Today, the U.S. Department of Homeland Security posted for public inspection the final rule to amend the process for the selection of the H-1B visa petitions subject to the annual numerical “cap.” The final regulations will be published in the Federal Register on January 31, 2019. As discussed further below, one of the new procedures will be effective for the upcoming H-1B cap season commencing on April 1, 2019, and the other change will not go into effect until 2020.

As we reported on December 3, 2018, in a proposed regulation published on December 3, 2018, DHS signaled forthcoming changes to the process used by U.S. Citizenship and Immigration Services (USCIS) to select and process cap-subject H-1B visa petitions. There are two major changes. The first is that USCIS will reverse the order in which it will consider petitions for H-1B beneficiaries. Under the new rule, USCIS will consider for the “regular” H-1B cap petitions for both H-1B beneficiaries who are bachelor’s degree holders as well as all petitions for those who have U.S. master’s or higher degrees. Historically, USCIS has conducted the “master’s cap” lottery first, with unselected petitions then being entered into the general lottery. Under the new rule, by conducting the “regular” cap lottery first, USCIS expects up to a 16% increase in the overall selection of advanced degree petitions. The second change represents a major departure in the cap H-1B selection process: implementation of an electronic registration requirement for petitioners seeking to file H-1B cap-subject petitions.

The final rule amends the regulations governing H-1B cap-subject petitions by adopting the above two provisions from the proposed rule, but provides for separate implementation dates. As noted above, the reversal of the order of the two lotteries by which USCIS will select H-1B petitions will become effective on April 1, 2019 – in time for the FY2020 “cap season.” This year, USCIS will conduct the general lottery for all timely received H-1B cap-subject petitions first, followed by the lottery limited to petitions on behalf of individuals with advanced degrees from U.S. universities. The second provision applying to cap-subject petitions will require H-1B petitioners to register electronically with USCIS during a designated registration period. Only those petitioners whose registrations are selected will be able to file an H-1Bcap-subject petition. However, this provision will be suspended for the fiscal year (FY) 2020 cap season, and only go into effect for the April 2020 lotteries. Thus, for this year, the filing process and timelines for all cap-subject H-1B petitions remains the same as in past years.

Pursuant to this final rule, as of April 1, 2019, USCIS will first conduct a general random lottery sufficient to meet the regular 65,000 annual cap, which will include individuals who are eligible for the advanced degree exemption. USCIS will then conduct a second lottery from the remaining eligible petitions, limited only to those seeking one of the 20,000 cap exemptions for individuals who hold U.S. advanced degrees. DHS has stated that these amended regulations are in furtherance of the Administration’s “Buy American and Hire American” Executive Order issued in April 2017.