shutterstock_645219262.jpg

Is the H-1B lottery about to end for good?

That’s the surprising Oct. 28 announcement from the U.S. Department of Homeland Security (DHS) and the Trump administration. Under the proposed rule, the current lottery would give way to a new system in which applicants are selected based on their salary levels. 

“Modifying the H-1B cap selection process by replacing the random selection process with a wage-level-based selection process is a better way to allocate H-1Bs when demand exceeds supply,” reads the DHS note about the rule. “If finalized as proposed, this new selection process would incentivize employers to offer higher wages or petition for positions requiring higher skills and higher-skilled workers instead of using the program to fill relatively lower-paid vacancies.”

This new system would impact both the H-1B regular cap and the H-1B advanced degree exemption. “The H-1B program is often exploited and abused by U.S. employers, and their U.S. clients, primarily seeking to hire foreign workers and pay lower wages,” Acting DHS Deputy Secretary Ken Cuccinelli wrote in a statement accompanying the announcement. “The current use of random selection to allocate H-1B visas makes it harder for businesses to plan their hiring, fails to leverage the H-1B program to truly compete for the world’s best and brightest, and hurts American workers by bringing in relatively lower-paid foreign labor at the expense of the American workforce.”

Because it’s a proposed rule, DHS will open up a public comment period, during which “interested parties” can submit their opinions.

This isn’t the first time that the U.S. government has attempted to tweak the H-1B lottery system. Back in 2018, for instance, the Trump administration and DHS proposed a new system that would favor those with advanced degrees. Under that proposal, H-1B applicants with master’s degrees (or higher) would be processed through a 20,000-visa “pool,” with the remaining petitions directed into a 65,000-visa “general” pool. That was a reversal of the existing system, which placed all applicants in the “general” pool before sending remaining applicants with advanced degrees into the “master’s cap” pool—and, in theory, it would lead to a significant increase in the number of H-1B holders with advanced degrees. 

Over the past four years, the Trump administration has launched a variety of efforts to change the H-1B visa. The net result of those efforts: the denial rate for H-1B petitions for initial employment rose from 6 percent during fiscal year 2015 to 29 percent through the second quarter of fiscal year 2020. Consulting and business-services firms, which are routinely accused of abusing the H-1B system to import cheaper workers from overseas, have been particularly hard-hit by denials. 

If the proposed DHS rule passes, and those applicants with the highest wages are permitted to apply first, it could have a seismic effect on the H-1B, further establishing it as a visa for advanced-degree workers with highly specialized skillsets—which was the original intent of the program. Consulting and business-services firms that have traditionally paid their H-1B workers less could be left out in the proverbial cold.