DHS Issues Final Rule to Modify H-1B Lottery and Prioritize Higher Salaries

On January 8^th, the U.S. Department of Homeland Security published a final rule which will modify the H-1B lottery system. The final rule will prioritize H-1B petitions that offer Level IV wages based on the Department of Labor’s Occupational Employment Statistics (OES) four-level wage system. This final rule will go into effect in 60 days if not rescinded by the Biden administration and will apply to new H-1B cap-subject petitions this H-1B season.

Under this final rule, H-1B cap-subject petitions will be selected by giving priority to those with the highest OES prevailing wage levels, starting with level IV, and then continue in descending order to wage levels III, II and I. This change is aimed at incentivizing employers to offer higher wages to H-1B employees. Level IV wages, generally reserved for highly experienced employees, represent the 75^th – 80^th percentile of local wages for the occupational classification.

A computerized lottery will still be used if the number of registrations for a specific wage level exceeds the number of H-1B slots that are available. We expect the Administration to implement revisions to the H-1B cap electronic registration form to collect the OES wage data in anticipation of this new selection process.

Although the final rule is set to go into effect for this coming H-1B cap season, the Biden Administration may elect to halt Trump-era rules that have not yet gone into effect. Williams Mullen is closely monitoring the situation and will provide updates as further information becomes available.

Employers should consult immigration counsel to identify H-1B candidates who may be affected by this final rule and develop a strategy in advance of the February/March 2021 electronic H-1B filing period.