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January 31, 2024

H-1B Visas: Current Realities and Proposed Rules

Jonathan A. Grode and Joshua H. Rolf
H-1B visas are available to foreign national workers in positions that require a bachelor’s degree in a specific field.

H-1B visas are available to foreign national workers in positions that require a bachelor’s degree in a specific field.

Depending on who you ask, the H-1B Program is a vital source of high-tech workers to U.S. firms, yet another threat to U.S. workers that is driving down their wages, or something in between. However, what has been objectively true about H-1B visas for more than a decade is that their demand has far outstripped their supply. This shortage has led not only to rampant abuse among employers and employees seeking to enhance their odds of securing a winning H-1B visa ticket but also to foreign nationals turning to more tenuous alternatives, if not simply leaving the United States. This article will provide a brief outline of the H-1B program, the crisis it is facing and the impacts of that crisis, and the proposed rules from the U.S. Department of Homeland Security (“DHS”) and its sub-agency, U.S. Citizenship and Immigration Services (“USCIS”).

H-1B visas are available to foreign national workers in positions that require a bachelor’s degree in a specific field. When compared to restrictions placed on other work visas (such as the “extraordinary ability” required for an O-1 visa or the non-transferability of the L-1 intracompany transfer), the H-1B appears attainable and attractive for employers and employees alike. However, H-1B visas are increasingly difficult to obtain due to the yearly limit of 85,000 new H-1B visas made available on October 1.

We say “increasingly” because through the early 2010s, new H-1B visas were available beyond their October 1 start date. During President Obama’s first term, it was normal for H-1Bs to remain available into the following calendar year, even though they can be requested up to 180 days in advance of October 1, in early April. In 2013, USCIS required hopeful employers to submit complete H-1B petitions within the first five business days of April to be entered into a randomized drawing, the H-1B lottery. USCIS adjudicated the selected H-1B petitions and returned unselected filings on the government’s dime, resulting in tens of millions of dollars spent by petitioners and the government to prepare and return unread H-1B petitions.

To combat these inefficiencies, USCIS implemented an electronic registration process in 2020 that requires employers to submit a brief online application and $10.00 to enter the H-1B lottery, rather than a complete petition. USCIS now notifies selected registrants by the end of March and invites them to submit complete H-1B petitions between April 1 and June 30. In doing so, USCIS emphasized that each employer could submit one registration per worker and that a worker could only appear on multiple registrations filed by different, unrelated employers if there were multiple bona fide job offers available.

Though it may have saved on postage and legal fees for unselected H-1B petitions, electronic registration has proven to be inefficient and open to abuse. The lower barrier for entry led to a surge of H-1B lottery entrants, increasing from approximately 200,000 in 2019 (the last year of the old system) to 781,000 in 2023–more than nine times the number of available H-1B visas. Additionally, slightly more than half of eligible registrations were for workers named on multiple filings. Thus, USCIS has been forced to conduct second (and even third) rounds of selections, forcing potential H-1B employers and employees to wait and hope that their numbers get called in a subsequent drawing.

The H-1Bs quota and the electronic registration’s inefficiency, uncertainty and vulnerability to abuse breed significant consequences. Not knowing if or when a worker may access an H-1B hamstrings an employer’s ability to effectively manage its operations and leaves workers’ futures subject to chance or the availability of another work-based visa. Multinationals have the benefit of leveraging the L-1 intracompany transfer, meaning unlucky employees can be seconded abroad and brought back a year later. Likewise, free trade agreements allow citizens of Canada (TN), Mexico (TN), Australia (E-3), Chile (H-1B1) and Singapore (H-1B1) the ability to apply for a country-specific visa classification. Some employees may also meet the “extraordinary ability” standard and qualify for O-1.

U.S. employers without foreign locations, workers who are not from one of the aforementioned countries, and workers who do not possess “extraordinary ability” have few options. Many workers enroll in a master’s or doctoral program at a university that offers employment authorization through curricular practical training, which allows students to work full-time while earning their degree but with the requirement to maintain student status and pay for their studies, making it far from ideal for many. Yet that option may be better than returning to their home country and working for the U.S. company from abroad and across time zones as a contractor. And, of course, lacking a viable avenue for living and working in the United States increases the chances that these workers will take all the benefits they bring to U.S. employers and their communities elsewhere.

In late October 2023, USCIS proposed rules intended to “modernize and improve the efficiency of the H-1B program, add benefits and flexibilities, and improve integrity measures” in several ways that address the concerns described above. One proposal is to shift the H-1B cap lottery selection to choosing the employees themselves, thereby eliminating the advantage of and incentive for multiple employers to submit multiple registrations for the same person, improving the odds for foreign national workers. In addition, while the proposed rules do not increase the number of new H-1B visas made available each year, they do widen the definition of employers that are statutorily exempt from the H-1B cap, which should expand the pool of U.S. companies able to seek H-1B visas for workers year-round regardless of the quota. As H-1B workers employed by statutorily exempt organizations are permitted to work concurrently for employers customarily subject to the H-1B cap, this expansion would also increase cap-subject employer’s access to professional workers. Though these proposed changes may address many of the problems with the H-1B program, it will likely require additional major amendments to meet the needs of U.S. employers for high-skilled workers.

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Jonathan A. Grode

Managing Partner and U.S. Practice Director of Green and Spiegel LLC

Jonathan A. Grode is Managing Partner and U.S. Practice Director of Green and Spiegel LLC, a Philadelphia-based law firm that solely practices U.S. immigration and nationality law.

Joshua H. Rolf

Senior Associate at Green and Spiegel LLC

Joshua H. Rolf is a Senior Associate at Green and Spiegel LLC and Lead of the Compliance and Special Projects Team