US withdraws proposed wage-based H-1B visa processing; lottery-based system to continue

In a move which will give relief to Indian IT companies, the US government on Tuesday withdrew a Donald Trump-era proposal which sought changing the process of granting H-1B visa from the current lottery system to a wage-based system.

The decision by the Department of Homeland Security comes following a verdict by the US District Court for the Northern District of California, which has vacated the rule.

In a note published on its website, the US Citizenship and Immigration Services (USCIS) said, “The Department of Homeland Security has published a final rule that withdraws the Modification of Registration Requirement for Petitioners Seeking to File Cap-Subject H-1B Petitions final rule, also known as the H-1B Selection Final Rule, issued Jan. 8, 2021. That rule was vacated by the US District Court for the Northern District of California.”

“On Sept. 15, 2021, the court in Chamber of Commerce of the United States of America et al. v. United States Department of Homeland Security, et al., No. 4:20–cv–07331 (N.D. Cal. March 19, 2021) vacated the H-1B Selection Final Rule. The rule would have changed the way USCIS selects H-1B registrations (or petitions, if registration is suspended) submitted by prospective petitioners seeking to file an H-1B cap-subject petition by ranking and selecting registrations based generally on corresponding wage levels,” the USCIS note reads.

In January 2021, the USCIS had announced to do away with the traditional lottery system in deciding the H-1B visa grants. But President Joe Biden administration had later announced that it was delaying the H-1B policy of the previous Donald Trump administration on the allocation of the said foreign work visas by continuing with the lottery system until December 31, 2021.

“DHS intends to comply with the court’s decision vacating the H-1B Selection Final Rule. Therefore, since regulatory changes promulgated through the H-1B Selection Final Rule are scheduled to be codified in the Code of Federal Regulations (CFR) at 8 CFR 214.2 on the rule’s new effective date, December 31, 2021, DHS is issuing this rule to withdraw the vacated H-1B Selection Final Rule.

“DHS is not required to provide notice and comment or delay the effective date of this rule because this rule simply implements the court’s vacatur of the H-1B Selection Final Rule and ensures that the vacated regulatory provisions are not codified in CFR. Following the vacatur, the changes made by the H-1B Selection Final Rule do not have any legal effect,” as per a public inspection document uploaded on federal registry of the US government.

“DHS has concluded that each of those three reasons—that notice and comment and a delayed effective date are unnecessary, impracticable, and contrary to the public interest— independently provides good cause to bypass any otherwise applicable requirements of notice and comment and a delayed effective date,” as per the same public inspection document.

The move will benefit the Indian technology firms and their subsidiaries as they are one of the key beneficiaries of H1B visas. According to a report published on 8 May and updated on 11 May 2021 in the New York Times, Indian technology majors like Infosys, Tata Consultancy Services and Wipro were among top firms who are “heaviest users of H-1Bs” in 2020.