Federal Register, Volume 86 Issue 5 (Friday, January 8, 2021)

[Federal Register Volume 86, Number 5 (Friday, January 8, 2021)]
[Rules and Regulations]
[Pages 1676-1735]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-00183]

[[Page 1675]]

Vol. 86

Friday,

No. 5

January 8, 2021

Part IV

Department of Homeland Security

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8 CFR Part 214

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

Federal Register / Vol. 86 , No. 5 / Friday, January 8, 2021 / Rules
and Regulations

[[Page 1676]]

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DEPARTMENT OF HOMELAND SECURITY

8 CFR Part 214

[CIS No. 2679-21; 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: Final rule.

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SUMMARY: The Department of Homeland Security (DHS or the Department) is
amending its regulations governing the process by which U.S.
Citizenship and Immigration Services (USCIS) selects H-1B registrations
for the filing of H-1B cap-subject petitions (or H-1B petitions for any
year in which the registration requirement is 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.

DATES: This final rule is effective March 9, 2021.

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,
5900 Capital Gateway Drive, Camp Springs, MD 20746; telephone 240-721-
3000 (this is not a toll-free number). 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

I. Table of Contents
II. Table of Abbreviations
III. Background and Discussion
A. Purpose and Summary of the Regulatory Action
B. Legal Authority
C. Summary of Changes From the Notice of Proposed Rulemaking
D. Implementation
E. The H-1B Visa Program
F. Current Selection Process
G. Final Rule
IV. Response to Public Comments on the Proposed Rule
A. Overview of Comments and General Feedback on the Proposed
Rule
1. General Support for the Proposed Rule
a. Positive Impacts on New Graduates and Entry-Level Workers
b. Positive Impacts on Healthcare Workforce
c. Positive Impacts on the Economy
2. General Opposition to the Proposed Rule
a. Immigration Policy Concerns
b. Negative Impacts on New Graduates and Entry-Level Workers,
Academic Institutions, Healthcare Workers and Facilities, Employers,
and the Economy
i. New Graduates and Entry-Level Workers
ii. Academic Institutions
iii. Healthcare Workforce and Facilities
iv. Employers
v. Economy
c. General Wage-Based Selection Concerns
3. Other General Feedback
B. Basis for Rule
1. DHS Statutory/Legal Authority
2. Substantive Comments on the Need for the Rule/DHS
Justification
a. Support for the DHS Rationale
b. Rule Is Based on False Premises/Rationale
c. Lack of Evidence To Support Rulemaking
C. Proposed Changes to the Registration Process for H-1B Cap-
Subject Petitions
1. Proposed Wage-Based Selection (Selection Process for Regular
Cap and Advanced Degree Exemption, Preservation of Random Selection
Within a Prevailing Wage)
2. Required Information From Petitioners
a. OES Wage Level
i. Highest OES Wage Level That the Proffered Wage Would Equal or
Exceed
ii. Highest OES Wage Level When There Is No Current OES
Prevailing Wage Information
iii. Lowest OES Wage Level That the Proffered Wage Would Equal
or Exceed When Beneficiary Would Work in Multiple Locations or
Positions
iv. Other Comments on OES Wage Level
b. Attestation to the Veracity of the Contents of the
Registration and Petition (Including Comments on Rejections,
Denials, and Revocations)
3. Requests for Comments on Alternatives
D. Other Issues Relating to Rule
1. Requests To Extend the Comment Period
2. Rulemaking Process
a. Multiple H-1B Rulemakings
b. Other Rulemaking Process Comments
3. Effective Date and Implementation
E. Statutory and Regulatory Requirements
1. Impacts and Benefits (E.O. 12866, 13563, and 13771)
a. Methodology and Adequacy of the Cost-Benefit Analysis
b. Costs
c. Benefits
2. Paperwork Reduction Act
F. Out of Scope
V. 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 Final Rule
3. Historic Population
4. Cost-Benefit Analysis
a. Costs and Cost Savings of Regulatory Changes to Petitioners
i. Methodology Based on Historic FYs 2019-2020
ii. FY 2021 Data
iii. Unquantified Costs & Benefits
iv. Costs of Filing Form I-129 Petitions
v. Costs of Submitting Registrations as Modified by This Final
Rule
vi. Familiarization Cost
b. Total Estimated Costs of Regulatory Changes
c. Costs to the Federal Government
B. Regulatory Flexibility Act
1. A Statement of Need for, and Objectives of, This Final Rule
2. A Statement of Significant Issues Raised by the Public
Comments in Response to the Initial Regulatory Flexibility Analysis,
a Statement of Assessment of Any Changes Made in the Proposed Rule
as a Result of Such Comments
3. The Response of the Agency to Any Comments Filed by the Chief
Counsel for Advocacy of the Small Business Administration in
Response to the Rule, and a Detailed Statement of Any Change Made to
the Final Rule as a Result of the Comments
4. A Description of and an Estimate of the Number of Small
Entities to Which This Final Rule Will Apply or an Explanation of
Why No Such Estimate Is Available
5. A Description of the Projected Reporting, Recordkeeping, and
Other Compliance Requirements of the Final Rule, Including an
Estimate of the Classes of Small Entities That Will Be Subject to
the Requirement and the Types of Professional Skills Necessary for
Preparation of the Report or Record
6. Description of the Steps the Agency Has Taken To Minimize the
Significant Economic Impact on Small Entities Consistent With the
Stated Objectives of the Applicable Statues, Including a Statement
of Factual, Policy, and Legal Reasons for Selecting the Alternative
Adopted in the Final Rule and Why Each One of the Other Significant
Alternatives to the Rule Considered by the Agency Which Affect the
Impact on Small Entities Was Rejected
C. Congressional Review Act
D. Unfunded Mandates Reform Act of 1995
E. Executive Order 13132 (Federalism)
F. Executive Order 12988 (Civil Justice Reform)
G. Executive Order 13175 (Consultation and Coordination With
Indian Tribal Governments)
H. National Environmental Policy Act (NEPA)
I. Paperwork Reduction Act
1. USCIS H-1B Registration Tool
2. USCIS Form I-129
J. Signature

II. Table of Abbreviations

BLS--U.S. Bureau of Labor Statistics
CEQ--Council on Environmental Quality
CNMI--Commonwealth of the Northern Mariana Islands
CRA--Congressional Review Act

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DHS--U.S. Department of Homeland Security
DOD--U.S. Department of Defense
DOL--U.S. Department of Labor
DOS--U.S. Department of State
EA--Environmental Assessment
EIS--Environmental Impact Statement
E.O.--Executive Order
FEMA--Federal Emergency Management Agency
FQHC--Federally Qualified Healthcare Center
FRFA--Final Regulatory Flexibility Analysis
FVRA--Federal Vacancies Reform Act
FY--Fiscal Year
GAO--U.S. Government Accountability Office
HHS--U.S. Department of Health and Human Services
HPSA--Health Professional Shortage Area
HSA--Homeland Security Act of 2002
ICE--U.S. Immigration and Customs Enforcement
IMG--International Medical Graduate
INA--Immigration and Nationality Act
INS--Immigration and Naturalization Service
IT--Information Technology
LCA--Labor Condition Application
NAICS--North American Industry Classification System
NEPA--National Environmental Policy Act
NPRM--Notice of Proposed Rulemaking
OES--Occupational Employment Statistics
OMB--Office of Management and Budget
OPT--Optional Practical Training
R&D--Research and Development
SOC--Standard Occupational Classification
STEM--Science, Technology, Engineering, and Mathematics
UMRA--Unfunded Mandates Reform Act of 1995
USCIS--U.S. Citizenship and Immigration Services
VA--U.S. Department of Veterans Affairs

III. Background and Discussion

A. Purpose and Summary of the Regulatory Action

DHS is amending its regulations governing the selection of
registrations submitted by 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 wage levels.
When applicable, USCIS will rank and select the registrations received
generally on the basis of the highest OES wage level that the proffered
wage equals or exceeds for the relevant 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. The proffered
wage is the wage that the employer intends to pay the beneficiary. This
ranking process will not alter the prevailing wage levels associated
with a given position for U.S. Department of Labor (DOL) purposes,
which are informed by a comparison of the requirements for the
proffered position to the normal requirements for the occupational
classification. This final rule will not affect the order of selection
as between the regular cap and the advanced degree exemption. The wage
level ranking will 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. While administering a random
lottery system is reasonable, it is inconsiderate of Congress's
statutory purposes for the H-1B program and its administration.
Instead, a registration system that faithfully implements the
Immigration and Nationality Act (INA) while prioritizing registrations
based on wage level within each cap will incentivize H-1B 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 and eligibility to file
an H-1B cap-subject petition. Moreover, it will maximize H-1B cap
allocations, so that they more likely will go to the best and brightest
workers; and it will disincentivize abuse of the H-1B program to fill
relatively lower-paid, lower-skilled positions, which is a significant
problem under the present selection system.\1\
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\1\ 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). See also HaeYoun Park, How Outsourcing Companies are
Gaming the Visa System, N.Y. Times (Nov. 10, 2015), https://www.nytimes.com/interactive/2015/11/06/us/outsourcing-companies-dominate-h1b-visas.html (noting ``H-1B workers at outsourcing firms
often receive wages at or slightly above $60,000, below what skilled
American technology professionals tend to earn, so those firms can
offer services to American companies at a lower cost, undercutting
American workers''); Daniel Costa and Ron Hira, H-1B Visas and
Prevailing Wage Level, Economic Policy Institute (May 4, 2020),
https://www.epi.org/publication/h-1b-visas-and-prevailing-wage-levels/ (explaining that ``the fundamental flaw of the H-1B program
is that it permits U.S. employers to legally underpay H-1B workers
relative to U.S. workers in similar occupations in the same region).
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B. Legal Authority

The Secretary of Homeland Security's authority for these regulatory
amendments is found in various sections of the Immigration and
Nationality Act (INA), 8 U.S.C. 1101 et seq., and the Homeland Security
Act of 2002 (HSA), Public Law 107-296, 116 Stat. 2135, 6 U.S.C. 101 et
seq. General authority for issuing this final 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.\2\
Further authority for these regulatory amendments is found in:
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\2\ 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'').
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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.
INA section 214(i), 8 U.S.C. 1184(i), which defines the
term ``specialty occupation,'' referenced in INA section
(101)(a)(15)(H)(i)(B), 8 U.S.C. 1101(a)(15)(H)(i)(B), a requirement for
the classification.
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.''

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Finally, as explained above, ``Congress left to the discretion of
USCIS how to handle simultaneous submissions.'' \3\ Accordingly,
``USCIS has discretion to decide how best to order those petitions'' in
furtherance of Congress' legislative purpose.\4\
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\3\ See Walker Macy v. USCIS, 243 F.Supp.3d 1156, 1176 (D. Or.
2017) (finding that USCIS' rule establishing the random-selection
process was a reasonable interpretation of the INA).
\4\ See 243 F.Supp.3d at 1176.
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C. Summary of Changes From the Notice of Proposed Rulemaking

Following careful consideration of public comments received,
including relevant data provided, DHS has declined to modify the
regulatory text proposed in the Notice of Proposed Rulemaking (NPRM)
published in the Federal Register on November 2, 2020.\5\ Therefore,
DHS is publishing this final rule as proposed in the NPRM.
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\5\ See U.S. Department of Homeland Security, U.S. Citizenship
and Immigration Services, Modification of Registration Requirement
for Petitioners Seeking To File Cap-Subject H-1B Petitions, 85 FR
69236 (Nov. 2, 2020).
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D. Implementation

The changes in this final rule will apply to all registrations (or
petitions, in the event that registration is suspended), including
those for the advanced degree exemption, submitted on or after the
effective date of the final rule. The treatment of registrations and
petitions filed prior to the effective date of this final rule will be
based on the regulatory requirements in place at the time the
registration or petition, as applicable, is properly submitted. DHS has
determined that this manner of implementation best balances operational
considerations with fairness to the public. USCIS will engage in public
outreach and provide training to the regulated public on the modified
registration system in advance of its implementation.

E. The H-1B Visa Program

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 U.S. 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.\6\ 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.\7\
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\6\ 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).
\7\ See INA section 214(i)(l), 8 U.S.C. 1184(i)(l).
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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).\8\ This limitation, commonly referred to as the ``H-
1B cap,'' generally does not apply to H-1B petitions filed on behalf of
certain aliens who have previously been counted against the cap.\9\ The
total number of foreign workers who may be granted initial H-1B
nonimmigrant status during any FY currently may not exceed 65,000.\10\
Certain petitions are exempt from the 65,000 numerical limitation.\11\
The annual exemption from the 65,000 cap for H-1B workers who have
earned a qualifying U.S. master's or higher degree may not exceed
20,000 foreign workers.\12\ Moreover, H-1B petitions for aliens who are
employed or have received offers of employment at institutions of
higher education, nonprofit entities related to or affiliated with
institutions of higher education, or nonprofit research organizations
or government research organizations, are also exempt from the cap.\13\
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\8\ See INA section 214(g), 8 U.S.C. 1184(g).
\9\ See INA section 214(g)(7), 8 U.S.C. 1184(g)(7).
\10\ See INA section 214(g), 8 U.S.C. 1184(g).
\11\ See INA section 214(g)(5) and (7), 8 U.S.C. 1184(g)(5) and
(7).
\12\ See INA section 214(g)(5)(C), 8 U.S.C. 1184(g)(5)(C).
\13\ See INA section 214(g)(5), 8 U.S.C. 1184(g)(5).
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F. Current Selection Process

DHS implemented the current H-1B registration process by regulation
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 selection
process, 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 then 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. 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).\14\ 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.\15\
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\14\ See 8 CFR 214.2(h)(8)(iii)(D)(2). See also 8 CFR
214.2(h)(8)(iii)(A)(4) (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).
\15\ During the initial filing period, if USCIS does not receive
a sufficient number of petitions projected as needed to reach the
numerical allocations, USCIS will select additional registrations,
or reopen the registration process, as applicable, to receive the
number of petitions projected as needed to reach the numerical
allocations. See 8 CFR 214.2(h)(8)(iii)(A)(7).
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G. Final Rule

Following careful consideration of all public comments received,
DHS is issuing this final rule as proposed in the NPRM, without
modifications to the regulatory text.

IV. Response to Public Comments on the Proposed Rule

A. Overview of Comments and General Feedback on the Proposed Rule

In response to the rulemaking, DHS received 1103 comments during
the 30-day public comment period, and 388 comments on the rule's
information collection requirements before the comment period ended. A
large majority of public comments received are form letter copies
rather than unique submissions. Commenters consisted primarily of
individuals, including anonymous submissions. DHS received the
remaining submissions from professional associations, trade or

[[Page 1679]]

business associations, employers/companies, law firms, advocacy groups,
schools/universities, attorneys/lawyers, joint submissions, research
institutes/organizations, and a union.
DHS reviewed all of the public comments received in response to the
proposed rule and is addressing substantive comments relevant to the
proposed rule (i.e., comments that are pertinent to the proposed rule
and DHS's role in administering the registration requirement for
petitioners seeking to file H-1B petitions on behalf of cap-subject
beneficiaries) in this section IV, grouped by subject area. While DHS
provides a brief overview of comments deemed out of scope of this
rulemaking in section IV.F. (e.g., comments seeking changes in U.S.
laws, or regulations and agency policies unrelated to the changes
proposed in the NPRM), DHS is not providing substantive responses to
those comments.
Public comments may be reviewed in their entirety at the Federal
Docket Management System (FDMS) at http://www.regulations.gov, docket
number USCIS-2020-0019-0001.
1. General Support for the Proposed Rule
Comments: Multiple commenters expressed general support for the
rule, providing the following rationale: The proposed rule should be
implemented as soon as possible; the proposed rule is a step in the
right direction; the proposed rule is necessary to protect U.S.
workers; the proposed rule is a well-guided and legal attempt to
strengthen the economy and legal immigration of workers; wage-based H-
1B allocation can help economic growth; salary is the best and most
reasonable criteria, since it is not practical to compare the skills of
one professional with another; people with higher salaries should be
prioritized to receive H-1B visas; the United States should increase
the possibility of obtaining a visa for people with higher degrees or
wages; the proposed rule would ensure more visas were allocated to the
best workers; the proposed rule would keep high-level, meritorious
employees in the United States; H-1B allocation should be merit-based;
the proposed rule would ensure that workers who were to contribute most
would get to stay in the United States while other workers still would
have the same chance of being selected as previous years; if companies
were willing to pay a higher salary for some workers, it would mean
that they would deserve a better chance to stay and work in the United
States; people with more professional experience should not have the
same chance of staying in the United States as college graduates or
less experienced professionals; the proposed rule would preserve the
true intent of the H-1B program, which was to allow U.S. companies to
seek out the best foreign talent; there would be less duplication of H-
1B petitions for the same employees; every year, many highly qualified
workers have had to leave the United States because they have not been
selected in the existing lottery system; entry-level recruitment of
U.S. citizens to fill roles occupied by H-1B beneficiaries can and
should be done in high schools, vocational schools, and college
campuses; the proposed rule would increase the average and median wage
levels of H-1B beneficiaries; the current lottery process makes it
difficult for employers to plan for their staffing needs, so the
proposed rule will benefit both employers and employees.
Response: DHS thanks these commenters for their support and agrees
with commenters that the proposed rule should be implemented as soon as
possible; the proposed rule is a step in the right direction; the
proposed rule is necessary to better protect U.S. workers, particularly
those U.S. workers competing against H-1B workers for entry-level jobs;
and this rule is a well-guided and legal attempt to improve the H-1B
cap selection process. DHS further agrees that relative salary
generally is a reasonable proxy for skill level and the wage level that
a proffered wage equals or exceeds is a reasonable criterion for
registration. DHS also agrees that this rule may lead to the selection
of the most-skilled or most-valued H-1B beneficiaries; may lead to an
increase in wages for H-1B beneficiaries; may increase access to entry-
level positions for available and qualified U.S. workers; and is
expected to reduce uncertainty about selection resulting from a purely
randomized process. Prioritizing wage levels in the registration
selection process is expected to incentivize 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 cap-subject petition filings.
In doing so, prioritization, as compared to a purely random selection
process, may reduce uncertainty about selection. In turn, U.S.
employers that might have petitioned for cap-subject H-1B workers to
fill relatively lower-paid, lower-skilled positions, may be
incentivized to hire available and qualified U.S. workers for those
positions.
Comments: Several commenters expressed support for the rule and the
need to stop visa fraud, abuse, and flooding of petitions by certain
staffing or consulting companies. One commenter said the proposed rule
would disincentivize companies from abusing the H-1B program and
harming U.S. workers. Other commenters stated that: The proposed rule
would decrease potential visa abuse by employers and make sure all
workers were paid according to their skillset as employers no longer
would be able to lower labor expenses by hiring foreign workers; the
proposed rule would have a positive impact on U.S. employees and
college-educated U.S. citizens who take out loans for their education
by making it harder for technology companies to discriminate against
U.S. citizens; U.S. workers are being laid off in large numbers because
corporations are outsourcing for profits; and the proposed rule is
necessary because Indian corporations are acquiring U.S. jobs.
Response: DHS agrees that this rule will reduce abuse and provide
incentives for employers to use the H-1B program to primarily fill
relatively lower-paid, lower-skilled positions.\16\ Prioritizing
registrations or petitions, as applicable, reflecting higher wage
levels for positions requiring higher skills and higher-skilled or more
valued aliens will further Congressional intent for the program by
helping U.S. employers fill labor shortages in positions requiring
highly skilled and/or highly educated workers.
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\16\ See supra note 1.
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a. Positive Impacts on New Graduates and Entry-Level Workers
Comments: An individual commenter wrote that this rule would be
extremely beneficial to international students graduating from U.S.
universities. The commenter explained that, while recent graduates
earning level I wages initially would be less likely to be selected in
the lottery, many of those recent graduates actually would benefit from
the rule over the long term. The commenter said that recent graduates
who were not initially selected likely would gain additional experience
in future years, which would make them more competitive for selection
at higher wage levels. The commenter indicated that Science,
Technology, Engineering, and Mathematics (STEM) graduates generally
have three chances at the existing H-1B lottery, and, ideally, new
graduates should not stay in level I positions for all three years. On
the other hand, non-STEM graduates

[[Page 1680]]

already have low selection odds under the existing lottery and, thus,
face difficulties finding suitable employment. With this proposed rule,
however, non-STEM graduates now would have a probable path forward and
would be able to negotiate with their employers to get H-1B
sponsorship. The commenter added that concerns that new graduate
employees would not be able to receive an H-1B visa, even from large
technology companies, are unfounded, knowing firsthand that new
graduates regularly receive job offers at level II wages or above from
large technology companies. A different commenter stated that there are
many new graduates with greater academic achievements and capability
who will be able to get job offers at level II wages or above. This
commenter stated that, for graduates unable to get job offers with
level II wages, this proposed rule could incentivize them to work hard
to prove their value and be promoted.
Response: DHS agrees that this rule could be beneficial to
international students, as the commenter explains. DHS recognizes that,
under this final rule, it is less probable that USCIS will select
registrations (or, if applicable, petitions) that reflect a wage level
that is lower than the prevailing wage level II. DHS agrees with the
comment that registrations (or, if applicable, petitions) reflecting
prevailing wage levels II, III, and IV will have greater chances of
being selected compared to the status quo. To the extent that recent
foreign graduates, STEM-track or otherwise, in Optional Practical
Training (OPT) can gain the necessary skills and experience to warrant
prevailing wage levels II or above, the final rule may result in
greater chances of selection of registrations (or, if applicable,
petitions) for those beneficiaries. Further, recent graduates with
master's or higher degrees from U.S. institutions of higher education
already benefit from the advanced degree exemption and cap selection
order, as eligibility for that exemption increases their chance of
selection. A registration or petition, as applicable, submitted on
behalf of an alien eligible for the advanced degree exemption is first
included in the submissions that may be selected toward the regular cap
projection. If not selected toward the regular cap projection,
submissions eligible for the advanced degree exemption may be selected
toward the advanced degree exemption projection. This existing
selection order increases the chance of selection for registrations or
petitions submitted on behalf of aliens who have earned a master's or
higher degree from a U.S. institution of higher education.
b. Positive Impacts on Healthcare Workforce
Comments: An individual commenter and a submission from U.S.
doctors indicated that thousands of U.S. citizen medical graduates have
been unemployed because residency positions have been filled by foreign
doctors on H-1B and J-1 visas. A submission from U.S. physicians stated
that it is inappropriate to hire non-citizen physicians at the
taxpayer's expense for federally funded residency training positions
instead of available and skilled U.S. physicians. The commenter said
the proposed rule is a step in the right direction to disincentivize a
trend in the physician residency training programs that have favored
foreign graduates and that have caused the displacement of several
thousand qualified U.S. citizen medical school graduates, which has
been an ongoing problem for the past few decades. The commenter
explained that this displacement cripples the U.S. economy as thousands
of qualified U.S. citizen doctors with federal student loan debt
continue to go ``unmatched.''
Response: DHS agrees with commenters that there are more U.S.
citizens who graduate from medical schools each year than are matched
with residency programs. DHS believes that this final rule may lead to
increased opportunities for entry-level positions for available and
qualified U.S. workers by incentivizing employers seeking cap-subject
H-1B beneficiaries to offer higher wage levels to increase the chance
for selection. This, in turn, may have the effect of freeing up entry-
level cap-subject positions for U.S. workers, including U.S. medical
graduates in the event they are seeking to be employed in cap-subject
positions.\17\ In turn, DHS hopes that increased opportunities for
those U.S. workers will benefit the U.S. economy.
---------------------------------------------------------------------------

\17\ See Rebecca Corey, The coronavirus pandemic is straining
hospitals, but many medical school grads can't get jobs, yahoo!news
(Mar. 27, 2020), https://news.yahoo.com/the-coronavirus-pandemic-is-straining-hospitals-but-many-medical-school-grads-cant-get-jobs-194905748.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAABHJK2wibpo_XDEjXtc-zr_UFFyWbMnPU1-_IO1uj9REueBPmgzPIgNToSGomCcZ5DQkT3lBW17oeLkUKfIZzPnh3TxqqonTKW84557Cgzfle-5_JPnq7_EzMIGQbadnRFvf7VrAscZWdhh0IXCob34vhCnor9QYNsheYgNsFZMS
(`` `You have a lot of students who are unmatched who have been
reporting working at delis, working as baristas. They might be
teaching at a community college or something like that because they
have an MD, but they can't work clinically,'' [Dr. Monya De, an
internist in Los Angeles] said. ``Service industry jobs are really
common. Bartending, waitering or waitressing. There are a lot of
unmatched students driving for Uber and Lyft, I will tell you that.'
'').
---------------------------------------------------------------------------

c. Positive Impacts on the Economy
Comments: An individual commenter in support of this rule stated
that the proposed rule would result in higher salaries for the H-1B
population, which will lead to increased spending for the U.S. economy.
The commenter also wrote that, under the proposed rule, employers would
have access to higher wage and more talented employees increasing
innovation and productivity. Another individual commenter similarly
said the proposed rule would improve innovation because it would favor
retaining more talented and highly paid individuals over less talented
workers. The commenter said wages serve as a proxy for talent, and the
proposed rule helps bring and retain talented individuals to the United
States.
Response: DHS agrees with these commenters and believes that this
rule may result in higher salaries for the H-1B population. This rule
may also increase innovation and productivity,\18\ and help retain and
attract talented aliens to the United States.\19\ DHS believes that
facilitating the admission of more highly-paid and relatively 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.\20\
---------------------------------------------------------------------------

\18\ See William Craig, How Your Productivity is Related To
Career Growth, Forbes (Dec. 31, 2015), https://www.forbes.com/sites/williamcraig/2015/12/31/how-your-productivity-is-related-to-career-growth/?sh=8fc20583363a (stating the ``basic tenet of economic
theory'' that ``The wage a worker earns, measured in units of
output, equals the amount of output the worker can produce'').
\19\ See Drew Calvert, Companies Want to Hire the Best
Employees. Can Changes to the H-1B Visa Program Help?,
KelloggInsight (Feb. 26, 2017), https://insight.kellogg.northwestern.edu/article/how-to-revamp-the-visa-program-for-highly-skilled-workers (noting ``[u]nder the current
system, U.S. companies are often discouraged from even attempting to
hire a foreign worker, despite how uniquely qualified he or she
might be).
\20\ See Muzaffar Chrishti and Stephen Yale-Loehr, The
Immigration Act of 1990: Unfinished Business a Quarter-Century
Later, Migration Policy Institute (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.'').
---------------------------------------------------------------------------

2. General Opposition to the Proposed Rule
Comments generally opposing the proposed rule fell into various

[[Page 1681]]

categories: Immigration policy concerns; negative impacts on new
graduates and entry-level workers, academic institutions, healthcare
workers and facilities, employers, and the economy; and general
concerns about wage-based selection. In addition, some comments fell
outside of the scope of these categories.
a. Immigration Policy Concerns
Comments: A few commenters opposed the rule and expressed
immigration policy concerns without substantive rationale, offering
only that: the proposed rule ``springs purely from nativism and no real
concern for domestic workers''; the proposed rule is inconsistent with
U.S. founding principles as a refuge for those seeking opportunity and
freedom; and imposing a wage-based prioritization system is contrary to
American values and would harm innovation.
Response: DHS disagrees with the comment that the proposal
``springs purely from nativism and no real concern for domestic
workers[.]'' This rule does not reduce the total number of aliens who
will receive cap-subject H-1B status in a given fiscal year. Instead,
this rule will benefit those H-1B beneficiaries who are most highly
paid and/or most highly skilled, relative to their SOC codes and areas
of intended employment. DHS believes this rule will incentivize
employers to offer higher wages and/or higher-skilled positions to H-1B
workers and disincentivize the existing widespread use of the H-1B
program to fill relatively lower-paid or lower-skilled positions, for
which there may be available and qualified U.S. workers. In general,
DHS recognizes that the admission of higher paid and/or higher skilled
workers is likely to benefit the economy and increase the United
States' competitive edge in the global labor market.\21\
---------------------------------------------------------------------------

\21\ See 85 FR 69236, 69239.
---------------------------------------------------------------------------

Further, this rule is intended to potentially increase employment
opportunities for relatively lower-skilled unemployed or underemployed
U.S. workers. Recent college graduates, some of who otherwise would
serve as U.S. workers, have the highest unemployment rate in decades,
and the underemployment rate (which reflects the rate at which workers
are accepting jobs lower than their academic or experience level) is at
an all-time high.\22\ Roughly 53 percent of recent college graduates,
some of who could potentially work in these jobs, are currently
unemployed or underemployed.\23\ While the overall unemployment rates
for college graduates is 3.8 percent, the unemployment rate is higher
for graduates with majors in some fields common to the H-1B program
such as computer science (5.2 percent), mathematics (4.9 percent) and
information systems & management (4.9 percent).\24\ This rule is
intended to potentially benefit the population of unemployed or
underemployed U.S. workers. DHS further disagrees that this rule is
inconsistent with U.S. founding principles as a refuge for those
seeking opportunity and freedom, and that instituting a ranking system
is contrary to American values and would harm innovation. First, the H-
1B program is a temporary, employment-based nonimmigrant program and
not a form of humanitarian relief. Additionally, by maximizing H-1B cap
allocations, so that they more likely would go to the best and
brightest workers, DHS believes that this rule likely would promote
opportunity, innovation, and development.
---------------------------------------------------------------------------

\22\ See Jack Kelly, Recent College Graduates Have the Highest
Unemployment Rate In Decades--Here's Why Universities Are To Blame,
Forbes (Nov. 14, 2019), https://www.forbes.com/sites/jackkelly/2019/11/14/recent-college-graduates-have-the-highest-unemployment-rate-in-decadesheres-why-universities-are-to-blame/?sh=333d181c320b. See
also Federal Reserve Bank of New York, The Labor Market for Recent
College Graduates (Oct. 22, 2020), https://www.newyorkfed.org/research/college-labor-market/college-labor-market_unemployment.html. This data does not differentiate college
graduates based on citizenship, and therefore, DHS cannot determine
the exact percentage of these college graduates that could serve as
US workers.
\23\ See Darko Jacimovic, College Graduates Unemployment Rate in
the US, What to Become (Nov. 25, 2020), https://whattobecome.com/
blog/college-graduates-unemployment-rate/
#:~:text=The%20median%20pay%20for%20those,in%20the%20US%20is%202.1%25
(citing University of Washington data); Irene Sullivan, What Now?,
The Oracle (Nov. 24, 2020), http://www.tntechoracle.com/2020/11/24/7833/. This data does not differentiate college graduates based on
citizenship, and therefore, DHS cannot determine the exact
percentage of these college graduates that could serve as U.S.
workers. However, DHS notes that, in 2019, international students
accounted for 5.5% of the students enrolled in U.S. colleges.
International Student Enrollment Statistics, https://educationdata.org/international-student-enrollment-statistics.
\24\ See Federal Reserve Bank of New York, The Labor Market for
Recent College Graduates (Oct. 22, 2020), https://www.newyorkfed.org/research/college-labor-market/college-labor-market_unemployment.html. This data does not differentiate college
graduates based on citizenship, and therefore, DHS cannot determine
the exact percentage of these college graduates that could serve as
U.S. workers.
---------------------------------------------------------------------------

b. Negative Impacts on New Graduates and Entry-Level Workers, Academic
Institutions, Healthcare Workers and Facilities, Employers, and the
Economy
Multiple commenters said the proposal would have negative impacts
on new graduates and entry-level workers, academic institutions,
healthcare workers and facilities, employers, and the economy.
i. New Graduates and Entry-Level Workers
Comments: Commenters stated, without substantive rationale, that
the proposed rule would negatively impact this population because: New
foreign graduates would be disadvantaged by this rule; the proposed
rule would prevent the future growth of new foreign graduates in the
workplace; the proposed rule would be unfair to immigrants who earn
lower wages; it takes time to be promoted from entry level to a more
senior level; it is ``too difficult for most people to earn that
much''; the proposed rule would dramatically reduce access to the H-1B
visa program for early career professionals, including those who have
completed master's or doctoral degrees at U.S. colleges and
universities; the proposed rule would make it nearly impossible for
entry-level employees with degrees in STEM majors to be eligible for H-
1Bs; non-STEM graduates would have a more difficult time obtaining H-1B
classification under the proposed rule; the rule would unfairly
discriminate against aliens who work in areas related to humanities,
arts, or accounting that do not receive high starting wages; the
proposed rule would greatly decrease the number of H-1B visas that
would be available to educators, translators, and other specialty
positions; doctors who recently graduated and entered medical residency
programs would have no chance of obtaining H-1B classification under
this proposed rule; the rule would negatively impact U.S. biomedical
research, as it would make it difficult for young scientists to study
and conduct health research in the United States; the computer science
industry requires experience to get to a higher level, which is
something new graduates do not typically have; it is harder to earn
higher wages quickly in certain industries, such as mechanical
engineering or medicine; basing the selection on wage levels would be
disadvantageous to people who work for small-sized companies, which
offer lower wages; the proposed rule would send a message that the
United States does not welcome talented foreign students; the rule
would divide international students because everyone would be
``considering the interests of their own''; and pushing entry-level
workers out in the beginning of their careers disobeys a fundamental
economics principle, which states that

[[Page 1682]]

laborers are underpaid in the early stage, but will make more with more
experience and skillsets.
Multiple commenters said the proposal would have negative impacts
on new foreign graduates and entry-level workers, and they provided
substantive rationale in support of those assertions. Specifically,
several commenters, including a form letter campaign, said the rule
would have a ``direct and negative'' impact on college-educated
foreign-born professionals by ``dramatically reducing'' access to the
H-1B visa program for early-career professionals because no aliens who
are paid a level I wage would be selected to submit a petition. A trade
association stated that early-career workers in science, math, and
engineering might be shut out by the proposed rule, but that those are
the workers the U.S. economy needs. Several commenters, including a
university, a professional association, and a joint submission, argued
that the proposed rule would reduce access to the H-1B program,
negatively impacting graduating international students. A university
stated that the proposed rule indirectly would affect F-1 and J-1
students and scholars by removing a pathway to employment after
completion of educational or training experiences in the United States,
which would also negatively impact the economy. The university argued
that almost all F-1 and J-1 visa holders enter at level I wages.
Response: DHS disagrees with the assertions that this rule will
either preclude or essentially preclude H-1B status for recent
graduates, entry-level foreign workers, and young alien professionals.
In general, registrations (or petitions, if applicable) will be
selected according to the wage level that the proffered wage equals or
exceeds. Therefore, if an employer chooses to offer a recent foreign
graduate a wage that equals or exceeds a particular wage level, the
registration will be grouped at that wage level, regardless of the
beneficiary's experience level or the requirements of the position.
Further, as explained in the proposed rule, DHS believes that a purely
random selection process is not optimal, and selection based on the
highest wage level that a proffered wage equals or exceeds is more
consistent with the primary purpose of the statute. DHS acknowledges
that, under this rule, in years of excess demand, relatively lower-paid
or lower-skilled positions will have a reduced chance of selection.
However, DHS believes that selection in this manner is consistent with
the primary purpose of the statute.
DHS further disagrees with the assertion that this rule will
preclude recent foreign medical graduates from obtaining H-1B status.
Importantly, according to DHS data, in FY 2019, more than 93 percent of
H-1B petitions approved for initial employment for physicians,
surgeons, and dentists were cap-exempt and thus not subject to the H-1B
cap selection process.\25\ Thus, it is not accurate to say that recent
foreign medical graduates, who may seek initial employment as
physicians, would have ``no chance'' of obtaining H-1B status under
this rule. DHS acknowledges that, under this rule, in years of excess
demand, in the infrequent situation of recent foreign medical graduates
seeking employment with a cap subject employer, recent foreign medical
graduates may face a reduced chance of selection for cap-subject H-1B
visas. However, because a significant majority of H-1B petitions filed
for recent foreign medical graduates are cap-exempt, and thus not
affected by this rule, this reduction likely will affect a minimal
population, if any, of recent medical graduates. Further, as explained
in the proposed rule, DHS believes that a random selection is not
optimal, and selection based on the highest wage level that a proffered
wage equals or exceeds is more consistent with the primary purpose of
the statute.
---------------------------------------------------------------------------

\25\ U.S. Department of Homeland Security, U.S. Citizenship and
Immigration Services, Office of Policy and Strategy, Policy Research
Division, Wage Level of H-1B Initial Employment Physician Approvals
(Cap-Subject and Cap-Exempt), Fiscal Year 2019, Database Queried:
PETAPP, Report Created: 11/18/2020, Systems: C3 via SASPME, DOL OFLC
Performance DATA H1B for 2019. Note that the tables for ``Wage Level
of H-1B Initial Employment Physicians Approvals'' and ``Wage Level
of H-1B Initial Employment Dentists Approvals'' show approval counts
for the cap year in which the petitions were filed. For these
tables, DHS used the approval counts for FY 2019. Whereas the tables
for ``Wage Level of Select Cap-subject H-1B Physicians Approvals''
and ``Wage Level of Select Cap-subject H-1B Dentists Approvals''
show approval counts for the cap year. For these tables, DHS used
the cap counts for Cap Year 2020. For purposes of this data, DHS
used the DOT code identified on the H-1B petition, namely, DOT codes
070-072 for physicians, surgeons, and dentists. The DOT Code is a
three-digit occupational group for professional, technical, and
managerial occupations and fashion models that can be obtained from
the Dictionary of Occupational Titles. DHS then linked petition data
to LCA data for wage level information.
---------------------------------------------------------------------------

In terms of STEM-specific concerns, DHS disagrees with comments
that this rule will make it ``harder'' or ``nearly impossible'' for
employers to hire entry-level employees with degrees in STEM majors.
These types of potential foreign workers have multiple avenues to
obtain employment in the United States. In general, foreign STEM
graduates can apply for the regular 12-month OPT plus an additional 24-
month extension of their post-completion OPT.\26\ The additional 24-
month extension of OPT is available only to foreign STEM graduates.
During the 3-year cumulative OPT period, such a graduate can gain
significant training and work experience with a U.S. employer and can
demonstrate their value to that employer. If the employer wants to
continue their employment by way of H-1B classification, then the
employer can choose to offer the worker a wage that will maximize their
chance of selection. Additionally, an employer could directly petition
for an employment-based immigrant visa for the alien at any time. There
is no statutory or regulatory requirement that an alien admitted on a
F-1 nonimmigrant visa go through OPT and/or the H-1B program before
being petitioned for an immigrant visa.
---------------------------------------------------------------------------

\26\ See 8 CFR 214.2(f)(10)(ii).
---------------------------------------------------------------------------

Concerning the comments about non-STEM graduates who work in the
humanities, arts, accounting, education, or other areas that generally
may not receive as high of starting wages as other occupations, DHS
does not believe these graduates will be unfairly impacted by this
rule. Because USCIS will be ranking and selecting registrations (or
petitions) generally based on the highest OES prevailing wage level
that the proffered wage equals or exceeds for the relevant SOC code,
this method of ranking takes into account wage variations by
occupation.
ii. Academic Institutions
Comments: A few individual commenters generally stated that the
proposed rule would harm schools and universities. Multiple commenters,
including a university, law firm, and individual commenters, stated
that this rule would negatively impact U.S. universities' ability to
recruit international students, which would affect enrollments, because
U.S. institutions would be less attractive due to the lower possibility
of remaining in the United States to work after completion of their
studies or at the conclusion of their OPT. Similarly, several
commenters said the proposal would make it difficult for universities
to attract top talent that would contribute to the U.S. economy. A
trade association stated that the rule would restrict the ability of
graduating talent to switch from F-1 student status to H-1B status,
particularly when operating in conjunction with the DOL Interim Final
Rule (IFR), Strengthening Wage Protections for the Temporary and
Permanent Employment of Certain

[[Page 1683]]

Aliens in the United States (DOL IFR).\27\ Another commenter stated
that the DOL IFR also is aimed at pricing international students and
others out of the U.S. labor market, while the Student and Exchange
Visitor Program proposed rule \28\ to limit the time students are
allowed to stay in the United States appears designed to deter foreign
students from coming to U.S. universities.
---------------------------------------------------------------------------

\27\ 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 (Oct. 8, 2020).
\28\ U.S. Department of Homeland Security, U.S. Immigration and
Customs Enforcement, Establishing a Fixed Time Period of Admission
and an Extension of Stay Procedure for Nonimmigrant Academic
Students, Exchange Visitors, and Representatives of Foreign
Information Media, 85 FR 60526 (Sept. 25, 2020).
---------------------------------------------------------------------------

A trade association stated, without evidence, that since graduating
international students are unlikely to find employers who are willing
to pay them the same rate as their median-wage workers, this would lead
to U.S.-educated international students taking their knowledge and
skills elsewhere. A university said that, if the proposed rule were
implemented, the United States would lose ``advanced science,
technology, engineering, and mathematics knowledge and talent'' because
international students would choose to pursue their education in
countries with more favorable immigration policies. Another commenter
claimed that international students would study elsewhere if they could
not identify employment opportunities after graduation, which would
``crippl[e] a critical pipeline of future community members, workers,
innovators and entrepreneurs.'' A few commenters stated that, under
this rule, the United States would lose money, talent, and
inventiveness by reducing the employment potential of foreign students
upon graduation from a U.S. educational institution, and the United
States eventually would lose attractiveness and competitiveness because
international students would go elsewhere. Some commenters provided
specific figures to detail the contributions of foreign enrollment at
U.S. universities. Specifically: Education service exports ranked sixth
among service exports in 2019 according to data released by the U.S.
Department of Commerce's Bureau of Economic Analysis; international
students studying in the United States added an estimated $41 billion
to the economy and supported over 458,000 jobs during the 2018 through
2019 academic year; international students make up 5.5 percent of the
total U.S. higher education population and contributed $44.7 billion to
the U.S. economy in 2018; international students have founded
approximately one-quarter of U.S. start-up companies worth $1 billion
or more; the Institution for International Education (IIE) reports that
international students contributed $482.5 million to the State of
Minnesota during 2018 through 2019, supporting 4,497 jobs;
international students and scholars contributed an estimated $304.2
million to the local Ithaca, New York, economy and supported nearly
4,000 jobs during the 2018 through 2019 academic year; and, in one
commenter's experience, foreign students paid more than $10,000 per
year full tuition compared to less than $4,000 for in-state residents,
which provided major subsidies for low income resident students.
Some commenters expressed that this is not the time to be driving
students away, as State and college/university budgets have suffered
greatly as a result of COVID-19. One commenter cited data indicating a
``shocking decline'' in international student enrollment at U.S.
institutions of higher education for the Fall 2020 semester, as well as
a study indicating that the overall economic impact generated by
international students had already started to decline in 2019, down to
$38.7 billion. The commenter said the declining enrollment numbers for
2020 are likely to perpetuate a large economic impact as we continue to
deal with the economic fallout of the COVID-19 pandemic. A professional
association stated that the proposed regulation would have a
``monumentally negative'' effect on U.S. colleges and universities at a
time when those institutions would be reeling from the impact of the
COVID-19 pandemic. The commenter cited statistics indicating that, in
the current school year, new enrollment of international students
dropped 43 percent because of COVID-19. The commenter concluded that
the COVID-19 pandemic, uncertainty about immigration status, and
``anti-immigrant rhetoric[,]'' compounded with this rule that would
further destabilize the career progression of foreign students by
eliminating a legal pathway to temporary employment opportunities in
the United States post-graduation, would create a ``perfect storm''
that would devastate the U.S. college and university system for years
to come.
Several commenters, including a university, advocacy group, and
individual commenters, said restricting the H-1B program for foreign
students, while competitor nations seek to expand their ability to
attract international students, would lead talented students to choose
other countries of study and decrease enrollments in U.S. institutions.
One of these commenters said countries such as Canada and Germany
already are seeing increases in international student enrollment as
U.S. restrictions to international students have led to waning interest
from the future CEOs, inventors, and researchers of the world. An
individual commenter said universities essentially would be training
laborers for other countries.
Some commenters stated that colleges and universities rely, in
particular, on foreign students who pay full tuition to help make up
for declining Federal and State support and to subsidize the cost of
education for U.S. students. An attorney stated that U.S. colleges,
universities, and communities benefit financially from the attendance
of foreign students, typically in F-1 foreign student nonimmigrant
status or J-1 exchange visitor nonimmigrant status. The commenter said
the economic and intellectual advancement of educational institutions
and their communities is enhanced by the presence of these students
from other countries.
A university stated that international students and scholars are
essential to a university's makeup, as students and faculty benefit
from exposure to intercultural differences and the leadership
opportunities that arise from global collaborations. Another commenter
stated that foreign national researchers and professors provide the
needed diversity to help educate students to become the professionals
they need, as they cannot compete globally if they do not have the
ability to adapt culturally.
An individual stated that this rule would make it impossible for
some colleges to fill teaching positions that they cannot fill with
qualified U.S. workers. For example, the commenter stated that North
Dakota colleges are not able to pay higher than the level I wage as
that is the average salary paid to all of its beginning professors and
researchers, and this rule would result in many of North Dakota
colleges having unfilled teaching positions and a decrease in higher
level class offerings, particularly in STEM fields, putting a strain on
education in the state. Multiple commenters offered similar concerns,
but at other levels of academic institutions and owing to their less-
desirable locations.
Response: DHS appreciates the academic benefits, cultural value,
and economic contributions that aliens make to academic institutions
and local

[[Page 1684]]

communities throughout the United States. DHS does not believe that
this rule will negatively impact the ability of U.S. colleges and
universities to recruit international students. Nor will the rule
impact the ability of international students to study in the United
States, which is the basis of their admission to the United States in
that status. While increased employment opportunities, both in the
United States and abroad, may be a factor in deciding whether to study
in the United States, the reputation of the academic institutions
themselves is also an important factor for the great majority of those
choosing to study in the United States.\29\ Further, DHS notes that
international students will continue to have significant employment
opportunities in the United States under this rule. First, this rule
has no impact on OPT, which allows for 12 months of employment for most
aliens admitted in F-1 student status, plus an additional 24-month
extension of post-completion OPT available only to STEM graduates.\30\
In addition, with the current random selection process, even the most
talented foreign student may have less than a 50 percent chance of
selection. This rule will increase the chance of employment at the
higher wage levels and thus may facilitate the selection of the best
and brightest students for cap-subject H-1B status. To the extent that
that this change does negatively affect the potential of some colleges
and universities to recruit international students, DHS believes that
any such harm will be outweighed by the benefits that this rule will
provide for the economy overall.\31\
---------------------------------------------------------------------------

\29\ See Daniel Obst and Joanne Forster, Perceptions of European
Higher Education in Third Countries, Outcome of a Study by the
Academic Cooperation Association, Country Report: USA, Institute of
International Education, https://www.iie.org/Research-and-Insights/Publications/International-Students-in-the-United-States.
\30\ See 8 CFR 214.2(f)(10)(ii).
\31\ See Muzaffar Chrishti and Stephen Yale-Loehr, The
Immigration Act of 1990: Unfinished Business a Quarter-Century
Later, Migration Policy Institute (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.'').
---------------------------------------------------------------------------

Facilitating the admission of higher-skilled foreign workers, as
indicated by their earning of wages that equal or exceed higher
prevailing wage levels, 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 discussed in the NPRM.
Further, DHS disagrees that this rule will make it ``impossible''
for academic institutions to fill teaching and research positions.
Congress already exempted from the annual H-1B cap aliens who are
employed or have received offers of employment at institutions of
higher education, nonprofit entities related to or affiliated with
institutions of higher education, nonprofit research organizations or
government research organizations.\32\ Therefore, many petitions for
academic institutions will not be affected by this rule.\33\ In FY 2020
alone, USCIS approved over 41,000 petitions for petitioners that
qualified under one of these cap exemptions.\34\ These cap exemptions
mitigate these commenters' concerns or misunderstanding of the H-1B
program. Comments about the DOL IFR and the Student and Exchange
Visitor Program proposed rule are out of scope, so DHS will not address
them.
---------------------------------------------------------------------------

\32\ See INA section 214(g)(5), 8 U.S.C. 1184(g)(5).
\33\ See INA section 214(g)(5), 8 U.S.C. 1184(g)(5).
\34\ U.S. Department of Homeland Security, U.S. Citizenship and
Immigration Services, Office of Policy and Strategy, Policy Research
Division (PRD), Cap-Exempt H-1B Approvals in Certain Categories,
Dec. 9, 2020. This data shows the following breakdown for cap-exempt
H-1B approvals: 20,097 for institution of higher education; 11,847
for affiliated or related non-profit entities; 5,131 for non-profit
research organizations or government research organization; and
3,998 for beneficiaries employed at a qualifying cap exempt entity.
---------------------------------------------------------------------------

iii. Healthcare Workforce and Facilities
(a) Impact on Healthcare Workers
Comments: Some commenters expressed concern that the rule could
prevent qualified and highly skilled entry-level health care workers
and recent foreign-born graduates from medical school from obtaining an
H-1B visa. A professional association said this proposal would reduce
the overall number of international medical graduates (IMGs) practicing
in the United States, also stating that pricing H-1B visa holders out
of the physician employment market would only exacerbate ongoing
physician shortages and worsen barriers to care for patients. Another
professional association cited data forecasting an increasing physician
shortage and said H-1B physicians fulfill a ``vital and irreplaceable
role.'' The commenter said stringent performance and pay thresholds
already exist that must be met to even be considered for an H-1B visa
and placing additional wage barriers on the cap would garner no benefit
and, instead, would harm U.S. patients and health care systems. A
university and an individual commenter stated that physicians enter the
field with a level I wage, despite high levels of education and
training, and argued that, under the proposal, it would be ``virtually
impossible'' for a new physician to obtain H-1B unless they are
employed by a cap-exempt institution. The university and the commenter
cited a 2016 Journal of the American Medical Association (JAMA) study,
which found that 29 percent of physicians were born outside of the
United States, helping to fill the physician shortage, and that this
rule ignores problems like this. Another professional association
stated that it is an incorrect assumption that skill level is
definitively associated with wage amount, as there are many situations
where a highly skilled H-1B physician may choose to accept a lower wage
(e.g., expand their skillset, altruistic motives, the potential to gain
lawful permanent residency in a shorter time span). Therefore, the
proposed rule would create a false presupposition that would stop
highly qualified physicians from practicing in less affluent
institutions. Thus, the proposed rule would create a situation where
much needed physician positions remain vacant, only wealthy medical
conglomerates are able to afford to sponsor H-1B physicians, or wages
become so inflated that far fewer H-1B physicians can be hired. A few
individuals noted that a number of rural and/or underserved communities
rely on foreign trained dentists, and that this rule would make it
difficult to recruit dentist in rural and/or underserved areas.
A couple of professional associations said the rule potentially
could eliminate the H-1B visa option for recent graduates, including
IMGs and postdoctoral researchers, with serious consequences for the
U.S. healthcare workforce. One of these commenters said IMGs compose
nearly one-fourth of the U.S. physician workforce and one-fourth of the
country's resident physicians in training. The commenter stated that,
due to this rule, these highly qualified physicians may choose to go to
other countries rather than risk being unable to complete training
requirements, build up a medical practice, or perform clinical duties.
A professional association wrote specifically about the impacts of
the rule on the availability of primary care physicians. The commenter
cited data indicating that the United States is facing a primary care
physician shortage and stated that IMGs play a vital role in filling
this gap. The commenter went on to say that family medicine and other
primary care physicians typically have lower annual salaries than
specialty

[[Page 1685]]

physicians, and, since this proposal favors H-1B petitioners with
higher annual salaries, it also may discriminate against family
physicians unfairly.
Response: DHS disagrees with the assertion that this rule will
prevent recent medical or dental graduates from obtaining H-1B status,
as Congress already exempted from the H-1B cap any alien who is
employed or has received an offer of employment at an institution of
higher education, a related or affiliated non-profit entity, or a non-
profit research organization or a governmental research
organization.\35\ As stated above, in FY 2019, more than 93 percent of
H-1B petitions approved for initial employment for physicians,
surgeons, and dentists were cap-exempt and, thus, not subject to the H-
1B cap selection process. Because a significant majority are not
affected by this rule, this reduction likely will affect a minimal
population, if any, of recent foreign medical graduates.
---------------------------------------------------------------------------

\35\ See INA section 214(g)(5), 8 U.S.C. 1184(g)(5); 8 CFR
214.2(h)(8)(iii)(F).
---------------------------------------------------------------------------

In addition, Congress has established programs meant to encourage
certain recent foreign medical graduates to serve in the United States
as H-1B nonimmigrants. These programs are exempt from the annual caps
and unaffected by this rule. Certain J-1 exchange visitors are subject
to a 2-year foreign residence requirement under INA section 212(e), 8
U.S.C. 1182(e), which requires them to return to their country of
nationality or country of last residence for at least two years in the
aggregate prior to being eligible to apply for an immigrant visa;
adjustment of status; or a nonimmigrant visa, such as an H-1B visa
(with limited exceptions).\36\ However, INA section 214(l), 8 U.S.C.
1184(l), contains provisions authorizing waivers of the 2-year foreign
residence requirement for certain aliens, including foreign medical
graduates who agree to work full-time (at least 40 hours per week) in
H-1B classification for not less than three years in a shortage area
designated by the U.S. Department of Health and Human Services (HHS)
with a request from an interested federal government agency or state
agency of public health or its equivalent, or with the U.S. Department
of Veterans Affairs (VA).\37\ The petition requesting a change to H-1B
nonimmigrant status for these physicians is not subject to the
numerical limitations contained in INA section 214(g)(1)(A), 8 U.S.C.
1184(g)(1)(A).\38\ While participation in the Conrad State 30 program
(relating to waivers based on requests from a state agency of public
health or its equivalent for service in an HHS-designated shortage
area) is limited to 30 participants per eligible jurisdiction annually,
the other programs have no limits on the number of participants.\39\
---------------------------------------------------------------------------

\36\ See INA section 212(e), 8 U.S.C. 1182(e); INA section 248,
8 U.S.C. 1258.
\37\ See INA section 214(l), 8 U.S.C. 1184(l). See also 8 CFR
212.7(c)(9).
\38\ See INA section 214(l)(2)(A), 8 U.S.C. 1184(l)(2)(A).
\39\ See INA section 214(l)(1)(B), 8 U.S.C. 1184(l)(1)(B).
---------------------------------------------------------------------------

Further, DHS disagrees with the comment that this rule may unfairly
discriminate against family physicians and other primary care
physicians who typically have lower annual salaries than specialty
physicians. In general, family physicians or other primary care
physicians have different SOC codes than specialty physicians. As DOL
prevailing wage level calculations generally differ by SOC codes, when
wage data is available, the corresponding wage level would necessarily
account for the different occupational classification for primary care
physicians as opposed to other types of physicians. When such wage
level data is unavailable, wage level ranking will be based on the
skill, education, and experience requirements for the position, again
taking into account the particulars of the relevant occupational
classification, such that registrations or petitions for primary care
physicians will be ranked in comparison to the normal requirements for
primary care physicians and not in comparison to other types of
physicians. As such, DHS does not believe that this rule will
disadvantage registrations or petitions for primary care physicians or
any other subset of physicians.
(b) Rural and/or Underserved Communities
Comments: Multiple commenters, including several professional
associations, said the rule would negatively impact the U.S. health
care system in areas that are rural and/or underserved where IMG and
non-citizen physicians are particularly essential. A professional
association cited data indicating that IMGs are more likely to become
primary care physicians and practice in rural and other underserved
areas where physician shortages are the direst and that rely heavily on
family physicians for ambulatory and emergency care. A couple of
professional associations similarly said IMGs typically serve in rural
and/or medically underserved communities, providing care to many of our
country's most at-risk citizens. One of these commenters stated that,
although 20 percent of the country's population resides in rural areas,
fewer than 10 percent of U.S. physicians actually practice in those
communities, resulting in over 23 million rural Americans living in
federally designated primary medical Health Professional Shortage Areas
(HPSA). This commenter also stated that recently graduated H-1B
physicians participating in pipeline programs in the beginning of their
careers, such as Conrad State 30, fall within the first and second
tiers of the prevailing wage determination. Therefore, the proposed
rule would create a system that removes physicians who are willing and
ready to practice in medically underserved areas and cuts off those
patients who are most in need from receiving physician care.
A professional association stated that Federally Qualified
Healthcare Centers (FQHC), institutions that serve high-risk, medically
underserved populations in HPSAs, do not qualify for exemption from the
H-1B visa cap. To fill the physician gap, FQHCs utilize H-1B physicians
to care for patients in these health care underserved areas. The
commenter stated that, if the proposed rule is enacted, these FQHCs
would be unable to obtain early-career H-1B physicians and are unlikely
to be able to compete with larger, more affluent organizations to offer
a higher proffered wage to increase their chances of obtaining H-1B
physician candidates and reducing the physician shortages identified by
HPSA data.
A company stated that rural hospitals and other health care
facilities rely heavily on healthcare-staffing companies to fill their
staffing needs, but the rates staffing companies are able to charge
rural facilities usually are much lower than the rates they are able to
charge facilities in affluent metropolitan areas. Thus, the rule would
cause staffing companies to place their professionals where the
staffing companies can charge the highest rates, so that staffing
companies can maintain sufficient profitability and ensure that their
workers are able to obtain H-1B visas. The commenter concluded that the
rule would decrease the supply of healthcare labor to rural and other
underserved communities, where it is needed most.
Response: DHS acknowledges the important role that early career and
entry level foreign physicians may play in providing health care in
rural and/or underserved communities. As explained in response to the
previous comments, Congress has established programs meant to direct
foreign medical graduates to those communities.

[[Page 1686]]

Also as noted above, physicians whose nonimmigrant status is
changed to H-1B through their participation in any of the three waiver
programs in INA section 214(l), 8 U.S.C. 1184(l), are not subject to
the annual H-1B caps. The Conrad State 30 program (relating to waivers
based on requests from a state agency of public health or its
equivalent for service in an HHS-designated shortage area) is limited
to 30 participants per eligible jurisdiction annually.\40\ However,
there are no annual limits on the number of aliens who can obtain a
waiver through service in an HHS-designated shortage area based on the
request of a federal interested government agency. Since these programs
are not subject to the annual H-1B caps, they will not be affected by
this rule and the programs will continue to provide a pipeline for
these physicians to serve in HHS-designated shortage areas.
---------------------------------------------------------------------------

\40\ See INA section 214(l)(1)(B), 8 U.S.C. 1184(l)(1)(B).
---------------------------------------------------------------------------

Congress has established a similar statute in the immigrant
context, which also channels physicians to serve in HHS-designated
shortage areas, commonly known as the Physician National Interest
Waiver Program.\41\ That program has no limits on the number of
physicians who can participate in a given fiscal year, though there are
numerical limitations on the number of employment-based immigrant visas
that can be allocated annually. This program is unaffected by this rule
and will continue to provide a pipeline for an unlimited number of
physicians to serve in HHS-designated shortage areas.
---------------------------------------------------------------------------

\41\ See INA section 203(b)(2)(B)(ii)(I), 8 U.S.C.
1153(b)(2)(B)(ii).
---------------------------------------------------------------------------

DHS agrees with the commenters who stated that medical institutions
in rural and/or underserved areas may not be institutions of higher
education, related or affiliated non-profit entities, or non-profit
research organizations or governmental research organizations. As a
result, aliens who are employed by or who have received an offer of
employment from such medical institutions may not be exempt from the
annual H-1B numerical limitations under INA section 214(g)(5), 8 U.S.C.
1184(g)(5). However, some of those medical institutions do meet the
requirements to be cap-exempt, and their employees will not be subject
to the numerical limitations.\42\
---------------------------------------------------------------------------

\42\ U.S. Department of Homeland Security, U.S. Citizenship and
Immigration Services, Office of Policy and Strategy, Policy Research
Division, Wage Level of H-1B Initial Employment Physician Approvals
(Cap-Subject and Cap-Exempt), Fiscal Year 2019, Database Queried:
PETAPP, Report Created: 11/18/2020, Systems: C3 via SASPME, DOL OFLC
Performance DATA H1B for 2019 (showing that, in FY 2019, more than
93 percent of H-1B petitions approved for initial employment for
physicians, surgeons, and dentists were cap-exempt and not subject
to the H-1B cap selection process).
---------------------------------------------------------------------------

DHS acknowledges that some alien physicians who currently serve in
rural and/or underserved areas as H-1B nonimmigrants are not
participating in the waiver programs of INA section 214(l), 8 U.S.C.
1184(l), and they are not working for cap-exempt employers. These
physicians may be in positions categorized as prevailing wage levels I
or II, depending on their individual circumstances. However, such
physicians may avail themselves of alternative pathways to serve in
these areas such as the Physician National Interest Waiver Program and
not be subject to the annual H-1B numerical limitations.
Further, as with all other cap-subject H-1B visas, DHS will rank
and select registrations for these positions generally according to the
highest OES prevailing wage level that the proffered wage equals or
exceeds, which necessarily takes into account the area of intended
employment when such wage level data is available. Where there is no
current OES prevailing wage information for the proffered position,
which DHS recognizes is the case for some physician positions based on
limitations in OES data, the registrant would follow DOL guidance on
prevailing wage determinations to determine which OES wage level to
select on the registration. The determination of the appropriate wage
level in those instances would be based on the skill, education, and
experience requirements of the position, and generally does not take
into consideration the area of intended employment. Therefore, DHS does
not believe that this rule necessarily will disadvantage rural and/or
underserved communities relative to registrations or petitions based on
offers of employment in other areas.
(c) COVID-19
Comments: Several commenters stated that the rule would have
particularly concerning impacts on the U.S. healthcare workforce as the
United States grapples with the COVID-19 pandemic. A professional
association said these visa cap requirements come at a most inopportune
time, as the United States sustains some of the highest rates of COVID-
19 cases worldwide and depends on early career physicians to serve on
the frontlines. The commenter said H-1B physicians have played a large
role in caring for those who are seriously ill from COVID-19, including
those facing health complications following recovery from this disease.
Similarly, another professional association cited data indicating that,
currently, the States where H-1B physicians are providing care are also
those with some of the highest COVID-19 case counts.
Response: DHS certainly appreciates the significant contributions
of all healthcare professionals, especially during the current COVID-19
pandemic, but DHS continues to note that many foreign medical
professionals are eligible for cap-exempt H-1B status and are not
impacted by this rule. Additionally, DHS believes that this rule will
provide benefits to the greater U.S. workforce that outweigh any
potential negative impacts on the relatively small subset of H-1B cap-
subject healthcare workers.
For example, DHS received submissions from unemployed and
underemployed U.S. citizen medical graduates who attested to the
decades-long problem of displacement of several thousands of qualified
U.S. citizen IMGs and graduates of U.S. medical schools for federally
funded residency training positions. This rule may benefit these
unemployed and underemployed U.S. citizen medical graduates by
potentially increasing employment opportunities. Further, DHS notes
that this final rule is not a temporary rule that is limited in
duration to the COVID-19 pandemic; moreover, this final rule will not
have immediate impact on H-1B employment as it will first be applied to
the FY 2022 registration and selection process, the beneficiaries of
which will not be able to begin employment in H-1B classification until
October 1, 2021.
(d) Healthcare Facilities
Comments: A professional association stated that larger, wealthier
companies are much more likely to be able to pay augmented salaries to
increase their chances of selection for filing of H-1B cap-subject
petitions. In comparison, smaller, less affluent medical practices
would not be able to compete with these large conglomerates, despite
having a much greater need for physicians. As such, larger hospital
systems would be able to buy H-1B visas for their physicians, leaving
mid to small size practices even more understaffed.
A trade association stated that its members in the healthcare
industry are very concerned about the impact this rule would have on
their ability to continue hiring H-1B foreign medical graduates, who
are critical for healthcare providers to meet the needs of their
patients. The commenter said

[[Page 1687]]

the disruptions caused by the rule would be profound on these
employers, as they continue to struggle in confronting the ongoing
COVID-19 pandemic.
A law firm stated that the salary market in healthcare is not like
the salary market in other fields and explained that, because so much
of hospitals' reimbursement processes are governed by Medicare and a
tiny handful of large insurance companies, it would be impossible for
U.S. healthcare facilities to negotiate reimbursement rates in a manner
to significantly raise salaries. The commenter said that this rule is a
``blunt object'' that would lead to additional Silicon Valley,
California, H-1B visas in place of visas that currently help the
healthcare of U.S. citizens, and rural facilities would suffer the
brunt of this policy.
Response: DHS appreciates the significant contributions of all
healthcare professionals, especially during the current COVID-19
pandemic, but believes that this rule will provide benefits to the
greater U.S. workforce. DHS does not believe that the changes in this
rule will have a disproportionately negative impact on small- to mid-
sized medical practices as compared to larger hospital systems. It is
not necessarily the case that larger hospital systems are more willing
or able to provide higher salaries to their employees.\43\ DHS also
does not believe that the changes in this rule will have a
disproportionately negative impact on rural facilities, as it is not
necessarily the case that rural facilities are unwilling or unable to
provide relatively higher salaries compared to facilities in other
areas.\44\ With respect to the ability to offer increased wages
generally, DHS acknowledges that employers of healthcare professionals,
like employers in all industries, must consider a variety of factors in
determining employee salaries. However, this rule does not require
employers to pay a higher wage, and, as stated in the NPRM and above,
employers that might have petitioned for a cap-subject H-1B worker to
fill relatively lower-paid, lower-skilled positions may be incentivized
to hire available and qualified U.S. workers for those positions. Also
as noted above, DHS believes that selecting by wage level in such years
is more consistent with the dominant legislative purpose of the H-1B
program, which is to help U.S. employers fill labor shortages in
positions requiring highly skilled or highly educated workers.
---------------------------------------------------------------------------

\43\ See Wayne Lipton, Is a Bigger Medical Practice Always
Better?, Physicians Practice (June 21, 2012), https://www.physicianspractice.com/view/bigger-medical-practice-always-better.
\44\ See Bonnie Darves, Demystifying Urban Versus Rural
Physician Compensation, The New England Journal of Medicine Career
Center (Mar. 4, 2019), https://www.nejmcareercenter.org/article/demystifying-urban-versus-rural-physician-compensation/.
---------------------------------------------------------------------------

iv. Employers
Comments: Multiple commenters said the proposal would have the
following negative impacts on employers without providing substantive
rationale: Many industries and companies benefit from entry-level
employees who bring energy, innovation, and diversity; the proposal
would reduce the number of H-1B workers ``that employers can access'';
the rule may incentivize employers to favor domestic applicants in the
short term, but businesses may not be able to hire the people best
suited for the job in the long run; companies would suffer because
foreign employees will not waste their time with companies that they do
not think will be able to sponsor them for a visa; to be competitive in
the H-1B registration process, companies would have to pay double the
costs for new hires; this rule would be beneficial for a few industries
and create biases for other industries; the rule would jeopardize the
employers' ability to meet business objectives, develop and provide new
products to market, and stay competitive in a global market; this
proposal would create ``vicious competition cycles'' among H-1B
candidates and their employers; and, if this proposal were implemented,
there would be a shortage in the job market for junior level employees.
Response: For the reasons explained above, DHS disagrees with the
assertions that this rule will preclude or essentially preclude H-1B
status for recent graduates and entry-level workers. The rule is not
intended to, and DHS does not expect that it will, reduce the number of
cap-subject H-1B workers. As explained in the NPRM and above, DHS
believes that the rule will maximize H-1B cap allocations so that they
more likely will go to the best and brightest workers, consistent with
Congressional intent. DHS believes that this rule will facilitate the
admission of higher-skilled workers or those for whom employers proffer
wages commensurate with higher prevailing wage levels, which will
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. Finally, as stated in
the NPRM and above, employers that might have petitioned for a cap-
subject H-1B worker to fill relatively lower-paid, lower-skilled
positions, may be incentivized to hire available and qualified U.S.
workers for those positions.
(a) Impacts on Companies
Comments: A couple of professional associations stated that the
proposal would have an adverse impact on petitioners in terms of
employment, productivity loss, search and hire costs, lost profits
resulting from labor turnover, and more. One of these professional
associations added that the use of wage data for selection of H-1B
registrants would unfairly discriminate against and burden law-abiding
employers. The commenter also argued that the current H-1B registration
has been beneficial to employers because it has a much earlier
indication of the lottery's outcome, and that the proposal would
``diminish predictability'' for companies.
A trade association said the rule would place an excessive cost
burden on petitioners because they would be required to offer
dramatically increased wages to prospective H-1B employees, especially
in conjunction with the new increased wage levels implemented through
the DOL IFR.\45\ The commenter stated that employers would be
``forced'' to offer prevailing wages above the 95th percentile to equal
or exceed level IV prevailing wages. Another trade association argued
that the proposal, in conjunction with the DOL IFR, may result in pay
that exceeds that of comparable U.S. workers, which may result in
personnel strains and new costs for U.S. companies. Several commenters,
including a professional association, company, and research
organization, stated that employers would be ``forced'' to either
forego hiring foreign professionals or hire foreign workers at a salary
level higher than U.S. workers, which would cause problems for the
employers such as internal equity issues. An individual commenter
stated that the rule would create public relations problems for
companies, arguing that ``forcing'' companies to pay foreign workers
more than the market currently dictates would disenfranchise U.S.
workers in similar positions.
---------------------------------------------------------------------------

\45\ Strengthening Wage Protections for the Temporary and
Permanent Employment of Certain Aliens in the United States, 85 FR
63872.
---------------------------------------------------------------------------

Response: DHS disagrees that this rule will unfairly discriminate
against and burden law-abiding employers. While petitioners may
initially spend more on search and hire costs to obtain foreign workers
who command higher wages or have higher skill levels, DHS believes

[[Page 1688]]

these petitioners will see an increase in productivity as a result of
hiring such higher-skilled workers. Regarding the benefits of the
registration process, this rule will continue to use the same
registration process (with the added factor of ranking and selection by
wage level), which will continue to provide predictability for
companies in the H-1B cap selection process. In fact, this rule may
increase predictability for companies offering relatively higher wages
in order to increase their chances of selection.
As for the concern about offering prevailing wages above the 95th
percentile, DHS notes that the DOL IFR was set aside and no longer is
being implemented as of the publication of this final rule.\46\ As for
the concerns about ``internal equity issues'' or ``public relations
problems'' caused by paying foreign workers more than the U.S. workers
in similar positions, nothing in this rule requires an employer to
offer an H-1B worker a higher wage than a U.S. citizen worker for the
same position.
---------------------------------------------------------------------------

\46\ On December 1, 2020, the U.S. District Court for the
Northern District of California issued an order in Chamber of
Commerce, et al. v. DHS, et al., No. 20-cv-7331, setting aside the
DOL IFR, 85 FR 63872. Similarly, on December 3, 2020, the U.S.
District Court for the District of New Jersey issued a preliminary
injunction in ITServe Alliance, Inc., et al. v. Scalia, et al., No.
20-cv-14604, applying to the plaintiffs in that case. Also on
December 3, 2020, DOL announced that it will no longer implement the
IFR, consistent with the above referenced court orders.
---------------------------------------------------------------------------

(b) Impacts on Available Workforce
Comments: Several commenters, including a professional association
and a trade association, argued that the proposal would harm the
ability of U.S. companies to hire aliens for entry-level jobs. A
company asserted that the NPRM would diminish U.S. companies' access to
the full range of talent, across all career stages, necessary to build
a complete workforce. An advocacy group similarly said that the rule
does a disservice to companies struggling to fill talent gaps across
multiple levels of employment. An individual commenter said the rule
would end the H-1B program ``for good'' for many professions that are
in short supply. An individual commenter argued that the proposal makes
the H-1B process more challenging for both small and large employers
who have relatively small numbers of H-1B workers compared to the
overall workforce, and makes it ``almost impossible'' to fill certain
positions without being able to supplement the U.S. workforce. A trade
association said that the proposal is an example of ``government heavy-
handedness'' which presents U.S. companies with prospective
difficulties in meeting workforce needs.
An anonymous commenter said the rule would severely interrupt many
U.S. companies' operations, as it would disqualify many foreign workers
fulfilling specialty jobs and make it difficult for companies to find
reasonable substitutes for the labor. The commenter stated that DHS'
statement that these disadvantages would be offset by increased
productivity and availability of higher wage H-1B petitioners is
``optimistic'' and lacks support.
An individual commenter said their company would be impacted
because entry-level STEM candidates have played critical roles
throughout the organization, and the proposal would mean they would be
unable to draw from the world's leading talent. In addition, some of
their H-1B employees gain OPT through the company, and it would be
detrimental to their business to be forced to terminate these employees
after they have received training.
Response: DHS acknowledges that, under this final rule, an employer
offering a level I wage under the regular cap, and an employer offering
a level I or II wage under the advanced degree exemption, may have a
reduced chance of selection than under the current random selection
process. However, DHS believes that selecting based on wage level 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 prevailing wage levels or proffering wages equaling or
exceeding the highest prevailing wage levels relative to their SOC code
and area of intended employment, either of which correlate with higher
skill levels.\47\ Prospective employers who seek to ``draw from the
world's leading talent'' may maximize their likelihood of selection by
offering wages commensurate with such a high skill level rather than
offering relatively low wages. Further, DHS disagrees with suggestions
that this rule would end the H-1B program's utility for certain
companies or disqualify many foreign workers fulfilling specialty
occupation jobs. This rule does not affect current H-1B employees
(unless such workers become subject to the H-1B numerical allocations
in the limited circumstance that their cap-exempt employment
terminates) nor does the rule change the eligibility criteria to
qualify for an H-1B visa.
---------------------------------------------------------------------------

\47\ See 85 FR 69236, 69239.
---------------------------------------------------------------------------

(c) Impacts on Specific Types of Employers
Comments: A professional association said that the proposal would
negatively impact the information technology (IT) industry, which
already is facing a scarcity of high-skilled candidates. The commenter
cited a study, which found that there were over 650,000 unfilled
computer-related jobs posted between September and October 2020, which
often are filled with employees from abroad with degrees. The proposed
rule would limit the ability of IT companies to hire foreign workers
and would stifle U.S. innovation, harm economic growth and, therefore,
impact job opportunities for U.S. workers. An individual commenter
discussed how the proposed rule actually would achieve the opposite of
its desired outcome, which would be increased wages for H-1B workers,
particularly in the IT sector. The commenter explained that companies
are realizing that employees can accomplish their jobs at home during
the COVID-19 crisis. If this is the case, employers could avoid the
costs associated with foreign worker sponsorship and, instead, employ
H-1B workers at lower wages while they remain in their respective
countries. A research institute explained that the proposed rule is
targeting the IT industry to prevent employers in that industry from
obtaining H-1B visas or making it too expensive for them to employ H-1B
visa holders.
An individual argued that a financial technology company would be
negatively impacted, giving the example of a Database Administrator
position, which the commenter said does not require a level III or IV
prevailing wage, but often is difficult to fill with U.S. workers.
A couple of individual commenters, an advocacy group, and a
professional association said that companies need workers through the
H-1B program because there are not enough qualified U.S. workers in
STEM fields. Another individual commenter cited a STEM worker shortage,
arguing that the United States should be ``rolling out the welcome
mat'' for high-skilled talent. A professional association and an
individual commenter also addressed the claimed current STEM shortage
and explained how the proposed rule would further hurt employers'
ability to hire college-educated foreign workers. A trade association
stated that the proposed rule would make the H-1B visa program unusable
for many engineering firms. The association,

[[Page 1689]]

citing data from the National Science Foundation, asserted that the
engineering workforce is growing slower than the demand for engineers,
and is growing older. Therefore, the engineering industry needs to be
able to access labor from around the world to fill key positions. A
company and a professional association said that U.S. graduates with
advanced degrees in STEM, such as computer science, IT, or industrial
engineering, are predominately foreign students and that the NPRM would
negatively harm companies seeking these employees. A medical device
company that employs research and development (R&D) engineers stated
that the rule would result in poorer talent to develop medical
technologies or higher wages to international talent, which would
reduce overall R&D resources and impact their ability to deliver the
best healthcare technologies.
A trade association said that restricting H-1B visas to senior
professionals with higher wages would negatively impact manufacturers
and their ability to hire aliens with STEM education and training to
fill roles as researchers, scientists, engineers, and technicians. The
commenter explained that the NPRM may deter aliens from attending
college in the United States and restrict the talent pipeline. Further,
the commenter stated that manufacturers rely on a skilled and
innovative workforce that allows them to remain competitive, and that
this NPRM will provide other countries a competitive advantage. This is
coupled with the claim that the workforce challenge is expected to get
worse in the future, with studies showing that nearly half of the 4.6
million manufacturing jobs could go unfilled, according to the
commenter.
A university and an individual stated that the proposed system
would encourage employers to artificially inflate their job
requirements to increase the chance of acceptance through the lottery,
creating an unfair advantage for larger employers. An individual
commenter similarly said the rule disproportionately favors companies
willing to pay the most money to foreign workers. An individual
commenter said the rule would pit companies against each other to
provide the highest salary, which would give larger tech companies
control over the H-1B selection lottery. A law firm stated that start-
up companies would be negatively impacted because they do not have the
capital to be able to offer ``obscenely high salaries'' to be
competitive in this process.
A few commenters noted that the increased difficulty in obtaining
H-1B workers could have a negative effect on R&D or innovation at their
companies. For example, a professional association said that companies
in the automotive sector that have committed hundreds of millions of
dollars to developing fuel-efficient engines no longer would be able to
hire and retain recent graduates who have the academic background
necessary to drive innovation through the H-1B program. Another
professional association wrote that the proposed rule would negatively
impact companies developing products that strengthen national security,
as it would diminish the ability of U.S. employers to hire workers for
the development of technology including artificial intelligence,
quantum information science, robotics, and fifth-generation
communications technology.
Response: DHS does not believe this rule will have a disparate
negative impact on IT companies, financial technology companies,
engineering firms, manufacturers, or companies in any particular
industry. Additionally, DHS does not believe this rule will
disadvantage companies developing products that strengthen national
security or companies driving innovation in the automotive sector.
Instead, DHS believes this rule will incentivize employers to proffer
higher wages, or to petition for positions requiring higher skills and
higher-skilled aliens that are commensurate with higher wage levels,
thereby attracting the best and the brightest employees and promoting
innovation across all industries.
Moreover, DHS disagrees with the assertion that this rule will make
the H-1B visa program ``unusable'' for engineering firms. While DHS
acknowledges that some data may show that the engineering workforce is
growing slower than the demand for engineers, DHS disagrees with the
commenter that this means engineering firms must hire entry-level
foreign workers to fill this gap. In fact, DHS data shows that, for
``Architecture and Engineering Occupations,'' there has been a
significant number of petitions filed for level III and IV positions.
Specifically, for FYs 2018 and 2019, employers filed 11,519 and 7,045
petitions (total of 18,564) for level III and IV positions,
respectively, compared to 15,625 and 25,147 petitions (total of 40,772)
for level I and II positions, respectively.\48\ While registrations
ranked according to prevailing wage level I and below likely will face
reduced chances of selection, those ranked according to level II and
greater stand increased chances of selection, as discussed in the NPRM.
---------------------------------------------------------------------------

\48\ 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 SOC CODE Occupation by Wage Level As of August 28, 2020, Database
Queried: Aug. 28, 2020, Report Created: Aug. 17, 2020, Systems: C3
via SASPME, DOL OFLC Performance DATA H1B for 2018, 2019. This data
does not further break down how many of these petitions were for
``Architecture'' occupations versus ``Engineering'' occupations.
---------------------------------------------------------------------------

DHS also disagrees that the rule will disadvantage the IT industry
or stifle innovation. Conversely, DHS believes this rule may increase
innovation and productivity.\49\ Notably, other commenters claimed that
this rule would favor the IT industry (which DHS disputes as well).
Again, and as made apparent through these conflicting comments, DHS
does not believe this rule will have a disparate negative or positive
impact on the IT industry or companies in any particular industry.
---------------------------------------------------------------------------

\49\ See Michael R. Strain, The link between wages and
productivity is strong, American Enterprise Institute (AEI) and
Institute for the Study of Labor (IZA) (Feb. 4, 2019), https://www.aei.org/research-products/report/the-link-between-wages-and-productivity-is-strong/.
---------------------------------------------------------------------------

Comment: An individual commenter stated that the rule would
negatively impact non-profit organizations and public schools because
they would need to compete with and pay the prevailing wages offered by
for-profit businesses. Another individual commenter said that non-
profits do not operate to maximize profit, and that their budgets
cannot accommodate level III or IV prevailing wages. The commenter also
argued that there is a large need for immigrant social workers who are
able to better connect with and relate to the large population of
noncitizens in the United States. Another commenter claimed that, if
the H-1B proposed changes go into effect, many school districts
throughout the United States would have a difficult time finding
teachers.
Response: DHS does not believe that this rule will have a
significant negative impact on non-profit organizations or public
schools. Congress already exempted from the H-1B cap any alien who is
employed or has received an offer of employment at an institution of
higher education, a related or affiliated non-profit entity, or a non-
profit research organization or a governmental research
organization.\50\ Thus, many petitions for non-profits will not be
affected by this rule. Some public schools also are exempt from the H-
1B cap based on their affiliation with

[[Page 1690]]

institutions of higher education.\51\ For those non-profit entities or
public school districts that are not cap-exempt and are unable to
proffer wages that equal or exceed prevailing wage levels with greater
chances of selection, they may be able to find available and qualified
workers outside of the H-1B program.\52\
---------------------------------------------------------------------------

\50\ See INA section 214(g)(5), 8 U.S.C. 1184(g)(5); 8 CFR
214.2(h)(8)(iii)(F).
\51\ See Burr Forman McNair et al., School Districts Taking
Advantage of New H-1B Cap Exempt Regulations, JDSUPRA (June 1,
2017), https://www.jdsupra.com/legalnews/school-districts-taking-advantage-of-64663/.
\52\ Data shows that roughly 53 percent of recent college
graduates in the United States are currently unemployed or
underemployed. See Darko Jacimovic, College Graduates Unemployment
Rate in the US, What to Become (Nov. 25, 2020), https://
whattobecome.com/blog/college-graduates-unemployment-rate/
#:~:text=The%20median%20pay%20for%20those,in%20the%20US%20is%202.1%25
(citing University of Washington data).
---------------------------------------------------------------------------

(d) Other Comments on Impacts on Employers
Comments: Multiple commenters argued that the rule likely would
result in a significant and sudden downturn in immigration casework,
and would cause immigration law firms to scale back operations and lay
off staff, at a time when the U.S. economy already is in a precarious
position and unemployment is high.
Response: DHS disagrees with these commenters as this rule is not
intended or expected to result in fewer H-1B workers in the United
States, and will not affect existing H-1B workers, unless such workers
become subject to the numerical allocations, and therefore should not
reduce workload for immigration law firms overall. Employers with
existing H-1B employees, who are not affected by this rule, may still
need immigration law firm services. In addition, while some employers
may opt not to participate in the H-1B program as a source for
potential new employees and may not require immigration law firm
services for those potential new employees as a result, given the high
demand for H-1B visas, other employers may have the opportunity to
begin participating in the program or to increase their existing
participation in the program and may require increased services of
immigration firms and attorneys. Therefore, DHS does not anticipate
that this rule will have a negative overall impact on law firms and
attorneys.
Comments: Multiple commenters reasoned that, with a focus on base
wages, the proposed rule may result in employers abandoning the use of
variable compensation, such as bonuses, profit-sharing payments, stock,
and other incentives tied to performance. A commenter argued that
variable pay can benefit a company by focusing organizations, business
units, and individuals on specific goals and objectives. Alternatively,
employers offering such compensation packages may be disadvantaged
relative to others offering solely wage-based compensation.
Response: DHS recognizes that companies may offer various forms of
benefits and benefits provided as compensation for services, such as
cash bonuses, stock options, paid insurance, retirement and savings
plans, and profit-sharing plans. While cash bonuses may, in limited
circumstances, be counted towards the annual salary,\53\ other forms of
benefits such as stock options, profit sharing plans, and flexible work
schedules may not be readily quantifiable or guaranteed, which means
that they cannot reliably be calculated into proffered wages. Further,
as one commenter pointed out, if a beneficiary is highly valued, that
beneficiary may be able to discuss with their employer changes to their
compensation structure that could result in a more easily quantifiable
proffered wage.
---------------------------------------------------------------------------

\53\ See 20 CFR 655.731(c)(2).
---------------------------------------------------------------------------

v. Economy
Comments: Multiple commenters said the proposal would have the
following negative impacts on the economy without providing substantive
rationale: The rule would hurt the overall economy; the American public
would assume the increased cost of labor through hidden corporate taxes
or increased costs of services; this would affect U.S. economic
development because many young people will be blocked by this new rule;
this proposal would increase economic and cultural divisions that
already exist because it would eliminate all ``interactive
possibilities from social and cultural disciplines''; the proposed rule
would harm the U.S. economy because the United States needs
international students to bring funds to the country to study and live;
international students educated at U.S. colleges have better
acculturation to U.S. society, which is very important for long-term
growth of the economy.
An individual commenter stated that the proposal would ``gut the
system'' and lead to further economic decline. Other commenters argued
that this rule would hurt the economy during a global pandemic when the
economy is suffering. An individual commenter said that, to rebound
from the pandemic and meet the challenges that face the United States,
the country must expand opportunities for skilled workers, particularly
in the STEM and health professions. A few individual commenters
asserted, without evidence, that the proposal is based on the ``false
premise'' that individuals who earn more contribute more to the
economy, and that the rule promotes falsities about the workers who
strengthen the U.S. economy. A few individual commenters stated that
the proposal provides no evidence that higher wages correspond with
labor needs of employers or provide a greater economic benefit.
Response: DHS does not agree that this rule will harm the U.S.
economy or economic development, increase costs for the American
public, or increase cultural or economic divisions. Instead, DHS
believes that this rule will facilitate the admission of higher-skilled
workers, which will 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. It may
also benefit U.S. workers, as employers that might have petitioned for
cap-subject H-1B workers to fill relatively lower-paid, lower-skilled
positions, may be incentivized to hire available and qualified U.S.
workers for those positions.
Comments: A university said that foreign graduates do not take jobs
from U.S. citizens, but, rather, they create new jobs and contribute
``billions'' to the economy. An individual commenter argued that
attracting the best and brightest from around the world for education
and employment helps to drive innovation and benefits the U.S. economy
and nation as a whole, but the proposed rule would not lead to that
outcome. An individual cited numerous studies in arguing that the
current framework, in contrast to a proposed ``best and brightest''
prioritization, generates more economic benefits of the type intended
by Congress. Several other commenters argued that the rule would cause
professionals to seek careers elsewhere. A law firm stated that the
rule could halt innovation in the United States, as studies have shown
a positive correlation between foreign students and innovation.
An advocacy group said that the rule would risk preventing highly
skilled professionals from bringing their talents to the United States,
despite their education and skill, which likely would result in the
United States missing out on the contributions of needed talent across
multiple industries. A trade association stated that ``each facet'' of
the U.S. workforce is enabled by an

[[Page 1691]]

immigration system that allows access to foreign talent to allow
employers to remain competitive, and argued that highly-skilled foreign
executives and managers help run key aspects of U.S. companies that
create thousands of jobs for domestic workers. The commenter said that
it is this ``synergy'' between aliens and U.S. residents that underpins
the United States' ``vibrant'' economy. An attorney argued that the
United States would lose the benefits that come with younger, recently
educated professionals whose value already has been assessed against
the ease of employing U.S. applicants. An advocacy group said that the
U.S. population is aging, and the country needs immigrants to help the
economy grow. In addition, the commenter said that, for the United
States' innovation future, the country needs international students. An
individual commenter stated that favoring aliens far into their careers
over young professionals is ``perverse'' because they may have only a
decade of their careers left, which is not in the country's best
interest. Another commenter said that this proposal could result in
future H-1B participants who are older, not necessarily high-skilled,
and have no exposure to American culture. The commenter said
international students and the H-1B program are key drivers of job
growth and economic dynamism, and altering the H-1B program to exclude
recent graduates may stymie these positive effects.
Response: DHS appreciates the economic contributions that highly
skilled aliens make to the United States. Rather than reducing such
contributions or halting innovation, DHS believes that this rule will
incentivize employers to attract and recruit highly-skilled aliens, as
opposed to the current random selection process that ``favors companies
hiring workers with interchangeable skills en masse over those with a
pressing need to hire specific foreign experts,'' \54\ and, thus, will
benefit the economy overall.\55\ The rule is not intended to, and DHS
does not expect that it will, reduce the number of H-1B workers. DHS
also notes that this rule does not preclude recent graduates from
obtaining H-1B status or employers from directly sponsoring a recent
foreign graduate for an employment-based immigrant visa. Although this
rule will reduce the chance of selection for those at lower wage levels
in years of excess demand, DHS believes that selecting by wage level in
such years is more consistent with the dominant legislative purpose of
the H-1B program, which is to help U.S. employers fill labor shortages
in positions requiring highly skilled or highly educated workers.
Furthermore, DHS disagrees with the commenter that selecting higher
paid and/or more highly skilled workers necessarily means that
employers will be selecting those with less time left in their careers
and thus those who will not be in the country's best interest. In
addition, DHS does not believe that the time spent in the workforce
determines the degree of contribution to the economy or the country. As
explained in the NPRM and above, DHS believes that the rule will
maximize H-1B cap allocations so that they more likely would go to the
best and brightest workers.
---------------------------------------------------------------------------

\54\ See Drew Calvert, Companies Want to Hire the Best
Employees. Can Changes to the H-1B Visa Program Help?,
KelloggInsight (Feb. 6, 2017), https://insight.kellogg.northwestern.edu/article/how-to-revamp-the-visa-program-for-highly-skilled-workers (further noting ``[u]nder the
current system, U.S. companies are often discouraged from even
attempting to hire a foreign worker, despite how uniquely qualified
he or she might be'').
\55\ See Muzaffar Chrishti and Stephen Yale-Loehr, The
Immigration Act of 1990: Unfinished Business a Quarter-Century
Later, Migration Policy Institute (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.'').
---------------------------------------------------------------------------

Comments: Several commenters said that the proposal could have the
unintended consequence of ``forcing'' entire businesses offshore. A
professional association said that the proposal would result in more
companies outsourcing jobs abroad and would discourage innovation. An
individual commenter said that each job that is off-shored will take
with it multiple other U.S. positions because the United States will
lose the economic contributions of foreign workers, such as rented
apartments, home mortgages, cares, groceries, and more. Another
commenter said that this rule would make it more expensive for
companies to hire in U.S. locations, and they eventually would move
entire sections of their operation overseas or outsource labor, hurting
U.S. workers in the long run.
Response: DHS disagrees with the commenters who state that this
rule will cause employers to move operations to other countries. These
commenters cited research \56\ suggesting that restricting H-1B
immigration is likely to cause multinational firms to offshore their
highly skilled labor as the basis for concerns about this rule.
However, DHS disagrees that this rule restricts H-1B immigration.
Again, this rule does not affect the statutorily mandated annual H-1B
cap, nor does it affect substantive eligibility requirements for an H-
1B visa. While DHS acknowledges this rule may impose costs to
individual employers, neither the comments nor sources cited address
the countervailing impact on those level III and IV employers impacted
or benefited by this rule. DHS believes that this rule, instead, will
facilitate the admission of higher-skilled workers, which will 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.
---------------------------------------------------------------------------

\56\ See Britta Glennon, How Do Restrictions on High-Skilled
Immigration Affect Offshoring? Evidence from the H-1B Program,
National Bureau of Economic Research (July 2020), https://www.nber.org/papers/w27538; Michelle Marks, Skilled, foreign workers
are giving up on their American dreams--and turning to Canada,
Business Insider (Mar. 31, 2019), https://www.businessinsider.com/h-1b-visa-rejects-moving-to-canada-2019-3. Notably, the latter article
focuses on how the current random lottery process disincentivizes
prospective high-skilled beneficiaries seeking H-1B visas in the
United States and incentivizes them to seek visas in countries with
more merit-based selection processes.
---------------------------------------------------------------------------

Comments: A couple of commenters, including a trade association,
said that, in many cases, the proposed rule would require employers to
pay their H-1Bs more than the actual market wages for U.S. citizens
holding comparable positions. An individual commenter argued that
prioritizing wages conflicts with the current DOL Prevailing Wage
system, which ensures that H-1B holders do not depress the wages of
U.S. workers. A company said that artificially raising the amount of
money an employer must devote to paying H-1B workers would result in
the company employing fewer workers overall, including U.S. workers.
The commenter's reasoning was that, as a salary-focused ``arms race''
begins, employers would rely less and less on labor and more on
technology and other means to avoid the unsustainable wage levels.
Another commenter said the proposal would create the issue of wage
discrimination against U.S. employees because an employer would have to
offer a higher level of pay to H-1B applicants than to citizens for the
same position.
Response: To the extent that these comments refer to wages required
as a result of the DOL IFR, DHS notes that, on December 1, 2020, the
U.S. District Court for the Northern District of California issued an
order in Chamber of Commerce, et al. v. DHS, et al., No. 20-cv-7331,
setting aside the Interim

[[Page 1692]]

Final Rule Strengthening Wage Protections for the Temporary and
Permanent Employment of Certain Aliens in the United States, 85 FR
63872 (Oct. 8, 2020), which took effect on October 8, 2020, and
implemented reforms to the prevailing wage methodology for the
Permanent Employment Certification, H-1B, H-1B1, and E-3 visa programs.
Similarly, on December 3, 2020, the U.S. District Court for the
District of New Jersey issued a preliminary injunction in ITServe
Alliance, Inc., et al. v. Scalia, et al., No. 20-cv-14604, applying to
the plaintiffs in that case. On December 3, 2020, DOL announced that it
is taking necessary steps to comply with the courts' orders and is no
longer implementing the IFR.\57\
---------------------------------------------------------------------------

\57\ U.S. Department of Labor, Employment and Training
Administration, Foreign Labor Certification, Announcements, https://www.dol.gov/agencies/eta/foreign-labor (last visited Dec. 21, 2020).
---------------------------------------------------------------------------

As explained in the NPRM, the ranking process established by this
rule does not alter the prevailing wage level associated with a given
position for DOL purposes, which is informed by a comparison of the
requirements for the proffered position to the normal requirements for
the occupational classification. While DHS acknowledges that this final
rule will result in more registrations (or petitions, as applicable)
being selected for relatively higher paid, higher-skilled
beneficiaries, the rule does not change, and does not conflict with,
prevailing wage requirements. This final rule merely fills in a
statutory gap regarding how to administer the H-1B numerical
allocations in years of excess demand.
DHS disagrees with the contentions that, by raising salaries for H-
1B workers, this rule will cause employers to reduce their overall
workforce including U.S. workers, rely less on labor, or pay their H-1B
workers more than their U.S. workers holding comparable positions.
First, by incentivizing employers to use the H-1B program to fill
positions requiring higher prevailing wage levels, or proffering wages
commensurate with higher prevailing wage levels, employers may see a
possible increase in productivity, as explained in the NPRM. Because of
the possible increase in productivity, it is not necessarily the case
that employers would employ fewer workers overall or rely less on
labor. DHS believes that this rule will facilitate the admission of
higher-skilled workers, which will 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.
Second, concerning the contentions that this rule would force
employers to pay their H-1B workers more than their U.S. workers or
otherwise harm U.S. workers, this final rule does not mandate employers
to pay more for their H-1B workers; again, this rule merely fills in a
statutory gap regarding how to administer the H-1B numerical
allocations in years of excess demand. And as stated in the NPRM, this
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, and
may incentivize employers to recruit available and qualified U.S.
workers.
c. General Wage-Based Selection Concerns
Comments: Many commenters, mostly individual commenters, generally
disagreed with the proposed rule and expressed wage-based selection
concerns without providing substantive rationale, stating that: Wage is
not the only factor to judge the value of a worker, and the rule
erroneously assumes that salary is the best indicator of a worker's
value to society; H-1B wages are commensurate with experience and
should not be used to establish eligibility; basing selection on wage
levels violates U.S. values, such as fairness and justice; every
position has ``many wages,'' so it is better to distinguish people
within a position rather than based on wages; certain locations in the
United States, such as rural areas, have lower wages compared to large
cities with higher wage levels; the proposed rule would hamper regional
development for rural areas because employers in these communities
would not be able to pay the high wages to hire H-1B workers; whether
an individual can get an H-1B visa depends on how important their work
is to the country and does not depend on how much they can earn; the
rule will damage U.S. talent capital investments because ``current
price does not equal to final quality''; ranking by wage is not an
accurate reflection of one's skill level because it could simply be
based on age or years of experience; there are lower-paying jobs which
still need to be filled by H-1B visa workers; basing selection on
salary is unfair because the salary starting point and growth speed are
different for different industries; the proposed rule does not address
abuse in the H-1B program, such as staffing companies filing multiple
petitions for each person and full-time workers filing as part-time so
that their salary on file is doubled; this proposal artificially could
increase wages, and wages should be determined by supply and demand
instead; and, in some industries or locations, the beneficiaries' base
salaries are similar enough to fall into one or two categories, which
would make them likely to be the same as a random lottery under DOL's
new prevailing wage level calculations.
Response: 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 reflects the unique qualities the beneficiary possesses. Thus,
DHS believes this rule will benefit the best and brightest workers in
all professions. DHS does not agree that this rule will favor certain
high-paying professions or companies, as the rule takes into account
the wage level relative to the SOC code--as opposed to salary alone--
when ranking registrations. Regarding the concern for depressed areas,
the rule equalizes geographic differences in salary amounts by taking
into account the area of intended employment when ranking
registrations. Particularly, as stated in the final rule, USCIS will
select H-1B registrations based on the highest OES prevailing wage
level that the proffered wage equals or exceeds for the relevant SOC
code and area(s) of intended employment. In ranking according to the
wage level, the final rule makes it so that registrations for the same
wage level will be ranked the same regardless of whether their
proffered wages are different owing to their areas of intended
employment.
Regarding the concerns about fairness, DHS believes that this rule
is fair to U.S. workers, H-1B workers, and petitioners. Conversely, the
current random selection process is not fair to U.S. workers whose
wages may be adversely affected by an influx of relatively lower-paid
H-1B workers, or to U.S. employers who have sought to petition for
foreign workers at higher OES prevailing wage levels and are not
selected.
3. Other General Feedback
Comment: An immigration practitioner in Guam noted that many H-1B
visas are awarded to engineers coming to perform projects for the
military realignment in Guam, and that this rule poses a threat to
those projects' timely completions.
Response: DHS disagrees with this commenter. H-1B workers in Guam
(or the Commonwealth of the Northern

[[Page 1693]]

Mariana Islands (CNMI)) are exempt from the statutory numerical
limitation for H-1B classification until December 31, 2029.\58\ As this
final rule simply modifies the registration requirement applicable to
cap-subject H-1B petitions, it will not affect cap-exempt H-1B
petitions for engineers or other H-1B workers coming to work in Guam
(or the CNMI).
---------------------------------------------------------------------------

\58\ See 48 U.S.C. 1806(b)(A).
---------------------------------------------------------------------------

B. Basis for Rule

1. DHS Statutory/Legal Authority
Comments: A few individuals supported the rule, saying that the
changes to H-1B selection are consistent with Congressional intent and
statutory language. Another commenter argued that the INA's silence is
an ``invitation'' for USCIS to establish criteria to prioritize
petitions. Likewise, a research organization commented that the
statutory language is ambiguous and USCIS' proposal would reasonably
address the ambiguity.
Response: DHS agrees with these comments that the rule is
consistent with Congressional intent and statutory language; 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; the term ``filed'' as used in INA section 214(g)(3), 8
U.S.C. 1184(g)(3), is ambiguous; and these changes are reasonable and
within DHS' general authority. DHS, therefore, is relying on its
general statutory authority to implement these regulations to design a
selection system that prioritizes selection generally based on the
highest prevailing wage level that a proffered wage equals or exceeds.
See INA section 103(a), 214(a) and (c)(1), 8 U.S.C. 1103(a), 1184(a)
and (c)(1).
Comment: A business association generally argued that Acting
Secretary Chad Wolf's tenure is in violation of the Homeland Security
Act and the Federal Vacancies Reform Act (FVRA). Similarly, a
professional association commented that Acting Secretary Wolf's tenure
also violates Executive Order (E.O.) 13753, which established a DHS
order of succession. The commenter added a citation to a U.S.
Government Accountability Office (GAO) report concluding that Acting
Secretary Wolf's appointment violated the order of succession. The
commenter also provided citations to court decisions overturning DHS
rulemakings based on Acting Secretary Wolf's authority. Finally, the
commenter argued that DHS's attempted corrections of issues concerning
Acting Secretary Wolf's tenure are insufficient to cure rules
promulgated under his authority.
Response: DHS disagrees with the commenters that Acting Secretary
Wolf's tenure is in violation of the HSA and the FVRA; Secretary Wolf
is validly acting as Secretary of Homeland Security. On April 9, 2019,
then-Secretary Nielsen, who was Senate-confirmed, used the authority
provided by 6 U.S.C. 113(g)(2) to establish the order of succession for
the Secretary of Homeland Security.\59\ This change to the order of
succession applied to any vacancy. This exercise of the authority to
establish an order of succession for DHS pursuant to 6 U.S.C. 113(g)(2)
superseded the FVRA and the order of succession found in Executive
Order 13753, 81 FR 90667 (Dec. 9, 2016). As a result of this change,
and pursuant to 6 U.S.C. 113(g)(2), Kevin K. McAleenan, who was Senate-
confirmed as the Commissioner of U.S. Customs and Border Protection,
was the next successor and served as Acting Secretary without time
limitation. Acting Secretary McAleenan subsequently amended the
Secretary's order of succession pursuant to 6 U.S.C. 113(g)(2), placing
the Under Secretary for Strategy, Policy, and Plans position third in
the order of succession, below the positions of the Deputy Secretary
and Under Secretary for Management.\60\ Because the Deputy Secretary
and Under Secretary for Management positions were vacant when Mr.
McAleenan resigned, Mr. Wolf, as the Senate-confirmed Under Secretary
for Strategy, Policy, and Plans, was the next successor and began
serving as the Acting Secretary.
---------------------------------------------------------------------------

\59\ DHS, Orders of Succession and Delegations of Authorities
for Named Positions, Delegation No. 00106, Revision No. 08.5 (Apr.
10, 2019).
\60\ DHS, Orders of Succession and Delegations of Authorities
for Named Positions, Delegation No. 00106, Revision No. 08.6 (Nov.
8, 2019).
---------------------------------------------------------------------------

Further, because he has been serving as the Acting Secretary
pursuant to an order of succession established under 6 U.S.C.
113(g)(2), the FVRA's prohibition on a nominee's acting service while
his or her nomination is pending does not apply, and Mr. Wolf remains
the Acting Secretary notwithstanding President Trump's September 10,
2020, transmission to the Senate of Mr. Wolf's nomination to serve as
DHS Secretary.\61\
---------------------------------------------------------------------------

\61\ Compare 6 U.S.C. 113(a)(1)(A) (cross-referencing the FVRA
without the ``notwithstanding'' caveat), with id. 113(g)(1)-(2)
(noting the FVRA provisions and specifying, in contrast, that
section 113(g) provides for acting secretary service
``notwithstanding'' those provisions); see also 5 U.S.C.
3345(b)(1)(B) (restricting acting officer service under section
3345(a), in particular, by an official whose nomination has been
submitted to the Senate for permanent service in that position).
---------------------------------------------------------------------------

That said, there have been recent challenges to whether Mr. Wolf's
service is invalid, resting on the erroneous contention that the orders
of succession issued by former Secretary Nielsen and former Acting
Secretary McAleenan were invalid. The Department believes those
challenges are not based on an accurate view of the law. But even if
those contentions are legally correct--meaning that neither former
Secretary Nielsen nor former Acting Secretary McAleenan issued a valid
order of succession--under 6 U.S.C. 113(g)(2)--then the FVRA would have
applied, and Executive Order 13753 would have governed the order of
succession for the Secretary of Homeland Security from the date of
former Secretary Nielsen's resignation.
The FVRA provides an alternative basis for an official to exercise
the functions and duties of the Secretary temporarily in an acting
capacity. In that alternate scenario, under the authority of the FVRA,
Mr. Wolf would have been ineligible to serve as the Acting Secretary of
DHS after his nomination was submitted to the Senate, 5 U.S.C.
3345(b)(1)(B), and Peter Gaynor, the Administrator of the Federal
Emergency Management Agency (FEMA), would have--by operation of
Executive Order 13753--become eligible to exercise the functions and
duties of the Secretary temporarily in an acting capacity. This is
because Executive Order 13753 pre-established the President's
succession order for DHS when the FVRA applies. Mr. Gaynor would have
been the most senior official eligible to exercise the functions and
duties of the Secretary under that succession order, and thus would
have become the official eligible to act as Secretary once Mr. Wolf's
nomination was submitted to the Senate.\62\ Then, in this alternate
scenario in which, as assumed above, there was no valid succession
order under 6 U.S.C. 113(g)(2), the submission of Mr. Wolf's nomination
to the Senate would have restarted the FVRA's time limits. 5 U.S.C.
3346(a)(2).
---------------------------------------------------------------------------

\62\ 5 U.S.C. 3346(a)(2).
---------------------------------------------------------------------------

Out of an abundance of caution, and to minimize any disruption to
DHS and to the Administration's goal of maintaining homeland security,
on November 14, 2020, with Mr. Wolf's nomination still pending in the
Senate, Mr. Gaynor exercised the authority of Acting Secretary that he
would have had (in the absence of any governing succession order under
6 U.S.C. 113(g)(2)) to designate a new order of succession under 6
U.S.C. 113(g)(2) (the

[[Page 1694]]

``Gaynor Order'').\63\ In particular, Mr. Gaynor issued an order of
succession with the same ordering of positions listed in former Acting
Secretary McAleenan's November 2019 order. The Gaynor Order thus placed
the Under Secretary for Strategy, Policy, and Plans above the FEMA
Administrator in the order of succession. Once the Gaynor Order was
executed, it superseded any authority Mr. Gaynor may have had under the
FVRA and confirmed Mr. Wolf's authority to continue to serve as the
Acting Secretary. Hence, regardless of whether Mr. Wolf already
possessed authority pursuant to the November 8, 2019, order of
succession effectuated by former Acting Secretary McAleenan (as the
Departments have previously concluded), the Gaynor Order provides an
alternative basis for concluding that Mr. Wolf currently serves as the
Acting Secretary.\64\
---------------------------------------------------------------------------

\63\ Mr. Gaynor signed an order that established an identical
order of succession on September 10, 2020, the day Mr. Wolf's
nomination was submitted, but it appears he signed that order before
the nomination was received by the Senate. To resolve any concern
that his September 10 order was ineffective, Mr. Gaynor signed a new
order on November 14, 2020. Prior to Mr. Gaynor's new order, the
U.S. District Court for the District of New York issued an opinion
concluding that Mr. Gaynor did not have authority to act as
Secretary, relying in part on the fact that DHS did not notify
Congress of Administrator Gaynor's service, as required under 5
U.S.C. 3349(a). Batalla Vidal v. Wolf, No. 16CV4756NGGVMS, 2020 WL
6695076, at *9 (E.D.N.Y. Nov. 14, 2020). The Departments disagree
that the FVRA's notice requirement affects the validity of an acting
officer's service; nowhere does section 3349 indicate that agency
reporting obligations are tied to an acting officer's ability to
serve.
\64\ On October 9, 2020, the U.S. District Court for the
District of Columbia issued an opinion indicating that it is likely
that section 113(g)(2) orders can be issued by only Senate-confirmed
secretaries of DHS and, thus, that Mr. Gaynor likely had no
authority to issue a section 113(g)(2) succession order. Nw.
Immigrant Rights Project v. United States Citizenship & Immigration
Servs., No. CV 19-3283 (RDM), 2020 WL 5995206, at *24 (D.D.C. Oct.
8, 2020). This decision is incorrect because the authority in
section 113(g)(2) allows ``the Secretary'' to designate an order of
succession, 6 U.S.C. 113(g)(2), and an ``acting officer is vested
with the same authority that could be exercised by the officer for
whom he acts.'' In re Grand Jury Investigation, 916 F.3d 1047, 1055
(D.C. Cir. 2019). The Acting Secretary of DHS is accordingly
empowered to exercise the authority of ``the Secretary'' of DHS to
``designate [an] order of succession.'' 6 U.S.C. 113(g)(2). In
addition, this is the only district court opinion to have reached
such a conclusion about the authority of the Acting Secretary, and
the Departments are contesting that determination.
---------------------------------------------------------------------------

On November 16, 2020, Acting Secretary Wolf ratified any and all
actions involving delegable duties that he took between November 13,
2019, through November 16, 2020, including the NPRM that is the subject
of this rulemaking.
Under section 103(a)(1) of the Act, 8 U.S.C. 1103(a)(1), the
Secretary is charged with the administration and enforcement of the INA
and all other immigration laws (except for the powers, functions, and
duties of the President, the Attorney General, and certain consular,
diplomatic, and Department of State officials). The Secretary is also
authorized to delegate his or her authority to any officer or employee
of the agency and to designate other officers of the Department to
serve as Acting Secretary.\65\ The Homeland Security Act further
provides that every officer of the Department ``shall perform the
functions specified by law for the official's office or prescribed by
the Secretary.'' \66\
---------------------------------------------------------------------------

\65\ See INA 103, 8 U.S.C. 1103, and 6 U.S.C. 113(g)(2).
\66\ See 6 U.S.C. 113(f).
---------------------------------------------------------------------------

Comments: Multiple commenters asserted that this rule is ultra
vires, inconsistent with Congressional intent, and a clear violation of
the INA. Specifically, they contend that the INA sets forth the
procedure for allocating visas and prioritizes the selection of H-1B
cap-subject petitions in the ``order in which they are filed[,]'' which
does not limit selection under the H-1B cap to those employers who pay
the most or otherwise authorize DHS to impose substantive selection
criteria. Several commenters stated that USCIS lacks the statutory
authority to make such a change and cannot use the statute's purported
silence as an invitation to adopt criteria, such as wage level or skill
level, to prioritize the selection of H-1B cap subject visas. Some of
these commenters also disagreed with DHS about the statute's silence
and stated that Congress has previously made specific modification to
the way in which H-1B cap numbers are allocated, specifically, the
American Competitiveness in the Twenty-First Century Act of 2000
providing for the numerically limited exemption for beneficiaries who
have earned a master's or higher degree from a U.S. institution of
higher education. If Congress intended to make any other changes to the
statutory language that H-1B cap numbers ``shall be issued . . . in the
order in which petitions are filed[,]'' it could have done so as part
of that or subsequent legislation. One commenter cited several cases in
arguing that general rulemaking authority and statutory silence on an
issue is not tantamount to Congressional authorization for rulemaking
on a given issue; another commenter stated that the statute is neither
silent nor ambiguous as it states that H-1B visas shall be issued, or
H-1B status granted, ``in order in which petitions are filed''; and a
trade association commented that the use of the term ``shall''
indicates that there is no ambiguity as to how petitions may be sorted.
One commenter cited several INA provisions in arguing that, where it
intended to do so, Congress made distinctions within classes of
potential visa applicants, and thus the statute reflects Congressional
intent not to distinguish on other bases. One commenter said that the
proposed rule would be found unlawful in court, because the law does
not make an allowance for basing H-1B visas on salary, and the rule is
contrary to the plain language of the statute. A form letter campaign
wrote that the law does not require employers to pay H-1B workers more
than U.S. workers, and the law does not allow the agency to prioritize
petitions for higher-wage applicants.
Response: DHS disagrees with the commenters' assertions that the
statute is not silent or ambiguous and that this rulemaking is ultra
vires. As stated in the NPRM, this 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.\67\ 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. 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.\68\ ``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.'' \69\ Rather, these
implementation details are entrusted to DHS to administer. So, while
the statute provides annual limitations on the number of aliens who may
be issued initial H-1B visas or otherwise provided H-1B nonimmigrant
status, the statute does not specify how petitions must be

[[Page 1695]]

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.''
\70\
---------------------------------------------------------------------------

\67\ See 85 FR 69236, 69242.
\68\ See INA section 214(c)(1), 8 U.S.C. 1184(c)(1). See also
Walker Macy, 243 F.Supp.3d at 1176 (``Congress left to the
discretion of USCIS how to handle simultaneous submissions, [and
accordingly], USCIS has discretion to decide how best to order those
petitions.'').
\69\ See 243 F.Supp.3d at 1175.
\70\ See 243 F.Supp.3d 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.'' Contrary to the
commenters' assertions, this statutory provision, and, more
specifically the term ``filed'' as used in INA section 214(g)(3), 8
U.S.C. 1184(g)(3), is ambiguous.\71\ 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.\72\
---------------------------------------------------------------------------

\71\ See 243 F.Supp.3d 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.''). The availability of electronic
submission of H-1B registrations has not alleviated this issue as
multiple registrations can still be submitted simultaneously.
\72\ See U.S. Department of Homeland Security, U.S. Citizenship
and Immigration Services, Registration Requirement for Petitioners
Seeking To File H-1B Petitions on Behalf of Cap-Subject Aliens, 84
FR 888, 896 (Jan. 31, 2019).
---------------------------------------------------------------------------

A literal application of this statutory language, as suggested by
various commenters, would lead to an absurd or impossible result. The
Department of State (DOS) does not issue H-1B visas, and USCIS does not
otherwise provide H-1B status, based on the order in which petitions
are filed. Such a literal application would necessarily mean that
processing delays pertaining to a petition earlier in the petition
filing order would preclude issuance of a visa or provision of status
to all other H-1B petitions later in the petition filing order. To
avoid such an absurd result, the longstanding approach to implementing
the numerical limitation has been to project the number of petitions
needed to reach the numerical limitation. The issue, however, is how to
select registrations or petitions, as applicable, when the number of
submissions exceeds the number projected as needed to reach the
numerical limitation or the advanced degree exemption, particularly
when those submissions all occur within the same narrow window of time.
DHS is not changing the approach to administering the numerical
allocations as it relates to the use of projections. DHS is, however,
changing the selection process for selecting registrations or
petitions, as applicable, to determine which petitions are properly
filed and eligible for further processing consistent with INA section
214(g)(3), 8 U.S.C. 1184(g)(3).
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.
While the random selection of registrations or petitions, as
applicable, DHS established in the H-1B Registration Final Rule 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, DHS concludes that prioritization and selection based
on wage levels ``is a reasonable and rational interpretation of USCIS'
obligations under the INA to resolve the issues of processing H-1B
petitions'' \73\ in years of excess demand and is within DHS's existing
statutory authority.
---------------------------------------------------------------------------

\73\ See Walker Macy, 243 F.Supp.3d at 1175.
---------------------------------------------------------------------------

Comment: Multiple commenters cited a USCIS response to a comment in
the H-1B Registration Final Rule and wrote that USCIS previously
supported the position that prioritization of selection based on salary
or other substantive factors would require explicit Congressional
authorization. Commenters also cited a 1991 rulemaking in arguing that
Immigration and Naturalization Service (INS) previously acknowledged
that the INA does not authorize establishing criteria to prioritize
petitions. These commenters also provided language from a 1990 INS
rulemaking indicating that a statutory change would be necessary to
exclude entry-level H-1B workers. A law firm argued that the Agency
cannot reverse a position of this kind without providing a reasoned
explanation.
Response: DHS disagrees with the commenters that prior statements
by INS or USCIS preclude DHS from making the changes set forth in this
final rule. DHS acknowledged in the proposed rule 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. DHS also explained that the
prior statement did not provide further analysis regarding that
conclusion and that upon further review and consideration of the issue
initially raised in comments to the Registration Requirement for
Petitioners Seeking to File H-1B Petitions on Behalf of Cap-Subject
Aliens NPRM (H-1B Registration Proposed Rule),\74\ DHS concluded 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 continues to believe that the changes made in this
final rule are within its general authority, consistent with the
existing statute, and despite prior statements to the contrary, does
not require statutory change or explicit congressional authorization.
DHS is relying on its general statutory authority to implement the
statute and, consistent with that authority, is revising the
regulations to implement 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).
---------------------------------------------------------------------------

\74\ U.S. Department of Homeland Security, U.S. Citizenship and
Immigration Services, Registration Requirement for Petitioners
Seeking to File H-1B Petitions on Behalf of Cap-Subject Aliens, 83
FR 62406 (proposed Dec. 3, 2018).

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

[[Page 1696]]

DHS disagrees with the assertion that this rule will exclude entry-
level workers. This final rule merely revises how USCIS will select H-
1B cap-subject petitions toward the H-1B numerical allocations to
determine which petitions are ``filed'' and eligible for further
processing. The rule does not change substantive eligibility
requirements. While DHS acknowledges that registrations or petitions,
as applicable, based on a proffered wage that corresponds to a level I
or level II wage likely will face a reduced chance of selection in the
H-1B cap selection process, the rule does not preclude selection of
registrations or petitions for entry-level workers.
DHS also disagrees with the commenters' claim that the prior
statements by INS in the preamble to the Temporary Alien Workers
Seeking Classification Under the Immigration and Nationality Act final
rule are relevant to this final rule.\75\ INS was responding to general
comments about administering the numerical limitation, but was not
considering how to administer the H-1B numerical allocations when the
number of submitted petitions exceeds the numerical allocation. Such
circumstances did not exist at the infancy of the H-1B program and when
the numerical limitation was created, so this issue was not considered
at that time. Again, this final rule merely revises how USCIS will
select H-1B cap-subject registrations or petitions, as applicable,
toward the H-1B numerical allocations to determine which petitions are
``filed'' and thus eligible for further processing; in addition, this
final rule addresses how USCIS will select registrations or petitions,
as applicable, when the number of submitted registrations or petitions
exceeds the projected number needed to reach the numerical allocations.
Once properly filed, H-1B cap-subject petitions generally will be
processed in order based on the assigned filing date.
---------------------------------------------------------------------------

\75\ U.S. Department of Justice, Immigration and Naturalization
Service, Temporary Alien Workers Seeking Classification Under the
Immigration and Nationality Act, 56 FR 61111 (Dec. 2, 1991).
---------------------------------------------------------------------------

DHS also disagrees that comments made by INS in the preamble to the
1990 final rule,\76\ are relevant to the interpretation of DHS's
authority to implement the numerical allocations under the existing
statute. The 1990 rule preceded the enactment of the Immigration Act of
1990 (IMMACT 90), Public Law 101-649, 104 Stat. 4978, the creation of
the H-1B classification for specialty occupation workers, and the
implementation of a numerical limitation on H-1B workers. As such, the
statements cited by the commenter are not relevant to the
interpretation of the existing statute, including the authority of DHS
to administer the H-1B numerical allocations.
---------------------------------------------------------------------------

\76\ U.S. Department of Justice, Immigration and Naturalization
Service, Temporary Alien Workers Seeking Classification Under the
Immigration and Nationality Act, 55 FR 2606 (Jan. 26, 1990).
---------------------------------------------------------------------------

Comment: A company stated that USCIS' ability to interpret the term
``filed'' is not unlimited and that the proposed, complex
prioritization scheme unambiguously exceeds the scope of the term.
Similarly, a law firm and individual argued that, according to Walker
Macy v. USCIS, USCIS does not have ``unfettered'' discretion to
determine which petitions are filed, but, instead, must reasonably
interpret the statute. The law firm said the proposed interpretation is
unreasonable because of the impacts it would have on U.S. companies and
innovation. Multiple commenters said that the current system of putting
applicants in a lottery when they apply simultaneously comports with
the INA's language, but that the proposed methodology would
impermissibly deviate from the INA. Similarly, a company stated that
Congress' guiding principal for selecting H-1B petitions is timing and
that the current lottery system conforms to this principal. An
individual commenter similarly argued, citing Walker Macy v. USCIS,
that the proposed rule deviates from the temporal principal without
statutory or judicial basis. Other commenters asserted that USCIS'
reference to the ``dominant legislative purpose'' of the statute,
construed as prioritizing the application of the most skilled workers,
is unreasonable. The commenters reasoned that the INA simply
prioritizes filling labor shortages, without regard to wage levels.
Several commenters stated that the allowance of H-1B visas for aliens
with undergraduate degrees precludes prioritizing petitions based on
wage levels.
Response: DHS disagrees with the commenters' assertions that this
rule misstates the scope of the term ``filed'' or that the rule is
based on an unreasonable interpretation of the statute. As stated in
the NPRM and in response to other comments in this preamble, DHS
believes that this 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.\77\ 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 (i.e.,
situations where prioritizing petitions solely in a temporal manner is
impossible), to effectively and efficiently administer the H-1B cap
selection process. 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.\78\ ``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.'' \79\ 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 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.'' \80\
---------------------------------------------------------------------------

\77\ See 85 FR 69236, 69242.
\78\ See INA section 214(c)(1), 8 U.S.C. 1184(c)(1). See also
Walker Macy, 243 F.Supp.3d at 1176 (``Congress left to the
discretion of USCIS how to handle simultaneous submissions, [and,
accordingly], USCIS has discretion to decide how best to order those
petitions.'').
\79\ See 243 F.Supp.3d at 1175.
\80\ See 243 F.Supp.3d at 1176.
---------------------------------------------------------------------------

DHS believes, contrary to commenters' assertions, that
prioritization and selection generally based on the highest OES wage
level that the proffered wage equals or exceeds ``is a reasonable and
rational interpretation of USCIS's obligations under the INA to resolve
the issues of processing H-1B petitions'' \81\ in years of excess
demand and is within DHS's existing statutory authority. ``It is a
cardinal canon of statutory construction that statutes should be
interpreted harmoniously with their dominant legislative purpose.''
\82\ Yet, under the

[[Page 1697]]

current registration system the majority of H-1B cap-subject petitions
have been filed for positions certified at the two lowest wage levels:
I and II.\83\ 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.\84\ By changing the selection process, for
these years of excess demand, from a random lottery selection to a
wage-level-based selection process, DHS will 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.
---------------------------------------------------------------------------

\81\ See 243 F.Supp.3d at 1175.
\82\ 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.'')).
\83\ 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, H-1B Visas and Prevailing Wage Level, Economic
Policy Institute (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 the DOL IFR, 85 FR 63872.
\84\ 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'').
---------------------------------------------------------------------------

Comments: A couple of commenters said the changes made by the rule
should be decided by Congress. Similarly, a few commenters stated
generally that the proposal is not authorized by Congress or is in
violation of Congressional intent. A few commenters said that 8 U.S.C.
1184(g)(5)(C) (the exemption from the cap for beneficiaries who have
earned a master's or higher degree from a U.S. institution of higher
education) demonstrates that, where Congress intends to target
petitions for highly skilled workers, it has done so explicitly. Others
commented that, when this cap was legislated, it was clear that
petitions still would exceed visa allocations and that the statute
should be understood to have intentionally omitted any change to the
priority of visa petitions; and one commenter added that the proposed
rule would impact the ratio of advanced-degree holders to other H-1B
recipients that Congress authorized when providing the 20,000 U.S.
advanced degree exemption. A company stated that the proposal is
untethered to statutory language, providing examples of Congressional
``guidance'' and reasoning that nowhere in such guidance or the INA is
there reference to salary or the OES prevailing wage level as a basis
for selecting H-1B petitions. A professional association stated that
effectively imposing an additional wage requirement would be
inappropriate, especially for physicians.
Response: DHS disagrees with these comments. As stated in the NPRM
and as explained above, this rule is consistent with Congressional
intent and is 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.\85\ Furthermore,
DHS disagrees with the commenters' assertions that the statute, or
legislative history, indicates that Congress has spoken to the specific
issue addressed by this final rule: how to select petitions toward the
numerical allocations when the number of petitions filed is greater
than the number of petitions projected as needed to reach the H-1B
numerical allocations. As explained in the NPRM and in response to
other comments, the statute is silent on this issue. 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. 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.\86\ ``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.'' \87\ Rather, these
implementation details are entrusted for DHS to administer. Nor should
it be understood that Congress had spoken on this issue when the cap
was legislated because it was not clear at that time that petitions
would exceed visa allocations on the very first day that petitions
could be filed, thus leading to a situation where prioritizing
petitions solely in a temporal manner is impossible. So, while the
statute provides annual limitations on the number of aliens who may be
issued initial H-1B visas or 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.''
\88\
---------------------------------------------------------------------------

\85\ 85 FR 69236, 69242.
\86\ See INA section 214(c)(1), 8 U.S.C. 1184(c)(1). See also
Walker Macy, 243 F.Supp.3d at 1176 (``Congress left to the
discretion of USCIS how to handle simultaneous submissions, [and
accordingly], USCIS has discretion to decide how best to order those
petitions.'').
\87\ See 243 F.Supp.3d at 1175.
\88\ See 243 F.Supp.3d at 1176.
---------------------------------------------------------------------------

Comments: Some commenters expressed that this rule is not
consistent with the statutory framework Congress implemented for the
admission of foreign workers into the United States, as Congress
designated DOL to have the primary authority in protecting and
enforcing the statute related to the U.S. labor market and wages.
Multiple commenters stated that Congress did not intend for wage levels
to serve as a basis for preferring certain petitions, as evidenced by
the statute's prevailing wage requirement. An individual commented that
the preamble's statement that ``Congress expressly authorized DHS to
determine eligibility for H-1B classification upon petition by the
importing employer'' fails to recognize that this authorization is for
USCIS' determination regarding specific employers' applications, rather
than for categorically determining which wages or jobs qualify for H-1B
visas.
Response: DHS disagrees with the commenters assertion that this
rule is inconsistent with the statute. As explained in the NPRM and in
response to other comments, DHS believes that this rule is consistent
with its statutory authority. DHS agrees that DOL has the primary
authority to protect the wages and working conditions of U.S. workers
consistent with the provisions of INA section 212(n), 8 U.S.C. 1182(n),
but

[[Page 1698]]

those provisions are separate from INA section 214, 8 U.S.C. 1184, and
the statutory provisions pertaining to the form and manner of
submitting H-1B petitions and the administration of the H-1B numerical
allocations, both of which are within DHS's authority consistent with
INA section 214, 8 U.S.C. 1184. Further, the fact that Congress
authorized DOL to administer and enforce a wage requirement, including
setting prevailing wage levels for the H-1B program, does not speak to
or limit DHS' authority to establish an orderly, efficient, and fair
system for selecting registrations (or, if applicable, petitions),
based on OES prevailing wage levels, toward the projected number needed
to reach annual H-1B numerical allocations.
Comments: Multiple commenters, as part of a form letter campaign,
stated that the legal impact of the proposed rule must be considered
together with other recent rules, including the recently published DOL.
Another commenter stated that USCIS should work with DOL to
appropriately set up the wage levels.
Response: On December 1, 2020, the U.S. District Court for the
Northern District of California issued an order in Chamber of Commerce,
et al. v. DHS, et al., No. 20-cv-7331, setting aside the DOL IFR.
Similarly, on December 3, 2020, the U.S. District Court for the
District of New Jersey issued a preliminary injunction in ITServe
Alliance, Inc., et al. v. Scalia, et al., No. 20-cv-14604, applying to
the plaintiffs in that case. DOL has taken necessary steps to comply
with the courts' orders and is no longer implementing the DOL IFR. DHS,
therefore, disagrees with the commenter's assertion that DHS must
consider the DOL IFR in the context of this final rule.
DHS also disagrees with the premise of the commenters'
recommendation that DHS work with DOL to set appropriate wage levels.
This final rule is not setting wage levels. As explained in the NPRM
and in response to other comments, this final rule changes how DHS will
select registrations or petitions, as applicable, toward the projected
number needed to reach the annual H-1B numerical allocations. While
this final rule uses DOL wage levels to determine how to rank and
select registrations or petitions, as applicable, based generally on
the wage level that the proffered wage equals or exceeds, this final
rule is not mandating employers pay a higher wage nor is it changing
wage levels.
Comments: One commenter noted the proposal would make the H-1B
process similar to that of the O-1 visa, but that Congress knowingly
avoided doing so in 1990. According to the commenter, the new rule, in
effect, is redrafting the 1990 legislation to make the H-1B visa more
closely resemble the O-1 visa and Congress certainly could have ranked
H-1Bs in 1990 if it wanted to do so. Other commenters also noted that
the O-1 visa is for those with extraordinary ability, not those just
starting their careers, and that the H-1B program serves different
purposes. Another commenter also cited a House sponsor of the H-1B
program as saying that the O-1 program, not H-1B, was the ``best and
brightest'' program.
Response: DHS disagrees with the claim that it is reforming the H-
1B classification to more closely resemble the O-1 classification.\89\
While DHS acknowledges that this rule will result in more registrations
(or petitions, as applicable) being selected for relatively higher-
paid, higher-skilled beneficiaries, the rule is not changing
substantive eligibility requirements for the H-1B classification and is
not, in any way, reforming the H-1B classification to more closely
resemble the O-1 classification. This final rule merely fills in a
statutory gap regarding how to administer the H-1B numerical
allocations in years of excess demand. The statute provides annual
limitations on the number of aliens who may be issued initial H-1B
visas or otherwise provided H-1B nonimmigrant status, but it 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.'' \90\ The current scheme of pure
randomization of selectees does not optimally serve Congress' purpose
for the H-1B program. Therefore, this rule will revise the H-1B cap
selection 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.
---------------------------------------------------------------------------

\89\ The O-1 nonimmigrant classification is for aliens with
extraordinary ability in the sciences, arts, education, business, or
athletics, or who have a demonstrated record of extraordinary
achievement in the motion picture and television industry. See INA
section 101(a)(15)(O), 8 U.S.C. 1101(a)(15)(O); 8 CFR 214.2(o).
\90\ See Walker Macy, 243 F.Supp.3d at 1176.
---------------------------------------------------------------------------

Comment: An individual noted that Congress previously considered
legislation called the I-Squared Act that sought to alter the selection
process by ranking H-1Bs based on a number of factors rather than
having a random lottery. That legislation has not passed, which is an
indicator that Congress does not see the change as a priority.
Conversely, an individual commenter wrote that Congress intended to
delegate H-1B visa allocation to USCIS and that the I-Squared bill
failed because of other provisions it contained.
Response: DHS disagrees with the assertion that the fate of the I-
Squared bill is relevant to interpretation of the existing statute.
While Congress has considered such legislation, the failure of such
legislation (or any other proposed legislation) to be passed and signed
into law does not change the existing authority DHS has under the INA.
As explained in response to other comments, DHS believes that selection
of registrations or petitions, as applicable, based on corresponding
wage level is consistent with the discretion provided to DHS in the
current statute to administer the annual H-1B numerical allocations.
Comment: A few commenters cited the Senate Report for The American
Competitiveness Act as demonstrating Congressional opposition to
granting H-1B visas on a preferential basis to the highest-paid aliens.
The commenters argued that the language of the Senate Report
contradicts E.O. 13788 and that E.O. 13788 does not establish
Congressional purpose or policy, and its emphasis on highly paid
beneficiaries as applied in this context would be inconsistent with
Congress' direction.
Response: DHS disagrees with these comments because they ignore the
fact that DHS has proposed to modify the registration requirement
within the context of the annual demand for H-1B cap-subject petitions,
including those filed for the advanced degree exemption, consistently
exceeding annual statutory allocations.
Although Congress instructed that cap-subject H-1B visas (or H-1B
nonimmigrant status) be allocated based on the order in which petitions
are filed, it was silent with regard to the allocation of
simultaneously submitted petitions. While the random lottery selection
process is a reasonable solution, DHS believes that an allocation
generally based on the highest OES prevailing wage level that the
proffered wage equals or exceeds better fulfills Congress' stated
intent that the H-1B program help U.S. employers fill labor shortages
in positions requiring highly skilled workers.\91\
---------------------------------------------------------------------------

\91\ 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'').

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

[[Page 1699]]

This legislative history, as cited in the proposed rule, is
consistent with the Senate Report the commenters cite.\92\ Both support
the notion that Congress intended the H-1B program to fill labor
shortages in positions requiring highly skilled workers. Contrary to
the commenter's assertion that DHS only cited to E.O. 13788 to support
this priority, DHS cited to the legislative history of the Immigration
Act of 1990, the legislation that created the H-1B program, to support
the priority to allocate generally based on the highest OES prevailing
wage level that the proffered wage equals or exceeds.\93\ DHS cited to
E.O. 13788 solely to note that a wage-level based selection was
consistent with the administration's policy goals, not as legal
authority for the proposed rule.
---------------------------------------------------------------------------

\92\ 85 FR 69236, 69238.
\93\ 85 FR 69236, 69238.
---------------------------------------------------------------------------

Comment: An individual commenter and a professional association
argued that Presidential Proclamation 10052 is not authoritative to the
extent that it conflicts with the INA, and that the proposal fails to
explain how it ``is consistent with applicable law or is practicable at
this point in time,'' especially in light of the forthcoming change in
administration.
Response: DHS disagrees with the assertion that Presidential
Proclamation 10052 conflicts with the INA.\94\ In any event, the
authority for this regulation stems not from that proclamation but from
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.
---------------------------------------------------------------------------

\94\ 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).
---------------------------------------------------------------------------

Comment: One commenter stated that salary also is a proxy variable
for age, as, in most industries, more experienced individuals get paid
higher wages. This commenter asked whether USCIS has the authority to
apply ``salary'' as a secondary sorting mechanism for H-1B
registrations, and if so, what would prevent USCIS also from using
arbitrary sorting mechanisms such as age, geography, country of birth,
race, religion, or gender.
Response: DHS disagrees that salary is a proxy for age. While
salary is a reasonable proxy for skill, level of skill is not
necessarily correlated to age. DHS also disagrees with the commenter's
implied assertion that wage level is an arbitrary sorting mechanism. As
explained in the NPRM and in response to other comments, corresponding
wage level is an objective way to prioritize selection in a manner
consistent with the general purpose of the H-1B classification. DHS has
not proposed, and does not intend to propose, selecting registrations
or petitions, as applicable, based on factors that are unreasonable,
inappropriate, or inconsistent with the purpose of the H-1B
classification.
2. Substantive Comments on the Need for the Rule/DHS Justification
Comments: An anonymous commenter wrote that the proposed rule's
wage standard for H-1B visa eligibility is arbitrary and capricious.
The commenter said that DHS does not explain the rationale behind
making wages the sole indicator of a worker's eligibility for visa
sponsorship. The commenter also argued that the rule's rationale is
flawed because it would not protect U.S. workers, since the H-1B visa
applies only to specialty occupations. Another commenter opined that
this rule is an attempt to add a new wage requirement as a part of H-1B
eligibility. This commenter stated that this attempt is inconsistent
with Congressional intent and would be an abuse of discretion by the
Department.
Response: DHS believes these commenters misstate the scope of this
rule. This rule does not make ``wages the sole indicator of a worker's
eligibility for [H-1B] visa sponsorship'' and does not otherwise change
the substantive standards for H-1B eligibility. DHS stated in the NPRM
that registration, when required, is merely an antecedent procedural
step that must be completed by prospective petitioners before they are
eligible to file an H-1B cap-subject petition (emphasis added).\95\
Even if registration were suspended, the rule merely revises how USCIS
would select H-1B cap-subject petitions toward the H-1B numerical
allocations to determine which petitions are ``filed'' and thus
eligible for further processing. But the rule does not change
substantive eligibility requirements. DHS also disagrees with the
commenter's assertion that the rule would not better protect U.S.
workers. As explained in response to other comments, prioritizing the
selection of H-1B registrations or petitions, as applicable, based
generally on the highest OES prevailing wage level that the proffered
wage equals or exceeds will incentivize employers to offer higher wages
or higher-skilled positions to H-1B workers and disincentivize the
existing widespread use of the H-1B program to fill relatively lower-
paid or lower-skilled positions, for which there may be available and
qualified U.S. workers. DHS, therefore, believes that this rule will
benefit U.S. workers who compete against entry-level H-1B workers and
will incentivize H-1B petitioners to offer higher wages, further
benefiting U.S. workers whose wages might otherwise be depressed by an
influx of relatively lower-paid, lower-skilled H-1B workers.
---------------------------------------------------------------------------

\95\ 85 FR 69236, 69243. See also H-1B Registration Final Rule,
84 FR 888, 900 (``submission of the registration is merely an
antecedent procedural requirement to properly file the petition. It
is not intended to replace the petition adjudication process or
assess the eligibility of the beneficiary for the offered
position.'').
---------------------------------------------------------------------------

a. Support for the DHS Rationale
Comments: Many commenters expressed support for the proposed rule
and DHS justification. Several commenters stated that the proposed rule
is based on a true premise that salary equates with value. A research
organization stated that there is no evidence to suggest that the H-1B
program was designed to fill entry-level jobs at entry-level wages, and
prioritizing H-1B petitions at high wage levels will safeguard U.S.
wage standards and increase labor efficiency. The commenter went on to
state that prioritizing higher H-1B wage levels will not undermine the
program, but, rather, will incentivize recruitment and retention, while
also helping U.S. workers in labor categories that have seen stagnant
wage growth in recent history. The commenter reasoned that, because
employers do not have to test the market before hiring H-1B workers,
wages are a good indicator of the actual market need for workers in a
given field.
Response: DHS agrees with these commenters and thanks them for
their support.
b. Rule Is Based on False Premises/Rationale
Comment: Many commenters, including those who participated in an
orchestrated form letter campaign, stated that the proposal is based on
the false premise that salary alone equates with value and that
individuals who earn more in their profession contribute more to the
economy. An individual commenter discussed the fundamental flaw in
associating level I and level II workers with low-paying, low-skilled
work, where in reality, entry-level doctors, lawyers, engineers, and

[[Page 1700]]

architects are professionals performing specialty occupations. A
professional association stated that the salaries associated with each
wage level do not fully capture an individual's contribution to
society; in fact, there often is an inverse correlation. A professional
association said DHS has created a condition where employers would be
able to buy their way into the proposed H-1B visa cap selection system
by offering a higher wage to the beneficiary regardless of skill, which
would negate the stated purpose of the proposed rule to garner more
high-skilled workers in the U.S. workforce.
Some commenters said the proposed rule is based on the false
premise that foreign workers depress wages and take away jobs from U.S.
workers. A university stated that the foreign workers this rule targets
fill critical needs in the U.S. labor market, bolster innovation,
create jobs, and drive economic growth. The commenter, along with an
individual commenter, stated that some studies show foreign workers
have a positive impact on wages overall. Similarly, an advocacy group
said limiting the amount of high-skilled foreign workers in the United
States does not mean that there will be more jobs available to U.S.
workers; rather, it would mean many companies would shift jobs
overseas. The commenter stated that, if the H-1B program were expanded,
it could result in up to 1.2 million new jobs for U.S. workers. The
commenter went on to state that the program does not have a
``depressive effect'' on U.S. worker wages, and concluded by saying
that, by restricting the H-1B program, the proposed rule would not have
the intended effects of boosting American jobs and wages. An individual
commenter stated that USCIS already has protected U.S. workers by
increasing fees and updating the definition of ``specialized
knowledge,'' and there is no need to distort the labor markets and harm
U.S. competitiveness at a time when the U.S. can once again be a leader
in technology development.
Response: DHS disagrees with these comments. DHS believes that
salary generally is a reasonable proxy for skill level.\96\ As stated
in the NPRM, 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 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. While we believe that the rule may
incentivize an employer to proffer a higher wage to increase their
chances of selection, we also believe the employer only would do so if
it was in their economic interest to do so based on the beneficiary's
skill level and relative value to the employer.
---------------------------------------------------------------------------

\96\ U.S. Department of Labor, Education and Pay Level, https://www.dol.gov/general/topic/wages/educational (``Generally speaking,
jobs that require high levels of education and skill pay higher
wages than jobs that require few skills and little education.'')
(last visited Dec. 21, 2020). See also Ed Andrews, Relationship
between Skills and Wages, Smart Solutions Group (Dec. 2015), http://smartsolutionsgroup.net/wp-content/uploads/2015/12/Relationship-Between-Skills-and-Wages.pdf (``There is a very strong correlation
between Skills Levels and Wages--as expected, higher skills levels
have higher wages and low skill levels have lower wages.); DOL IFR,
85 FR 63872 (it is a ``largely self-evident proposition that workers
in occupations that require sophisticated skills and training
receive higher wages based on those skills.'').
---------------------------------------------------------------------------

DHS acknowledges that aliens may be offered salaries at level I or
level II prevailing wages to work in specialty occupations and may be
eligible for H-1B status. However, DHS also believes that, in years of
excess demand exceeding annual limits for H-1B visas subject to the
numerical allocations, the current process of random selection does not
optimally serve Congress' purpose for the H-1B program. Instead, in
years of excess demand, selection of H-1B cap-subject petitions on the
basis of the highest OES prevailing wage level that the proffered wage
equals or exceeds is more consistent with the purpose of the H-1B
program and 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.\97\
---------------------------------------------------------------------------

\97\ See Kirk Doran et al., The Effects of High-Skilled
Immigration Policy on Firms: Evidence from Visa Lotteries,
University of Notre Dame (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., Understanding
the Economic Impact of the H-1B Program on the U.S., Working Paper
23153, National Bureau of Economic Research (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.'').
---------------------------------------------------------------------------

DHS does not agree that the rule will limit or restrict the number
of H-1B workers, and that is not the rule's intent. DHS also does not
agree that this rule will result in companies shifting jobs overseas or
will harm U.S. competitiveness. Rather, DHS believes that the admission
of higher-skilled workers would benefit the economy and increase the
United States' competitive edge in the global labor market.
Comment: An individual commenter stated that the lowest paid H-1B
worker makes more than H-2 workers, and yet, the administration has
expanded the H-2 guest worker program and is presently seeking to lower
prevailing wages for these workers, suggesting that ``increasing the
wages paid to foreign workers is not actually a consistent policy or
priority for the administration.'' The commenter also said the NPRM's
reference to incidents of long-time U.S. employees being laid off in
favor of younger workers are actually more complicated and show the
declining enrollment in IT and STEM fields by U.S. students. The
commenter went on to say that H-1B workers are more costly than U.S.
workers, which demonstrates that there are not enough similarly
situated U.S. workers.
Response: DHS disagrees with the commenter's assertions. Regarding
the H-2 program, DHS disagrees that the administration's policies have
been inconsistent, as these programs serve different purposes. As DHS
has stated above and in the NPRM, 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. DHS believes that this rule
reflects that intent more faithfully than a random selection process.
DHS also disagrees that the instances cited in the NPRM of U.S.
employers replacing qualified and skilled U.S. workers with relatively
lower-skilled H-1B workers shows declining enrollment in STEM fields by
U.S. students, and does not agree with the commenter's assessment
regarding insufficient U.S. workers.\98\ Actually,

[[Page 1701]]

the fact that more than a third of recent American graduates with STEM
degrees do not obtain work in a STEM field indicates that there is no
shortage of qualified recent American graduates to fill STEM jobs.\99\
---------------------------------------------------------------------------

\98\ See e.g., Hal Salzman, Daniel Kuehn, and B. Lindsay Lowell,
Guestworkers in the High-Skill U.S. Labor Market: An analysis of
supply, employment, and wage trends, Economic Policy Institute (Apr.
24, 2013), at 26, 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..'');
Ron Hira and Bharath Gopalaswamy, Reforming US' High-Skilled
Guestworker Program, Atlantic Council (Jan. 2019), at 11, https://www.atlanticcouncil.org/wp-content/uploads/2019/09/Reforming_US_High-Skilled_Guestworkers_Program.pdf (``By every
objective measure, most H-1B workers have no more than ordinary
skills, skills that are abundantly available in the US labor market.
That means they are likely competing with (and substituting for) US
workers, rather than complementing them as was the program's
intention . . . H-1B workers are underpaid and placed in substandard
working conditions, while US workers' wages are depressed, and they
lose out on job opportunities'').
\99\ See Ron Hira and Bharath Gopalaswamy, Reforming US' High-
Skilled Guestworker Program, Atlantic Council (Jan. 2019), at 7,
https://www.atlanticcouncil.org/wp-content/uploads/2019/09/Reforming_US_High-Skilled_Guestworkers_Program.pdf (``Further
examining the career transitions of these graduates, we look at the
reasons why a third of computer science graduates, and nearly half
of engineering graduates, do not go into a job directly related to
their degree (Figure E). For computer science graduates employed one
year after graduation (i.e., excluding those unemployed or in
graduate school), about half of those who took a job outside of IT
say they did so because the career prospects were better elsewhere,
and roughly a third because they couldn't find a job in IT. For
engineering graduates, it's about an even split, with approximately
one-third each saying they did not enter an engineering job either
because of career prospects or they couldn't find an engineering
job. In short, of those graduates with the most IT-relevant
education, a large share report they were unable to find an IT job
while others found IT jobs to be paying lower wages or offering less
attractive working conditions and career prospects than other, non-
STEM jobs.'').
---------------------------------------------------------------------------

Finally, concerning the comment that H-1B workers are more costly
than U.S. workers, DHS recognizes that employers often incur upfront
costs to file H-1B petitions (including filing fees and preparation
fees). However, DHS believes these upfront costs are offset by the
employer's ability to legally pay their H-1B employees relatively low
wages below the local median wage. Data show that the majority of H-1B
cap-subject petitions have been filed for positions certified at the
level I or level II prevailing wages, both of which are set below the
local median wage.\100\ Employers may realize additional cost savings
over the span of several years as they continue to employ these H-1B
workers at below-median wages without any statutory requirement to
increase the workers' wage levels or wages beyond the minimum required
wages. Unlike U.S. workers, H-1B workers are tied to their specific
employer, and, therefore, may lack the negotiating power of similarly
skilled U.S. workers to request wage increases.\101\ DHS believes that
the random selection process is not fair to U.S. workers whose wages
may be adversely impacted by relatively lower-paid H-1B workers.
---------------------------------------------------------------------------

\100\ See Daniel Costa and Ron Hira, H-1B Visas and Prevailing
Wage Level, Economic Policy Institute (May 4, 2020), https://www.epi.org/publication/h-1b-visas-and-prevailingwage-levels/
(explaining that the H-1B allows employers to use the H-1B program
``to pay [H-1B] workers well below market wages'' and ``undercut
local wages'').
\101\ See Ron Hira and Bharath Gopalaswamy, Reforming US' High-
Skilled Guestworker Program, Atlantic Council (Jan. 2019), https://www.atlanticcouncil.org/wp-content/uploads/2019/09/Reforming_US_High-Skilled_Guestworkers_Program.pdf (``The current
system not only harms Americans; it also enables H-1B workers to be
exploited. H-1B workers themselves are underpaid, vulnerable to
abuse, and frequently placed in poor working conditions.'').
---------------------------------------------------------------------------

c. Lack of Evidence To Support Rulemaking
Comments: An advocacy group stated that the evidence provided in
the NPRM is not robust enough to justify such a dramatic change in
policy. According to the commenter, the agency failed to consider
multiple sources that suggest the current H-1B program benefits U.S.
workers and the economy. Similarly, a trade association said that the
Agency ``selectively cherrypicked a small minority of studies'' from
sources that regularly object to the use of temporary highly-skilled
foreign talent, asserting that, had USCIS completed a more
comprehensive review of literature, it would have been clear that the
H-1B visa program and workers make significant contributions to the
U.S. economy and society.
A joint submission from multiple organizations said that DHS even
communicates its failure to gather sufficient evidence before
publication, and that DHS appears to be operating under the
misconception that anything can be published as an NPRM and the burden
shifts to the public to analyze the potential impacts. The commenters
said that DHS should gather more data before restarting the regulatory
process. An individual commenter similarly said that the agency
provides inadequate justifications for the proposed changes, while
another individual commenter said that the proposed rule is ``half-
baked and flawed in a number of ways'' and requires proper rule-making
procedures. An individual commenter stated that the proposed rule does
not explain how giving priority to higher wage levels is a more
efficient allocation process than the current random lottery process.
The commenter said the H-1B lottery is a fair solution to the issue of
many petitions arriving on the same day or time, and the proposed rule
would ``go beyond the principle of fairness.''
A trade association stated that the APA does not allow an agency to
make significant change without completing an accurate cost-benefit
analysis, which the agency did not do, nor did it allow sufficient time
for stakeholders to conduct their own assessments. A company similarly
stated that the Department's ``scant justification'' for wage-based
selection of H-1B petitions violates the APA because a Level I or II
prevailing wage does not mean that that the worker is not highly
skilled or vital. The company said that the Department's reasoning for
the proposed rule lacks a ``rational connection between the facts found
and the choice made.'' An anonymous commenter wrote that the proposal
is arbitrary and capricious, asserting that DHS does not explain the
rationale behind making wages the sole indicator of a worker's
eligibility for visa sponsorship.
Response: DHS disagrees with these comments. DHS conducted a
comprehensive review of the issues, relying on both internal data and
external studies and reports.\102\ DHS acknowledges the articles,
studies, and reports submitted by commenters that purport to show the
overall benefits of H-1B workers.\103\ DHS recognizes that some H-1B
workers do fill gaps in the labor market and make contributions to the
overall economy. However, while some studies show the benefits of H-1B
workers overall, DHS also believes that sufficient evidence
demonstrates that a prevalence of relatively lower-paid and lower-
skilled H-1B workers is

[[Page 1702]]

detrimental to U.S. workers.\104\ As discussed in the NPRM and above,
DHS further believes that the influx of relatively lower-skilled and
lower-paid H-1B workers is not consistent with the dominant legislative
purpose of the statute. Prioritizing registrations based on wage level
likely 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.
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\102\ See, e.g., Kirk Doran et al., The Effects of High-Skilled
Immigration Policy on Firms: Evidence from Visa Lotteries,
University of Notre Dame (Feb. 2016), https://gspp.berkeley.edu/assets/uploads/research/pdf/h1b.pdf; John Bound et al.,
Understanding the Economic Impact of the H-1B Program on the U.S.,
Working Paper 23153, National Bureau of Economic Research (Feb.
2017), http://www.nber.org/papers/w23153; Daniel Costa and Ron Hira,
H-1B Visas and Prevailing Wage Level, Economic Policy Institute (May
4, 2020), https://www.epi.org/publication/h-1b-visas-and-prevailing-wage-levels/.
\103\ See, e.g., Neil G. Ruiz and Jens Manuel Krogstad, Salaries
Have Risen for High-Skilled Foreign Workers in U.S. on H-1B Visas,
Pew Research Center (Aug. 16, 2017), https://www.pewresearch.org/facttank/2017/08/16/salaries-have-risen-for-high-skilled-foreign-workers-in-u-s-on-h-1b-visas/; A. Nicole Kreisberg, H-1B Visas: No
Impact on Wages, American Institute for Economic Research (Sept.
2014), https://www.aier.org/research/h-1b-visas-no-impact-on-wages/;
Jonathan Rothwell and Neil G. Ruiz, H-1B Visas and the STEM
Shortage, The Brookings Institution (May 10, 2013), https://www.brookings.edu/research/h-1b-visas-and-the-stem-shortage/; Neil
G. Ruiz et al., The Search for Skills: Demand for H-1B Immigrant
Workers in U.S. Metropolitan Areas, The Brookings Institution (July
18, 2012), https://www.brookings.edu/research/the-search-for-skills-demand-for-h-1b-immigrant-workers-in-u-s-metropolitan-areas/;
Madeline Zavodny, The H-1B Program and Its Effects on Information
Technology Workers, Federal Reserve Bank of Atlanta (Sept. 2003),
https://www.frbatlanta.org/research/publications/economic-review/2003/q3/vol88no3_H-1B-program-and-effects-on-information-technology-workers.aspx.
\104\ See The National Academies of Sciences, Engineering, and
Medicine, The Economic and Fiscal Consequences of Immigration 258
(Washington, DC: The National Academies Press 2017), https://doi.org/10.17226/23550 (noting that differing results across certain
studies ``may reflect immigrant heterogeneity generally and among H-
1B workers in particular'').
---------------------------------------------------------------------------

Based on its comprehensive review of the submitted comments and
available evidence, DHS has concluded that, by changing the selection
process, in these years of excess demand, from a random lottery
selection to selection generally based on the highest OES prevailing
wage level that the proffered wage equals or exceeds, DHS will
implement the statute more faithfully to its dominant legislative
purpose. DHS further believes that this will 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. It may also benefit U.S. workers as employers that
might have petitioned for a cap-subject H-1B worker to fill relatively
lower-paid, lower-skilled positions, may be incentivized to hire
available and qualified U.S. workers for those positions. DHS believes
that the available data and information support this rulemaking and
that it is not necessary to gather more data or to restart the
regulatory process.

C. Proposed Changes to the Registration Process for H-1B Cap-Subject
Petitions

1. Proposed Wage-Based Selection (Selection Process for Regular Cap and
Advanced Degree Exemption, Preservation of Random Selection Within a
Prevailing Wage)
Comment: A business association commented that adding in a non-
random variable to the H-1B cap selection process would open the door
to pre-adjudication, which may add new burdens to the petitioners and
USCIS. The commenter also said the addition of the wage factor may
cause potential enforcement or audit actions if USCIS does not agree
with a petitioner's assessment of ``corresponding wage level,'' either
when adjudicating the petition or in the course of a post-adjudication
audit. In addition, the commenter said the ``corresponding wage level''
listed on the lottery registration would not necessarily match the
``wage level'' designated on the Labor Condition Application (LCA)
form, creating confusion.
Response: DHS disagrees that ranking according to the highest OES
prevailing wage level that the proffered wage equals or exceeds will be
a pre-adjudication, as submission of the electronic registration is
merely an antecedent procedural requirement to properly file the
petition. It is not intended to replace the petition adjudication
process or assess substantive eligibility. With respect to new burdens
resulting from the additional information provided, these are captured
below in section V. Statutory and Regulatory Requirements. DHS believes
that the additional burden, which is relatively small, is necessary to
ensure that USCIS implements the registration system in a manner that
realistically, effectively, efficiently, and more faithfully
administers the cap selection process.
DHS acknowledges that the ``wage level'' listed by the petitioner
on the registration form may not always match the ``wage level''
indicated on the LCA. However, DHS believes that the instructions
provided in the registration system and on the H-1B petition are
sufficiently clear to avoid confusion. Further, USCIS officers will be
sufficiently trained on the reasons why the wage level on the
registration form may not always match the LCA, and may request
additional evidence from the petitioner, as appropriate, to resolve
material discrepancies in this regard. However, DHS notes that USCIS
may deny or revoke a petition 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.\105\
---------------------------------------------------------------------------

\105\ See new 8 CFR 214.2(h)(8)(iii)(D)(1)(ii).
---------------------------------------------------------------------------

Comment: A professional association noted that DHS proposes to
abruptly and unnecessarily change the selection process for H-1B cap-
subject petitions by prioritizing registrants based on the highest OES
prevailing wage level, and consider applicants solely based on the
amount of money that they would be paid, rather than the utility that
they would bring to the U.S. workforce.
Response: DHS believes that ranking and selecting by the highest
OES prevailing wage level that the proffered wage equals or exceeds is
a practical way to achieve 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. As stated previously, the new ranking system takes into
account the wage level relative to the SOC code and area(s) of intended
employment--as opposed to salary alone--when ranking registrations.
While DHS agrees that the utility an H-1B beneficiary brings to the
U.S. workforce is important, there is no practical, objective way to
measure utility such that DHS could use this quality to rank and select
H-1B registrations or petitions.
2. Required Information From Petitioners
a. OES Wage Level
i. Highest OES Wage Level That the Proffered Wage Would Equal or Exceed
Comments: Several commenters said DHS should rank registrations at
OES prevailing wage level I separate from those falling below OES
prevailing wage level I, so that registrations who meet wage level I
are prioritized for H-1B selection over those falling below level I.
Some commenters noted that the DOL IFR placed the level I wage at the
45th percentile (close to previous level III), creating vast
differentiation within this large group. Therefore, the benefits of the
rule of differentiating candidates would fail for at least 90 percent
of registrations, as the DOL IFR would result in the prevailing wage
level I and below group being much larger and DHS needing to select
from that group completely at random. With that lack of
differentiation, the new rule would not accomplish its purpose of
retaining the best talent. Therefore, these commenters urged DHS to
consider separating those registrations at or above level I wages from
those falling below, as opposed to putting them into one giant group.
Response: DHS does not agree with the suggestions to separate OES
wage level I from a wage below level I. DHS expects that all
petitioners offering a wage lower than the OES wage level I wage will
be using another legitimate source other than OES or an independent
authoritative source, including a private wage survey. Therefore, such
a change effectively could preclude petitioners that utilize one of
those other sources from being selected for registration. By grouping
OES wage level I and below together, those petitioners have a fair
chance of selection and are not precluded from using a private wage
survey as appropriate. Since the DOL IFR was set

[[Page 1703]]

aside on December 1, 2020, and is no longer being implemented, DHS will
not be considering the impact of the DOL IFR in the context of this
final rule.\106\
---------------------------------------------------------------------------

\106\ On December 1, 2020, the U.S. District Court for the
Northern District of California issued an order in Chamber of
Commerce, et al. v. DHS, et al., No. 20-cv-7331, setting aside the
DOL IFR, 85 FR 63872. Similarly, on December 3, 2020, the U.S.
District Court for the District of New Jersey issued a preliminary
injunction in ITServe Alliance, Inc., et al. v. Scalia, et al., No.
20-cv-14604, applying to the plaintiffs in that case. Also, on
December 3, 2020, DOL announced that it would no longer implement
the IFR, consistent with the above referenced court orders.
---------------------------------------------------------------------------

Comments: A professional association remarked that petitioners who
use private survey data would be disadvantaged by the proposed rule and
said that, even when private wage surveys provide an accurate
prevailing wage, the proposed rule requires the employer to
``downgrade'' the H-1B registration to the lower OES prevailing wage
level. The commenter concluded that, as a result, the proposed rule's
artificial preference in the registration system to what is admittedly
incomplete or possibly inaccurate OES wage data reduces the chance that
employers intending to pay the H-1B required wage based on the
statutory ``best information available''--in this case a private
industry survey--will see their registration selection chances
materially reduced. A law firm questioned which factors contributed to
DHS's decision to use the OES wage levels as opposed to wage leveling
from a permissible private wage survey.
Response: DHS appreciates the commenter's question. When
determining how to rank and select registrations (or petitions) by wage
level, DHS decided to use OES prevailing wage levels because they are
the most comprehensive and objective source for comparing wages. The
OES program produces employment and wage estimates annually for nearly
800 occupations.\107\ Additionally, most petitioners are familiar with
the OES wage levels since they are used by DOL and have been used in
the foreign labor certification process since 1998.\108\ OES wage level
data is publicly available through the Foreign Labor Certification Data
Center's Online Wage Library. Private wage surveys are not publicly
available and do not always have four wage levels.
---------------------------------------------------------------------------

\107\ See U.S. Department of Labor, Bureau of Labor Statistics,
Occupational Employment Statistics, https://www.bls.gov/oes/home.htm
(last visited Dec. 14, 2020).
\108\ See U.S. Department of Labor, Employment and Training
Administration, Prevailing Wages (PERM, H-2B, H-1B, H-1B1, and E-3),
https://www.dol.gov/agencies/eta/foreign-labor/wages/prevailing-wage
(last visited Dec. 14, 2020).
---------------------------------------------------------------------------

DHS disagrees with the commenter's assertion that petitioners who
use private survey data would be disadvantaged by the rule. Petitioners
may continue to use private wage surveys, if they choose to do so, to
establish that they will be paying the beneficiary a required wage.
This rule, however, will rank and select registrations or petitions, as
applicable, based on the highest OES wage level that the proffered wage
equals or exceeds as OES wage data is the most comprehensive and
objective source for comparing wages.
Comment: An individual commenter stated that the requirement to
designate the wage level is confusing because DHS is asking petitioners
to designate not the wage level associated with the job opportunity,
but the highest OES wage level for which the proffered wage exceeds the
OES wage. The commenter said asking petitioners to determine two
different wage levels makes the process deliberately complex and ripe
for error, which could be fatal given the proposed increased authority
of USCIS to deny petitions for discrepancies in wage levels. The
commenter also expressed concern that the position, its substantive job
duties, its occupational classification, the intended worksite, the
prevailing wage, and the actual wage are now required at the
registration stage in order to comply with the ``complicated ranking-
wage-level calculation.''
Response: DHS does not agree with the comment stating that asking
petitioners to specify the highest corresponding OES wage level that
the proffered wage would equal or exceed on the registration is
confusing or burdensome. Further, DHS disagrees with the comment
stating that the position, its substantive job duties, its occupational
classification, the intended worksite, the prevailing wage, and the
actual wage are now required at the registration stage. 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 only the
highest OES wage level that the proffered wage equals or exceeds for
the relevant SOC code in the area of intended employment. 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.
Comment: A professional association asserted that the U.S. Bureau
of Labor Statistics' (BLS) OES wage survey skews wage data higher for
several professions, including physician specialties. The commenter
suggested that wage survey data collected from employees has
significant issues, including that the data is collected voluntarily,
wage data is grouped rather than provided for individual employees,
larger urban centers are overrepresented compared to smaller practices,
and physicians in rural areas are underreported. The association added
that, in situations where there is less wage data, DHS will be unable
to accurately adjudicate cap slots, citing data from the American
Immigration Council and the Foreign Labor Certification Data Center.
The association also said the DOL IFR increases the prevailing wage
requirements and exacerbates the issue by establishing a default wage
for physicians of $208,000 where data is unavailable. The professional
association stated that the BLS prevailing wage does not comply with
DHS's claim that higher skill level positions must be paid higher
wages. The association asserted that statistical analysis problems with
the BLS OES survey would cause the population of H-1B physicians to be
paid equally regardless of skill or experience. The commenter further
stated that rural and other underserved areas will not meet the wage
requirements and will lose access to critically needed physicians.
Response: On December 1, 2020, the U.S. District Court for the
Northern District of California issued an order in Chamber of Commerce,
et al. v. DHS, et al., No. 20-cv-7331, setting aside the DOL IFR, which
took effect on October 8, 2020, and implemented reforms to the
prevailing wage methodology for the Permanent Employment Certification,
H-1B, H-1B1, and E-3 visa programs. Similarly, on December 3, 2020, the
U.S. District Court for the District of New Jersey issued a preliminary
injunction in ITServe Alliance, Inc., et al. v. Scalia, et al., No. 20-
cv-14604, applying to the plaintiffs in that case. On December 3, 2020,
DOL announced that it was taking necessary steps to comply with the
courts' orders and will no longer implement the IFR. These steps
include making required technical changes to the Foreign Labor
Application Gateway (FLAG) system to replace the October 8, 2020,
through June 30, 2021, wage source year data that was implemented under
the DOL IFR with the OES prevailing wage data that was in effect on
October 7, 2020, and reflecting such data updates in the Foreign Labor

[[Page 1704]]

Certification Data Center Online Wage Library \109\ at https://www.flcdatacenter.com/ with the correct prevailing wage data for each
SOC and area of intended employment through June 30, 2021.\110\
---------------------------------------------------------------------------

\109\ 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, https://www.flcdatacenter.com/ (last visited Dec. 15, 2020).
\110\ DOL, Employment and Training Administration, Foreign Labor
Certification, Announcements https://www.dol.gov/agencies/eta/foreign-labor (last visited Dec. 21, 2020).
---------------------------------------------------------------------------

While prevailing wage level data remains unavailable for some SOC
codes in some areas of intended employment, DHS believes that its
solution in that limited circumstance, as proposed in the NPRM and
retained in this final rule, still will allow DHS to select
registrations according to the metric of the registrant's self-
identified prevailing wage level as calculated using DOL's prevailing
wage level guidance.\111\ DHS recognizes that this solution is
imperfect as it does not provide a means for those registrants to
proffer wages that equal or exceed higher prevailing wage levels than
those commensurate with the position requirements. However, DHS
concludes that it is the best available option to serve the overarching
goal of revising the selection process to ensure that H-1B petitions
are filed for positions requiring relatively higher skill levels or
proffering wages commensurate with higher skill levels. The commenter's
statements that limitations in OES data would cause the population of
H-1B physicians to be paid equally regardless of skill or experience,
or that such limitations undermine the premise that higher skill level
positions must be paid higher wages, is beyond the scope of this
rulemaking. This rule does not require an employer to pay a certain
wage. This rule merely pertains to ranking and selection of
registrations or petitions, as applicable, based on corresponding wage
level. In the limited instance where OES data is unavailable, the
registrant would follow DOL guidance on prevailing wage determinations
to determine which OES wage level to select on the registration,
notwithstanding the proffered salary.
---------------------------------------------------------------------------

\111\ U.S. Department of Labor, Employment and Training
Administration, Prevailing Wage Determination Policy Guidance,
Nonagricultural Immigration Programs (Revised Nov. 2009), https://www.dol.gov/sites/dolgov/files/ETA/oflc/pdfs/NPWHC_Guidance_Revised_11_2009.pdf.
---------------------------------------------------------------------------

ii. Highest OES Wage Level When There Is No Current OES Prevailing Wage
Information
Comment: A business association commented that, although using the
prevailing wage worksheet to determine wage level makes sense, there is
no way to escalate to a higher corresponding wage level by paying more,
unlike when an OES wage is used. The commenter added that the
unavailability of an OES wage may be an indication that a job is new or
novel, and therefore may be even more in need of H-1B workers to
fulfill employment needs.
Response: DHS recognizes that some occupations do not have current
OES prevailing wage information available on DOL's Online Wage Library.
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. While petitioners may not be able
to increase their chance of selection by increasing the proffered wage,
they can increase their chance of selection by petitioning for
positions requiring higher skill, experience, or education levels.
DHS believes that, in the absence of current OES prevailing wage
information, selecting according to wage level is the best way to
ensure that registrations (or petitions) are selected consistent with
the primary purpose of the H-1B program, which is to help U.S.
employers fill labor shortages in positions requiring highly skilled or
highly educated workers. DHS data shows a correlation between higher
salaries and higher wage levels.\112\ Thus, even in those limited
instances where no OES prevailing wage information is available, DHS
believes that selecting according to wage level is likely to result in
selection of the highest-paid or highest-skilled beneficiaries,
consistent with the goals of the H-1B program. DHS will not comment on
whether the unavailability of OES wage indicates that a job is new,
novel, or in more demand, as that is outside the scope of this rule.
---------------------------------------------------------------------------

\112\ 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.
---------------------------------------------------------------------------

Comment: One commenter asked, where the OES wage levels are
missing, what penalties, if any, will be applied to petitioners or
beneficiaries if USCIS disagrees with the wage level selected by the
petitioner after selection has occurred.
Response: 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 established DOL guidance, all prospective
petitioners would be able to determine the appropriate OES wage level
for purposes of completing the registration or petition, as applicable,
regardless of whether they were to specify an OES wage level or utilize
the OES program as the prevailing wage source on an LCA.
During the adjudication process, if USCIS disagrees with the wage
level selected by the petitioner, USCIS will comply with 8 CFR
103.2(b)(8) and may provide the petitioner an opportunity to explain
the selected wage level, as applicable. If USCIS determines that the
petitioner failed to meet its burden of proof in establishing that it
selected the appropriate SOC code for the position, or if USCIS
determines that the petition was not based on a valid registration
(e.g., if there is a discrepancy in wage levels between the
registration and the petition), USCIS may deny the petition. 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.\113\ If USCIS determines that the statement of facts
contained in the petition or on the LCA was not true and correct,
inaccurate, fraudulent, or misrepresented a material fact, USCIS may
revoke the approval of that petition.\114\
---------------------------------------------------------------------------

\113\ See new 8 CFR 214.2(h)(8)(iii)(D)(1)(ii).
\114\ See 8 CFR 214.2(h)(11)(iii)(A)(2).
---------------------------------------------------------------------------

Comment: A professional association stated that, because the
registration system does not contemplate a real-time adjudication of
whether occupations lacking current OES prevailing wage information are
correctly slotted under USCIS' selection system, there would be no
fail-safe mechanism for employers to confirm that the wage-preference
selection process in fact operated as USCIS predicted in the proposed
rule. The commenter stated that, before any further rule is published,
DHS, DOL and OMB should investigate and determine whether any proposed
wage-preference H-1B selection process relying upon

[[Page 1705]]

incomplete OES data can be established, notwithstanding these apparent
data gaps and deficiencies. The commenter concluded that, despite the
inadequacy or unavailability of OES data, the proposed rule ignores the
requirement that wage data be sourced from ``the best information
available,'' placing unwarranted and artificial reliance on OES data
despite its faults or lack of availability.
Response: DHS recognizes that prevailing wage level data remains
unavailable for some SOC codes in some areas of intended employment.
However, DHS still believes that OES provides the most comprehensive
and objective publicly available source for obtaining prevailing wage
information and, thus, is still the best available option to serve the
overarching 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.\115\
---------------------------------------------------------------------------

\115\ See Kirk Doran et al., The Effects of High-Skilled
Immigration Policy on Firms: Evidence from Visa Lotteries,
University of Notre Dame (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., Understanding
the Economic Impact of the H-1B Program on the U.S., Working Paper
23153, National Bureau of Economic Research (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.'').
---------------------------------------------------------------------------

iii. Lowest OES Wage Level That the Proffered Wage Would Equal or
Exceed When Beneficiary Would Work in Multiple Locations or Positions
Comment: A commenter said employers may relocate an employee to
temporarily work remotely in a location where average salary is low to
keep wages low while increasing the H-1B wage level and the chance of
being selected. The commenter suggested that the area code used for the
selection of H-1B registrations only should be the registered official
address of the company, instead of anywhere where the employee will
work, concluding that employers should be fined for misrepresenting
work locations to take advantage of lower wages.
Response: DHS appreciates this commenter's concern, but believes
the commenter misunderstood how the new H-1B cap selection process will
work and the limitations contained in the proposed rule to limit the
potential for abuse or gaming of the selection process. If the H-1B
beneficiary will work in multiple locations or multiple positions, the
registrant or petitioner must specify on the registration or petition,
as applicable, the lowest corresponding OES wage level that the
proffered wage will equal or exceed for the relevant SOC code in the
area of intended employment, and USCIS will rank and select based on
the lowest corresponding OES wage level.
DHS provides the following example for illustrative purposes only.
A prospective employer intends to employ an H-1B beneficiary as a level
I ``Civil Engineer'' position (SOC code 17-2051) at two locations: San
Francisco, California and Montgomery, Alabama. The Alabama location was
specifically chosen because of that locality's generally lower
prevailing wages. The required level I prevailing wage for each area of
intended employment is $77,147 per year \116\ and $62,858 per
year,\117\ respectively. In this scenario, to meet the level I
prevailing wage for the San Francisco area of intended employment, the
minimum annual wage the prospective petitioner must offer to the
beneficiary is $77,147. While an annual salary of $77,147 would exceed
the level II prevailing wage for the Montgomery, Alabama, area of
intended employment,\118\ the prospective petitioner still must select
Level I for purposes of the registration because that is the lowest
corresponding OES wage level that the proffered wage will equal or
exceed for the relevant SOC code in all areas of intended employment.
This rule also includes provisions authorizing USCIS to deny an H-1B
petition if USCIS determines that the statements on the registration or
petition were inaccurate, fraudulent or misrepresented a material
fact.\119\ 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 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.\120\
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\116\ U.S. Department of Labor, Foreign Labor Certification Data
Center, Online Wage Library, https://www.flcdatacenter.com/OesQuickResults.aspx?code=17-2051&area=41860&year=21&source=1 (last
visited Dec. 21, 2020) (providing prevailing wage level values for
SOC code 17-2051 in San Francisco-Oakland-Hayward, CA, in the All
Industries database for 7/2020-6/2021).
\117\ U.S. Department of Labor, Foreign Labor Certification Data
Center, Online Wage Library, https://www.flcdatacenter.com/OesQuickResults.aspx?code=17-2051&area=33860&year=21&source=1 (last
visited Dec. 21, 2020) (providing prevailing wage level values for
SOC code 17-2051 in Montgomery, AL, in the All Industries database
for 7/2020-6/2021).
\118\ U.S. Department of Labor, Foreign Labor Certification Data
Center, Online Wage Library, https://www.flcdatacenter.com/OesQuickResults.aspx?code=17-2051&area=33860&year=21&source=1 (last
visited Dec. 21, 2020) (showing that a level II wage = $74,901).
\119\ See new 8 CFR 214.2(h)(10)(ii).
\120\ See new 8 CFR 214.2(h)(10)(ii).
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Comment: A professional association expressed concern with the
proposed rule's language stating, ``if the beneficiary will work in
multiple locations, or in multiple positions if the registrant is an
agent, USCIS will rank and select the registration for the lowest
corresponding OES wage level that the proffered wage will equal or
exceed.'' \121\ The commenter stated that, basing the chance for
selection on the lower wage figure is an ``arbitrary'' protocol without
explanation. Likewise, an individual commenter said the provision is
unfairly discriminatory and lacks adequate justification, adding that
it is ``unconscionable to use an inverted system'' for ranking.
---------------------------------------------------------------------------

\121\ 85 FR 69236, 69263.
---------------------------------------------------------------------------

Response: DHS chose to use the lowest corresponding OES wage level
that the proffered wage will equal or exceed in the case of multiple
locations or multiple positions to prevent gaming of the registration
process. If DHS were to invert the process and rank based on the
highest corresponding OES wage level that the proffered wage were to
equal or exceed, then petitioners could place the beneficiary in a
lower-paying position for most of the time and a higher-paying position
for only a small percent of the time, but use that higher-paying
position to rank higher in the selection process and increase their
chances of being selected in the registration process. Similarly, in
the case of multiple locations, petitioners could place the beneficiary
in a higher-paying locality for only a small percent of time, but use
that higher-paying locality to rank higher in the selection process and
increase their chances of being selected in the registration process.
iv. Other Comments on OES Wage Level
Comment: Several commenters said that the proposed rule's changes
to prevailing wage levels are in direct opposition to established
guidance set forth in the DOL Employment and

[[Page 1706]]

Training Administration Prevailing Wage Determination Policy
Guidance.\122\
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\122\ U.S. Department of Labor, Employment and Training
Administration, Prevailing Wage Determination Policy Guidance,
Nonagricultural Immigration Programs (Revised Nov. 2009), https://www.dol.gov/sites/dolgov/files/ETA/oflc/pdfs/NPWHC_Guidance_Revised_11_2009.pdf.
---------------------------------------------------------------------------

Response: This rule does not conflict with or change established
DOL guidance. DHS clearly stated in the NPRM that this ranking and
selection process will not alter the prevailing wage levels associated
with a given position for DOL purposes, which are informed by a
comparison of the requirements for the proffered position to the normal
requirements for the occupational classification.\123\
---------------------------------------------------------------------------

\123\ 85 FR 69236, 69237.
---------------------------------------------------------------------------

Comment: A professional association wrote that the OES wage data
has various shortcomings, and there are advantages to using a variety
of wage data. Prevailing wage data can originate from multiple sources,
including wage surveys published by private organizations and employer-
conducted surveys. The association said that BLS OES survey data used
to calculate prevailing wages is not designed for foreign labor
certification, and OES survey data captures no information about
differences based on skills, training, experience or responsibility
levels of the workers, all of which are factors the INA requires DHS to
consider. The association said that the OES survey is the best
available source of wage data for the Department's purposes, but it is
not perfectly suited to the H-1B, H-1B1, and E-3 classifications, nor
to the Permanent Labor Certification Program (PERM). The professional
association also commented that the proposed rule does not describe the
cases when OES prevailing wage data would be unavailable or how USCIS
officials would be trained to interpret DOL guidance, and petitioners
who cannot use Online Wage Library data would have no way to know
whether USCIS officials misinterpreted the DOL guidance and mistakenly
disagreed with an employer's wage level selection.
Response: When determining how to rank and select registrations (or
petitions, as applicable) by the highest OES prevailing wage level that
the proffered wage equals or exceeds, DHS decided to use OES prevailing
wage levels because OES is the most comprehensive and objective source
for comparing wages. The OES program produces employment and wage
estimates annually for nearly 800 occupations.\124\ Additionally, most
petitioners are familiar with the OES wage levels since they are used
by DOL and have been used in the foreign labor certification process
since 1998.\125\ During the adjudication process, if USCIS disagrees
with the wage level selected by the petitioner, USCIS will comply with
8 CFR 103.2(b)(8) and may provide the petitioner an opportunity to
explain the wage level, as applicable. If USCIS determines that the
petitioner failed to meet its burden of proof in establishing that it
selected the appropriate SOC code for the position, or if USCIS
determines that the petition was not based on a valid registration
(e.g., if there is a discrepancy in wage levels between the
registration and the petition), USCIS may deny the petition.\126\ 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.\127\ If USCIS determines that the statement
of facts contained in the petition or on the LCA was not true and
correct, inaccurate, fraudulent, or misrepresented a material fact,
USCIS may revoke the approval of that petition.\128\
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\124\ U.S. Department of Labor, U.S. Bureau of Labor Statistics,
Occupational Employment Statistics, https://www.bls.gov/oes/home.htm
(last visited on Dec. 11, 2020).
\125\ U.S. Department of Labor, Employment and Training
Administration, Prevailing Wages (PERM, H-2B, H-1B, H-1B1, and E-3),
https://www.dol.gov/agencies/eta/foreign-labor/wages/prevailing-wage
(last visited Dec. 11, 2020).
\126\ See new 8 CFR 214.2(h)(8)(iii)(D)(1)(i).
\127\ See new 8 CFR 214.2(h)(8)(iii)(D)(1)(ii).
\128\ See new 8 CFR 214.2(h)(11)(iii)(A)(2).
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b. Attestation to the Veracity of the Contents of the Registration and
Petition (Including Comments on Rejections, Denials, and Revocations)
Comments: One commenter noted the need to ensure that ranking and
selection as described would not enable attempts to increase the chance
of selection by representing one wage level at the registration stage
and a lower wage level at the H-1B petition filing stage.
Response: DHS appreciates and shares the commenter's concern. New 8
CFR 214.2(h)(8)(iii)(D)(1)(iii), (h)(10)(ii), and (h)(11)(iii)(A)(2)
address the concern that registrants could misrepresent wage levels at
the registration stage to increase chances of selection. Specifically,
this final rule empowers USCIS to deny a petition if USCIS determines
that the statements on the registration or petition were inaccurate,
fraudulent, or misrepresented a material fact. The rule also authorizes
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 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. The ability to deny or revoke
approval of an H-1B petition in such a context will defend against
registrants and petitioners attempting to abuse the H-1B cap selection
process by misrepresenting wage levels.
Comment: One commenter asked what factors DHS will use to determine
if a petitioner attempted to circumvent the proposed rule by filing a
subsequent new petition with a lower wage under a related entity, and
whether DHS will consider that related entities may have different
compensation ranges for similar positions in making this determination.
Response: DHS thanks this commenter for the question. Under new 8
CFR 214.2(h)(10)(ii), USCIS 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 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. Whether 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
is an issue of fact that USCIS will determine based on the totality of
the record. As such, DHS cannot provide an exclusive list of factors
that USCIS will consider in such adjudications. In general, however,
the petitioner or a related entity bears the burden of proof to
demonstrate that: the new or amended petition is not part of the
petitioner's attempt to unfairly increase the odds of selection during
the registration or petition selection process; the initial H-1B
petition and the underlying registration, when applicable, was based on
a legitimate

[[Page 1707]]

job offer; \129\ and the new or amended petition is nonfrivolous.\130\
---------------------------------------------------------------------------

\129\ See new 8 CFR 214.2(h)(10)(ii) (``A valid registration
must represent a legitimate job offer.''); U.S. Department of
Homeland Security, U.S. Citizenship and Immigration Services, Policy
Memorandum PM-602-0114, Rescission of Policy Memoranda (June 17,
2020), https://www.uscis.gov/sites/default/files/document/memos/PM-602-0114_ITServeMemo.pdf (``A bona fide job offer must exist at the
time of filing [the H-1B petition].'').
\130\ See 8 CFR 214.2(h)(2)(i)(H).
---------------------------------------------------------------------------

Further, DHS notes that, under the current registration system, the
petitioner identified at the registration stage must match the
petitioner of the subsequently filed petition. 8 CFR
214.2(h)(8)(iii)(D) states that a petitioner may not substitute the
beneficiary named in the original registration or transfer the
registration to another petitioner. This rule has not changed this
requirement. Accordingly, USCIS may deny an H-1B cap-subject petition
if an entity other than the petitioner identified at the registration
stage, including a related entity, files the petition.
Comment: An individual suggested allowing future H-1B extensions or
renewals only with a wage level that is equal or greater than the wage
level selected in the lottery for the first time.
Response: H-1B extensions or renewals are not impacted by this
rule, and DHS declines to impose a universal requirement that all
extension or renewal requests must be for a position at the equal or
greater wage level. Employers are permitted to file an extension
petition requesting continuation of previously approved employment
without change with the same employer, which most likely involves a
position at the same wage level. Furthermore, employers are permitted
to file extension or amended petitions requesting new employment,
change in previously approved employment, new concurrent employment,
change of employer, or amended employment. All of these petition types
could involve positions with different SOC codes, which makes a
straight comparison of wage levels impractical.
However, under new 8 CFR 214.2(h)(10)(ii), USCIS 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 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.
Comment: An individual commenter said that the formal certification
requirement, whereby the petitioner's authorized signatory certifies
``that the proffered wage on the petition will equal or exceed the wage
level on the applicable registration,'' does not recognize that
registrations are submitted in March for a fiscal year beginning the
following October. Therefore, particularly in years such as FY 2021
where there is a second round of selections, H-1B cap petitions may be
filed after OES wages have changed. The commenter said the new question
added to the registration seems to address this concern, by specifying
``[a]s of the date of this submission . . . ,'' but the formal
certification that is binding on the employer does not make this
distinction, which could lead to unnecessary and inappropriate
liability. The commenter said that the certification should be revised
to reflect only an attestation that the wage ``will equal or exceed the
prevailing wage, in effect at the time of submission, that is
associated with the wage level selected in the registration.''
Response: DHS thanks the commenter, but declines to adopt the
suggestion. As the commenter notes, the registration form makes
sufficiently clear that the information provided on the registration is
``as of the date of submission of this registration.'' DHS believes
that further changes to the form are unnecessary and could potentially
lead to gaming of the registration system.
3. Requests for Comments on Alternatives
Comment: A research organization and a labor union recommended
having staggered filing deadlines for petitions by wage levels as an
alternative in case the proposed rule is met with legal challenges.
Under this alternative, USCIS could have a first filing period, where
only petitions with jobs paying level IV are considered. Once all the
level IV petitions are submitted and approved, then a second filing
period at a later date could be set to receive only petitions with jobs
paying level III wages. After those are collected and approved, if
there are any visas remaining under the H-1B cap, then a filing period
for level II wages would be next, and finally a filing period for level
I. This way, all of the petitions would not be submitted at once,
thereby still allowing DHS to adjudicate and allocate petitions ``in
the order in which'' they were filed, as the statute requires. If there
were more petitions than available H-1B slots at a particular wage
level, there could be a ``mini-lottery'' within that wage level.
Response: DHS appreciates the commenters' suggestions to use
staggered filing deadlines. However, DHS believes it is not necessary
to create staggered filing deadlines since, as stated in the NPRM and
as explained above, this 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.\131\ Further, DHS believes that staggered filing
deadlines may create operational challenges for managing the cap and
adjudicating petitions in a timely manner. Staggered filing periods
could also have unintended consequences for petitioners filing H-1B
cap-subject petitions for beneficiaries who are in F-1 status and
seeking a change of status.\132\ Therefore, DHS declines to adopt this
suggestion.
---------------------------------------------------------------------------

\131\ 85 FR 69236, 69242.
\132\ See 8 CFR 214.2(f)(5)(vi).
---------------------------------------------------------------------------

Comment: One commenter suggested using only the beneficiary's
annual wage to prioritize the selection of registrations.
Response: DHS appreciates the commenter's suggestion to prioritize
selection based on annual wage. However, DHS believes that selecting
registrations or petitions, as applicable, solely based on the highest
salary would unfairly favor certain professions, industries, or
geographic locations. Therefore, DHS believes that prioritizing
generally based on the highest OES wage level that the proffered wage
equals or exceeds for the relevant SOC code and in the area of intended
employment is the better alternative.
Comment: Several commenters were concerned about the possibility of
abuse by companies who would offer part-time positions at greater
hourly wages, but would reduce overall working hours, to increase their
chance of selection. Other commenters expressed similar concerns about
potential abuse of part-time positions, indicating that review should
be stricter for part-time H-1B applicants.
Response: This final rule authorizes USCIS to reject or deny a
petition or, if approved, revoke the approval of a petition, if the
statement of facts contained on the registration form is inaccurate,
fraudulent, misrepresents any material fact, or is not true and
correct.\133\ Similarly, this final rule authorizes USCIS to deny or
revoke approval of a subsequent new or

[[Page 1708]]

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.\134\ Thus, if USCIS
finds that an employer misrepresented the part-time or full-time nature
of a position, the number of hours the beneficiary would work, or the
proffered salary, then USCIS could deny or revoke the petition. The
ability to deny or revoke approval of an H-1B petition in this context
will militate against registrants and petitioners attempting to abuse
the H-1B cap selection process through misrepresentation.
---------------------------------------------------------------------------

\133\ See new 8 CFR 214.2(h)(8)(iii)(D)(1)(ii).
\134\ See new 8 CFR 214.2(h)(8)(iii)(D)(1)(iii).
---------------------------------------------------------------------------

Comment: One commenter suggested that, 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, then USCIS should rank and choose registrations by the
highest prevailing wage within that wage level. Another commenter
stated that visas should be allocated by the prevailing wage, even
within each level.
Response: DHS does not believe that selecting the highest
prevailing wage within a wage level is a better alternative to randomly
selecting within a single wage level when USCIS receives 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. DHS prefers
to give all registrations ranked at the particular wage level the same
chance of selection because those registrations generally would
represent workers at the same skill level. If DHS were to select the
highest prevailing wage within a wage level, that could unfairly
advantage registrations or petitions for positions in higher-paying
metropolitan areas or occupations.
Comment: One commenter suggested giving preference to beneficiaries
with U.S. degrees. Another commenter stated that DHS should consider
adding an advantage to candidates who receive a U.S. education as this
will benefit U.S. institutions of higher education.
Response: DHS declines to adopt the commenters' suggestions.
Registrations or petitions, as applicable, submitted for beneficiaries
who have earned a master's or higher degree from a U.S. institution of
higher education already have a higher chance of selection through the
administration of the selection process. DHS reversed the order in
which USCIS selects registrations or petitions, as applicable, which
was expected to result in an increase in the number of H-1B
beneficiaries with a master's degree or higher from a U.S. institution
of higher education selected by up to 16 percent each year \135\ and
resulted in an 11 percent increase in FY 2020.\136\
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\135\ H-1B Registration Final Rule, 84 FR 888, 890.
\136\ U.S. Department of Homeland Security, U.S. Citizenship and
Immigration Services, DHS Proposes Minimal Registration Fee for
Petitioners Seeking to File H-1B Cap-Subject Petitions (Sept. 3,
2019), https://www.uscis.gov/news/alerts/dhs-proposes-minimal-registration-fee-for-petitioners-seeking-to-file-h-1b-cap-subject-petitions.
---------------------------------------------------------------------------

Comment: Some commenters said that DHS should consider ranking by
years of experience, rather than by wage. One commenter asked DHS to
give an advantage to candidates who have work experience in the United
States.
Response: DHS declines to adopt these alternatives, as ranking by
years of experience would not best accomplish the goal of attracting
the most highly skilled workers. DHS believes that salary, relative to
others in the same occupational classification and area of intended
employment, rather than years of experience, is generally more
indicative of skill level and the relative value of the worker to the
United States.
Comment: A few commenters said that DHS should consider providing
quotas for each wage level, rather than simply ranking and selecting in
descending order by wage levels. Other commenters suggested setting a
limit or quota on the number of registrations submitted by certain
types of employers, such as staffing agencies or H-1B dependent
companies. Another commenter supported measures to prevent staffing
companies from filing multiple registrations for offshore workers and
stated that companies should not be able to submit more than one
registration per beneficiary. Another commenter stated that it is
``crucial'' to regulate consulting companies and staffing agencies.
Response: DHS declines to pursue the alternative of setting quotas
for each wage level or for certain types of companies as this
alternative would not best accomplish the goal of attracting the most
highly skilled workers. With respect to comments about prohibiting
staffing companies from filing multiple registrations, DHS declines to
adopt the commenters' suggestions as DHS regulations already prohibit
an employer from submitting more than one registration per beneficiary
in any fiscal year.\137\ Comments about the need to further regulate
consulting and staffing companies are outside the scope of this final
rule.
---------------------------------------------------------------------------

\137\ See 8 CFR 214.2(h)(8)(iii)(A)(2).
---------------------------------------------------------------------------

Comment: A few commenters suggested that DHS prohibit multiple H-1B
petitions for the same beneficiary by different employers.
Response: DHS regulations already prohibit a petitioner, or related
entities, from submitting more than one H-1B cap-subject petition for
the same beneficiary in the same fiscal year, absent a legitimate
business need.\138\ Because registration is not intended to replace the
petition adjudication process or to assess eligibility, USCIS cannot
feasibly determine at the registration stage whether different entities
that submit registrations on behalf of the same beneficiary are
``related'' or have a ``legitimate business need.'' Further, INA
section 214(g)(7), 8 U.S.C. 1184(g)(7), allows for ``multiple petitions
[to be] approved for 1 alien.'' For these reasons, DHS declines to
adopt the commenters' suggestion.
---------------------------------------------------------------------------

\138\ See 8 CFR 214.2(h)(2)(i)(G).
---------------------------------------------------------------------------

Comment: One commenter stated that DHS should consider increasing
the numerical cap exemption for beneficiaries who have earned a
master's or higher degree from a U.S. institution of higher education
as most of the highly skilled positions do not depend entirely on the
number of years of experience, but on the higher education degree
requirements.
Response: This rule does not affect either the statutorily mandated
annual H-1B numerical limitation of 65,000 on the number of aliens who
may be issued initial cap-subject H-1B visas or otherwise provided
initial H-1B status, or the annual cap exemption for 20,000 aliens who
have earned a master's or higher degree from a U.S. institution of
higher education.\139\ As the numerical allocations are set by statute,
DHS lacks the authority to adopt the commenter's suggestion.
---------------------------------------------------------------------------

\139\ See INA section 214(g)(1)(A) and (5)(C), 8 U.S.C.
1184(g)(1)(A) and (5)(C).
---------------------------------------------------------------------------

Comment: An individual suggested DHS implement a ``market based cap
and selection system'' by first identifying areas of the job market,
like medical workers, that are most in need at the moment and, from
there, ranking by wage or wage level.
Response: DHS believes that identifying areas of the job market
that are most in need is not feasible, as it is subjective and would be
subject to constant change. This rule is not a

[[Page 1709]]

temporary rule that is limited in duration to the COVID-19 pandemic,
and regularly adjusting selection criteria based on the needs of the
job market would be administratively burdensome. Therefore, DHS
declines to adopt the commenter's suggestion.
Comments: A few commenters proposed that DHS prioritize selection
based on multiple factors, including the prospective beneficiary's
degree from a U.S. institution, the length of time legally studying or
working in the United States, skills, wages, and other qualifications.
Other commenters stated that the DHS should weigh other desirable
factors, such as whether H-1B employees are U.S. university graduates
and whether the petitioner is a small business contributing a
significant amount of their income to wages. This would allow small
businesses to compete for H-1B visas and prevent larger corporations
from being the only employers to benefit from the H-1B program. Another
comment urged DHS to create a prioritization system that incentivizes
employers to petition for permanence for H-1B workers, among other
desirable employer behavior in addition to fair compensation.
Response: DHS believes that identifying and weighing multiple
factors is not feasible, as such an approach could be overly
complicated, unpredictable, and subjective. Therefore, DHS declines to
adopt the commenters' suggestions.
Comment: A professional association requested that DHS exempt
physicians from this rule. An individual suggested providing exceptions
or waivers for certain industries, such as the healthcare/
pharmaceutical fields, due to the different experience requirements in
those fields.
Response: DHS declines to exempt physicians or other specific
occupations or fields from the rule. While DHS certainly appreciates
the significant challenges faced by healthcare professionals,
especially during the current COVID-19 pandemic, DHS recognizes that
there are many other occupations that can be considered critical now
and at various times in the future. Carving out exceptions for some
occupations would be highly problematic, particularly as this rule is
not a temporary rule that is limited in duration to the COVID-19
pandemic.
Comment: An individual commented on the alternative proposal of
weighting registrations such that ``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 so on.'' The commenter questioned why DHS set the
multiples at 4 times, 3 times, and 2 times.
Response: The multiples of 4 times, 3 times, and 2 times,
correspond to wage levels IV, III, and II, respectively. As this
commenter did not provide additional rationale in support of or against
this alternative, DHS will not further consider this alternative.

D. Other Issues Relating to Rule

1. Requests To Extend the Comment Period
Comments: A few commenters and a professional association stated
that the public has not been given sufficient time to comment on the
proposed rule. One commenter said that there is no substantiated reason
to limit the comment period and that doing so degrades the rulemaking
process. An individual commenter stated that implementing these changes
for the FY 2022 H-1B cap filing season would cause even more
uncertainty for international students who already have faced enough
uncertainty over the past year due to COVID-19, the Student and
Exchange Visitor Program proposed rule,\140\ and USCIS processing
times.
---------------------------------------------------------------------------

\140\ DHS, U.S. Immigration and Customs Enforcement,
Establishing a Fixed Time Period of Admission and an Extension of
Stay Procedure for Nonimmigrant Academic Students, Exchange
Visitors, and Representatives of Foreign Information Media, 85 FR
60526 (Sept. 25, 2020).
---------------------------------------------------------------------------

An individual commenter and a university requested that the comment
period be extended to 60 days because of the proposed rule's magnitude
and the impacts of COVID-19 on employers' resources. A professional
association requested the same extension to allow for meaningful public
comment, citing the language of E.O. 12866 and E.O. 13563, explaining
that those executive orders recommend a comment period of no less than
60 days. The association listed six issues for which the proposed rule
requests feedback and asserted that a 30-day comment period does not
allow adequate time to address these issues. The association also said
that, since this rule was published during the Thanksgiving season, the
comment period was effectively shortened even further, undercutting the
purpose of the notice and comment process. An individual commenter
questioned why DHS was ``rushing'' the proposed rule during the holiday
season as opposed to providing more time for public comment.
Response: While DHS acknowledges that E.O. 12866 and 13563 indicate
that agencies generally should provide 60 days for public comment, DHS
believes that the 30-day comment period was sufficient and declines to
extend the comment period. This rule is narrow in scope, and 30 days
was sufficient time for the public to determine the impacts of the
proposed rule, if any, and to prepare and submit comments. The
sufficiency of the 30-day comment period is demonstrated by the number
of high-quality comments received from the public, including
individuals, attorneys, employers, and organizations. Given the narrow
scope of the rule, the quantity and quality of comments received in
response to the proposed rule, and other publicly available information
regarding the rule, DHS believes that the 30-day comment period has
been sufficient.
2. Rulemaking Process
a. Multiple H-1B Rulemakings
Comments: An anonymous commenter stated that the proposed rule does
not discuss the DOL IFR,\141\ or explain whether DHS and DOL consulted
with each other in drafting the rules. The commenter added that
Congress has given DOL the primary authority in protecting U.S. labor,
and the proposed rule does not address how it would interact with the
DOL rule, or why the proposed rule was necessary given the DOL IFR.
---------------------------------------------------------------------------

\141\ 85 FR 63872.
---------------------------------------------------------------------------

An advocacy group stated that the proposed rule should not be
implemented while the DOL IFR and the DHS IFR, Strengthening the H-1B
Nonimmigrant Visa Classification Program (H-1B Strengthening IFR),\142\
were pending and being challenged in court. The commenter said it would
be impossible to comment on the proposed rule without considering the
impacts of the other two rules that will affect the H-1B process as
well. Similarly, a research organization wrote that recently proposed
rules by Federal agencies with respect to wages for foreign workers in
work visa programs have been inconsistent and confusing. An anonymous
commenter stated that their workplace has been overworked for months
responding to the multiple regulatory changes to the H-1B program.
---------------------------------------------------------------------------

\142\ U.S. Department of Homeland Security, U.S. Citizenship and
Immigration Services, Strengthening the H-1B Nonimmigrant Visa
Classification Program, 85 FR 63918 (Oct. 8, 2020).
---------------------------------------------------------------------------

Response: On December 1, 2020, the U.S. District Court for the
Northern District of California issued an order in Chamber of Commerce,
et al. v. DHS, et al., No. 20-cv-7331, setting aside the DOL IFR and
the DHS IFR. Similarly, on December 3, 2020, the U.S. District

[[Page 1710]]

Court for the District of New Jersey issued a preliminary injunction in
ITServe Alliance, Inc., et al. v. Scalia, et al., No. 20-cv-14604,
applying to the plaintiffs in that case. DOL has taken necessary steps
to comply with the courts' orders and is no longer implementing the DOL
IFR. DHS also took necessary steps to comply with the order in Chamber
of Commerce, et al. v. DHS, et al., and is not implementing the DHS
IFR. DHS, therefore, disagrees with the commenter's assertions that DHS
must consider the DOL and DHS IFRs in the context of this final rule as
both IFRs were set aside and are no longer being implemented.
b. Other Rulemaking Process Comments
Comments: A joint submission from multiple organizations opposed
the proposed rule and said that they were willing to participate in an
informal dialogue with DHS or formally participate in an Advance Notice
of Proposed Rulemaking process to help DHS determine whether a rule is
needed, what regulation to develop, and viable alternative suggestions.
A trade association also opposed the rule and advised USCIS to pursue a
formal rulemaking effort that provides stakeholders with more input
before the formal rulemaking process begins.
Response: DHS believes that the public has had sufficient
opportunity to review and comment on this rule, as demonstrated by the
number of high-quality comments received from the public, including
individuals, attorneys, employers, and organizations. Given the narrow
scope of the rule, the quantity and quality of comments received in
response to the proposed rule, and other publicly available information
regarding the rule, DHS believes that the public has had sufficient
opportunity to participate in the rulemaking process.
Comment: A professional association commented that the public had
no advance notice that the proposed rule was forthcoming because it was
never listed on the Unified Agenda. The association also said USCIS had
previously concluded that the policy now being proposed was not a
permissible agency action, and therefore stakeholders were not prepared
to conduct the sophisticated analysis necessary to assess the policy
now being proposed in this rule.
Response: DHS believes that the public has had sufficient
opportunity to review and comment on this rule, as demonstrated by the
number of high-quality comments received from the public, including
individuals, attorneys, employers, and organizations. Further, DHS
explained in the NPRM that this 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, and DHS believes that the comment period
provided sufficient time to assess the rule.
Comment: A research organization wrote that the administration
waited until the 2020 election to take substantive action on the H-1B
program, and while DOL and USCIS have legal authority to make the
regulatory changes, the timing and regulatory process have made them
susceptible to legal challenges. An individual commenter said that the
administration will change in a few weeks and suggested that the
proposed rule is being rushed into implementation before that happens.
An individual commenter said USCIS should wait to promulgate the rule
until the new presidential administration takes over and the Senate
confirms a new head of both USCIS and DHS.
Response: DHS agrees that it has the legal authority to amend its
regulations governing the selection of registrations submitted by
prospective petitioners seeking to file H-1B cap-subject petitions (or
the selection of petitions, if the registration process is suspended).
DHS believes that the public has had sufficient opportunity to review
and comment on this rule, as demonstrated by the number of high-quality
comments received from the public, including individuals, attorneys,
employers, and organizations. DHS believes that the public has had
sufficient opportunity to participate in the rulemaking process.
3. Effective Date and Implementation
Comments: A few individual commenters supported the proposed rule's
immediate implementation to protect U.S. jobs. Another individual
commenter contradicted claims that it is too late in the year for
employers to accommodate changes in the registration system, saying
that many companies wait until the new year to reach out to employees
anyway, and recent changes to the H-1B process have made it easier to
petition.
Response: DHS agrees that this rule is being published with
sufficient time to implement it for the FY 2022 registration period.
Comments: Many commenters, including a form letter campaign, said
that, if USCIS were to finalize the proposed rule, it should not
implement the proposed rule for the FY 2022 H-1B cap filing season (set
to begin in March 2021) because changes so close to the beginning of
that season would adversely impact U.S. employers, immigration lawyers,
and individuals. Multiple commenters said companies have already made
hiring decisions based on the existing registration system, so delaying
implementation until the FY 2023 cap filing season (set to begin in
March 2022) would give the regulated community time to adjust. A
company commented that implementing the rule for the upcoming H-1B cap
filing season would create uncertainty and confusion. A few commenters
added that stakeholders have had to adapt to the new online
registration system, which has ongoing issues, so it is unlikely that
further modifications to the registration system will be implemented to
run smoothly for the upcoming H-1B season. An individual commenter
opposed implementing the proposed rule at this time because the U.S.
economy needs time and stability to recover.
Response: DHS believes that this rule is being published with
sufficient time to allow employers to plan appropriately prior to the
start of the registration period for FY 2022. DHS does not believe that
petitioners will face significant adverse impacts with the
implementation of this change in the selection process and believes
that employers have sufficient time to make any decisions they believe
are needed as a result of this rule, such as increasing proffered wages
to increase the odds of selection. Further, DHS believes that there is
sufficient time to allow for testing and modification and that delaying
implementation at this time is not necessary.

E. Statutory and Regulatory Requirements

1. Impacts and Benefits (E.O. 12866, 13563, and 13771)
a. Methodology and Adequacy of the Cost-Benefit Analysis
Comments: Multiple commenters provided input on the wage data DHS
used to analyze the impact of the proposed rule. A couple of commenters
referenced that the economic analysis conducted in the proposed rule
was based on previous OES wage levels, rather than the new ones
implemented as a result of the DOL IFR. One of these commenters stated
that, with the huge changes in the wage levels resulting from the DOL
IFR, the H-1B data would be much more skewed, and the economic impact
analysis in the proposed rule was completely invalid. Another commenter
explained that all of the analysis done in the proposed rule was based
on previous OES wage

[[Page 1711]]

levels and there has not been any economic impact analysis based on the
new wage rules. One commenter expressed that this rule must be read in
concert with the DOL IFR, which reset how prevailing wage levels were
calculated for H-1Bs. To get selected in the H-1B registration process
under the proposed rule, the employer would have to pay a level III or
IV prevailing wage, but those wages would be so artificially high that
employers would not be able to pay them. The commenter concluded that
DHS should push the proposed rule back at least one year to allow time
for next year's H-1B data to become available. Another commenter said
96 percent of total applicants still would fall into the new OES wage
``level 1 below'' and would be eligible for random selection, so the
proposed rule would not have an impact. A commenter echoed concerns
about the use of previous OES wage levels, writing that DHS's analysis
in the proposed rule was invalid.
Response: The NPRM analysis was written using the appropriate
baseline and the best information that was available to DHS at that
time, which was prior to the publication of the DOL IFR.\143\ On
December 1, 2020, the U.S. District Court for the Northern District of
California issued an order in Chamber of Commerce, et al. v. DHS, et
al., No. 20-cv-7331, setting aside the DOL IFR. Similarly, on December
3, 2020, the U.S. District Court for the District of New Jersey issued
a preliminary injunction in ITServe Alliance, Inc., et al. v. Scalia,
et al., No. 20-cv-14604, applying to the plaintiffs in that case. DOL
has taken necessary steps to comply with the courts' orders and no
longer is implementing the DOL IFR. DHS, therefore, disagrees with the
commenter's assertion that DHS must analyze the DOL IFR in the context
of this final rule. This final rule does not require employers pay a
higher wage, instead it prioritizes selection of registrations or
petitions, as applicable, generally based on the highest OES prevailing
wage level that the proffered wage equals or exceeds for the relevant
SOC code and area(s) of intended employment. The selection of H-1B
registrations or petitions, as applicable, will be based on the
existing OES wage levels at the time of submission, and the economic
analysis in the proposed rule properly accounted for OES prevailing
wage levels that were in effect at the time the analysis was conducted
and remain in effect at this time.
---------------------------------------------------------------------------

\143\ See DOL IFR, 85 FR 63872.
---------------------------------------------------------------------------

Comments: An anonymous commenter stated that Table 13 of the NPRM
is inconsistent with the proposed rule's language. The commenter
questioned why there would be level III and IV registrations selected
in the advanced degree exemption if level III and IV registrations
would be ``100% selected'' in the regular cap, and the proposed rule
would not affect the order of selection between the regular cap and
advanced degree exemption.
Response: This final rule will not affect the order of selection
between the regular cap and advanced degree exemption or the number of
registrations that will be selected for each allocation. USCIS first
selects registrations toward the number projected as needed to reach
the regular cap, from among all registrations properly submitted,
including those indicating that the beneficiary will be eligible for
the advance degree exemption. USCIS then selects registrations
indicating eligibility for the advanced degree exemption using the same
process. With the revised selection method based on corresponding OES
wage level and ranking shown in Table 13, 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.
Comments: A couple of commenters wrote that DHS took wage levels
specified as ``N/A'' and consolidated them with level I wages in its
Table 7 calculations even though there is no evidentiary basis for
assuming that characterization or correlation to be accurate or
appropriate. Wages negotiated under a collective bargaining agreement
often exceed market rates, and private wage surveys frequently have
more than 4 wage levels, which makes direct analogy to OES impractical,
if not impossible. Since there was no way to determine the true ranking
of the N/A petitions, they should have been excluded from the
allocation rather than arbitrarily added to the level I share.
Consolidating them had the prejudicial effect of attributing 31.5
percent of regular cap and 37 percent of advanced degree cap to level
I, when, in fact, those numbers would have been 22.8 percent and 27.5
percent, respectively, had level I counts not included the petitions
whose wage level was N/A. An individual commenter similarly wrote that
DHS's analysis incorrectly claims that a number of petitions are
categorized as having a wage level of N/A due to modifications to DOL's
SOC structure in 2018. The commenter stated that all FY 2019 and FY
2020 petitions were filed using the 2010 SOC structure and thus the
2018 SOC structure would not impact those petitions. The commenter said
that the N/A designations are likely because Question 13 on Form 9035
only requires a designation of OES wage levels when relying on a
prevailing wage and is left blank when petitions rely on a permissible
alternative. This commenter also stated that, according to DHS's
analysis in Table 6, the OES Wage Level was unavailable about 12
percent of the time for cap-subject H-1B petitions selected for
adjudication in FYs 2019 and 2020. DHS labels these petitions as ones
where the OES Wage Level is ``N/A'' and then, curiously, includes all
such ``N/A'' OES Wage Level petitions as level I petitions for purposes
of its analysis when they are not particularly likely to be all or
mostly level I jobs.
Response: DHS understands and agrees with the commenter that N/A
designations are likely when registrants rely on a permissible
alternative private wage source that is not based on the OES survey.
For these registrants choosing to rely on a prevailing wage that is not
based on the OES survey, if the proffered wage is less than the
corresponding level I OES wage, the registrant would select the ``Wage
Level I and below'' box on the registration form. DHS deliberately
chose to group these registrations together with level I registrations
so that petitioners relying on non-OES sources would have a fairer
chance of selection than if they were ranked below level I
registrations, and to avoid penalizing prospective petitioners who
properly rely on a private wage survey to determine the required wage
for the proffered position.
As explained in response to other comments, DHS does not agree with
the suggestions to separate OES prevailing wage level I from those
falling below level I. DHS expects that all petitioners offering a wage
lower than the OES wage level I wage will be using a legitimate source
other than OES or an

[[Page 1712]]

independent authoritative source, including a private wage survey.
Therefore, such a change effectively could preclude petitioners that
utilize one of those other sources from being selected for
registration. By grouping OES wage level I and below OES wage level I
together, those petitioners have a fairer chance of selection. DHS was
unable to estimate how many registrations, initially classified as N/A,
would end up in each wage level classification as a result of this
rule. Due to data limitations and missing data, DHS may have included
some N/A wage information into OES wage level I and below that could be
classified as a wage higher than level I in the future. If DHS did not
incorporate the petitions that fell into the N/A category, then the
overall total of petitions would have been understated. DHS analysis
used estimates in the Unquantified Costs & Benefits section to show a
possible outcome and distribution of registrations once this rule is
implemented.
Comments: A trade association wrote that DHS conducted insufficient
data collection to assess the impact of the proposed rule, given that
it has OES skill wage level data for only 56 percent of registered H-1B
petitions selected in the lottery. The commenter wrote that DHS should
review data on all H-1B adjudications to better assess the relative
distribution of H-1B petitions by OES level, or conduct a survey of H-
1B employers to better quantify the impact of the proposed rule by OES
level.
Response: USCIS analyzed the impacts of this rule in an objective
manner using the best available data at the time the analysis was
written. DHS has OES wage level data only on the 56 percent of
petitions that were selected toward the numerical allocations from FY
2019 and FY 2020. DHS does not have the wage level break down for the
44 percent of petitions that were not selected since those petitions
were returned to petitioners without entering data into DHS databases.
The wage level break downs for the 56 percent that were selected for
adjudication had a similar distribution for both FY 2019 and FY 2020.
DHS used this distribution as an estimate of what the future
registrations split out by wage levels may look like for the missing 44
percent of petitions.
Comments: An individual commenter said the proposed rule does not
analyze the indirect impact the rule will have on the wages of
employees, only those directly impacted by the rule. The commenter also
wrote that the proposed rule does not consider its impact on employers
whose higher marginal costs cause them to forego expansion or close
down. An individual commenter said that DHS does not provide evidence
to support its statement that the proposed rule will have no effect on
wages or growth, writing that it is unlikely that the rule will not
depress wages and growth.
Response: DHS acknowledges that some petitioners might be impacted
in terms of employment, productivity loss, search and hire costs, and
profits resulting from labor turnover. The current random lottery
system does not guarantee registrants that they will be able to
petition for H-1B workers, and it could have the same effects and cause
companies to search for alternative options. In cases where companies
cannot find reasonable substitutes for the labor the H-1B beneficiaries
would have provided, if selected under the random lottery process,
affected petitioners also could 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. The commenter provided
neither an explanation nor a basis to support the claim that wages
would be depressed. DHS acknowledges that some employers' growth
(profit) could be affected; however, asserting that economic growth
would be harmed fails to account for the fact that this rule will not
reduce or otherwise affect the statutorily authorized number of initial
H-1B visas granted per year. USCIS analyzed the impacts of this rule in
an objective manner using the best available data at the time the
analysis was written and does not have quantifiable data on the effect
on wages or growth.
Comment: A law firm stated that the DHS does not sufficiently
quantify the impact of costs to petitioners, including training, labor
for substitute workers, loss of productivity, and loss of revenue. The
commenter wrote that, to meet the requirements of E.O. 12866, DHS
should explain its justification for proposing changes recognized to
have a negative impact on productivity and revenue of petitioners. The
commenter also asked DHS to explain how the proposed rule was tailored
to ensure it imposed the least possible burden on society as required
under E.O. 12866.
Response: Executive Orders 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).
DHS analyzed all potential costs, benefits, and transfers of this rule.
While DHS understands there are costs to some populations, there also
are benefits to other populations.
Comment: An advocacy group wrote that DHS states that an increase
in H-1B recipients with higher salaries will compensate for any loss in
international students and early career professionals under the
proposed rule. However, the commenter states that DHS does not provide
any analysis to this effect and should provide a more precise estimate
of the costs associated with changes, particularly whether the rule
would have an impact on the ability of employers to attract talented
employees.
Response: DHS does not believe that this rule will negatively
impact the ability of employers to attract talented employees. Rather,
DHS believes that this rule will allow employers to attract the best
and the brightest employees.
Comment: A law firm said the costs of the proposal are inconsistent
with the aggregate cost savings the agency expected unselected
petitions and the government to realize from registration. OMB
designated the proposed rule as an ``economically significant''
regulatory action. In the NPRM, DHS estimated that, for a ten-year
implementation period, the costs to the public would be more than $15.9
million annualized at 3-percent, and more than $16 million annualized
at 7-percent. DHS also acknowledged the possibility that the proposed
regulation ``could result in private sector expenditures exceeding $100
million, adjusted for inflation to $168 million in 2019 dollars, in any
1 year.'' The costs likely are higher, as the agency has grossly
underestimated the time-burden of this proposed regulation, such as
suggesting that it will take a mere 20 minutes more to prepare the
registration.
Response: DHS acknowledges that this final rule has been designated
an economically significant regulatory action by the Office of
Information and Regulatory Affairs (OIRA), of the Office of Management
and Budget. However, OIRA has waived review of this regulation under
E.O. 12866, section 6(a)(3)(A). DHS disagrees that it will take more
than 20 minutes to complete the additional information collection
associated with the registration tool. Registrants or petitioners, as
applicable, only will be required to provide, in addition to the
information already to be collected, the highest OES prevailing wage
level that the proffered wage equals or exceeds for the relevant SOC
code in the area of intended

[[Page 1713]]

employment. In the limited instance where there is no current OES
prevailing wage information for the proffered position, the registrant
will follow DOL guidance on prevailing wage determinations to determine
which OES wage level to select on the registration, and USCIS will rank
and select based on the highest OES wage level.
b. Costs
Comments: An individual commenter stated that, under the proposed
rule, USCIS would incur additional costs related to maintaining records
detailing how USCIS processed each H-1B petition to document the
correct handling and prioritization of all petitions. The commenter
also wrote that USCIS's cost for processing petitions will increase
significantly, as it will have to review each petition for salary,
location, and job code to determine sorting order. Another commenter
wrote that the proposed rule indicates that DHS would not incur
additional costs to the government because the agency could increase
filing fees to cover costs, but that, itself, indicates the proposed
rule would result in costs to DHS that should have been fully analyzed.
Response: The INA provides for the collection of fees through
USCIS's biannual fee schedule review, at a level that will ensure
recovery of the full costs of providing adjudication and naturalization
services by DHS. This includes administrative costs and services
provided without charge to certain applicants and petitioners.\144\ DHS
notes the time necessary for USCIS to review the information submitted
with the forms relevant to this final rule includes the time to
adjudicate the benefit request. These costs are captured in the fees
collected for the benefit request from petitioners. DHS accounts for
familiarization cost and additional costs due to the increased burden
per response for the petitioners, which is shown as costs in the
Regulatory Impact Analysis. Other form applications and petition fees
will cover the increased adjudication costs until the fee rule is
reassessed
---------------------------------------------------------------------------

\144\ See INA section 286(m), 8 U.S.C. 1356(m).
---------------------------------------------------------------------------

Comment: One commenter wrote that the proposed rule likely would
require technical changes to USCIS's registration system that the
agency has already implemented for the FY 2021 H-1B cap season. The
commenter added that it is noteworthy that the proposed rule follows a
recent announcement that USCIS must furlough 70 percent of its
workforce. Another commenter said that, if this rule is put in place,
companies will stop hiring foreign workers and USCIS will lose the
revenue from this program as it is already in a fiscal crisis.
Response: The President of the United States signed into law the
Continuing Appropriations Act, 2021 and Other Extensions Act, H.R.
8337,\145\ which became Public Law 116-159, on October 1, 2020. This
public law includes language from the Emergency Stopgap USCIS
Stabilization Act, which allows USCIS to establish and collect
additional premium processing fees, and to use those additional funds
for expanded purposes. Because of the authorization to increase premium
processing fees, and cost-savings measures taken by the agency, USCIS
is in a better place financially. As a result, USCIS was able to avoid
all potential furloughs, and, barring unforeseen changes in
circumstances, any potential furloughs in FY 2021.\146\
---------------------------------------------------------------------------

\145\ Continuing Appropriations Act, 2021 and Other Extensions
Act, Public Law 116-159, 134 Stat. 709 (Oct 1, 2020).
\146\ See U.S. Department of Homeland Security, U.S. Citizenship
and Immigration Services, USCIS Averts Furlough of Nearly 70% of
Workforce (Aug. 25, 2020), https://www.uscis.gov/news/news-releases/uscis-averts-furlough-of-nearly-70-of-workforce.
---------------------------------------------------------------------------

c. Benefits
Comment: An individual commenter wrote that the proposed rule has
been criticized for favoring larger firms over smaller businesses and
startups, but it is unlikely that these types of businesses would
immediately need the types of high salaried workers who would qualify
for an H-1B visa. Instead, the commenter said there should be
sufficient domestic talent under this rule to meet those labor needs.
An individual commenter wrote that the proposed rule would have the
benefit of curbing the practice of employers underpaying H-1B
petitioners by offering level I wages to those with sufficient
experience for higher wages. As a result, employers will not be able to
favor cheaper international labor and would consider domestic labor.
Response: DHS agrees with this commenter that there should be
sufficient replacement labor available in the U.S. workforce that can
meet domestic labor needs. This rule will help the U.S. workforce, as
employers that might have petitioned for cap-subject H-1B workers to
fill relatively lower-paid, lower-skilled positions, may be
incentivized to hire available and qualified U.S. workers for those
positions.
Comment: Referencing DHS's suggestion that one of the proposed
rule's unquantified benefits is increased opportunities for lower-
skilled U.S. workers in the labor market, an individual commenter
stated that low-skilled workers cannot replace H-1B specialty
occupation workers.
Response: DHS disagrees. If an employer is hiring an entry-level
employee at a level I prevailing wage, then an available and qualified
U.S. worker can be a substitute.
2. Paperwork Reduction Act
Comments: A commenter stated that requiring an employer to provide
a wage level at the time of electronic registration for the H-1B cap
seems to violate the Paperwork Reduction Act (PRA), which generally
only permits the collection of information needed to meet a legally
supported objective. The commenter indicated DHS has not adequately
explained how collecting the OES prevailing wage level at the time of
electronic registration is consistent with the PRA, as employers are
not required to obtain an LCA at the time of the electronic
registration for the H-1B cap.
Response: DHS disagrees that requiring the registrant to provide
the wage level that the proffered wage corresponds to for the relevant
SOC and area of employment, or that corresponds to the position
requirements when OES wage data is unavailable, at the time of
electronic registration for the H-1B cap would violate the PRA. Once
this rule becomes effective, collection of such information would be
needed to implement the rule and to select registrations in accordance
with this rule, and thus would be a legally supported objective. As
noted in the NPRM, an LCA is not a requirement for registration.
However, consistent with the registrant's attestation that the
registration is submitted for a valid offer of employment, DHS expects
each registrant (i.e., the prospective petitioner or the attorney or
accredited representative submitting the registration for the
prospective petitioner) to know and be able to provide the relevant
corresponding wage level when submitting a registration, regardless of
whether they have a certified LCA at that time.

F. Out of Scope

An individual commenter called for relief for those who need
housing and food, ``instead of bringing in foreigners.'' Another
individual commenter said that the increase in H-1B visas and
outsourcing to foreign contractors caused their spouse's wages to
stagnate despite increased responsibility, and

[[Page 1714]]

fewer U.S. born entry-level employees were hired. Yet another
individual commenter wrote that the agency should make it easier to
report visa fraud, and that stricter, more comprehensive punishments
should be in place for visa fraud. A few anonymous commenters said that
the H-1B visa is a ``scam.'' A trade association wrote in opposition to
two other rules related to the H-1B visa published by DOL and DHS, the
latter of which revised the definition of ``specialty occupations''
eligible for H-1B visas, limited visas to one year for third party
worksites, and expanded DHS worksite oversight.\147\ Another trade
association also wrote in opposition to the DOL and DHS IFRs, objecting
specifically to the DHS IFR's revisions to the definitions of
``specialty occupations'' and ``U.S. employer,'' the requirements for
corroborating evidence for specialty occupations, and the amended
validity period for third-party placement at worksites.\148\ The
commenter provided background information and a summary of the DHS IFR.
One commenter said the lottery system is unfair, and USCIS should
instead focus on limiting fraud and abuse of the lottery system. Yet
another trade association opposed the proposed rule and suggested that
the Agency implement reforms as discussed in the National Association
of Manufacturer's ``A Way Forward'' plan, including statutory changes
to the H-1B program, border security measures, asylum, and other
immigration programs. A union argued that due to the ``timing and
rushed nature'' of the DOL IFR and this proposed rule, any changes are
vulnerable to procedural challenge and are likely politically
motivated. The commenter went on to provide extensive feedback on the
DOL and DHS IFRs and the H-1B program at large, calling for immigration
reform and urging the Departments of Labor and Homeland Security to
make structural changes to the H-1B program that protect workers'
rights. A research organization wrote about the H-1B program in
general, saying that allowing outsourcing companies to hire H-1B
workers lets employers use the immigration system to ``degrade labor
standards for skilled workers'' and exploit H-1B employees.
Additionally, the commenter argued that outsourcing companies are using
the H-1B program to underpay H-1B workers, replace U.S. workers, and
send tech jobs abroad. A submission on behalf of U.S. citizen medical
graduates urged expanding the H-1B and J-1 visa ban to include the
healthcare sector, prioritizing U.S. citizens for placement in
residency programs, or that the Accreditation Council for Graduate
Medical Education (ACGME) consider opening up more residency spots and
new residency programs. A professional association recommended that
USCIS modify its regulation at 8 CFR 214.2(h)(8)(iii)(A)(4)
(``Limitation on requested start date'') permitting a requested start
date on or after the first day for the applicable fiscal year.
---------------------------------------------------------------------------

\147\ DOL IFR, 85 FR 63872; H-1B Strengthening IFR, 85 FR 63918.
\148\ H-1B Strengthening IFR, 85 FR 63918.
---------------------------------------------------------------------------

Response: DHS appreciates these comments; however, DHS did not
propose to address these issues in the proposed rule, so these comments
fall outside of the scope of this rulemaking. DHS is finalizing this
rule as proposed.

V. 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). Executive
Order 13563 emphasizes the importance of quantifying both costs and
benefits, of reducing costs, of harmonizing rules, and of promoting
flexibility.
Pursuant to Executive Order 12866 (Regulatory Planning and Review),
the Office of Information and Regulatory Affairs (OIRA), of the Office
of Management and Budget, has determined that this final rule is an
economically significant regulatory action. However, OIRA has waived
review of this regulation under section 6(a)(3)(A) of Executive Order
12866.
1. Summary of Economic Effects
DHS is amending 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 and selection
based on OES wage levels corresponding to their SOC codes. USCIS will
rank and select the registrations properly submitted (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 equals
or exceeds for the relevant SOC code and in the area of intended
employment. USCIS will begin with OES wage level IV and proceed in
descending order with OES wage levels III, II, and I. DHS is amending
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 (or grants of initial H-1B status)
favoring petitioners that proffer relatively higher wages. In the
analysis that follows, DHS presents its best estimate for how H-1B
petitioners will be affected by and will respond to the increased
probability of selection of registrations of petitions proffering the
highest wages for a given occupation and area of employment. DHS
estimates the net costs that will result from this final 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 $15,968,792 annualized at 3-percent, $16,089,770
annualized at 7-percent.
Table 1 provides a more detailed summary of the final rule
provisions and their impacts.

[[Page 1715]]

Table 1--Summary of Provisions and Economic Impacts of the Final Rule
----------------------------------------------------------------------------------------------------------------
Description of changes Estimated costs of Estimated benefits of
Provision to provision provisions provisions
----------------------------------------------------------------------------------------------------------------
Currently, USCIS randomly selects H- USCIS will rank and Quantitative: Quantitative:
1B registrations or cap-subject select H-1B Petitioners-- Petitioners--
petitions, as applicable. USCIS registrations (or H-1B $3,457,401 None.
will change the selection process petitions if the costs annually for DHS/USCIS--
to prioritize selection of registration petitioners completing None.
registrations or cap-subject requirement is and filing Form I-129 Qualitative:
petitions, as applicable, based on suspended) generally petitions with an U.S. Workers--
corresponding OES wage level. based on the highest additional time burden A possible
DHS regulations currently address H- OES wage level that the of 15 minutes. increase in employment
1B cap allocation in various proffered wage equals $11,795,997 opportunities for
contexts:. or exceeds for the costs annually for similarly 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 final electronic workers seeking
the H-1B regular cap during the rule will 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 final Qualitative: corresponding to lower
the H-1B advanced degree exemption rule also will add Petitioners-- wage positions.
numerical limitation during the instructions and Petitioners H-1B Workers--
initial registration period.. questions to the H-1B may incur costs to A possible
5. Increase to the number of 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 final rule will Petitioners classified as lower-
selections in event of suspended not affect the order of that would have hired level work to
registration process.. selection as between relatively low-paid H- employers able to pay
8. Denial of petition............... the regular cap and the 1B workers, but were the highest wages for
9. Revocation of approval of advanced degree unable to do so the most highly
petition.. exemption. because of non- skilled workers.
If USCIS receives and selection (and A possible
ranks 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 will 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 is authorized to level I wages may be
deny a subsequent new incentivized to offer
or amended petition their H-1B employees
filed by the higher wages, so that
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
determines that the new offer H-1B workers
or amended petition was wages that corresponds
filed to reduce the with level III or
wage level listed on level IV OES wages may
the original petition have higher chances of
to unfairly increase selection.
the odds of selection DHS/USCIS--
during the registration Submitting
selection process. additional wage level
In any year in which information on both an
USCIS suspends the H-1B electronic
electronic registration registration and on
process for cap-subject Form I-129 will allow
petitions, USCIS will, USCIS to maintain the
instead, allow for the integrity of the H-1B
submission of H-1B cap- cap selection and
subject petitions. adjudication
After USCIS receives a processes.
sufficient number of Registrations
petitions to meet the H- or petitions, as
1B regular cap and were applicable, will be
to complete the more likely to be
selection process of selected under the
petitions for the H-1B numerical allocations
regular cap following for the highest paid,
the same method of and presumably highest
ranking and selection skilled or highest-
based on corresponding valued, beneficiaries.
OES wage level, USCIS
will determine whether
there is 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 FY DHS/USCIS--
understanding the 2022. 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.
----------------------------------------------------------------------------------------------------------------

In addition to the impacts summarized here, Table 2 presents the
accounting statement as required by OMB Circular A-4.\149\
---------------------------------------------------------------------------

\149\ 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 over 10 N/A N/A N/A ...............................
years (discount rate in parenthesis). N/A N/A N/A
-----------------------------------------------------------------------------------------------------------

[[Page 1716]]

Annualized quantified, but un-monetized, 0 0 0
benefits.
-----------------------------------------------------------------------------------------------------------
Unquantified Benefits................... This final rule will benefit petitioners agreeing to pay H-1B workers a RIA.
proffered wage corresponding to OES wage level III or IV, by increasing
their chance of selection in the H-1B cap selection process. These
changes align with the Administration's goals of improving policies such
that the H-1B classification more likely will be awarded to the highest
paid or highest skilled beneficiaries. These changes will also better
align the administration of the H-1B program with the dominant
Congressional intent.
This final rule may provide increased opportunities for similarly skilled
U.S. workers in the labor market to compete for work as there will be
fewer H-1B workers paid at the lower wage levels to compete with U.S.
workers.\150\
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 will result in increased marginal
productivity of all H-1B workers.
This final rule may provide increased wages for positions offered to H-1B
cap-subject beneficiaries.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Costs:
Annualized monetized costs over 10 years (3 percent) $15,968,792 N/A N/A RIA.
(discount rate in parenthesis). (7 percent) $16,089,770 N/A N/A
-----------------------------------------------------------------------------------------------------------
Annualized quantified, but un-monetized, N/A ...............................
costs.
-----------------------------------------------------------------------------------------------------------
Qualitative (unquantified) costs........ This final rule is expected to reduce the number of petitions for lower RIA.
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 will also lose
profits from the lost productivity. In such cases, employers will 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 will 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: ``on N/A N/A N/A ...............................
budget''.
-----------------------------------------------------------------------------------------------------------
From whom to whom?...................... ...............................
-----------------------------------------------------------------------------------------------------------
Annualized monetized transfers: ``off- N/A N/A N/A ...............................
budget''.
-----------------------------------------------------------------------------------------------------------
From whom to whom?...................... N/A N/A N/A ...............................
--------------------------------------------------------------------------------------------------------------------------------------------------------
Miscellaneous analyses/category Effects Source citation
--------------------------------------------------------------------------------------------------------------------------------------------------------
Effects on state, local, and/or tribal N/A RFA.
governments.
-----------------------------------------------------------------------------------------------------------
Effects on small businesses................. N/A RFA.
-----------------------------------------------------------------------------------------------------------
Effects on wages............................ N/A None.
-----------------------------------------------------------------------------------------------------------
Effects on growth........................... N/A None.
--------------------------------------------------------------------------------------------------------------------------------------------------------

2. Background and Purpose of the Final Rule
---------------------------------------------------------------------------

\150\ 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 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.\151\
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.\152\
---------------------------------------------------------------------------

\151\ 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).
\152\ See INA section 214(i)(l), 8 U.S.C. 1184(i)(l).
---------------------------------------------------------------------------

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.\153\ Congress has also
provided for various exemptions from the annual numerical allocations,
including an exemption for

[[Page 1717]]

20,000 aliens who have earned a master's or higher degree from a U.S.
institution of higher education.\154\
---------------------------------------------------------------------------

\153\ See INA section 214(g)(1)(A), 8 U.S.C. 1184(g)(1)(A).
\154\ 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.\155\ 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.\156\ 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).\157\ 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.\158\
---------------------------------------------------------------------------

\155\ See 8 CFR 214.2(h)(8)(iii)(A).
\156\ See 8 CFR 214.2(h)(8)(iii)(A)(5)-(6).
\157\ See 8 CFR 214.2(h)(8)(iii)(D)(2).
\158\ See 8 CFR 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).\159\ 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.\160\ This final rule amends DHS regulations concerning
the selection of electronic 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 will rank
and select the registrations received 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(s) of intended employment,
beginning with OES wage level IV and proceeding in descending order
with OES wage levels III, II, and I and below.\161\ For registrants
relying on a private wage survey, if the proffered wage is less than
the corresponding level I OES wage, the registrant will select the
``Wage Level I and below'' box on the registration form.\162\ If USCIS
receives and ranks more registrations at a particular wage level than
the projected number needed to meet the applicable numerical
allocation, USCIS will randomly select from all registrations within
that wage level a sufficient number of registrations needed to reach
the applicable numerical limitation.\163\
---------------------------------------------------------------------------

\159\ See 8 CFR 214.2(h)(4)(i)(B).
\160\ See 20 CFR 655.731 through 655.735.
\161\ See new 8 CFR 214.2(h)(8)(iii)(A)(1)(i).
\162\ See new 8 CFR 214.2(h)(8)(iii)(A)(1)(i).
\163\ See new 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.\164\ 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),\165\ H-1B petitioners submit Form I-129 with applicable
supplements for H-1B petitions. Through the Fee Schedule Final Rule,
DHS created a new Form I-129 for H-1B petitioners.\166\ Form I-129 does
not include separate supplements as relevant data collection fields
have been incorporated into Form I-129. 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 will complete
the new Form I-129H1.
---------------------------------------------------------------------------

\164\ 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).
\165\ DHS estimates the costs and benefits of this final 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 final rule as a result of the
litigation. Should DHS not prevail in the Fee Schedule Final Rule
litigation, this final rule may reflect overstated transfers, costs,
and opportunity costs associated with the filing of the Form I-129.
\166\ See Fee Schedule Final Rule, 85 FR 46788.

Table 3--H-1B Cap-Subject Petitions Submitted to USCIS for FY 2016--FY 2020
----------------------------------------------------------------------------------------------------------------
Total number of
H-1B cap-subject Total number of H- Number of
Fiscal year petitions 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

[[Page 1718]]

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 \167\ 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 was
ongoing at the time of this analysis.
---------------------------------------------------------------------------

\167\ 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.\168\ 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 274,237
registrations.
---------------------------------------------------------------------------

\168\ See H-1B Registration Final Rule, 84 FR 888.
---------------------------------------------------------------------------

4. Cost-Benefit Analysis
Through these changes, petitioners will 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.\169\ 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.\170\ For purposes of this final
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.\171\
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.\172\ 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.\173\ 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.\174\ Table
4 summarizes the compensation rates used in this analysis.
---------------------------------------------------------------------------

\169\ 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).
\170\ 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).
\171\ Calculation of the weighted mean hourly wage for HR
specialists: $32.58 per hour x 1.46 = $47.5668 = $47.57 (rounded)
per hour.
\172\ 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.
\173\ DHS uses the terms ``in-house lawyer'' and ``outsourced
lawyer'' to differentiate between the types of lawyers that may file
Form I-129 on behalf of an employer petitioning for an H-1B
beneficiary.
\174\ 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.

Table 4--Summary of Estimated Wages for Form I-129 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.

a. Costs and Cost Savings of Regulatory Changes to Petitioners
i. Methodology Based on Historic FYs 2019-2020
This final rule primarily will change the manner in which USCIS
selects H-1B registrations (or H-1B petitions for any year in which the
registration requirement is suspended), by first

[[Page 1719]]

selecting registrations generally based on the highest OES wage level
that the proffered wage equals or exceeds for the relevant SOC code and
area(s) of intended employment. In April 2019, DHS added an electronic
registration requirement for petitioners seeking to file H-1B petitions
on behalf of cap-subject aliens.\175\ 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 274,237 registrations were
submitted during the initial registration period, of which 123,244
\176\ registrations were for beneficiaries eligible for the advanced
degree exemption and 145,950 were for beneficiaries under the regular
cap.\177\
---------------------------------------------------------------------------

\175\ See H-1B Registration Final Rule, 84 FR 888.
\176\ The total number of registrations for the advanced degree
exemption and the regular cap do not equal the total 274,237
submitted registrations because the remaining 5,043 submitted
registrations were invalid (e.g., as prohibited duplicate
registrations).
\177\ U.S. Department of Homeland Security, U.S. Citizenship and
Immigration Services, Office of Policy and Strategy, Policy Research
Division (PRD), Form I-129 H-1B, FY 2021 Data, 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
the advanced degree exemption. If the petition was not selected under
the advanced degree exemption, those cases then were added back to the
pool and had a second chance of 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 toward the number projected as
needed to reach 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 \178\ of
the H-1B cap-subject petitions submitted, with 82,900 toward the
regular cap and 26,930 toward the advanced degree exemption.
---------------------------------------------------------------------------

\178\ 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.\179\ While there are some challenges to
using OES wage data as a timeseries, DHS uses the wage data to provide
some insight.\180\ 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) \181\ structure was modified in 2018, some
petitions were categorized as N/A in FY 2019. In 2019, DOL started to
use a hybrid OES \182\ occupational structure for classifying the
petitions for FY 2020.
---------------------------------------------------------------------------

\179\ USCIS created the tool to link USCIS H-1B data to the DOL
data for FY 2019.
\180\ 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).
\181\ 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).
\182\ 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 will 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 will be able to determine the appropriate OES
wage level for purposes of completing the registration, regardless of
whether they specify an

[[Page 1720]]

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 has OES wage level data only on the petitions that were
selected toward the numerical allocations and does not have the wage
level break down for the 85,725 \183\ (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.
---------------------------------------------------------------------------

\183\ 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

ii. FY 2021 Data \184\
---------------------------------------------------------------------------

\184\ FY 2021 data pertains to the registrations received during
FY 2020 for the FY 2021 H-1B cap season.
---------------------------------------------------------------------------

The population affected by this final 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.\185\ 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.\186\ 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.\187\ USCIS then randomly selects from the
remaining registrations a sufficient number projected as needed to
reach the advanced degree exemption.\188\ 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 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
274,237. 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 final rule.\189\
There were many factors that led to an increased number of
registrations for FY 2021; one possible factor is that the cost and
burden to submit the registration is less than the

[[Page 1721]]

cost and burden to submit complete Form I-129 packages.
---------------------------------------------------------------------------

\185\ See 8 CFR 214.2(h)(8)(iii)(A).
\186\ See 8 CFR 214.2(h)(8)(iii)(D).
\187\ See 8 CFR 214.2(h)(8)(iii)(A)(5).
\188\ See 8 CFR 214.2(h)(8)(iii)(A)(6).
\189\ DHS uses FY 2021 H-1B cap selection data as the population
to estimate certain costs for this final 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, 106,100 registrations
initially 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 H-1B 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
final 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
--------------------------------------------------------------------------------------------------------------------------------------------------------
Number of
Total number of H-1B Round 1 number of H-1B Round 2 number of H-1B Total number of H-1B registrations
Fiscal year registrations registrations selected registrations selected registrations selected submitted with
submitted * form G-28 **
--------------------------------------------------------------------------------------------------------------------------------------------------------
2021............................. 274,237 106,100 18,315 124,415 N/A
----------------------------------------------------------------------------------------------------------------------
Total........................ 274,237 106,100 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 processing H-1B cap-subject petitions
for FY 2021.
** Note: Complete 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 \190\ of selected registrations will include
Form G-28. DHS applies those percentages to the number of total
registrations and estimates 218,567 \191\ Form G-28 were submitted with
total registrations received. DHS uses the total registrations received
for the FY 2021 H-1B cap selection process (274,237) as the estimate of
registrations that will be received annually.
---------------------------------------------------------------------------

\190\ Calculation: 81,165 Forms G-28/101,822 Form I-129
petitions = 79.7 percent = 80 percent (rounded).
\191\ Calculation: 274,237 * 79.7 percent = 218,567 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
\192\ 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 approximately 80
percent \193\ of H-1B petitions typically will be completed and filed
by a lawyer or other accredited representative (hereafter lawyer). DHS
assumes the remaining 20 percent of H-1B petitions will be completed
and filed by HR specialists.
---------------------------------------------------------------------------

\192\ 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'').
\193\ 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.\194\
---------------------------------------------------------------------------

\194\ 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, The American Bar Foundation and the National
Association for Law Placemen (NALP) Foundation for Law Career
Research and Education (2009), 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.

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....... 274,237 54,847 71,302 148,088

[[Page 1722]]

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 will be
affected by each requirement of this final 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 will be affected by the
various requirements of this final rule.
iii. Unquantified Costs & Benefits
Given that the demand for H-1B cap-subject visas, including those
filed for the advanced degree exemption, frequently has exceeded the
annual H-1B numerical allocations, this final rule will 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.
This final 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 final 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 that offer H-1B
workers wages that correspond with level IV or level III OES wages will
have higher chances of selection.
For the FY 2021 H-1B cap selection process, USCIS initially
selected 106,100 (39 percent) \195\ 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.
---------------------------------------------------------------------------

\195\ Calculation: 106,100 Registrations Randomly Selected/
274,237 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
Fiscal year H-1B registrations Regular cap Advanced degree
submitted exemption
----------------------------------------------------------------------------------------------------------------
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 274,237 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. At the time of
analysis, the wage level data was unavailable for FY 2021 because the
petition filing process was 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.

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

[[Page 1723]]

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
will 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 FY 2021 data

This final rule will change the H-1B cap selection process, but
will leave in place selecting first toward the regular cap and second
toward the advanced degree exemption. USCIS now will rank and select
the registrations received (or petitions, as applicable) 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 and below. 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 will be
selected and 58,999, or 75 percent, of the registrations with a
proffered wage that corresponds to OES wage level II will be selected
toward the regular cap projections. None of the registrations with a
proffered wage that corresponds to OES wage level I or below will 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 will be selected and 12,744,
or 20 percent, of the registrations with a proffered wage that
corresponds to OES wage level II will be selected. DHS estimates that
none of the registrations with a proffered wage that corresponds to OES
wage level I or below will 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 will 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 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
-----------------------------------------------------------------------------------------------
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.

[[Page 1724]]

This final rule may primarily affect prospective petitioners
seeking to file H-1B cap-subject petitions with a proffered wage that
corresponds to OES wage level II, I, and below.\196\ As Table 13 shows,
this final rule is expected to result in a reduced likelihood that
registrations for level II will be selected, as well as the likelihood
that registrations for level I and below wages will 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 will 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.
---------------------------------------------------------------------------

\196\ 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 at
U.S. Department of Labor, Employment and Training Administration,
Prevailing Wage Determination Policy Guidance, Nonagricultural
Immigration Programs (Revised Nov. 2009), https://www.dol.gov/sites/dolgov/files/ETA/oflc/pdfs/NPWHC_Guidance_Revised_11_2009.pdf; and
at U.S. Department of Labor, Foreign Labor Certification Data
Center, Online Wage Library, https://www.flcdatacenter.com/ (last
visited Dec. 15, 2020). DHS acknowledges that varying wage levels
correspond to varying skill levels. In analyzing the economic
effects of this final 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 final rule might result in more
registrations (or petitions, if registration is suspended) with a
proffered wage that corresponds to level IV and level III OES wages for
H-1B cap-subject beneficiaries. DHS believes a benefit of this final
rule may be that some petitioners may choose to increase proffered
wages for H-1B cap-subject beneficiaries, so that the petitioners may
have greater chances of selection. This change will, in turn, benefit
H-1B beneficiaries who ultimately will receive a higher rate of pay
than 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
final rule will 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 will be benefits or costs.
As a result of this final rule, costs will be borne by prospective
petitioners that would hire lower wage level H-1B cap-subject
beneficiaries, but are unable to do so because of a reduced chance of
selection in the H-1B selection process compared to the random lottery
process. Such employers also may 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 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 is denied will incur an average cost of $4,398 per worker (in
2019 dollars) \197\ to search for and hire a U.S. worker in place of an
H-1B 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 final rule primarily will be a cost to these
petitioners through lost productivity and profits.
---------------------------------------------------------------------------

\197\ 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 H-1B beneficiaries would have
provided, affected petitioners also will lose profits from the lost
productivity. In such cases, employers will incur opportunity costs by
having to choose the next best alternative to fill the job prospective
H-1B workers would have filled. There may be additional opportunity
costs to employers such as search costs and training.
Such possible disruptions to companies will depend on the
interaction of a number of complex variables that constantly are 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 expects wages paid to H-1B
beneficiaries to be higher in light of this final rule, DHS is unable
to quantify the benefit of increased compensation because not all of
the wage increases will correspond with productivity increases. This
final 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 will be present during the
COVID-19 pandemic and the ensuing economic recovery if the prospective
petitioners are 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 will be
submitting registrations with a proffered wage that will correspond to
OES wage level I and II and that substitute toward unemployed or
underemployed individuals in the U.S. labor force will create an
additional indirect benefit from this rule. This will benefit those in
the U.S. labor force if petitioners decide to select a U.S. worker
rather than a prevailing wage level I or II H-1B worker. DHS notes
that, although the COVID-19 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 is changing the filing procedures to allow USCIS to deny
or revoke approval of a subsequent new or amended petition filed by the
petitioner,

[[Page 1725]]

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 is 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 changes to petitioners.
iv. Costs of Filing Form I-129 Petitions
DHS is amending Form I-129, which must be filed by petitioners on
behalf of H-1B beneficiaries, to align with the regulatory changes DHS
is making in this final rule. The changes to Form I-129 will result in
an increased time burden to complete and submit the form.
Absent the changes implemented through this final rule, the current
estimated time burden to complete and file Form I-129 is 2.84 hours per
petition. As a result of the changes in this final rule, DHS estimates
the total time burden to complete and file Form I-129 will be 3.09
hours per petition, to account for the 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. DHS estimates the
time burden will increase by a total of 15 minutes (0.25 hours) per
petition for completing a Form I-129 petition.\198\
---------------------------------------------------------------------------

\198\ 0.25 hours additional time to complete and file Form I-129
= (3.09 hours to complete and file the new Form I-129)-(2.84 hours
to complete and file the current Form I-129 and its supplements)
---------------------------------------------------------------------------

To estimate the additional cost of filing Form I-129, DHS applies
the additional estimated time burden to complete and file Form 1-129
(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-129 petitions will be approximately $3,457,401.

Table 14--Additional Opportunity Costs of Time to Petitioners for Filing Form I-129 Petitions From an Increase
in Time Burden
----------------------------------------------------------------------------------------------------------------
Additional time
Cost items Total affected burden to complete Compensation Total cost
population Form I-129 (hours) rate
A B C D = A x B x C
----------------------------------------------------------------------------------------------------------------
Opportunity cost of time to
complete Form I-129 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.

v. Costs of Submitting Registrations as Modified by This Final Rule
DHS is amending the required information on the H-1B Registration
Tool. In addition to the information required on the current
registration tool, a registrant will 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, if such data is
available. 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 is less than
the corresponding level I OES wage, the registrant will select the
``Wage Level I and below'' box on the registration tool. If the
registration indicates that the H-1B beneficiary will work in multiple
locations, or in multiple positions if the prospective petitioner is an
agent, USCIS will rank and select the registration based on the lowest
corresponding OES wage level that the proffered wage equals or exceeds.
In the limited instance where there is no current OES prevailing wage
information for the proffered position, the registrant will follow DOL
guidance on prevailing wage determinations to select the OES wage level
on the registration, and USCIS will rank and select based on the
highest OES wage level. The changes to this registration requirement
will 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.\199\ DHS estimates the total time burden to complete and
file a registration in light of this final rule will 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 will spend
reviewing instructions, completing the registration, and submitting the
registration.
---------------------------------------------------------------------------

\199\ 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 will
be approximately $11,795,997.

[[Page 1726]]

Table 15--Additional Cost of Submitting Registrations
----------------------------------------------------------------------------------------------------------------
Additional time
Total affected burden to submit Compensation
Cost items population registrations rate Total cost
(hours)
A B C D = A x B x C
----------------------------------------------------------------------------------------------------------------
Opportunity cost of time to
complete registrations by:
HR specialist.................... 54,847 0.33 $47.57 $860,994
In-house lawyer.................. 71,302 0.33 102.00 2,400,025
Outsourced lawyer................ 148,088 0.33 174.65 8,534,978
------------------------------------------------------------------------------
Total........................ 274,237 .................... ................. 11,795,997
----------------------------------------------------------------------------------------------------------------
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 will 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 will be selected for adjudication to meet the numerical
allocations and 105,697 petitions will 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 in light of this final rule will be
significantly higher in the event registration is suspended because
more petitions will be prepared and submitted in this scenario.
However, if registration is suspended there will be no costs associated
with registration, so the overall additional cost of this final rule to
petitioners will be less (stated another way, the estimated added cost
for submitting approximately 212,000 petitions if registration is
suspended will 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 final rule will be less if registration is
suspended, DHS is not separately estimating the costs for years when
registration will be suspended and, instead, is relying on the
additional costs created by this final rule when registration will be
required to estimate total costs of this final rule to petitioners
seeking to file H-1B cap-subject petitions.
vi. Familiarization Cost
Familiarization costs comprise the opportunity cost of the time
spent reading and understanding the details of a rule 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 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 \200\ 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 lawyers, and Outsourced
lawyers from Table 4, and assuming one person at each entity
familiarizes themself with the rule, DHS estimates a one-time total
familiarization cost of $6,285,527 in FY 2022.
---------------------------------------------------------------------------

\200\ Source: USCIS, Office of Policy and Strategy, Policy
Research Division (PRD), Form I-129H-1B, Claims 3, IRFA data (Aug.
18, 2020) & USCIS Analysis.

Table 16--Familiarization Costs to the Petitioners
----------------------------------------------------------------------------------------------------------------
Additional
Total affected time burden to Compensation
Cost items population familiarize 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.

[[Page 1727]]

b. Total Estimated Costs of Regulatory Changes
In this section, DHS presents the total annual costs of this final
rule annualized over a 10-year implementation period. Table 17 details
the total annual costs of this final rule to petitioners will be
$21,538,925 in FY 2022 and $15,253,398 in FY 2023 through 2032.

Table 17--Summary of Estimated Annual Costs to Petitioners in This Final
Rule
------------------------------------------------------------------------
Total estimated
Costs annual cost
------------------------------------------------------------------------
Petitioners' additional opportunity cost of time in $3,457,401
filing Form I-129 petitions.........................
Petitioners' additional opportunity cost of time in 11,795,997
submitting information on the registration..........
Familiarization Cost (Year 1 only FY 2022)........... 6,285,527
------------------
Total Annual Costs (undiscounted) = FY 2022...... 21,538,925
Total Annual Cost (undiscounted) = FY 2023-FY 15,253,398
2032............................................
------------------------------------------------------------------------

Table 18 shows costs over the 10-year implementation period of this
final rule. DHS estimates the 10-year total net cost of the rule to
petitioners to be approximately $158,819,507 undiscounted, $136,217,032
discounted at 3-percent, and $113,007,809 discounted at 7-percent. Over
the 10-year implementation period of the rule, DHS estimates the
annualized costs of the rule to be $15,968,792 annualized at 3-percent,
$16,089,770 annualized at 7-percent.

Table 18--Total Costs of This Final Rule
------------------------------------------------------------------------
Total estimated costs
-------------------------------
$21,538,925 (year 1);
Year $15,253,398 (year 2-10)
-------------------------------
Discounted at Discounted at
3-percent 7-percent
------------------------------------------------------------------------
1....................................... $20,911,578 $20,129,836
2....................................... 14,377,791 13,322,909
3....................................... 13,959,020 12,451,316
4....................................... 13,552,447 11,636,744
5....................................... 13,157,715 10,875,462
6....................................... 12,774,481 10,163,983
7....................................... 12,402,408 9,499,050
8....................................... 12,041,173 8,877,617
9....................................... 11,690,459 8,296,838
10...................................... 11,349,961 7,754,054
-------------------------------
Total............................... 136,217,032 113,007,809
------------------------------------------------------------------------
Annualized.......................... 15,968,792 16,089,770
------------------------------------------------------------------------

E.O. 13771 directs agencies to reduced regulation and control
regulatory costs. This final rule is expected to be an E.O. 13771
regulatory action. DHS estimates the total cost of this rule will be
$10,515,740 annualized using a 7- percent discount rate over a
perpetual time horizon, in 2016 dollars, and discounted back to 2016.
c. Costs to the Federal Government
DHS is revising the process and system by which H-1B registrations
or petitions, as applicable, will be selected toward the annual
numerical allocations. This final rule will require updates to USCIS 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.\201\ 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
final rule includes the time to adjudicate the benefit request. These
costs are captured in the fees collected for the benefit request from
petitioners.
---------------------------------------------------------------------------

\201\ See INA section 286(m), 8 U.S.C. 1356(m).
---------------------------------------------------------------------------

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

[[Page 1728]]

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 final rule will affect entities that file and pay fees
for H-1B non-immigrant benefit requests. The USCIS forms that are
subject to an RFA analysis for this final rule are Form I-129, Petition
for a Nonimmigrant Worker and the Registration H-1B Tool.
DHS does not believe that the changes in this final rule will have
a significant economic impact on a substantial number of small entities
that will file H-1B petitions. A Final Regulatory Flexibility Analysis
(FRFA) follows.
1. A Statement of Need for, and Objectives of, This Final Rule
DHS's objectives and legal authority for this final rule are
discussed earlier in the preamble. DHS is amending its regulations
governing H-1B specialty occupation workers. The purpose of this final
rule is to better ensure that H-1B classification is more likely to be
awarded to petitioners seeking to employ relatively higher-skilled and
higher-paid beneficiaries. DHS believes these changes will
disincentivize use of the H-1B program to fill relatively lower-paid,
lower-skilled positions.
2. A Statement of Significant Issues Raised by the Public Comments in
Response to the Initial Regulatory Flexibility Analysis, a Statement of
Assessment of Any Changes Made in the Proposed Rule as a Result of Such
Comments
Comments: A professional association wrote that DHS claimed that no
small entities would be significantly impacted by the proposed rule,
but DHS also estimated that 80.1 percent of those that filed Form I-129
were small entities. An individual commenter wrote that DHS incorrectly
concluded that the proposed rule would not have a significant impact on
small entities because small businesses would be unlikely to have the
legal expertise or institutional knowledge to navigate the H-1B system.
Response: DHS estimates the economic impact for each small entity,
based on the additional cost and time associated with the changes to
the form, in percentages, is the sum of the impacts of the final rule
divided by the entity's sales revenue.\202\ DHS constructed the
distribution of economic impact of the final rule based on a sample of
312 small entities. Across all 312 small entities, the increase in cost
to a small entity will 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) will experience a cost increase that is greater than 5
percent of revenues.
---------------------------------------------------------------------------

\202\ 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 this
final 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 13. 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 = $11,795,997/274,237) from Table 14.
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.
---------------------------------------------------------------------------

Comments: Some commenters generally stated that the proposed rule
would harm small businesses. Multiple commenters, including a trade
association, employer, and individuals, wrote that the proposed rule
would harm small and emerging businesses who, often, could not offer
higher salaries compared to larger firms. Other commenters said the
proposed rule would favor larger firms at the expense of small and
medium sized businesses. An individual commenter wrote that the
proposed rule would harm small technology companies and start-ups that
are dependent on recruiting young talent, as they would be required to
offer such employees level III and level IV wages when level I and
level II wages would be more appropriate. Another individual commenter
said companies would suffer because many small information technology
or financial companies could not provide as high of salaries to their
foreign workers as big companies could. An individual commenter wrote
that the proposed rule would harm small businesses that often could not
find the appropriate talent domestically and would have a legitimate
need to hire H-1B workers, while another commenter argued the proposed
rule would shrink the hiring talent pool for small businesses. An
individual commenter wrote that, under the proposed rule, small
businesses would not be able to operate due to an inability to find
suitable employees. Similarly, an individual commenter wrote that the
proposed rule would ensure that H-1B visas would go to ``the highest
bidders'' and would discriminate against smaller businesses with a
genuine need for H-1B employees. An individual commenter wrote that the
proposed rule would encourage larger employers who could afford to pay
higher wages to employees to artificially inflate their job
requirements and increase their chance of selection through the ranked
selection process. Another commenter asserted that smaller companies in
non-metropolitan areas, who might have difficulty finding domestic
candidates for positions, would be negatively impacted by the proposed
rule.
Response: DHS acknowledges that an employer offering a level I or
below wage under the regular cap, and an employer offering a level II,
I, or below wage under the advanced degree exemption, may have a lesser
chance of selection than under the current random selection process.
DHS does not believe that the changes in this final rule will have a
significant economic impact on a substantial number of small
businesses. As explained in the NPRM, DHS conducted an RFA and found
that the changes in this rule would not have a significant economic
impact on a substantial number of small entities.
Additionally, this rule does not treat people who work for small-
sized entities differently than those who work for large companies.
While DHS recognizes that some small businesses may operate on smaller
margins than larger companies, if an employer values a beneficiary's
work and the unique qualities the beneficiary possesses, the employer
can offer a higher wage than required by the prevailing wage level to
reflect that value. If a small company is unable to pay an employee at
wage level III or IV for a greater chance of selection, they could then
try to find a substitute U.S. worker.
Comments: An individual commenter wrote that rural areas and
smaller towns depend on entry-level H-1B workers at a level I wage, but
those communities would not be able to justify hiring such H-1B workers
at level III and level IV wages. Another individual commenter said the
rule would harm employers in rural areas where wages, often, would be
lower. A professional association wrote that small and medium sized
medical practices, often serving rural or

[[Page 1729]]

low-income areas, depend on new or inexperienced physicians at the
level I or level II wage rate and would be unable to compete for H-1B
cap slots for these employees under the proposed rule. An employer
wrote that rural healthcare providers would not be able to meet the
wage rates necessary to attract workers on H-1B visas, and, as a
result, the proposed rule would decrease the supply of healthcare labor
to rural communities.
Response: The rule takes the geographic area into account when
ranking registrations or petitions, and, therefore, DHS does not agree
that this rule will harm employers in rural or other areas where wages
often are lower. Particularly, as stated in the proposed rule, USCIS
will select H-1B registrations or petitions, as applicable, based on
the highest OES prevailing wage level that the proffered wage equals or
exceeds for the relevant SOC code and area(s) of intended employment
(emphasis added). The prevailing wage already accounts for wage
variations by location. Additionally, this rule does not treat foreign
workers who work for small-sized entities differently than those who
work for large companies.
3. The Response of the Agency to Any Comments Filed by the Chief
Counsel for Advocacy of the Small Business Administration in Response
to the Rule, and a Detailed Statement of Any Change Made to the Final
Rule as a Result of the Comments
DHS did not receive comments on this rule from the Chief Counsel
for Advocacy of the Small Business Administration.
4. A Description of and an Estimate of the Number of Small Entities to
Which This Final Rule Will Apply or an Explanation of Why No Such
Estimate Is Available
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 final 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,\203\ revenue, and employee count for each entity
in the sample. To determine whether an entity is small for purposes of
the RFA, DHS first classified the entity by its NAICS code and, then,
used SBA size standards guidelines \204\ to classify the revenue or
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.
---------------------------------------------------------------------------

\203\ U.S. Census Bureau, North American Industry Classification
System, http://www.census.gov/eos/www/naics/ (last visited Oct. 21,
2020).
\204\ 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.
Small Business Administration, Office of Advocacy, A Guide for
Government Agencies, How to Comply with the Regulatory Flexibility
Act (Aug. 2017), at 19, https://www.sba.gov/sites/default/files/advocacy/How-to-Comply-with-the-RFA-WEB.pdf.
---------------------------------------------------------------------------

Using FY 2020 internal data on actual filings of Form I-129 H-1B
petitions, DHS identified 24,111 \205\ 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 estimation for the impacted population of
entities using the standard statistical formula at a 5 percent margin
of error. Then, DHS created a sample size greater than the minimum
necessary to increase the likelihood that our matches would meet or
exceed the minimum required sample.
---------------------------------------------------------------------------

\205\ Source: USCIS, Office of Policy and Strategy, Policy
Research Division (PRD), Form I-129H-1B, Claims 3, IRFA data (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 RFAs, DHS assumes filing entities
without database matches or missing revenue/employee count data are
likely to be small entities. As a result, to prevent underestimating
the number of small entities this rule will 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-129. 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 19 below. The annual numeric
estimate of the small entities impacted by this final rule is 19,319
entities.\206\
---------------------------------------------------------------------------

\206\ The annual numeric estimate of the small entities (19,319)
= Population (24,111) * Percentage of small entities (80.1%).

Table 19--Number of Small Entities for Form I-129 for H-1B, FY 2020
------------------------------------------------------------------------
Proportion of
Population Number of population
small 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 this final rule on each small entity. The economic impact on
each small entity, in percentages, is the sum of the impacts of the
final rule divided by the entity's sales revenue.\207\ DHS constructed
the distribution of economic impact of the final rule based on the
sample of 312 small entities. Across all 312 small

[[Page 1730]]

entities, the increase in cost to a small entity will 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) will 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 will be significantly affected by this
final rule.
---------------------------------------------------------------------------

\207\ 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 this
final 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 = $11,795,997/274,237) 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 this final rule
will have a significant economic impact on a substantial number of
small entities that file H-1B petitions.
5. A Description of the Projected Reporting, Recordkeeping, and Other
Compliance Requirements of the Final Rule, Including an Estimate of the
Classes of Small Entities That Will Be Subject to the Requirement and
the Types of Professional Skills Necessary for Preparation of the
Report or Record
As stated above in the preamble, this final rule will impose
additional reporting, recordkeeping, or other compliance requirements
on entities that could be small entities.
6. Description of the Steps the Agency Has Taken To Minimize the
Significant Economic Impact on Small Entities Consistent With the
Stated Objectives of the Applicable Statues, Including a Statement of
Factual, Policy, and Legal Reasons for Selecting the Alternative
Adopted in the Final Rule and Why Each One of the Other Significant
Alternatives to the Rule Considered by the Agency Which Affect the
Impact on Small Entities Was Rejected
DHS requested 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 sought comments on
alternatives that would accomplish the objectives of the proposed rule
without unduly burdening small entities. DHS also welcomed 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.
Comment: Some commenters said that DHS should consider ranking by
years of experience, rather than by wage. One commenter asked DHS to
give an advantage to candidates who have work experience in the United
States.
Response: DHS declines to adopt these alternatives, as ranking and
selection by years of experience would not best accomplish the goal of
attracting the best and brightest workers. DHS believes that the
salary, relative to others in the same occupational classification and
area of intended employment, rather than years of experience, is
generally more indicative of skill level and relative value/
productivity of the worker to the United States. See section 3.3
Requests for comments on alternatives for additional suggested
alternatives.

C. Congressional Review Act

The Office of Information and Regulatory Affairs has determined
that this final rule is a major rule, as defined in 5 U.S.C. 804, also
known as the ``Congressional Review Act'' (CRA), as enacted in section
251 of the Small Business Regulatory Enforcement Fairness Act of 1996,
Public Law 104-121, sec. 251, 110 Stat. 868, 873, and codified at 5
U.S.C. 801 et seq. Therefore, the rule requires at least a 60-day
delayed effective date. DHS has complied with the CRA's reporting
requirements and has sent this final rule to Congress and to the
Comptroller General as required by 5 U.S.C. 801(a)(1).

D. Unfunded Mandates Reform Act of 1995

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.\208\
---------------------------------------------------------------------------

\208\ 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.
---------------------------------------------------------------------------

This rule does not contain a ``Federal mandate'' as defined in UMRA
that may result in $100 million or more expenditures (adjusted annually
for inflation--$168 million in 2019 dollars) in any one year by State,
local and tribal governments or the private sector. This rule also does
not uniquely affect small governments. Accordingly, Title II of UMRA
requires no further agency action or analysis.

E. Executive Order 13132 (Federalism)

This final rule will 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 has determined that this final rule does
not have sufficient federalism implications to warrant the preparation
of a federalism summary impact statement.

F. Executive Order 12988 (Civil Justice Reform)

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

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

This final 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.

H. National Environmental Policy Act (NEPA)

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

[[Page 1731]]

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).\209\ 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.\210\
---------------------------------------------------------------------------

\209\ See 40 CFR 1507.3(b)(2)(ii), 1508.4.
\210\ Instruction Manual section V.B(2)(a)-(c).
---------------------------------------------------------------------------

As discussed in more detail throughout this final rule, DHS is
amending regulations governing the selection of registrations or
petitions, as applicable, toward the annual H-1B numerical allocations.
This final rule establishes that, if more registrations are received
during the annual initial registration period (or petition filing
period, if applicable) than necessary to reach the applicable numerical
allocation, USCIS will rank and select the registrations (or petitions,
if the registration process is suspended) received on the basis of the
highest OES prevailing 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 and below. If a
proffered wage falls below an OES wage level I, because the proffered
wage 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.\211\
---------------------------------------------------------------------------

\211\ 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 final 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, consequently
will 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 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 is
implementing will affect how many petitions will be filed for workers
to be employed in specialty occupations or whether the regulatory
amendments herein will result in an overall change in the number of H-
1B petitions that ultimately will be approved, and the number of H-1B
workers who will be employed in the United States in any FY. DHS has no
reason to believe that these amendments to H-1B regulations will change
the environmental effect, if any, of the existing regulations.
Therefore, DHS has determined that, even if NEPA applied to this
action, this final 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 final rule will maintain the
current human environment by proposing improvements to the H-1B program
that will take effect during the economic crisis caused by COVID-19 in
a way that more effectively will prevent an adverse impact from the
employment of H-1B workers on the wages and working conditions of
similarly employed U.S. workers. This final 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.

I. Paperwork Reduction Act

Under the Paperwork Reduction Act of 1995 (PRA) Public Law 104-13,
44 U.S.C. 3501, et seq., all Departments are required to submit to the
Office of Management and Budget, for review and approval, any reporting
requirements inherent in a rule. In compliance with the PRA, DHS
published a notice of proposed rulemaking on November 2, 2020, in which
it requested comments on the revisions to the information collections
associated with this rulemaking.\212\ DHS responded to those comments
in Section IV.E.2. of this final rule.
---------------------------------------------------------------------------

\212\ See 85 FR 69236, 69261-2.
---------------------------------------------------------------------------

The following is an overview of the information collections
associated with this final rule:
1. USCIS H-1B Registration Tool
(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
(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

[[Page 1732]]

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.

J. 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 Ian J. Brekke, 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 amends 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)
introductory text;
0
b. Adding paragraphs (h)(8)(iii)(A)(1)(i) and (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. Revising paragraph (h)(10)(ii);
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). *
* *
(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

[[Page 1733]]

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 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

[[Page 1734]]

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) Notice of denial. The petitioner shall be notified of the
reasons for the denial and of the right to appeal the denial of the
petition under 8 CFR part 103. 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 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. There is no appeal from a decision to deny an
extension of stay to the alien.
(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,

[[Page 1735]]

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.
* * * * *

Ian J. Brekke,
Senior Official Performing the Duties of the General Counsel, U.S.
Department of Homeland Security.
[FR Doc. 2021-00183 Filed 1-7-21; 8:45 am]
BILLING CODE 9111-97-P