April means one thing in the world of immigration: vying for selection in the H-1B Cap Lottery. With the unemployment rate at 4.1%, the quest for global talent is hot and the demand for visas--- unabated. Despite concerns that the visa program would face significant structural changes during the past year, no such overhaul took shape. Yet applicants should expect a higher level of scrutiny and will need advance planning to successfully obtain, maintain, and extend their visas.
The Cap Recapped
Congress sets numerical limitations on the number of new H-1B allowed annually. Since 2005, that limit has been set at 65,000 for first-time filings (Regular cap) and 20,000 first-time filings for beneficiaries who have completed US master's or higher-level degrees (Master’s cap). When the volume of filings exceeds numerical limitations, a “lottery” is triggered. The lottery has been triggered (and cap reached) in the first week of April for the past five years.
Anecdotal hiring reports suggest that this year the regular and advanced degree H-1B caps will again be exceeded within the minimum five day filing period. For Fiscal Year 2019 (FY19), this filing period is April 2-6, 2018. Prior experience suggests that the lottery will be conducted within one to three weeks, yet those not selected for processing may continue to receive their applications and filing fees by return mail for months. Those selected will be issued receipt notices and they can track the progress of their application by text or email notification.
Last March, USCIS suspended premium processing for all cases filed after April 3rd, citing a backlog of cases. The suspension was unexpected and had a dramatic effect, derailing many employment start dates and thwarting international travel plans for extension applicants.
Current processing times of extensions are ranging from two to four months, depending on the service center. It’s not as likely that these processing times would form a legitimate basis for suspending premium services again this Spring. Yet, since the potential for suspension exists, and a suspension could occur without warning, clients should consider upgrading for any time sensitive needs. This is particularly important for extension applicants, since they may have travel needs and may need approval notices for other purposes such as driver's license renewals. Cap subject applicants, even if premium processed, still cannot begin employment until October 1st. We recommend that cap subject cases be filed "regular" processing at first, with an eye towards upgrading if the case is selected after the lottery is conducted. At that juncture, using premium can give start date certainty that is business critical.
Declarations of Change: Executive Orders and Policy Memos
The executive order (EO) Buy American, Hire American was released in April 2017 and technically changed nothing in the law. Yet, as a result of this EO, the application and interpretation of existing regulations has shifted. A heightened level of scrutiny, increased rejections and delays, and new policy memoranda directives all equal a more challenging H-1B adjudication environment. Since the EO's publication, the agency has confirmed that it is working on a combination of rule-making, policy memoranda, and operational changes with the stated objective of "protecting the economic interests of U.S. workers and preventing fraud and abuse."
Staffing Industry Singled Out for Increased Scrutiny
One such new policy memorandum, "Contracts and Itineraries Requirements for H-1B Petitions Involving Third-Party Worksites makes clear that the placement of H-1B visa holders at third-party worksites is perceived by USCIS as an area of potential abuse. Applications that include multiple or intermediary vendors between the H-1B worker and the end-client should expect a higher level of scrutiny. Practices such as paying less than the required wage, benching (not paying the required wage during work stoppages) and having employees perform jobs that are not specialty occupations are all referenced as abuses more likely to occur at third-party sites. Going forward, to assure success, a case must document "specific and non-speculative qualifying assignments in a specialty occupation for the entire time requested on the petition." While none of these requirements is exactly new, the failure to produce these materials, or to produce an uncorroborated statement without supporting evidence, will be used as the basis for denial. Assignments that are limited in duration could be met with shortened approval periods, as well.
Trends and Outcomes in RFEs
Approximately one in four H-1B applications in FY18 received a Request for Evidence (RFE) and the rate of RFEs was anecdotally even higher in the staffing industry. This is a marked increase over prior years and is likely to be repeated this year. Many RFEs last cycle were a novel challenge to the use of Level 1 or entry level wage assignments on the LCA. Specifically, USCIS argued that any job offer in which an H-1B worker would be paid an entry-level (Level 1) wage was de facto not a specialty occupation. In our analysis we argued that there was simply no basis in the law for this line of reasoning and, in two recent cases, the Administrative Appeals Office agreed.
Though it reached different outcomes in these cases, the AAO confirmed that there is no inherent inconsistency between an entry-level position and a specialty occupation (and thus the approval of the H-1B). For many professional occupations (think physicians, lawyers, engineers) the "basic understanding" that supports a Level 1 wage may require years of study, though not necessarily years of experience. Use of an entry-level wage does not make that individual any less a professional.
Strategies for Success
Businesses must now be open to different approaches of getting to the goal--- placement of a skilled employee. This includes considering hiring practices that provide increased lead time for case preparation and strong documentation, increased wage offers to avoid arguments that the LCA does not match the job, and providing additional documentary evidence that may have been technically required, but not enforced under prior adjudication priorities.
Additional strategies and evidence considerations should now include:
- End-client letters, with specific details regarding duties, dates, wages, and qualifications when the employment relationship involves third-party worksites.
- Selection of the most qualified candidates and offering Level 2 wages or above. While not mandated, this can go a long way towards ultimate approval and placement.
- Start early! Allow time to acquire strong supporting evidence and a certified prevailing wage which fixes the appropriate wage level so that USCIS cannot allege that an improper level or occupational classification was used.
- Avoid cross placements or hybrid job descriptions. Do not rely on expert opinion letters.
- Consider alternate visa types (like O-1 or L-1), when qualified.
Cases have been denied if a job description does not match up to the candidate's educational background. For example, if a candidate has a Mechanical Engineering degree, limit their job title and duties to jobs that are strictly mechanical in nature. Outcomes have been mixed if the qualifications for the job do not line up and rely on education plus experience or expert opinion letters.
H-4 EAD, Consider Getting Counted
Though often highly educated themselves, the spouses of H-1B visa holders had no work authorization as part of their H-4 dependent visa until 2015. Under current policy, if their spouse has an approved I-140 case (employment based green card application) then the H-4 may apply for free-market, temporary work authorization. From October 2015 to September 2016, 41,526 people received such authorization.
Now the H-4 EAD is under threat. A lawsuit and a proposed regulation change are in the works to rescind work authorization for H-4s. Revocation was noted in the glimpse of regulations under development and review (called the Unified Agenda). Publication of a revocation notice was expected this month. While this hasn't happened, concerns are well placed and making use of alternate strategies is highly recommended.
Individuals who now possess H-4 EADs, and who qualify, should utilize the opportunity to file for their own H-1B status immediately. This may insulate them from potential work interruption should the EAD be rescinded with short notice.
Audits and On-Site Anti-Fraud Investigations
There has been a spike in anti-fraud investigations, though not necessarily in actual violations findings. Many employers have been taken off guard by the sudden arrival of an officer at their HQ or employee worksite. The visits have particularly targeted on-site investigations to situations where:
- The agency cannot validate the employer's basic business information through commercially available data (such as Dun and Bradstreet).
- The employer is H-1B-dependent.
- The employer petitions for H-1B workers who work offsite at another company or location of the organization.
Knowing what to expect in the event of an FDNS officer visit can make the experience less disruptive to your staff and your foreign national employees. Even if your company has never been audited before, it is important to have a plan in place and to make certain that your I-9 records and Public Access Files are compliant. Learn more about the audit experience with our reference guide. When in doubt, Ellis Porter attorneys are available for on-site compliance assistance. Just ask!
85,000 H-1B visas will be awarded this cap season. Building a successful application, with the help of Ellis Porter, is achievable through proper strategy and strong supporting evidence.