A pending lawsuit regarding the current registration system for the annual H-1B lottery can move forward, per a federal judge. The H-1B lawsuit claims the registration system decreases the chances of lottery selection for those who follow the law and submit a single registration. While the U.S. government sought to have the case dismissed, U.S. District Judge Trevor N. McFadden denied the request. The court states that the suing H-1B applicants don’t need to prove the employers still want to hire them in order to pursue their claim. Judge McFadden held that if the H-1B applicants can show they had an active job offer when they initiated the lawsuit, standing is established and the lawsuit can move forward.

Background

In 2019, the H-1B lottery changed dramatically, moving to an online registrations system and selection process. This system has now been used for two years, during 2020 and 2021. While many people are in favor of the new system due to its ease and convenience, others believe the registration system is unfairly impacting H-1B applicants and reducing the chances of selection for eligible candidates.

Previously, H-1B petitioning companies filed H-1B petitions on April 1, the earliest date available, for the annual quota of 85,000 H-1B visas (including the additional 20,000 master’s cap visas). The lottery would remain open for 7 days, but typically U.S. Citizenship and Immigration Services (USCIS) would receive enough petitions to fill the lottery within the first few days. Following this 7-day filing period, USCIS would then conduct a lottery and the petitions selected would receive receipt notices. If you were not selected, your petition would be mailed back to you.

Under the new registration system, only those who are selected in the lottery file H-1B petitions to USCIS. Instead of filing petitions, H-1B petitioning companies simply register the names and basic information of the candidates they are applying for under the lottery. No further details regarding the role, the company, or the actual position offered is included in the registration process. Then, only if the candidate is selected, the company will file a petition to USCIS during the designated filing period indicated on the selection notice, including all of the actual employment details.

While this change has significantly reduced the number of paper filings USCIS receives as well as eliminated the burden of preparing complete H-1B petitions for candidates who will not ultimately be selected, many people believe the new system unfairly harms their chance of being selected. The reason is simple – the new registration system allows for multiple registrations for the same candidate. USCIS has no visibility to the role being offered to the individual under the registration process. As such, the same person and the same job can be registered for by multiple agencies, unfairly increasing their odds of selection.

The previous system included employment details for each individual. As a result, if the same employment opportunity was filed for and selected by more than one entity, USCIS would issue a Notice of Intent to Deny (NOID) and then deny both filings. Because USCIS had visibility to the actual employment details per person under the previous system, they had the insight into multiple filings for the same person and role.

Under the governing H-1B statute, companies may not file multiple petitions for the same candidate in the H-1B lottery. In an adopted decision from the Administrative Appeals Office (AAO) of USCIS based on an appeal ILBSG filed in 2018, USCIS clarified that if the end client project was the same for 2 or more petitions for the same candidate, that was enough to establish the companies were related for purposes of the multiple petitions rule. In other words, if completely separate legally distinct companies filed petitions for the same beneficiary, if the end client project was the same for both petitions, USCIS would find the multiple petitions rule was violated and deny both petitions.

Importantly, this multiple petition rule only applies to petitions actually filed to USCIS – it is not triggered by multiple registrations for the same employee. If multiple employers register the same employee, even if the employee is selected more than once, as long as only one petition is ultimately filed to USCIS, the rule will not be violated.

USCIS previously targeted multiple filings even if the companies were distinct separate legal entities as long as the project documentation was similar. The registration system does not allow USCIS to scrutinize this issue the same way. The registration information required includes only the candidate’s name and basic biographic information, without any project or job information required. As such, if more than one company registers the same employee for the same end client project, there is no way for USCIS to discover this information. As long as only one petition is ultimately filed, the employee can be registered through more than one company to increase his/her chances of being selected.

Lawsuit

On this basis, in June 2021, more than 500 H-1B visa program applicants sued USCIS over the lottery change, arguing that the new system reduces their chances of receiving an H-1B visa. These 500 applicants were not selected in any of the three selection rounds which took place in 2021. In the lawsuit complaint, these applicants allege that the new registration system makes it easier for “H-1B consultancies” and “phony employers” to submit multiple registrations on behalf of the same candidate, which increases the chances of that candidate being selected while decreasing the chances of those who follow the rules and only submit a single registration.

On December 11, Judge McFadden denied the government’s motion to dismiss the lawsuit, finding that the applicants have the standing to sue. Judge McFadden further held that that the applicants had offered substantial evidence that the new system has contributed to an increase in the number of registrations and that the existing fraud prevention measures do not appear to be working, stating that “the department argues that fraud prevention measures already exist and ‘stand to deter the fraud plaintiffs’ fear. But if the court credits the applicants’ claims, as it must … the decrease in the probability of selection in the lottery shows that these measures, if they work at all, are ineffective.”

The lawsuit seeks to force USCIS to change the lottery rules and abandon the registration system. The applicants contend that the fact USCIS has had to open a third selection round for this year’s lottery bolsters their argument that USCIS accepted multiple registrations for the same workers and therefore had to conduct multiple selection periods to reach the yearly cap.

ILBSG will continue to monitor this lawsuit and update its clients on any new developments. This is important litigation to watch, as we head into 2022 and prepare for another H-1B lottery. As always, we will report on any new changes as they occur and make sure our clients get the right advice.

If you have any questions about the upcoming H-1B lottery, please reach out to an ILBSG attorney today. We are here to help.

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