The New H-1B Cap Electronic Registration System: What Employers Should Expect in 2020

Significant changes are expected for the upcoming H-1B cap process in 2020. With the holiday season quickly approaching, this is the time for employers to review their H-1B cap cases and processes to determine what internal changes may need to be made in light of the proposed external changes by the U.S. Citizenship and Immigration Services (USCIS).

The biggest change by USCIS could be the implementation of the electronic registration or pre-registration system for the H-1B cap process, including the impact on the cap selection/lottery, which has been required for the last several years. The open question is whether USCIS can implement its new system and technology in time (by mid-February 2020) to meet the regulatory time frame established in the final rule.

Overview of Electronic Registration (Pre-Registration) for H-1B Cap Cases

The final rule outlining the new H-1B cap electronic registration system and process was published on January 31, 2019 and was effective on April 1, 2019. According to a press release from USCIS on November 7, 2019, “USCIS is slated to implement the registration process for the fiscal year 2021 H-1B cap selection process, pending completed testing of the system. The agency will announce the implementation timeframe and initial registration period in the Federal Register once a formal decision has been made, and USCIS will offer ample notice to the public in advance of implementing the registration requirement.”

Additionally, Ken Cuccinelli, the former acting director of USCIS, stated at a recent conference that he believes the government will be ready to implement the new system and that USCIS should announce by the end of 2019 whether this new tool for electronic registration will be ready.

Although it is not clear when the electronic registration process will be finalized and implemented, we do know that the actual registration process appears to be straightforward – requiring basic information about the company and the beneficiary. However, employers must still fully analyze each case prior to registration to ensure the cases they are submitting would be approvable if chosen in the lottery.

Important details of the new H-1B cap selection electronic process include:

• USCIS will establish a designated registration period. This mandatory registration process will start before April 1. Pursuant to the new rule, in each fiscal year, the registration period will begin at least 14 days prior to April 1. The registration period will last for at least 14 days. The final rule also provides that USCIS must provide a 30-day notice period of the opening of the registration period, that USCIS will post this information on their website and that an official notice will be published in the Federal Register. Pursuant to this regulatory timeline, the registration period must be announced no later than February 18, 2020.
• H-1B cap pre-registration and the selection process would all be conducted electronically. With the new system, all petitioners would file a registration relating to each prospective H-1B cap beneficiary they intend to hire. Only beneficiaries selected in the registration process would then require petitions to be filed on their behalf by the petitioning employer. Registration information would include employer name, employer FEIN, employer mailing address, authorized representative’s name, title and contact information, and beneficiary’s name, birthdate and country of birth, country of citizenship, gender and passport number. If represented by an attorney, a G-28 must be submitted electronically. Employers may only submit one registration per beneficiary and will be required to make an attestation confirming they intend to file an H-1B petition for the beneficiary if the pre-registration is selected/receipted. If multiple registrations are filed for the same beneficiary for the same employer, all registrations for that beneficiary will be deemed invalid. If USCIS determines it has received more registrations than needed to reach the cap, USCIS will close the registration period and will randomly select a sufficient number of registrations needed to meet the cap.
• USCIS will send notification of electronic registration receipt and H-1B cap selection. In the materials provided to date about the electronic registration process, USCIS has indicated that some type of “receipt” will be generated when the basic information is included in the electronic registration system for the $10 fee. The rule also provides that there will be some type of notice to those selected in the electronic H-1B cap selection process with further details about the filing period and other requirements. We expect USCIS to provide more detail about this “official” notice of cap selection as it is unclear whether this will be in the form of an electronic notification or paper receipt notice. Again, if the new electronic registration for H-1B cap selection is implemented to be paperless and more streamlined for USCIS, we would expect that the same would be true for notification to employers whose H-1B cap employees were selected for petition filing.
• USCIS will establish a filing period. Once notified, petitioning employers will have 90 days to file H-1B petitions for beneficiaries selected under the H-1B cap. This is a change from the proposed rule which only would have allowed 60 days to file. Again, the documentation to be provided after such a selection would provide the timing/deadline for the H-1B cap petition filing period.

Additional highlights of the new electronic registration process include:

• USCIS may reopen the registration process to ensure cap numbers do not go unused. Additionally, if the cap is not met during the initial registration period, USCIS will accept all registrations and will continue to accept registrations until the cap has been met.
• Unselected registrations will remain “on reserve” in the system. These registrations will be selected if USCIS determines the cap has not been met.
• The final rule does not include a staggered filing period as initially proposed. This ensures that foreign students in F-1 status will still be able to take advantage of “cap-gap” work authorization. Under the current “cap-gap” rule, to maintain valid status and F-1 OPT work authorization through September 30, the H-1B cap petition must be filed by the time of the current F-1 OPT work authorization expiration. Under the new electronic registration rule, this means that if the F-1 OPT work authorization will expire on May 1, 2020, the H-1B cap petition (once selected and notified under the new electronic system) must be filed no later than April 30, 2020 to ensure the continued F-1 “cap-gap” status and work authorization. In this scenario employers would not be able to take advantage of the full 90-day filing period.
• Registrations will be selected in reverse as compared to how lottery selections have been made in the past. USCIS first counts all cap-subject H-1B registrations, including those that may be eligible for the advanced degree exemption, toward the regular cap until the projected number of H-1Bs needed to meet the regular cap (65,000) is reached. Once the regular cap projected number is reached, USCIS then counts those petitions eligible for the advanced degree exemption and not selected under the regular cap toward the projected number needed to reach the advanced degree exemption allocation (20,000). This part of the electronic registration rule was implemented for last year’s H-1B cap selection process.
• USCIS will closely monitor whether selected registrations result in the filing of H-1B petitions.

USCIS Imposes $10 Filing Fee for Electronic Registration

On November 8, 2019, the USCIS issued a final rule that will require a $10 nonrefundable fee for each H-1B registration submitted by petitioning employers implementing the electronic registration system.

The final rule is effective December 9, 2019. The fee will be required when registrations are submitted. USCIS expects this fee will support the new electronic registration system to make the H-1B cap selection process more efficient for both petitioners and the agency.

H-1B Cap Reminders

With the H-1B cap, only a limited number of H-1B work visas are available each year. Under the regular H-1B cap, 65,000 H-1B visas are available. An additional 20,000 are available under an exemption for foreign nationals (usually F-1 students) who have graduated from a U.S. college or university with a master's degree or higher. Cap-subject H-1B visas become available each year on October 1, and filings with USCIS can be made no sooner than six months in advance.

The H-1B visa is the most popular visa category for employers to obtain work authorization for key foreign national employees and is available for a wide variety of professional positions, including engineering, biology, computer science, accounting, teaching, sales/marketing and many other professional occupations. Foreign nationals who will fill a professional "specialty occupation" position can qualify for H-1B status. A "specialty occupation" is an occupation that requires at least a bachelor's degree (or the equivalent) as a minimum requirement. The foreign national must have a bachelor's degree (or the equivalent) in the field of specialty to qualify for H-1B status.

It is important to note that not all H-1B cases are subject to the cap. Petitions not subject to the cap include H-1B extensions, petitions to change H-1B employers and petitions filed by institutions of higher education.

Start Preparing Now for H-1B Cap Season

It is anticipated that, as in prior years, the H-1B cap will be met once the registration system opens and the H-1B cap selection process or lottery will again be conducted. Although the registration system will only require basic information about the company and beneficiary, employers should analyze each case to ensure it is approvable. Steps to take before registration may include:

• Identifying employees for whom a registration will be submitted
• Analyzing education to see if the beneficiary will qualify under the U.S. master’s degree cap exemption
• Obtaining credential evaluations for non-U.S. degrees
• Reviewing and analyzing immigration status
• Preparing Labor Condition Applications
• Obtaining detailed job descriptions

Looking Ahead at H-1B Cap Processing - Requests for Evidence to Continue

Due in large part to the “Buy American, Hire American” executive order, there has and continues to be a significant increase in the number of requests for evidence issued in H-1B cases. USCIS frequently asks for additional evidence to show:

• The position requires a bachelor's degree or equivalent in a related field and is a specialty occupation under H-1B rules
• The degree held by the candidate is in a field related to the occupation
• The candidate's education and/or experience is equivalent to a U.S. bachelor's degree
• The petitioning employer would supervise and control the work of the H-1B employee
• Evidence from the foreign national to establish maintenance of prior status in the U.S. (e.g. F-1 student status)

Conclusion

This year’s H-1B cap season will likely be one with significant change if USCIS finalizes and implements the electronic registration tool for the filing of H-1B cap cases. If this new H-1B cap electronic system is implemented smoothly without glitches and delays, such a streamlined and efficient process will enhance the H-1B cap selection/lottery process for users and interested parties.

The Faegre Baker Daniels Immigration and Global Mobility team will continue to monitor these issues and will provide additional guidance when available.