufficient 
federalism implications to warrant the preparation of a federalism 
summary impact statement.

G. Paperwork Reduction Act

    Under the Paperwork Reduction Act of 1995, Public Law 104-13, all 
Departments are required to submit to the Office of Management and 
Budget (OMB), for review and approval, any reporting requirements 
inherent in a rule. This rule does not impose any new reporting or 
record-keeping requirements under the Paperwork Reduction Act.

List of Subjects in 8 CFR Part 214

    Administrative practice and procedure, Aliens, Employment, Foreign 
Officials, Health Professions, Reporting and recordkeeping 
requirements, Students.


0
Accordingly, part 214 of chapter I of title 8 of the Code of Federal 
Regulations is amended as follows:

PART 214--NONIMMIGRANT CLASSES

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

    Authority: 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; 8 CFR part 2.


0
2. Section 214.2 is amended by:
0
a. Adding new paragraph (h)(2)(i)(G);
0
b. Revising paragraph (h)(8)(i)(A);
0
c. Revising paragraph (h)(8)(ii)(B); and by
0
d. Revising paragraph (h)(8)(ii)(D). The addition and revisions read as 
follows:


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

* * * * *
    (h) * * *
    (2) * * *
    (i) * * *
    (G) Multiple H-1B petitions. An employer may not file, in the same 
fiscal year, more than one H-1B petition on behalf of the same alien if 
the alien is subject to the numerical limitations of section 
214(g)(1)(A) of the Act or is exempt from those limitations under 
section 214(g)(5)(C) of the Act. If an H-1B petition is denied, on a 
basis other than fraud or misrepresentation, the employer may file a 
subsequent H-1B petition on behalf of the same alien in the same fiscal 
year, provided that the numerical limitation has not been reached or if 
the filing qualifies as exempt from the numerical limitation. 
Otherwise, filing more than one H-1B petition by an employer on behalf 
of the same alien in the same fiscal year will result in the denial or 
revocation of all such petitions. If USCIS believes that related 
entities (such as a parent company, subsidiary, or affiliate) may not 
have a legitimate business need to file more than one H-1B petition on 
behalf of the same alien subject to the numerical limitations of 
section 214(g)(1)(A) of the Act or otherwise eligible for an exemption 
under section 214(g)(5)(C) of the Act, USCIS may issue a request for 
additional evidence or notice of intent to deny, or notice of intent to 
revoke each petition. If any of the related entities fail to 
demonstrate a legitimate business need to file an H-1B petition on 
behalf of the same alien, all petitions filed on that alien's behalf by 
the related entities will be denied or revoked.
* * * * *
    (8) * * *
    (i) * * *
    (A) Aliens classified as H-1B nonimmigrants, excluding those 
involved in Department of Defense research and development projects or 
coproduction projects, may not exceed the limits identified in section 
214(g)(1)(A) of the Act.
* * * * *
    (ii) * * *
    (B) When calculating the numerical limitations or the number of 
exemptions under section 214(g)(5)(C) of the Act for a given fiscal 
year, USCIS will make numbers available to petitions in the

[[Page 15395]]

order in which the petitions are filed. USCIS will make projections of 
the number of petitions necessary to achieve the numerical limit of 
approvals, taking into account historical data related to approvals, 
denials, revocations, and other relevant factors. USCIS will monitor 
the number of petitions (including the number of beneficiaries 
requested when necessary) received and will notify the public of the 
date that USCIS has received the necessary number of petitions (the 
``final receipt date''). The day the news is published will not control 
the final receipt date. When necessary to ensure the fair and orderly 
allocation of numbers in a particular classification subject to a 
numerical limitation or the exemption under section 214(g)(5)(C) of the 
Act, USCIS may randomly select from among the petitions received on the 
final receipt date the remaining number of petitions deemed necessary 
to generate the numerical limit of approvals. This random selection 
will be made via computer-generated selection as validated by the 
Office of Immigration Statistics. Petitions subject to a numerical 
limitation not randomly selected or that were received after the final 
receipt date will be rejected. Petitions filed on behalf of aliens 
otherwise eligible for the exemption under section 214(g)(5)(C) of the 
Act not randomly selected or that were received after the final receipt 
date will be rejected if the numerical limitation under 214(g)(1) of 
the Act has been reached for that fiscal year. Petitions indicating 
that they are exempt from the numerical limitation but that are 
determined by USCIS after the final receipt date to be subject to the 
numerical limit will be denied and filing fees will not be returned or 
refunded. If the final receipt date is any of the first five business 
days on which petitions subject to the applicable numerical limit may 
be received (i.e., if the numerical limit is reached on any one of the 
first five business days that filings can be made), USCIS will randomly 
apply all of the numbers among the petitions received on any of those 
five business days, conducting the random selection among the petitions 
subject to the exemption under section 214(g)(5)(C) of the Act first.
* * * * *
    (D) If the total numbers available in a fiscal year are used, new 
petitions and the accompanying fee shall be rejected and returned with 
a notice that numbers are unavailable for the particular nonimmigrant 
classification until the beginning of the next fiscal year. Petitions 
received after the total numbers available in a fiscal year are used 
stating that the alien beneficiaries are exempt from the numerical 
limitation will be denied and filing fees will not be returned or 
refunded if USCIS later determines that such beneficiaries are subject 
to the numerical limitation.
* * * * *

    Dated: March 18, 2008.
Michael Chertoff,
Secretary.
[FR Doc. E8-5906 Filed 3-21-08; 8:45 am]
BILLING CODE 4410-10-P