In January 2021, the Trump Administration published a Final Rule, modifying the H-1B visa lottery and selection process for Cap-subject petitions to introduce a wage-based system. Under the Final Rule, petitions with the highest proposed wage levels are granted selection first, before the lower wage level registrations are considered. For example, Wage Level IV registrations will be prioritized first. Once all the Wage Level IV registrations have been selected, USCIS will move on to Wage Level III and so on until the selection process is complete.

In February 2021, USCIS announced that the Final Rule would be postponed until December 31, 2021, because the Department would not have sufficient time to update the current system before this year’s H-1B registration period, which began back in March. At the time, this was much-welcomed relief for H-1B petitioning companies, who may not be able to afford the highest wages in order to secure visas and meet their staffing needs.

Until now, it has been unclear if the Biden Administration would allow the Trump-era rule to go into effect later this year, although we know President Biden supports a wage-based system as we have reported in the past. Now, President Biden has made his support of the Final Rule and its wage-based system explicit.

In a new court filing, the Biden Administration defended Trump’s Final Rule on three grounds. The Biden Administration argued that the rule was properly issued by a duly authorized official, that it complies with our immigration laws, and that DHS adequately responded to all significant comments during the rulemaking process. The rule’s validity is being challenged in Chamber of Commerce of the United States of America v. U.S Department of Homeland Security, an ongoing lawsuit. The outcome of this lawsuit could impact the H-1B program going forward, so this is a development to watch.

Should the court decide that the Final Rule was improper because of how it was created, nothing would prevent the Biden Administration from undergoing a new rulemaking process and publishing their own rule to create a wage-based system. This seems probable, as President Biden has been clear he favors a wage-based system for the H-1B cap rather than a lottery. However, if the court decides that the wage-based system does not comport with the Immigration and Nationality Act, which states that H-1B visas “shall be issued… in the order in which petitions are filed for such visas,” an administrative rule may not be sufficient to change the current lottery system and any future published rules could be similarly struck down.

Should that happen, there is always the possibility a wage-based system could be included in any legislative action from Congress. As a reminder, the U.S. Citizenship Act of 2021 introduced in February outlining President Biden’s plans for comprehensive immigration reform included a provision to codify the wage-based system into law. Whether such a provision would survive, or an immigration reform bill will even pass, is something only time will tell.

ILBSG will continue to keep its clients updated on any new developments in this area. If you have any questions, reach out to an ILBSG attorney today.

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