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US Policy: H-1B Lottery Reversal and Pre-Registration System

Background and Overview of Measures –
On 30th January 2019, the U.S. Department of Homeland Services announced the final rule on the H-1B registration system and lottery systems. The rule will be published in the Federal Register on 31st January, and will go into effect on 1st April. The electronic registration requirement is suspended for (at least) this upcoming FY 2020 H-1B cap season. A Notice of Proposed Rulemaking (NPRM) was announced by USCIS for the same, on 30th November 2018. This entails creating a pre-registration system for the H-1B visa program and change the order in which petitions are adjudicated. Per USCIS, shifting to electronic registration would reduce overall costs for petitioners and create a more efficient and cost-effective H-1B cap petition process. The proposed changes also increase chances of beneficiaries with a master’s or higher degree from a U.S. institution of higher education to be selected under the H-1B cap and that H-1B visas would be awarded to the most-skilled and highest-paid beneficiaries.

Measures imposed include:
1) Requires petitioners seeking to file H-1B cap-subject petitions to first electronically register each one individually with USCIS during a designated registration period. Only those receiving a registration number could then advance to actually filling an LCA and visa petition. New measures would also be imposed to prevent flooding the process by penalizing petitioners who obtain registration numbers and then do not proceed to the next steps.
2) Reverse the order by which USCIS selects H-1B petitions under H-1B cap and advanced degree exemption. There are currently two allocations of new H-1B visas awarded under the caps annually. One is for 20,000 which are reserved for recipients of Masters Degrees or higher from U.S. institutions. The other is for 65,000 which are reserved for recipients of bachelor degrees or higher (or the foreign equivalent). USCIS believes it has the discretion to determine the order in which these two lotteries will happen. They have been doing the 20,000 first, but the new rule would do the 65,000 first

NASSCOM, in liaison with our key members, carefully reviewed the 139-page NPRM proposal to evaluate its implications for U.S. companies and the economy. We submitted comments under the 30-day public comment period to the USCIS. DHS issued the final rule on 30th January 2019, incorporating feedback and inputs from various stakeholders. NASSCOM submissions were partially accepted – the pre-registration system has now been deferred to the FY 2020 season, and the initial time-periods have also been increased. However the order of the two lotteries have been reversed – NASSCOM had submitted against this outcome.

Impact on the Indian IT Industry –
The lottery reversal is likely to marginally increase the visas that go to people with higher degrees from U.S. institutions. This is because flipping the lotteries will increase the number of people with advanced degrees in the general lottery for the 65,000 visas while still reserving an additional 20,000 visas for beneficiaries with advanced degrees from US institutions. Currently, these 20,000 are taken out of the pool considered in the general lottery increasing the likelihood that a particular petition submitted by one of our companies for someone with a bachelorette degree or a degree from a non-U.S. institution will be selected. The rule does not change any eligibility criteria or give new preference to any group of individuals per se. It is estimated that this change may result in as many as 5,000 more visas going to beneficiaries with advanced degrees than in the past.

NASSCOM appreciates efforts to develop a more efficient, cost-effective process and are pleased with the decision by DHS to delay the implementation of the revised pre-registration system, as requested by NASSCOM in our official comments submitted to the U.S. Government in December 2018. We continue to have concerns about efforts to revise the current lottery system, specifically that the USCIS lacks the legal authority to flip the order of the two H-1B “visa lotteries.” India-based and India-centric global IT services companies play a critical role helping U.S. companies be nimbler and more competitive, enabling them to grow and create more jobs and opportunities for Americans. Already, our members are making billions of dollars of investments in the USA, employing more than 175,000 people, and spending millions of dollars on upskilling programs. It is important that they and others continue to have access to the necessary talent so that they can help their U.S. customers thrive. To the extent U.S. policy makes it more difficult and costlier for global IT service companies to provide their expertise in the United States, it will weaken the U.S. companies that depend on them to help fill their skills gaps. Contrary to what is intended, this action could put U.S. jobs at risk and create pressure to send more IT work abroad, rather than performing it in the United States.

NASSCOM and many others remain concerned that the U.S. Government is effectively deciding what the industry needs. The change falsely presumes that an advanced degree indicates greater and more valued skill sets. In theory, this means that someone who has just obtained a Master’s degree in say art history or Medieval literature is of greater value to the U.S. economy that someone with a BA in computer science, mathematics, or economics and has years of experience in the field. It ignores the fact that there are many fields where the path is typically to enter right after obtaining one’s undergraduate degree and then gain experience and ongoing training on the job. The overwhelming majority of these highly skilled workers just a bachelor’s degree. It also presumes that the training people get at any U.S. college or university is automatically superior to the training that someone might get at schools like University of Oxford, University of Cambridge ETH Zurich – Swiss Federal Institute of Technology, the Indian IITs and IIMs, Nanyang Technological University, McGill University, the International Max Planck Research Schools to just name a few.

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