[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]


 ========================================================================
 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.
 
 ========================================================================
 

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

[[Page 69236]]


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

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.

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

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\
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \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).
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

    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\
---------------------------------------------------------------------------

    \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.'').
---------------------------------------------------------------------------

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\
---------------------------------------------------------------------------

    \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.

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

[[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\
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \19\ See Walker Macy, 243 F.Supp.3d at 1174.
---------------------------------------------------------------------------

    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\
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

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\
---------------------------------------------------------------------------

    \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).
---------------------------------------------------------------------------

    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\
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

    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