DHS’s Proposed Registration Requirement for H-1B Petitions and Its Potential Adverse Impact on U.S. Employers and Prospective H-1B Employees

28Dec
2018

DHS’s Proposed Registration Requirement for H-1B Petitions and Its Potential Adverse Impact on U.S. Employers and Prospective H-1B Employees

By Xiaojie (Marta) Meng, Alex Kim

On December 3, 2018, the Department of Homeland Security (DHS) published a proposed regulation in the Federal Register that would impose an internet-based registration requirement for cap subject H-1B petitions.

A. DHS is Proposing Amendments to Introduce an Electronic Registration Requirement for H-1B Petitions and to Change the Order in Which Petitions Eligible for the Advanced Degree Exemption Are Selected

Although the proposed rule is well-intentioned, aiming to reduce the cost, paperwork burden, and complexity of participation in the H-1B program, some commenters have observed that it does not conform to the statutory requirements for the H-1B program.[1] Moreover, the proposed rule contains serious shortcomings likely to jeopardize the interests of U.S. employers and prospective H-1B employees by causing postponements and delays in the filing and adjudication of cases and creating confusion regarding the application of the “cap-gap” extension. While we are not opposed per se to the introduction of a registration requirement for H-1B petitions, the issues of protracted delay and cap-gap applicability must be addressed in order to avoid causing serious detriment to employers and employees participating in the H-1B program. Therefore, we respectfully and strongly urge USCIS to hold off on implementing the proposed registration requirement until a thorough test and evaluation has been conducted and the aforementioned issues have been resolved.

The Department of Homeland Security (“DHS”) is proposing to introduce a new H-1B registration process that would require petitioners seeking to file H-1B cap-subject petitions, including both regular cap petitions and petitions asserting eligibility for the advanced degree exemption, to first electronically register with USCIS during a designated registration period prior to the date that petitions could be filed. Petitioners would be asked to provide basic information regarding the petitioner and beneficiary, including the employer’s name, employer identification number, mailing address, beneficiary’s name, country of citizenship, passport number, and whether the beneficiary has obtained a master’s or higher degree from a U.S. institution of higher education. Once USCIS has received the number of electronic registrations needed to reach the H-1B regular cap limit, USCIS would close the registration period and randomly select the registrations to fill the regular H-1B cap. H-1B cap-subject petitions would only be filed on behalf of beneficiaries whose registrations were selected by USCIS. Unselected registrations would remain on reserve in the system for the applicable fiscal year.

DHS is also proposing to change the order by which USCIS selects H-1B petitions for the regular cap and advanced degree exemption. Under the current system, petitions eligible for the advanced degree exemption are selected first, and regular cap petitions are then selected afterwards.  DHS’s proposed amendments would reverse the order of selection. USCIS would select all registrations needed to meet the 65,000 regular cap limit first, then select registrations that are eligible for the 20,000 advanced degree exemption limit next. Changing the order of selection in this way will likely increase the total number of petitions selected under the regular cap for H-1B beneficiaries who possess a master’s or higher degree each fiscal year, because the regular cap pool of petitions would likely contain a greater number of such petitions.

As discussed below, DHS’s proposed rule significantly shifts the timetable for filing and adjudicating H-1B petitions, creating a considerable likelihood of postponements and delays in the petitioning process. Combined with USCIS’s already prolonged adjudication time on H-1B petitions and suspension of premium processing for H-1B petitions in recent years, the foreseeable delays are anticipated to cause substantial harm to the interests of U.S. employers and prospective employees participating in the H-1B program. In particular, the proposal’s failure to address the cap-gap extension creates serious uncertainties regarding the lawful presence and work authorization of F-1 students applying for H-1B status in the upcoming cap season.

B. DHS’s Proposed Changes Will Shift the Timetable for Filing H-1B Petitions Later into the Year, Which Will Cause Foreseeable Postponement of Filings and Delayed Adjudication of PetitionsThe proposed 60-day filing window for cap-subject H-1B petitions will cause filings to be postponed and adjudication of petitions to be delayed.

1.The proposed 60-day filing window for cap-subject H-1B petitions will cause filings to be postponed and adjudication of petitions to be delayed.

DHS’s proposed registration requirement significantly shifts the timetable for submitting and receiving decisions on H-1B petitions later into the year. Under the process currently in place, competition over a limited number of H-1B visas has caused petitioners in previous years to submit their petitions on or soon after the opening day of the filing period on April 1. In the past five fiscal years, USCIS received well over 100,000 completed H-1B petitions within the first few days of the filing period, which means all petitions to be adjudicated were in USCIS’s possession by early April. Nevertheless, USCIS still has had difficulty adjudicating all petitions by October 1, causing many U.S. employers and prospective H-1B employees to delay or modify their H-1B employment arrangements.

Under the proposed registration requirement, USCIS would permit petitioners to file their petitions at least two months later than under the current process. The electronic registration period would begin at least fourteen calendar days before the first day of filing on April 1 or, if April 1 falls on a weekend or holiday, the next business day. For registrations that are selected, USCIS would give petitioners a designated period of at least 60 days to properly file a completed petition for the named beneficiary. That means for the initial filing round starting on April 1, petitions would be due on May 31. The extended filing deadline significantly pushes the timeline for submitting H-1B cap-subject petitions later into the year and shrinks the period of time USCIS has to adjudicate the petitions before the start of the fiscal year on October 1. This will almost certainly cause petition filings to be postponed and adjudication of petitions to be delayed, forcing a greater number of U.S. employers and prospective H-1B employees to wait beyond the start of the fiscal year on October 1 for decisions on their petitions.

2.The introduction of multiple, staggered filing windows will further exacerbate delays in the adjudication of petitions.

In addition to the 60-day filing window, DHS is proposing to allow USCIS to stagger filings by specifying multiple filing periods for each fiscal year. Under the proposed changes, separate filing windows would be staggered over multiple, consecutive filing periods. For example, USCIS could specify an initial filing window between April 1 and May 31 and a second filing window between May 1 and June 30. That means a significant number of petitions would be filed as late as June 30, leaving USCIS only three months to finish adjudicating those petitions in time for the October 1 start of the fiscal year. Even leaving aside the additional time needed to process RFE requests, the multiple, consecutive filing periods will almost certainly cause a substantial number of H-1B petitions to not be timely adjudicated by October 1. Each progressive filing window would leave USCIS a shorter amount of time for adjudication by October 1, with the foreseeable result that U.S. employers and prospective H-1B employees will experience serious delays in receiving decisions from USCIS.

3.The impact of the delays is made worse by USCIS’s suspension of premium processing for H-1B petitions.

On August 28, 2018, USCIS announced that it would be extending its suspension of premium processing for cap-subject H-1B petitions until February 19, 2019. The suspension was originally expected to be lifted on September 10, 2018. In the past, the processing of petitions under premium processing allowed foreign nationals to receive expedited approval of their petitions and change of status requests while in the United States. Thus, they could travel abroad without worrying about abandoning a pending change of status request by leaving the country. In addition, U.S. employers who needed their H-1B employees to start work without delay on October 1 could use premium processing to ensure they received a decision in time to enable the employees to get a timely start. Now, the extended suspension of premium processing will likely cause further hardship to U.S. employers and prospective employees dealing with extended delays for decisions on their H-1B petitions.

C. Implementing DHS’s Proposed Changes Without Clear Measures Addressing the Delays and Their Impact on the Cap-Gap Extension Will Cause Severe Detriment to U.S. Employers and Prospective H-1B Employees

1.The foreseeable delays in petition adjudication will cause many prospective H-1B employees not to receive a decision by October 1, when their cap-gap extension and employment authorization will expire.

Without clear measures addressing how the proposed changes will affect the cap-gap extension, the delays caused by DHS’s proposed filing periods will seriously harm the interests of prospective H-1B employees. Many prospective H-1B employees are F-1 students whose status expires before the start of their H-1B employment. These students rely on the cap-gap extension provided for under 8 CFR §214.2(f)(5)(vi) to maintain lawful status in the United States. Under cap-gap, the duration of status and employment authorization of an F-1 student who is the beneficiary of an H-1B petition is automatically extended until October 1 of the fiscal year for which such H-1B status is requested. However, the extension expires on October 1. That means F-1 students still waiting for a decision on their H-1B petitions at that time will lose the ability to work and lawfully stay in the country. Therefore, delays in the adjudication process will create all kinds of difficulties for F-1 students, such as financial loss, interruption to their lives, and uncertainty about their ability to remain in the country. Greater numbers of F-1 students relying on the cap-gap extension for lawful status in the United States will be forced to incur significant costs to leave the United States on October 1.

2.It is unclear under DHS’s proposed rule what documents F-1 students should use to claim the cap-gap extension.

Moreover, under DHS’s proposed changes, it is unclear what documents students would be able to use to claim the cap-gap extension. Since registration is the new proposed means for selection to file an H-1B petition, uncertainty remains about what related documents would prove cap-gap eligibility. Under the current rules, F-1 students who are eligible for the cap-gap extension can use proof of proper filing of their H-1B petitions to extend F-1 status until June 1. In addition, they can use the I-797 receipt notice from USCIS to extend F-1 status until September 30.[2] Although the extensions are applied automatically under 8 CFR§214.2(f)(5)(vi)(A), students can use these documents to prove that the extension applies in their case. However, DHS’s proposed rule fails to address this important issue. In their proposal, DHS states that registrants will receive a printable electronic registration receipt notification containing a unique identifying number for USCIS tracking and recordkeeping purposes. Further clarification is needed regarding whether this notification can be used for purposes of claiming the cap-gap extension.

i. Students whose registration is selected but whose status expires before October 1, 2018

To illustrate the potential difficulties, we offer the example of a student whose F-1 status expires in April or May. The student has his or her registration selected. However, the student needs time to prepare the petition and does not file it right away. In the meantime, how does the student claim the cap-gap extension? Can the student claim it using the selection notice?

ii. Students whose registrations are unselected but on reserve

In another example, a student’s registration is not selected and placed on reserve by USCIS. What is the student’s status? Is the student eligible for the cap-gap extension? Do students placed on reserve receive a notice to show that they are on reserve? Will they be able to use that notice to claim the cap-gap extension? Even if USCIS accepts the notice as proof of cap-gap eligibility, for what period of time is the cap-gap extension granted? Does the extension last until June or September or later?

3.The lack of clarity surrounding the proposed changes with respect to the cap-gap extension puts students at risk of involuntarily violating their status, exposing them to severe immigration consequences described by the August 2018 USCIS policy memorandum on unlawful presence.

The lack of clarity about the proposed changes’ effects on the cap-gap extension puts F-1 students whose status expires before October 1 at risk of suffering severe immigration consequences for involuntarily being out of status. This is a serious issue in light of USCIS’s August 9, 2018 policy memorandum on the accrual of unlawful presence for F, J, and M Nonimmigrants. The memorandum establishes a new policy that nonimmigrants in these categories who fail to maintain nonimmigrant status begin accruing unlawful presence no longer on the day after USCIS formally finds a status violation or an immigration judge orders the applicant excluded, but at the time the event causing the termination of status occurs, such as the expiration of the students’ pursued course of study, engagement in an unauthorized activity, or expiration of the Form I-94.[3] If the cap-gap extension is determined to operate differently under DHS’s proposed registration and filing system than it currently does, F-1 students with pending H-1B petitions risk inadvertently accruing unlawful presence in the United States.

As discussed above, DHS’s proposed changes will likely harm the interests of U.S. employers and prospective H-1B employees by shifting the timetable for filing and adjudicating H-1B petitions, which will cause foreseeable postponements and delays in the petitioning process. These delays will exacerbate the adverse effects of USCIS’s already prolonged adjudication time and suspension of premium processing for H-1B petitions. Moreover, DHS’s failure to address the applicability of the cap-gap extension creates serious uncertainties regarding the lawful presence and work authorization of F-1 students applying for H-1B status in the upcoming cap season. In order to avoid these adverse consequences, we strongly urge DHS to adopt the following measures:

D. Comments and Suggestions Regarding DHS’s Proposed Changes

• Amend the rules governing the cap-gap extension before or concurrent with DHS’s roll out of the proposed changes. The current rules set an expiration date for the extension on September 30 based on the assumption that USCIS will have reached a final decision on all H-1B petitions by that time. This assumption has not held up at least in the past two H-1B cap seasons, and the proposed changes appear likely to cause further delays. Therefore, the cap-gap rules need to be updated to account for the new reality.
• Reinstate premium processing for H-1B petitions to mitigate the effects of the anticipated delays caused by the proposed changes.
• Release a test version of the proposed registration system before actual implementation so that issues can be resolved without producing detrimental effects for U.S. employers and prospective H-1B employees.

In addition, we also highlight several issues of a technical nature we think present a further impediment to the sound implementation of DHS’s proposed changes and offer the following suggestions:

1.Automatically update an F-1 student’s information in SEVIS when the student’s registration is selected in the lottery.

To ensure that a student in F-1 status who is the beneficiary of an H-1B petition has a way to prove eligibility for the cap-gap extension, USCIS should ask for the beneficiary’s SEVIS number during the registration process so that the student’s information can automatically be updated in SEVIS if he or she is selected in the lottery.

2.Provide notice by mail when a registration is selected in the initial round or later off the unselected reserve list.

When a petitioner’s registration is initially selected or its unselected registration on reserve is later selected, it is currently unclear under DHS’s proposed changes whether USCIS would notify the petitioner by mail. We ask for further clarification on that. It is important that USCIS establish a reliable method of reaching and informing those on the reserve list if they are selected.

3.Withdrawing and resubmitting a registration to correct a typo or error should not be counted as a multiple filing.

In the proposed changes, petitioners will not be able to edit a registration once it has been received by USCIS. We request further explanation to clarify whether a petitioner would be able to withdraw a registration and resubmit it were a typo or error discovered. If resubmission is permitted, we submit that USCIS should not consider that a multiple filing by the same employer for the same beneficiary. 

4.Provide warning indicators when multiple filings are submitted by mistake.

When an employer is large, and several members of the HR staff are handling registrations, multiple registrations could inadvertently be entered due to coordination errors, especially assuming the proposed changes are hastily implemented for the next H-1B cap season. We recommend that the electronic registration system include a pop-up warning feature indicating when duplicate registrations are submitted by the same employer for the same beneficiary.

5.In the registration system, provide a feature allowing the petitioner to choose between cap-subject and master’s cap petitions.

Currently, H-1B petitioners specify the type of H-1B petition they are filing and whether the regular cap or the master’s degree cap applies on the Form I-129DC. Similarly, petitioners registering through the proposed electronic registration system should be required to provide information about which cap applies, regardless of the beneficiary’s degree. Since not all U.S. master’s degrees qualify for the master’s degree cap, by requesting the degree information only, the system may improperly classify the registration.

E. Conclusion

DHS’s proposed amendments introduce a new registration requirement that significantly shifts the timetable for filing and adjudicating H-1B petitions later into the year. The contracted adjudication periods and postponed filings that are likely to result will almost certainly cause protracted delays, which will be exacerbated by USCIS’s extended suspension of premium processing for H-1B petitions. Moreover, the failure of DHS’s proposed changes to address the impact on the cap-gap extension will harm U.S. employers and prospective H-1B beneficiaries that rely on cap-gap to lawfully remain in the country. These issues must be addressed and reconciled before the changes can be soundly implemented. Specific procedures pertaining to registration, notification, and documentation under the new system must be clarified to allow participants to engage with the system effectively.

We greatly appreciate DHS’s efforts to create a new H-1B registration process that seeks to reduce the cost, paperwork burden, and complexity of participation in the H-1B program by alleviating the burden of preparing and filing H-1B cap-subject petitions. However, as described here, critical issues remain to be resolved. Therefore, we highly recommend USCIS release a test version of the system before formally implementing it. Our office has participated in USCIS’ test of the system in September 2017 and would welcome further efforts to iron out the details. Those details will be the key to ensuring the eventual successful launch of the new electronic registration system.

[1] William A. Stock & Steven R. Miller, USCIS Proposes Rule to Select More U.S. Master’s Degree Holders in H-1B Lottery and Establish Electronic Pre-Filing Lottery for H-1Bs, Klasko Immigration Law Partners Blog (Dec. 4, 2018), https://www.klaskolaw.com/news-politics/uscis-proposes-rule-to-select-more-u-s-masters-degree-holders-in-h-1b-lottery-and-establish-electronic-pre-filing-lottery-for-h-1bs

[2] See USCIS, Extension of Post Completion Optional Practice Training (OPT) and F-1 Status for Eligible Students under the H-1B Cap-Gap Regulation, https://uscis.gov/working-united-states/temporary-workers/h-1b-specialty-occupations-and-fashion-models/extension-post-completion-optional-practical-training-opt-and-f-1-status-eligible-students-under-h-1b-cap-gap-regulations (last visited Dec. 26, 2018); Policy Guidance 1004-03 – Update to Optional Practical Training (April 23, 2010).

[3] See USCIS Policy Memorandum, “Accrual of Unlawful Presence and F, J, and M Nonimmigrants” (August 9, 2018)