[Federal Register Volume 86, Number 5 (Friday, January 8, 2021)]
[Rules and Regulations]
[Pages 1676-1735]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-00183]



[[Page 1675]]

Vol. 86

Friday,

No. 5

January 8, 2021

Part IV





Department of Homeland Security





-----------------------------------------------------------------------





8 CFR Part 214





Modification of Registration Requirement for Petitioners Seeking To 
File Cap-Subject H-1B Petitions; Final Rule

Federal Register / Vol. 86 , No. 5 / Friday, January 8, 2021 / Rules 
and Regulations

[[Page 1676]]


-----------------------------------------------------------------------

DEPARTMENT OF HOMELAND SECURITY

8 CFR Part 214

[CIS No. 2679-21; DHS Docket No. USCIS-2020-0019]
RIN 1615-AC61


Modification of Registration Requirement for Petitioners Seeking 
To File Cap-Subject H-1B Petitions

AGENCY: U.S. Citizenship and Immigration Services, Department of 
Homeland Security.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Department of Homeland Security (DHS or the Department) is 
amending its regulations governing the process by which U.S. 
Citizenship and Immigration Services (USCIS) selects H-1B registrations 
for the filing of H-1B cap-subject petitions (or H-1B petitions for any 
year in which the registration requirement is suspended), by generally 
first selecting registrations based on the highest Occupational 
Employment Statistics (OES) prevailing wage level that the proffered 
wage equals or exceeds for the relevant Standard Occupational 
Classification (SOC) code and area(s) of intended employment.

DATES: This final rule is effective March 9, 2021.

FOR FURTHER INFORMATION CONTACT: Charles L. Nimick, Chief, Business and 
Foreign Workers Division, Office of Policy and Strategy, U.S. 
Citizenship and Immigration Services, Department of Homeland Security, 
5900 Capital Gateway Drive, Camp Springs, MD 20746; telephone 240-721-
3000 (this is not a toll-free number). Individuals with hearing or 
speech impairments may access the telephone numbers above via TTY by 
calling the toll-free Federal Information Relay Service at 1-877-889-
5627 (TTY/TDD).

SUPPLEMENTARY INFORMATION:

I. Table of Contents

I. Table of Contents
II. Table of Abbreviations
III. Background and Discussion
    A. Purpose and Summary of the Regulatory Action
    B. Legal Authority
    C. Summary of Changes From the Notice of Proposed Rulemaking
    D. Implementation
    E. The H-1B Visa Program
    F. Current Selection Process
    G. Final Rule
IV. Response to Public Comments on the Proposed Rule
    A. Overview of Comments and General Feedback on the Proposed 
Rule
    1. General Support for the Proposed Rule
    a. Positive Impacts on New Graduates and Entry-Level Workers
    b. Positive Impacts on Healthcare Workforce
    c. Positive Impacts on the Economy
    2. General Opposition to the Proposed Rule
    a. Immigration Policy Concerns
    b. Negative Impacts on New Graduates and Entry-Level Workers, 
Academic Institutions, Healthcare Workers and Facilities, Employers, 
and the Economy
    i. New Graduates and Entry-Level Workers
    ii. Academic Institutions
    iii. Healthcare Workforce and Facilities
    iv. Employers
    v. Economy
    c. General Wage-Based Selection Concerns
    3. Other General Feedback
    B. Basis for Rule
    1. DHS Statutory/Legal Authority
    2. Substantive Comments on the Need for the Rule/DHS 
Justification
    a. Support for the DHS Rationale
    b. Rule Is Based on False Premises/Rationale
    c. Lack of Evidence To Support Rulemaking
    C. Proposed Changes to the Registration Process for H-1B Cap-
Subject Petitions
    1. Proposed Wage-Based Selection (Selection Process for Regular 
Cap and Advanced Degree Exemption, Preservation of Random Selection 
Within a Prevailing Wage)
    2. Required Information From Petitioners
    a. OES Wage Level
    i. Highest OES Wage Level That the Proffered Wage Would Equal or 
Exceed
    ii. Highest OES Wage Level When There Is No Current OES 
Prevailing Wage Information
    iii. Lowest OES Wage Level That the Proffered Wage Would Equal 
or Exceed When Beneficiary Would Work in Multiple Locations or 
Positions
    iv. Other Comments on OES Wage Level
    b. Attestation to the Veracity of the Contents of the 
Registration and Petition (Including Comments on Rejections, 
Denials, and Revocations)
    3. Requests for Comments on Alternatives
    D. Other Issues Relating to Rule
    1. Requests To Extend the Comment Period
    2. Rulemaking Process
    a. Multiple H-1B Rulemakings
    b. Other Rulemaking Process Comments
    3. Effective Date and Implementation
    E. Statutory and Regulatory Requirements
    1. Impacts and Benefits (E.O. 12866, 13563, and 13771)
    a. Methodology and Adequacy of the Cost-Benefit Analysis
    b. Costs
    c. Benefits
    2. Paperwork Reduction Act
    F. Out of Scope
V. Statutory and Regulatory Requirements
    A. Executive Orders 12866 (Regulatory Planning and Review), 
Executive Order 13563 (Improving Regulation and Regulatory Review), 
and Executive Order 13771 (Reducing Regulation and Controlling 
Regulatory Costs)
    1. Summary of Economic Effects
    2. Background and Purpose of the Final Rule
    3. Historic Population
    4. Cost-Benefit Analysis
    a. Costs and Cost Savings of Regulatory Changes to Petitioners
    i. Methodology Based on Historic FYs 2019-2020
    ii. FY 2021 Data
    iii. Unquantified Costs & Benefits
    iv. Costs of Filing Form I-129 Petitions
    v. Costs of Submitting Registrations as Modified by This Final 
Rule
    vi. Familiarization Cost
    b. Total Estimated Costs of Regulatory Changes
    c. Costs to the Federal Government
    B. Regulatory Flexibility Act
    1. A Statement of Need for, and Objectives of, This Final Rule
    2. A Statement of Significant Issues Raised by the Public 
Comments in Response to the Initial Regulatory Flexibility Analysis, 
a Statement of Assessment of Any Changes Made in the Proposed Rule 
as a Result of Such Comments
    3. The Response of the Agency to Any Comments Filed by the Chief 
Counsel for Advocacy of the Small Business Administration in 
Response to the Rule, and a Detailed Statement of Any Change Made to 
the Final Rule as a Result of the Comments
    4. A Description of and an Estimate of the Number of Small 
Entities to Which This Final Rule Will Apply or an Explanation of 
Why No Such Estimate Is Available
    5. A Description of the Projected Reporting, Recordkeeping, and 
Other Compliance Requirements of the Final Rule, Including an 
Estimate of the Classes of Small Entities That Will Be Subject to 
the Requirement and the Types of Professional Skills Necessary for 
Preparation of the Report or Record
    6. Description of the Steps the Agency Has Taken To Minimize the 
Significant Economic Impact on Small Entities Consistent With the 
Stated Objectives of the Applicable Statues, Including a Statement 
of Factual, Policy, and Legal Reasons for Selecting the Alternative 
Adopted in the Final Rule and Why Each One of the Other Significant 
Alternatives to the Rule Considered by the Agency Which Affect the 
Impact on Small Entities Was Rejected
    C. Congressional Review Act
    D. Unfunded Mandates Reform Act of 1995
    E. Executive Order 13132 (Federalism)
    F. Executive Order 12988 (Civil Justice Reform)
    G. Executive Order 13175 (Consultation and Coordination With 
Indian Tribal Governments)
    H. National Environmental Policy Act (NEPA)
    I. Paperwork Reduction Act
    1. USCIS H-1B Registration Tool
    2. USCIS Form I-129
    J. Signature

II. Table of Abbreviations

BLS--U.S. Bureau of Labor Statistics
CEQ--Council on Environmental Quality
CNMI--Commonwealth of the Northern Mariana Islands
CRA--Congressional Review Act

[[Page 1677]]

DHS--U.S. Department of Homeland Security
DOD--U.S. Department of Defense
DOL--U.S. Department of Labor
DOS--U.S. Department of State
EA--Environmental Assessment
EIS--Environmental Impact Statement
E.O.--Executive Order
FEMA--Federal Emergency Management Agency
FQHC--Federally Qualified Healthcare Center
FRFA--Final Regulatory Flexibility Analysis
FVRA--Federal Vacancies Reform Act
FY--Fiscal Year
GAO--U.S. Government Accountability Office
HHS--U.S. Department of Health and Human Services
HPSA--Health Professional Shortage Area
HSA--Homeland Security Act of 2002
ICE--U.S. Immigration and Customs Enforcement
IMG--International Medical Graduate
INA--Immigration and Nationality Act
INS--Immigration and Naturalization Service
IT--Information Technology
LCA--Labor Condition Application
NAICS--North American Industry Classification System
NEPA--National Environmental Policy Act
NPRM--Notice of Proposed Rulemaking
OES--Occupational Employment Statistics
OMB--Office of Management and Budget
OPT--Optional Practical Training
R&D--Research and Development
SOC--Standard Occupational Classification
STEM--Science, Technology, Engineering, and Mathematics
UMRA--Unfunded Mandates Reform Act of 1995
USCIS--U.S. Citizenship and Immigration Services
VA--U.S. Department of Veterans Affairs

III. Background and Discussion

A. Purpose and Summary of the Regulatory Action

    DHS is amending its regulations governing the selection of 
registrations submitted by prospective petitioners seeking to file H-1B 
cap-subject petitions (or the selection of petitions, if the 
registration process is suspended), which includes petitions subject to 
the regular cap and those asserting eligibility for the advanced degree 
exemption, to allow for ranking and selection based on wage levels. 
When applicable, USCIS will rank and select the registrations received 
generally on the basis of the highest OES wage level that the proffered 
wage equals or exceeds for the relevant SOC code in the area of 
intended employment, beginning with OES wage level IV and proceeding in 
descending order with OES wage levels III, II, and I. The proffered 
wage is the wage that the employer intends to pay the beneficiary. This 
ranking process will not alter the prevailing wage levels associated 
with a given position for U.S. Department of Labor (DOL) purposes, 
which are informed by a comparison of the requirements for the 
proffered position to the normal requirements for the occupational 
classification. This final rule will not affect the order of selection 
as between the regular cap and the advanced degree exemption. The wage 
level ranking will occur first for the regular cap selection and then 
for the advanced degree exemption.
    Rote ordering of petitions leads to impossible results because 
petitions are submitted simultaneously. While administering a random 
lottery system is reasonable, it is inconsiderate of Congress's 
statutory purposes for the H-1B program and its administration. 
Instead, a registration system that faithfully implements the 
Immigration and Nationality Act (INA) while prioritizing registrations 
based on wage level within each cap will incentivize H-1B employers to 
offer higher wages, or to petition for positions requiring higher 
skills and higher-skilled aliens that are commensurate with higher wage 
levels, to increase the likelihood of selection and eligibility to file 
an H-1B cap-subject petition. Moreover, it will maximize H-1B cap 
allocations, so that they more likely will go to the best and brightest 
workers; and it will disincentivize abuse of the H-1B program to fill 
relatively lower-paid, lower-skilled positions, which is a significant 
problem under the present selection system.\1\
---------------------------------------------------------------------------

    \1\ See U.S. Department of Homeland Security, U.S. Citizenship, 
and Immigration Services, Office of Policy and Strategy, Policy 
Research Division, I-129 Petition for H-1B Nonimmigrant Worker (Cap 
Subject) Wage Levels for H-1B Petitions filed in FY2018, Database 
Queried: Aug. 17, 2020, Report Created: Aug. 17, 2020, Systems: C3 
via SASPME, DOL OFLC Performance DATA H1B for 2018, 2019 (showing 
that, for petitions with identifiable certified labor condition 
applications, 161,432 of the 189,963 (or approximately 85%) H-1B 
petitions for which wage levels were reported were for level I and 
II wages); I-129 Petition for H-1B Nonimmigrant Worker (Cap Subject) 
Wage Levels for H-1B Petitions filed in FY2019, Database Queried: 
Aug. 17, 2020, Report Created: Aug. 17, 2020, Systems: C3 via 
SASPME, DOL OFLC Performance DATA H1B for 2018, 2019 (showing that, 
for petitions with identifiable certified labor condition 
applications, 87,589 of the 103,067 (or approximately 85%) H-1B 
petitions for which wage levels were reported were for level I and 
II wages). See also HaeYoun Park, How Outsourcing Companies are 
Gaming the Visa System, N.Y. Times (Nov. 10, 2015), https://www.nytimes.com/interactive/2015/11/06/us/outsourcing-companies-dominate-h1b-visas.html (noting ``H-1B workers at outsourcing firms 
often receive wages at or slightly above $60,000, below what skilled 
American technology professionals tend to earn, so those firms can 
offer services to American companies at a lower cost, undercutting 
American workers''); Daniel Costa and Ron Hira, H-1B Visas and 
Prevailing Wage Level, Economic Policy Institute (May 4, 2020), 
https://www.epi.org/publication/h-1b-visas-and-prevailing-wage-levels/ (explaining that ``the fundamental flaw of the H-1B program 
is that it permits U.S. employers to legally underpay H-1B workers 
relative to U.S. workers in similar occupations in the same region).
---------------------------------------------------------------------------

B. Legal Authority

    The Secretary of Homeland Security's authority for these regulatory 
amendments is found in various sections of the Immigration and 
Nationality Act (INA), 8 U.S.C. 1101 et seq., and the Homeland Security 
Act of 2002 (HSA), Public Law 107-296, 116 Stat. 2135, 6 U.S.C. 101 et 
seq. General authority for issuing this final rule is found in INA 
section 103(a), 8 U.S.C. 1103(a), which authorizes the Secretary to 
administer and enforce the immigration and nationality laws, as well as 
HSA section 102, 6 U.S.C. 112, which vests all of the functions of DHS 
in the Secretary and authorizes the Secretary to issue regulations.\2\ 
Further authority for these regulatory amendments is found in:
---------------------------------------------------------------------------

    \2\ See also 6 U.S.C. 202(4) (charging the Secretary with 
``[e]stablishing and administering rules . . . governing the 
granting of visas or other forms of permission . . . to enter the 
United States to individuals who are not a citizen or an alien 
lawfully admitted for permanent residence in the United States'').
---------------------------------------------------------------------------

    <bullet> INA section 101(a)(15)(H)(i)(b), 8 U.S.C. 
1101(a)(15)(H)(i)(b), which classifies as nonimmigrants aliens coming 
temporarily to the United States to perform services in a specialty 
occupation or as a fashion model with distinguished merit and ability;
    <bullet> INA section 214(a)(1), 8 U.S.C. 1184(a)(1), which 
authorizes the Secretary to prescribe by regulation the terms and 
conditions of the admission of nonimmigrants;
    <bullet> INA section 214(c), 8 U.S.C. 1184(c), which, among other 
things, authorizes the Secretary to prescribe how an importing employer 
may petition for an H nonimmigrant worker, and the information that an 
importing employer must provide in the petition; and
    <bullet> INA section 214(g), 8 U.S.C. 1184(g), which, among other 
things, prescribes the H-1B numerical limitations, various exceptions 
to those limitations, and criteria concerning the order of processing 
H-1B petitions.
    <bullet> INA section 214(i), 8 U.S.C. 1184(i), which defines the 
term ``specialty occupation,'' referenced in INA section 
(101)(a)(15)(H)(i)(B), 8 U.S.C. 1101(a)(15)(H)(i)(B), a requirement for 
the classification.
    Further, under HSA section 101, 6 U.S.C. 111(b)(1)(F), a primary 
mission of DHS is to ``ensure that the overall economic security of the 
United States is not diminished by efforts, activities, and programs 
aimed at securing the homeland.''

[[Page 1678]]

    Finally, as explained above, ``Congress left to the discretion of 
USCIS how to handle simultaneous submissions.'' \3\ Accordingly, 
``USCIS has discretion to decide how best to order those petitions'' in 
furtherance of Congress' legislative purpose.\4\
---------------------------------------------------------------------------

    \3\ See Walker Macy v. USCIS, 243 F.Supp.3d 1156, 1176 (D. Or. 
2017) (finding that USCIS' rule establishing the random-selection 
process was a reasonable interpretation of the INA).
    \4\ See 243 F.Supp.3d at 1176.
---------------------------------------------------------------------------

C. Summary of Changes From the Notice of Proposed Rulemaking

    Following careful consideration of public comments received, 
including relevant data provided, DHS has declined to modify the 
regulatory text proposed in the Notice of Proposed Rulemaking (NPRM) 
published in the Federal Register on November 2, 2020.\5\ Therefore, 
DHS is publishing this final rule as proposed in the NPRM.
---------------------------------------------------------------------------

    \5\ See U.S. Department of Homeland Security, U.S. Citizenship 
and Immigration Services, Modification of Registration Requirement 
for Petitioners Seeking To File Cap-Subject H-1B Petitions, 85 FR 
69236 (Nov. 2, 2020).
---------------------------------------------------------------------------

D. Implementation

    The changes in this final rule will apply to all registrations (or 
petitions, in the event that registration is suspended), including 
those for the advanced degree exemption, submitted on or after the 
effective date of the final rule. The treatment of registrations and 
petitions filed prior to the effective date of this final rule will be 
based on the regulatory requirements in place at the time the 
registration or petition, as applicable, is properly submitted. DHS has 
determined that this manner of implementation best balances operational 
considerations with fairness to the public. USCIS will engage in public 
outreach and provide training to the regulated public on the modified 
registration system in advance of its implementation.

E. The H-1B Visa Program

    The H-1B visa program allows U.S. employers to temporarily hire 
foreign workers to perform services in a specialty occupation, services 
related to a U.S. Department of Defense (DOD) cooperative research and 
development project or coproduction project, or services of 
distinguished merit and ability in the field of fashion modeling.\6\ A 
specialty occupation is defined as an occupation that requires the (1) 
theoretical and practical application of a body of highly specialized 
knowledge and (2) attainment of a bachelor's or higher degree in the 
specific specialty (or its equivalent) as a minimum qualification for 
entry into the occupation in the United States.\7\
---------------------------------------------------------------------------

    \6\ See INA section 101(a)(15)(H)(i)(b), 8 U.S.C. 
1101(a)(15)(H)(i)(b); Public Law 101-649, section 222(a)(2), 104 
Stat. 4978 (Nov. 29, 1990); 8 CFR 214.2(h).
    \7\ See INA section 214(i)(l), 8 U.S.C. 1184(i)(l).
---------------------------------------------------------------------------

    Congress has established limits on the number of foreign workers 
who may be granted initial H-1B nonimmigrant visas or status each 
fiscal year (FY).\8\ This limitation, commonly referred to as the ``H-
1B cap,'' generally does not apply to H-1B petitions filed on behalf of 
certain aliens who have previously been counted against the cap.\9\ The 
total number of foreign workers who may be granted initial H-1B 
nonimmigrant status during any FY currently may not exceed 65,000.\10\ 
Certain petitions are exempt from the 65,000 numerical limitation.\11\ 
The annual exemption from the 65,000 cap for H-1B workers who have 
earned a qualifying U.S. master's or higher degree may not exceed 
20,000 foreign workers.\12\ Moreover, H-1B petitions for aliens who are 
employed or have received offers of employment at institutions of 
higher education, nonprofit entities related to or affiliated with 
institutions of higher education, or nonprofit research organizations 
or government research organizations, are also exempt from the cap.\13\
---------------------------------------------------------------------------

    \8\ See INA section 214(g), 8 U.S.C. 1184(g).
    \9\ See INA section 214(g)(7), 8 U.S.C. 1184(g)(7).
    \10\ See INA section 214(g), 8 U.S.C. 1184(g).
    \11\ See INA section 214(g)(5) and (7), 8 U.S.C. 1184(g)(5) and 
(7).
    \12\ See INA section 214(g)(5)(C), 8 U.S.C. 1184(g)(5)(C).
    \13\ See INA section 214(g)(5), 8 U.S.C. 1184(g)(5).
---------------------------------------------------------------------------

F. Current Selection Process

    DHS implemented the current H-1B registration process by regulation 
after determining that it could introduce a cost-saving, innovative 
solution to facilitate the selection of H-1B cap-subject petitions 
toward the annual numerical allocations. Under the current selection 
process, all petitioners seeking to file an H-1B cap-subject petition 
must first electronically submit a registration for each beneficiary on 
whose behalf they seek to file an H-1B cap-subject petition, unless 
USCIS suspends the registration requirement. A prospective petitioner 
whose registration is selected is then eligible to file an H-1B cap-
subject petition for the selected registration during the associated 
filing period.
    USCIS monitors the number of H-1B registrations it receives during 
the announced registration period and, at the conclusion of that 
period, if more registrations are submitted than projected as needed to 
reach the numerical allocations, randomly selects from among properly 
submitted registrations the number of registrations projected as needed 
to reach the H-1B numerical allocations. USCIS first selects 
registrations submitted on behalf of all beneficiaries, including those 
eligible for the advanced degree exemption. USCIS then selects from the 
remaining registrations a sufficient number projected as needed to 
reach the advanced degree exemption.
    A prospective petitioner whose registration is selected is notified 
of the selection and instructed that the petitioner is eligible to file 
an H-1B cap-subject petition for the beneficiary named in the selected 
registration within a filing period that is at least 90 days in 
duration and begins no earlier than 6 months ahead of the actual date 
of need (commonly referred to as the employment start date).\14\ When 
registration is required, a petitioner seeking to file an H-1B cap-
subject petition is not eligible to file the petition unless the 
petition is based on a valid, selected registration for the beneficiary 
named in the petition.\15\
---------------------------------------------------------------------------

    \14\ See 8 CFR 214.2(h)(8)(iii)(D)(2). See also 8 CFR 
214.2(h)(8)(iii)(A)(4) (If the petition is based on a registration 
that was submitted during the initial registration period, then the 
beneficiary's employment start date on the petition must be October 
1 of the associated FY, consistent with the registration, regardless 
of when the petition is filed).
    \15\ During the initial filing period, if USCIS does not receive 
a sufficient number of petitions projected as needed to reach the 
numerical allocations, USCIS will select additional registrations, 
or reopen the registration process, as applicable, to receive the 
number of petitions projected as needed to reach the numerical 
allocations. See 8 CFR 214.2(h)(8)(iii)(A)(7).
---------------------------------------------------------------------------

G. Final Rule

    Following careful consideration of all public comments received, 
DHS is issuing this final rule as proposed in the NPRM, without 
modifications to the regulatory text.

IV. Response to Public Comments on the Proposed Rule

A. Overview of Comments and General Feedback on the Proposed Rule

    In response to the rulemaking, DHS received 1103 comments during 
the 30-day public comment period, and 388 comments on the rule's 
information collection requirements before the comment period ended. A 
large majority of public comments received are form letter copies 
rather than unique submissions. Commenters consisted primarily of 
individuals, including anonymous submissions. DHS received the 
remaining submissions from professional associations, trade or

[[Page 1679]]

business associations, employers/companies, law firms, advocacy groups, 
schools/universities, attorneys/lawyers, joint submissions, research 
institutes/organizations, and a union.
    DHS reviewed all of the public comments received in response to the 
proposed rule and is addressing substantive comments relevant to the 
proposed rule (i.e., comments that are pertinent to the proposed rule 
and DHS's role in administering the registration requirement for 
petitioners seeking to file H-1B petitions on behalf of cap-subject 
beneficiaries) in this section IV, grouped by subject area. While DHS 
provides a brief overview of comments deemed out of scope of this 
rulemaking in section IV.F. (e.g., comments seeking changes in U.S. 
laws, or regulations and agency policies unrelated to the changes 
proposed in the NPRM), DHS is not providing substantive responses to 
those comments.
    Public comments may be reviewed in their entirety at the Federal 
Docket Management System (FDMS) at http://www.regulations.gov, docket 
number USCIS-2020-0019-0001.
1. General Support for the Proposed Rule
    Comments: Multiple commenters expressed general support for the 
rule, providing the following rationale: The proposed rule should be 
implemented as soon as possible; the proposed rule is a step in the 
right direction; the proposed rule is necessary to protect U.S. 
workers; the proposed rule is a well-guided and legal attempt to 
strengthen the economy and legal immigration of workers; wage-based H-
1B allocation can help economic growth; salary is the best and most 
reasonable criteria, since it is not practical to compare the skills of 
one professional with another; people with higher salaries should be 
prioritized to receive H-1B visas; the United States should increase 
the possibility of obtaining a visa for people with higher degrees or 
wages; the proposed rule would ensure more visas were allocated to the 
best workers; the proposed rule would keep high-level, meritorious 
employees in the United States; H-1B allocation should be merit-based; 
the proposed rule would ensure that workers who were to contribute most 
would get to stay in the United States while other workers still would 
have the same chance of being selected as previous years; if companies 
were willing to pay a higher salary for some workers, it would mean 
that they would deserve a better chance to stay and work in the United 
States; people with more professional experience should not have the 
same chance of staying in the United States as college graduates or 
less experienced professionals; the proposed rule would preserve the 
true intent of the H-1B program, which was to allow U.S. companies to 
seek out the best foreign talent; there would be less duplication of H-
1B petitions for the same employees; every year, many highly qualified 
workers have had to leave the United States because they have not been 
selected in the existing lottery system; entry-level recruitment of 
U.S. citizens to fill roles occupied by H-1B beneficiaries can and 
should be done in high schools, vocational schools, and college 
campuses; the proposed rule would increase the average and median wage 
levels of H-1B beneficiaries; the current lottery process makes it 
difficult for employers to plan for their staffing needs, so the 
proposed rule will benefit both employers and employees.
    Response: DHS thanks these commenters for their support and agrees 
with commenters that the proposed rule should be implemented as soon as 
possible; the proposed rule is a step in the right direction; the 
proposed rule is necessary to better protect U.S. workers, particularly 
those U.S. workers competing against H-1B workers for entry-level jobs; 
and this rule is a well-guided and legal attempt to improve the H-1B 
cap selection process. DHS further agrees that relative salary 
generally is a reasonable proxy for skill level and the wage level that 
a proffered wage equals or exceeds is a reasonable criterion for 
registration. DHS also agrees that this rule may lead to the selection 
of the most-skilled or most-valued H-1B beneficiaries; may lead to an 
increase in wages for H-1B beneficiaries; may increase access to entry-
level positions for available and qualified U.S. workers; and is 
expected to reduce uncertainty about selection resulting from a purely 
randomized process. Prioritizing wage levels in the registration 
selection process is expected to incentivize employers to offer higher 
wages, or to petition for positions requiring higher skills and higher-
skilled aliens that are commensurate with higher wage levels, to 
increase the likelihood of selection for cap-subject petition filings. 
In doing so, prioritization, as compared to a purely random selection 
process, may reduce uncertainty about selection. In turn, U.S. 
employers that might have petitioned for cap-subject H-1B workers to 
fill relatively lower-paid, lower-skilled positions, may be 
incentivized to hire available and qualified U.S. workers for those 
positions.
    Comments: Several commenters expressed support for the rule and the 
need to stop visa fraud, abuse, and flooding of petitions by certain 
staffing or consulting companies. One commenter said the proposed rule 
would disincentivize companies from abusing the H-1B program and 
harming U.S. workers. Other commenters stated that: The proposed rule 
would decrease potential visa abuse by employers and make sure all 
workers were paid according to their skillset as employers no longer 
would be able to lower labor expenses by hiring foreign workers; the 
proposed rule would have a positive impact on U.S. employees and 
college-educated U.S. citizens who take out loans for their education 
by making it harder for technology companies to discriminate against 
U.S. citizens; U.S. workers are being laid off in large numbers because 
corporations are outsourcing for profits; and the proposed rule is 
necessary because Indian corporations are acquiring U.S. jobs.
    Response: DHS agrees that this rule will reduce abuse and provide 
incentives for employers to use the H-1B program to primarily fill 
relatively lower-paid, lower-skilled positions.\16\ Prioritizing 
registrations or petitions, as applicable, reflecting higher wage 
levels for positions requiring higher skills and higher-skilled or more 
valued aliens will further Congressional intent for the program by 
helping U.S. employers fill labor shortages in positions requiring 
highly skilled and/or highly educated workers.
---------------------------------------------------------------------------

    \16\ See supra note 1.
---------------------------------------------------------------------------

a. Positive Impacts on New Graduates and Entry-Level Workers
    Comments: An individual commenter wrote that this rule would be 
extremely beneficial to international students graduating from U.S. 
universities. The commenter explained that, while recent graduates 
earning level I wages initially would be less likely to be selected in 
the lottery, many of those recent graduates actually would benefit from 
the rule over the long term. The commenter said that recent graduates 
who were not initially selected likely would gain additional experience 
in future years, which would make them more competitive for selection 
at higher wage levels. The commenter indicated that Science, 
Technology, Engineering, and Mathematics (STEM) graduates generally 
have three chances at the existing H-1B lottery, and, ideally, new 
graduates should not stay in level I positions for all three years. On 
the other hand, non-STEM graduates

[[Page 1680]]

already have low selection odds under the existing lottery and, thus, 
face difficulties finding suitable employment. With this proposed rule, 
however, non-STEM graduates now would have a probable path forward and 
would be able to negotiate with their employers to get H-1B 
sponsorship. The commenter added that concerns that new graduate 
employees would not be able to receive an H-1B visa, even from large 
technology companies, are unfounded, knowing firsthand that new 
graduates regularly receive job offers at level II wages or above from 
large technology companies. A different commenter stated that there are 
many new graduates with greater academic achievements and capability 
who will be able to get job offers at level II wages or above. This 
commenter stated that, for graduates unable to get job offers with 
level II wages, this proposed rule could incentivize them to work hard 
to prove their value and be promoted.
    Response: DHS agrees that this rule could be beneficial to 
international students, as the commenter explains. DHS recognizes that, 
under this final rule, it is less probable that USCIS will select 
registrations (or, if applicable, petitions) that reflect a wage level 
that is lower than the prevailing wage level II. DHS agrees with the 
comment that registrations (or, if applicable, petitions) reflecting 
prevailing wage levels II, III, and IV will have greater chances of 
being selected compared to the status quo. To the extent that recent 
foreign graduates, STEM-track or otherwise, in Optional Practical 
Training (OPT) can gain the necessary skills and experience to warrant 
prevailing wage levels II or above, the final rule may result in 
greater chances of selection of registrations (or, if applicable, 
petitions) for those beneficiaries. Further, recent graduates with 
master's or higher degrees from U.S. institutions of higher education 
already benefit from the advanced degree exemption and cap selection 
order, as eligibility for that exemption increases their chance of 
selection. A registration or petition, as applicable, submitted on 
behalf of an alien eligible for the advanced degree exemption is first 
included in the submissions that may be selected toward the regular cap 
projection. If not selected toward the regular cap projection, 
submissions eligible for the advanced degree exemption may be selected 
toward the advanced degree exemption projection. This existing 
selection order increases the chance of selection for registrations or 
petitions submitted on behalf of aliens who have earned a master's or 
higher degree from a U.S. institution of higher education.
b. Positive Impacts on Healthcare Workforce
    Comments: An individual commenter and a submission from U.S. 
doctors indicated that thousands of U.S. citizen medical graduates have 
been unemployed because residency positions have been filled by foreign 
doctors on H-1B and J-1 visas. A submission from U.S. physicians stated 
that it is inappropriate to hire non-citizen physicians at the 
taxpayer's expense for federally funded residency training positions 
instead of available and skilled U.S. physicians. The commenter said 
the proposed rule is a step in the right direction to disincentivize a 
trend in the physician residency training programs that have favored 
foreign graduates and that have caused the displacement of several 
thousand qualified U.S. citizen medical school graduates, which has 
been an ongoing problem for the past few decades. The commenter 
explained that this displacement cripples the U.S. economy as thousands 
of qualified U.S. citizen doctors with federal student loan debt 
continue to go ``unmatched.''
    Response: DHS agrees with commenters that there are more U.S. 
citizens who graduate from medical schools each year than are matched 
with residency programs. DHS believes that this final rule may lead to 
increased opportunities for entry-level positions for available and 
qualified U.S. workers by incentivizing employers seeking cap-subject 
H-1B beneficiaries to offer higher wage levels to increase the chance 
for selection. This, in turn, may have the effect of freeing up entry-
level cap-subject positions for U.S. workers, including U.S. medical 
graduates in the event they are seeking to be employed in cap-subject 
positions.\17\ In turn, DHS hopes that increased opportunities for 
those U.S. workers will benefit the U.S. economy.
---------------------------------------------------------------------------

    \17\ See Rebecca Corey, The coronavirus pandemic is straining 
hospitals, but many medical school grads can't get jobs, yahoo!news 
(Mar. 27, 2020), https://news.yahoo.com/the-coronavirus-pandemic-is-straining-hospitals-but-many-medical-school-grads-cant-get-jobs-194905748.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAABHJK2wibpo_XDEjXtc-zr_UFFyWbMnPU1-_IO1uj9REueBPmgzPIgNToSGomCcZ5DQkT3lBW17oeLkUKfIZzPnh3TxqqonTKW84557Cgzfle-5_JPnq7_EzMIGQbadnRFvf7VrAscZWdhh0IXCob34vhCnor9QYNsheYgNsFZMS 
(`` `You have a lot of students who are unmatched who have been 
reporting working at delis, working as baristas. They might be 
teaching at a community college or something like that because they 
have an MD, but they can't work clinically,'' [Dr. Monya De, an 
internist in Los Angeles] said. ``Service industry jobs are really 
common. Bartending, waitering or waitressing. There are a lot of 
unmatched students driving for Uber and Lyft, I will tell you that.' 
'').
---------------------------------------------------------------------------

c. Positive Impacts on the Economy
    Comments: An individual commenter in support of this rule stated 
that the proposed rule would result in higher salaries for the H-1B 
population, which will lead to increased spending for the U.S. economy. 
The commenter also wrote that, under the proposed rule, employers would 
have access to higher wage and more talented employees increasing 
innovation and productivity. Another individual commenter similarly 
said the proposed rule would improve innovation because it would favor 
retaining more talented and highly paid individuals over less talented 
workers. The commenter said wages serve as a proxy for talent, and the 
proposed rule helps bring and retain talented individuals to the United 
States.
    Response: DHS agrees with these commenters and believes that this 
rule may result in higher salaries for the H-1B population. This rule 
may also increase innovation and productivity,\18\ and help retain and 
attract talented aliens to the United States.\19\ DHS believes that 
facilitating the admission of more highly-paid and relatively higher-
skilled workers ``would benefit the economy and increase the United 
States' competitive edge in attracting the `best and the brightest' in 
the global labor market,'' consistent with the goals of the H-1B 
program.\20\
---------------------------------------------------------------------------

    \18\ See William Craig, How Your Productivity is Related To 
Career Growth, Forbes (Dec. 31, 2015), https://www.forbes.com/sites/williamcraig/2015/12/31/how-your-productivity-is-related-to-career-growth/?sh=8fc20583363a (stating the ``basic tenet of economic 
theory'' that ``The wage a worker earns, measured in units of 
output, equals the amount of output the worker can produce'').
    \19\ See Drew Calvert, Companies Want to Hire the Best 
Employees. Can Changes to the H-1B Visa Program Help?, 
KelloggInsight (Feb. 26, 2017), https://insight.kellogg.northwestern.edu/article/how-to-revamp-the-visa-program-for-highly-skilled-workers (noting ``[u]nder the current 
system, U.S. companies are often discouraged from even attempting to 
hire a foreign worker, despite how uniquely qualified he or she 
might be).
    \20\ See Muzaffar Chrishti and Stephen Yale-Loehr, The 
Immigration Act of 1990: Unfinished Business a Quarter-Century 
Later, Migration Policy Institute (July 2016), https://www.migrationpolicy.org/sites/default/files/publications/1990-Act_2016_FINAL.pdf (``Sponsors of [the Immigration Act of 1990 which 
created the H-1B program as it exists today] believed that 
facilitating the admission of higher-skilled immigrants would 
benefit the economy and increase the United States' competitive edge 
in attracting the `best and the brightest' in the global labor 
market.'').
---------------------------------------------------------------------------

2. General Opposition to the Proposed Rule
    Comments generally opposing the proposed rule fell into various

[[Page 1681]]

categories: Immigration policy concerns; negative impacts on new 
graduates and entry-level workers, academic institutions, healthcare 
workers and facilities, employers, and the economy; and general 
concerns about wage-based selection. In addition, some comments fell 
outside of the scope of these categories.
a. Immigration Policy Concerns
    Comments: A few commenters opposed the rule and expressed 
immigration policy concerns without substantive rationale, offering 
only that: the proposed rule ``springs purely from nativism and no real 
concern for domestic workers''; the proposed rule is inconsistent with 
U.S. founding principles as a refuge for those seeking opportunity and 
freedom; and imposing a wage-based prioritization system is contrary to 
American values and would harm innovation.
    Response: DHS disagrees with the comment that the proposal 
``springs purely from nativism and no real concern for domestic 
workers[.]'' This rule does not reduce the total number of aliens who 
will receive cap-subject H-1B status in a given fiscal year. Instead, 
this rule will benefit those H-1B beneficiaries who are most highly 
paid and/or most highly skilled, relative to their SOC codes and areas 
of intended employment. DHS believes this rule will incentivize 
employers to offer higher wages and/or higher-skilled positions to H-1B 
workers and disincentivize the existing widespread use of the H-1B 
program to fill relatively lower-paid or lower-skilled positions, for 
which there may be available and qualified U.S. workers. In general, 
DHS recognizes that the admission of higher paid and/or higher skilled 
workers is likely to benefit the economy and increase the United 
States' competitive edge in the global labor market.\21\
---------------------------------------------------------------------------

    \21\ See 85 FR 69236, 69239.
---------------------------------------------------------------------------

    Further, this rule is intended to potentially increase employment 
opportunities for relatively lower-skilled unemployed or underemployed 
U.S. workers. Recent college graduates, some of who otherwise would 
serve as U.S. workers, have the highest unemployment rate in decades, 
and the underemployment rate (which reflects the rate at which workers 
are accepting jobs lower than their academic or experience level) is at 
an all-time high.\22\ Roughly 53 percent of recent college graduates, 
some of who could potentially work in these jobs, are currently 
unemployed or underemployed.\23\ While the overall unemployment rates 
for college graduates is 3.8 percent, the unemployment rate is higher 
for graduates with majors in some fields common to the H-1B program 
such as computer science (5.2 percent), mathematics (4.9 percent) and 
information systems & management (4.9 percent).\24\ This rule is 
intended to potentially benefit the population of unemployed or 
underemployed U.S. workers. DHS further disagrees that this rule is 
inconsistent with U.S. founding principles as a refuge for those 
seeking opportunity and freedom, and that instituting a ranking system 
is contrary to American values and would harm innovation. First, the H-
1B program is a temporary, employment-based nonimmigrant program and 
not a form of humanitarian relief. Additionally, by maximizing H-1B cap 
allocations, so that they more likely would go to the best and 
brightest workers, DHS believes that this rule likely would promote 
opportunity, innovation, and development.
---------------------------------------------------------------------------

    \22\ See Jack Kelly, Recent College Graduates Have the Highest 
Unemployment Rate In Decades--Here's Why Universities Are To Blame, 
Forbes (Nov. 14, 2019), https://www.forbes.com/sites/jackkelly/2019/11/14/recent-college-graduates-have-the-highest-unemployment-rate-in-decadesheres-why-universities-are-to-blame/?sh=333d181c320b. See 
also Federal Reserve Bank of New York, The Labor Market for Recent 
College Graduates (Oct. 22, 2020), https://www.newyorkfed.org/research/college-labor-market/college-labor-market_unemployment.html. This data does not differentiate college 
graduates based on citizenship, and therefore, DHS cannot determine 
the exact percentage of these college graduates that could serve as 
US workers.
    \23\ See Darko Jacimovic, College Graduates Unemployment Rate in 
the US, What to Become (Nov. 25, 2020), https://whattobecome.com/
blog/college-graduates-unemployment-rate/
#:~:text=The%20median%20pay%20for%20those,in%20the%20US%20is%202.1%25
 (citing University of Washington data); Irene Sullivan, What Now?, 
The Oracle (Nov. 24, 2020), http://www.tntechoracle.com/2020/11/24/7833/. This data does not differentiate college graduates based on 
citizenship, and therefore, DHS cannot determine the exact 
percentage of these college graduates that could serve as U.S. 
workers. However, DHS notes that, in 2019, international students 
accounted for 5.5% of the students enrolled in U.S. colleges. 
International Student Enrollment Statistics, https://educationdata.org/international-student-enrollment-statistics.
    \24\ See Federal Reserve Bank of New York, The Labor Market for 
Recent College Graduates (Oct. 22, 2020), https://www.newyorkfed.org/research/college-labor-market/college-labor-market_unemployment.html. This data does not differentiate college 
graduates based on citizenship, and therefore, DHS cannot determine 
the exact percentage of these college graduates that could serve as 
U.S. workers.
---------------------------------------------------------------------------

b. Negative Impacts on New Graduates and Entry-Level Workers, Academic 
Institutions, Healthcare Workers and Facilities, Employers, and the 
Economy
    Multiple commenters said the proposal would have negative impacts 
on new graduates and entry-level workers, academic institutions, 
healthcare workers and facilities, employers, and the economy.
i. New Graduates and Entry-Level Workers
    Comments: Commenters stated, without substantive rationale, that 
the proposed rule would negatively impact this population because: New 
foreign graduates would be disadvantaged by this rule; the proposed 
rule would prevent the future growth of new foreign graduates in the 
workplace; the proposed rule would be unfair to immigrants who earn 
lower wages; it takes time to be promoted from entry level to a more 
senior level; it is ``too difficult for most people to earn that 
much''; the proposed rule would dramatically reduce access to the H-1B 
visa program for early career professionals, including those who have 
completed master's or doctoral degrees at U.S. colleges and 
universities; the proposed rule would make it nearly impossible for 
entry-level employees with degrees in STEM majors to be eligible for H-
1Bs; non-STEM graduates would have a more difficult time obtaining H-1B 
classification under the proposed rule; the rule would unfairly 
discriminate against aliens who work in areas related to humanities, 
arts, or accounting that do not receive high starting wages; the 
proposed rule would greatly decrease the number of H-1B visas that 
would be available to educators, translators, and other specialty 
positions; doctors who recently graduated and entered medical residency 
programs would have no chance of obtaining H-1B classification under 
this proposed rule; the rule would negatively impact U.S. biomedical 
research, as it would make it difficult for young scientists to study 
and conduct health research in the United States; the computer science 
industry requires experience to get to a higher level, which is 
something new graduates do not typically have; it is harder to earn 
higher wages quickly in certain industries, such as mechanical 
engineering or medicine; basing the selection on wage levels would be 
disadvantageous to people who work for small-sized companies, which 
offer lower wages; the proposed rule would send a message that the 
United States does not welcome talented foreign students; the rule 
would divide international students because everyone would be 
``considering the interests of their own''; and pushing entry-level 
workers out in the beginning of their careers disobeys a fundamental 
economics principle, which states that

[[Page 1682]]

laborers are underpaid in the early stage, but will make more with more 
experience and skillsets.
    Multiple commenters said the proposal would have negative impacts 
on new foreign graduates and entry-level workers, and they provided 
substantive rationale in support of those assertions. Specifically, 
several commenters, including a form letter campaign, said the rule 
would have a ``direct and negative'' impact on college-educated 
foreign-born professionals by ``dramatically reducing'' access to the 
H-1B visa program for early-career professionals because no aliens who 
are paid a level I wage would be selected to submit a petition. A trade 
association stated that early-career workers in science, math, and 
engineering might be shut out by the proposed rule, but that those are 
the workers the U.S. economy needs. Several commenters, including a 
university, a professional association, and a joint submission, argued 
that the proposed rule would reduce access to the H-1B program, 
negatively impacting graduating international students. A university 
stated that the proposed rule indirectly would affect F-1 and J-1 
students and scholars by removing a pathway to employment after 
completion of educational or training experiences in the United States, 
which would also negatively impact the economy. The university argued 
that almost all F-1 and J-1 visa holders enter at level I wages.
    Response: DHS disagrees with the assertions that this rule will 
either preclude or essentially preclude H-1B status for recent 
graduates, entry-level foreign workers, and young alien professionals. 
In general, registrations (or petitions, if applicable) will be 
selected according to the wage level that the proffered wage equals or 
exceeds. Therefore, if an employer chooses to offer a recent foreign 
graduate a wage that equals or exceeds a particular wage level, the 
registration will be grouped at that wage level, regardless of the 
beneficiary's experience level or the requirements of the position. 
Further, as explained in the proposed rule, DHS believes that a purely 
random selection process is not optimal, and selection based on the 
highest wage level that a proffered wage equals or exceeds is more 
consistent with the primary purpose of the statute. DHS acknowledges 
that, under this rule, in years of excess demand, relatively lower-paid 
or lower-skilled positions will have a reduced chance of selection. 
However, DHS believes that selection in this manner is consistent with 
the primary purpose of the statute.
    DHS further disagrees with the assertion that this rule will 
preclude recent foreign medical graduates from obtaining H-1B status. 
Importantly, according to DHS data, in FY 2019, more than 93 percent of 
H-1B petitions approved for initial employment for physicians, 
surgeons, and dentists were cap-exempt and thus not subject to the H-1B 
cap selection process.\25\ Thus, it is not accurate to say that recent 
foreign medical graduates, who may seek initial employment as 
physicians, would have ``no chance'' of obtaining H-1B status under 
this rule. DHS acknowledges that, under this rule, in years of excess 
demand, in the infrequent situation of recent foreign medical graduates 
seeking employment with a cap subject employer, recent foreign medical 
graduates may face a reduced chance of selection for cap-subject H-1B 
visas. However, because a significant majority of H-1B petitions filed 
for recent foreign medical graduates are cap-exempt, and thus not 
affected by this rule, this reduction likely will affect a minimal 
population, if any, of recent medical graduates. Further, as explained 
in the proposed rule, DHS believes that a random selection is not 
optimal, and selection based on the highest wage level that a proffered 
wage equals or exceeds is more consistent with the primary purpose of 
the statute.
---------------------------------------------------------------------------

    \25\ U.S. Department of Homeland Security, U.S. Citizenship and 
Immigration Services, Office of Policy and Strategy, Policy Research 
Division, Wage Level of H-1B Initial Employment Physician Approvals 
(Cap-Subject and Cap-Exempt), Fiscal Year 2019, Database Queried: 
PETAPP, Report Created: 11/18/2020, Systems: C3 via SASPME, DOL OFLC 
Performance DATA H1B for 2019. Note that the tables for ``Wage Level 
of H-1B Initial Employment Physicians Approvals'' and ``Wage Level 
of H-1B Initial Employment Dentists Approvals'' show approval counts 
for the cap year in which the petitions were filed. For these 
tables, DHS used the approval counts for FY 2019. Whereas the tables 
for ``Wage Level of Select Cap-subject H-1B Physicians Approvals'' 
and ``Wage Level of Select Cap-subject H-1B Dentists Approvals'' 
show approval counts for the cap year. For these tables, DHS used 
the cap counts for Cap Year 2020. For purposes of this data, DHS 
used the DOT code identified on the H-1B petition, namely, DOT codes 
070-072 for physicians, surgeons, and dentists. The DOT Code is a 
three-digit occupational group for professional, technical, and 
managerial occupations and fashion models that can be obtained from 
the Dictionary of Occupational Titles. DHS then linked petition data 
to LCA data for wage level information.
---------------------------------------------------------------------------

    In terms of STEM-specific concerns, DHS disagrees with comments 
that this rule will make it ``harder'' or ``nearly impossible'' for 
employers to hire entry-level employees with degrees in STEM majors. 
These types of potential foreign workers have multiple avenues to 
obtain employment in the United States. In general, foreign STEM 
graduates can apply for the regular 12-month OPT plus an additional 24-
month extension of their post-completion OPT.\26\ The additional 24-
month extension of OPT is available only to foreign STEM graduates. 
During the 3-year cumulative OPT period, such a graduate can gain 
significant training and work experience with a U.S. employer and can 
demonstrate their value to that employer. If the employer wants to 
continue their employment by way of H-1B classification, then the 
employer can choose to offer the worker a wage that will maximize their 
chance of selection. Additionally, an employer could directly petition 
for an employment-based immigrant visa for the alien at any time. There 
is no statutory or regulatory requirement that an alien admitted on a 
F-1 nonimmigrant visa go through OPT and/or the H-1B program before 
being petitioned for an immigrant visa.
---------------------------------------------------------------------------

    \26\ See 8 CFR 214.2(f)(10)(ii).
---------------------------------------------------------------------------

    Concerning the comments about non-STEM graduates who work in the 
humanities, arts, accounting, education, or other areas that generally 
may not receive as high of starting wages as other occupations, DHS 
does not believe these graduates will be unfairly impacted by this 
rule. Because USCIS will be ranking and selecting registrations (or 
petitions) generally based on the highest OES prevailing wage level 
that the proffered wage equals or exceeds for the relevant SOC code, 
this method of ranking takes into account wage variations by 
occupation.
ii. Academic Institutions
    Comments: A few individual commenters generally stated that the 
proposed rule would harm schools and universities. Multiple commenters, 
including a university, law firm, and individual commenters, stated 
that this rule would negatively impact U.S. universities' ability to 
recruit international students, which would affect enrollments, because 
U.S. institutions would be less attractive due to the lower possibility 
of remaining in the United States to work after completion of their 
studies or at the conclusion of their OPT. Similarly, several 
commenters said the proposal would make it difficult for universities 
to attract top talent that would contribute to the U.S. economy. A 
trade association stated that the rule would restrict the ability of 
graduating talent to switch from F-1 student status to H-1B status, 
particularly when operating in conjunction with the DOL Interim Final 
Rule (IFR), Strengthening Wage Protections for the Temporary and 
Permanent Employment of Certain

[[Page 1683]]

Aliens in the United States (DOL IFR).\27\ Another commenter stated 
that the DOL IFR also is aimed at pricing international students and 
others out of the U.S. labor market, while the Student and Exchange 
Visitor Program proposed rule \28\ to limit the time students are 
allowed to stay in the United States appears designed to deter foreign 
students from coming to U.S. universities.
---------------------------------------------------------------------------

    \27\ U.S. Department of Labor, Employment and Training 
Administration, Strengthening Wage Protections for the Temporary and 
Permanent Employment of Certain Aliens in the United States, 85 FR 
63872 (Oct. 8, 2020).
    \28\ U.S. Department of Homeland Security, U.S. Immigration and 
Customs Enforcement, Establishing a Fixed Time Period of Admission 
and an Extension of Stay Procedure for Nonimmigrant Academic 
Students, Exchange Visitors, and Representatives of Foreign 
Information Media, 85 FR 60526 (Sept. 25, 2020).
---------------------------------------------------------------------------

    A trade association stated, without evidence, that since graduating 
international students are unlikely to find employers who are willing 
to pay them the same rate as their median-wage workers, this would lead 
to U.S.-educated international students taking their knowledge and 
skills elsewhere. A university said that, if the proposed rule were 
implemented, the United States would lose ``advanced science, 
technology, engineering, and mathematics knowledge and talent'' because 
international students would choose to pursue their education in 
countries with more favorable immigration policies. Another commenter 
claimed that international students would study elsewhere if they could 
not identify employment opportunities after graduation, which would 
``crippl[e] a critical pipeline of future community members, workers, 
innovators and entrepreneurs.'' A few commenters stated that, under 
this rule, the United States would lose money, talent, and 
inventiveness by reducing the employment potential of foreign students 
upon graduation from a U.S. educational institution, and the United 
States eventually would lose attractiveness and competitiveness because 
international students would go elsewhere. Some commenters provided 
specific figures to detail the contributions of foreign enrollment at 
U.S. universities. Specifically: Education service exports ranked sixth 
among service exports in 2019 according to data released by the U.S. 
Department of Commerce's Bureau of Economic Analysis; international 
students studying in the United States added an estimated $41 billion 
to the economy and supported over 458,000 jobs during the 2018 through 
2019 academic year; international students make up 5.5 percent of the 
total U.S. higher education population and contributed $44.7 billion to 
the U.S. economy in 2018; international students have founded 
approximately one-quarter of U.S. start-up companies worth $1 billion 
or more; the Institution for International Education (IIE) reports that 
international students contributed $482.5 million to the State of 
Minnesota during 2018 through 2019, supporting 4,497 jobs; 
international students and scholars contributed an estimated $304.2 
million to the local Ithaca, New York, economy and supported nearly 
4,000 jobs during the 2018 through 2019 academic year; and, in one 
commenter's experience, foreign students paid more than $10,000 per 
year full tuition compared to less than $4,000 for in-state residents, 
which provided major subsidies for low income resident students.
    Some commenters expressed that this is not the time to be driving 
students away, as State and college/university budgets have suffered 
greatly as a result of COVID-19. One commenter cited data indicating a 
``shocking decline'' in international student enrollment at U.S. 
institutions of higher education for the Fall 2020 semester, as well as 
a study indicating that the overall economic impact generated by 
international students had already started to decline in 2019, down to 
$38.7 billion. The commenter said the declining enrollment numbers for 
2020 are likely to perpetuate a large economic impact as we continue to 
deal with the economic fallout of the COVID-19 pandemic. A professional 
association stated that the proposed regulation would have a 
``monumentally negative'' effect on U.S. colleges and universities at a 
time when those institutions would be reeling from the impact of the 
COVID-19 pandemic. The commenter cited statistics indicating that, in 
the current school year, new enrollment of international students 
dropped 43 percent because of COVID-19. The commenter concluded that 
the COVID-19 pandemic, uncertainty about immigration status, and 
``anti-immigrant rhetoric[,]'' compounded with this rule that would 
further destabilize the career progression of foreign students by 
eliminating a legal pathway to temporary employment opportunities in 
the United States post-graduation, would create a ``perfect storm'' 
that would devastate the U.S. college and university system for years 
to come.
    Several commenters, including a university, advocacy group, and 
individual commenters, said restricting the H-1B program for foreign 
students, while competitor nations seek to expand their ability to 
attract international students, would lead talented students to choose 
other countries of study and decrease enrollments in U.S. institutions. 
One of these commenters said countries such as Canada and Germany 
already are seeing increases in international student enrollment as 
U.S. restrictions to international students have led to waning interest 
from the future CEOs, inventors, and researchers of the world. An 
individual commenter said universities essentially would be training 
laborers for other countries.
    Some commenters stated that colleges and universities rely, in 
particular, on foreign students who pay full tuition to help make up 
for declining Federal and State support and to subsidize the cost of 
education for U.S. students. An attorney stated that U.S. colleges, 
universities, and communities benefit financially from the attendance 
of foreign students, typically in F-1 foreign student nonimmigrant 
status or J-1 exchange visitor nonimmigrant status. The commenter said 
the economic and intellectual advancement of educational institutions 
and their communities is enhanced by the presence of these students 
from other countries.
    A university stated that international students and scholars are 
essential to a university's makeup, as students and faculty benefit 
from exposure to intercultural differences and the leadership 
opportunities that arise from global collaborations. Another commenter 
stated that foreign national researchers and professors provide the 
needed diversity to help educate students to become the professionals 
they need, as they cannot compete globally if they do not have the 
ability to adapt culturally.
    An individual stated that this rule would make it impossible for 
some colleges to fill teaching positions that they cannot fill with 
qualified U.S. workers. For example, the commenter stated that North 
Dakota colleges are not able to pay higher than the level I wage as 
that is the average salary paid to all of its beginning professors and 
researchers, and this rule would result in many of North Dakota 
colleges having unfilled teaching positions and a decrease in higher 
level class offerings, particularly in STEM fields, putting a strain on 
education in the state. Multiple commenters offered similar concerns, 
but at other levels of academic institutions and owing to their less-
desirable locations.
    Response: DHS appreciates the academic benefits, cultural value, 
and economic contributions that aliens make to academic institutions 
and local

[[Page 1684]]

communities throughout the United States. DHS does not believe that 
this rule will negatively impact the ability of U.S. colleges and 
universities to recruit international students. Nor will the rule 
impact the ability of international students to study in the United 
States, which is the basis of their admission to the United States in 
that status. While increased employment opportunities, both in the 
United States and abroad, may be a factor in deciding whether to study 
in the United States, the reputation of the academic institutions 
themselves is also an important factor for the great majority of those 
choosing to study in the United States.\29\ Further, DHS notes that 
international students will continue to have significant employment 
opportunities in the United States under this rule. First, this rule 
has no impact on OPT, which allows for 12 months of employment for most 
aliens admitted in F-1 student status, plus an additional 24-month 
extension of post-completion OPT available only to STEM graduates.\30\ 
In addition, with the current random selection process, even the most 
talented foreign student may have less than a 50 percent chance of 
selection. This rule will increase the chance of employment at the 
higher wage levels and thus may facilitate the selection of the best 
and brightest students for cap-subject H-1B status. To the extent that 
that this change does negatively affect the potential of some colleges 
and universities to recruit international students, DHS believes that 
any such harm will be outweighed by the benefits that this rule will 
provide for the economy overall.\31\
---------------------------------------------------------------------------

    \29\ See Daniel Obst and Joanne Forster, Perceptions of European 
Higher Education in Third Countries, Outcome of a Study by the 
Academic Cooperation Association, Country Report: USA, Institute of 
International Education, https://www.iie.org/Research-and-Insights/Publications/International-Students-in-the-United-States.
    \30\ See 8 CFR 214.2(f)(10)(ii).
    \31\ See Muzaffar Chrishti and Stephen Yale-Loehr, The 
Immigration Act of 1990: Unfinished Business a Quarter-Century 
Later, Migration Policy Institute (July 2016), https://www.migrationpolicy.org/sites/default/files/publications/1990-Act_2016_FINAL.pdf (``Sponsors of [the Immigration Act of 1990 which 
created the H-1B program as it exists today] believed that 
facilitating the admission of higher-skilled immigrants would 
benefit the economy and increase the United States' competitive edge 
in attracting the `best and the brightest' in the global labor 
market.'').
---------------------------------------------------------------------------

    Facilitating the admission of higher-skilled foreign workers, as 
indicated by their earning of wages that equal or exceed higher 
prevailing wage levels, would benefit the economy and increase the 
United States' competitive edge in attracting the ``best and the 
brightest'' in the global labor market, consistent with the goals of 
the H-1B program discussed in the NPRM.
    Further, DHS disagrees that this rule will make it ``impossible'' 
for academic institutions to fill teaching and research positions. 
Congress already exempted from the annual H-1B cap aliens who are 
employed or have received offers of employment at institutions of 
higher education, nonprofit entities related to or affiliated with 
institutions of higher education, nonprofit research organizations or 
government research organizations.\32\ Therefore, many petitions for 
academic institutions will not be affected by this rule.\33\ In FY 2020 
alone, USCIS approved over 41,000 petitions for petitioners that 
qualified under one of these cap exemptions.\34\ These cap exemptions 
mitigate these commenters' concerns or misunderstanding of the H-1B 
program. Comments about the DOL IFR and the Student and Exchange 
Visitor Program proposed rule are out of scope, so DHS will not address 
them.
---------------------------------------------------------------------------

    \32\ See INA section 214(g)(5), 8 U.S.C. 1184(g)(5).
    \33\ See INA section 214(g)(5), 8 U.S.C. 1184(g)(5).
    \34\ U.S. Department of Homeland Security, U.S. Citizenship and 
Immigration Services, Office of Policy and Strategy, Policy Research 
Division (PRD), Cap-Exempt H-1B Approvals in Certain Categories, 
Dec. 9, 2020. This data shows the following breakdown for cap-exempt 
H-1B approvals: 20,097 for institution of higher education; 11,847 
for affiliated or related non-profit entities; 5,131 for non-profit 
research organizations or government research organization; and 
3,998 for beneficiaries employed at a qualifying cap exempt entity.
---------------------------------------------------------------------------

iii. Healthcare Workforce and Facilities
(a) Impact on Healthcare Workers
    Comments: Some commenters expressed concern that the rule could 
prevent qualified and highly skilled entry-level health care workers 
and recent foreign-born graduates from medical school from obtaining an 
H-1B visa. A professional association said this proposal would reduce 
the overall number of international medical graduates (IMGs) practicing 
in the United States, also stating that pricing H-1B visa holders out 
of the physician employment market would only exacerbate ongoing 
physician shortages and worsen barriers to care for patients. Another 
professional association cited data forecasting an increasing physician 
shortage and said H-1B physicians fulfill a ``vital and irreplaceable 
role.'' The commenter said stringent performance and pay thresholds 
already exist that must be met to even be considered for an H-1B visa 
and placing additional wage barriers on the cap would garner no benefit 
and, instead, would harm U.S. patients and health care systems. A 
university and an individual commenter stated that physicians enter the 
field with a level I wage, despite high levels of education and 
training, and argued that, under the proposal, it would be ``virtually 
impossible'' for a new physician to obtain H-1B unless they are 
employed by a cap-exempt institution. The university and the commenter 
cited a 2016 Journal of the American Medical Association (JAMA) study, 
which found that 29 percent of physicians were born outside of the 
United States, helping to fill the physician shortage, and that this 
rule ignores problems like this. Another professional association 
stated that it is an incorrect assumption that skill level is 
definitively associated with wage amount, as there are many situations 
where a highly skilled H-1B physician may choose to accept a lower wage 
(e.g., expand their skillset, altruistic motives, the potential to gain 
lawful permanent residency in a shorter time span). Therefore, the 
proposed rule would create a false presupposition that would stop 
highly qualified physicians from practicing in less affluent 
institutions. Thus, the proposed rule would create a situation where 
much needed physician positions remain vacant, only wealthy medical 
conglomerates are able to afford to sponsor H-1B physicians, or wages 
become so inflated that far fewer H-1B physicians can be hired. A few 
individuals noted that a number of rural and/or underserved communities 
rely on foreign trained dentists, and that this rule would make it 
difficult to recruit dentist in rural and/or underserved areas.
    A couple of professional associations said the rule potentially 
could eliminate the H-1B visa option for recent graduates, including 
IMGs and postdoctoral researchers, with serious consequences for the 
U.S. healthcare workforce. One of these commenters said IMGs compose 
nearly one-fourth of the U.S. physician workforce and one-fourth of the 
country's resident physicians in training. The commenter stated that, 
due to this rule, these highly qualified physicians may choose to go to 
other countries rather than risk being unable to complete training 
requirements, build up a medical practice, or perform clinical duties.
    A professional association wrote specifically about the impacts of 
the rule on the availability of primary care physicians. The commenter 
cited data indicating that the United States is facing a primary care 
physician shortage and stated that IMGs play a vital role in filling 
this gap. The commenter went on to say that family medicine and other 
primary care physicians typically have lower annual salaries than 
specialty

[[Page 1685]]

physicians, and, since this proposal favors H-1B petitioners with 
higher annual salaries, it also may discriminate against family 
physicians unfairly.
    Response: DHS disagrees with the assertion that this rule will 
prevent recent medical or dental graduates from obtaining H-1B status, 
as Congress already exempted from the H-1B cap any alien who is 
employed or has received an offer of employment at an institution of 
higher education, a related or affiliated non-profit entity, or a non-
profit research organization or a governmental research 
organization.\35\ As stated above, in FY 2019, more than 93 percent of 
H-1B petitions approved for initial employment for physicians, 
surgeons, and dentists were cap-exempt and, thus, not subject to the H-
1B cap selection process. Because a significant majority are not 
affected by this rule, this reduction likely will affect a minimal 
population, if any, of recent foreign medical graduates.
---------------------------------------------------------------------------

    \35\ See INA section 214(g)(5), 8 U.S.C. 1184(g)(5); 8 CFR 
214.2(h)(8)(iii)(F).
---------------------------------------------------------------------------

    In addition, Congress has established programs meant to encourage 
certain recent foreign medical graduates to serve in the United States 
as H-1B nonimmigrants. These programs are exempt from the annual caps 
and unaffected by this rule. Certain J-1 exchange visitors are subject 
to a 2-year foreign residence requirement under INA section 212(e), 8 
U.S.C. 1182(e), which requires them to return to their country of 
nationality or country of last residence for at least two years in the 
aggregate prior to being eligible to apply for an immigrant visa; 
adjustment of status; or a nonimmigrant visa, such as an H-1B visa 
(with limited exceptions).\36\ However, INA section 214(l), 8 U.S.C. 
1184(l), contains provisions authorizing waivers of the 2-year foreign 
residence requirement for certain aliens, including foreign medical 
graduates who agree to work full-time (at least 40 hours per week) in 
H-1B classification for not less than three years in a shortage area 
designated by the U.S. Department of Health and Human Services (HHS) 
with a request from an interested federal government agency or state 
agency of public health or its equivalent, or with the U.S. Department 
of Veterans Affairs (VA).\37\ The petition requesting a change to H-1B 
nonimmigrant status for these physicians is not subject to the 
numerical limitations contained in INA section 214(g)(1)(A), 8 U.S.C. 
1184(g)(1)(A).\38\ While participation in the Conrad State 30 program 
(relating to waivers based on requests from a state agency of public 
health or its equivalent for service in an HHS-designated shortage 
area) is limited to 30 participants per eligible jurisdiction annually, 
the other programs have no limits on the number of participants.\39\
---------------------------------------------------------------------------

    \36\ See INA section 212(e), 8 U.S.C. 1182(e); INA section 248, 
8 U.S.C. 1258.
    \37\ See INA section 214(l), 8 U.S.C. 1184(l). See also 8 CFR 
212.7(c)(9).
    \38\ See INA section 214(l)(2)(A), 8 U.S.C. 1184(l)(2)(A).
    \39\ See INA section 214(l)(1)(B), 8 U.S.C. 1184(l)(1)(B).
---------------------------------------------------------------------------

    Further, DHS disagrees with the comment that this rule may unfairly 
discriminate against family physicians and other primary care 
physicians who typically have lower annual salaries than specialty 
physicians. In general, family physicians or other primary care 
physicians have different SOC codes than specialty physicians. As DOL 
prevailing wage level calculations generally differ by SOC codes, when 
wage data is available, the corresponding wage level would necessarily 
account for the different occupational classification for primary care 
physicians as opposed to other types of physicians. When such wage 
level data is unavailable, wage level ranking will be based on the 
skill, education, and experience requirements for the position, again 
taking into account the particulars of the relevant occupational 
classification, such that registrations or petitions for primary care 
physicians will be ranked in comparison to the normal requirements for 
primary care physicians and not in comparison to other types of 
physicians. As such, DHS does not believe that this rule will 
disadvantage registrations or petitions for primary care physicians or 
any other subset of physicians.
(b) Rural and/or Underserved Communities
    Comments: Multiple commenters, including several professional 
associations, said the rule would negatively impact the U.S. health 
care system in areas that are rural and/or underserved where IMG and 
non-citizen physicians are particularly essential. A professional 
association cited data indicating that IMGs are more likely to become 
primary care physicians and practice in rural and other underserved 
areas where physician shortages are the direst and that rely heavily on 
family physicians for ambulatory and emergency care. A couple of 
professional associations similarly said IMGs typically serve in rural 
and/or medically underserved communities, providing care to many of our 
country's most at-risk citizens. One of these commenters stated that, 
although 20 percent of the country's population resides in rural areas, 
fewer than 10 percent of U.S. physicians actually practice in those 
communities, resulting in over 23 million rural Americans living in 
federally designated primary medical Health Professional Shortage Areas 
(HPSA). This commenter also stated that recently graduated H-1B 
physicians participating in pipeline programs in the beginning of their 
careers, such as Conrad State 30, fall within the first and second 
tiers of the prevailing wage determination. Therefore, the proposed 
rule would create a system that removes physicians who are willing and 
ready to practice in medically underserved areas and cuts off those 
patients who are most in need from receiving physician care.
    A professional association stated that Federally Qualified 
Healthcare Centers (FQHC), institutions that serve high-risk, medically 
underserved populations in HPSAs, do not qualify for exemption from the 
H-1B visa cap. To fill the physician gap, FQHCs utilize H-1B physicians 
to care for patients in these health care underserved areas. The 
commenter stated that, if the proposed rule is enacted, these FQHCs 
would be unable to obtain early-career H-1B physicians and are unlikely 
to be able to compete with larger, more affluent organizations to offer 
a higher proffered wage to increase their chances of obtaining H-1B 
physician candidates and reducing the physician shortages identified by 
HPSA data.
    A company stated that rural hospitals and other health care 
facilities rely heavily on healthcare-staffing companies to fill their 
staffing needs, but the rates staffing companies are able to charge 
rural facilities usually are much lower than the rates they are able to 
charge facilities in affluent metropolitan areas. Thus, the rule would 
cause staffing companies to place their professionals where the 
staffing companies can charge the highest rates, so that staffing 
companies can maintain sufficient profitability and ensure that their 
workers are able to obtain H-1B visas. The commenter concluded that the 
rule would decrease the supply of healthcare labor to rural and other 
underserved communities, where it is needed most.
    Response: DHS acknowledges the important role that early career and 
entry level foreign physicians may play in providing health care in 
rural and/or underserved communities. As explained in response to the 
previous comments, Congress has established programs meant to direct 
foreign medical graduates to those communities.

[[Page 1686]]

    Also as noted above, physicians whose nonimmigrant status is 
changed to H-1B through their participation in any of the three waiver 
programs in INA section 214(l), 8 U.S.C. 1184(l), are not subject to 
the annual H-1B caps. The Conrad State 30 program (relating to waivers 
based on requests from a state agency of public health or its 
equivalent for service in an HHS-designated shortage area) is limited 
to 30 participants per eligible jurisdiction annually.\40\ However, 
there are no annual limits on the number of aliens who can obtain a 
waiver through service in an HHS-designated shortage area based on the 
request of a federal interested government agency. Since these programs 
are not subject to the annual H-1B caps, they will not be affected by 
this rule and the programs will continue to provide a pipeline for 
these physicians to serve in HHS-designated shortage areas.
---------------------------------------------------------------------------

    \40\ See INA section 214(l)(1)(B), 8 U.S.C. 1184(l)(1)(B).
---------------------------------------------------------------------------

    Congress has established a similar statute in the immigrant 
context, which also channels physicians to serve in HHS-designated 
shortage areas, commonly known as the Physician National Interest 
Waiver Program.\41\ That program has no limits on the number of 
physicians who can participate in a given fiscal year, though there are 
numerical limitations on the number of employment-based immigrant visas 
that can be allocated annually. This program is unaffected by this rule 
and will continue to provide a pipeline for an unlimited number of 
physicians to serve in HHS-designated shortage areas.
---------------------------------------------------------------------------

    \41\ See INA section 203(b)(2)(B)(ii)(I), 8 U.S.C. 
1153(b)(2)(B)(ii).
---------------------------------------------------------------------------

    DHS agrees with the commenters who stated that medical institutions 
in rural and/or underserved areas may not be institutions of higher 
education, related or affiliated non-profit entities, or non-profit 
research organizations or governmental research organizations. As a 
result, aliens who are employed by or who have received an offer of 
employment from such medical institutions may not be exempt from the 
annual H-1B numerical limitations under INA section 214(g)(5), 8 U.S.C. 
1184(g)(5). However, some of those medical institutions do meet the 
requirements to be cap-exempt, and their employees will not be subject 
to the numerical limitations.\42\
---------------------------------------------------------------------------

    \42\ U.S. Department of Homeland Security, U.S. Citizenship and 
Immigration Services, Office of Policy and Strategy, Policy Research 
Division, Wage Level of H-1B Initial Employment Physician Approvals 
(Cap-Subject and Cap-Exempt), Fiscal Year 2019, Database Queried: 
PETAPP, Report Created: 11/18/2020, Systems: C3 via SASPME, DOL OFLC 
Performance DATA H1B for 2019 (showing that, in FY 2019, more than 
93 percent of H-1B petitions approved for initial employment for 
physicians, surgeons, and dentists were cap-exempt and not subject 
to the H-1B cap selection process).
---------------------------------------------------------------------------

    DHS acknowledges that some alien physicians who currently serve in 
rural and/or underserved areas as H-1B nonimmigrants are not 
participating in the waiver programs of INA section 214(l), 8 U.S.C. 
1184(l), and they are not working for cap-exempt employers. These 
physicians may be in positions categorized as prevailing wage levels I 
or II, depending on their individual circumstances. However, such 
physicians may avail themselves of alternative pathways to serve in 
these areas such as the Physician National Interest Waiver Program and 
not be subject to the annual H-1B numerical limitations.
    Further, as with all other cap-subject H-1B visas, DHS will rank 
and select registrations for these positions generally according to the 
highest OES prevailing wage level that the proffered wage equals or 
exceeds, which necessarily takes into account the area of intended 
employment when such wage level data is available. Where there is no 
current OES prevailing wage information for the proffered position, 
which DHS recognizes is the case for some physician positions based on 
limitations in OES data, the registrant would follow DOL guidance on 
prevailing wage determinations to determine which OES wage level to 
select on the registration. The determination of the appropriate wage 
level in those instances would be based on the skill, education, and 
experience requirements of the position, and generally does not take 
into consideration the area of intended employment. Therefore, DHS does 
not believe that this rule necessarily will disadvantage rural and/or 
underserved communities relative to registrations or petitions based on 
offers of employment in other areas.
(c) COVID-19
    Comments: Several commenters stated that the rule would have 
particularly concerning impacts on the U.S. healthcare workforce as the 
United States grapples with the COVID-19 pandemic. A professional 
association said these visa cap requirements come at a most inopportune 
time, as the United States sustains some of the highest rates of COVID-
19 cases worldwide and depends on early career physicians to serve on 
the frontlines. The commenter said H-1B physicians have played a large 
role in caring for those who are seriously ill from COVID-19, including 
those facing health complications following recovery from this disease. 
Similarly, another professional association cited data indicating that, 
currently, the States where H-1B physicians are providing care are also 
those with some of the highest COVID-19 case counts.
    Response: DHS certainly appreciates the significant contributions 
of all healthcare professionals, especially during the current COVID-19 
pandemic, but DHS continues to note that many foreign medical 
professionals are eligible for cap-exempt H-1B status and are not 
impacted by this rule. Additionally, DHS believes that this rule will 
provide benefits to the greater U.S. workforce that outweigh any 
potential negative impacts on the relatively small subset of H-1B cap-
subject healthcare workers.
    For example, DHS received submissions from unemployed and 
underemployed U.S. citizen medical graduates who attested to the 
decades-long problem of displacement of several thousands of qualified 
U.S. citizen IMGs and graduates of U.S. medical schools for federally 
funded residency training positions. This rule may benefit these 
unemployed and underemployed U.S. citizen medical graduates by 
potentially increasing employment opportunities. Further, DHS notes 
that this final rule is not a temporary rule that is limited in 
duration to the COVID-19 pandemic; moreover, this final rule will not 
have immediate impact on H-1B employment as it will first be applied to 
the FY 2022 registration and selection process, the beneficiaries of 
which will not be able to begin employment in H-1B classification until 
October 1, 2021.
(d) Healthcare Facilities
    Comments: A professional association stated that larger, wealthier 
companies are much more likely to be able to pay augmented salaries to 
increase their chances of selection for filing of H-1B cap-subject 
petitions. In comparison, smaller, less affluent medical practices 
would not be able to compete with these large conglomerates, despite 
having a much greater need for physicians. As such, larger hospital 
systems would be able to buy H-1B visas for their physicians, leaving 
mid to small size practices even more understaffed.
    A trade association stated that its members in the healthcare 
industry are very concerned about the impact this rule would have on 
their ability to continue hiring H-1B foreign medical graduates, who 
are critical for healthcare providers to meet the needs of their 
patients. The commenter said

[[Page 1687]]

the disruptions caused by the rule would be profound on these 
employers, as they continue to struggle in confronting the ongoing 
COVID-19 pandemic.
    A law firm stated that the salary market in healthcare is not like 
the salary market in other fields and explained that, because so much 
of hospitals' reimbursement processes are governed by Medicare and a 
tiny handful of large insurance companies, it would be impossible for 
U.S. healthcare facilities to negotiate reimbursement rates in a manner 
to significantly raise salaries. The commenter said that this rule is a 
``blunt object'' that would lead to additional Silicon Valley, 
California, H-1B visas in place of visas that currently help the 
healthcare of U.S. citizens, and rural facilities would suffer the 
brunt of this policy.
    Response: DHS appreciates the significant contributions of all 
healthcare professionals, especially during the current COVID-19 
pandemic, but believes that this rule will provide benefits to the 
greater U.S. workforce. DHS does not believe that the changes in this 
rule will have a disproportionately negative impact on small- to mid-
sized medical practices as compared to larger hospital systems. It is 
not necessarily the case that larger hospital systems are more willing 
or able to provide higher salaries to their employees.\43\ DHS also 
does not believe that the changes in this rule will have a 
disproportionately negative impact on rural facilities, as it is not 
necessarily the case that rural facilities are unwilling or unable to 
provide relatively higher salaries compared to facilities in other 
areas.\44\ With respect to the ability to offer increased wages 
generally, DHS acknowledges that employers of healthcare professionals, 
like employers in all industries, must consider a variety of factors in 
determining employee salaries. However, this rule does not require 
employers to pay a higher wage, and, as stated in the NPRM and above, 
employers that might have petitioned for a cap-subject H-1B worker to 
fill relatively lower-paid, lower-skilled positions may be incentivized 
to hire available and qualified U.S. workers for those positions. Also 
as noted above, DHS believes that selecting by wage level in such years 
is more consistent with the dominant legislative purpose of the H-1B 
program, which is to help U.S. employers fill labor shortages in 
positions requiring highly skilled or highly educated workers.
---------------------------------------------------------------------------

    \43\ See Wayne Lipton, Is a Bigger Medical Practice Always 
Better?, Physicians Practice (June 21, 2012), https://www.physicianspractice.com/view/bigger-medical-practice-always-better.
    \44\ See Bonnie Darves, Demystifying Urban Versus Rural 
Physician Compensation, The New England Journal of Medicine Career 
Center (Mar. 4, 2019), https://www.nejmcareercenter.org/article/demystifying-urban-versus-rural-physician-compensation/.
---------------------------------------------------------------------------

iv. Employers
    Comments: Multiple commenters said the proposal would have the 
following negative impacts on employers without providing substantive 
rationale: Many industries and companies benefit from entry-level 
employees who bring energy, innovation, and diversity; the proposal 
would reduce the number of H-1B workers ``that employers can access''; 
the rule may incentivize employers to favor domestic applicants in the 
short term, but businesses may not be able to hire the people best 
suited for the job in the long run; companies would suffer because 
foreign employees will not waste their time with companies that they do 
not think will be able to sponsor them for a visa; to be competitive in 
the H-1B registration process, companies would have to pay double the 
costs for new hires; this rule would be beneficial for a few industries 
and create biases for other industries; the rule would jeopardize the 
employers' ability to meet business objectives, develop and provide new 
products to market, and stay competitive in a global market; this 
proposal would create ``vicious competition cycles'' among H-1B 
candidates and their employers; and, if this proposal were implemented, 
there would be a shortage in the job market for junior level employees.
    Response: For the reasons explained above, DHS disagrees with the 
assertions that this rule will preclude or essentially preclude H-1B 
status for recent graduates and entry-level workers. The rule is not 
intended to, and DHS does not expect that it will, reduce the number of 
cap-subject H-1B workers. As explained in the NPRM and above, DHS 
believes that the rule will maximize H-1B cap allocations so that they 
more likely will go to the best and brightest workers, consistent with 
Congressional intent. DHS believes that this rule will facilitate the 
admission of higher-skilled workers or those for whom employers proffer 
wages commensurate with higher prevailing wage levels, which will 
benefit the economy and increase the United States' competitive edge in 
attracting the best and the brightest in the global labor market, 
consistent with the goals of the H-1B program. Finally, as stated in 
the NPRM and above, employers that might have petitioned for a cap-
subject H-1B worker to fill relatively lower-paid, lower-skilled 
positions, may be incentivized to hire available and qualified U.S. 
workers for those positions.
(a) Impacts on Companies
    Comments: A couple of professional associations stated that the 
proposal would have an adverse impact on petitioners in terms of 
employment, productivity loss, search and hire costs, lost profits 
resulting from labor turnover, and more. One of these professional 
associations added that the use of wage data for selection of H-1B 
registrants would unfairly discriminate against and burden law-abiding 
employers. The commenter also argued that the current H-1B registration 
has been beneficial to employers because it has a much earlier 
indication of the lottery's outcome, and that the proposal would 
``diminish predictability'' for companies.
    A trade association said the rule would place an excessive cost 
burden on petitioners because they would be required to offer 
dramatically increased wages to prospective H-1B employees, especially 
in conjunction with the new increased wage levels implemented through 
the DOL IFR.\45\ The commenter stated that employers would be 
``forced'' to offer prevailing wages above the 95th percentile to equal 
or exceed level IV prevailing wages. Another trade association argued 
that the proposal, in conjunction with the DOL IFR, may result in pay 
that exceeds that of comparable U.S. workers, which may result in 
personnel strains and new costs for U.S. companies. Several commenters, 
including a professional association, company, and research 
organization, stated that employers would be ``forced'' to either 
forego hiring foreign professionals or hire foreign workers at a salary 
level higher than U.S. workers, which would cause problems for the 
employers such as internal equity issues. An individual commenter 
stated that the rule would create public relations problems for 
companies, arguing that ``forcing'' companies to pay foreign workers 
more than the market currently dictates would disenfranchise U.S. 
workers in similar positions.
---------------------------------------------------------------------------

    \45\ Strengthening Wage Protections for the Temporary and 
Permanent Employment of Certain Aliens in the United States, 85 FR 
63872.
---------------------------------------------------------------------------

    Response: DHS disagrees that this rule will unfairly discriminate 
against and burden law-abiding employers. While petitioners may 
initially spend more on search and hire costs to obtain foreign workers 
who command higher wages or have higher skill levels, DHS believes

[[Page 1688]]

these petitioners will see an increase in productivity as a result of 
hiring such higher-skilled workers. Regarding the benefits of the 
registration process, this rule will continue to use the same 
registration process (with the added factor of ranking and selection by 
wage level), which will continue to provide predictability for 
companies in the H-1B cap selection process. In fact, this rule may 
increase predictability for companies offering relatively higher wages 
in order to increase their chances of selection.
    As for the concern about offering prevailing wages above the 95th 
percentile, DHS notes that the DOL IFR was set aside and no longer is 
being implemented as of the publication of this final rule.\46\ As for 
the concerns about ``internal equity issues'' or ``public relations 
problems'' caused by paying foreign workers more than the U.S. workers 
in similar positions, nothing in this rule requires an employer to 
offer an H-1B worker a higher wage than a U.S. citizen worker for the 
same position.
---------------------------------------------------------------------------

    \46\ On December 1, 2020, the U.S. District Court for the 
Northern District of California issued an order in Chamber of 
Commerce, et al. v. DHS, et al., No. 20-cv-7331, setting aside the 
DOL IFR, 85 FR 63872. Similarly, on December 3, 2020, the U.S. 
District Court for the District of New Jersey issued a preliminary 
injunction in ITServe Alliance, Inc., et al. v. Scalia, et al., No. 
20-cv-14604, applying to the plaintiffs in that case. Also on 
December 3, 2020, DOL announced that it will no longer implement the 
IFR, consistent with the above referenced court orders.
---------------------------------------------------------------------------

(b) Impacts on Available Workforce
    Comments: Several commenters, including a professional association 
and a trade association, argued that the proposal would harm the 
ability of U.S. companies to hire aliens for entry-level jobs. A 
company asserted that the NPRM would diminish U.S. companies' access to 
the full range of talent, across all career stages, necessary to build 
a complete workforce. An advocacy group similarly said that the rule 
does a disservice to companies struggling to fill talent gaps across 
multiple levels of employment. An individual commenter said the rule 
would end the H-1B program ``for good'' for many professions that are 
in short supply. An individual commenter argued that the proposal makes 
the H-1B process more challenging for both small and large employers 
who have relatively small numbers of H-1B workers compared to the 
overall workforce, and makes it ``almost impossible'' to fill certain 
positions without being able to supplement the U.S. workforce. A trade 
association said that the proposal is an example of ``government heavy-
handedness'' which presents U.S. companies with prospective 
difficulties in meeting workforce needs.
    An anonymous commenter said the rule would severely interrupt many 
U.S. companies' operations, as it would disqualify many foreign workers 
fulfilling specialty jobs and make it difficult for companies to find 
reasonable substitutes for the labor. The commenter stated that DHS' 
statement that these disadvantages would be offset by increased 
productivity and availability of higher wage H-1B petitioners is 
``optimistic'' and lacks support.
    An individual commenter said their company would be impacted 
because entry-level STEM candidates have played critical roles 
throughout the organization, and the proposal would mean they would be 
unable to draw from the world's leading talent. In addition, some of 
their H-1B employees gain OPT through the company, and it would be 
detrimental to their business to be forced to terminate these employees 
after they have received training.
    Response: DHS acknowledges that, under this final rule, an employer 
offering a level I wage under the regular cap, and an employer offering 
a level I or II wage under the advanced degree exemption, may have a 
reduced chance of selection than under the current random selection 
process. However, DHS believes that selecting based on wage level is 
necessary and consistent with the intent of the H-1B statutory scheme 
to utilize the numerical cap in a way that incentivizes a U.S. 
employer's recruitment of beneficiaries for positions requiring the 
highest prevailing wage levels or proffering wages equaling or 
exceeding the highest prevailing wage levels relative to their SOC code 
and area of intended employment, either of which correlate with higher 
skill levels.\47\ Prospective employers who seek to ``draw from the 
world's leading talent'' may maximize their likelihood of selection by 
offering wages commensurate with such a high skill level rather than 
offering relatively low wages. Further, DHS disagrees with suggestions 
that this rule would end the H-1B program's utility for certain 
companies or disqualify many foreign workers fulfilling specialty 
occupation jobs. This rule does not affect current H-1B employees 
(unless such workers become subject to the H-1B numerical allocations 
in the limited circumstance that their cap-exempt employment 
terminates) nor does the rule change the eligibility criteria to 
qualify for an H-1B visa.
---------------------------------------------------------------------------

    \47\ See 85 FR 69236, 69239.
---------------------------------------------------------------------------

(c) Impacts on Specific Types of Employers
    Comments: A professional association said that the proposal would 
negatively impact the information technology (IT) industry, which 
already is facing a scarcity of high-skilled candidates. The commenter 
cited a study, which found that there were over 650,000 unfilled 
computer-related jobs posted between September and October 2020, which 
often are filled with employees from abroad with degrees. The proposed 
rule would limit the ability of IT companies to hire foreign workers 
and would stifle U.S. innovation, harm economic growth and, therefore, 
impact job opportunities for U.S. workers. An individual commenter 
discussed how the proposed rule actually would achieve the opposite of 
its desired outcome, which would be increased wages for H-1B workers, 
particularly in the IT sector. The commenter explained that companies 
are realizing that employees can accomplish their jobs at home during 
the COVID-19 crisis. If this is the case, employers could avoid the 
costs associated with foreign worker sponsorship and, instead, employ 
H-1B workers at lower wages while they remain in their respective 
countries. A research institute explained that the proposed rule is 
targeting the IT industry to prevent employers in that industry from 
obtaining H-1B visas or making it too expensive for them to employ H-1B 
visa holders.
    An individual argued that a financial technology company would be 
negatively impacted, giving the example of a Database Administrator 
position, which the commenter said does not require a level III or IV 
prevailing wage, but often is difficult to fill with U.S. workers.
    A couple of individual commenters, an advocacy group, and a 
professional association said that companies need workers through the 
H-1B program because there are not enough qualified U.S. workers in 
STEM fields. Another individual commenter cited a STEM worker shortage, 
arguing that the United States should be ``rolling out the welcome 
mat'' for high-skilled talent. A professional association and an 
individual commenter also addressed the claimed current STEM shortage 
and explained how the proposed rule would further hurt employers' 
ability to hire college-educated foreign workers. A trade association 
stated that the proposed rule would make the H-1B visa program unusable 
for many engineering firms. The association,

[[Page 1689]]

citing data from the National Science Foundation, asserted that the 
engineering workforce is growing slower than the demand for engineers, 
and is growing older. Therefore, the engineering industry needs to be 
able to access labor from around the world to fill key positions. A 
company and a professional association said that U.S. graduates with 
advanced degrees in STEM, such as computer science, IT, or industrial 
engineering, are predominately foreign students and that the NPRM would 
negatively harm companies seeking these employees. A medical device 
company that employs research and development (R&D) engineers stated 
that the rule would result in poorer talent to develop medical 
technologies or higher wages to international talent, which would 
reduce overall R&D resources and impact their ability to deliver the 
best healthcare technologies.
    A trade association said that restricting H-1B visas to senior 
professionals with higher wages would negatively impact manufacturers 
and their ability to hire aliens with STEM education and training to 
fill roles as researchers, scientists, engineers, and technicians. The 
commenter explained that the NPRM may deter aliens from attending 
college in the United States and restrict the talent pipeline. Further, 
the commenter stated that manufacturers rely on a skilled and 
innovative workforce that allows them to remain competitive, and that 
this NPRM will provide other countries a competitive advantage. This is 
coupled with the claim that the workforce challenge is expected to get 
worse in the future, with studies showing that nearly half of the 4.6 
million manufacturing jobs could go unfilled, according to the 
commenter.
    A university and an individual stated that the proposed system 
would encourage employers to artificially inflate their job 
requirements to increase the chance of acceptance through the lottery, 
creating an unfair advantage for larger employers. An individual 
commenter similarly said the rule disproportionately favors companies 
willing to pay the most money to foreign workers. An individual 
commenter said the rule would pit companies against each other to 
provide the highest salary, which would give larger tech companies 
control over the H-1B selection lottery. A law firm stated that start-
up companies would be negatively impacted because they do not have the 
capital to be able to offer ``obscenely high salaries'' to be 
competitive in this process.
    A few commenters noted that the increased difficulty in obtaining 
H-1B workers could have a negative effect on R&D or innovation at their 
companies. For example, a professional association said that companies 
in the automotive sector that have committed hundreds of millions of 
dollars to developing fuel-efficient engines no longer would be able to 
hire and retain recent graduates who have the academic background 
necessary to drive innovation through the H-1B program. Another 
professional association wrote that the proposed rule would negatively 
impact companies developing products that strengthen national security, 
as it would diminish the ability of U.S. employers to hire workers for 
the development of technology including artificial intelligence, 
quantum information science, robotics, and fifth-generation 
communications technology.
    Response: DHS does not believe this rule will have a disparate 
negative impact on IT companies, financial technology companies, 
engineering firms, manufacturers, or companies in any particular 
industry. Additionally, DHS does not believe this rule will 
disadvantage companies developing products that strengthen national 
security or companies driving innovation in the automotive sector. 
Instead, DHS believes this rule will incentivize employers to proffer 
higher wages, or to petition for positions requiring higher skills and 
higher-skilled aliens that are commensurate with higher wage levels, 
thereby attracting the best and the brightest employees and promoting 
innovation across all industries.
    Moreover, DHS disagrees with the assertion that this rule will make 
the H-1B visa program ``unusable'' for engineering firms. While DHS 
acknowledges that some data may show that the engineering workforce is 
growing slower than the demand for engineers, DHS disagrees with the 
commenter that this means engineering firms must hire entry-level 
foreign workers to fill this gap. In fact, DHS data shows that, for 
``Architecture and Engineering Occupations,'' there has been a 
significant number of petitions filed for level III and IV positions. 
Specifically, for FYs 2018 and 2019, employers filed 11,519 and 7,045 
petitions (total of 18,564) for level III and IV positions, 
respectively, compared to 15,625 and 25,147 petitions (total of 40,772) 
for level I and II positions, respectively.\48\ While registrations 
ranked according to prevailing wage level I and below likely will face 
reduced chances of selection, those ranked according to level II and 
greater stand increased chances of selection, as discussed in the NPRM.
---------------------------------------------------------------------------

    \48\ U.S. Department of Homeland Security, U.S. Citizenship and 
Immigration Services, Office of Policy and Strategy, Policy Research 
Division, H1B Petitions for Non Immigrant Worker (I-129) Summarized 
by SOC CODE Occupation by Wage Level As of August 28, 2020, Database 
Queried: Aug. 28, 2020, Report Created: Aug. 17, 2020, Systems: C3 
via SASPME, DOL OFLC Performance DATA H1B for 2018, 2019. This data 
does not further break down how many of these petitions were for 
``Architecture'' occupations versus ``Engineering'' occupations.
---------------------------------------------------------------------------

    DHS also disagrees that the rule will disadvantage the IT industry 
or stifle innovation. Conversely, DHS believes this rule may increase 
innovation and productivity.\49\ Notably, other commenters claimed that 
this rule would favor the IT industry (which DHS disputes as well). 
Again, and as made apparent through these conflicting comments, DHS 
does not believe this rule will have a disparate negative or positive 
impact on the IT industry or companies in any particular industry.
---------------------------------------------------------------------------

    \49\ See Michael R. Strain, The link between wages and 
productivity is strong, American Enterprise Institute (AEI) and 
Institute for the Study of Labor (IZA) (Feb. 4, 2019), https://www.aei.org/research-products/report/the-link-between-wages-and-productivity-is-strong/.
---------------------------------------------------------------------------

    Comment: An individual commenter stated that the rule would 
negatively impact non-profit organizations and public schools because 
they would need to compete with and pay the prevailing wages offered by 
for-profit businesses. Another individual commenter said that non-
profits do not operate to maximize profit, and that their budgets 
cannot accommodate level III or IV prevailing wages. The commenter also 
argued that there is a large need for immigrant social workers who are 
able to better connect with and relate to the large population of 
noncitizens in the United States. Another commenter claimed that, if 
the H-1B proposed changes go into effect, many school districts 
throughout the United States would have a difficult time finding 
teachers.
    Response: DHS does not believe that this rule will have a 
significant negative impact on non-profit organizations or public 
schools. Congress already exempted from the H-1B cap any alien who is 
employed or has received an offer of employment at an institution of 
higher education, a related or affiliated non-profit entity, or a non-
profit research organization or a governmental research 
organization.\50\ Thus, many petitions for non-profits will not be 
affected by this rule. Some public schools also are exempt from the H-
1B cap based on their affiliation with

[[Page 1690]]

institutions of higher education.\51\ For those non-profit entities or 
public school districts that are not cap-exempt and are unable to 
proffer wages that equal or exceed prevailing wage levels with greater 
chances of selection, they may be able to find available and qualified 
workers outside of the H-1B program.\52\
---------------------------------------------------------------------------

    \50\ See INA section 214(g)(5), 8 U.S.C. 1184(g)(5); 8 CFR 
214.2(h)(8)(iii)(F).
    \51\ See Burr Forman McNair et al., School Districts Taking 
Advantage of New H-1B Cap Exempt Regulations, JDSUPRA (June 1, 
2017), https://www.jdsupra.com/legalnews/school-districts-taking-advantage-of-64663/.
    \52\ Data shows that roughly 53 percent of recent college 
graduates in the United States are currently unemployed or 
underemployed. See Darko Jacimovic, College Graduates Unemployment 
Rate in the US, What to Become (Nov. 25, 2020), https://
whattobecome.com/blog/college-graduates-unemployment-rate/
#:~:text=The%20median%20pay%20for%20those,in%20the%20US%20is%202.1%25
 (citing University of Washington data).
---------------------------------------------------------------------------

(d) Other Comments on Impacts on Employers
    Comments: Multiple commenters argued that the rule likely would 
result in a significant and sudden downturn in immigration casework, 
and would cause immigration law firms to scale back operations and lay 
off staff, at a time when the U.S. economy already is in a precarious 
position and unemployment is high.
    Response: DHS disagrees with these commenters as this rule is not 
intended or expected to result in fewer H-1B workers in the United 
States, and will not affect existing H-1B workers, unless such workers 
become subject to the numerical allocations, and therefore should not 
reduce workload for immigration law firms overall. Employers with 
existing H-1B employees, who are not affected by this rule, may still 
need immigration law firm services. In addition, while some employers 
may opt not to participate in the H-1B program as a source for 
potential new employees and may not require immigration law firm 
services for those potential new employees as a result, given the high 
demand for H-1B visas, other employers may have the opportunity to 
begin participating in the program or to increase their existing 
participation in the program and may require increased services of 
immigration firms and attorneys. Therefore, DHS does not anticipate 
that this rule will have a negative overall impact on law firms and 
attorneys.
    Comments: Multiple commenters reasoned that, with a focus on base 
wages, the proposed rule may result in employers abandoning the use of 
variable compensation, such as bonuses, profit-sharing payments, stock, 
and other incentives tied to performance. A commenter argued that 
variable pay can benefit a company by focusing organizations, business 
units, and individuals on specific goals and objectives. Alternatively, 
employers offering such compensation packages may be disadvantaged 
relative to others offering solely wage-based compensation.
    Response: DHS recognizes that companies may offer various forms of 
benefits and benefits provided as compensation for services, such as 
cash bonuses, stock options, paid insurance, retirement and savings 
plans, and profit-sharing plans. While cash bonuses may, in limited 
circumstances, be counted towards the annual salary,\53\ other forms of 
benefits such as stock options, profit sharing plans, and flexible work 
schedules may not be readily quantifiable or guaranteed, which means 
that they cannot reliably be calculated into proffered wages. Further, 
as one commenter pointed out, if a beneficiary is highly valued, that 
beneficiary may be able to discuss with their employer changes to their 
compensation structure that could result in a more easily quantifiable 
proffered wage.
---------------------------------------------------------------------------

    \53\ See 20 CFR 655.731(c)(2).
---------------------------------------------------------------------------

v. Economy
    Comments: Multiple commenters said the proposal would have the 
following negative impacts on the economy without providing substantive 
rationale: The rule would hurt the overall economy; the American public 
would assume the increased cost of labor through hidden corporate taxes 
or increased costs of services; this would affect U.S. economic 
development because many young people will be blocked by this new rule; 
this proposal would increase economic and cultural divisions that 
already exist because it would eliminate all ``interactive 
possibilities from social and cultural disciplines''; the proposed rule 
would harm the U.S. economy because the United States needs 
international students to bring funds to the country to study and live; 
international students educated at U.S. colleges have better 
acculturation to U.S. society, which is very important for long-term 
growth of the economy.
    An individual commenter stated that the proposal would ``gut the 
system'' and lead to further economic decline. Other commenters argued 
that this rule would hurt the economy during a global pandemic when the 
economy is suffering. An individual commenter said that, to rebound 
from the pandemic and meet the challenges that face the United States, 
the country must expand opportunities for skilled workers, particularly 
in the STEM and health professions. A few individual commenters 
asserted, without evidence, that the proposal is based on the ``false 
premise'' that individuals who earn more contribute more to the 
economy, and that the rule promotes falsities about the workers who 
strengthen the U.S. economy. A few individual commenters stated that 
the proposal provides no evidence that higher wages correspond with 
labor needs of employers or provide a greater economic benefit.
    Response: DHS does not agree that this rule will harm the U.S. 
economy or economic development, increase costs for the American 
public, or increase cultural or economic divisions. Instead, DHS 
believes that this rule will facilitate the admission of higher-skilled 
workers, which will benefit the economy and increase the United States' 
competitive edge in attracting the best and the brightest in the global 
labor market, consistent with the goals of the H-1B program. It may 
also benefit U.S. workers, as employers that might have petitioned for 
cap-subject H-1B workers to fill relatively lower-paid, lower-skilled 
positions, may be incentivized to hire available and qualified U.S. 
workers for those positions.
    Comments: A university said that foreign graduates do not take jobs 
from U.S. citizens, but, rather, they create new jobs and contribute 
``billions'' to the economy. An individual commenter argued that 
attracting the best and brightest from around the world for education 
and employment helps to drive innovation and benefits the U.S. economy 
and nation as a whole, but the proposed rule would not lead to that 
outcome. An individual cited numerous studies in arguing that the 
current framework, in contrast to a proposed ``best and brightest'' 
prioritization, generates more economic benefits of the type intended 
by Congress. Several other commenters argued that the rule would cause 
professionals to seek careers elsewhere. A law firm stated that the 
rule could halt innovation in the United States, as studies have shown 
a positive correlation between foreign students and innovation.
    An advocacy group said that the rule would risk preventing highly 
skilled professionals from bringing their talents to the United States, 
despite their education and skill, which likely would result in the 
United States missing out on the contributions of needed talent across 
multiple industries. A trade association stated that ``each facet'' of 
the U.S. workforce is enabled by an

[[Page 1691]]

immigration system that allows access to foreign talent to allow 
employers to remain competitive, and argued that highly-skilled foreign 
executives and managers help run key aspects of U.S. companies that 
create thousands of jobs for domestic workers. The commenter said that 
it is this ``synergy'' between aliens and U.S. residents that underpins 
the United States' ``vibrant'' economy. An attorney argued that the 
United States would lose the benefits that come with younger, recently 
educated professionals whose value already has been assessed against 
the ease of employing U.S. applicants. An advocacy group said that the 
U.S. population is aging, and the country needs immigrants to help the 
economy grow. In addition, the commenter said that, for the United 
States' innovation future, the country needs international students. An 
individual commenter stated that favoring aliens far into their careers 
over young professionals is ``perverse'' because they may have only a 
decade of their careers left, which is not in the country's best 
interest. Another commenter said that this proposal could result in 
future H-1B participants who are older, not necessarily high-skilled, 
and have no exposure to American culture. The commenter said 
international students and the H-1B program are key drivers of job 
growth and economic dynamism, and altering the H-1B program to exclude 
recent graduates may stymie these positive effects.
    Response: DHS appreciates the economic contributions that highly 
skilled aliens make to the United States. Rather than reducing such 
contributions or halting innovation, DHS believes that this rule will 
incentivize employers to attract and recruit highly-skilled aliens, as 
opposed to the current random selection process that ``favors companies 
hiring workers with interchangeable skills en masse over those with a 
pressing need to hire specific foreign experts,'' \54\ and, thus, will 
benefit the economy overall.\55\ The rule is not intended to, and DHS 
does not expect that it will, reduce the number of H-1B workers. DHS 
also notes that this rule does not preclude recent graduates from 
obtaining H-1B status or employers from directly sponsoring a recent 
foreign graduate for an employment-based immigrant visa. Although this 
rule will reduce the chance of selection for those at lower wage levels 
in years of excess demand, DHS believes that selecting by wage level in 
such years is more consistent with the dominant legislative purpose of 
the H-1B program, which is to help U.S. employers fill labor shortages 
in positions requiring highly skilled or highly educated workers. 
Furthermore, DHS disagrees with the commenter that selecting higher 
paid and/or more highly skilled workers necessarily means that 
employers will be selecting those with less time left in their careers 
and thus those who will not be in the country's best interest. In 
addition, DHS does not believe that the time spent in the workforce 
determines the degree of contribution to the economy or the country. As 
explained in the NPRM and above, DHS believes that the rule will 
maximize H-1B cap allocations so that they more likely would go to the 
best and brightest workers.
---------------------------------------------------------------------------

    \54\ See Drew Calvert, Companies Want to Hire the Best 
Employees. Can Changes to the H-1B Visa Program Help?, 
KelloggInsight (Feb. 6, 2017), https://insight.kellogg.northwestern.edu/article/how-to-revamp-the-visa-program-for-highly-skilled-workers (further noting ``[u]nder the 
current system, U.S. companies are often discouraged from even 
attempting to hire a foreign worker, despite how uniquely qualified 
he or she might be'').
    \55\ See Muzaffar Chrishti and Stephen Yale-Loehr, The 
Immigration Act of 1990: Unfinished Business a Quarter-Century 
Later, Migration Policy Institute (July 2016), https://www.migrationpolicy.org/sites/default/files/publications/1990-Act_2016_FINAL.pdf (``Sponsors of [the Immigration Act of 1990 which 
created the H-1B program as it exists today] believed that 
facilitating the admission of higher-skilled immigrants would 
benefit the economy and increase the United States' competitive edge 
in attracting the `best and the brightest' in the global labor 
market.'').
---------------------------------------------------------------------------

    Comments: Several commenters said that the proposal could have the 
unintended consequence of ``forcing'' entire businesses offshore. A 
professional association said that the proposal would result in more 
companies outsourcing jobs abroad and would discourage innovation. An 
individual commenter said that each job that is off-shored will take 
with it multiple other U.S. positions because the United States will 
lose the economic contributions of foreign workers, such as rented 
apartments, home mortgages, cares, groceries, and more. Another 
commenter said that this rule would make it more expensive for 
companies to hire in U.S. locations, and they eventually would move 
entire sections of their operation overseas or outsource labor, hurting 
U.S. workers in the long run.
    Response: DHS disagrees with the commenters who state that this 
rule will cause employers to move operations to other countries. These 
commenters cited research \56\ suggesting that restricting H-1B 
immigration is likely to cause multinational firms to offshore their 
highly skilled labor as the basis for concerns about this rule. 
However, DHS disagrees that this rule restricts H-1B immigration. 
Again, this rule does not affect the statutorily mandated annual H-1B 
cap, nor does it affect substantive eligibility requirements for an H-
1B visa. While DHS acknowledges this rule may impose costs to 
individual employers, neither the comments nor sources cited address 
the countervailing impact on those level III and IV employers impacted 
or benefited by this rule. DHS believes that this rule, instead, will 
facilitate the admission of higher-skilled workers, which will benefit 
the economy and increase the United States' competitive edge in 
attracting the best and the brightest in the global labor market, 
consistent with the goals of the H-1B program.
---------------------------------------------------------------------------

    \56\ See Britta Glennon, How Do Restrictions on High-Skilled 
Immigration Affect Offshoring? Evidence from the H-1B Program, 
National Bureau of Economic Research (July 2020), https://www.nber.org/papers/w27538; Michelle Marks, Skilled, foreign workers 
are giving up on their American dreams--and turning to Canada, 
Business Insider (Mar. 31, 2019), https://www.businessinsider.com/h-1b-visa-rejects-moving-to-canada-2019-3. Notably, the latter article 
focuses on how the current random lottery process disincentivizes 
prospective high-skilled beneficiaries seeking H-1B visas in the 
United States and incentivizes them to seek visas in countries with 
more merit-based selection processes.
---------------------------------------------------------------------------

    Comments: A couple of commenters, including a trade association, 
said that, in many cases, the proposed rule would require employers to 
pay their H-1Bs more than the actual market wages for U.S. citizens 
holding comparable positions. An individual commenter argued that 
prioritizing wages conflicts with the current DOL Prevailing Wage 
system, which ensures that H-1B holders do not depress the wages of 
U.S. workers. A company said that artificially raising the amount of 
money an employer must devote to paying H-1B workers would result in 
the company employing fewer workers overall, including U.S. workers. 
The commenter's reasoning was that, as a salary-focused ``arms race'' 
begins, employers would rely less and less on labor and more on 
technology and other means to avoid the unsustainable wage levels. 
Another commenter said the proposal would create the issue of wage 
discrimination against U.S. employees because an employer would have to 
offer a higher level of pay to H-1B applicants than to citizens for the 
same position.
    Response: To the extent that these comments refer to wages required 
as a result of the DOL IFR, DHS notes that, on December 1, 2020, the 
U.S. District Court for the Northern District of California issued an 
order in Chamber of Commerce, et al. v. DHS, et al., No. 20-cv-7331, 
setting aside the Interim

[[Page 1692]]

Final Rule Strengthening Wage Protections for the Temporary and 
Permanent Employment of Certain Aliens in the United States, 85 FR 
63872 (Oct. 8, 2020), which took effect on October 8, 2020, and 
implemented reforms to the prevailing wage methodology for the 
Permanent Employment Certification, H-1B, H-1B1, and E-3 visa programs. 
Similarly, on December 3, 2020, the U.S. District Court for the 
District of New Jersey issued a preliminary injunction in ITServe 
Alliance, Inc., et al. v. Scalia, et al., No. 20-cv-14604, applying to 
the plaintiffs in that case. On December 3, 2020, DOL announced that it 
is taking necessary steps to comply with the courts' orders and is no 
longer implementing the IFR.\57\
---------------------------------------------------------------------------

    \57\ U.S. Department of Labor, Employment and Training 
Administration, Foreign Labor Certification, Announcements, https://www.dol.gov/agencies/eta/foreign-labor (last visited Dec. 21, 2020).
---------------------------------------------------------------------------

    As explained in the NPRM, the ranking process established by this 
rule does not alter the prevailing wage level associated with a given 
position for DOL purposes, which is informed by a comparison of the 
requirements for the proffered position to the normal requirements for 
the occupational classification. While DHS acknowledges that this final 
rule will result in more registrations (or petitions, as applicable) 
being selected for relatively higher paid, higher-skilled 
beneficiaries, the rule does not change, and does not conflict with, 
prevailing wage requirements. This final rule merely fills in a 
statutory gap regarding how to administer the H-1B numerical 
allocations in years of excess demand.
    DHS disagrees with the contentions that, by raising salaries for H-
1B workers, this rule will cause employers to reduce their overall 
workforce including U.S. workers, rely less on labor, or pay their H-1B 
workers more than their U.S. workers holding comparable positions. 
First, by incentivizing employers to use the H-1B program to fill 
positions requiring higher prevailing wage levels, or proffering wages 
commensurate with higher prevailing wage levels, employers may see a 
possible increase in productivity, as explained in the NPRM. Because of 
the possible increase in productivity, it is not necessarily the case 
that employers would employ fewer workers overall or rely less on 
labor. DHS believes that this rule will facilitate the admission of 
higher-skilled workers, which will benefit the economy and increase the 
United States' competitive edge in attracting the best and the 
brightest in the global labor market, consistent with the goals of the 
H-1B program.
    Second, concerning the contentions that this rule would force 
employers to pay their H-1B workers more than their U.S. workers or 
otherwise harm U.S. workers, this final rule does not mandate employers 
to pay more for their H-1B workers; again, this rule merely fills in a 
statutory gap regarding how to administer the H-1B numerical 
allocations in years of excess demand. And as stated in the NPRM, this 
rule may provide increased opportunities for lower-skilled U.S. workers 
in the labor market to compete for work as there would be fewer H-1B 
workers paid at the lower wage levels to compete with U.S. workers, and 
may incentivize employers to recruit available and qualified U.S. 
workers.
c. General Wage-Based Selection Concerns
    Comments: Many commenters, mostly individual commenters, generally 
disagreed with the proposed rule and expressed wage-based selection 
concerns without providing substantive rationale, stating that: Wage is 
not the only factor to judge the value of a worker, and the rule 
erroneously assumes that salary is the best indicator of a worker's 
value to society; H-1B wages are commensurate with experience and 
should not be used to establish eligibility; basing selection on wage 
levels violates U.S. values, such as fairness and justice; every 
position has ``many wages,'' so it is better to distinguish people 
within a position rather than based on wages; certain locations in the 
United States, such as rural areas, have lower wages compared to large 
cities with higher wage levels; the proposed rule would hamper regional 
development for rural areas because employers in these communities 
would not be able to pay the high wages to hire H-1B workers; whether 
an individual can get an H-1B visa depends on how important their work 
is to the country and does not depend on how much they can earn; the 
rule will damage U.S. talent capital investments because ``current 
price does not equal to final quality''; ranking by wage is not an 
accurate reflection of one's skill level because it could simply be 
based on age or years of experience; there are lower-paying jobs which 
still need to be filled by H-1B visa workers; basing selection on 
salary is unfair because the salary starting point and growth speed are 
different for different industries; the proposed rule does not address 
abuse in the H-1B program, such as staffing companies filing multiple 
petitions for each person and full-time workers filing as part-time so 
that their salary on file is doubled; this proposal artificially could 
increase wages, and wages should be determined by supply and demand 
instead; and, in some industries or locations, the beneficiaries' base 
salaries are similar enough to fall into one or two categories, which 
would make them likely to be the same as a random lottery under DOL's 
new prevailing wage level calculations.
    Response: DHS believes that an employer who offers a higher wage 
than required by the prevailing wage level does so because that higher 
wage is a clear reflection of the beneficiary's value to the employer, 
which reflects the unique qualities the beneficiary possesses. Thus, 
DHS believes this rule will benefit the best and brightest workers in 
all professions. DHS does not agree that this rule will favor certain 
high-paying professions or companies, as the rule takes into account 
the wage level relative to the SOC code--as opposed to salary alone--
when ranking registrations. Regarding the concern for depressed areas, 
the rule equalizes geographic differences in salary amounts by taking 
into account the area of intended employment when ranking 
registrations. Particularly, as stated in the final rule, USCIS will 
select H-1B registrations based on the highest OES prevailing wage 
level that the proffered wage equals or exceeds for the relevant SOC 
code and area(s) of intended employment. In ranking according to the 
wage level, the final rule makes it so that registrations for the same 
wage level will be ranked the same regardless of whether their 
proffered wages are different owing to their areas of intended 
employment.
    Regarding the concerns about fairness, DHS believes that this rule 
is fair to U.S. workers, H-1B workers, and petitioners. Conversely, the 
current random selection process is not fair to U.S. workers whose 
wages may be adversely affected by an influx of relatively lower-paid 
H-1B workers, or to U.S. employers who have sought to petition for 
foreign workers at higher OES prevailing wage levels and are not 
selected.
3. Other General Feedback
    Comment: An immigration practitioner in Guam noted that many H-1B 
visas are awarded to engineers coming to perform projects for the 
military realignment in Guam, and that this rule poses a threat to 
those projects' timely completions.
    Response: DHS disagrees with this commenter. H-1B workers in Guam 
(or the Commonwealth of the Northern

[[Page 1693]]

Mariana Islands (CNMI)) are exempt from the statutory numerical 
limitation for H-1B classification until December 31, 2029.\58\ As this 
final rule simply modifies the registration requirement applicable to 
cap-subject H-1B petitions, it will not affect cap-exempt H-1B 
petitions for engineers or other H-1B workers coming to work in Guam 
(or the CNMI).
---------------------------------------------------------------------------

    \58\ See 48 U.S.C. 1806(b)(A).
---------------------------------------------------------------------------

B. Basis for Rule

1. DHS Statutory/Legal Authority
    Comments: A few individuals supported the rule, saying that the 
changes to H-1B selection are consistent with Congressional intent and 
statutory language. Another commenter argued that the INA's silence is 
an ``invitation'' for USCIS to establish criteria to prioritize 
petitions. Likewise, a research organization commented that the 
statutory language is ambiguous and USCIS' proposal would reasonably 
address the ambiguity.
    Response: DHS agrees with these comments that the rule is 
consistent with Congressional intent and statutory language; the 
statute is silent as to how USCIS must select H-1B petitions, or 
registrations, to be filed toward the numerical allocations in years of 
excess demand; the term ``filed'' as used in INA section 214(g)(3), 8 
U.S.C. 1184(g)(3), is ambiguous; and these changes are reasonable and 
within DHS' general authority. DHS, therefore, is relying on its 
general statutory authority to implement these regulations to design a 
selection system that prioritizes selection generally based on the 
highest prevailing wage level that a proffered wage equals or exceeds. 
See INA section 103(a), 214(a) and (c)(1), 8 U.S.C. 1103(a), 1184(a) 
and (c)(1).
    Comment: A business association generally argued that Acting 
Secretary Chad Wolf's tenure is in violation of the Homeland Security 
Act and the Federal Vacancies Reform Act (FVRA). Similarly, a 
professional association commented that Acting Secretary Wolf's tenure 
also violates Executive Order (E.O.) 13753, which established a DHS 
order of succession. The commenter added a citation to a U.S. 
Government Accountability Office (GAO) report concluding that Acting 
Secretary Wolf's appointment violated the order of succession. The 
commenter also provided citations to court decisions overturning DHS 
rulemakings based on Acting Secretary Wolf's authority. Finally, the 
commenter argued that DHS's attempted corrections of issues concerning 
Acting Secretary Wolf's tenure are insufficient to cure rules 
promulgated under his authority.
    Response: DHS disagrees with the commenters that Acting Secretary 
Wolf's tenure is in violation of the HSA and the FVRA; Secretary Wolf 
is validly acting as Secretary of Homeland Security. On April 9, 2019, 
then-Secretary Nielsen, who was Senate-confirmed, used the authority 
provided by 6 U.S.C. 113(g)(2) to establish the order of succession for 
the Secretary of Homeland Security.\59\ This change to the order of 
succession applied to any vacancy. This exercise of the authority to 
establish an order of succession for DHS pursuant to 6 U.S.C. 113(g)(2) 
superseded the FVRA and the order of succession found in Executive 
Order 13753, 81 FR 90667 (Dec. 9, 2016). As a result of this change, 
and pursuant to 6 U.S.C. 113(g)(2), Kevin K. McAleenan, who was Senate-
confirmed as the Commissioner of U.S. Customs and Border Protection, 
was the next successor and served as Acting Secretary without time 
limitation. Acting Secretary McAleenan subsequently amended the 
Secretary's order of succession pursuant to 6 U.S.C. 113(g)(2), placing 
the Under Secretary for Strategy, Policy, and Plans position third in 
the order of succession, below the positions of the Deputy Secretary 
and Under Secretary for Management.\60\ Because the Deputy Secretary 
and Under Secretary for Management positions were vacant when Mr. 
McAleenan resigned, Mr. Wolf, as the Senate-confirmed Under Secretary 
for Strategy, Policy, and Plans, was the next successor and began 
serving as the Acting Secretary.
---------------------------------------------------------------------------

    \59\ DHS, Orders of Succession and Delegations of Authorities 
for Named Positions, Delegation No. 00106, Revision No. 08.5 (Apr. 
10, 2019).
    \60\ DHS, Orders of Succession and Delegations of Authorities 
for Named Positions, Delegation No. 00106, Revision No. 08.6 (Nov. 
8, 2019).
---------------------------------------------------------------------------

    Further, because he has been serving as the Acting Secretary 
pursuant to an order of succession established under 6 U.S.C. 
113(g)(2), the FVRA's prohibition on a nominee's acting service while 
his or her nomination is pending does not apply, and Mr. Wolf remains 
the Acting Secretary notwithstanding President Trump's September 10, 
2020, transmission to the Senate of Mr. Wolf's nomination to serve as 
DHS Secretary.\61\
---------------------------------------------------------------------------

    \61\ Compare 6 U.S.C. 113(a)(1)(A) (cross-referencing the FVRA 
without the ``notwithstanding'' caveat), with id. 113(g)(1)-(2) 
(noting the FVRA provisions and specifying, in contrast, that 
section 113(g) provides for acting secretary service 
``notwithstanding'' those provisions); see also 5 U.S.C. 
3345(b)(1)(B) (restricting acting officer service under section 
3345(a), in particular, by an official whose nomination has been 
submitted to the Senate for permanent service in that position).
---------------------------------------------------------------------------

    That said, there have been recent challenges to whether Mr. Wolf's 
service is invalid, resting on the erroneous contention that the orders 
of succession issued by former Secretary Nielsen and former Acting 
Secretary McAleenan were invalid. The Department believes those 
challenges are not based on an accurate view of the law. But even if 
those contentions are legally correct--meaning that neither former 
Secretary Nielsen nor former Acting Secretary McAleenan issued a valid 
order of succession--under 6 U.S.C. 113(g)(2)--then the FVRA would have 
applied, and Executive Order 13753 would have governed the order of 
succession for the Secretary of Homeland Security from the date of 
former Secretary Nielsen's resignation.
    The FVRA provides an alternative basis for an official to exercise 
the functions and duties of the Secretary temporarily in an acting 
capacity. In that alternate scenario, under the authority of the FVRA, 
Mr. Wolf would have been ineligible to serve as the Acting Secretary of 
DHS after his nomination was submitted to the Senate, 5 U.S.C. 
3345(b)(1)(B), and Peter Gaynor, the Administrator of the Federal 
Emergency Management Agency (FEMA), would have--by operation of 
Executive Order 13753--become eligible to exercise the functions and 
duties of the Secretary temporarily in an acting capacity. This is 
because Executive Order 13753 pre-established the President's 
succession order for DHS when the FVRA applies. Mr. Gaynor would have 
been the most senior official eligible to exercise the functions and 
duties of the Secretary under that succession order, and thus would 
have become the official eligible to act as Secretary once Mr. Wolf's 
nomination was submitted to the Senate.\62\ Then, in this alternate 
scenario in which, as assumed above, there was no valid succession 
order under 6 U.S.C. 113(g)(2), the submission of Mr. Wolf's nomination 
to the Senate would have restarted the FVRA's time limits. 5 U.S.C. 
3346(a)(2).
---------------------------------------------------------------------------

    \62\ 5 U.S.C. 3346(a)(2).
---------------------------------------------------------------------------

    Out of an abundance of caution, and to minimize any disruption to 
DHS and to the Administration's goal of maintaining homeland security, 
on November 14, 2020, with Mr. Wolf's nomination still pending in the 
Senate, Mr. Gaynor exercised the authority of Acting Secretary that he 
would have had (in the absence of any governing succession order under 
6 U.S.C. 113(g)(2)) to designate a new order of succession under 6 
U.S.C. 113(g)(2) (the

[[Page 1694]]

``Gaynor Order'').\63\ In particular, Mr. Gaynor issued an order of 
succession with the same ordering of positions listed in former Acting 
Secretary McAleenan's November 2019 order. The Gaynor Order thus placed 
the Under Secretary for Strategy, Policy, and Plans above the FEMA 
Administrator in the order of succession. Once the Gaynor Order was 
executed, it superseded any authority Mr. Gaynor may have had under the 
FVRA and confirmed Mr. Wolf's authority to continue to serve as the 
Acting Secretary. Hence, regardless of whether Mr. Wolf already 
possessed authority pursuant to the November 8, 2019, order of 
succession effectuated by former Acting Secretary McAleenan (as the 
Departments have previously concluded), the Gaynor Order provides an 
alternative basis for concluding that Mr. Wolf currently serves as the 
Acting Secretary.\64\
---------------------------------------------------------------------------

    \63\ Mr. Gaynor signed an order that established an identical 
order of succession on September 10, 2020, the day Mr. Wolf's 
nomination was submitted, but it appears he signed that order before 
the nomination was received by the Senate. To resolve any concern 
that his September 10 order was ineffective, Mr. Gaynor signed a new 
order on November 14, 2020. Prior to Mr. Gaynor's new order, the 
U.S. District Court for the District of New York issued an opinion 
concluding that Mr. Gaynor did not have authority to act as 
Secretary, relying in part on the fact that DHS did not notify 
Congress of Administrator Gaynor's service, as required under 5 
U.S.C. 3349(a). Batalla Vidal v. Wolf, No. 16CV4756NGGVMS, 2020 WL 
6695076, at *9 (E.D.N.Y. Nov. 14, 2020). The Departments disagree 
that the FVRA's notice requirement affects the validity of an acting 
officer's service; nowhere does section 3349 indicate that agency 
reporting obligations are tied to an acting officer's ability to 
serve.
    \64\ On October 9, 2020, the U.S. District Court for the 
District of Columbia issued an opinion indicating that it is likely 
that section 113(g)(2) orders can be issued by only Senate-confirmed 
secretaries of DHS and, thus, that Mr. Gaynor likely had no 
authority to issue a section 113(g)(2) succession order. Nw. 
Immigrant Rights Project v. United States Citizenship & Immigration 
Servs., No. CV 19-3283 (RDM), 2020 WL 5995206, at *24 (D.D.C. Oct. 
8, 2020). This decision is incorrect because the authority in 
section 113(g)(2) allows ``the Secretary'' to designate an order of 
succession, 6 U.S.C. 113(g)(2), and an ``acting officer is vested 
with the same authority that could be exercised by the officer for 
whom he acts.'' In re Grand Jury Investigation, 916 F.3d 1047, 1055 
(D.C. Cir. 2019). The Acting Secretary of DHS is accordingly 
empowered to exercise the authority of ``the Secretary'' of DHS to 
``designate [an] order of succession.'' 6 U.S.C. 113(g)(2). In 
addition, this is the only district court opinion to have reached 
such a conclusion about the authority of the Acting Secretary, and 
the Departments are contesting that determination.
---------------------------------------------------------------------------

    On November 16, 2020, Acting Secretary Wolf ratified any and all 
actions involving delegable duties that he took between November 13, 
2019, through November 16, 2020, including the NPRM that is the subject 
of this rulemaking.
    Under section 103(a)(1) of the Act, 8 U.S.C. 1103(a)(1), the 
Secretary is charged with the administration and enforcement of the INA 
and all other immigration laws (except for the powers, functions, and 
duties of the President, the Attorney General, and certain consular, 
diplomatic, and Department of State officials). The Secretary is also 
authorized to delegate his or her authority to any officer or employee 
of the agency and to designate other officers of the Department to 
serve as Acting Secretary.\65\ The Homeland Security Act further 
provides that every officer of the Department ``shall perform the 
functions specified by law for the official's office or prescribed by 
the Secretary.'' \66\
---------------------------------------------------------------------------

    \65\ See INA 103, 8 U.S.C. 1103, and 6 U.S.C. 113(g)(2).
    \66\ See 6 U.S.C. 113(f).
---------------------------------------------------------------------------

    Comments: Multiple commenters asserted that this rule is ultra 
vires, inconsistent with Congressional intent, and a clear violation of 
the INA. Specifically, they contend that the INA sets forth the 
procedure for allocating visas and prioritizes the selection of H-1B 
cap-subject petitions in the ``order in which they are filed[,]'' which 
does not limit selection under the H-1B cap to those employers who pay 
the most or otherwise authorize DHS to impose substantive selection 
criteria. Several commenters stated that USCIS lacks the statutory 
authority to make such a change and cannot use the statute's purported 
silence as an invitation to adopt criteria, such as wage level or skill 
level, to prioritize the selection of H-1B cap subject visas. Some of 
these commenters also disagreed with DHS about the statute's silence 
and stated that Congress has previously made specific modification to 
the way in which H-1B cap numbers are allocated, specifically, the 
American Competitiveness in the Twenty-First Century Act of 2000 
providing for the numerically limited exemption for beneficiaries who 
have earned a master's or higher degree from a U.S. institution of 
higher education. If Congress intended to make any other changes to the 
statutory language that H-1B cap numbers ``shall be issued . . . in the 
order in which petitions are filed[,]'' it could have done so as part 
of that or subsequent legislation. One commenter cited several cases in 
arguing that general rulemaking authority and statutory silence on an 
issue is not tantamount to Congressional authorization for rulemaking 
on a given issue; another commenter stated that the statute is neither 
silent nor ambiguous as it states that H-1B visas shall be issued, or 
H-1B status granted, ``in order in which petitions are filed''; and a 
trade association commented that the use of the term ``shall'' 
indicates that there is no ambiguity as to how petitions may be sorted. 
One commenter cited several INA provisions in arguing that, where it 
intended to do so, Congress made distinctions within classes of 
potential visa applicants, and thus the statute reflects Congressional 
intent not to distinguish on other bases. One commenter said that the 
proposed rule would be found unlawful in court, because the law does 
not make an allowance for basing H-1B visas on salary, and the rule is 
contrary to the plain language of the statute. A form letter campaign 
wrote that the law does not require employers to pay H-1B workers more 
than U.S. workers, and the law does not allow the agency to prioritize 
petitions for higher-wage applicants.
    Response: DHS disagrees with the commenters' assertions that the 
statute is not silent or ambiguous and that this rulemaking is ultra 
vires. As stated in the NPRM, this rule is consistent with and 
permissible under DHS's general statutory authority provided in INA 
sections 103(a), 214(a) and (c), 8 U.S.C. 1103(a), 1184(a) and (c), and 
HSA section 102, 6 U.S.C. 112.\67\ DHS created the registration 
requirement, based on its general statutory authority and its 
discretion to determine how best to handle simultaneous submissions in 
excess of the numerical allocations, to effectively and efficiently 
administer the H-1B cap selection process. Congress expressly 
authorized DHS to determine eligibility for H-1B classification upon 
petition by the importing employer, and to determine the form and 
information required to establish eligibility.\68\ ``Moreover, INA 
section 214(g)(3) does not provide that petitions must be processed in 
the order `received,' `submitted,' or `delivered.' Instead, they must 
be processed in the order `filed.' What it means to `file' a petition 
and how to handle simultaneously received petitions are ambiguous and 
were not dictated by Congress in the INA.'' \69\ Rather, these 
implementation details are entrusted to DHS to administer. So, while 
the statute provides annual limitations on the number of aliens who may 
be issued initial H-1B visas or otherwise provided H-1B nonimmigrant 
status, the statute does not specify how petitions must be

[[Page 1695]]

selected and counted toward the numerical allocations when USCIS 
receives more petitions on the first day than are projected as needed 
to reach the H-1B numerical allocations. Consequently, ``Congress left 
to the discretion of USCIS how to handle simultaneous submissions'' and 
``USCIS has discretion to decide how best to order those petitions.'' 
\70\
---------------------------------------------------------------------------

    \67\ See 85 FR 69236, 69242.
    \68\ See INA section 214(c)(1), 8 U.S.C. 1184(c)(1). See also 
Walker Macy, 243 F.Supp.3d at 1176 (``Congress left to the 
discretion of USCIS how to handle simultaneous submissions, [and 
accordingly], USCIS has discretion to decide how best to order those 
petitions.'').
    \69\ See 243 F.Supp.3d at 1175.
    \70\ See 243 F.Supp.3d at 1176.
---------------------------------------------------------------------------

    DHS acknowledges that INA section 214(g)(3), 8 U.S.C. 1184(g)(3), 
states that aliens subject to the H-1B numerical limitation in INA 
section 214(g)(1), 8 U.S.C. 1184(g)(1), shall be issued H-1B visas or 
otherwise provided H-1B nonimmigrant status ``in the order in which 
petitions are filed for such visas or status.'' Contrary to the 
commenters' assertions, this statutory provision, and, more 
specifically the term ``filed'' as used in INA section 214(g)(3), 8 
U.S.C. 1184(g)(3), is ambiguous.\71\ As discussed in the preamble to 
the Registration Requirement for Petitioners Seeking to File H-1B 
Petitions on Behalf of Cap-Subject Aliens Final Rule (H-1B Registration 
Final Rule), an indiscriminate application of this statutory language 
would lead to absurd or arbitrary results; the longstanding approach 
has been to project the number of petitions needed to reach the 
numerical allocations.\72\
---------------------------------------------------------------------------

    \71\ See 243 F.Supp.3d at 1167-68 (finding that USCIS's rule 
establishing the random-selection process was a reasonable 
interpretation of the INA that was entitled at least to Skidmore 
deference because what it means to ``file'' a petition is ambiguous 
and undefined under the INA and that Congress left to the discretion 
of USCIS how to handle simultaneous submissions. Specifically, the 
court said: ``Additionally, because Sec.  1184(g)(3) was passed by 
Congress in 1990 when there was not widespread public use of 
electronic submissions, it is logical that Congress anticipated H-1B 
petitions would be submitted either by U.S. mail or other carriers. 
Thus, it was reasonable to anticipate multiple petitions would 
arrive on the same day. It is therefore a reasonable interpretation 
of `filed' to include some further administrative step beyond mere 
receipt at a USCIS office to `order' multiple petitions that arrived 
in such a manner on the same day.''). The availability of electronic 
submission of H-1B registrations has not alleviated this issue as 
multiple registrations can still be submitted simultaneously.
    \72\ See U.S. Department of Homeland Security, U.S. Citizenship 
and Immigration Services, Registration Requirement for Petitioners 
Seeking To File H-1B Petitions on Behalf of Cap-Subject Aliens, 84 
FR 888, 896 (Jan. 31, 2019).
---------------------------------------------------------------------------

    A literal application of this statutory language, as suggested by 
various commenters, would lead to an absurd or impossible result. The 
Department of State (DOS) does not issue H-1B visas, and USCIS does not 
otherwise provide H-1B status, based on the order in which petitions 
are filed. Such a literal application would necessarily mean that 
processing delays pertaining to a petition earlier in the petition 
filing order would preclude issuance of a visa or provision of status 
to all other H-1B petitions later in the petition filing order. To 
avoid such an absurd result, the longstanding approach to implementing 
the numerical limitation has been to project the number of petitions 
needed to reach the numerical limitation. The issue, however, is how to 
select registrations or petitions, as applicable, when the number of 
submissions exceeds the number projected as needed to reach the 
numerical limitation or the advanced degree exemption, particularly 
when those submissions all occur within the same narrow window of time. 
DHS is not changing the approach to administering the numerical 
allocations as it relates to the use of projections. DHS is, however, 
changing the selection process for selecting registrations or 
petitions, as applicable, to determine which petitions are properly 
filed and eligible for further processing consistent with INA section 
214(g)(3), 8 U.S.C. 1184(g)(3).
    DHS created the registration requirement based on its general 
statutory authority and its discretion to determine how best to handle 
simultaneous submissions in excess of the numerical allocations, to 
effectively and efficiently administer the H-1B cap selection process. 
As provided in the H-1B Registration Final Rule, unless suspended by 
USCIS, registration is an antecedent procedural step that must be 
completed by prospective petitioners before they are eligible to file 
an H-1B cap-subject petition. As with the filing of petitions, and as 
explained above, a first-come, first-served basis for submitting 
electronic registrations is unreasonable and practically impossible.
    While the random selection of registrations or petitions, as 
applicable, DHS established in the H-1B Registration Final Rule is 
reasonable, it is neither the optimal nor the exclusive method of 
selecting petitions or registrations toward the numerical allocations 
when more registrations or petitions, as applicable, are submitted than 
projected as needed to reach the numerical allocations.
    In that vein, DHS concludes that prioritization and selection based 
on wage levels ``is a reasonable and rational interpretation of USCIS' 
obligations under the INA to resolve the issues of processing H-1B 
petitions'' \73\ in years of excess demand and is within DHS's existing 
statutory authority.
---------------------------------------------------------------------------

    \73\ See Walker Macy, 243 F.Supp.3d at 1175.
---------------------------------------------------------------------------

    Comment: Multiple commenters cited a USCIS response to a comment in 
the H-1B Registration Final Rule and wrote that USCIS previously 
supported the position that prioritization of selection based on salary 
or other substantive factors would require explicit Congressional 
authorization. Commenters also cited a 1991 rulemaking in arguing that 
Immigration and Naturalization Service (INS) previously acknowledged 
that the INA does not authorize establishing criteria to prioritize 
petitions. These commenters also provided language from a 1990 INS 
rulemaking indicating that a statutory change would be necessary to 
exclude entry-level H-1B workers. A law firm argued that the Agency 
cannot reverse a position of this kind without providing a reasoned 
explanation.
    Response: DHS disagrees with the commenters that prior statements 
by INS or USCIS preclude DHS from making the changes set forth in this 
final rule. DHS acknowledged in the proposed rule that the preamble to 
the H-1B Registration Final Rule states that prioritization of 
registration selection on factors other than degree level, such as 
salary, would require statutory changes. DHS also explained that the 
prior statement did not provide further analysis regarding that 
conclusion and that upon further review and consideration of the issue 
initially raised in comments to the Registration Requirement for 
Petitioners Seeking to File H-1B Petitions on Behalf of Cap-Subject 
Aliens NPRM (H-1B Registration Proposed Rule),\74\ DHS concluded that 
the statute is silent as to how USCIS must select H-1B petitions, or 
registrations, to be filed toward the numerical allocations in years of 
excess demand. DHS continues to believe that the changes made in this 
final rule are within its general authority, consistent with the 
existing statute, and despite prior statements to the contrary, does 
not require statutory change or explicit congressional authorization. 
DHS is relying on its general statutory authority to implement the 
statute and, consistent with that authority, is revising the 
regulations to implement a selection system that realistically, 
effectively, efficiently, and more faithfully administers the cap 
selection process. See INA section 103(a), 214(a) and (c)(1), 8 U.S.C. 
1103(a), 1184(a) and (c)(1).
---------------------------------------------------------------------------

    \74\ U.S. Department of Homeland Security, U.S. Citizenship and 
Immigration Services, Registration Requirement for Petitioners 
Seeking to File H-1B Petitions on Behalf of Cap-Subject Aliens, 83 
FR 62406 (proposed Dec. 3, 2018).

---------------------------------------------------------------------------

[[Page 1696]]

    DHS disagrees with the assertion that this rule will exclude entry-
level workers. This final rule merely revises how USCIS will select H-
1B cap-subject petitions toward the H-1B numerical allocations to 
determine which petitions are ``filed'' and eligible for further 
processing. The rule does not change substantive eligibility 
requirements. While DHS acknowledges that registrations or petitions, 
as applicable, based on a proffered wage that corresponds to a level I 
or level II wage likely will face a reduced chance of selection in the 
H-1B cap selection process, the rule does not preclude selection of 
registrations or petitions for entry-level workers.
    DHS also disagrees with the commenters' claim that the prior 
statements by INS in the preamble to the Temporary Alien Workers 
Seeking Classification Under the Immigration and Nationality Act final 
rule are relevant to this final rule.\75\ INS was responding to general 
comments about administering the numerical limitation, but was not 
considering how to administer the H-1B numerical allocations when the 
number of submitted petitions exceeds the numerical allocation. Such 
circumstances did not exist at the infancy of the H-1B program and when 
the numerical limitation was created, so this issue was not considered 
at that time. Again, this final rule merely revises how USCIS will 
select H-1B cap-subject registrations or petitions, as applicable, 
toward the H-1B numerical allocations to determine which petitions are 
``filed'' and thus eligible for further processing; in addition, this 
final rule addresses how USCIS will select registrations or petitions, 
as applicable, when the number of submitted registrations or petitions 
exceeds the projected number needed to reach the numerical allocations. 
Once properly filed, H-1B cap-subject petitions generally will be 
processed in order based on the assigned filing date.
---------------------------------------------------------------------------

    \75\ U.S. Department of Justice, Immigration and Naturalization 
Service, Temporary Alien Workers Seeking Classification Under the 
Immigration and Nationality Act, 56 FR 61111 (Dec. 2, 1991).
---------------------------------------------------------------------------

    DHS also disagrees that comments made by INS in the preamble to the 
1990 final rule,\76\ are relevant to the interpretation of DHS's 
authority to implement the numerical allocations under the existing 
statute. The 1990 rule preceded the enactment of the Immigration Act of 
1990 (IMMACT 90), Public Law 101-649, 104 Stat. 4978, the creation of 
the H-1B classification for specialty occupation workers, and the 
implementation of a numerical limitation on H-1B workers. As such, the 
statements cited by the commenter are not relevant to the 
interpretation of the existing statute, including the authority of DHS 
to administer the H-1B numerical allocations.
---------------------------------------------------------------------------

    \76\ U.S. Department of Justice, Immigration and Naturalization 
Service, Temporary Alien Workers Seeking Classification Under the 
Immigration and Nationality Act, 55 FR 2606 (Jan. 26, 1990).
---------------------------------------------------------------------------

    Comment: A company stated that USCIS' ability to interpret the term 
``filed'' is not unlimited and that the proposed, complex 
prioritization scheme unambiguously exceeds the scope of the term. 
Similarly, a law firm and individual argued that, according to Walker 
Macy v. USCIS, USCIS does not have ``unfettered'' discretion to 
determine which petitions are filed, but, instead, must reasonably 
interpret the statute. The law firm said the proposed interpretation is 
unreasonable because of the impacts it would have on U.S. companies and 
innovation. Multiple commenters said that the current system of putting 
applicants in a lottery when they apply simultaneously comports with 
the INA's language, but that the proposed methodology would 
impermissibly deviate from the INA. Similarly, a company stated that 
Congress' guiding principal for selecting H-1B petitions is timing and 
that the current lottery system conforms to this principal. An 
individual commenter similarly argued, citing Walker Macy v. USCIS, 
that the proposed rule deviates from the temporal principal without 
statutory or judicial basis. Other commenters asserted that USCIS' 
reference to the ``dominant legislative purpose'' of the statute, 
construed as prioritizing the application of the most skilled workers, 
is unreasonable. The commenters reasoned that the INA simply 
prioritizes filling labor shortages, without regard to wage levels. 
Several commenters stated that the allowance of H-1B visas for aliens 
with undergraduate degrees precludes prioritizing petitions based on 
wage levels.
    Response: DHS disagrees with the commenters' assertions that this 
rule misstates the scope of the term ``filed'' or that the rule is 
based on an unreasonable interpretation of the statute. As stated in 
the NPRM and in response to other comments in this preamble, DHS 
believes that this rule is consistent with and permissible under DHS's 
general statutory authority provided in INA sections 103(a), 214(a) and 
(c), 8 U.S.C. 1103(a), 1184(a) and (c), and HSA section 102, 6 U.S.C. 
112.\77\ DHS created the registration requirement, based on its general 
statutory authority and its discretion to determine how best to handle 
simultaneous submissions in excess of the numerical allocations (i.e., 
situations where prioritizing petitions solely in a temporal manner is 
impossible), to effectively and efficiently administer the H-1B cap 
selection process. Congress expressly authorized DHS to determine 
eligibility for H-1B classification upon petition by the importing 
employer, and to determine the form and information required to 
establish eligibility.\78\ ``Moreover, INA section 214(g)(3) does not 
provide that petitions must be processed in the order `received,' 
`submitted,' or `delivered.' Instead, they must be processed in the 
order `filed.' What it means to `file' a petition and how to handle 
simultaneously received petitions are ambiguous and were not dictated 
by Congress in the INA.'' \79\ Rather, these implementation details are 
entrusted for DHS to administer. So, while the statute provides annual 
limitations on the number of aliens who may be issued initial H-1B 
visas or otherwise provided H-1B nonimmigrant status, the statute does 
not specify how petitions must be selected and counted toward the 
numerical allocations when USCIS receives more petitions on the first 
day than are projected as needed to reach the H-1B numerical 
allocations. Consequently, ``Congress left to the discretion of USCIS 
how to handle simultaneous submissions'' and ``USCIS has discretion to 
decide how best to order those petitions.'' \80\
---------------------------------------------------------------------------

    \77\ See 85 FR 69236, 69242.
    \78\ See INA section 214(c)(1), 8 U.S.C. 1184(c)(1). See also 
Walker Macy, 243 F.Supp.3d at 1176 (``Congress left to the 
discretion of USCIS how to handle simultaneous submissions, [and, 
accordingly], USCIS has discretion to decide how best to order those 
petitions.'').
    \79\ See 243 F.Supp.3d at 1175.
    \80\ See 243 F.Supp.3d at 1176.
---------------------------------------------------------------------------

    DHS believes, contrary to commenters' assertions, that 
prioritization and selection generally based on the highest OES wage 
level that the proffered wage equals or exceeds ``is a reasonable and 
rational interpretation of USCIS's obligations under the INA to resolve 
the issues of processing H-1B petitions'' \81\ in years of excess 
demand and is within DHS's existing statutory authority. ``It is a 
cardinal canon of statutory construction that statutes should be 
interpreted harmoniously with their dominant legislative purpose.'' 
\82\ Yet, under the

[[Page 1697]]

current registration system the majority of H-1B cap-subject petitions 
have been filed for positions certified at the two lowest wage levels: 
I and II.\83\ This contradicts the dominant legislative purpose of the 
statute because the intent of the H-1B program is to help U.S. 
employers fill labor shortages in positions requiring highly skilled or 
highly educated workers.\84\ By changing the selection process, for 
these years of excess demand, from a random lottery selection to a 
wage-level-based selection process, DHS will implement the statute more 
faithfully to its dominant legislative purpose, increasing the chance 
of selection for registrations or petitions seeking to employ 
beneficiaries at wages that would equal or exceed the level IV or level 
III prevailing wage for the applicable occupational classification.
---------------------------------------------------------------------------

    \81\ See 243 F.Supp.3d at 1175.
    \82\ See Spilker v. Shayne Labs., Inc., 520 F.2d 523, 525 (9th 
Cir. 1975) (citing F.T.C. v. Fred Meyer, Inc., 390 U.S. 341, 349 
(1968) (``[W]e cannot, in the absence of an unmistakable directive, 
construe the Act in a manner which runs counter to the broad goals 
which Congress intended it to effectuate.'')).
    \83\ See U.S. Department of Homeland Security, U.S. Citizenship 
and Immigration. Services, Office of Policy and Strategy, Policy 
Research Division, H-1B Wage Level by Top 25 Metro, Database 
Queried: July 10, 2020, Report Created: July 14, 2020, Systems: C3 
via SASPME, DOL OFLC Performance DATA H1B for 2018, 2019, Bureau of 
Labor Statistics: Occupational Employment Statistics for 2018, 2019 
(establishing that, for the top 25 metropolitan service areas for 
which H-1B beneficiaries were sought in FYs 2018 and 2019, all level 
I wages, 84% of level II wages, and 76% of ``No Wage Level'' wages 
fell below the Bureau of Labor Statistics median wages); Daniel 
Costa and Ron Hira, H-1B Visas and Prevailing Wage Level, Economic 
Policy Institute (May 4, 2020), https://www.epi.org/publication/h-1b-visas-and-prevailing-wage-levels/ (explaining that ``three-fifths 
of all H-1B jobs were certified at the two lowest prevailing wages 
in 2019...., and, ``[i]n fiscal year (FY) 2019, a total of 60% of H-
1B positions certified by Department of Labor (DOL) had been 
assigned wage levels [I and II]: 14% were at H-1B Level 1 (the 17th 
percentile) and 46% per at H-1B Level 2 (34th percentile)''). Data 
concerning FY 2018 and 2019 petition filings pre-dates the 
publication of the DOL IFR, 85 FR 63872.
    \84\ See H.R. Rep. 101-723(I) (1990), as reprinted in 1990 
U.S.C.C.A.N. 6710, 6721 (stating ``The U.S. labor market is now 
faced with two problems that immigration policy can help to correct. 
The first is the need of American business for highly skilled, 
specially trained personnel to fill increasingly sophisticated jobs 
for which domestic personnel cannot be found and the need for other 
workers to meet specific labor shortages'').
---------------------------------------------------------------------------

    Comments: A couple of commenters said the changes made by the rule 
should be decided by Congress. Similarly, a few commenters stated 
generally that the proposal is not authorized by Congress or is in 
violation of Congressional intent. A few commenters said that 8 U.S.C. 
1184(g)(5)(C) (the exemption from the cap for beneficiaries who have 
earned a master's or higher degree from a U.S. institution of higher 
education) demonstrates that, where Congress intends to target 
petitions for highly skilled workers, it has done so explicitly. Others 
commented that, when this cap was legislated, it was clear that 
petitions still would exceed visa allocations and that the statute 
should be understood to have intentionally omitted any change to the 
priority of visa petitions; and one commenter added that the proposed 
rule would impact the ratio of advanced-degree holders to other H-1B 
recipients that Congress authorized when providing the 20,000 U.S. 
advanced degree exemption. A company stated that the proposal is 
untethered to statutory language, providing examples of Congressional 
``guidance'' and reasoning that nowhere in such guidance or the INA is 
there reference to salary or the OES prevailing wage level as a basis 
for selecting H-1B petitions. A professional association stated that 
effectively imposing an additional wage requirement would be 
inappropriate, especially for physicians.
    Response: DHS disagrees with these comments. As stated in the NPRM 
and as explained above, this rule is consistent with Congressional 
intent and is permissible under DHS's general statutory authority 
provided in INA sections 103(a), 214(a) and (c), 8 U.S.C. 1103(a), 
1184(a) and (c), and HSA section 102, 6 U.S.C. 112.\85\ Furthermore, 
DHS disagrees with the commenters' assertions that the statute, or 
legislative history, indicates that Congress has spoken to the specific 
issue addressed by this final rule: how to select petitions toward the 
numerical allocations when the number of petitions filed is greater 
than the number of petitions projected as needed to reach the H-1B 
numerical allocations. As explained in the NPRM and in response to 
other comments, the statute is silent on this issue. DHS created the 
registration requirement, based on its general statutory authority and 
its discretion to determine how best to handle simultaneous submissions 
in excess of the numerical allocations, to effectively and efficiently 
administer the H-1B cap selection process. Congress expressly 
authorized DHS to determine eligibility for H-1B classification upon 
petition by the importing employer, and to determine the form and 
information required to establish eligibility.\86\ ``Moreover, INA 
section 214(g)(3) does not provide that petitions must be processed in 
the order `received,' `submitted,' or `delivered.' Instead, they must 
be processed in the order `filed.' What it means to `file' a petition 
and how to handle simultaneously received petitions are ambiguous and 
were not dictated by Congress in the INA.'' \87\ Rather, these 
implementation details are entrusted for DHS to administer. Nor should 
it be understood that Congress had spoken on this issue when the cap 
was legislated because it was not clear at that time that petitions 
would exceed visa allocations on the very first day that petitions 
could be filed, thus leading to a situation where prioritizing 
petitions solely in a temporal manner is impossible. So, while the 
statute provides annual limitations on the number of aliens who may be 
issued initial H-1B visas or otherwise provided H-1B nonimmigrant 
status, the statute does not specify how petitions must be selected and 
counted toward the numerical allocations when USCIS receives more 
petitions on the first day than are projected as needed to reach the H-
1B numerical allocations. Consequently, ``Congress left to the 
discretion of USCIS how to handle simultaneous submissions'' and 
``USCIS has discretion to decide how best to order those petitions.'' 
\88\
---------------------------------------------------------------------------

    \85\ 85 FR 69236, 69242.
    \86\ See INA section 214(c)(1), 8 U.S.C. 1184(c)(1). See also 
Walker Macy, 243 F.Supp.3d at 1176 (``Congress left to the 
discretion of USCIS how to handle simultaneous submissions, [and 
accordingly], USCIS has discretion to decide how best to order those 
petitions.'').
    \87\ See 243 F.Supp.3d at 1175.
    \88\ See 243 F.Supp.3d at 1176.
---------------------------------------------------------------------------

    Comments: Some commenters expressed that this rule is not 
consistent with the statutory framework Congress implemented for the 
admission of foreign workers into the United States, as Congress 
designated DOL to have the primary authority in protecting and 
enforcing the statute related to the U.S. labor market and wages. 
Multiple commenters stated that Congress did not intend for wage levels 
to serve as a basis for preferring certain petitions, as evidenced by 
the statute's prevailing wage requirement. An individual commented that 
the preamble's statement that ``Congress expressly authorized DHS to 
determine eligibility for H-1B classification upon petition by the 
importing employer'' fails to recognize that this authorization is for 
USCIS' determination regarding specific employers' applications, rather 
than for categorically determining which wages or jobs qualify for H-1B 
visas.
    Response: DHS disagrees with the commenters assertion that this 
rule is inconsistent with the statute. As explained in the NPRM and in 
response to other comments, DHS believes that this rule is consistent 
with its statutory authority. DHS agrees that DOL has the primary 
authority to protect the wages and working conditions of U.S. workers 
consistent with the provisions of INA section 212(n), 8 U.S.C. 1182(n), 
but

[[Page 1698]]

those provisions are separate from INA section 214, 8 U.S.C. 1184, and 
the statutory provisions pertaining to the form and manner of 
submitting H-1B petitions and the administration of the H-1B numerical 
allocations, both of which are within DHS's authority consistent with 
INA section 214, 8 U.S.C. 1184. Further, the fact that Congress 
authorized DOL to administer and enforce a wage requirement, including 
setting prevailing wage levels for the H-1B program, does not speak to 
or limit DHS' authority to establish an orderly, efficient, and fair 
system for selecting registrations (or, if applicable, petitions), 
based on OES prevailing wage levels, toward the projected number needed 
to reach annual H-1B numerical allocations.
    Comments: Multiple commenters, as part of a form letter campaign, 
stated that the legal impact of the proposed rule must be considered 
together with other recent rules, including the recently published DOL. 
Another commenter stated that USCIS should work with DOL to 
appropriately set up the wage levels.
    Response: On December 1, 2020, the U.S. District Court for the 
Northern District of California issued an order in Chamber of Commerce, 
et al. v. DHS, et al., No. 20-cv-7331, setting aside the DOL IFR. 
Similarly, on December 3, 2020, the U.S. District Court for the 
District of New Jersey issued a preliminary injunction in ITServe 
Alliance, Inc., et al. v. Scalia, et al., No. 20-cv-14604, applying to 
the plaintiffs in that case. DOL has taken necessary steps to comply 
with the courts' orders and is no longer implementing the DOL IFR. DHS, 
therefore, disagrees with the commenter's assertion that DHS must 
consider the DOL IFR in the context of this final rule.
    DHS also disagrees with the premise of the commenters' 
recommendation that DHS work with DOL to set appropriate wage levels. 
This final rule is not setting wage levels. As explained in the NPRM 
and in response to other comments, this final rule changes how DHS will 
select registrations or petitions, as applicable, toward the projected 
number needed to reach the annual H-1B numerical allocations. While 
this final rule uses DOL wage levels to determine how to rank and 
select registrations or petitions, as applicable, based generally on 
the wage level that the proffered wage equals or exceeds, this final 
rule is not mandating employers pay a higher wage nor is it changing 
wage levels.
    Comments: One commenter noted the proposal would make the H-1B 
process similar to that of the O-1 visa, but that Congress knowingly 
avoided doing so in 1990. According to the commenter, the new rule, in 
effect, is redrafting the 1990 legislation to make the H-1B visa more 
closely resemble the O-1 visa and Congress certainly could have ranked 
H-1Bs in 1990 if it wanted to do so. Other commenters also noted that 
the O-1 visa is for those with extraordinary ability, not those just 
starting their careers, and that the H-1B program serves different 
purposes. Another commenter also cited a House sponsor of the H-1B 
program as saying that the O-1 program, not H-1B, was the ``best and 
brightest'' program.
    Response: DHS disagrees with the claim that it is reforming the H-
1B classification to more closely resemble the O-1 classification.\89\ 
While DHS acknowledges that this rule will result in more registrations 
(or petitions, as applicable) being selected for relatively higher-
paid, higher-skilled beneficiaries, the rule is not changing 
substantive eligibility requirements for the H-1B classification and is 
not, in any way, reforming the H-1B classification to more closely 
resemble the O-1 classification. This final rule merely fills in a 
statutory gap regarding how to administer the H-1B numerical 
allocations in years of excess demand. The statute provides annual 
limitations on the number of aliens who may be issued initial H-1B 
visas or otherwise provided H-1B nonimmigrant status, but it does not 
specify how petitions must be selected and counted toward the numerical 
allocations when USCIS receives more petitions on the first day than 
are projected as needed to reach the H-1B numerical allocations. 
Consequently, ``Congress left to the discretion of USCIS how to handle 
simultaneous submissions'' and ``USCIS has discretion to decide how 
best to order those petitions.'' \90\ The current scheme of pure 
randomization of selectees does not optimally serve Congress' purpose 
for the H-1B program. Therefore, this rule will revise the H-1B cap 
selection process to better align with the purpose of the H-1B program 
and Congressional intent, taking into account the pervasive 
oversubscription of demand for registrations and petitions.
---------------------------------------------------------------------------

    \89\ The O-1 nonimmigrant classification is for aliens with 
extraordinary ability in the sciences, arts, education, business, or 
athletics, or who have a demonstrated record of extraordinary 
achievement in the motion picture and television industry. See INA 
section 101(a)(15)(O), 8 U.S.C. 1101(a)(15)(O); 8 CFR 214.2(o).
    \90\ See Walker Macy, 243 F.Supp.3d at 1176.
---------------------------------------------------------------------------

    Comment: An individual noted that Congress previously considered 
legislation called the I-Squared Act that sought to alter the selection 
process by ranking H-1Bs based on a number of factors rather than 
having a random lottery. That legislation has not passed, which is an 
indicator that Congress does not see the change as a priority. 
Conversely, an individual commenter wrote that Congress intended to 
delegate H-1B visa allocation to USCIS and that the I-Squared bill 
failed because of other provisions it contained.
    Response: DHS disagrees with the assertion that the fate of the I-
Squared bill is relevant to interpretation of the existing statute. 
While Congress has considered such legislation, the failure of such 
legislation (or any other proposed legislation) to be passed and signed 
into law does not change the existing authority DHS has under the INA. 
As explained in response to other comments, DHS believes that selection 
of registrations or petitions, as applicable, based on corresponding 
wage level is consistent with the discretion provided to DHS in the 
current statute to administer the annual H-1B numerical allocations.
    Comment: A few commenters cited the Senate Report for The American 
Competitiveness Act as demonstrating Congressional opposition to 
granting H-1B visas on a preferential basis to the highest-paid aliens. 
The commenters argued that the language of the Senate Report 
contradicts E.O. 13788 and that E.O. 13788 does not establish 
Congressional purpose or policy, and its emphasis on highly paid 
beneficiaries as applied in this context would be inconsistent with 
Congress' direction.
    Response: DHS disagrees with these comments because they ignore the 
fact that DHS has proposed to modify the registration requirement 
within the context of the annual demand for H-1B cap-subject petitions, 
including those filed for the advanced degree exemption, consistently 
exceeding annual statutory allocations.
    Although Congress instructed that cap-subject H-1B visas (or H-1B 
nonimmigrant status) be allocated based on the order in which petitions 
are filed, it was silent with regard to the allocation of 
simultaneously submitted petitions. While the random lottery selection 
process is a reasonable solution, DHS believes that an allocation 
generally based on the highest OES prevailing wage level that the 
proffered wage equals or exceeds better fulfills Congress' stated 
intent that the H-1B program help U.S. employers fill labor shortages 
in positions requiring highly skilled workers.\91\
---------------------------------------------------------------------------

    \91\ H.R. Rep. 101-723(I) (1990), as reprinted in 1990 
U.S.C.C.A.N. 6710, 6721 (stating ``The U.S. labor market is now 
faced with two problems that immigration policy can help to correct. 
The first is the need of American business for highly skilled, 
specially trained personnel to fill increasingly sophisticated jobs 
for which domestic personnel cannot be found and the need for other 
workers to meet specific labor shortages'').

---------------------------------------------------------------------------

[[Page 1699]]

    This legislative history, as cited in the proposed rule, is 
consistent with the Senate Report the commenters cite.\92\ Both support 
the notion that Congress intended the H-1B program to fill labor 
shortages in positions requiring highly skilled workers. Contrary to 
the commenter's assertion that DHS only cited to E.O. 13788 to support 
this priority, DHS cited to the legislative history of the Immigration 
Act of 1990, the legislation that created the H-1B program, to support 
the priority to allocate generally based on the highest OES prevailing 
wage level that the proffered wage equals or exceeds.\93\ DHS cited to 
E.O. 13788 solely to note that a wage-level based selection was 
consistent with the administration's policy goals, not as legal 
authority for the proposed rule.
---------------------------------------------------------------------------

    \92\ 85 FR 69236, 69238.
    \93\ 85 FR 69236, 69238.
---------------------------------------------------------------------------

    Comment: An individual commenter and a professional association 
argued that Presidential Proclamation 10052 is not authoritative to the 
extent that it conflicts with the INA, and that the proposal fails to 
explain how it ``is consistent with applicable law or is practicable at 
this point in time,'' especially in light of the forthcoming change in 
administration.
    Response: DHS disagrees with the assertion that Presidential 
Proclamation 10052 conflicts with the INA.\94\ In any event, the 
authority for this regulation stems not from that proclamation but from 
DHS's general statutory authority provided in INA sections 103(a), 
214(a) and (c), 8 U.S.C. 1103(a), 1184(a) and (c), and HSA section 102, 
6 U.S.C. 112.
---------------------------------------------------------------------------

    \94\ See Proclamation 10052 of June 22, 2020, Suspension of 
Entry of Immigrants and Nonimmigrants Who Present a Risk to the 
United States Labor Market During the Economic Recovery Following 
the 2019 Novel Coronavirus Outbreak, 85 FR 38263 (June 25, 2020).
---------------------------------------------------------------------------

    Comment: One commenter stated that salary also is a proxy variable 
for age, as, in most industries, more experienced individuals get paid 
higher wages. This commenter asked whether USCIS has the authority to 
apply ``salary'' as a secondary sorting mechanism for H-1B 
registrations, and if so, what would prevent USCIS also from using 
arbitrary sorting mechanisms such as age, geography, country of birth, 
race, religion, or gender.
    Response: DHS disagrees that salary is a proxy for age. While 
salary is a reasonable proxy for skill, level of skill is not 
necessarily correlated to age. DHS also disagrees with the commenter's 
implied assertion that wage level is an arbitrary sorting mechanism. As 
explained in the NPRM and in response to other comments, corresponding 
wage level is an objective way to prioritize selection in a manner 
consistent with the general purpose of the H-1B classification. DHS has 
not proposed, and does not intend to propose, selecting registrations 
or petitions, as applicable, based on factors that are unreasonable, 
inappropriate, or inconsistent with the purpose of the H-1B 
classification.
2. Substantive Comments on the Need for the Rule/DHS Justification
    Comments: An anonymous commenter wrote that the proposed rule's 
wage standard for H-1B visa eligibility is arbitrary and capricious. 
The commenter said that DHS does not explain the rationale behind 
making wages the sole indicator of a worker's eligibility for visa 
sponsorship. The commenter also argued that the rule's rationale is 
flawed because it would not protect U.S. workers, since the H-1B visa 
applies only to specialty occupations. Another commenter opined that 
this rule is an attempt to add a new wage requirement as a part of H-1B 
eligibility. This commenter stated that this attempt is inconsistent 
with Congressional intent and would be an abuse of discretion by the 
Department.
    Response: DHS believes these commenters misstate the scope of this 
rule. This rule does not make ``wages the sole indicator of a worker's 
eligibility for [H-1B] visa sponsorship'' and does not otherwise change 
the substantive standards for H-1B eligibility. DHS stated in the NPRM 
that registration, when required, is merely an antecedent procedural 
step that must be completed by prospective petitioners before they are 
eligible to file an H-1B cap-subject petition (emphasis added).\95\ 
Even if registration were suspended, the rule merely revises how USCIS 
would select H-1B cap-subject petitions toward the H-1B numerical 
allocations to determine which petitions are ``filed'' and thus 
eligible for further processing. But the rule does not change 
substantive eligibility requirements. DHS also disagrees with the 
commenter's assertion that the rule would not better protect U.S. 
workers. As explained in response to other comments, prioritizing the 
selection of H-1B registrations or petitions, as applicable, based 
generally on the highest OES prevailing wage level that the proffered 
wage equals or exceeds will incentivize employers to offer higher wages 
or higher-skilled positions to H-1B workers and disincentivize the 
existing widespread use of the H-1B program to fill relatively lower-
paid or lower-skilled positions, for which there may be available and 
qualified U.S. workers. DHS, therefore, believes that this rule will 
benefit U.S. workers who compete against entry-level H-1B workers and 
will incentivize H-1B petitioners to offer higher wages, further 
benefiting U.S. workers whose wages might otherwise be depressed by an 
influx of relatively lower-paid, lower-skilled H-1B workers.
---------------------------------------------------------------------------

    \95\ 85 FR 69236, 69243. See also H-1B Registration Final Rule, 
84 FR 888, 900 (``submission of the registration is merely an 
antecedent procedural requirement to properly file the petition. It 
is not intended to replace the petition adjudication process or 
assess the eligibility of the beneficiary for the offered 
position.'').
---------------------------------------------------------------------------

a. Support for the DHS Rationale
    Comments: Many commenters expressed support for the proposed rule 
and DHS justification. Several commenters stated that the proposed rule 
is based on a true premise that salary equates with value. A research 
organization stated that there is no evidence to suggest that the H-1B 
program was designed to fill entry-level jobs at entry-level wages, and 
prioritizing H-1B petitions at high wage levels will safeguard U.S. 
wage standards and increase labor efficiency. The commenter went on to 
state that prioritizing higher H-1B wage levels will not undermine the 
program, but, rather, will incentivize recruitment and retention, while 
also helping U.S. workers in labor categories that have seen stagnant 
wage growth in recent history. The commenter reasoned that, because 
employers do not have to test the market before hiring H-1B workers, 
wages are a good indicator of the actual market need for workers in a 
given field.
    Response: DHS agrees with these commenters and thanks them for 
their support.
b. Rule Is Based on False Premises/Rationale
    Comment: Many commenters, including those who participated in an 
orchestrated form letter campaign, stated that the proposal is based on 
the false premise that salary alone equates with value and that 
individuals who earn more in their profession contribute more to the 
economy. An individual commenter discussed the fundamental flaw in 
associating level I and level II workers with low-paying, low-skilled 
work, where in reality, entry-level doctors, lawyers, engineers, and

[[Page 1700]]

architects are professionals performing specialty occupations. A 
professional association stated that the salaries associated with each 
wage level do not fully capture an individual's contribution to 
society; in fact, there often is an inverse correlation. A professional 
association said DHS has created a condition where employers would be 
able to buy their way into the proposed H-1B visa cap selection system 
by offering a higher wage to the beneficiary regardless of skill, which 
would negate the stated purpose of the proposed rule to garner more 
high-skilled workers in the U.S. workforce.
    Some commenters said the proposed rule is based on the false 
premise that foreign workers depress wages and take away jobs from U.S. 
workers. A university stated that the foreign workers this rule targets 
fill critical needs in the U.S. labor market, bolster innovation, 
create jobs, and drive economic growth. The commenter, along with an 
individual commenter, stated that some studies show foreign workers 
have a positive impact on wages overall. Similarly, an advocacy group 
said limiting the amount of high-skilled foreign workers in the United 
States does not mean that there will be more jobs available to U.S. 
workers; rather, it would mean many companies would shift jobs 
overseas. The commenter stated that, if the H-1B program were expanded, 
it could result in up to 1.2 million new jobs for U.S. workers. The 
commenter went on to state that the program does not have a 
``depressive effect'' on U.S. worker wages, and concluded by saying 
that, by restricting the H-1B program, the proposed rule would not have 
the intended effects of boosting American jobs and wages. An individual 
commenter stated that USCIS already has protected U.S. workers by 
increasing fees and updating the definition of ``specialized 
knowledge,'' and there is no need to distort the labor markets and harm 
U.S. competitiveness at a time when the U.S. can once again be a leader 
in technology development.
    Response: DHS disagrees with these comments. DHS believes that 
salary generally is a reasonable proxy for skill level.\96\ As stated 
in the NPRM, in most cases where the proffered wage equals or exceeds 
the prevailing wage, a prevailing wage rate reflecting a higher wage 
level is a reasonable proxy for the higher level of skill required for 
the position, based on the way prevailing wage determinations are made. 
DHS believes that an employer who offers a higher wage than required by 
the prevailing wage level does so because that higher wage is a clear 
reflection of the beneficiary's value to the employer, which, even if 
not related to the position's skill level per se, reflects the unique 
qualities the beneficiary possesses. While we believe that the rule may 
incentivize an employer to proffer a higher wage to increase their 
chances of selection, we also believe the employer only would do so if 
it was in their economic interest to do so based on the beneficiary's 
skill level and relative value to the employer.
---------------------------------------------------------------------------

    \96\ U.S. Department of Labor, Education and Pay Level, https://www.dol.gov/general/topic/wages/educational (``Generally speaking, 
jobs that require high levels of education and skill pay higher 
wages than jobs that require few skills and little education.'') 
(last visited Dec. 21, 2020). See also Ed Andrews, Relationship 
between Skills and Wages, Smart Solutions Group (Dec. 2015), http://smartsolutionsgroup.net/wp-content/uploads/2015/12/Relationship-Between-Skills-and-Wages.pdf (``There is a very strong correlation 
between Skills Levels and Wages--as expected, higher skills levels 
have higher wages and low skill levels have lower wages.); DOL IFR, 
85 FR 63872 (it is a ``largely self-evident proposition that workers 
in occupations that require sophisticated skills and training 
receive higher wages based on those skills.'').
---------------------------------------------------------------------------

    DHS acknowledges that aliens may be offered salaries at level I or 
level II prevailing wages to work in specialty occupations and may be 
eligible for H-1B status. However, DHS also believes that, in years of 
excess demand exceeding annual limits for H-1B visas subject to the 
numerical allocations, the current process of random selection does not 
optimally serve Congress' purpose for the H-1B program. Instead, in 
years of excess demand, selection of H-1B cap-subject petitions on the 
basis of the highest OES prevailing wage level that the proffered wage 
equals or exceeds is more consistent with the purpose of the H-1B 
program and with the administration's goal of improving policies such 
that H-1B classification is more likely to be awarded to petitioners 
seeking to employ higher-skilled and higher-paid beneficiaries.\97\
---------------------------------------------------------------------------

    \97\ See Kirk Doran et al., The Effects of High-Skilled 
Immigration Policy on Firms: Evidence from Visa Lotteries, 
University of Notre Dame (Feb. 2016), https://gspp.berkeley.edu/assets/uploads/research/pdf/h1b.pdf (noting that ``additional H-1Bs 
lead to lower average employee earnings and higher firm profits'' 
and the authors' ``results are more supportive of the narrative 
about the effects of H-1Bs on firms in which H-1Bs crowd out 
alternative workers, are paid less than the alternative workers whom 
they crowd out, and thus increase the firm's profits despite no 
measurable effect on innovation''); John Bound et al., Understanding 
the Economic Impact of the H-1B Program on the U.S., Working Paper 
23153, National Bureau of Economic Research (Feb. 2017), http://www.nber.org/papers/w23153 (``In the absence of immigration, wages 
for US computer scientists would have been 2.6% to 5.1% higher and 
employment in computer science for US workers would have been 6.1% 
to 10.8% higher in 2001.'').
---------------------------------------------------------------------------

    DHS does not agree that the rule will limit or restrict the number 
of H-1B workers, and that is not the rule's intent. DHS also does not 
agree that this rule will result in companies shifting jobs overseas or 
will harm U.S. competitiveness. Rather, DHS believes that the admission 
of higher-skilled workers would benefit the economy and increase the 
United States' competitive edge in the global labor market.
    Comment: An individual commenter stated that the lowest paid H-1B 
worker makes more than H-2 workers, and yet, the administration has 
expanded the H-2 guest worker program and is presently seeking to lower 
prevailing wages for these workers, suggesting that ``increasing the 
wages paid to foreign workers is not actually a consistent policy or 
priority for the administration.'' The commenter also said the NPRM's 
reference to incidents of long-time U.S. employees being laid off in 
favor of younger workers are actually more complicated and show the 
declining enrollment in IT and STEM fields by U.S. students. The 
commenter went on to say that H-1B workers are more costly than U.S. 
workers, which demonstrates that there are not enough similarly 
situated U.S. workers.
    Response: DHS disagrees with the commenter's assertions. Regarding 
the H-2 program, DHS disagrees that the administration's policies have 
been inconsistent, as these programs serve different purposes. As DHS 
has stated above and in the NPRM, the intent of the H-1B program is to 
help U.S. employers fill labor shortages in positions requiring highly 
skilled or highly educated workers. DHS believes that this rule 
reflects that intent more faithfully than a random selection process. 
DHS also disagrees that the instances cited in the NPRM of U.S. 
employers replacing qualified and skilled U.S. workers with relatively 
lower-skilled H-1B workers shows declining enrollment in STEM fields by 
U.S. students, and does not agree with the commenter's assessment 
regarding insufficient U.S. workers.\98\ Actually,

[[Page 1701]]

the fact that more than a third of recent American graduates with STEM 
degrees do not obtain work in a STEM field indicates that there is no 
shortage of qualified recent American graduates to fill STEM jobs.\99\
---------------------------------------------------------------------------

    \98\ See e.g., Hal Salzman, Daniel Kuehn, and B. Lindsay Lowell, 
Guestworkers in the High-Skill U.S. Labor Market: An analysis of 
supply, employment, and wage trends, Economic Policy Institute (Apr. 
24, 2013), at 26, https://files.epi.org/2013/bp359-guestworkers-high-skill-labor-market-analysis.pdf (``In other words, the data 
suggest that current U.S. immigration policies that facilitate large 
flows of guestworkers appear to provide firms with access to labor 
that will be in plentiful supply at wages that are too low to induce 
a significantly increased supply from the domestic workforce..''); 
Ron Hira and Bharath Gopalaswamy, Reforming US' High-Skilled 
Guestworker Program, Atlantic Council (Jan. 2019), at 11, https://www.atlanticcouncil.org/wp-content/uploads/2019/09/Reforming_US_High-Skilled_Guestworkers_Program.pdf (``By every 
objective measure, most H-1B workers have no more than ordinary 
skills, skills that are abundantly available in the US labor market. 
That means they are likely competing with (and substituting for) US 
workers, rather than complementing them as was the program's 
intention . . . H-1B workers are underpaid and placed in substandard 
working conditions, while US workers' wages are depressed, and they 
lose out on job opportunities'').
    \99\ See Ron Hira and Bharath Gopalaswamy, Reforming US' High-
Skilled Guestworker Program, Atlantic Council (Jan. 2019), at 7, 
https://www.atlanticcouncil.org/wp-content/uploads/2019/09/Reforming_US_High-Skilled_Guestworkers_Program.pdf (``Further 
examining the career transitions of these graduates, we look at the 
reasons why a third of computer science graduates, and nearly half 
of engineering graduates, do not go into a job directly related to 
their degree (Figure E). For computer science graduates employed one 
year after graduation (i.e., excluding those unemployed or in 
graduate school), about half of those who took a job outside of IT 
say they did so because the career prospects were better elsewhere, 
and roughly a third because they couldn't find a job in IT. For 
engineering graduates, it's about an even split, with approximately 
one-third each saying they did not enter an engineering job either 
because of career prospects or they couldn't find an engineering 
job. In short, of those graduates with the most IT-relevant 
education, a large share report they were unable to find an IT job 
while others found IT jobs to be paying lower wages or offering less 
attractive working conditions and career prospects than other, non-
STEM jobs.'').
---------------------------------------------------------------------------

    Finally, concerning the comment that H-1B workers are more costly 
than U.S. workers, DHS recognizes that employers often incur upfront 
costs to file H-1B petitions (including filing fees and preparation 
fees). However, DHS believes these upfront costs are offset by the 
employer's ability to legally pay their H-1B employees relatively low 
wages below the local median wage. Data show that the majority of H-1B 
cap-subject petitions have been filed for positions certified at the 
level I or level II prevailing wages, both of which are set below the 
local median wage.\100\ Employers may realize additional cost savings 
over the span of several years as they continue to employ these H-1B 
workers at below-median wages without any statutory requirement to 
increase the workers' wage levels or wages beyond the minimum required 
wages. Unlike U.S. workers, H-1B workers are tied to their specific 
employer, and, therefore, may lack the negotiating power of similarly 
skilled U.S. workers to request wage increases.\101\ DHS believes that 
the random selection process is not fair to U.S. workers whose wages 
may be adversely impacted by relatively lower-paid H-1B workers.
---------------------------------------------------------------------------

    \100\ See Daniel Costa and Ron Hira, H-1B Visas and Prevailing 
Wage Level, Economic Policy Institute (May 4, 2020), https://www.epi.org/publication/h-1b-visas-and-prevailingwage-levels/ 
(explaining that the H-1B allows employers to use the H-1B program 
``to pay [H-1B] workers well below market wages'' and ``undercut 
local wages'').
    \101\ See Ron Hira and Bharath Gopalaswamy, Reforming US' High-
Skilled Guestworker Program, Atlantic Council (Jan. 2019), https://www.atlanticcouncil.org/wp-content/uploads/2019/09/Reforming_US_High-Skilled_Guestworkers_Program.pdf (``The current 
system not only harms Americans; it also enables H-1B workers to be 
exploited. H-1B workers themselves are underpaid, vulnerable to 
abuse, and frequently placed in poor working conditions.'').
---------------------------------------------------------------------------

c. Lack of Evidence To Support Rulemaking
    Comments: An advocacy group stated that the evidence provided in 
the NPRM is not robust enough to justify such a dramatic change in 
policy. According to the commenter, the agency failed to consider 
multiple sources that suggest the current H-1B program benefits U.S. 
workers and the economy. Similarly, a trade association said that the 
Agency ``selectively cherrypicked a small minority of studies'' from 
sources that regularly object to the use of temporary highly-skilled 
foreign talent, asserting that, had USCIS completed a more 
comprehensive review of literature, it would have been clear that the 
H-1B visa program and workers make significant contributions to the 
U.S. economy and society.
    A joint submission from multiple organizations said that DHS even 
communicates its failure to gather sufficient evidence before 
publication, and that DHS appears to be operating under the 
misconception that anything can be published as an NPRM and the burden 
shifts to the public to analyze the potential impacts. The commenters 
said that DHS should gather more data before restarting the regulatory 
process. An individual commenter similarly said that the agency 
provides inadequate justifications for the proposed changes, while 
another individual commenter said that the proposed rule is ``half-
baked and flawed in a number of ways'' and requires proper rule-making 
procedures. An individual commenter stated that the proposed rule does 
not explain how giving priority to higher wage levels is a more 
efficient allocation process than the current random lottery process. 
The commenter said the H-1B lottery is a fair solution to the issue of 
many petitions arriving on the same day or time, and the proposed rule 
would ``go beyond the principle of fairness.''
    A trade association stated that the APA does not allow an agency to 
make significant change without completing an accurate cost-benefit 
analysis, which the agency did not do, nor did it allow sufficient time 
for stakeholders to conduct their own assessments. A company similarly 
stated that the Department's ``scant justification'' for wage-based 
selection of H-1B petitions violates the APA because a Level I or II 
prevailing wage does not mean that that the worker is not highly 
skilled or vital. The company said that the Department's reasoning for 
the proposed rule lacks a ``rational connection between the facts found 
and the choice made.'' An anonymous commenter wrote that the proposal 
is arbitrary and capricious, asserting that DHS does not explain the 
rationale behind making wages the sole indicator of a worker's 
eligibility for visa sponsorship.
    Response: DHS disagrees with these comments. DHS conducted a 
comprehensive review of the issues, relying on both internal data and 
external studies and reports.\102\ DHS acknowledges the articles, 
studies, and reports submitted by commenters that purport to show the 
overall benefits of H-1B workers.\103\ DHS recognizes that some H-1B 
workers do fill gaps in the labor market and make contributions to the 
overall economy. However, while some studies show the benefits of H-1B 
workers overall, DHS also believes that sufficient evidence 
demonstrates that a prevalence of relatively lower-paid and lower-
skilled H-1B workers is

[[Page 1702]]

detrimental to U.S. workers.\104\ As discussed in the NPRM and above, 
DHS further believes that the influx of relatively lower-skilled and 
lower-paid H-1B workers is not consistent with the dominant legislative 
purpose of the statute. Prioritizing registrations based on wage level 
likely would increase the average and median wage levels of H-1B 
beneficiaries who would be selected for further processing under the H-
1B allocations. Moreover, it would maximize H-1B cap allocations, so 
that they more likely would go to the best and brightest workers.
---------------------------------------------------------------------------

    \102\ See, e.g., Kirk Doran et al., The Effects of High-Skilled 
Immigration Policy on Firms: Evidence from Visa Lotteries, 
University of Notre Dame (Feb. 2016), https://gspp.berkeley.edu/assets/uploads/research/pdf/h1b.pdf; John Bound et al., 
Understanding the Economic Impact of the H-1B Program on the U.S., 
Working Paper 23153, National Bureau of Economic Research (Feb. 
2017), http://www.nber.org/papers/w23153; Daniel Costa and Ron Hira, 
H-1B Visas and Prevailing Wage Level, Economic Policy Institute (May 
4, 2020), https://www.epi.org/publication/h-1b-visas-and-prevailing-wage-levels/.
    \103\ See, e.g., Neil G. Ruiz and Jens Manuel Krogstad, Salaries 
Have Risen for High-Skilled Foreign Workers in U.S. on H-1B Visas, 
Pew Research Center (Aug. 16, 2017), https://www.pewresearch.org/facttank/2017/08/16/salaries-have-risen-for-high-skilled-foreign-workers-in-u-s-on-h-1b-visas/; A. Nicole Kreisberg, H-1B Visas: No 
Impact on Wages, American Institute for Economic Research (Sept. 
2014), https://www.aier.org/research/h-1b-visas-no-impact-on-wages/; 
Jonathan Rothwell and Neil G. Ruiz, H-1B Visas and the STEM 
Shortage, The Brookings Institution (May 10, 2013), https://www.brookings.edu/research/h-1b-visas-and-the-stem-shortage/; Neil 
G. Ruiz et al., The Search for Skills: Demand for H-1B Immigrant 
Workers in U.S. Metropolitan Areas, The Brookings Institution (July 
18, 2012), https://www.brookings.edu/research/the-search-for-skills-demand-for-h-1b-immigrant-workers-in-u-s-metropolitan-areas/; 
Madeline Zavodny, The H-1B Program and Its Effects on Information 
Technology Workers, Federal Reserve Bank of Atlanta (Sept. 2003), 
https://www.frbatlanta.org/research/publications/economic-review/2003/q3/vol88no3_H-1B-program-and-effects-on-information-technology-workers.aspx.
    \104\ See The National Academies of Sciences, Engineering, and 
Medicine, The Economic and Fiscal Consequences of Immigration 258 
(Washington, DC: The National Academies Press 2017), https://doi.org/10.17226/23550 (noting that differing results across certain 
studies ``may reflect immigrant heterogeneity generally and among H-
1B workers in particular'').
---------------------------------------------------------------------------

    Based on its comprehensive review of the submitted comments and 
available evidence, DHS has concluded that, by changing the selection 
process, in these years of excess demand, from a random lottery 
selection to selection generally based on the highest OES prevailing 
wage level that the proffered wage equals or exceeds, DHS will 
implement the statute more faithfully to its dominant legislative 
purpose. DHS further believes that this will benefit the economy and 
increase the United States' competitive edge in attracting the best and 
the brightest in the global labor market, consistent with the goals of 
the H-1B program. It may also benefit U.S. workers as employers that 
might have petitioned for a cap-subject H-1B worker to fill relatively 
lower-paid, lower-skilled positions, may be incentivized to hire 
available and qualified U.S. workers for those positions. DHS believes 
that the available data and information support this rulemaking and 
that it is not necessary to gather more data or to restart the 
regulatory process.

C. Proposed Changes to the Registration Process for H-1B Cap-Subject 
Petitions

1. Proposed Wage-Based Selection (Selection Process for Regular Cap and 
Advanced Degree Exemption, Preservation of Random Selection Within a 
Prevailing Wage)
    Comment: A business association commented that adding in a non-
random variable to the H-1B cap selection process would open the door 
to pre-adjudication, which may add new burdens to the petitioners and 
USCIS. The commenter also said the addition of the wage factor may 
cause potential enforcement or audit actions if USCIS does not agree 
with a petitioner's assessment of ``corresponding wage level,'' either 
when adjudicating the petition or in the course of a post-adjudication 
audit. In addition, the commenter said the ``corresponding wage level'' 
listed on the lottery registration would not necessarily match the 
``wage level'' designated on the Labor Condition Application (LCA) 
form, creating confusion.
    Response: DHS disagrees that ranking according to the highest OES 
prevailing wage level that the proffered wage equals or exceeds will be 
a pre-adjudication, as submission of the electronic registration is 
merely an antecedent procedural requirement to properly file the 
petition. It is not intended to replace the petition adjudication 
process or assess substantive eligibility. With respect to new burdens 
resulting from the additional information provided, these are captured 
below in section V. Statutory and Regulatory Requirements. DHS believes 
that the additional burden, which is relatively small, is necessary to 
ensure that USCIS implements the registration system in a manner that 
realistically, effectively, efficiently, and more faithfully 
administers the cap selection process.
    DHS acknowledges that the ``wage level'' listed by the petitioner 
on the registration form may not always match the ``wage level'' 
indicated on the LCA. However, DHS believes that the instructions 
provided in the registration system and on the H-1B petition are 
sufficiently clear to avoid confusion. Further, USCIS officers will be 
sufficiently trained on the reasons why the wage level on the 
registration form may not always match the LCA, and may request 
additional evidence from the petitioner, as appropriate, to resolve 
material discrepancies in this regard. However, DHS notes that USCIS 
may deny or revoke a petition if USCIS determines that the statement of 
facts contained on the registration form is inaccurate, fraudulent, 
misrepresents any material fact, or is not true and correct.\105\
---------------------------------------------------------------------------

    \105\ See new 8 CFR 214.2(h)(8)(iii)(D)(1)(ii).
---------------------------------------------------------------------------

    Comment: A professional association noted that DHS proposes to 
abruptly and unnecessarily change the selection process for H-1B cap-
subject petitions by prioritizing registrants based on the highest OES 
prevailing wage level, and consider applicants solely based on the 
amount of money that they would be paid, rather than the utility that 
they would bring to the U.S. workforce.
    Response: DHS believes that ranking and selecting by the highest 
OES prevailing wage level that the proffered wage equals or exceeds is 
a practical way to achieve the administration's goal of improving 
policies such that H-1B classification is more likely to be awarded to 
petitioners seeking to employ higher-skilled and higher-paid 
beneficiaries. As stated previously, the new ranking system takes into 
account the wage level relative to the SOC code and area(s) of intended 
employment--as opposed to salary alone--when ranking registrations. 
While DHS agrees that the utility an H-1B beneficiary brings to the 
U.S. workforce is important, there is no practical, objective way to 
measure utility such that DHS could use this quality to rank and select 
H-1B registrations or petitions.
2. Required Information From Petitioners
a. OES Wage Level
i. Highest OES Wage Level That the Proffered Wage Would Equal or Exceed
    Comments: Several commenters said DHS should rank registrations at 
OES prevailing wage level I separate from those falling below OES 
prevailing wage level I, so that registrations who meet wage level I 
are prioritized for H-1B selection over those falling below level I. 
Some commenters noted that the DOL IFR placed the level I wage at the 
45th percentile (close to previous level III), creating vast 
differentiation within this large group. Therefore, the benefits of the 
rule of differentiating candidates would fail for at least 90 percent 
of registrations, as the DOL IFR would result in the prevailing wage 
level I and below group being much larger and DHS needing to select 
from that group completely at random. With that lack of 
differentiation, the new rule would not accomplish its purpose of 
retaining the best talent. Therefore, these commenters urged DHS to 
consider separating those registrations at or above level I wages from 
those falling below, as opposed to putting them into one giant group.
    Response: DHS does not agree with the suggestions to separate OES 
wage level I from a wage below level I. DHS expects that all 
petitioners offering a wage lower than the OES wage level I wage will 
be using another legitimate source other than OES or an independent 
authoritative source, including a private wage survey. Therefore, such 
a change effectively could preclude petitioners that utilize one of 
those other sources from being selected for registration. By grouping 
OES wage level I and below together, those petitioners have a fair 
chance of selection and are not precluded from using a private wage 
survey as appropriate. Since the DOL IFR was set

[[Page 1703]]

aside on December 1, 2020, and is no longer being implemented, DHS will 
not be considering the impact of the DOL IFR in the context of this 
final rule.\106\
---------------------------------------------------------------------------

    \106\ On December 1, 2020, the U.S. District Court for the 
Northern District of California issued an order in Chamber of 
Commerce, et al. v. DHS, et al., No. 20-cv-7331, setting aside the 
DOL IFR, 85 FR 63872. Similarly, on December 3, 2020, the U.S. 
District Court for the District of New Jersey issued a preliminary 
injunction in ITServe Alliance, Inc., et al. v. Scalia, et al., No. 
20-cv-14604, applying to the plaintiffs in that case. Also, on 
December 3, 2020, DOL announced that it would no longer implement 
the IFR, consistent with the above referenced court orders.
---------------------------------------------------------------------------

    Comments: A professional association remarked that petitioners who 
use private survey data would be disadvantaged by the proposed rule and 
said that, even when private wage surveys provide an accurate 
prevailing wage, the proposed rule requires the employer to 
``downgrade'' the H-1B registration to the lower OES prevailing wage 
level. The commenter concluded that, as a result, the proposed rule's 
artificial preference in the registration system to what is admittedly 
incomplete or possibly inaccurate OES wage data reduces the chance that 
employers intending to pay the H-1B required wage based on the 
statutory ``best information available''--in this case a private 
industry survey--will see their registration selection chances 
materially reduced. A law firm questioned which factors contributed to 
DHS's decision to use the OES wage levels as opposed to wage leveling 
from a permissible private wage survey.
    Response: DHS appreciates the commenter's question. When 
determining how to rank and select registrations (or petitions) by wage 
level, DHS decided to use OES prevailing wage levels because they are 
the most comprehensive and objective source for comparing wages. The 
OES program produces employment and wage estimates annually for nearly 
800 occupations.\107\ Additionally, most petitioners are familiar with 
the OES wage levels since they are used by DOL and have been used in 
the foreign labor certification process since 1998.\108\ OES wage level 
data is publicly available through the Foreign Labor Certification Data 
Center's Online Wage Library. Private wage surveys are not publicly 
available and do not always have four wage levels.
---------------------------------------------------------------------------

    \107\ See U.S. Department of Labor, Bureau of Labor Statistics, 
Occupational Employment Statistics, https://www.bls.gov/oes/home.htm 
(last visited Dec. 14, 2020).
    \108\ See U.S. Department of Labor, Employment and Training 
Administration, Prevailing Wages (PERM, H-2B, H-1B, H-1B1, and E-3), 
https://www.dol.gov/agencies/eta/foreign-labor/wages/prevailing-wage 
(last visited Dec. 14, 2020).
---------------------------------------------------------------------------

    DHS disagrees with the commenter's assertion that petitioners who 
use private survey data would be disadvantaged by the rule. Petitioners 
may continue to use private wage surveys, if they choose to do so, to 
establish that they will be paying the beneficiary a required wage. 
This rule, however, will rank and select registrations or petitions, as 
applicable, based on the highest OES wage level that the proffered wage 
equals or exceeds as OES wage data is the most comprehensive and 
objective source for comparing wages.
    Comment: An individual commenter stated that the requirement to 
designate the wage level is confusing because DHS is asking petitioners 
to designate not the wage level associated with the job opportunity, 
but the highest OES wage level for which the proffered wage exceeds the 
OES wage. The commenter said asking petitioners to determine two 
different wage levels makes the process deliberately complex and ripe 
for error, which could be fatal given the proposed increased authority 
of USCIS to deny petitions for discrepancies in wage levels. The 
commenter also expressed concern that the position, its substantive job 
duties, its occupational classification, the intended worksite, the 
prevailing wage, and the actual wage are now required at the 
registration stage in order to comply with the ``complicated ranking-
wage-level calculation.''
    Response: DHS does not agree with the comment stating that asking 
petitioners to specify the highest corresponding OES wage level that 
the proffered wage would equal or exceed on the registration is 
confusing or burdensome. Further, DHS disagrees with the comment 
stating that the position, its substantive job duties, its occupational 
classification, the intended worksite, the prevailing wage, and the 
actual wage are now required at the registration stage. In addition to 
the information required on the current electronic registration form 
(and on the H-1B petition) and for purposes of this selection process 
and to establish the ranking order, a registrant (or a petitioner if 
registration is suspended) would be required to provide only the 
highest OES wage level that the proffered wage equals or exceeds for 
the relevant SOC code in the area of intended employment. While the OES 
wage level assessment would be based on the SOC code, area of intended 
employment, and proffered wage, the registrant would not need to supply 
the SOC code, area of intended employment, and proffered wage at the 
registration stage.
    Comment: A professional association asserted that the U.S. Bureau 
of Labor Statistics' (BLS) OES wage survey skews wage data higher for 
several professions, including physician specialties. The commenter 
suggested that wage survey data collected from employees has 
significant issues, including that the data is collected voluntarily, 
wage data is grouped rather than provided for individual employees, 
larger urban centers are overrepresented compared to smaller practices, 
and physicians in rural areas are underreported. The association added 
that, in situations where there is less wage data, DHS will be unable 
to accurately adjudicate cap slots, citing data from the American 
Immigration Council and the Foreign Labor Certification Data Center. 
The association also said the DOL IFR increases the prevailing wage 
requirements and exacerbates the issue by establishing a default wage 
for physicians of $208,000 where data is unavailable. The professional 
association stated that the BLS prevailing wage does not comply with 
DHS's claim that higher skill level positions must be paid higher 
wages. The association asserted that statistical analysis problems with 
the BLS OES survey would cause the population of H-1B physicians to be 
paid equally regardless of skill or experience. The commenter further 
stated that rural and other underserved areas will not meet the wage 
requirements and will lose access to critically needed physicians.
    Response: On December 1, 2020, the U.S. District Court for the 
Northern District of California issued an order in Chamber of Commerce, 
et al. v. DHS, et al., No. 20-cv-7331, setting aside the DOL IFR, which 
took effect on October 8, 2020, and implemented reforms to the 
prevailing wage methodology for the Permanent Employment Certification, 
H-1B, H-1B1, and E-3 visa programs. Similarly, on December 3, 2020, the 
U.S. District Court for the District of New Jersey issued a preliminary 
injunction in ITServe Alliance, Inc., et al. v. Scalia, et al., No. 20-
cv-14604, applying to the plaintiffs in that case. On December 3, 2020, 
DOL announced that it was taking necessary steps to comply with the 
courts' orders and will no longer implement the IFR. These steps 
include making required technical changes to the Foreign Labor 
Application Gateway (FLAG) system to replace the October 8, 2020, 
through June 30, 2021, wage source year data that was implemented under 
the DOL IFR with the OES prevailing wage data that was in effect on 
October 7, 2020, and reflecting such data updates in the Foreign Labor

[[Page 1704]]

Certification Data Center Online Wage Library \109\ at https://www.flcdatacenter.com/ with the correct prevailing wage data for each 
SOC and area of intended employment through June 30, 2021.\110\
---------------------------------------------------------------------------

    \109\ The Foreign Labor Certification Data Center, a component 
of the U.S. Department of Labor Office of Foreign Labor 
Certification, is the location of the Online Wage Library for 
prevailing wage determinations. U.S. Department of Labor, Foreign 
Labor Certification Data Center, Online Wage Library, https://www.flcdatacenter.com/ (last visited Dec. 15, 2020).
    \110\ DOL, Employment and Training Administration, Foreign Labor 
Certification, Announcements https://www.dol.gov/agencies/eta/foreign-labor (last visited Dec. 21, 2020).
---------------------------------------------------------------------------

    While prevailing wage level data remains unavailable for some SOC 
codes in some areas of intended employment, DHS believes that its 
solution in that limited circumstance, as proposed in the NPRM and 
retained in this final rule, still will allow DHS to select 
registrations according to the metric of the registrant's self-
identified prevailing wage level as calculated using DOL's prevailing 
wage level guidance.\111\ DHS recognizes that this solution is 
imperfect as it does not provide a means for those registrants to 
proffer wages that equal or exceed higher prevailing wage levels than 
those commensurate with the position requirements. However, DHS 
concludes that it is the best available option to serve the overarching 
goal of revising the selection process to ensure that H-1B petitions 
are filed for positions requiring relatively higher skill levels or 
proffering wages commensurate with higher skill levels. The commenter's 
statements that limitations in OES data would cause the population of 
H-1B physicians to be paid equally regardless of skill or experience, 
or that such limitations undermine the premise that higher skill level 
positions must be paid higher wages, is beyond the scope of this 
rulemaking. This rule does not require an employer to pay a certain 
wage. This rule merely pertains to ranking and selection of 
registrations or petitions, as applicable, based on corresponding wage 
level. In the limited instance where OES data is unavailable, the 
registrant would follow DOL guidance on prevailing wage determinations 
to determine which OES wage level to select on the registration, 
notwithstanding the proffered salary.
---------------------------------------------------------------------------

    \111\ U.S. Department of Labor, Employment and Training 
Administration, Prevailing Wage Determination Policy Guidance, 
Nonagricultural Immigration Programs (Revised Nov. 2009), https://www.dol.gov/sites/dolgov/files/ETA/oflc/pdfs/NPWHC_Guidance_Revised_11_2009.pdf.
---------------------------------------------------------------------------

ii. Highest OES Wage Level When There Is No Current OES Prevailing Wage 
Information
    Comment: A business association commented that, although using the 
prevailing wage worksheet to determine wage level makes sense, there is 
no way to escalate to a higher corresponding wage level by paying more, 
unlike when an OES wage is used. The commenter added that the 
unavailability of an OES wage may be an indication that a job is new or 
novel, and therefore may be even more in need of H-1B workers to 
fulfill employment needs.
    Response: DHS recognizes that some occupations do not have current 
OES prevailing wage information available on DOL's Online Wage Library. 
In the limited instance where there is no current OES prevailing wage 
information for the proffered position, the registrant would follow DOL 
guidance on prevailing wage determinations to determine which OES wage 
level to select on the registration. While petitioners may not be able 
to increase their chance of selection by increasing the proffered wage, 
they can increase their chance of selection by petitioning for 
positions requiring higher skill, experience, or education levels.
    DHS believes that, in the absence of current OES prevailing wage 
information, selecting according to wage level is the best way to 
ensure that registrations (or petitions) are selected consistent with 
the primary purpose of the H-1B program, which is to help U.S. 
employers fill labor shortages in positions requiring highly skilled or 
highly educated workers. DHS data shows a correlation between higher 
salaries and higher wage levels.\112\ Thus, even in those limited 
instances where no OES prevailing wage information is available, DHS 
believes that selecting according to wage level is likely to result in 
selection of the highest-paid or highest-skilled beneficiaries, 
consistent with the goals of the H-1B program. DHS will not comment on 
whether the unavailability of OES wage indicates that a job is new, 
novel, or in more demand, as that is outside the scope of this rule.
---------------------------------------------------------------------------

    \112\ For example, in Computer and Mathematical Occupations, the 
2019 national median salary for level I was $78,000; for level II 
was $90,000; for level III was $115,000; and for level IV was 
$136,000. Department of Homeland Security, USCIS, Office of 
Performance and Quality, SAS PME C3 Consolidated, VIBE, DOL OFLC TLC 
Disclosure Data queried 9/2020 TRK 6446.
---------------------------------------------------------------------------

    Comment: One commenter asked, where the OES wage levels are 
missing, what penalties, if any, will be applied to petitioners or 
beneficiaries if USCIS disagrees with the wage level selected by the 
petitioner after selection has occurred.
    Response: DHS expects each registrant would be able to identify the 
appropriate SOC code for the proffered position because all petitioners 
are required to identify the appropriate SOC code for the proffered 
position on the LCA, even when there is no applicable wage level on the 
LCA. Using the SOC code and established DOL guidance, all prospective 
petitioners would be able to determine the appropriate OES wage level 
for purposes of completing the registration or petition, as applicable, 
regardless of whether they were to specify an OES wage level or utilize 
the OES program as the prevailing wage source on an LCA.
    During the adjudication process, if USCIS disagrees with the wage 
level selected by the petitioner, USCIS will comply with 8 CFR 
103.2(b)(8) and may provide the petitioner an opportunity to explain 
the selected wage level, as applicable. If USCIS determines that the 
petitioner failed to meet its burden of proof in establishing that it 
selected the appropriate SOC code for the position, or if USCIS 
determines that the petition was not based on a valid registration 
(e.g., if there is a discrepancy in wage levels between the 
registration and the petition), USCIS may deny the petition. If USCIS 
determines that the statement of facts contained on the registration 
form is inaccurate, fraudulent, misrepresents any material fact, or is 
not true and correct, USCIS may reject or deny the petition or, if 
approved, may revoke the approval of a petition that was filed based on 
that registration.\113\ If USCIS determines that the statement of facts 
contained in the petition or on the LCA was not true and correct, 
inaccurate, fraudulent, or misrepresented a material fact, USCIS may 
revoke the approval of that petition.\114\
---------------------------------------------------------------------------

    \113\ See new 8 CFR 214.2(h)(8)(iii)(D)(1)(ii).
    \114\ See 8 CFR 214.2(h)(11)(iii)(A)(2).
---------------------------------------------------------------------------

    Comment: A professional association stated that, because the 
registration system does not contemplate a real-time adjudication of 
whether occupations lacking current OES prevailing wage information are 
correctly slotted under USCIS' selection system, there would be no 
fail-safe mechanism for employers to confirm that the wage-preference 
selection process in fact operated as USCIS predicted in the proposed 
rule. The commenter stated that, before any further rule is published, 
DHS, DOL and OMB should investigate and determine whether any proposed 
wage-preference H-1B selection process relying upon

[[Page 1705]]

incomplete OES data can be established, notwithstanding these apparent 
data gaps and deficiencies. The commenter concluded that, despite the 
inadequacy or unavailability of OES data, the proposed rule ignores the 
requirement that wage data be sourced from ``the best information 
available,'' placing unwarranted and artificial reliance on OES data 
despite its faults or lack of availability.
    Response: DHS recognizes that prevailing wage level data remains 
unavailable for some SOC codes in some areas of intended employment. 
However, DHS still believes that OES provides the most comprehensive 
and objective publicly available source for obtaining prevailing wage 
information and, thus, is still the best available option to serve the 
overarching goal of improving policies such that H-1B classification is 
more likely to be awarded to petitioners seeking to employ higher-
skilled and higher-paid beneficiaries.\115\
---------------------------------------------------------------------------

    \115\ See Kirk Doran et al., The Effects of High-Skilled 
Immigration Policy on Firms: Evidence from Visa Lotteries, 
University of Notre Dame (Feb. 2016), https://gspp.berkeley.edu/assets/uploads/research/pdf/h1b.pdf (noting that ``additional H-1Bs 
lead to lower average employee earnings and higher firm profits'' 
and the authors' ``results are more supportive of the narrative 
about the effects of H-1Bs on firms in which H-1Bs crowd out 
alternative workers, are paid less than the alternative workers whom 
they crowd out, and thus increase the firm's profits despite no 
measurable effect on innovation''); John Bound et al., Understanding 
the Economic Impact of the H-1B Program on the U.S., Working Paper 
23153, National Bureau of Economic Research (Feb. 2017), http://www.nber.org/papers/w23153 (``In the absence of immigration, wages 
for US computer scientists would have been 2.6% to 5.1% higher and 
employment in computer science for US workers would have been 6.1% 
to 10.8% higher in 2001.'').
---------------------------------------------------------------------------

iii. Lowest OES Wage Level That the Proffered Wage Would Equal or 
Exceed When Beneficiary Would Work in Multiple Locations or Positions
    Comment: A commenter said employers may relocate an employee to 
temporarily work remotely in a location where average salary is low to 
keep wages low while increasing the H-1B wage level and the chance of 
being selected. The commenter suggested that the area code used for the 
selection of H-1B registrations only should be the registered official 
address of the company, instead of anywhere where the employee will 
work, concluding that employers should be fined for misrepresenting 
work locations to take advantage of lower wages.
    Response: DHS appreciates this commenter's concern, but believes 
the commenter misunderstood how the new H-1B cap selection process will 
work and the limitations contained in the proposed rule to limit the 
potential for abuse or gaming of the selection process. If the H-1B 
beneficiary will work in multiple locations or multiple positions, the 
registrant or petitioner must specify on the registration or petition, 
as applicable, the lowest corresponding OES wage level that the 
proffered wage will equal or exceed for the relevant SOC code in the 
area of intended employment, and USCIS will rank and select based on 
the lowest corresponding OES wage level.
    DHS provides the following example for illustrative purposes only. 
A prospective employer intends to employ an H-1B beneficiary as a level 
I ``Civil Engineer'' position (SOC code 17-2051) at two locations: San 
Francisco, California and Montgomery, Alabama. The Alabama location was 
specifically chosen because of that locality's generally lower 
prevailing wages. The required level I prevailing wage for each area of 
intended employment is $77,147 per year \116\ and $62,858 per 
year,\117\ respectively. In this scenario, to meet the level I 
prevailing wage for the San Francisco area of intended employment, the 
minimum annual wage the prospective petitioner must offer to the 
beneficiary is $77,147. While an annual salary of $77,147 would exceed 
the level II prevailing wage for the Montgomery, Alabama, area of 
intended employment,\118\ the prospective petitioner still must select 
Level I for purposes of the registration because that is the lowest 
corresponding OES wage level that the proffered wage will equal or 
exceed for the relevant SOC code in all areas of intended employment. 
This rule also includes provisions authorizing USCIS to deny an H-1B 
petition if USCIS determines that the statements on the registration or 
petition were inaccurate, fraudulent or misrepresented a material 
fact.\119\ USCIS also may deny a subsequent new or amended petition 
filed by the petitioner, or a related entity, on behalf of the same 
beneficiary, if USCIS determines that the filing of the new or amended 
petition is part of the petitioner's attempt to unfairly increase the 
odds of selection during the registration or petition selection 
process, as applicable, such as by reducing the proffered wage to an 
amount that would be equivalent to a lower wage level than that 
indicated on the original petition.\120\
---------------------------------------------------------------------------

    \116\ U.S. Department of Labor, Foreign Labor Certification Data 
Center, Online Wage Library, https://www.flcdatacenter.com/OesQuickResults.aspx?code=17-2051&area=41860&year=21&source=1 (last 
visited Dec. 21, 2020) (providing prevailing wage level values for 
SOC code 17-2051 in San Francisco-Oakland-Hayward, CA, in the All 
Industries database for 7/2020-6/2021).
    \117\ U.S. Department of Labor, Foreign Labor Certification Data 
Center, Online Wage Library, https://www.flcdatacenter.com/OesQuickResults.aspx?code=17-2051&area=33860&year=21&source=1 (last 
visited Dec. 21, 2020) (providing prevailing wage level values for 
SOC code 17-2051 in Montgomery, AL, in the All Industries database 
for 7/2020-6/2021).
    \118\ U.S. Department of Labor, Foreign Labor Certification Data 
Center, Online Wage Library, https://www.flcdatacenter.com/OesQuickResults.aspx?code=17-2051&area=33860&year=21&source=1 (last 
visited Dec. 21, 2020) (showing that a level II wage = $74,901).
    \119\ See new 8 CFR 214.2(h)(10)(ii).
    \120\ See new 8 CFR 214.2(h)(10)(ii).
---------------------------------------------------------------------------

    Comment: A professional association expressed concern with the 
proposed rule's language stating, ``if the beneficiary will work in 
multiple locations, or in multiple positions if the registrant is an 
agent, USCIS will rank and select the registration for the lowest 
corresponding OES wage level that the proffered wage will equal or 
exceed.'' \121\ The commenter stated that, basing the chance for 
selection on the lower wage figure is an ``arbitrary'' protocol without 
explanation. Likewise, an individual commenter said the provision is 
unfairly discriminatory and lacks adequate justification, adding that 
it is ``unconscionable to use an inverted system'' for ranking.
---------------------------------------------------------------------------

    \121\ 85 FR 69236, 69263.
---------------------------------------------------------------------------

    Response: DHS chose to use the lowest corresponding OES wage level 
that the proffered wage will equal or exceed in the case of multiple 
locations or multiple positions to prevent gaming of the registration 
process. If DHS were to invert the process and rank based on the 
highest corresponding OES wage level that the proffered wage were to 
equal or exceed, then petitioners could place the beneficiary in a 
lower-paying position for most of the time and a higher-paying position 
for only a small percent of the time, but use that higher-paying 
position to rank higher in the selection process and increase their 
chances of being selected in the registration process. Similarly, in 
the case of multiple locations, petitioners could place the beneficiary 
in a higher-paying locality for only a small percent of time, but use 
that higher-paying locality to rank higher in the selection process and 
increase their chances of being selected in the registration process.
iv. Other Comments on OES Wage Level
    Comment: Several commenters said that the proposed rule's changes 
to prevailing wage levels are in direct opposition to established 
guidance set forth in the DOL Employment and

[[Page 1706]]

Training Administration Prevailing Wage Determination Policy 
Guidance.\122\
---------------------------------------------------------------------------

    \122\ U.S. Department of Labor, Employment and Training 
Administration, Prevailing Wage Determination Policy Guidance, 
Nonagricultural Immigration Programs (Revised Nov. 2009), https://www.dol.gov/sites/dolgov/files/ETA/oflc/pdfs/NPWHC_Guidance_Revised_11_2009.pdf.
---------------------------------------------------------------------------

    Response: This rule does not conflict with or change established 
DOL guidance. DHS clearly stated in the NPRM that this ranking and 
selection process will not alter the prevailing wage levels associated 
with a given position for DOL purposes, which are informed by a 
comparison of the requirements for the proffered position to the normal 
requirements for the occupational classification.\123\
---------------------------------------------------------------------------

    \123\ 85 FR 69236, 69237.
---------------------------------------------------------------------------

    Comment: A professional association wrote that the OES wage data 
has various shortcomings, and there are advantages to using a variety 
of wage data. Prevailing wage data can originate from multiple sources, 
including wage surveys published by private organizations and employer-
conducted surveys. The association said that BLS OES survey data used 
to calculate prevailing wages is not designed for foreign labor 
certification, and OES survey data captures no information about 
differences based on skills, training, experience or responsibility 
levels of the workers, all of which are factors the INA requires DHS to 
consider. The association said that the OES survey is the best 
available source of wage data for the Department's purposes, but it is 
not perfectly suited to the H-1B, H-1B1, and E-3 classifications, nor 
to the Permanent Labor Certification Program (PERM). The professional 
association also commented that the proposed rule does not describe the 
cases when OES prevailing wage data would be unavailable or how USCIS 
officials would be trained to interpret DOL guidance, and petitioners 
who cannot use Online Wage Library data would have no way to know 
whether USCIS officials misinterpreted the DOL guidance and mistakenly 
disagreed with an employer's wage level selection.
    Response: When determining how to rank and select registrations (or 
petitions, as applicable) by the highest OES prevailing wage level that 
the proffered wage equals or exceeds, DHS decided to use OES prevailing 
wage levels because OES is the most comprehensive and objective source 
for comparing wages. The OES program produces employment and wage 
estimates annually for nearly 800 occupations.\124\ Additionally, most 
petitioners are familiar with the OES wage levels since they are used 
by DOL and have been used in the foreign labor certification process 
since 1998.\125\ During the adjudication process, if USCIS disagrees 
with the wage level selected by the petitioner, USCIS will comply with 
8 CFR 103.2(b)(8) and may provide the petitioner an opportunity to 
explain the wage level, as applicable. If USCIS determines that the 
petitioner failed to meet its burden of proof in establishing that it 
selected the appropriate SOC code for the position, or if USCIS 
determines that the petition was not based on a valid registration 
(e.g., if there is a discrepancy in wage levels between the 
registration and the petition), USCIS may deny the petition.\126\ If 
USCIS determines that the statement of facts contained on the 
registration form is inaccurate, fraudulent, misrepresents any material 
fact, or is not true and correct, USCIS may reject or deny the petition 
or, if approved, may revoke the approval of a petition that was filed 
based on that registration.\127\ If USCIS determines that the statement 
of facts contained in the petition or on the LCA was not true and 
correct, inaccurate, fraudulent, or misrepresented a material fact, 
USCIS may revoke the approval of that petition.\128\
---------------------------------------------------------------------------

    \124\ U.S. Department of Labor, U.S. Bureau of Labor Statistics, 
Occupational Employment Statistics, https://www.bls.gov/oes/home.htm 
(last visited on Dec. 11, 2020).
    \125\ U.S. Department of Labor, Employment and Training 
Administration, Prevailing Wages (PERM, H-2B, H-1B, H-1B1, and E-3), 
https://www.dol.gov/agencies/eta/foreign-labor/wages/prevailing-wage 
(last visited Dec. 11, 2020).
    \126\ See new 8 CFR 214.2(h)(8)(iii)(D)(1)(i).
    \127\ See new 8 CFR 214.2(h)(8)(iii)(D)(1)(ii).
    \128\ See new 8 CFR 214.2(h)(11)(iii)(A)(2).
---------------------------------------------------------------------------

b. Attestation to the Veracity of the Contents of the Registration and 
Petition (Including Comments on Rejections, Denials, and Revocations)
    Comments: One commenter noted the need to ensure that ranking and 
selection as described would not enable attempts to increase the chance 
of selection by representing one wage level at the registration stage 
and a lower wage level at the H-1B petition filing stage.
    Response: DHS appreciates and shares the commenter's concern. New 8 
CFR 214.2(h)(8)(iii)(D)(1)(iii), (h)(10)(ii), and (h)(11)(iii)(A)(2) 
address the concern that registrants could misrepresent wage levels at 
the registration stage to increase chances of selection. Specifically, 
this final rule empowers USCIS to deny a petition if USCIS determines 
that the statements on the registration or petition were inaccurate, 
fraudulent, or misrepresented a material fact. The rule also authorizes 
USCIS to deny or revoke approval of a subsequent new or amended 
petition filed by the petitioner, or a related entity, on behalf of the 
same beneficiary, if USCIS determines that the filing of the new or 
amended petition is part of the petitioner's attempt to unfairly 
decrease the proffered wage to an amount that would be equivalent to a 
lower wage level, after listing a higher wage level on the registration 
to increase the odds of selection. The ability to deny or revoke 
approval of an H-1B petition in such a context will defend against 
registrants and petitioners attempting to abuse the H-1B cap selection 
process by misrepresenting wage levels.
    Comment: One commenter asked what factors DHS will use to determine 
if a petitioner attempted to circumvent the proposed rule by filing a 
subsequent new petition with a lower wage under a related entity, and 
whether DHS will consider that related entities may have different 
compensation ranges for similar positions in making this determination.
    Response: DHS thanks this commenter for the question. Under new 8 
CFR 214.2(h)(10)(ii), USCIS may deny a subsequent new or amended 
petition filed by the petitioner, or a related entity, on behalf of the 
same beneficiary, if USCIS determines that the filing of the new or 
amended petition is part of the petitioner's attempt to unfairly 
increase the odds of selection during the registration or petition 
selection process, as applicable, such as by reducing the proffered 
wage to an amount that would be equivalent to a lower wage level than 
that indicated on the original petition. Whether the new or amended 
petition is part of the petitioner's attempt to unfairly increase the 
odds of selection during the registration or petition selection process 
is an issue of fact that USCIS will determine based on the totality of 
the record. As such, DHS cannot provide an exclusive list of factors 
that USCIS will consider in such adjudications. In general, however, 
the petitioner or a related entity bears the burden of proof to 
demonstrate that: the new or amended petition is not part of the 
petitioner's attempt to unfairly increase the odds of selection during 
the registration or petition selection process; the initial H-1B 
petition and the underlying registration, when applicable, was based on 
a legitimate

[[Page 1707]]

job offer; \129\ and the new or amended petition is nonfrivolous.\130\
---------------------------------------------------------------------------

    \129\ See new 8 CFR 214.2(h)(10)(ii) (``A valid registration 
must represent a legitimate job offer.''); U.S. Department of 
Homeland Security, U.S. Citizenship and Immigration Services, Policy 
Memorandum PM-602-0114, Rescission of Policy Memoranda (June 17, 
2020), https://www.uscis.gov/sites/default/files/document/memos/PM-602-0114_ITServeMemo.pdf (``A bona fide job offer must exist at the 
time of filing [the H-1B petition].'').
    \130\ See 8 CFR 214.2(h)(2)(i)(H).
---------------------------------------------------------------------------

    Further, DHS notes that, under the current registration system, the 
petitioner identified at the registration stage must match the 
petitioner of the subsequently filed petition. 8 CFR 
214.2(h)(8)(iii)(D) states that a petitioner may not substitute the 
beneficiary named in the original registration or transfer the 
registration to another petitioner. This rule has not changed this 
requirement. Accordingly, USCIS may deny an H-1B cap-subject petition 
if an entity other than the petitioner identified at the registration 
stage, including a related entity, files the petition.
    Comment: An individual suggested allowing future H-1B extensions or 
renewals only with a wage level that is equal or greater than the wage 
level selected in the lottery for the first time.
    Response: H-1B extensions or renewals are not impacted by this 
rule, and DHS declines to impose a universal requirement that all 
extension or renewal requests must be for a position at the equal or 
greater wage level. Employers are permitted to file an extension 
petition requesting continuation of previously approved employment 
without change with the same employer, which most likely involves a 
position at the same wage level. Furthermore, employers are permitted 
to file extension or amended petitions requesting new employment, 
change in previously approved employment, new concurrent employment, 
change of employer, or amended employment. All of these petition types 
could involve positions with different SOC codes, which makes a 
straight comparison of wage levels impractical.
    However, under new 8 CFR 214.2(h)(10)(ii), USCIS may deny a 
subsequent new or amended petition filed by the petitioner, or a 
related entity, on behalf of the same beneficiary, if USCIS determines 
that the filing of the new or amended petition is part of the 
petitioner's attempt to unfairly increase the odds of selection during 
the registration or petition selection process, as applicable, such as 
by reducing the proffered wage to an amount that would be equivalent to 
a lower wage level than that indicated on the original petition.
    Comment: An individual commenter said that the formal certification 
requirement, whereby the petitioner's authorized signatory certifies 
``that the proffered wage on the petition will equal or exceed the wage 
level on the applicable registration,'' does not recognize that 
registrations are submitted in March for a fiscal year beginning the 
following October. Therefore, particularly in years such as FY 2021 
where there is a second round of selections, H-1B cap petitions may be 
filed after OES wages have changed. The commenter said the new question 
added to the registration seems to address this concern, by specifying 
``[a]s of the date of this submission . . . ,'' but the formal 
certification that is binding on the employer does not make this 
distinction, which could lead to unnecessary and inappropriate 
liability. The commenter said that the certification should be revised 
to reflect only an attestation that the wage ``will equal or exceed the 
prevailing wage, in effect at the time of submission, that is 
associated with the wage level selected in the registration.''
    Response: DHS thanks the commenter, but declines to adopt the 
suggestion. As the commenter notes, the registration form makes 
sufficiently clear that the information provided on the registration is 
``as of the date of submission of this registration.'' DHS believes 
that further changes to the form are unnecessary and could potentially 
lead to gaming of the registration system.
3. Requests for Comments on Alternatives
    Comment: A research organization and a labor union recommended 
having staggered filing deadlines for petitions by wage levels as an 
alternative in case the proposed rule is met with legal challenges. 
Under this alternative, USCIS could have a first filing period, where 
only petitions with jobs paying level IV are considered. Once all the 
level IV petitions are submitted and approved, then a second filing 
period at a later date could be set to receive only petitions with jobs 
paying level III wages. After those are collected and approved, if 
there are any visas remaining under the H-1B cap, then a filing period 
for level II wages would be next, and finally a filing period for level 
I. This way, all of the petitions would not be submitted at once, 
thereby still allowing DHS to adjudicate and allocate petitions ``in 
the order in which'' they were filed, as the statute requires. If there 
were more petitions than available H-1B slots at a particular wage 
level, there could be a ``mini-lottery'' within that wage level.
    Response: DHS appreciates the commenters' suggestions to use 
staggered filing deadlines. However, DHS believes it is not necessary 
to create staggered filing deadlines since, as stated in the NPRM and 
as explained above, this rule is consistent with and permissible under 
DHS's general statutory authority provided in INA sections 103(a), 
214(a) and (c), 8 U.S.C. 1103(a), 1184(a) and (c), and HSA section 102, 
6 U.S.C. 112.\131\ Further, DHS believes that staggered filing 
deadlines may create operational challenges for managing the cap and 
adjudicating petitions in a timely manner. Staggered filing periods 
could also have unintended consequences for petitioners filing H-1B 
cap-subject petitions for beneficiaries who are in F-1 status and 
seeking a change of status.\132\ Therefore, DHS declines to adopt this 
suggestion.
---------------------------------------------------------------------------

    \131\ 85 FR 69236, 69242.
    \132\ See 8 CFR 214.2(f)(5)(vi).
---------------------------------------------------------------------------

    Comment: One commenter suggested using only the beneficiary's 
annual wage to prioritize the selection of registrations.
    Response: DHS appreciates the commenter's suggestion to prioritize 
selection based on annual wage. However, DHS believes that selecting 
registrations or petitions, as applicable, solely based on the highest 
salary would unfairly favor certain professions, industries, or 
geographic locations. Therefore, DHS believes that prioritizing 
generally based on the highest OES wage level that the proffered wage 
equals or exceeds for the relevant SOC code and in the area of intended 
employment is the better alternative.
    Comment: Several commenters were concerned about the possibility of 
abuse by companies who would offer part-time positions at greater 
hourly wages, but would reduce overall working hours, to increase their 
chance of selection. Other commenters expressed similar concerns about 
potential abuse of part-time positions, indicating that review should 
be stricter for part-time H-1B applicants.
    Response: This final rule authorizes USCIS to reject or deny a 
petition or, if approved, revoke the approval of a petition, if the 
statement of facts contained on the registration form is inaccurate, 
fraudulent, misrepresents any material fact, or is not true and 
correct.\133\ Similarly, this final rule authorizes USCIS to deny or 
revoke approval of a subsequent new or

[[Page 1708]]

amended petition filed by the petitioner, or a related entity, on 
behalf of the same beneficiary, if USCIS determines that the filing of 
the new or amended petition is part of the petitioner's attempt to 
unfairly decrease the proffered wage to an amount that would be 
equivalent to a lower wage level, after listing a higher wage level on 
the registration to increase the odds of selection.\134\ Thus, if USCIS 
finds that an employer misrepresented the part-time or full-time nature 
of a position, the number of hours the beneficiary would work, or the 
proffered salary, then USCIS could deny or revoke the petition. The 
ability to deny or revoke approval of an H-1B petition in this context 
will militate against registrants and petitioners attempting to abuse 
the H-1B cap selection process through misrepresentation.
---------------------------------------------------------------------------

    \133\ See new 8 CFR 214.2(h)(8)(iii)(D)(1)(ii).
    \134\ See new 8 CFR 214.2(h)(8)(iii)(D)(1)(iii).
---------------------------------------------------------------------------

    Comment: One commenter suggested that, if USCIS were to receive and 
rank more registrations (or petitions, in any year in which the 
registration process is suspended) at a particular prevailing wage 
level than the projected number needed to meet the numerical 
limitation, then USCIS should rank and choose registrations by the 
highest prevailing wage within that wage level. Another commenter 
stated that visas should be allocated by the prevailing wage, even 
within each level.
    Response: DHS does not believe that selecting the highest 
prevailing wage within a wage level is a better alternative to randomly 
selecting within a single wage level when USCIS receives more 
registrations (or petitions, in any year in which the registration 
process is suspended) at a particular prevailing wage level than the 
projected number needed to meet the numerical limitation. DHS prefers 
to give all registrations ranked at the particular wage level the same 
chance of selection because those registrations generally would 
represent workers at the same skill level. If DHS were to select the 
highest prevailing wage within a wage level, that could unfairly 
advantage registrations or petitions for positions in higher-paying 
metropolitan areas or occupations.
    Comment: One commenter suggested giving preference to beneficiaries 
with U.S. degrees. Another commenter stated that DHS should consider 
adding an advantage to candidates who receive a U.S. education as this 
will benefit U.S. institutions of higher education.
    Response: DHS declines to adopt the commenters' suggestions. 
Registrations or petitions, as applicable, submitted for beneficiaries 
who have earned a master's or higher degree from a U.S. institution of 
higher education already have a higher chance of selection through the 
administration of the selection process. DHS reversed the order in 
which USCIS selects registrations or petitions, as applicable, which 
was expected to result in an increase in the number of H-1B 
beneficiaries with a master's degree or higher from a U.S. institution 
of higher education selected by up to 16 percent each year \135\ and 
resulted in an 11 percent increase in FY 2020.\136\
---------------------------------------------------------------------------

    \135\ H-1B Registration Final Rule, 84 FR 888, 890.
    \136\ U.S. Department of Homeland Security, U.S. Citizenship and 
Immigration Services, DHS Proposes Minimal Registration Fee for 
Petitioners Seeking to File H-1B Cap-Subject Petitions (Sept. 3, 
2019), https://www.uscis.gov/news/alerts/dhs-proposes-minimal-registration-fee-for-petitioners-seeking-to-file-h-1b-cap-subject-petitions.
---------------------------------------------------------------------------

    Comment: Some commenters said that DHS should consider ranking by 
years of experience, rather than by wage. One commenter asked DHS to 
give an advantage to candidates who have work experience in the United 
States.
    Response: DHS declines to adopt these alternatives, as ranking by 
years of experience would not best accomplish the goal of attracting 
the most highly skilled workers. DHS believes that salary, relative to 
others in the same occupational classification and area of intended 
employment, rather than years of experience, is generally more 
indicative of skill level and the relative value of the worker to the 
United States.
    Comment: A few commenters said that DHS should consider providing 
quotas for each wage level, rather than simply ranking and selecting in 
descending order by wage levels. Other commenters suggested setting a 
limit or quota on the number of registrations submitted by certain 
types of employers, such as staffing agencies or H-1B dependent 
companies. Another commenter supported measures to prevent staffing 
companies from filing multiple registrations for offshore workers and 
stated that companies should not be able to submit more than one 
registration per beneficiary. Another commenter stated that it is 
``crucial'' to regulate consulting companies and staffing agencies.
    Response: DHS declines to pursue the alternative of setting quotas 
for each wage level or for certain types of companies as this 
alternative would not best accomplish the goal of attracting the most 
highly skilled workers. With respect to comments about prohibiting 
staffing companies from filing multiple registrations, DHS declines to 
adopt the commenters' suggestions as DHS regulations already prohibit 
an employer from submitting more than one registration per beneficiary 
in any fiscal year.\137\ Comments about the need to further regulate 
consulting and staffing companies are outside the scope of this final 
rule.
---------------------------------------------------------------------------

    \137\ See 8 CFR 214.2(h)(8)(iii)(A)(2).
---------------------------------------------------------------------------

    Comment: A few commenters suggested that DHS prohibit multiple H-1B 
petitions for the same beneficiary by different employers.
    Response: DHS regulations already prohibit a petitioner, or related 
entities, from submitting more than one H-1B cap-subject petition for 
the same beneficiary in the same fiscal year, absent a legitimate 
business need.\138\ Because registration is not intended to replace the 
petition adjudication process or to assess eligibility, USCIS cannot 
feasibly determine at the registration stage whether different entities 
that submit registrations on behalf of the same beneficiary are 
``related'' or have a ``legitimate business need.'' Further, INA 
section 214(g)(7), 8 U.S.C. 1184(g)(7), allows for ``multiple petitions 
[to be] approved for 1 alien.'' For these reasons, DHS declines to 
adopt the commenters' suggestion.
---------------------------------------------------------------------------

    \138\ See 8 CFR 214.2(h)(2)(i)(G).
---------------------------------------------------------------------------

    Comment: One commenter stated that DHS should consider increasing 
the numerical cap exemption for beneficiaries who have earned a 
master's or higher degree from a U.S. institution of higher education 
as most of the highly skilled positions do not depend entirely on the 
number of years of experience, but on the higher education degree 
requirements.
    Response: This rule does not affect either the statutorily mandated 
annual H-1B numerical limitation of 65,000 on the number of aliens who 
may be issued initial cap-subject H-1B visas or otherwise provided 
initial H-1B status, or the annual cap exemption for 20,000 aliens who 
have earned a master's or higher degree from a U.S. institution of 
higher education.\139\ As the numerical allocations are set by statute, 
DHS lacks the authority to adopt the commenter's suggestion.
---------------------------------------------------------------------------

    \139\ See INA section 214(g)(1)(A) and (5)(C), 8 U.S.C. 
1184(g)(1)(A) and (5)(C).
---------------------------------------------------------------------------

    Comment: An individual suggested DHS implement a ``market based cap 
and selection system'' by first identifying areas of the job market, 
like medical workers, that are most in need at the moment and, from 
there, ranking by wage or wage level.
    Response: DHS believes that identifying areas of the job market 
that are most in need is not feasible, as it is subjective and would be 
subject to constant change. This rule is not a

[[Page 1709]]

temporary rule that is limited in duration to the COVID-19 pandemic, 
and regularly adjusting selection criteria based on the needs of the 
job market would be administratively burdensome. Therefore, DHS 
declines to adopt the commenter's suggestion.
    Comments: A few commenters proposed that DHS prioritize selection 
based on multiple factors, including the prospective beneficiary's 
degree from a U.S. institution, the length of time legally studying or 
working in the United States, skills, wages, and other qualifications. 
Other commenters stated that the DHS should weigh other desirable 
factors, such as whether H-1B employees are U.S. university graduates 
and whether the petitioner is a small business contributing a 
significant amount of their income to wages. This would allow small 
businesses to compete for H-1B visas and prevent larger corporations 
from being the only employers to benefit from the H-1B program. Another 
comment urged DHS to create a prioritization system that incentivizes 
employers to petition for permanence for H-1B workers, among other 
desirable employer behavior in addition to fair compensation.
    Response: DHS believes that identifying and weighing multiple 
factors is not feasible, as such an approach could be overly 
complicated, unpredictable, and subjective. Therefore, DHS declines to 
adopt the commenters' suggestions.
    Comment: A professional association requested that DHS exempt 
physicians from this rule. An individual suggested providing exceptions 
or waivers for certain industries, such as the healthcare/
pharmaceutical fields, due to the different experience requirements in 
those fields.
    Response: DHS declines to exempt physicians or other specific 
occupations or fields from the rule. While DHS certainly appreciates 
the significant challenges faced by healthcare professionals, 
especially during the current COVID-19 pandemic, DHS recognizes that 
there are many other occupations that can be considered critical now 
and at various times in the future. Carving out exceptions for some 
occupations would be highly problematic, particularly as this rule is 
not a temporary rule that is limited in duration to the COVID-19 
pandemic.
    Comment: An individual commented on the alternative proposal of 
weighting registrations such that ``a level IV position would have four 
times greater chance of selection than a level I position, a level III 
position would have three times greater chance of selection than a 
level I position, and so on.'' The commenter questioned why DHS set the 
multiples at 4 times, 3 times, and 2 times.
    Response: The multiples of 4 times, 3 times, and 2 times, 
correspond to wage levels IV, III, and II, respectively. As this 
commenter did not provide additional rationale in support of or against 
this alternative, DHS will not further consider this alternative.

D. Other Issues Relating to Rule

1. Requests To Extend the Comment Period
    Comments: A few commenters and a professional association stated 
that the public has not been given sufficient time to comment on the 
proposed rule. One commenter said that there is no substantiated reason 
to limit the comment period and that doing so degrades the rulemaking 
process. An individual commenter stated that implementing these changes 
for the FY 2022 H-1B cap filing season would cause even more 
uncertainty for international students who already have faced enough 
uncertainty over the past year due to COVID-19, the Student and 
Exchange Visitor Program proposed rule,\140\ and USCIS processing 
times.
---------------------------------------------------------------------------

    \140\ DHS, U.S. Immigration and Customs Enforcement, 
Establishing a Fixed Time Period of Admission and an Extension of 
Stay Procedure for Nonimmigrant Academic Students, Exchange 
Visitors, and Representatives of Foreign Information Media, 85 FR 
60526 (Sept. 25, 2020).
---------------------------------------------------------------------------

    An individual commenter and a university requested that the comment 
period be extended to 60 days because of the proposed rule's magnitude 
and the impacts of COVID-19 on employers' resources. A professional 
association requested the same extension to allow for meaningful public 
comment, citing the language of E.O. 12866 and E.O. 13563, explaining 
that those executive orders recommend a comment period of no less than 
60 days. The association listed six issues for which the proposed rule 
requests feedback and asserted that a 30-day comment period does not 
allow adequate time to address these issues. The association also said 
that, since this rule was published during the Thanksgiving season, the 
comment period was effectively shortened even further, undercutting the 
purpose of the notice and comment process. An individual commenter 
questioned why DHS was ``rushing'' the proposed rule during the holiday 
season as opposed to providing more time for public comment.
    Response: While DHS acknowledges that E.O. 12866 and 13563 indicate 
that agencies generally should provide 60 days for public comment, DHS 
believes that the 30-day comment period was sufficient and declines to 
extend the comment period. This rule is narrow in scope, and 30 days 
was sufficient time for the public to determine the impacts of the 
proposed rule, if any, and to prepare and submit comments. The 
sufficiency of the 30-day comment period is demonstrated by the number 
of high-quality comments received from the public, including 
individuals, attorneys, employers, and organizations. Given the narrow 
scope of the rule, the quantity and quality of comments received in 
response to the proposed rule, and other publicly available information 
regarding the rule, DHS believes that the 30-day comment period has 
been sufficient.
2. Rulemaking Process
a. Multiple H-1B Rulemakings
    Comments: An anonymous commenter stated that the proposed rule does 
not discuss the DOL IFR,\141\ or explain whether DHS and DOL consulted 
with each other in drafting the rules. The commenter added that 
Congress has given DOL the primary authority in protecting U.S. labor, 
and the proposed rule does not address how it would interact with the 
DOL rule, or why the proposed rule was necessary given the DOL IFR.
---------------------------------------------------------------------------

    \141\ 85 FR 63872.
---------------------------------------------------------------------------

    An advocacy group stated that the proposed rule should not be 
implemented while the DOL IFR and the DHS IFR, Strengthening the H-1B 
Nonimmigrant Visa Classification Program (H-1B Strengthening IFR),\142\ 
were pending and being challenged in court. The commenter said it would 
be impossible to comment on the proposed rule without considering the 
impacts of the other two rules that will affect the H-1B process as 
well. Similarly, a research organization wrote that recently proposed 
rules by Federal agencies with respect to wages for foreign workers in 
work visa programs have been inconsistent and confusing. An anonymous 
commenter stated that their workplace has been overworked for months 
responding to the multiple regulatory changes to the H-1B program.
---------------------------------------------------------------------------

    \142\ U.S. Department of Homeland Security, U.S. Citizenship and 
Immigration Services, Strengthening the H-1B Nonimmigrant Visa 
Classification Program, 85 FR 63918 (Oct. 8, 2020).
---------------------------------------------------------------------------

    Response: On December 1, 2020, the U.S. District Court for the 
Northern District of California issued an order in Chamber of Commerce, 
et al. v. DHS, et al., No. 20-cv-7331, setting aside the DOL IFR and 
the DHS IFR. Similarly, on December 3, 2020, the U.S. District

[[Page 1710]]

Court for the District of New Jersey issued a preliminary injunction in 
ITServe Alliance, Inc., et al. v. Scalia, et al., No. 20-cv-14604, 
applying to the plaintiffs in that case. DOL has taken necessary steps 
to comply with the courts' orders and is no longer implementing the DOL 
IFR. DHS also took necessary steps to comply with the order in Chamber 
of Commerce, et al. v. DHS, et al., and is not implementing the DHS 
IFR. DHS, therefore, disagrees with the commenter's assertions that DHS 
must consider the DOL and DHS IFRs in the context of this final rule as 
both IFRs were set aside and are no longer being implemented.
b. Other Rulemaking Process Comments
    Comments: A joint submission from multiple organizations opposed 
the proposed rule and said that they were willing to participate in an 
informal dialogue with DHS or formally participate in an Advance Notice 
of Proposed Rulemaking process to help DHS determine whether a rule is 
needed, what regulation to develop, and viable alternative suggestions. 
A trade association also opposed the rule and advised USCIS to pursue a 
formal rulemaking effort that provides stakeholders with more input 
before the formal rulemaking process begins.
    Response: DHS believes that the public has had sufficient 
opportunity to review and comment on this rule, as demonstrated by the 
number of high-quality comments received from the public, including 
individuals, attorneys, employers, and organizations. Given the narrow 
scope of the rule, the quantity and quality of comments received in 
response to the proposed rule, and other publicly available information 
regarding the rule, DHS believes that the public has had sufficient 
opportunity to participate in the rulemaking process.
    Comment: A professional association commented that the public had 
no advance notice that the proposed rule was forthcoming because it was 
never listed on the Unified Agenda. The association also said USCIS had 
previously concluded that the policy now being proposed was not a 
permissible agency action, and therefore stakeholders were not prepared 
to conduct the sophisticated analysis necessary to assess the policy 
now being proposed in this rule.
    Response: DHS believes that the public has had sufficient 
opportunity to review and comment on this rule, as demonstrated by the 
number of high-quality comments received from the public, including 
individuals, attorneys, employers, and organizations. Further, DHS 
explained in the NPRM that this rule is consistent with and permissible 
under DHS's general statutory authority provided in INA sections 
103(a), 214(a) and (c), 8 U.S.C. 1103(a), 1184(a) and (c), and HSA 
section 102, 6 U.S.C. 112, and DHS believes that the comment period 
provided sufficient time to assess the rule.
    Comment: A research organization wrote that the administration 
waited until the 2020 election to take substantive action on the H-1B 
program, and while DOL and USCIS have legal authority to make the 
regulatory changes, the timing and regulatory process have made them 
susceptible to legal challenges. An individual commenter said that the 
administration will change in a few weeks and suggested that the 
proposed rule is being rushed into implementation before that happens. 
An individual commenter said USCIS should wait to promulgate the rule 
until the new presidential administration takes over and the Senate 
confirms a new head of both USCIS and DHS.
    Response: DHS agrees that it has the legal authority to amend its 
regulations governing the selection of registrations submitted by 
prospective petitioners seeking to file H-1B cap-subject petitions (or 
the selection of petitions, if the registration process is suspended). 
DHS believes that the public has had sufficient opportunity to review 
and comment on this rule, as demonstrated by the number of high-quality 
comments received from the public, including individuals, attorneys, 
employers, and organizations. DHS believes that the public has had 
sufficient opportunity to participate in the rulemaking process.
3. Effective Date and Implementation
    Comments: A few individual commenters supported the proposed rule's 
immediate implementation to protect U.S. jobs. Another individual 
commenter contradicted claims that it is too late in the year for 
employers to accommodate changes in the registration system, saying 
that many companies wait until the new year to reach out to employees 
anyway, and recent changes to the H-1B process have made it easier to 
petition.
    Response: DHS agrees that this rule is being published with 
sufficient time to implement it for the FY 2022 registration period.
    Comments: Many commenters, including a form letter campaign, said 
that, if USCIS were to finalize the proposed rule, it should not 
implement the proposed rule for the FY 2022 H-1B cap filing season (set 
to begin in March 2021) because changes so close to the beginning of 
that season would adversely impact U.S. employers, immigration lawyers, 
and individuals. Multiple commenters said companies have already made 
hiring decisions based on the existing registration system, so delaying 
implementation until the FY 2023 cap filing season (set to begin in 
March 2022) would give the regulated community time to adjust. A 
company commented that implementing the rule for the upcoming H-1B cap 
filing season would create uncertainty and confusion. A few commenters 
added that stakeholders have had to adapt to the new online 
registration system, which has ongoing issues, so it is unlikely that 
further modifications to the registration system will be implemented to 
run smoothly for the upcoming H-1B season. An individual commenter 
opposed implementing the proposed rule at this time because the U.S. 
economy needs time and stability to recover.
    Response: DHS believes that this rule is being published with 
sufficient time to allow employers to plan appropriately prior to the 
start of the registration period for FY 2022. DHS does not believe that 
petitioners will face significant adverse impacts with the 
implementation of this change in the selection process and believes 
that employers have sufficient time to make any decisions they believe 
are needed as a result of this rule, such as increasing proffered wages 
to increase the odds of selection. Further, DHS believes that there is 
sufficient time to allow for testing and modification and that delaying 
implementation at this time is not necessary.

E. Statutory and Regulatory Requirements

1. Impacts and Benefits (E.O. 12866, 13563, and 13771)
a. Methodology and Adequacy of the Cost-Benefit Analysis
    Comments: Multiple commenters provided input on the wage data DHS 
used to analyze the impact of the proposed rule. A couple of commenters 
referenced that the economic analysis conducted in the proposed rule 
was based on previous OES wage levels, rather than the new ones 
implemented as a result of the DOL IFR. One of these commenters stated 
that, with the huge changes in the wage levels resulting from the DOL 
IFR, the H-1B data would be much more skewed, and the economic impact 
analysis in the proposed rule was completely invalid. Another commenter 
explained that all of the analysis done in the proposed rule was based 
on previous OES wage

[[Page 1711]]

levels and there has not been any economic impact analysis based on the 
new wage rules. One commenter expressed that this rule must be read in 
concert with the DOL IFR, which reset how prevailing wage levels were 
calculated for H-1Bs. To get selected in the H-1B registration process 
under the proposed rule, the employer would have to pay a level III or 
IV prevailing wage, but those wages would be so artificially high that 
employers would not be able to pay them. The commenter concluded that 
DHS should push the proposed rule back at least one year to allow time 
for next year's H-1B data to become available. Another commenter said 
96 percent of total applicants still would fall into the new OES wage 
``level 1 below'' and would be eligible for random selection, so the 
proposed rule would not have an impact. A commenter echoed concerns 
about the use of previous OES wage levels, writing that DHS's analysis 
in the proposed rule was invalid.
    Response: The NPRM analysis was written using the appropriate 
baseline and the best information that was available to DHS at that 
time, which was prior to the publication of the DOL IFR.\143\ On 
December 1, 2020, the U.S. District Court for the Northern District of 
California issued an order in Chamber of Commerce, et al. v. DHS, et 
al., No. 20-cv-7331, setting aside the DOL IFR. Similarly, on December 
3, 2020, the U.S. District Court for the District of New Jersey issued 
a preliminary injunction in ITServe Alliance, Inc., et al. v. Scalia, 
et al., No. 20-cv-14604, applying to the plaintiffs in that case. DOL 
has taken necessary steps to comply with the courts' orders and no 
longer is implementing the DOL IFR. DHS, therefore, disagrees with the 
commenter's assertion that DHS must analyze the DOL IFR in the context 
of this final rule. This final rule does not require employers pay a 
higher wage, instead it prioritizes selection of registrations or 
petitions, as applicable, generally based on the highest OES prevailing 
wage level that the proffered wage equals or exceeds for the relevant 
SOC code and area(s) of intended employment. The selection of H-1B 
registrations or petitions, as applicable, will be based on the 
existing OES wage levels at the time of submission, and the economic 
analysis in the proposed rule properly accounted for OES prevailing 
wage levels that were in effect at the time the analysis was conducted 
and remain in effect at this time.
---------------------------------------------------------------------------

    \143\ See DOL IFR, 85 FR 63872.
---------------------------------------------------------------------------

    Comments: An anonymous commenter stated that Table 13 of the NPRM 
is inconsistent with the proposed rule's language. The commenter 
questioned why there would be level III and IV registrations selected 
in the advanced degree exemption if level III and IV registrations 
would be ``100% selected'' in the regular cap, and the proposed rule 
would not affect the order of selection between the regular cap and 
advanced degree exemption.
    Response: This final rule will not affect the order of selection 
between the regular cap and advanced degree exemption or the number of 
registrations that will be selected for each allocation. USCIS first 
selects registrations toward the number projected as needed to reach 
the regular cap, from among all registrations properly submitted, 
including those indicating that the beneficiary will be eligible for 
the advance degree exemption. USCIS then selects registrations 
indicating eligibility for the advanced degree exemption using the same 
process. With the revised selection method based on corresponding OES 
wage level and ranking shown in Table 13, the approximated average 
indicates that all registrations with a proffered wage that corresponds 
to OES wage level IV or level III would be selected and 58,999, or 75 
percent, of the registrations with a proffered wage that corresponds to 
OES wage level II would be selected toward the regular cap projections. 
None of the registrations with a proffered wage that corresponds to OES 
wage level I or below would be selected toward the regular cap 
projections. For the advanced degree exemption, DHS estimates all 
registrations with a proffered wage that corresponds to OES wage levels 
IV and III would be selected and 12,744, or 20 percent, of the 
registrations with a proffered wage that corresponds to OES wage level 
II would be selected. DHS estimates that none of the registrations with 
a proffered wage that corresponds to OES wage level I or below would be 
selected.
    Comments: A couple of commenters wrote that DHS took wage levels 
specified as ``N/A'' and consolidated them with level I wages in its 
Table 7 calculations even though there is no evidentiary basis for 
assuming that characterization or correlation to be accurate or 
appropriate. Wages negotiated under a collective bargaining agreement 
often exceed market rates, and private wage surveys frequently have 
more than 4 wage levels, which makes direct analogy to OES impractical, 
if not impossible. Since there was no way to determine the true ranking 
of the N/A petitions, they should have been excluded from the 
allocation rather than arbitrarily added to the level I share. 
Consolidating them had the prejudicial effect of attributing 31.5 
percent of regular cap and 37 percent of advanced degree cap to level 
I, when, in fact, those numbers would have been 22.8 percent and 27.5 
percent, respectively, had level I counts not included the petitions 
whose wage level was N/A. An individual commenter similarly wrote that 
DHS's analysis incorrectly claims that a number of petitions are 
categorized as having a wage level of N/A due to modifications to DOL's 
SOC structure in 2018. The commenter stated that all FY 2019 and FY 
2020 petitions were filed using the 2010 SOC structure and thus the 
2018 SOC structure would not impact those petitions. The commenter said 
that the N/A designations are likely because Question 13 on Form 9035 
only requires a designation of OES wage levels when relying on a 
prevailing wage and is left blank when petitions rely on a permissible 
alternative. This commenter also stated that, according to DHS's 
analysis in Table 6, the OES Wage Level was unavailable about 12 
percent of the time for cap-subject H-1B petitions selected for 
adjudication in FYs 2019 and 2020. DHS labels these petitions as ones 
where the OES Wage Level is ``N/A'' and then, curiously, includes all 
such ``N/A'' OES Wage Level petitions as level I petitions for purposes 
of its analysis when they are not particularly likely to be all or 
mostly level I jobs.
    Response: DHS understands and agrees with the commenter that N/A 
designations are likely when registrants rely on a permissible 
alternative private wage source that is not based on the OES survey. 
For these registrants choosing to rely on a prevailing wage that is not 
based on the OES survey, if the proffered wage is less than the 
corresponding level I OES wage, the registrant would select the ``Wage 
Level I and below'' box on the registration form. DHS deliberately 
chose to group these registrations together with level I registrations 
so that petitioners relying on non-OES sources would have a fairer 
chance of selection than if they were ranked below level I 
registrations, and to avoid penalizing prospective petitioners who 
properly rely on a private wage survey to determine the required wage 
for the proffered position.
    As explained in response to other comments, DHS does not agree with 
the suggestions to separate OES prevailing wage level I from those 
falling below level I. DHS expects that all petitioners offering a wage 
lower than the OES wage level I wage will be using a legitimate source 
other than OES or an

[[Page 1712]]

independent authoritative source, including a private wage survey. 
Therefore, such a change effectively could preclude petitioners that 
utilize one of those other sources from being selected for 
registration. By grouping OES wage level I and below OES wage level I 
together, those petitioners have a fairer chance of selection. DHS was 
unable to estimate how many registrations, initially classified as N/A, 
would end up in each wage level classification as a result of this 
rule. Due to data limitations and missing data, DHS may have included 
some N/A wage information into OES wage level I and below that could be 
classified as a wage higher than level I in the future. If DHS did not 
incorporate the petitions that fell into the N/A category, then the 
overall total of petitions would have been understated. DHS analysis 
used estimates in the Unquantified Costs & Benefits section to show a 
possible outcome and distribution of registrations once this rule is 
implemented.
    Comments: A trade association wrote that DHS conducted insufficient 
data collection to assess the impact of the proposed rule, given that 
it has OES skill wage level data for only 56 percent of registered H-1B 
petitions selected in the lottery. The commenter wrote that DHS should 
review data on all H-1B adjudications to better assess the relative 
distribution of H-1B petitions by OES level, or conduct a survey of H-
1B employers to better quantify the impact of the proposed rule by OES 
level.
    Response: USCIS analyzed the impacts of this rule in an objective 
manner using the best available data at the time the analysis was 
written. DHS has OES wage level data only on the 56 percent of 
petitions that were selected toward the numerical allocations from FY 
2019 and FY 2020. DHS does not have the wage level break down for the 
44 percent of petitions that were not selected since those petitions 
were returned to petitioners without entering data into DHS databases. 
The wage level break downs for the 56 percent that were selected for 
adjudication had a similar distribution for both FY 2019 and FY 2020. 
DHS used this distribution as an estimate of what the future 
registrations split out by wage levels may look like for the missing 44 
percent of petitions.
    Comments: An individual commenter said the proposed rule does not 
analyze the indirect impact the rule will have on the wages of 
employees, only those directly impacted by the rule. The commenter also 
wrote that the proposed rule does not consider its impact on employers 
whose higher marginal costs cause them to forego expansion or close 
down. An individual commenter said that DHS does not provide evidence 
to support its statement that the proposed rule will have no effect on 
wages or growth, writing that it is unlikely that the rule will not 
depress wages and growth.
    Response: DHS acknowledges that some petitioners might be impacted 
in terms of employment, productivity loss, search and hire costs, and 
profits resulting from labor turnover. The current random lottery 
system does not guarantee registrants that they will be able to 
petition for H-1B workers, and it could have the same effects and cause 
companies to search for alternative options. In cases where companies 
cannot find reasonable substitutes for the labor the H-1B beneficiaries 
would have provided, if selected under the random lottery process, 
affected petitioners also could lose profits from the lost 
productivity. In such cases, employers would incur opportunity costs by 
having to choose the next best alternative to immediately fill the job 
the prospective H-1B worker would have filled. The commenter provided 
neither an explanation nor a basis to support the claim that wages 
would be depressed. DHS acknowledges that some employers' growth 
(profit) could be affected; however, asserting that economic growth 
would be harmed fails to account for the fact that this rule will not 
reduce or otherwise affect the statutorily authorized number of initial 
H-1B visas granted per year. USCIS analyzed the impacts of this rule in 
an objective manner using the best available data at the time the 
analysis was written and does not have quantifiable data on the effect 
on wages or growth.
    Comment: A law firm stated that the DHS does not sufficiently 
quantify the impact of costs to petitioners, including training, labor 
for substitute workers, loss of productivity, and loss of revenue. The 
commenter wrote that, to meet the requirements of E.O. 12866, DHS 
should explain its justification for proposing changes recognized to 
have a negative impact on productivity and revenue of petitioners. The 
commenter also asked DHS to explain how the proposed rule was tailored 
to ensure it imposed the least possible burden on society as required 
under E.O. 12866.
    Response: Executive Orders 12866 and 13563 direct agencies to 
assess the costs, benefits, and transfers of available alternatives, 
and if regulation is necessary, to select regulatory approaches that 
maximize net benefits (including potential economic, environmental, 
public health and safety effects, distributive impacts, and equity). 
DHS analyzed all potential costs, benefits, and transfers of this rule. 
While DHS understands there are costs to some populations, there also 
are benefits to other populations.
    Comment: An advocacy group wrote that DHS states that an increase 
in H-1B recipients with higher salaries will compensate for any loss in 
international students and early career professionals under the 
proposed rule. However, the commenter states that DHS does not provide 
any analysis to this effect and should provide a more precise estimate 
of the costs associated with changes, particularly whether the rule 
would have an impact on the ability of employers to attract talented 
employees.
    Response: DHS does not believe that this rule will negatively 
impact the ability of employers to attract talented employees. Rather, 
DHS believes that this rule will allow employers to attract the best 
and the brightest employees.
    Comment: A law firm said the costs of the proposal are inconsistent 
with the aggregate cost savings the agency expected unselected 
petitions and the government to realize from registration. OMB 
designated the proposed rule as an ``economically significant'' 
regulatory action. In the NPRM, DHS estimated that, for a ten-year 
implementation period, the costs to the public would be more than $15.9 
million annualized at 3-percent, and more than $16 million annualized 
at 7-percent. DHS also acknowledged the possibility that the proposed 
regulation ``could result in private sector expenditures exceeding $100 
million, adjusted for inflation to $168 million in 2019 dollars, in any 
1 year.'' The costs likely are higher, as the agency has grossly 
underestimated the time-burden of this proposed regulation, such as 
suggesting that it will take a mere 20 minutes more to prepare the 
registration.
    Response: DHS acknowledges that this final rule has been designated 
an economically significant regulatory action by the Office of 
Information and Regulatory Affairs (OIRA), of the Office of Management 
and Budget. However, OIRA has waived review of this regulation under 
E.O. 12866, section 6(a)(3)(A). DHS disagrees that it will take more 
than 20 minutes to complete the additional information collection 
associated with the registration tool. Registrants or petitioners, as 
applicable, only will be required to provide, in addition to the 
information already to be collected, the highest OES prevailing wage 
level that the proffered wage equals or exceeds for the relevant SOC 
code in the area of intended

[[Page 1713]]

employment. In the limited instance where there is no current OES 
prevailing wage information for the proffered position, the registrant 
will follow DOL guidance on prevailing wage determinations to determine 
which OES wage level to select on the registration, and USCIS will rank 
and select based on the highest OES wage level.
b. Costs
    Comments: An individual commenter stated that, under the proposed 
rule, USCIS would incur additional costs related to maintaining records 
detailing how USCIS processed each H-1B petition to document the 
correct handling and prioritization of all petitions. The commenter 
also wrote that USCIS's cost for processing petitions will increase 
significantly, as it will have to review each petition for salary, 
location, and job code to determine sorting order. Another commenter 
wrote that the proposed rule indicates that DHS would not incur 
additional costs to the government because the agency could increase 
filing fees to cover costs, but that, itself, indicates the proposed 
rule would result in costs to DHS that should have been fully analyzed.
    Response: The INA provides for the collection of fees through 
USCIS's biannual fee schedule review, at a level that will ensure 
recovery of the full costs of providing adjudication and naturalization 
services by DHS. This includes administrative costs and services 
provided without charge to certain applicants and petitioners.\144\ DHS 
notes the time necessary for USCIS to review the information submitted 
with the forms relevant to this final rule includes the time to 
adjudicate the benefit request. These costs are captured in the fees 
collected for the benefit request from petitioners. DHS accounts for 
familiarization cost and additional costs due to the increased burden 
per response for the petitioners, which is shown as costs in the 
Regulatory Impact Analysis. Other form applications and petition fees 
will cover the increased adjudication costs until the fee rule is 
reassessed
---------------------------------------------------------------------------

    \144\ See INA section 286(m), 8 U.S.C. 1356(m).
---------------------------------------------------------------------------

    Comment: One commenter wrote that the proposed rule likely would 
require technical changes to USCIS's registration system that the 
agency has already implemented for the FY 2021 H-1B cap season. The 
commenter added that it is noteworthy that the proposed rule follows a 
recent announcement that USCIS must furlough 70 percent of its 
workforce. Another commenter said that, if this rule is put in place, 
companies will stop hiring foreign workers and USCIS will lose the 
revenue from this program as it is already in a fiscal crisis.
    Response: The President of the United States signed into law the 
Continuing Appropriations Act, 2021 and Other Extensions Act, H.R. 
8337,\145\ which became Public Law 116-159, on October 1, 2020. This 
public law includes language from the Emergency Stopgap USCIS 
Stabilization Act, which allows USCIS to establish and collect 
additional premium processing fees, and to use those additional funds 
for expanded purposes. Because of the authorization to increase premium 
processing fees, and cost-savings measures taken by the agency, USCIS 
is in a better place financially. As a result, USCIS was able to avoid 
all potential furloughs, and, barring unforeseen changes in 
circumstances, any potential furloughs in FY 2021.\146\
---------------------------------------------------------------------------

    \145\ Continuing Appropriations Act, 2021 and Other Extensions 
Act, Public Law 116-159, 134 Stat. 709 (Oct 1, 2020).
    \146\ See U.S. Department of Homeland Security, U.S. Citizenship 
and Immigration Services, USCIS Averts Furlough of Nearly 70% of 
Workforce (Aug. 25, 2020), https://www.uscis.gov/news/news-releases/uscis-averts-furlough-of-nearly-70-of-workforce.
---------------------------------------------------------------------------

c. Benefits
    Comment: An individual commenter wrote that the proposed rule has 
been criticized for favoring larger firms over smaller businesses and 
startups, but it is unlikely that these types of businesses would 
immediately need the types of high salaried workers who would qualify 
for an H-1B visa. Instead, the commenter said there should be 
sufficient domestic talent under this rule to meet those labor needs. 
An individual commenter wrote that the proposed rule would have the 
benefit of curbing the practice of employers underpaying H-1B 
petitioners by offering level I wages to those with sufficient 
experience for higher wages. As a result, employers will not be able to 
favor cheaper international labor and would consider domestic labor.
    Response: DHS agrees with this commenter that there should be 
sufficient replacement labor available in the U.S. workforce that can 
meet domestic labor needs. This rule will help the U.S. workforce, as 
employers that might have petitioned for cap-subject H-1B workers to 
fill relatively lower-paid, lower-skilled positions, may be 
incentivized to hire available and qualified U.S. workers for those 
positions.
    Comment: Referencing DHS's suggestion that one of the proposed 
rule's unquantified benefits is increased opportunities for lower-
skilled U.S. workers in the labor market, an individual commenter 
stated that low-skilled workers cannot replace H-1B specialty 
occupation workers.
    Response: DHS disagrees. If an employer is hiring an entry-level 
employee at a level I prevailing wage, then an available and qualified 
U.S. worker can be a substitute.
2. Paperwork Reduction Act
    Comments: A commenter stated that requiring an employer to provide 
a wage level at the time of electronic registration for the H-1B cap 
seems to violate the Paperwork Reduction Act (PRA), which generally 
only permits the collection of information needed to meet a legally 
supported objective. The commenter indicated DHS has not adequately 
explained how collecting the OES prevailing wage level at the time of 
electronic registration is consistent with the PRA, as employers are 
not required to obtain an LCA at the time of the electronic 
registration for the H-1B cap.
    Response: DHS disagrees that requiring the registrant to provide 
the wage level that the proffered wage corresponds to for the relevant 
SOC and area of employment, or that corresponds to the position 
requirements when OES wage data is unavailable, at the time of 
electronic registration for the H-1B cap would violate the PRA. Once 
this rule becomes effective, collection of such information would be 
needed to implement the rule and to select registrations in accordance 
with this rule, and thus would be a legally supported objective. As 
noted in the NPRM, an LCA is not a requirement for registration. 
However, consistent with the registrant's attestation that the 
registration is submitted for a valid offer of employment, DHS expects 
each registrant (i.e., the prospective petitioner or the attorney or 
accredited representative submitting the registration for the 
prospective petitioner) to know and be able to provide the relevant 
corresponding wage level when submitting a registration, regardless of 
whether they have a certified LCA at that time.

F. Out of Scope

    An individual commenter called for relief for those who need 
housing and food, ``instead of bringing in foreigners.'' Another 
individual commenter said that the increase in H-1B visas and 
outsourcing to foreign contractors caused their spouse's wages to 
stagnate despite increased responsibility, and

[[Page 1714]]

fewer U.S. born entry-level employees were hired. Yet another 
individual commenter wrote that the agency should make it easier to 
report visa fraud, and that stricter, more comprehensive punishments 
should be in place for visa fraud. A few anonymous commenters said that 
the H-1B visa is a ``scam.'' A trade association wrote in opposition to 
two other rules related to the H-1B visa published by DOL and DHS, the 
latter of which revised the definition of ``specialty occupations'' 
eligible for H-1B visas, limited visas to one year for third party 
worksites, and expanded DHS worksite oversight.\147\ Another trade 
association also wrote in opposition to the DOL and DHS IFRs, objecting 
specifically to the DHS IFR's revisions to the definitions of 
``specialty occupations'' and ``U.S. employer,'' the requirements for 
corroborating evidence for specialty occupations, and the amended 
validity period for third-party placement at worksites.\148\ The 
commenter provided background information and a summary of the DHS IFR. 
One commenter said the lottery system is unfair, and USCIS should 
instead focus on limiting fraud and abuse of the lottery system. Yet 
another trade association opposed the proposed rule and suggested that 
the Agency implement reforms as discussed in the National Association 
of Manufacturer's ``A Way Forward'' plan, including statutory changes 
to the H-1B program, border security measures, asylum, and other 
immigration programs. A union argued that due to the ``timing and 
rushed nature'' of the DOL IFR and this proposed rule, any changes are 
vulnerable to procedural challenge and are likely politically 
motivated. The commenter went on to provide extensive feedback on the 
DOL and DHS IFRs and the H-1B program at large, calling for immigration 
reform and urging the Departments of Labor and Homeland Security to 
make structural changes to the H-1B program that protect workers' 
rights. A research organization wrote about the H-1B program in 
general, saying that allowing outsourcing companies to hire H-1B 
workers lets employers use the immigration system to ``degrade labor 
standards for skilled workers'' and exploit H-1B employees. 
Additionally, the commenter argued that outsourcing companies are using 
the H-1B program to underpay H-1B workers, replace U.S. workers, and 
send tech jobs abroad. A submission on behalf of U.S. citizen medical 
graduates urged expanding the H-1B and J-1 visa ban to include the 
healthcare sector, prioritizing U.S. citizens for placement in 
residency programs, or that the Accreditation Council for Graduate 
Medical Education (ACGME) consider opening up more residency spots and 
new residency programs. A professional association recommended that 
USCIS modify its regulation at 8 CFR 214.2(h)(8)(iii)(A)(4) 
(``Limitation on requested start date'') permitting a requested start 
date on or after the first day for the applicable fiscal year.
---------------------------------------------------------------------------

    \147\ DOL IFR, 85 FR 63872; H-1B Strengthening IFR, 85 FR 63918.
    \148\ H-1B Strengthening IFR, 85 FR 63918.
---------------------------------------------------------------------------

    Response: DHS appreciates these comments; however, DHS did not 
propose to address these issues in the proposed rule, so these comments 
fall outside of the scope of this rulemaking. DHS is finalizing this 
rule as proposed.

V. Statutory and Regulatory Requirements

A. Executive Orders 12866 (Regulatory Planning and Review), Executive 
Order 13563 (Improving Regulation and Regulatory Review), and Executive 
Order 13771 (Reducing Regulation and Controlling Regulatory Costs)

    Executive Orders (E.O.) 12866 and 13563 direct agencies to assess 
the costs, benefits, and transfers of available alternatives, and if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, of reducing costs, of harmonizing rules, and of promoting 
flexibility.
    Pursuant to Executive Order 12866 (Regulatory Planning and Review), 
the Office of Information and Regulatory Affairs (OIRA), of the Office 
of Management and Budget, has determined that this final rule is an 
economically significant regulatory action. However, OIRA has waived 
review of this regulation under section 6(a)(3)(A) of Executive Order 
12866.
1. Summary of Economic Effects
    DHS is amending its regulations governing the selection of 
registrants eligible to file H-1B cap-subject petitions, which includes 
petitions subject to the regular cap and those asserting eligibility 
for the advanced degree exemption, to allow for ranking and selection 
based on OES wage levels corresponding to their SOC codes. USCIS will 
rank and select the registrations properly submitted (or petitions in 
any year in which the registration process is suspended) generally on 
the basis of the highest OES wage level that the proffered wage equals 
or exceeds for the relevant SOC code and in the area of intended 
employment. USCIS will begin with OES wage level IV and proceed in 
descending order with OES wage levels III, II, and I. DHS is amending 
the relevant sections of DHS regulations to reflect these changes.
    The described change in selection is expected to result in a 
different allocation of H-1B visas (or grants of initial H-1B status) 
favoring petitioners that proffer relatively higher wages. In the 
analysis that follows, DHS presents its best estimate for how H-1B 
petitioners will be affected by and will respond to the increased 
probability of selection of registrations of petitions proffering the 
highest wages for a given occupation and area of employment. DHS 
estimates the net costs that will result from this final rule compared 
to the baseline of the H-1B visa program. For the 10-year 
implementation period of the rule, DHS estimates the annualized costs 
to the public would be $15,968,792 annualized at 3-percent, $16,089,770 
annualized at 7-percent.
    Table 1 provides a more detailed summary of the final rule 
provisions and their impacts.

[[Page 1715]]



                      Table 1--Summary of Provisions and Economic Impacts of the Final Rule
----------------------------------------------------------------------------------------------------------------
                                       Description of changes      Estimated costs of     Estimated benefits of
              Provision                     to provision               provisions               provisions
----------------------------------------------------------------------------------------------------------------
Currently, USCIS randomly selects H-  USCIS will rank and       Quantitative:            Quantitative:
 1B registrations or cap-subject       select H-1B              Petitioners--            Petitioners--
 petitions, as applicable. USCIS       registrations (or H-1B   <bullet> $3,457,401      <bullet> None.
 will change the selection process     petitions if the          costs annually for      DHS/USCIS--
 to prioritize selection of            registration              petitioners completing  <bullet> None.
 registrations or cap-subject          requirement is            and filing Form I-129   Qualitative:
 petitions, as applicable, based on    suspended) generally      petitions with an       U.S. Workers--
 corresponding OES wage level.         based on the highest      additional time burden  <bullet> A possible
DHS regulations currently address H-   OES wage level that the   of 15 minutes.           increase in employment
 1B cap allocation in various          proffered wage equals    <bullet> $11,795,997      opportunities for
 contexts:.                            or exceeds for the        costs annually for       similarly skilled
1. Fewer registrations than needed     relevant SOC code and     prospective              unemployed or
 to meet the H-1B regular cap..        area(s) of intended       petitioners submitting   underemployed U.S.
2. Sufficient registrations to meet    employment. This final    electronic               workers seeking
 the H-1B regular cap during the       rule will add             registrations with an    employment in
 initial registration period..         instructions and a        additional time burden   positions otherwise
3. Fewer registrations than needed     question to the           of 20 minutes.           offered to H-1B cap-
 to meet the H-1B advanced degree      registration form to     DHS/USCIS--               subject beneficiaries
 exemption numerical limitation..      select the appropriate   <bullet> None.            at wage levels
4. Sufficient registrations to meet    wage level. This final   Qualitative:              corresponding to lower
 the H-1B advanced degree exemption    rule also will add       Petitioners--             wage positions.
 numerical limitation during the       instructions and         <bullet> Petitioners     H-1B Workers--
 initial registration period..         questions to the H-1B     may incur costs to      <bullet> A possible
5. Increase to the number of           petition seeking the      seek out and train       increase in
 registrations projected to meet the   same wage level           other workers, or to     productivity, measured
 H-1B regular cap or advanced degree   information and other     induce workers with      in increased H-1B
 exemption allocations in a FY..       information concerning    similar qualifications   wages, resulting from
6. H-1B cap-subject petition filing    the proffered position    to consider changing     the reallocation of a
 following registration--(1) Filing    to assess the             industry or              fixed number of visas
 procedures..                          prevailing wage level.    occupation.              from positions
7. Petition-based cap-subject          This final rule will     <bullet> Petitioners      classified as lower-
 selections in event of suspended      not affect the order of   that would have hired    level work to
 registration process..                selection as between      relatively low-paid H-   employers able to pay
8. Denial of petition...............   the regular cap and the   1B workers, but were     the highest wages for
9. Revocation of approval of           advanced degree           unable to do so          the most highly
 petition..                            exemption.                because of non-          skilled workers.
                                      If USCIS receives and      selection (and          <bullet> A possible
                                       ranks more                ineligibility to file    increase in wages for
                                       registrations at a        petitions), may incur    positions offered to H-
                                       particular wage level     reduced labor            1B cap-subject
                                       than the projected        productivity and         beneficiaries for the
                                       number needed to meet     revenue.                 same work to improve
                                       the numerical            <bullet> Petitioners      the prospective
                                       limitation, USCIS will    may incur costs from     petitioner's chance of
                                       randomly select from      offering beneficiaries   selection.
                                       all registrations         higher wages for the    Petitioners--
                                       within that particular    same work to achieve    <bullet> Level I and
                                       wage level a sufficient   greater chances of       level II beneficiaries
                                       number of registrations   selection.               may see increased
                                       needed to reach the      DHS/USCIS--               wages. Companies who
                                       numerical limitation.    <bullet> None.            have historically paid
                                      USCIS is authorized to                              level I wages may be
                                       deny a subsequent new                              incentivized to offer
                                       or amended petition                                their H-1B employees
                                       filed by the                                       higher wages, so that
                                       petitioner, or a                                   they could have a
                                       related entity, on                                 greater chance of
                                       behalf of the same                                 selection at a level
                                       beneficiary for a lower                            II or higher.
                                       wage level if USCIS                               <bullet> Employers who
                                       determines that the new                            offer H-1B workers
                                       or amended petition was                            wages that corresponds
                                       filed to reduce the                                with level III or
                                       wage level listed on                               level IV OES wages may
                                       the original petition                              have higher chances of
                                       to unfairly increase                               selection.
                                       the odds of selection                             DHS/USCIS--
                                       during the registration                           <bullet> Submitting
                                       selection process.                                 additional wage level
                                      In any year in which                                information on both an
                                       USCIS suspends the H-1B                            electronic
                                       electronic registration                            registration and on
                                       process for cap-subject                            Form I-129 will allow
                                       petitions, USCIS will,                             USCIS to maintain the
                                       instead, allow for the                             integrity of the H-1B
                                       submission of H-1B cap-                            cap selection and
                                       subject petitions.                                 adjudication
                                       After USCIS receives a                             processes.
                                       sufficient number of                              <bullet> Registrations
                                       petitions to meet the H-                           or petitions, as
                                       1B regular cap and were                            applicable, will be
                                       to complete the                                    more likely to be
                                       selection process of                               selected under the
                                       petitions for the H-1B                             numerical allocations
                                       regular cap following                              for the highest paid,
                                       the same method of                                 and presumably highest
                                       ranking and selection                              skilled or highest-
                                       based on corresponding                             valued, beneficiaries.
                                       OES wage level, USCIS
                                       will determine whether
                                       there is a sufficient
                                       number of remaining
                                       petitions to meet the H-
                                       1B advanced degree
                                       exemption numerical
                                       limitation.
Familiarization Cost................  Familiarization costs     Quantitative:            Quantitative:
                                       comprise the             Petitioners--            Petitioners--
                                       opportunity cost of the  <bullet> One-time cost   <bullet> None.
                                       time spent reading and    of $6,285,527 in FY     DHS/USCIS--
                                       understanding the         2022.                   <bullet> None.
                                       details of a rule to     DHS/USCIS--              Qualitative:
                                       fully comply with the    <bullet> None.           Petitioners--
                                       new regulation(s).       Qualitative:             <bullet> None.
                                                                Petitioners--            DHS/USCIS--
                                                                <bullet> None.           <bullet> None.
                                                                DHS/USCIS--
                                                                None.
----------------------------------------------------------------------------------------------------------------

    In addition to the impacts summarized here, Table 2 presents the 
accounting statement as required by OMB Circular A-4.\149\
---------------------------------------------------------------------------

    \149\ White House, Office of Management and Budget, Circular A-4 
(Sept. 17, 2003), available at https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/circulars/A4/a-4.pdf (last visited Aug. 11, 
2020).

                                                          Table 2--OMB A-4 Accounting Statement
                                                              [$, 2019 for FY 2022-FY 2032]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                  Category                        Primary estimate         Minimum estimate         Maximum estimate             Source citation
--------------------------------------------------------------------------------------------------------------------------------------------------------
Benefits:
    Annualized Monetized Benefits over 10                         N/A                      N/A                      N/A  ...............................
     years (discount rate in parenthesis).                        N/A                      N/A                      N/A
                                             -----------------------------------------------------------------------------------------------------------

[[Page 1716]]

 
    Annualized quantified, but un-monetized,                        0                        0                        0
     benefits.
                                             -----------------------------------------------------------------------------------------------------------
    Unquantified Benefits...................   This final rule will benefit petitioners agreeing to pay H-1B workers a   RIA.
                                               proffered wage corresponding to OES wage level III or IV, by increasing
                                                  their chance of selection in the H-1B cap selection process. These
                                               changes align with the Administration's goals of improving policies such
                                               that the H-1B classification more likely will be awarded to the highest
                                                paid or highest skilled beneficiaries. These changes will also better
                                                    align the administration of the H-1B program with the dominant
                                                                        Congressional intent.
                                              This final rule may provide increased opportunities for similarly skilled
                                                U.S. workers in the labor market to compete for work as there will be
                                                fewer H-1B workers paid at the lower wage levels to compete with U.S.
                                                                            workers.\150\
                                                Further, assuming demand outpaces the 85,000 visas currently available
                                                for annual allocation, DHS believes that the potential reallocation of
                                                 visas to favor those petitioners able to offer the highest wages to
                                              recruit the most highly skilled workers will result in increased marginal
                                                                  productivity of all H-1B workers.
                                              This final rule may provide increased wages for positions offered to H-1B
                                              cap-subject beneficiaries.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Costs:
    Annualized monetized costs over 10 years  (3 percent) $15,968,792                      N/A                      N/A  RIA.
     (discount rate in parenthesis).          (7 percent) $16,089,770                      N/A                      N/A
                                             -----------------------------------------------------------------------------------------------------------
    Annualized quantified, but un-monetized,                                     N/A                                     ...............................
     costs.
                                             -----------------------------------------------------------------------------------------------------------
    Qualitative (unquantified) costs........   This final rule is expected to reduce the number of petitions for lower   RIA.
                                               wage H-1B workers. This may result in increased recruitment or training
                                                  costs for petitioners that seek new pools of talent. Additionally,
                                                petitioners' labor costs or training costs for substitute workers may
                                               increase. DHS also acknowledges that some petitioners might be impacted
                                               in terms of the employment, productivity loss, search and hire cost per
                                               employer of $4,398, and profits resulting from labor turnover. In cases
                                              where companies cannot find reasonable substitutions for the labor the H-
                                               1B beneficiary would have provided, affected petitioners will also lose
                                               profits from the lost productivity. In such cases, employers will incur
                                                  opportunity costs by having to choose the next best alternative to
                                                  immediately filling the job the prospective H-1B worker would have
                                                filled. There may be additional opportunity costs to employers such as
                                                                      search costs and training.
                                               Such possible disruptions to companies will depend on the interaction of
                                                 a number of complex variables that are constantly in flux, including
                                              national, state, and local labor market conditions, economic and business
                                                    factors, the type of occupations and skills involved, and the
                                                       substitutability between H-1B workers and U.S. workers.
                                              Petitioners that would have hired relatively lower-paid H-1B workers, but
                                               were unable to do so because of non-selection (and ineligibility to file
                                                    a petition), may incur reduced labor productivity and revenue.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Transfers:
    Annualized monetized transfers: ``on                          N/A                      N/A                      N/A  ...............................
     budget''.
                                             -----------------------------------------------------------------------------------------------------------
    From whom to whom?......................                                                                             ...............................
                                             -----------------------------------------------------------------------------------------------------------
    Annualized monetized transfers: ``off-                        N/A                      N/A                      N/A  ...............................
     budget''.
                                             -----------------------------------------------------------------------------------------------------------
    From whom to whom?......................                      N/A                      N/A                      N/A  ...............................
--------------------------------------------------------------------------------------------------------------------------------------------------------
       Miscellaneous analyses/category                                         Effects                                           Source citation
--------------------------------------------------------------------------------------------------------------------------------------------------------
Effects on state, local, and/or tribal                                           N/A                                     RFA.
 governments.
                                             -----------------------------------------------------------------------------------------------------------
Effects on small businesses.................                                     N/A                                     RFA.
                                             -----------------------------------------------------------------------------------------------------------
Effects on wages............................                                     N/A                                     None.
                                             -----------------------------------------------------------------------------------------------------------
Effects on growth...........................                                     N/A                                     None.
--------------------------------------------------------------------------------------------------------------------------------------------------------

2. Background and Purpose of the Final Rule
---------------------------------------------------------------------------

    \150\ DHS acknowledges, however, that some employers may 
increase the wages of existing H-1B workers without changing job 
requirements or requiring higher levels of education, skills, 
training, and experience. In those cases, there may not be 
anticipated vacancies at wage levels I and II for U.S. workers to 
fill.
---------------------------------------------------------------------------

    The H-1B visa program allows U.S. employers to temporarily hire 
foreign workers to perform services in a specialty occupation, services 
related to a Department of Defense (DOD) cooperative research and 
development project or coproduction project, or services of 
distinguished merit and ability in the field of fashion modeling.\151\ 
A specialty occupation is defined as an occupation that requires the 
(1) theoretical and practical application of a body of highly 
specialized knowledge and (2) attainment of a bachelor's or higher 
degree in the specific specialty (or its equivalent) as a minimum 
qualification for entry into the occupation in the United States.\152\
---------------------------------------------------------------------------

    \151\ See INA section 101(a)(15)(H)(i)(b), 8 U.S.C. 
1101(a)(15)(H)(i)(b); Public Law 101-649, section 222(a)(2), 104 
Stat. 4978 (Nov. 29, 1990); 8 CFR 214.2(h).
    \152\ See INA section 214(i)(l), 8 U.S.C. 1184(i)(l).
---------------------------------------------------------------------------

    The number of aliens who may be issued initial H-1B visas or 
otherwise provided initial H-1B nonimmigrant status during any FY has 
been capped at various levels by Congress over time, with the current 
numerical limit generally being 65,000 per FY.\153\ Congress has also 
provided for various exemptions from the annual numerical allocations, 
including an exemption for

[[Page 1717]]

20,000 aliens who have earned a master's or higher degree from a U.S. 
institution of higher education.\154\
---------------------------------------------------------------------------

    \153\ See INA section 214(g)(1)(A), 8 U.S.C. 1184(g)(1)(A).
    \154\ See INA section 214(g)(5) and (7), 8 U.S.C. 1184(g)(5) and 
(7).
---------------------------------------------------------------------------

    Under the current regulation, all petitioners seeking to file an H-
1B cap-subject petition must first electronically submit a registration 
for each beneficiary on whose behalf they seek to file an H-1B cap-
subject petition, unless USCIS suspends the registration 
requirement.\155\ USCIS monitors the number of H-1B registrations 
submitted during the announced registration period of at least 14 days 
and, at the conclusion of that period, if more registrations are 
submitted than projected as needed to reach the numerical allocations, 
randomly selects from among properly submitted registrations the number 
of registrations projected as needed to reach the H-1B numerical 
allocations.\156\ Under this random H-1B registration selection 
process, USCIS first selects registrations submitted on behalf of all 
beneficiaries, including those eligible for the advanced degree 
exemption. USCIS then selects from the remaining registrations a 
sufficient number projected as needed to reach the advanced degree 
exemption. A prospective petitioner whose registration is selected is 
notified of the selection and instructed that the petitioner is 
eligible to file an H-1B cap-subject petition for the beneficiary named 
in the selected registration within a filing period that is at least 90 
days in duration and begins no earlier than 6 months ahead of the 
actual date of need (commonly referred to as the employment start 
date).\157\ When registration is required, a petitioner seeking to file 
an H-1B cap-subject petition is not eligible to file the petition 
unless the petition is based on a valid, selected registration for the 
beneficiary named in the petition.\158\
---------------------------------------------------------------------------

    \155\ See 8 CFR 214.2(h)(8)(iii)(A).
    \156\ See 8 CFR 214.2(h)(8)(iii)(A)(5)-(6).
    \157\ See 8 CFR 214.2(h)(8)(iii)(D)(2).
    \158\ See 8 CFR 214.2(h)(8)(iii)(A)(1).
---------------------------------------------------------------------------

    Prior to filing an H-1B petition, the employer is required to 
obtain a certified Labor Condition Application (LCA) from the 
Department of Labor (DOL).\159\ The LCA form collects information about 
the employer and the occupation for the H-1B worker(s). The LCA 
requires certain attestations from the employer, including, among 
others, that the employer will pay the H-1B worker(s) at least the 
required wage.\160\ This final rule amends DHS regulations concerning 
the selection of electronic registrations submitted by or on behalf of 
prospective petitioners seeking to file H-1B cap-subject petitions (or 
the selection of petitions, if the registration process is suspended), 
which includes petitions subject to the regular cap and those asserting 
eligibility for the advanced degree exemption, to allow for ranking and 
selection based on OES wage levels. When applicable, USCIS will rank 
and select the registrations received generally on the basis of the 
highest OES wage level that the proffered wage equals or exceeds for 
the relevant SOC code and in the area(s) of intended employment, 
beginning with OES wage level IV and proceeding in descending order 
with OES wage levels III, II, and I and below.\161\ For registrants 
relying on a private wage survey, if the proffered wage is less than 
the corresponding level I OES wage, the registrant will select the 
``Wage Level I and below'' box on the registration form.\162\ If USCIS 
receives and ranks more registrations at a particular wage level than 
the projected number needed to meet the applicable numerical 
allocation, USCIS will randomly select from all registrations within 
that wage level a sufficient number of registrations needed to reach 
the applicable numerical limitation.\163\
---------------------------------------------------------------------------

    \159\ See 8 CFR 214.2(h)(4)(i)(B).
    \160\ See 20 CFR 655.731 through 655.735.
    \161\ See new 8 CFR 214.2(h)(8)(iii)(A)(1)(i).
    \162\ See new 8 CFR 214.2(h)(8)(iii)(A)(1)(i).
    \163\ See new 8 CFR 214.2(h)(8)(iii)(A)(5)-(6).
---------------------------------------------------------------------------

3. Historic Population
    The historic population consists of petitioners who file on behalf 
of H-1B cap-subject beneficiaries (in other words, beneficiaries who 
are subject to the annual numerical limitation, including those 
eligible for the advanced degree exemption). DHS uses the 5-year 
average of H-1B cap-subject petitions received for FYs 2016 to 2020 
(211,797) as the historic estimate of H-1B cap-subject petitions that 
were submitted annually.\164\ Prior to publication of U.S. Citizenship 
and Immigration Services Fee Schedule and Changes to Certain Other 
Immigration Benefit Request Requirements (Fee Schedule Final 
Rule),\165\ H-1B petitioners submit Form I-129 with applicable 
supplements for H-1B petitions. Through the Fee Schedule Final Rule, 
DHS created a new Form I-129 for H-1B petitioners.\166\ Form I-129 does 
not include separate supplements as relevant data collection fields 
have been incorporated into Form I-129. DHS assumes that the number of 
petitioners who previously filled out the Form I-129 and H-1B 
supplements is the same as the number of petitioners who will complete 
the new Form I-129H1.
---------------------------------------------------------------------------

    \164\ In FY 2018, 198,460 H-1B petitions were submitted in the 
first five days that cap-subject petitions could be submitted, a 16 
percent decline in H-1B cap-subject petitions from FY 2017. Though 
the receipt of H-1B cap-subject petitions fell in FY 2018, the 
petitions received still far exceeded the numerical limitations, 
continuing a trend of excess demand since FY 2011. For H-1B filing 
petitions data prior to FY 2014, see U.S. Department of Homeland 
Security, U.S. Citizenship and Immigration Services, Reports and 
Studies, https://www.uscis.gov/tools/reports-studies/reports-and-studies (last visited Sept. 2, 2020).
    \165\ DHS estimates the costs and benefits of this final rule 
using the newly published U.S. Citizenship and Immigration Services 
Fee Schedule and Changes to Certain Other Immigration Benefit 
Request Requirements, final rule (Fee Schedule Final Rule), and 
associated form changes, as the baseline. 85 FR 46788 (Aug. 3, 
2020). The Fee Schedule Final Rule was scheduled to go into effect 
on October 2, 2020. On September 29, 2020, the U.S. District Court 
for the Northern District of California issued a nationwide 
injunction, which prevents DHS from implementing the Fee Schedule 
Final Rule. See Immigrant Legal Resource Center v. Wolf, No. 4:20-
cv-5883 (N.D. Cal. Sept. 29, 2020). In addition, on October 8, 2020, 
DHS was also preliminarily enjoined from implementing and enforcing 
the Fee Schedule Final Rule by the U.S. District Court for the 
District of Columbia, including by adopting any form changes 
associated with the rule. See Northwest Immigrant Rights Project v. 
U.S. Citizenship and Immigration Servs., 1:19-cv-03283-RDM (D.D.C. 
Oct. 8, 2020). DHS intends to vigorously defend these lawsuits and 
is not changing the baseline for this final rule as a result of the 
litigation. Should DHS not prevail in the Fee Schedule Final Rule 
litigation, this final rule may reflect overstated transfers, costs, 
and opportunity costs associated with the filing of the Form I-129.
    \166\ See Fee Schedule Final Rule, 85 FR 46788.

                   Table 3--H-1B Cap-Subject Petitions Submitted to USCIS for FY 2016--FY 2020
----------------------------------------------------------------------------------------------------------------
                                                          Total number of
                                                          H-1B cap-subject  Total number of H-     Number of
                      Fiscal year                            petitions        1B  petitions     petitions filed
                                                             submitted           selected       with  Form G-28
----------------------------------------------------------------------------------------------------------------
2016...................................................            232,973             97,711             72,292
2017...................................................            236,444             95,818             68,743
2018...................................................            198,460             95,923             78,900

[[Page 1718]]

 
2019...................................................            190,098            110,376             93,495
2020...................................................            201,011            109,283             92,396
                                                        --------------------------------------------------------
    Total..............................................          1,058,986            509,111            405,826
----------------------------------------------------------------------------------------------------------------
    5-year average.....................................            211,797            101,822             81,165
----------------------------------------------------------------------------------------------------------------
Source: Total Number of H-1B Cap-Subject Petitions Submitted FYs 2016-2020, USCIS Service Center Operations
  (SCOPS), June 2019. Total Number of Selected Petitions data, USCIS Office of Performance and Qualify (OPQ),
  Performance Analysis and External Reporting (PAER), July 2020.

    Table 3 also shows historical Form G-28 filings by attorneys or 
accredited representatives accompanying selected H-1B cap-subject 
petitions. DHS notes that these forms are not mutually exclusive. Based 
on the 5-year average, DHS estimates 79.7 percent \167\ of selected 
petitions will be filed with a Form G-28. Table 3 does not include data 
for FY 2021 as the registration requirement was first implemented for 
the FY 2021 H-1B cap selection process, and petition submission was 
ongoing at the time of this analysis.
---------------------------------------------------------------------------

    \167\ Calculation: 81,165 Forms G-28/101,822 Form I-129 
petitions = 79.7 percent
---------------------------------------------------------------------------

    The H-1B selection process changed significantly after the 
publication of the H-1B Registration Final Rule.\168\ That rule 
established a mandatory electronic registration requirement that 
requires petitioners seeking to file cap-subject H-1B petitions, 
including those eligible for the advanced degree exemption, to first 
electronically register with USCIS during a designated registration 
period. That rule also reversed the order by which USCIS counts H-1B 
registrations (or petitions, for any year in which the registration 
requirement is suspended) toward the number projected to meet the H-1B 
numerical allocations, such that USCIS first selects registrations 
submitted on behalf of all beneficiaries, including those eligible for 
the advanced degree exemption. USCIS then selects from the remaining 
registrations a sufficient number projected as needed to reach the 
advanced degree exemption. The registration requirement was first 
implemented for the FY 2021 H-1B cap. During the initial registration 
period for the FY 2021 H-1B cap selection process, DHS received 274,237 
registrations.
---------------------------------------------------------------------------

    \168\ See H-1B Registration Final Rule, 84 FR 888.
---------------------------------------------------------------------------

4. Cost-Benefit Analysis
    Through these changes, petitioners will incur costs associated with 
additional time burden in completing the registration process and, if 
selected for filing, the petition process. In this analysis, DHS 
estimates the opportunity cost of time for these occupations using 
average hourly wage rates of $32.58 for HR specialists and $69.86 for 
lawyers.\169\ However, average hourly wage rates do not account for 
worker benefits such as paid leave, insurance, and retirement. DHS 
accounts for worker benefits when estimating the opportunity cost of 
time by calculating a benefits-to-wage multiplier using the most recent 
DOL, BLS report detailing average compensation for all civilian workers 
in major occupational groups and industries. DHS estimates the 
benefits-to-wage multiplier is 1.46.\170\ For purposes of this final 
rule, DHS calculates the average total rate of compensation as $47.57 
per hour for an HR specialist, where the average hourly wage is $32.58 
per hour worked and average benefits are $14.99 per hour.\171\ 
Additionally, DHS calculates the average total rate of compensation as 
$102.00 per hour for an in-house lawyer, where the average hourly wage 
is $69.86 per hour worked and average benefits are $32.14 per 
hour.\172\ Moreover, DHS recognizes that a firm may choose, but is not 
required, to outsource the preparation and submission of registrations 
and filing of H-1B petitions to outsourced lawyers.\173\ Therefore, DHS 
calculates the average total rate of compensation as $174.65, which is 
the average hourly U.S. wage rate for lawyers multiplied by 2.5 to 
approximate an hourly billing rate for an outsourced lawyer.\174\ Table 
4 summarizes the compensation rates used in this analysis.
---------------------------------------------------------------------------

    \169\ See U.S. Department of Labor, Bureau of Labor Statistics, 
Occupational Employment Statistics, May 2019 National Occupational 
Employment and Wage Estimates-National, SOC 13-1071--Human Resources 
Specialist and SOC 23-1011--Lawyers, https://www.bls.gov/oes/2019/may/oes_nat.htm (last visited Sept. 2, 2020).
    \170\ The benefits-to-wage multiplier is calculated as follows: 
($37.10 Total Employee Compensation per hour) / ($25.47 Wages and 
Salaries per hour) = 1.457 = 1.46 (rounded). See U.S. Department of 
Labor, Bureau of Labor Statistics, Economic News Release, Employer 
Cost for Employee Compensation (December 2019), Table 1. Employer 
Costs for Employee Compensation by ownership (Dec. 2019), https://www.bls.gov/news.release/archives/ecec_03192020.pdf (last visited 
Sept. 2, 2020).
    \171\ Calculation of the weighted mean hourly wage for HR 
specialists: $32.58 per hour x 1.46 = $47.5668 = $47.57 (rounded) 
per hour.
    \172\ Calculation of weighted mean hourly wage for in-house 
lawyers: $102.00 average hourly total rate of compensation for in-
house lawyer = $69.86 average hourly wage rate for lawyer (in-house) 
x 1.46 benefits-to-wage multiplier.
    \173\ DHS uses the terms ``in-house lawyer'' and ``outsourced 
lawyer'' to differentiate between the types of lawyers that may file 
Form I-129 on behalf of an employer petitioning for an H-1B 
beneficiary.
    \174\ Calculation of weighted mean hourly wage for outside 
counsel: $174.65 average hourly total rate of compensation for 
outsourced lawyer = $69.86 average hourly wage rate for lawyer (in-
house) x 2.5 conversion multiplier. DHS uses a conversion multiplier 
of 2.5 to estimate the average hourly wage rate for outsourced 
lawyer based on the hourly wage rate for an in-house lawyer. DHS has 
used this conversion multiplier in various previous rulemakings. The 
DHS analysis in Exercise of Time-Limited Authority to Increase the 
Fiscal Year 2018 Numerical Limitation for the H-2B Temporary 
Nonagricultural Worker Program, 83 FR 24905 (May 31, 2018), used a 
multiplier of 2.5 to convert in-house attorney wages to the cost of 
outsourced attorney wages.

  Table 4--Summary of Estimated Wages for Form I-129 Filers by Type of
                                  Filer
------------------------------------------------------------------------
                                                              Hourly
                                                           compensation
                                                               rate
------------------------------------------------------------------------
Human Resources (HR) Specialist.........................          $47.57
In-house lawyer.........................................          102.00
Outsourced lawyer.......................................          174.65
------------------------------------------------------------------------
Source: USCIS analysis.

a. Costs and Cost Savings of Regulatory Changes to Petitioners
i. Methodology Based on Historic FYs 2019-2020
    This final rule primarily will change the manner in which USCIS 
selects H-1B registrations (or H-1B petitions for any year in which the 
registration requirement is suspended), by first

[[Page 1719]]

selecting registrations generally based on the highest OES wage level 
that the proffered wage equals or exceeds for the relevant SOC code and 
area(s) of intended employment. In April 2019, DHS added an electronic 
registration requirement for petitioners seeking to file H-1B petitions 
on behalf of cap-subject aliens.\175\ Under the current regulation, all 
petitioners seeking to file an H-1B cap-subject petition must first 
electronically submit a registration for each beneficiary on whose 
behalf they seek to file an H-1B cap-subject petition, unless the 
registration requirement is suspended. If the registration is selected, 
the petitioner is eligible to file an H-1B cap-subject petition for the 
beneficiary named in the selected registration during the associated 
filing period. The registration requirement was suspended for the FY 
2020 H-1B cap and first implemented for the FY 2021 H-1B cap. The 
initial H-1B registration period for the FY 2021 H-1B cap was March 1, 
2020, through March 20, 2020. A total of 274,237 registrations were 
submitted during the initial registration period, of which 123,244 
\176\ registrations were for beneficiaries eligible for the advanced 
degree exemption and 145,950 were for beneficiaries under the regular 
cap.\177\
---------------------------------------------------------------------------

    \175\ See H-1B Registration Final Rule, 84 FR 888.
    \176\ The total number of registrations for the advanced degree 
exemption and the regular cap do not equal the total 274,237 
submitted registrations because the remaining 5,043 submitted 
registrations were invalid (e.g., as prohibited duplicate 
registrations).
    \177\ U.S. Department of Homeland Security, U.S. Citizenship and 
Immigration Services, Office of Policy and Strategy, Policy Research 
Division (PRD), Form I-129 H-1B, FY 2021 Data, Claims 3 (Aug. 31, 
2020) & USCIS Analysis.
---------------------------------------------------------------------------

    Prior to implementing the registration requirement, USCIS 
administered the H-1B cap by projecting the number of petitions needed 
to reach the numerical allocations. H-1B cap-subject petitions were 
randomly selected when the number of petitions received on the final 
receipt date exceeded the number projected as needed to reach the 
numerical allocations. All petitions eligible for the advanced degree 
exemption had an equal chance of being selected toward the advanced 
degree exemption, and all remaining petitions had an equal chance of 
being selected toward the regular cap. In FY 2019, USCIS first selected 
petitions toward the number of petitions projected as needed to reach 
the advanced degree exemption. If the petition was not selected under 
the advanced degree exemption, those cases then were added back to the 
pool and had a second chance of selection under the regular cap. In FY 
2020, the selection order was reversed, such that USCIS first selected 
petitions toward the number projected as needed to reach the regular 
cap from among all petitions received. USCIS then selected toward the 
number of petitions projected as needed to reach the advanced degree 
exemption from among those petitions eligible for the advanced degree 
exemption, but that were not selected toward the number projected as 
needed to reach the regular cap.
    Table 5 shows the number of petitions submitted and selected in FYs 
2019 and 2020. It also displays the approximated 2-year averages of the 
petitions that were submitted and selected for the H-1B regular cap or 
advanced degree exemption. On average, DHS selected 56 percent \178\ of 
the H-1B cap-subject petitions submitted, with 82,900 toward the 
regular cap and 26,930 toward the advanced degree exemption.
---------------------------------------------------------------------------

    \178\ Calculation: 109,830 2-year average of Petitions Randomly 
Selected in FYs 2019-2020/195,555 2- year average of Total Number of 
H-1B Cap-Subject Petitions Filed in FYs 2019-2020 = 56%

                   Table 5--H-1B Cap-Subject Petitions Submitted to USCIS, for FY 2019-FY 2020
----------------------------------------------------------------------------------------------------------------
                                       Total number of
                                       H-1B cap-subject   Total petitions                       Advanced degree
             Fiscal year                  petitions           selected         Regular cap         exemption
                                          submitted
----------------------------------------------------------------------------------------------------------------
2019................................            190,098            110,376             82,956             27,420
2020................................            201,011            109,283             82,843             26,440
                                     ---------------------------------------------------------------------------
    Total...........................            391,109            219,659            165,799             53,860
    2-Year Average..................            195,555            109,830             82,900             26,930
----------------------------------------------------------------------------------------------------------------
Source: USCIS, Office of Policy and Strategy, Policy Research Division (PRD), Claims 3. July 21, 2020 & USCIS
  Analysis

    DHS does not have data on the OES wage levels for selected 
petitions prior to FY 2019.\179\ While there are some challenges to 
using OES wage data as a timeseries, DHS uses the wage data to provide 
some insight.\180\ Table 6 shows the petitions that were selected for 
FYs 2019 and 2020, categorized by OES wage level. The main difference 
between the FY 2019 and FY 2020 data sets is that there are more 
petitions classified as not applicable (N/A) in the FY 2019 data 
compared to the FY 2020 data. Since DOL's Standard Occupational 
Classification (SOC) \181\ structure was modified in 2018, some 
petitions were categorized as N/A in FY 2019. In 2019, DOL started to 
use a hybrid OES \182\ occupational structure for classifying the 
petitions for FY 2020.
---------------------------------------------------------------------------

    \179\ USCIS created the tool to link USCIS H-1B data to the DOL 
data for FY 2019.
    \180\ U.S. Department of Labor, Bureau of Labor Statistics, 
Occupational Employment Statistics, Frequently Asked Questions, 
https://www.bls.gov/oes/oes_ques.htm (last visited Sept. 2, 2020) 
(Can OES data be used to compare changes in employment or wages over 
time? Although the OES survey methodology is designed to create 
detailed cross-sectional employment and wage estimates for the U.S., 
States, metropolitan and nonmetropolitan areas, across industry and 
by industry, it is less useful for comparisons of two or more points 
in time. Challenges in using OES data as a time series include 
changes in the occupational, industrial, and geographical 
classification systems, changes in the way data are collected, 
changes in the survey reference period, and changes in mean wage 
estimation methodology, as well as permanent features of the 
methodology).
    \181\ U.S. Department of Labor, Bureau of Labor Statistics, 
Standard Occupational Classification https://www.bls.gov/soc/2018/home.htm (last visited Oct. 27, 2020).
    \182\ U.S. Department of Labor, Bureau of Labor Statistics, 
Occupational Employment Statistics, Implementing the 2018 SOC in the 
OES program--May 2019 and May 2020 Hybrid Occupations, https://www.bls.gov/oes/soc_2018.htm (last visited Sept. 2, 2020).
---------------------------------------------------------------------------

    Another data limitation was that some of the FY 2020 data was 
incomplete with missing fields, and could not be classified into the 
specific wage levels; therefore, the petitions were categorized as N/A. 
DHS expects each registrant that is classified as N/A will be able to 
identify the appropriate SOC code for the proffered position because 
all petitioners are required to identify the appropriate SOC code for 
the proffered position on the LCA, even when there is no applicable 
wage level on the LCA. Using the SOC code and the above-mentioned DOL 
guidance, all registrants will be able to determine the appropriate OES 
wage level for purposes of completing the registration, regardless of 
whether they specify an

[[Page 1720]]

OES wage level or utilize the OES program as the prevailing wage source 
on an LCA. While there are limitations to the data used, DHS believes 
that the estimates are helpful to see the current wage levels and 
estimate the future populations in each wage level.

                                                Table 6--Selected Petitions by Wage Level FY 2019-FY 2020
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              Level I        Level II        Level III       Level IV           N/A            Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
Advanced Degree Exemption:
FY 2019.................................................           7,363          13,895           2,016             553           3,593          27,420
FY 2020.................................................           7,453          14,467           2,311             694           1,515          26,440
                                                         -----------------------------------------------------------------------------------------------
Total...................................................          14,816          28,362           4,327           1,247           5,108          53,860
    2-Year Average......................................           7,408          14,181           2,164             623           2,554          26,930
--------------------------------------------------------------------------------------------------------------------------------------------------------
Regular Cap:                                              ..............  ..............  ..............  ..............  ..............  ..............
FY 2019.................................................          18,557          42,621           8,447           3,540           9,791          82,956
FY 2020.................................................          19,232          46,439           8,796           3,677           4,699          82,843
                                                         -----------------------------------------------------------------------------------------------
    Total...............................................          37,789          89,060          17,243           7,217          14,490         165,799
    2-Year Average......................................          18,895          44,530           8,622           3,608           7,245          82,900
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: USCIS, Office of Policy and Strategy, Policy Research Division (PRD), Claims 3. July 21, 2020 & USCIS Analysis.

    DHS has OES wage level data only on the petitions that were 
selected toward the numerical allocations and does not have the wage 
level break down for the 85,725 \183\ (44 percent) of petitions that 
were not selected since those petitions were returned to petitioners 
without entering data into DHS databases. Due to data limitations, DHS 
estimated the wage level break down for the 44 percent of petitions 
that were not selected because wage levels vary significantly between 
occupations and localities. Table 7 shows the 2-year approximated 
average of H-1B cap-subject petitions that were selected, separated by 
OES wage level, and percentages of accepted petitions by each wage 
category. The wage category with the most petitions, as estimated, is 
OES wage level II.
---------------------------------------------------------------------------

    \183\ Calculation: 195,555 2-year average of Total Number of H-
1B Cap-Subject Petitions received in FYs 2019-2020 -109,830 2-year 
average of Petitions Randomly Selected in FYs 2019-2020 = 85,725

       Table 7--Current Estimated Number of Selected Petitions by Wage Level and Cap Type FY 2019-FY 2020
----------------------------------------------------------------------------------------------------------------
                                                            Regular cap              Advanced degree exemption
                      Level                      ---------------------------------------------------------------
                                                     Selected       % of total       Selected       % of total
----------------------------------------------------------------------------------------------------------------
Level I & N/A...................................          26,140           31.50           9,962           36.99
Level II........................................          44,530           53.70          14,181           52.66
Level III.......................................           8,622           10.40           2,164            8.04
Level IV........................................           3,608            4.40             623            2.31
                                                 ---------------------------------------------------------------
    Total.......................................          82,900             100          26,930             100
----------------------------------------------------------------------------------------------------------------
Source: USCIS, Office of Policy and Strategy, Policy Research Division (PRD), Claims 3. July 21, 2020 & USCIS
  Analysis

    ii. FY 2021 Data \184\
---------------------------------------------------------------------------

    \184\ FY 2021 data pertains to the registrations received during 
FY 2020 for the FY 2021 H-1B cap season.
---------------------------------------------------------------------------

    The population affected by this final rule consists of prospective 
petitioners seeking to file H-1B cap-subject petitions, including those 
eligible for the advanced degree exemption. DHS regulations require all 
petitioners seeking to file H-1B cap-subject petitions to first 
electronically submit a registration for each beneficiary on whose 
behalf they seek to file an H-1B cap-subject petition, unless USCIS 
suspends the registration requirement.\185\ A prospective petitioner 
whose registration is selected is eligible to file an H-1B cap-subject 
petition for the beneficiary named in the selected registration during 
the associated filing period.\186\ Under the current H-1B registration 
selection process, USCIS first randomly selects registrations submitted 
on behalf of all beneficiaries, including those eligible for the 
advanced degree exemption.\187\ USCIS then randomly selects from the 
remaining registrations a sufficient number projected as needed to 
reach the advanced degree exemption.\188\ Prior to the implementation 
of the H-1B registration requirement for the FY 2021 H-1B cap selection 
process, petitioners submitted an annual average of 211,797 cap-subject 
H-1B petitions over FYs 2016 through 2020. The number of registrations 
submitted for the FY 2021 H-1B cap selection process, however, was 
274,237. Because the number of registrations submitted for the FY 2021 
H-1B cap selection process was significantly higher than the number of 
petitions submitted in prior years, DHS will use the total number of 
registrations submitted for the FY 2021 H-1B cap selection process as 
the population to estimate certain costs for this final rule.\189\ 
There were many factors that led to an increased number of 
registrations for FY 2021; one possible factor is that the cost and 
burden to submit the registration is less than the

[[Page 1721]]

cost and burden to submit complete Form I-129 packages.
---------------------------------------------------------------------------

    \185\ See 8 CFR 214.2(h)(8)(iii)(A).
    \186\ See 8 CFR 214.2(h)(8)(iii)(D).
    \187\ See 8 CFR 214.2(h)(8)(iii)(A)(5).
    \188\ See 8 CFR 214.2(h)(8)(iii)(A)(6).
    \189\ DHS uses FY 2021 H-1B cap selection data as the population 
to estimate certain costs for this final rule because FY 2021 is the 
first year that registration was required. As explained above, DHS 
added the registration requirement on April 19, 2019, but the 
registration requirement was suspended for the FY 2020 H-1B cap.
---------------------------------------------------------------------------

    For the FY 2021 H-1B cap selection process, 106,100 registrations 
initially were selected to submit a petition. Prospective petitioners 
with selected registrations only were eligible to file H-1B petitions 
based on the selected registrations during a 90-day filing window. 
USCIS did not receive enough H-1B petitions during the initial filing 
period to meet the number of petitions projected as needed to reach the 
H-1B numerical allocations, so the selection process was run again in 
August 2020. An additional 18,315 registrations were selected in August 
2020 for a total of 124,415 selected registrations for FY 2021. While 
the current number of registrations selected toward the FY 2021 
numerical allocations is 124,415, DHS estimates certain costs for this 
final rule using the number of registrations initially selected 
(106,100) as the best estimate of the number of petitions needed to 
reach the numerical allocations.

                                             Table 8--H-1B Cap-Subject Registrations Submitted, for FY 2021
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                           Number of
                                    Total number of  H-1B   Round 1 number of  H-1B  Round 2 number of  H-1B   Total number of  H-1B     registrations
           Fiscal year                  registrations       registrations  selected  registrations  selected  registrations  selected    submitted with
                                          submitted                                                                      *                form G-28 **
--------------------------------------------------------------------------------------------------------------------------------------------------------
2021.............................                  274,237                  106,100                   18,315                  124,415                N/A
                                  ----------------------------------------------------------------------------------------------------------------------
    Total........................                  274,237                  106,100                   18,315                  124,415                N/A
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: USCIS, Office of Policy and Strategy, Policy Research Division (PRD), Claims 3. August 31, 2020 USCIS Analysis.
* Note: USCIS administered the selection process twice because an insufficient number of petitions were filed following initial registration selection
  to reach the number of petitions projected as needed to reach the numerical allocations. USCIS has not finished processing H-1B cap-subject petitions
  for FY 2021.
** Note: Complete data is still unavailable for FY 2021. USCIS used FYs 2019-2020 from Table 3 to estimate the percentage of submitted G-28s below.

    Table 3 shows historical Form G-28 filings by attorneys or 
accredited representatives accompanying selected H-1B cap-subject 
petitions. DHS notes that these forms are not mutually exclusive. Based 
on the historical 5-year average from earlier in this analysis, DHS 
estimates 79.7 percent \190\ of selected registrations will include 
Form G-28. DHS applies those percentages to the number of total 
registrations and estimates 218,567 \191\ Form G-28 were submitted with 
total registrations received. DHS uses the total registrations received 
for the FY 2021 H-1B cap selection process (274,237) as the estimate of 
registrations that will be received annually.
---------------------------------------------------------------------------

    \190\ Calculation: 81,165 Forms G-28/101,822 Form I-129 
petitions = 79.7 percent = 80 percent (rounded).
    \191\ Calculation: 274,237 * 79.7 percent = 218,567 Form G-28.
---------------------------------------------------------------------------

    Additionally, DHS assumes that petitioners may use human resources 
(HR) specialists (or entities that provide equivalent services) 
(hereafter HR specialist) or use lawyers or accredited representatives 
\192\ to complete and file H-1B petitions. A lawyer or accredited 
representative appearing before DHS must file Form G-28 to establish 
their eligibility and authorization to represent a client (applicant, 
petitioner, requestor, beneficiary or derivative, or respondent) in an 
immigration matter before DHS. DHS estimates that approximately 80 
percent \193\ of H-1B petitions typically will be completed and filed 
by a lawyer or other accredited representative (hereafter lawyer). DHS 
assumes the remaining 20 percent of H-1B petitions will be completed 
and filed by HR specialists.
---------------------------------------------------------------------------

    \192\ 8 CFR 292.1(a)(4) (defining an accredited representative 
as ``a person representing an organization described in Sec.  292.2 
of this chapter who has been accredited by the Board'').
    \193\ Calculation: 81,165 petitions filed with Form G-28/101,822 
average petitions selected = 79.7 percent petitions completed and 
filed by a lawyer or other accredited representative (hereafter 
lawyer)
---------------------------------------------------------------------------

    Petitioners who use lawyers to complete and file H-1B petitions may 
either use an in-house lawyer or hire an outsourced lawyer. Of the 
total number of H-1B petitions filed in FY 2021, DHS estimates that 26 
percent were filed by in-house lawyers, while the remaining 54 percent 
were filed by outsourced lawyers.\194\
---------------------------------------------------------------------------

    \194\ DHS uses data from the longitudinal study conducted in 
2003 and 2007 on legal career and placement of lawyers, which found 
that 18.6, 55, and 26.2 percent of lawyers practice law at 
government (federal and local) institutions, private law firms, and 
private businesses (as inside counsel), respectively. See Dinovitzer 
et al, After the JD II: Second Results from a National Study of 
Legal Careers, The American Bar Foundation and the National 
Association for Law Placemen (NALP) Foundation for Law Career 
Research and Education (2009), Table 3.1, p. 27, https://www.law.du.edu/documents/directory/publications/sterling/AJD2.pdf. 
Among those working in private law firms and private businesses (54 
and 26 percent, respectively), DHS estimates that, while 67.7 
percent of lawyers practice law in private law firms, the remaining 
32.3 percent practice in private businesses (54 percent + 25.7 
percent = 79.7 percent, 67.7 percent = 54/79.7*100, 32.2 percent = 
25.7/79.7*100). Because 79.7 percent of the H-1B petitions are filed 
by lawyers or accredited representatives, DHS multiplies 79.7 
percent by 32.3 and 67.7 percent to estimate the proportion of 
petitions filed by in-house lawyers (working in private businesses) 
and outsourced lawyer (working in private law firms), respectively.
    26 (rounded) percent of petitions filed by in-house lawyers = 80 
percent of petitions filed by lawyers or accredited representatives 
x 32.3 percent of lawyers work in private businesses.
    54 (rounded) percent of petitions filed by outsourced lawyer = 
80 percent of petitions filed by lawyers or accredited 
representatives x 67.7 percent of lawyers work in private law firms.

                       Table 9--Summary of Estimated Average Number of Petitions/Registrations Submitted Annually by Type of Filer
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                        Number of petitions/  Number of petitions/  Number of petitions/
                                                                    Estimated average       registrations         registrations         registrations
                       Affected population                         population affected    submitted by  HR      submitted by  in-       submitted by
                                                                                             specialists          house lawyers      outsourced lawyers
                                                                                     A           B = A x 20%           C = A x 26%           D = A x 54%
--------------------------------------------------------------------------------------------------------------------------------------------------------
Estimated number of H-1B registrations submitted annually.......               274,237                54,847                71,302               148,088

[[Page 1722]]

 
Estimated number of H-1B registrations selected to file H-1B cap               106,100                21,220                27,586                57,294
 petitions annually.............................................
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: USCIS analysis.

    Based on the total estimated number of affected populations shown 
in Table 9, DHS further estimates the number of entities that will be 
affected by each requirement of this final rule to estimate the costs 
arising from the regulatory changes in the cost-benefit analysis 
section. Additionally, DHS uses the same proportion of HR specialists, 
in-house lawyers, and outsourced lawyers (20, 26, and 54 percent, 
respectively) to estimate the population that will be affected by the 
various requirements of this final rule.
iii. Unquantified Costs & Benefits
    Given that the demand for H-1B cap-subject visas, including those 
filed for the advanced degree exemption, frequently has exceeded the 
annual H-1B numerical allocations, this final rule will increase the 
chance of selection for registrations (or petitions, if registration 
were suspended) seeking to employ beneficiaries at level IV or level 
III wages. DHS believes this incentive for petitioners to offer wages 
that maximize their probability of selection is necessary to address 
the risk that greater numbers of U.S. employers could rely on the 
program to access relatively lower-cost labor, precluding other 
employers from benefitting from the H-1B program's intended purpose of 
providing high-skilled nonimmigrant labor to supplement domestic labor. 
This final rule could result in higher proffered wages or a reduction 
in the downward pressure on wages in industries and occupations with 
concentrations of relatively lower-paid H-1B workers. Additionally, 
this final rule may lead to an increase in employment opportunities for 
unemployed or underemployed U.S. workers seeking employment in 
positions otherwise offered to H-1B cap-subject beneficiaries at wage 
levels corresponding to lower wage positions. Employers that offer H-1B 
workers wages that correspond with level IV or level III OES wages will 
have higher chances of selection.
    For the FY 2021 H-1B cap selection process, USCIS initially 
selected 106,100 (39 percent) \195\ of H-1B registrations submitted 
toward the numerical allocations; of those 80,600 were selected toward 
the number projected as needed to reach the regular cap, and 25,500 
were selected toward the number projected as needed to reach the 
advanced degree exemption. The total number of H-1B registrations 
submitted was 274,237; however, 5,043 were invalid. Of the 269,194 
valid registrations, 145,950 were submitted toward the regular cap and 
123,244 were eligible for selection under the advanced degree 
exemption.
---------------------------------------------------------------------------

    \195\ Calculation: 106,100 Registrations Randomly Selected/
274,237 Total Number of H-1B Cap-Subject registrations Filed in 2020 
= 39%.

                         Table 10--H-1B Cap-Subject Registrations Submitted for FY 2021
----------------------------------------------------------------------------------------------------------------
                                        Total number of valid
             Fiscal year                  H-1B registrations          Regular cap            Advanced degree
                                              submitted                                         exemption
----------------------------------------------------------------------------------------------------------------
2021.................................                  269,194                  145,950                  123,244
                                      --------------------------------------------------------------------------
    Total............................                  269,194                  145,950                  123,244
----------------------------------------------------------------------------------------------------------------
Source: USCIS, Office of Policy and Strategy, Policy Research Division (PRD), Claims 3. August 31, 2020 & USCIS
  & Analysis.
* Note: The total number of registrations in this table does not equal 274,237 because 5,043 of the
  registrations were invalid.

    DHS estimated the wage level distribution for FY 2021 based on the 
average distribution observed in FYs 2019 and 2020. At the time of 
analysis, the wage level data was unavailable for FY 2021 because the 
petition filing process was ongoing. Table 11 displays the historic 2-
year (FY 2019 and FY 2020) approximated average of H-1B cap-subject 
petitions that were selected, separated by OES wage level, and 
percentages of selected petitions by each wage category.

                   Table 11--Historic Number of Selected Petitions by Wage Level and Cap Type
----------------------------------------------------------------------------------------------------------------
                                                            Regular cap              Advanced degree exemption
                      Level                      ---------------------------------------------------------------
                                                     Selected       % of total       Selected       % of total
----------------------------------------------------------------------------------------------------------------
Level I & Below.................................          26,140           31.50           9,962           36.99
Level II........................................          44,530           53.70          14,181           52.66
Level III.......................................           8,622           10.40           2,164            8.04

[[Page 1723]]

 
Level IV........................................           3,608            4.40             623            2.31
                                                 ---------------------------------------------------------------
    Total.......................................          82,900             100          26,930             100
----------------------------------------------------------------------------------------------------------------
Source: USCIS, Office of Policy and Strategy, Policy Research Division (PRD), Claims 3. July 21, 2020 & USCIS
  Analysis.
* Note: Totals are based on 2-year averages of petitions randomly selected in FYs 2019-2020, Table 11 is
  replicated from Table 7.

    DHS assumes that FY 2021 wage level distribution of registrations 
will equal the wage level distribution observed in FYs 2019 through 
2020 data. DHS multiplied the percentage of selected petitions by level 
from Table 11 to estimate the breakdown of registrations by wage level. 
For example, DHS multiplied 145,950 by 4.4 percent to estimate that a 
total of 6,422 registrations would have been categorized as wage level 
IV under the regular cap.

                 Table 12--Current Estimated Number of Registrations by Wage Level and Cap Type
----------------------------------------------------------------------------------------------------------------
                                                            Regular cap              Advanced degree exemption
                                                 ---------------------------------------------------------------
                      Level                          Estimated         % of          Estimated         % of
                                                   registrations   registrations   registrations   registrations
----------------------------------------------------------------------------------------------------------------
Level I & Below.................................          45,974           31.50          45,588           36.99
Level II........................................          78,375           53.70          64,900           52.66
Level III.......................................          15,179           10.40           9,909            8.04
Level IV........................................           6,422            4.40           2,847            2.31
                                                 ---------------------------------------------------------------
    Total.......................................         145,950             100         123,244             100
----------------------------------------------------------------------------------------------------------------
Source: USCIS, Office of Policy and Strategy, Policy Research Division (PRD), Claims 3. August 31, 2020 & USCIS
  Analysis
* Note: Totals are based on FY 2021 data

    This final rule will change the H-1B cap selection process, but 
will leave in place selecting first toward the regular cap and second 
toward the advanced degree exemption. USCIS now will rank and select 
the registrations received (or petitions, as applicable) generally on 
the basis of the highest OES wage level that the proffered wage equals 
or exceeds for the relevant SOC code and in the area of intended 
employment, beginning with OES wage level IV and proceeding in 
descending order with OES wage levels III, II, and I and below. As a 
result of the approximated 2-year average from above, DHS displays the 
projected selection percentages for registrations under the regular cap 
and advanced degree exemption in Table 13. With the revised selection 
method based on corresponding OES wage level and ranking, the 
approximated average indicates that all registrations with a proffered 
wage that corresponds to OES wage level IV or level III will be 
selected and 58,999, or 75 percent, of the registrations with a 
proffered wage that corresponds to OES wage level II will be selected 
toward the regular cap projections. None of the registrations with a 
proffered wage that corresponds to OES wage level I or below will be 
selected toward the regular cap projections. For the advanced degree 
exemption, DHS estimates all registrations with a proffered wage that 
corresponds to OES wage levels IV and III will be selected and 12,744, 
or 20 percent, of the registrations with a proffered wage that 
corresponds to OES wage level II will be selected. DHS estimates that 
none of the registrations with a proffered wage that corresponds to OES 
wage level I or below will be selected.
    DHS is using the approximated 2-year average from above to 
illustrate the expected distribution of future selected registration 
percentages by corresponding wage level. However, DHS is unable to 
quantify the actual outcome because DHS cannot predict the actual 
number of registrations that will be received at each wage level 
because employers may change the number of registrations they choose to 
submit and the wages they offer in response to the changes in this 
rule.

                                   Table 13--New Estimated Number of Selected Registrations by Wage Level and Cap Type
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                            Regular cap                              Advanced degree exemption
                                                         -----------------------------------------------------------------------------------------------
                          Level                                Total         Selected                          Total         Selected
                                                           registrations   registrations    % Selected     registrations   registrations    % Selected
--------------------------------------------------------------------------------------------------------------------------------------------------------
Level I & Below.........................................          45,974               0               0          45,588               0               0
Level II................................................          78,375          58,999              75          64,900          12,744              20
Level III...............................................          15,179          15,179             100           9,909           9,909             100
Level IV................................................           6,422           6,422             100           2,847           2,847             100
                                                         -----------------------------------------------------------------------------------------------
    Total...............................................         145,950          80,600  ..............         123,244          25,500  ..............
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: USCIS, Office of Policy and Strategy, Policy Research Division (PRD), Claims 3. August 31, 2020 & USCIS Analysis.
* Note: Totals are based on FY 2021 data.


[[Page 1724]]

    This final rule may primarily affect prospective petitioners 
seeking to file H-1B cap-subject petitions with a proffered wage that 
corresponds to OES wage level II, I, and below.\196\ As Table 13 shows, 
this final rule is expected to result in a reduced likelihood that 
registrations for level II will be selected, as well as the likelihood 
that registrations for level I and below wages will not be selected. A 
prospective petitioner, however, could choose to increase the proffered 
wage, so that it corresponds to a higher wage level. Another possible 
effect is that employers will not fill vacant positions that would have 
been filled by H-1B workers. These employers may be unable to find 
qualified U.S. workers, or may leave those positions vacant because 
they cannot justify raising the wage to stand greater chances of 
selection in the H-1B cap selection process. That, in turn, could 
result in fewer registrations and H-1B cap-subject petitions with a 
proffered wage that corresponds to OES wage level II and below.
---------------------------------------------------------------------------

    \196\ DOL uses wage levels to determine the prevailing wage 
based on the level of education, experience (including special 
skills and other requirements), or supervisory duties required for a 
position; however, USCIS would use wage levels to rank and select 
registrations (or petitions, as applicable) based on the rate of pay 
for the wage level that the proffered wage were to equal or exceed. 
More information about DOL wage level determinations can be found at 
U.S. Department of Labor, Employment and Training Administration, 
Prevailing Wage Determination Policy Guidance, Nonagricultural 
Immigration Programs (Revised Nov. 2009), https://www.dol.gov/sites/dolgov/files/ETA/oflc/pdfs/NPWHC_Guidance_Revised_11_2009.pdf; and 
at U.S. Department of Labor, Foreign Labor Certification Data 
Center, Online Wage Library, https://www.flcdatacenter.com/ (last 
visited Dec. 15, 2020). DHS acknowledges that varying wage levels 
correspond to varying skill levels. In analyzing the economic 
effects of this final rule, DHS recognizes that prospective 
petitioners may offer wages exceeding the wage levels associated 
with the skills required for given positions to increase their 
chances of selection under the ranked selection process.
---------------------------------------------------------------------------

    DHS acknowledges that this final rule might result in more 
registrations (or petitions, if registration is suspended) with a 
proffered wage that corresponds to level IV and level III OES wages for 
H-1B cap-subject beneficiaries. DHS believes a benefit of this final 
rule may be that some petitioners may choose to increase proffered 
wages for H-1B cap-subject beneficiaries, so that the petitioners may 
have greater chances of selection. This change will, in turn, benefit 
H-1B beneficiaries who ultimately will receive a higher rate of pay 
than they otherwise would have in the absence of this rule. However, 
DHS is not able to estimate the magnitude of such benefits. DHS 
acknowledges the change in the selection procedure resulting from this 
final rule will create distributional effects and costs. DHS is unable 
to quantify the extent or determine the probability of H-1B petitioner 
behavioral changes. Therefore, DHS does not know the portion of overall 
impacts of this rule that will be benefits or costs.
    As a result of this final rule, costs will be borne by prospective 
petitioners that would hire lower wage level H-1B cap-subject 
beneficiaries, but are unable to do so because of a reduced chance of 
selection in the H-1B selection process compared to the random lottery 
process. Such employers also may incur additional costs to find 
available replacement workers. DHS estimates costs incurred associated 
with loss of productivity from not being able to hire H-1B workers, or 
the need to search for and hire U.S. workers to replace H-1B workers. 
Although DHS does not have data to estimate the costs resulting from 
productivity loss for these employers, DHS provides an estimate of the 
search and hiring costs for the replacement workers. Accordingly, based 
on the result of the study conducted by the Society for Human Resource 
Management (SHRM) in 2016, DHS assumes that an entity whose H-1B 
petition is denied will incur an average cost of $4,398 per worker (in 
2019 dollars) \197\ to search for and hire a U.S. worker in place of an 
H-1B worker during the period of this economic analysis. If petitioners 
cannot find suitable replacements for the labor H-1B cap-subject 
beneficiaries would have provided if selected and, ultimately, granted 
H-1B status, this final rule primarily will be a cost to these 
petitioners through lost productivity and profits.
---------------------------------------------------------------------------

    \197\ Society for Human Resource Management (SHRM), 2016 Human 
Capital Benchmarking Report, at 16, https://www.shrm.org/hr-today/trends-and-forecasting/research-and-surveys/Documents/2016-Human-Capital-Report.pdf (last visited Oct. 21, 2020). The study was based 
on data collected from 2,048 randomly selected human resource 
professionals who participated in the 2016 SHRM Human Capital 
Benchmarking Survey. The hiring cost is reported as $4,129 per 
worker in 2016 dollars and converted to 2019 dollars in this 
analysis. The hiring cost includes third-party agency fees, 
advertising agency fees, job fairs, online job board fees, employee 
referrals, travel costs of applicants and staff, relocation costs, 
recruiter pay and benefits, and talent acquisition system costs.
---------------------------------------------------------------------------

    DHS also acknowledges that some petitioners might be impacted in 
terms of the employment, productivity loss, search and hire costs, and 
profits resulting from labor turnover. In cases where companies cannot 
find reasonable substitutes for the labor H-1B beneficiaries would have 
provided, affected petitioners also will lose profits from the lost 
productivity. In such cases, employers will incur opportunity costs by 
having to choose the next best alternative to fill the job prospective 
H-1B workers would have filled. There may be additional opportunity 
costs to employers such as search costs and training.
    Such possible disruptions to companies will depend on the 
interaction of a number of complex variables that constantly are in 
flux, including national, state, and local labor market conditions, 
economic and business factors, the type of occupations and skills 
involved, and the substitutability between H-1B workers and U.S. 
workers. These costs to petitioners are expected to be offset by 
increased productivity and reduced costs to find available workers for 
petitioners of higher wage level H-1B beneficiaries.
    DHS uses the compensation to H-1B employees as a measure of the 
overall impact of the provisions. While DHS expects wages paid to H-1B 
beneficiaries to be higher in light of this final rule, DHS is unable 
to quantify the benefit of increased compensation because not all of 
the wage increases will correspond with productivity increases. This 
final rule may indirectly benefit prospective petitioners submitting 
registrations with a proffered wage that corresponds to OES wage Level 
I and II registrations. The indirect benefit will be present during the 
COVID-19 pandemic and the ensuing economic recovery if the prospective 
petitioners are able to find replacement workers accepting a lower wage 
and factoring in the replacement cost of $4,398 per worker in the 
United States. Similarly, prospective petitioners that will be 
submitting registrations with a proffered wage that will correspond to 
OES wage level I and II and that substitute toward unemployed or 
underemployed individuals in the U.S. labor force will create an 
additional indirect benefit from this rule. This will benefit those in 
the U.S. labor force if petitioners decide to select a U.S. worker 
rather than a prevailing wage level I or II H-1B worker. DHS notes 
that, although the COVID-19 pandemic is widespread, the severity of its 
impacts varies by locality and industry, and there may be structural 
impediments to the national and local labor market. Accordingly, DHS 
cannot quantify with confidence, the net benefit of the redistribution 
of H-1B cap selections detailed in this analysis.
    DHS also is changing the filing procedures to allow USCIS to deny 
or revoke approval of a subsequent new or amended petition filed by the 
petitioner,

[[Page 1725]]

or a related entity, on behalf of the same beneficiary, if USCIS 
determines that the filing of the new or amended petition is part of 
the petitioner's attempt to unfairly decrease the proffered wage to an 
amount that is equivalent to a lower wage level, after listing a higher 
wage level on the registration (or petition, if registration is 
suspended) to increase the odds of selection. DHS is unable to quantify 
the cost of these changes to petitioners.
iv. Costs of Filing Form I-129 Petitions
    DHS is amending Form I-129, which must be filed by petitioners on 
behalf of H-1B beneficiaries, to align with the regulatory changes DHS 
is making in this final rule. The changes to Form I-129 will result in 
an increased time burden to complete and submit the form.
    Absent the changes implemented through this final rule, the current 
estimated time burden to complete and file Form I-129 is 2.84 hours per 
petition. As a result of the changes in this final rule, DHS estimates 
the total time burden to complete and file Form I-129 will be 3.09 
hours per petition, to account for the additional time petitioners will 
spend reviewing instructions, gathering the required documentation and 
information, completing the petition, preparing statements, attaching 
necessary documentation, and submitting the petition. DHS estimates the 
time burden will increase by a total of 15 minutes (0.25 hours) per 
petition for completing a Form I-129 petition.\198\
---------------------------------------------------------------------------

    \198\ 0.25 hours additional time to complete and file Form I-129 
= (3.09 hours to complete and file the new Form I-129)-(2.84 hours 
to complete and file the current Form I-129 and its supplements)
---------------------------------------------------------------------------

    To estimate the additional cost of filing Form I-129, DHS applies 
the additional estimated time burden to complete and file Form 1-129 
(0.25 hours) to the respective total population and compensation rate 
of who may file, including an HR specialist, in-house lawyer, or 
outsourced lawyer. As shown in Table 14, DHS estimates, the total 
additional annual opportunity cost of time to petitioners completing 
and filing Form I-129 petitions will be approximately $3,457,401.

 Table 14--Additional Opportunity Costs of Time to Petitioners for Filing Form I-129 Petitions From an Increase
                                                 in Time Burden
----------------------------------------------------------------------------------------------------------------
                                                         Additional time
            Cost items               Total affected    burden to complete      Compensation        Total cost
                                       population      Form I-129  (hours)         rate
                                                   A                     B                  C      D = A x B x C
----------------------------------------------------------------------------------------------------------------
Opportunity cost of time to
 complete Form I-129 for H-1B
 petitions by:
HR specialist....................             21,220                  0.25             $47.57           $252,359
In-house lawyer..................             27,586                  0.25             102.00            703,443
Outsourced lawyer................             57,294                  0.25             174.65          2,501,599
                                  ------------------------------------------------------------------------------
    Total........................            106,100  ....................  .................          3,457,401
----------------------------------------------------------------------------------------------------------------
Source: USCIS analysis.

v. Costs of Submitting Registrations as Modified by This Final Rule
    DHS is amending the required information on the H-1B Registration 
Tool. In addition to the information required on the current 
registration tool, a registrant will be required to provide the highest 
OES wage level that the proffered wage equals or exceeds for the 
relevant SOC code in the area of intended employment, if such data is 
available. The proffered wage is the wage that the employer intends to 
pay the beneficiary. The SOC code and area of intended employment would 
be indicated on the LCA filed with the petition. For registrants 
relying on a private wage survey, if the proffered wage is less than 
the corresponding level I OES wage, the registrant will select the 
``Wage Level I and below'' box on the registration tool. If the 
registration indicates that the H-1B beneficiary will work in multiple 
locations, or in multiple positions if the prospective petitioner is an 
agent, USCIS will rank and select the registration based on the lowest 
corresponding OES wage level that the proffered wage equals or exceeds. 
In the limited instance where there is no current OES prevailing wage 
information for the proffered position, the registrant will follow DOL 
guidance on prevailing wage determinations to select the OES wage level 
on the registration, and USCIS will rank and select based on the 
highest OES wage level. The changes to this registration requirement 
will impose increased opportunity costs of time to registrants, by 
adding additional information to their registration.
    The current estimated time burden to complete and file an 
electronic registration is 30 minutes (0.5 hours) per 
registration.\199\ DHS estimates the total time burden to complete and 
file a registration in light of this final rule will be 50 minutes 
(0.83 hours) per registration, which amounts to an additional time 
burden of 20 minutes (0.33 hours) per registration. The additional time 
burden accounts for the additional time a registrant will spend 
reviewing instructions, completing the registration, and submitting the 
registration.
---------------------------------------------------------------------------

    \199\ Agency Information Collection Activities; Revision of a 
Currently Approved Collection: H-1B Registration Tool, 84 FR 54159 
(Oct. 9, 2019).
---------------------------------------------------------------------------

    To estimate the additional cost of submitting a registration, DHS 
applies the additional estimated time burden to complete and submit the 
registration (0.33 hours) to the respective total population and total 
rate of compensation of who may file, including HR specialists, in-
house lawyers, or outsourced lawyers. As shown in Table 15, DHS 
estimates the total additional annual opportunity cost of time to the 
prospective petitioners of completing and submitting registrations will 
be approximately $11,795,997.

[[Page 1726]]



                              Table 15--Additional Cost of Submitting Registrations
----------------------------------------------------------------------------------------------------------------
                                                         Additional time
                                     Total affected     burden to submit       Compensation
            Cost items                 population         registrations            rate            Total cost
                                                             (hours)
                                                   A                     B                  C      D = A x B x C
----------------------------------------------------------------------------------------------------------------
Opportunity cost of time to
 complete registrations by:
HR specialist....................             54,847                  0.33             $47.57           $860,994
In-house lawyer..................             71,302                  0.33             102.00          2,400,025
Outsourced lawyer................            148,088                  0.33             174.65          8,534,978
                                  ------------------------------------------------------------------------------
    Total........................            274,237  ....................  .................         11,795,997
----------------------------------------------------------------------------------------------------------------
Source: USCIS analysis.

    While the expectation is that the registration process will be run 
on an annual basis, USCIS may suspend the H-1B registration 
requirement, in its discretion, if it determines that the registration 
process is inoperable for any reason. The selection process also allows 
for selection based solely on the submission of petitions in any year 
in which the registration process is suspended due to technical or 
other issues. In years when registration is suspended, DHS estimates, 
based on the 5-year average of H-1B cap-subject petitions received for 
FYs 2016 to 2020, that 211,797 H-1B cap-subject petitions will be 
submitted annually. In the event registration is suspended and 211,797 
H-1B cap-subject petitions are submitted, DHS estimates that 106,100 
petitions will be selected for adjudication to meet the numerical 
allocations and 105,697 petitions will be rejected. For FY 2021, DHS 
selected 124,415 registrations to generate the 106,100 petitions 
projected to meet the numerical allocations. Therefore, DHS estimates 
that the additional cost to petitioners for preparing and submitting H-
1B cap-subject petitions in light of this final rule will be 
significantly higher in the event registration is suspended because 
more petitions will be prepared and submitted in this scenario. 
However, if registration is suspended there will be no costs associated 
with registration, so the overall additional cost of this final rule to 
petitioners will be less (stated another way, the estimated added cost 
for submitting approximately 212,000 petitions if registration is 
suspended will be less than the added costs based on approximately 
274,000 registrations and 106,000 petitions for those with selected 
registrations). Since the expectation is that registration will be run 
on an annual basis, and because the estimated additional costs 
resulting from this final rule will be less if registration is 
suspended, DHS is not separately estimating the costs for years when 
registration will be suspended and, instead, is relying on the 
additional costs created by this final rule when registration will be 
required to estimate total costs of this final rule to petitioners 
seeking to file H-1B cap-subject petitions.
vi. Familiarization Cost
    Familiarization costs comprise the opportunity cost of the time 
spent reading and understanding the details of a rule to fully comply 
with the new regulation(s). To the extent that an individual or entity 
directly regulated by the rule incurs familiarization costs, those 
familiarization costs are a direct cost of the rule. The entities 
directly regulated by this rule are the employers who file H-1B 
petitions. Using FY 2020 internal data on actual filings of Form I-129 
H-1B petitions, DHS identified 24,111 \200\ unique entities. DHS 
assumes that the petitioners require approximately two hours to 
familiarize themselves with the rule. Using the average total rate of 
compensation of HR specialists, In-house lawyers, and Outsourced 
lawyers from Table 4, and assuming one person at each entity 
familiarizes themself with the rule, DHS estimates a one-time total 
familiarization cost of $6,285,527 in FY 2022.
---------------------------------------------------------------------------

    \200\ Source: USCIS, Office of Policy and Strategy, Policy 
Research Division (PRD), Form I-129H-1B, Claims 3, IRFA data (Aug. 
18, 2020) & USCIS Analysis.

                               Table 16--Familiarization Costs to the Petitioners
----------------------------------------------------------------------------------------------------------------
                                                                    Additional
                                                  Total affected  time burden to   Compensation
                   Cost items                       population      familiarize        rate         Total cost
                                                                      (hours)
                                                               A               B               C   D = A x B x C
----------------------------------------------------------------------------------------------------------------
Opportunity cost of time to familiarize the rule
 by:
HR specialist...................................           4,822               2          $47.57        $458,765
In-house lawyer.................................           6,269               2          102.00       1,278,876
Outsourced lawyer...............................          13,020               2          174.65       4,547,886
                                                 ---------------------------------------------------------------
    Total.......................................          24,111  ..............  ..............       6,285,527
----------------------------------------------------------------------------------------------------------------
Source: USCIS analysis.


[[Page 1727]]

b. Total Estimated Costs of Regulatory Changes
    In this section, DHS presents the total annual costs of this final 
rule annualized over a 10-year implementation period. Table 17 details 
the total annual costs of this final rule to petitioners will be 
$21,538,925 in FY 2022 and $15,253,398 in FY 2023 through 2032.

Table 17--Summary of Estimated Annual Costs to Petitioners in This Final
                                  Rule
------------------------------------------------------------------------
                                                        Total estimated
                        Costs                             annual cost
------------------------------------------------------------------------
Petitioners' additional opportunity cost of time in           $3,457,401
 filing Form I-129 petitions.........................
Petitioners' additional opportunity cost of time in           11,795,997
 submitting information on the registration..........
Familiarization Cost (Year 1 only FY 2022)...........          6,285,527
                                                      ------------------
    Total Annual Costs (undiscounted) = FY 2022......         21,538,925
    Total Annual Cost (undiscounted) = FY 2023-FY             15,253,398
     2032............................................
------------------------------------------------------------------------

    Table 18 shows costs over the 10-year implementation period of this 
final rule. DHS estimates the 10-year total net cost of the rule to 
petitioners to be approximately $158,819,507 undiscounted, $136,217,032 
discounted at 3-percent, and $113,007,809 discounted at 7-percent. Over 
the 10-year implementation period of the rule, DHS estimates the 
annualized costs of the rule to be $15,968,792 annualized at 3-percent, 
$16,089,770 annualized at 7-percent.

                Table 18--Total Costs of This Final Rule
------------------------------------------------------------------------
                                               Total estimated costs
                                         -------------------------------
                                               $21,538,925 (year 1);
                  Year                        $15,253,398 (year 2-10)
                                         -------------------------------
                                           Discounted at   Discounted at
                                             3-percent       7-percent
------------------------------------------------------------------------
1.......................................     $20,911,578     $20,129,836
2.......................................      14,377,791      13,322,909
3.......................................      13,959,020      12,451,316
4.......................................      13,552,447      11,636,744
5.......................................      13,157,715      10,875,462
6.......................................      12,774,481      10,163,983
7.......................................      12,402,408       9,499,050
8.......................................      12,041,173       8,877,617
9.......................................      11,690,459       8,296,838
10......................................      11,349,961       7,754,054
                                         -------------------------------
    Total...............................     136,217,032     113,007,809
------------------------------------------------------------------------
    Annualized..........................      15,968,792      16,089,770
------------------------------------------------------------------------

    E.O. 13771 directs agencies to reduced regulation and control 
regulatory costs. This final rule is expected to be an E.O. 13771 
regulatory action. DHS estimates the total cost of this rule will be 
$10,515,740 annualized using a 7- percent discount rate over a 
perpetual time horizon, in 2016 dollars, and discounted back to 2016.
c. Costs to the Federal Government
    DHS is revising the process and system by which H-1B registrations 
or petitions, as applicable, will be selected toward the annual 
numerical allocations. This final rule will require updates to USCIS IT 
systems and additional time spent by USCIS on H-1B registrations or 
petitions.
    The INA provides for the collection of fees at a level that will 
ensure recovery of the full costs of providing adjudication and 
naturalization services by DHS, including administrative costs and 
services provided without charge to certain applicants and 
petitioners.\201\ DHS notes USCIS establishes its fees by assigning 
costs to an adjudication based on its relative adjudication burden and 
use of USCIS resources. Fees are established at an amount that is 
necessary to recover these assigned costs such as salaries and benefits 
of clerical staff, officers, and managers, plus an amount to recover 
unassigned overhead (such as facility rent, IT equipment and systems, 
or other expenses) and immigration services provided without charge. 
Consequently, since USCIS immigration fees are based on resource 
expenditures related to the benefit in question, USCIS uses the fee 
associated with an information collection as a reasonable measure of 
the collection's costs to USCIS. DHS notes the time necessary for USCIS 
to review the information submitted with the forms relevant to this 
final rule includes the time to adjudicate the benefit request. These 
costs are captured in the fees collected for the benefit request from 
petitioners.
---------------------------------------------------------------------------

    \201\ See INA section 286(m), 8 U.S.C. 1356(m).
---------------------------------------------------------------------------

B. Regulatory Flexibility Act

    The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, as 
amended by the Small Business Regulatory Enforcement Fairness Act of 
1996, Public Law 104-121 (March 29, 1996), requires Federal agencies to 
consider the potential impact of regulations on

[[Page 1728]]

small entities during the development of their rules. ``Small 
entities'' are small businesses, not-for-profit organizations that are 
not dominant in their fields, and governmental jurisdictions with 
populations of less than 50,000. An ``individual'' is not considered a 
small entity, and costs to an individual from a rule are not considered 
for RFA purposes. In addition, the courts have held that the RFA 
requires an agency to perform an initial regulatory flexibility 
analysis (IRFA) of small entity impacts only when a rule directly 
regulates small entities. Consequently, any indirect impacts from a 
rule to a small entity are not considered as costs for RFA purposes.
    Although individuals, rather than small entities, submit the 
majority of immigration and naturalization benefit applications and 
petitions, this final rule will affect entities that file and pay fees 
for H-1B non-immigrant benefit requests. The USCIS forms that are 
subject to an RFA analysis for this final rule are Form I-129, Petition 
for a Nonimmigrant Worker and the Registration H-1B Tool.
    DHS does not believe that the changes in this final rule will have 
a significant economic impact on a substantial number of small entities 
that will file H-1B petitions. A Final Regulatory Flexibility Analysis 
(FRFA) follows.
1. A Statement of Need for, and Objectives of, This Final Rule
    DHS's objectives and legal authority for this final rule are 
discussed earlier in the preamble. DHS is amending its regulations 
governing H-1B specialty occupation workers. The purpose of this final 
rule is to better ensure that H-1B classification is more likely to be 
awarded to petitioners seeking to employ relatively higher-skilled and 
higher-paid beneficiaries. DHS believes these changes will 
disincentivize use of the H-1B program to fill relatively lower-paid, 
lower-skilled positions.
2. A Statement of Significant Issues Raised by the Public Comments in 
Response to the Initial Regulatory Flexibility Analysis, a Statement of 
Assessment of Any Changes Made in the Proposed Rule as a Result of Such 
Comments
    Comments: A professional association wrote that DHS claimed that no 
small entities would be significantly impacted by the proposed rule, 
but DHS also estimated that 80.1 percent of those that filed Form I-129 
were small entities. An individual commenter wrote that DHS incorrectly 
concluded that the proposed rule would not have a significant impact on 
small entities because small businesses would be unlikely to have the 
legal expertise or institutional knowledge to navigate the H-1B system.
    Response: DHS estimates the economic impact for each small entity, 
based on the additional cost and time associated with the changes to 
the form, in percentages, is the sum of the impacts of the final rule 
divided by the entity's sales revenue.\202\ DHS constructed the 
distribution of economic impact of the final rule based on a sample of 
312 small entities. Across all 312 small entities, the increase in cost 
to a small entity will range from 0.00000026 percent to 2.5 percent of 
that entity's FY 2020 revenue. Of the 312 small entities, 0 percent (0 
small entities) will experience a cost increase that is greater than 5 
percent of revenues.
---------------------------------------------------------------------------

    \202\ The economic impact, in percent, for each small entity i = 
(Cost of one petition for entity i x Number of petitions for entity 
i) x 100. The cost of one petition for entity i ($75.60) is 
estimated by adding the two cost components per petition of this 
final rule ($75.60 = $32.59 + $43.01). The first component ($32.59) 
is the weighted average additional cost of filing a petition, and is 
calculated by dividing total cost by the number of petitions ($32.59 
= $3,457,401/106,100) from Table 13. The second component ($43.01) 
is the weighted average cost of submitting information on the 
registration and is calculated by dividing total cost by the number 
of baseline petitions ($43.01 = $11,795,997/274,237) from Table 14. 
The number of petitions for entity i is taken from USCIS internal 
data on actual filings of I-129 H-1B petition. The entity's sales 
revenue is taken from ReferenceUSA, Manta, Cortera, and Guidestar 
databases.
---------------------------------------------------------------------------

    Comments: Some commenters generally stated that the proposed rule 
would harm small businesses. Multiple commenters, including a trade 
association, employer, and individuals, wrote that the proposed rule 
would harm small and emerging businesses who, often, could not offer 
higher salaries compared to larger firms. Other commenters said the 
proposed rule would favor larger firms at the expense of small and 
medium sized businesses. An individual commenter wrote that the 
proposed rule would harm small technology companies and start-ups that 
are dependent on recruiting young talent, as they would be required to 
offer such employees level III and level IV wages when level I and 
level II wages would be more appropriate. Another individual commenter 
said companies would suffer because many small information technology 
or financial companies could not provide as high of salaries to their 
foreign workers as big companies could. An individual commenter wrote 
that the proposed rule would harm small businesses that often could not 
find the appropriate talent domestically and would have a legitimate 
need to hire H-1B workers, while another commenter argued the proposed 
rule would shrink the hiring talent pool for small businesses. An 
individual commenter wrote that, under the proposed rule, small 
businesses would not be able to operate due to an inability to find 
suitable employees. Similarly, an individual commenter wrote that the 
proposed rule would ensure that H-1B visas would go to ``the highest 
bidders'' and would discriminate against smaller businesses with a 
genuine need for H-1B employees. An individual commenter wrote that the 
proposed rule would encourage larger employers who could afford to pay 
higher wages to employees to artificially inflate their job 
requirements and increase their chance of selection through the ranked 
selection process. Another commenter asserted that smaller companies in 
non-metropolitan areas, who might have difficulty finding domestic 
candidates for positions, would be negatively impacted by the proposed 
rule.
    Response: DHS acknowledges that an employer offering a level I or 
below wage under the regular cap, and an employer offering a level II, 
I, or below wage under the advanced degree exemption, may have a lesser 
chance of selection than under the current random selection process. 
DHS does not believe that the changes in this final rule will have a 
significant economic impact on a substantial number of small 
businesses. As explained in the NPRM, DHS conducted an RFA and found 
that the changes in this rule would not have a significant economic 
impact on a substantial number of small entities.
    Additionally, this rule does not treat people who work for small-
sized entities differently than those who work for large companies. 
While DHS recognizes that some small businesses may operate on smaller 
margins than larger companies, if an employer values a beneficiary's 
work and the unique qualities the beneficiary possesses, the employer 
can offer a higher wage than required by the prevailing wage level to 
reflect that value. If a small company is unable to pay an employee at 
wage level III or IV for a greater chance of selection, they could then 
try to find a substitute U.S. worker.
    Comments: An individual commenter wrote that rural areas and 
smaller towns depend on entry-level H-1B workers at a level I wage, but 
those communities would not be able to justify hiring such H-1B workers 
at level III and level IV wages. Another individual commenter said the 
rule would harm employers in rural areas where wages, often, would be 
lower. A professional association wrote that small and medium sized 
medical practices, often serving rural or

[[Page 1729]]

low-income areas, depend on new or inexperienced physicians at the 
level I or level II wage rate and would be unable to compete for H-1B 
cap slots for these employees under the proposed rule. An employer 
wrote that rural healthcare providers would not be able to meet the 
wage rates necessary to attract workers on H-1B visas, and, as a 
result, the proposed rule would decrease the supply of healthcare labor 
to rural communities.
    Response: The rule takes the geographic area into account when 
ranking registrations or petitions, and, therefore, DHS does not agree 
that this rule will harm employers in rural or other areas where wages 
often are lower. Particularly, as stated in the proposed rule, USCIS 
will select H-1B registrations or petitions, as applicable, based on 
the highest OES prevailing wage level that the proffered wage equals or 
exceeds for the relevant SOC code and area(s) of intended employment 
(emphasis added). The prevailing wage already accounts for wage 
variations by location. Additionally, this rule does not treat foreign 
workers who work for small-sized entities differently than those who 
work for large companies.
3. The Response of the Agency to Any Comments Filed by the Chief 
Counsel for Advocacy of the Small Business Administration in Response 
to the Rule, and a Detailed Statement of Any Change Made to the Final 
Rule as a Result of the Comments
    DHS did not receive comments on this rule from the Chief Counsel 
for Advocacy of the Small Business Administration.
4. A Description of and an Estimate of the Number of Small Entities to 
Which This Final Rule Will Apply or an Explanation of Why No Such 
Estimate Is Available
    For this analysis, DHS conducted a sample analysis of historical 
Form I-129 H-1B petitions to estimate the number of small entities 
impacted by this final rule. DHS utilized a subscription-based online 
database of U.S. entities, ReferenceUSA, as well as three other open-
access, free databases of public and private entities, Manta, Cortera, 
and Guidestar, to determine the North American Industry Classification 
System (NAICS) code,\203\ revenue, and employee count for each entity 
in the sample. To determine whether an entity is small for purposes of 
the RFA, DHS first classified the entity by its NAICS code and, then, 
used SBA size standards guidelines \204\ to classify the revenue or 
employee count threshold for each entity. Based on the NAICS codes, 
some entities were classified as small based on their annual revenue, 
and some by their numbers of employees. Once as many entities as 
possible were matched, those that had relevant data were compared to 
the size standards provided by the SBA to determine whether they were 
small or not. Those that could not be matched or compared were assumed 
to be small under the presumption that non-small entities would have 
been identified by one of the databases at some point in their 
existence.
---------------------------------------------------------------------------

    \203\ U.S. Census Bureau, North American Industry Classification 
System, http://www.census.gov/eos/www/naics/ (last visited Oct. 21, 
2020).
    \204\ DHS utilized a subscription-based online database of U.S. 
entities, ReferenceUSA, as well as three other open-access, free 
databases of public and private entities, Manta, Cortera, and 
Guidestar, to determine the North American Industry Classification 
System (NAICS) code, revenue, and employee count for each entity. 
Guidelines suggested by the SBA Office of Advocacy indicate that the 
impact of a rule could be significant if the cost of the regulation 
exceeds 5 percent of the labor costs of the entities in the sector. 
Small Business Administration, Office of Advocacy, A Guide for 
Government Agencies, How to Comply with the Regulatory Flexibility 
Act (Aug. 2017), at 19, https://www.sba.gov/sites/default/files/advocacy/How-to-Comply-with-the-RFA-WEB.pdf.
---------------------------------------------------------------------------

    Using FY 2020 internal data on actual filings of Form I-129 H-1B 
petitions, DHS identified 24,111 \205\ unique entities. DHS devised a 
methodology to conduct the small entity analysis based on a 
representative, random sample of the potentially impacted population. 
DHS first determined the minimum sample size necessary to achieve a 95 
percent confidence level estimation for the impacted population of 
entities using the standard statistical formula at a 5 percent margin 
of error. Then, DHS created a sample size greater than the minimum 
necessary to increase the likelihood that our matches would meet or 
exceed the minimum required sample.
---------------------------------------------------------------------------

    \205\ Source: USCIS, Office of Policy and Strategy, Policy 
Research Division (PRD), Form I-129H-1B, Claims 3, IRFA data (Aug. 
18, 2020) & USCIS Analysis.
---------------------------------------------------------------------------

    DHS randomly selected a sample of 473 entities from the population 
of 24,111 entities that filed Form I-129 for H-1B petitions in FY 2020. 
Of the 473 entities, 406 entities returned a successful match of a 
filing entity in the ReferenceUSA, Manta, Cortera, and Guidestar 
databases; 67 entities did not return a match. Using these databases' 
revenue or employee count and their assigned North American Industry 
Classification System (NAICS) code, DHS determined 312 of the 406 
matches to be small entities, 94 to be non-small entities. Based on 
previous experience conducting RFAs, DHS assumes filing entities 
without database matches or missing revenue/employee count data are 
likely to be small entities. As a result, to prevent underestimating 
the number of small entities this rule will affect, DHS conservatively 
considers all the non-matched and missing entities as small entities 
for the purpose of this analysis. Therefore, DHS conservatively 
classifies 379 of 473 entities as small entities, including combined 
non-matches (67), and small entity matches (312). Thus, DHS estimates 
that 80.1% (379 of 473) of the entities filing Form I-129 H-1B 
petitions are small entities.
    In this analysis DHS assumes that the distribution of firm size for 
our sample is the same as the entire population of Form I-129. Thus, 
DHS estimates the number of small entities to be 80.1% of the 
population of 24,111 entities that filed Form I-129 under the H-1B 
classification, as summarized in Table 19 below. The annual numeric 
estimate of the small entities impacted by this final rule is 19,319 
entities.\206\
---------------------------------------------------------------------------

    \206\ The annual numeric estimate of the small entities (19,319) 
= Population (24,111) * Percentage of small entities (80.1%).

   Table 19--Number of Small Entities for Form I-129 for H-1B, FY 2020
------------------------------------------------------------------------
                                                          Proportion of
              Population                   Number of        population
                                         small entities     (percent)
------------------------------------------------------------------------
24,111................................          19,319             80.1
------------------------------------------------------------------------

    Following the distributional assumptions above, DHS uses the set of 
312 small entities with matched revenue data to estimate the economic 
impact of this final rule on each small entity. The economic impact on 
each small entity, in percentages, is the sum of the impacts of the 
final rule divided by the entity's sales revenue.\207\ DHS constructed 
the distribution of economic impact of the final rule based on the 
sample of 312 small entities. Across all 312 small

[[Page 1730]]

entities, the increase in cost to a small entity will range from 
0.00000026 percent to 2.5 percent of that entity's FY 2020 revenue. Of 
the 312 small entities, 0 percent (0 small entities) will experience a 
cost increase that is greater than 5 percent of revenues. Extrapolating 
to the population of 19,319 small entities and assuming an economic 
impact significance threshold of 5 percent of annual revenues, DHS 
estimates no small entities will be significantly affected by this 
final rule.
---------------------------------------------------------------------------

    \207\ The economic impact, in percent, for each small entity i = 
(Cost of one petition for entity i x Number of petitions for entity 
i) x 100. The cost of one petition for entity i ($75.60) is 
estimated by adding the two cost components per petition of this 
final rule ($75.60 = $32.59 + $43.01). The first component ($32.59) 
is the weighted average additional cost of filing a petition, and is 
calculated by dividing total cost by the number of petitions ($32.59 
= $3,457,401/106,100) from Table 14. The second component ($43.01) 
is the weighted average cost of submitting information on the 
registration and is calculated by dividing total cost by the number 
of baseline petitions ($43.01 = $11,795,997/274,237) from Table 15. 
The number of petitions for entity i is taken from USCIS internal 
data on actual filings of I-129 H-1B petition. The entity's sales 
revenue is taken from ReferenceUSA, Manta, Cortera, and Guidestar 
databases.
---------------------------------------------------------------------------

    Based on this analysis, DHS does not believe that this final rule 
will have a significant economic impact on a substantial number of 
small entities that file H-1B petitions.
5. A Description of the Projected Reporting, Recordkeeping, and Other 
Compliance Requirements of the Final Rule, Including an Estimate of the 
Classes of Small Entities That Will Be Subject to the Requirement and 
the Types of Professional Skills Necessary for Preparation of the 
Report or Record
    As stated above in the preamble, this final rule will impose 
additional reporting, recordkeeping, or other compliance requirements 
on entities that could be small entities.
6. Description of the Steps the Agency Has Taken To Minimize the 
Significant Economic Impact on Small Entities Consistent With the 
Stated Objectives of the Applicable Statues, Including a Statement of 
Factual, Policy, and Legal Reasons for Selecting the Alternative 
Adopted in the Final Rule and Why Each One of the Other Significant 
Alternatives to the Rule Considered by the Agency Which Affect the 
Impact on Small Entities Was Rejected
    DHS requested comments on, including potential alternatives to, the 
proposed ranking and selection of registrations based on the OES 
prevailing wage level that corresponds to the requirements of the 
proffered position in situations where there is no current OES 
prevailing wage information. In the RFA context, DHS sought comments on 
alternatives that would accomplish the objectives of the proposed rule 
without unduly burdening small entities. DHS also welcomed any public 
comments or data on the number of small entities that would be 
petitioning for an H-1B employee and any direct impacts on those small 
entities.
    Comment: Some commenters said that DHS should consider ranking by 
years of experience, rather than by wage. One commenter asked DHS to 
give an advantage to candidates who have work experience in the United 
States.
    Response: DHS declines to adopt these alternatives, as ranking and 
selection by years of experience would not best accomplish the goal of 
attracting the best and brightest workers. DHS believes that the 
salary, relative to others in the same occupational classification and 
area of intended employment, rather than years of experience, is 
generally more indicative of skill level and relative value/
productivity of the worker to the United States. See section 3.3 
Requests for comments on alternatives for additional suggested 
alternatives.

C. Congressional Review Act

    The Office of Information and Regulatory Affairs has determined 
that this final rule is a major rule, as defined in 5 U.S.C. 804, also 
known as the ``Congressional Review Act'' (CRA), as enacted in section 
251 of the Small Business Regulatory Enforcement Fairness Act of 1996, 
Public Law 104-121, sec. 251, 110 Stat. 868, 873, and codified at 5 
U.S.C. 801 et seq. Therefore, the rule requires at least a 60-day 
delayed effective date. DHS has complied with the CRA's reporting 
requirements and has sent this final rule to Congress and to the 
Comptroller General as required by 5 U.S.C. 801(a)(1).

D. Unfunded Mandates Reform Act of 1995

    The Unfunded Mandates Reform Act of 1995 (UMRA) is intended, among 
other things, to curb the practice of imposing unfunded federal 
mandates on State, local, and tribal governments. Title II of the UMRA 
requires each federal agency to prepare a written statement assessing 
the effects of any federal mandate in a proposed or final agency rule 
that may result in a $100 million or more expenditure (adjusted 
annually for inflation) in any one year by State, local, and tribal 
governments, in the aggregate, or by the private sector. Based on the 
Consumer Price Index for All Urban Consumers (CPI-U), the value 
equivalent of $100 million in 1995 adjusted for inflation to 2019 
levels is approximately $168 million.\208\
---------------------------------------------------------------------------

    \208\ See U.S. Department of Labor, Bureau of Labor Statistics, 
Historical Consumer Price Index for All Urban Consumers (CPI-U): 
U.S. city average, all items, by month, https://www.bls.gov/cpi/tables/supplemental-files/historical-cpi-u-202003.pdf (last visited 
Sept. 2, 2020).
    Calculation of inflation: (1) Calculate the average monthly CPI-
U for the reference year (1995) and the current year (2019); (2) 
Subtract reference year CPI-U from current year CPI-U; (3) Divide 
the difference of the reference year CPI-U and current year CPI-U by 
the reference year CPI-U; (4) Multiply by 100 = [(Average monthly 
CPI-U for 2019-Average monthly CPI-U for 1995)/(Average monthly CPI-
U for 1995)] * 100 = [(255.657-152.383)/152.383] * 100 = (103.274/
152.383) *100 = 0.6777 * 100 = 67.77 percent = 68 percent (rounded)
    Calculation of inflation-adjusted value: $100 million in 1995 
dollars * 1.68 = $168 million in 2019 dollars.
---------------------------------------------------------------------------

    This rule does not contain a ``Federal mandate'' as defined in UMRA 
that may result in $100 million or more expenditures (adjusted annually 
for inflation--$168 million in 2019 dollars) in any one year by State, 
local and tribal governments or the private sector. This rule also does 
not uniquely affect small governments. Accordingly, Title II of UMRA 
requires no further agency action or analysis.

E. Executive Order 13132 (Federalism)

    This final rule will not have substantial direct effects on the 
states, on the relationship between the national government and the 
states, or on the distribution of power and responsibilities among the 
various levels of government. Therefore, in accordance with section 6 
of Executive Order 13132, DHS has determined that this final rule does 
not have sufficient federalism implications to warrant the preparation 
of a federalism summary impact statement.

F. Executive Order 12988 (Civil Justice Reform)

    This final rule meets the applicable standards set forth in 
sections 3(a) and 3(b)(2) of Executive Order 12988.

G. Executive Order 13175 (Consultation and Coordination With Indian 
Tribal Governments)

    This final rule does not have ``tribal implications'' because it 
does not have substantial direct effects on one or more Indian tribes, 
on the relationship between the Federal Government and Indian tribes, 
or on the distribution of power and responsibilities between the 
Federal Government and Indian tribes. Accordingly, E.O. 13175, 
Consultation and Coordination with Indian Tribal Governments, requires 
no further agency action or analysis.

H. National Environmental Policy Act (NEPA)

    DHS analyzes actions to determine whether the National 
Environmental Policy Act, Public Law 91-190, 42 U.S.C. 4321 through 
4347 (NEPA), applies to them and, if so, what degree of analysis is 
required. DHS Directive 023-01 Rev. 01 (Directive) and Instruction 
Manual 023-01-001-01 Rev. 01, Implementation of the National 
Environmental Policy Act (Instruction Manual) establish the policies 
and procedures that DHS and its

[[Page 1731]]

components use to comply with NEPA and the Council on Environmental 
Quality (CEQ) regulations for implementing NEPA, 40 CFR parts 1500-
1508.
    The CEQ regulations allow federal agencies to establish, with CEQ 
review and concurrence, categories of actions (``categorical 
exclusions'') that experience has shown do not individually or 
cumulatively have a significant effect on the human environment and, 
therefore, do not require an Environmental Assessment (EA) or 
Environmental Impact Statement (EIS).\209\ Categorical exclusions 
established by DHS are set forth in Appendix A of the Instruction 
Manual. Under DHS NEPA implementing procedures, for an action to be 
categorically excluded, it must satisfy each of the following three 
conditions: (1) The entire action clearly fits within one or more of 
the categorical exclusions; (2) the action is not a piece of a larger 
action; and (3) no extraordinary circumstances exist that create the 
potential for a significant environmental effect.\210\
---------------------------------------------------------------------------

    \209\ See 40 CFR 1507.3(b)(2)(ii), 1508.4.
    \210\ Instruction Manual section V.B(2)(a)-(c).
---------------------------------------------------------------------------

    As discussed in more detail throughout this final rule, DHS is 
amending regulations governing the selection of registrations or 
petitions, as applicable, toward the annual H-1B numerical allocations. 
This final rule establishes that, if more registrations are received 
during the annual initial registration period (or petition filing 
period, if applicable) than necessary to reach the applicable numerical 
allocation, USCIS will rank and select the registrations (or petitions, 
if the registration process is suspended) received on the basis of the 
highest OES prevailing wage level that the proffered wage equals or 
exceeds for the relevant SOC code and in the area of intended 
employment, beginning with OES wage level IV and proceeding in 
descending order with OES wage levels III, II, and I and below. If a 
proffered wage falls below an OES wage level I, because the proffered 
wage is based on a prevailing wage from another legitimate source 
(other than OES) or an independent authoritative source, USCIS will 
rank the registration in the same category as OES wage level I.\211\
---------------------------------------------------------------------------

    \211\ If the proffered wage is expressed as a range, USCIS would 
make the comparison using the lowest wage in the range.
---------------------------------------------------------------------------

    Generally, DHS believes NEPA does not apply to a rule intended to 
change a discrete aspect of a visa program because any attempt to 
analyze its potential impacts would be largely speculative, if not 
completely so. This final rule does not propose to alter the statutory 
limitations on the numbers of nonimmigrants who: May be issued initial 
H-1B visas or granted initial H-1B nonimmigrant status, consequently 
will be admitted into the United States as H-1B nonimmigrants, will be 
allowed to change their status to H-1B, or will extend their stay in H-
1B status. DHS cannot reasonably estimate whether the wage level-based 
ranking approach to select H-1B registrations (or petitions in any year 
in which the registration requirement were suspended) that DHS is 
implementing will affect how many petitions will be filed for workers 
to be employed in specialty occupations or whether the regulatory 
amendments herein will result in an overall change in the number of H-
1B petitions that ultimately will be approved, and the number of H-1B 
workers who will be employed in the United States in any FY. DHS has no 
reason to believe that these amendments to H-1B regulations will change 
the environmental effect, if any, of the existing regulations. 
Therefore, DHS has determined that, even if NEPA applied to this 
action, this final rule clearly fits within categorical exclusion A3(d) 
in the Instruction Manual, which provides an exclusion for 
``promulgation of rules . . . that amend an existing regulation without 
changing its environmental effect.'' This final rule will maintain the 
current human environment by proposing improvements to the H-1B program 
that will take effect during the economic crisis caused by COVID-19 in 
a way that more effectively will prevent an adverse impact from the 
employment of H-1B workers on the wages and working conditions of 
similarly employed U.S. workers. This final rule is not a part of a 
larger action and presents no extraordinary circumstances creating the 
potential for significant environmental effects. Therefore, this action 
is categorically excluded and no further NEPA analysis is required.

I. Paperwork Reduction Act

    Under the Paperwork Reduction Act of 1995 (PRA) Public Law 104-13, 
44 U.S.C. 3501, et seq., all Departments are required to submit to the 
Office of Management and Budget, for review and approval, any reporting 
requirements inherent in a rule. In compliance with the PRA, DHS 
published a notice of proposed rulemaking on November 2, 2020, in which 
it requested comments on the revisions to the information collections 
associated with this rulemaking.\212\ DHS responded to those comments 
in Section IV.E.2. of this final rule.
---------------------------------------------------------------------------

    \212\ See 85 FR 69236, 69261-2.
---------------------------------------------------------------------------

    The following is an overview of the information collections 
associated with this final rule:
1. USCIS H-1B Registration Tool
    (1) Type of Information Collection: Revision of a Currently 
Approved Collection.
    (2) Title of the Form/Collection: H-1B Registration Tool.
    (3) Agency form number, if any, and the applicable component of the 
DHS sponsoring the collection: OMB-64; USCIS.
    (4) Affected public who will be asked or required to respond, as 
well as a brief abstract: Primary: Business or other for-profit. USCIS 
will use the data collected through the H-1B Registration Tool to 
select a sufficient number of registrations projected as needed to meet 
the applicable H-1B cap allocations and to notify registrants whether 
their registrations were selected.
    (5) An estimate of the total number of respondents and the amount 
of time estimated for an average respondent to respond: The estimated 
total number of respondents for the information collection H-1B 
Registration Tool is 275,000, and the estimated hour burden per 
response is 0.833 hours.
    (6) An estimate of the total public burden (in hours) associated 
with the collection: The total estimated annual hour burden associated 
with this collection of information is 229,075 hours.
    (7) An estimate of the total public burden (in cost) associated 
with the collection: The estimated total annual cost burden associated 
with this collection of information is $0.
2. USCIS Form I-129
    (1) Type of Information Collection: Revision of a Currently 
Approved Collection.
    (2) Title of the Form/Collection: Petition for a Nonimmigrant 
Worker.
    (3) Agency form number, if any, and the applicable component of the 
DHS sponsoring the collection: I-129; USCIS.
    (4) Affected public who will be asked or required to respond, as 
well as a brief abstract: Primary: Business or other for-profit. USCIS 
uses the data collected on this form to determine eligibility for the 
requested nonimmigrant petition and/or requests to extend or change 
nonimmigrant status. An employer (or agent, where applicable) uses this 
form to petition USCIS for an alien to

[[Page 1732]]

temporarily enter as a nonimmigrant. An employer (or agent, where 
applicable) also uses this form to request an extension of stay or 
change of status on behalf of the alien worker. The form serves the 
purpose of standardizing requests for nonimmigrant workers and ensuring 
that basic information required for assessing eligibility is provided 
by the petitioner while requesting that beneficiaries be classified 
under certain nonimmigrant employment categories. It also assists USCIS 
in compiling information required by Congress annually to assess 
effectiveness and utilization of certain nonimmigrant classifications.
    USCIS also uses the data to determine continued eligibility. For 
example, the data collected is used in compliance reviews and other 
inspections to ensure that all program requirements are being met.
    (5) An estimate of the total number of respondents and the amount 
of time estimated for an average respondent to respond: I-129 is 
294,751 and the estimated hour burden per response is 3.09 hours; the 
estimated total number of respondents for the information collection E-
1/E-2 Classification Supplement to Form I-129 is 4,760 and the 
estimated hour burden per response is 0.67 hours; the estimated total 
number of respondents for the information collection Trade Agreement 
Supplement to Form I-129 is 3,057 and the estimated hour burden per 
response is 0.67 hours; the estimated total number of respondents for 
the information collection H Classification Supplement to Form I-129 is 
96,291 and the estimated hour burden per response is 2 hours; the 
estimated total number of respondents for the information collection H-
1B and H-1B1 Data Collection and Filing Fee Exemption Supplement is 
96,291 and the estimated hour burden per response is 1 hour; the 
estimated total number of respondents for the information collection L 
Classification Supplement to Form I-129 is 37,831 and the estimated 
hour burden per response is 1.34 hours; the estimated total number of 
respondents for the information collection O and P Classifications 
Supplement to Form I-129 is 22,710 and the estimated hour burden per 
response is 1 hour; the estimated total number of respondents for the 
information collection Q-1 Classification Supplement to Form I-129 is 
155 and the estimated hour burden per response is 0.34 hours; the 
estimated total number of respondents for the information collection R-
1 Classification Supplement to Form I-129 is 6,635 and the estimated 
hour burden per response is 2.34 hours.
    (6) An estimate of the total public burden (in hours) associated 
with the collection: The total estimated annual hour burden associated 
with this collection of information is 1,293,873 hours.
    (7) An estimate of the total public burden (in cost) associated 
with the collection: The estimated total annual cost burden associated 
with this collection of information is $70,681,290.

J. Signature

    The Acting Secretary of Homeland Security, Chad F. Wolf, having 
reviewed and approved this document, is delegating the authority to 
electronically sign this document to Ian J. Brekke, who is the Senior 
Official Performing the Duties of the General Counsel for DHS, for 
purposes of publication in the Federal Register.

List of Subjects in 8 CFR Part 214

    Administrative practice and procedure, Aliens, Cultural exchange 
programs, Employment, Foreign officials, Health professions, Reporting 
and recordkeeping requirements, Students.

    Accordingly, DHS amends part 214 of chapter I of title 8 of the 
Code of Federal Regulations as follows:

PART 214--NONIMMIGRANT CLASSES

0
1. The authority citation for part 214 continues to read as follows:

    Authority: 6 U.S.C. 202, 236; 8 U.S.C. 1101, 1102, 1103, 1182, 
1184, 1186a, 1187, 1221, 1281, 1282, 1301-1305 and 1372; sec. 643, 
Pub. L. 104-208, 110 Stat. 3009-708; Pub. L. 106-386, 114 Stat. 
1477-1480; section 141 of the Compacts of Free Association with the 
Federated States of Micronesia and the Republic of the Marshall 
Islands, and with the Government of Palau, 48 U.S.C. 1901 note and 
1931 note, respectively; 48 U.S.C. 1806; 8 CFR part 2; Pub. L. 115-
218.


0
2. Section 214.2 is amended by:
0
a. Revising the first sentence of paragraph (h)(8)(iii)(A)(1) 
introductory text;
0
b. Adding paragraphs (h)(8)(iii)(A)(1)(i) and (ii);
0
c. In paragraph (h)(8)(iii)(A)(5)(i), revising the last two sentences 
and adding a sentence at the end;
0
d. In paragraph (h)(8)(iii)(A)(5)(ii), revising the last two sentences 
and adding a sentence at the end;
0
e. In paragraph (h)(8)(iii)(A)(6)(i), revising the last two sentences 
and adding a sentence at the end;
0
f. In paragraph (h)(8)(iii)(A)(6)(ii), revising the last two sentences 
and adding a sentence at the end;
0
g. Revising paragraphs (h)(8)(iii)(A)(7) and (h)(8)(iii)(D)(1);
0
h. In paragraph (h)(8)(iv)(B)(1), revising the last three sentences and 
adding three sentences at the end;
0
i. Revising paragraph (h)(8)(iv)(B)(2);
0
j. Removing and reserving paragraph (h)(8)(v);
0
k. Revising paragraph (h)(10)(ii);
0
l. Revising paragraph (h)(11)(iii)(A)(2);
0
m. Redesignating paragraphs (h)(11)(iii)(A)(3) through (5) as 
(h)(11)(iii)(A)(4) through (6); and
0
n. Adding a new paragraph (h)(11)(iii)(A)(3) and paragraph (h)(24)(i).
    The revisions and additions read as follows:


Sec.  214.2  Special requirements for admission, extension, and 
maintenance of status.

* * * * *
    (h) * * *
    (8) * * *
    (iii) * * *
    (A) * * *
    (1) * * * Except as provided in paragraph (h)(8)(iv) of this 
section, before a petitioner is eligible to file an H-1B cap-subject 
petition for a beneficiary who may be counted under section 
214(g)(1)(A) of the Act (``H-1B regular cap'') or eligible for 
exemption under section 214(g)(5)(C) of the Act (``H-1B advanced degree 
exemption''), the prospective petitioner or its attorney or accredited 
representative must register to file a petition on behalf of an alien 
beneficiary electronically through the USCIS website (www.uscis.gov). * 
* *
    (i) Ranking by wage levels. USCIS will rank and select 
registrations as set forth in paragraphs (h)(8)(iii)(A)(5) and (6) of 
this section. For purposes of the ranking and selection process, USCIS 
will use the highest corresponding Occupational Employment Statistics 
(OES) wage level that the proffered wage will equal or exceed for the 
relevant Standard Occupational Classification (SOC) code and area(s) of 
intended employment. If the proffered wage is lower than the OES wage 
level I, because it is based on a prevailing wage from another 
legitimate source (other than OES) or an independent authoritative 
source, USCIS will rank the registration in the same category as OES 
wage level I. If the H-1B beneficiary will work in multiple locations, 
or in multiple positions if the registrant is an agent, USCIS will rank 
and select the registration based on the lowest corresponding OES wage 
level that the proffered wage will equal or exceed. Where there is no 
current OES prevailing wage information for the proffered position, 
USCIS will rank and

[[Page 1733]]

select the registration based on the OES wage level that corresponds to 
the requirements of the proffered position.
    (ii) [Reserved]
* * * * *
    (5) * * *
    (i) * * * If USCIS has received more registrations on the final 
registration date than necessary to meet the H-1B regular cap under 
Section 214(g)(1)(A) of the Act, USCIS will rank and select from among 
all registrations properly submitted on the final registration date on 
the basis of the highest OES wage level that the proffered wage equals 
or exceeds for the relevant SOC code and area of intended employment, 
beginning with OES wage level IV and proceeding in descending order 
with OES wage levels III, II, and I. Where there is no current OES 
prevailing wage information for the proffered position, USCIS will rank 
and select petitions based on the appropriate wage level that 
corresponds to the requirements of the proffered position. If USCIS 
receives and ranks more registrations at a particular wage level than 
the projected number needed to meet the numerical limitation, USCIS 
will randomly select from all registrations within that particular wage 
level a sufficient number of registrations needed to reach the 
numerical limitation.
    (ii) * * * If USCIS has received more than a sufficient number of 
registrations to meet the H-1B regular cap under Section 214(g)(1)(A) 
of the Act, USCIS will rank and select from among all registrations 
properly submitted during the initial registration period on the basis 
of the highest OES wage level that the proffered wage equals or exceeds 
for the relevant SOC code and area of intended employment, beginning 
with OES wage level IV and proceeding in descending order with OES wage 
levels III, II, and I. Where there is no current OES prevailing wage 
information for the proffered position, USCIS will rank and select 
petitions based on the appropriate wage level that corresponds to the 
requirements of the proffered position. If USCIS receives and ranks 
more registrations at a particular wage level than the projected number 
needed to meet the numerical limitation, USCIS will randomly select 
from all registrations within that particular wage level a sufficient 
number of registrations needed to reach the numerical limitation.
    (6) * * *
    (i) * * * If on the final registration date, USCIS has received 
more registrations than necessary to meet the H-1B advanced degree 
exemption limitation under Section 214(g)(5)(C) of the Act, USCIS will 
rank and select, from among the registrations properly submitted on the 
final registration date that may be counted against the advanced degree 
exemption, the number of registrations necessary to reach the H-1B 
advanced degree exemption on the basis of the highest OES wage level 
that the proffered wage equals or exceeds for the relevant SOC code and 
in the area of intended employment, beginning with OES wage level IV 
and proceeding in descending order with OES wage levels III, II, and I. 
Where there is no current OES prevailing wage information for the 
proffered position, USCIS will rank and select petitions based on the 
appropriate wage level that corresponds to the requirements of the 
proffered position. If USCIS receives and ranks more registrations at a 
particular wage level than the projected number needed to meet the 
numerical limitation, USCIS will randomly select from all registrations 
within that particular wage level a sufficient number of registrations 
necessary to reach the H-1B advanced degree exemption.
    (ii) * * * USCIS will rank and select, from among the remaining 
registrations properly submitted during the initial registration period 
that may be counted against the advanced degree exemption numerical 
limitation, the number of registrations necessary to reach the H-1B 
advanced degree exemption on the basis of the highest OES wage level 
that the proffered wage equals or exceeds for the relevant SOC code and 
in the area of intended employment, beginning with OES wage level IV 
and proceeding in descending order with OES wage levels III, II, and I. 
Where there is no current OES prevailing wage information for the 
proffered position, USCIS will rank and select petitions based on the 
appropriate wage level that corresponds to the requirements of the 
proffered position. If USCIS receives and ranks more registrations at a 
particular wage level than the projected number needed to meet the 
numerical limitation, USCIS will randomly select from all registrations 
within that particular wage level a sufficient number of registrations 
necessary to reach the H-1B advanced degree exemption.
    (7) Increase to the number of registrations projected to meet the 
H-1B regular cap or advanced degree exemption allocations in a fiscal 
year. Unselected registrations will remain on reserve for the 
applicable fiscal year. If USCIS determines that it needs to select 
additional registrations to receive the number of petitions projected 
to meet the numerical limitations, USCIS will select from among the 
registrations that are on reserve a sufficient number to meet the H-1B 
regular cap or advanced degree exemption numerical limitation, as 
applicable. If all of the registrations on reserve are selected and 
there are still fewer registrations than needed to reach the H-1B 
regular cap or advanced degree exemption numerical limitation, as 
applicable, USCIS may reopen the applicable registration period until 
USCIS determines that it has received a sufficient number of 
registrations projected to meet the H-1B regular cap or advanced degree 
exemption numerical limitation. USCIS will monitor the number of 
registrations received and will notify the public of the date that 
USCIS has received the necessary number of registrations (the new 
``final registration date''). The day the public is notified will not 
control the applicable final registration date. When selecting 
additional registrations under this paragraph, USCIS will rank and 
select properly submitted registrations in accordance with paragraphs 
(h)(8)(iii)(A)(1), (5), and (6) of this section. If the registration 
period will be re-opened, USCIS will announce the start of the re-
opened registration period on the USCIS website at www.uscis.gov.
* * * * *
    (D) * * * (1) Filing procedures. In addition to any other 
applicable requirements, a petitioner may file an H-1B petition for a 
beneficiary that may be counted under section 214(g)(1)(A) or eligible 
for exemption under section 214(g)(5)(C) of the Act only if the 
petition is based on a valid registration submitted by the petitioner, 
or its designated representative, on behalf of the beneficiary that was 
selected beforehand by USCIS. The petition must be filed within the 
filing period indicated in the selection notice. A petitioner may not 
substitute the beneficiary named in the original registration or 
transfer the registration to another petitioner.
    (i) If a petitioner files an H-1B cap-subject petition based on a 
registration that was not selected beforehand by USCIS, based on a 
registration for a different beneficiary than the beneficiary named in 
the petition, or based on a registration considered by USCIS to be 
invalid, the H-1B cap-subject petition will be rejected or denied. 
USCIS will consider a registration to be invalid if the registration 
fee associated with the registration is declined, rejected, or canceled 
after submission as the registration fee is non-refundable and

[[Page 1734]]

due at the time the registration is submitted.
    (ii) If USCIS determines that the statement of facts contained on 
the registration form is inaccurate, fraudulent, misrepresents any 
material fact, or is not true and correct, USCIS may reject or deny the 
petition or, if approved, may revoke the approval of a petition that 
was filed based on that registration.
    (iii) USCIS also may deny or revoke approval of a subsequent new or 
amended petition filed by the petitioner, or a related entity, on 
behalf of the same beneficiary, if USCIS determines that the filing of 
the new or amended petition is part of the petitioner's attempt to 
unfairly decrease the proffered wage to an amount that would be 
equivalent to a lower wage level, after listing a higher wage level on 
the registration to increase the odds of selection. USCIS will not deny 
or revoke approval of such an amended or new petition solely on the 
basis of a different proffered wage if that wage does not correspond to 
a lower OES wage level than the wage level on which the registration 
selection was based.
* * * * *
    (iv) * * *
    (B) * * *
    (1) * * * If the final receipt date is any of the first five 
business days on which petitions subject to the H-1B regular cap may be 
received, USCIS will select from among all the petitions properly 
submitted during the first five business days the number of petitions 
deemed necessary to meet the H-1B regular cap. If USCIS has received 
more petitions than necessary to meet the numerical limitation for the 
H-1B regular cap, USCIS will rank and select the petitions received on 
the basis of the highest Occupational Employment Statistics (OES) wage 
level that the proffered wage equals or exceeds for the relevant 
Standard Occupational Classification (SOC) code in the area of intended 
employment, beginning with OES wage level IV and proceeding in 
descending order with OES wage levels III, II, and I. Where there is no 
current OES prevailing wage information for the proffered position, 
USCIS will rank and select petitions based on the appropriate wage 
level that corresponds to the requirements of the proffered position. 
If the wage falls below an OES wage level I, USCIS will rank the 
petition in the same category as OES wage level I. USCIS will rank the 
petition in the same manner even if, instead of obtaining an OES 
prevailing wage, a petitioner elects to obtain a prevailing wage using 
another legitimate source (other than OES) or an independent 
authoritative source. If USCIS receives and ranks more petitions at a 
particular wage level than the projected number needed to meet the 
numerical limitation, USCIS will randomly select from among all 
eligible petitions within that particular wage level a sufficient 
number of petitions needed to reach the numerical limitation.
    (2) Advanced degree exemption selection in event of suspended 
registration process. After USCIS has received a sufficient number of 
petitions to meet the H-1B regular cap and, as applicable, completed 
the selection process of petitions for the H-1B regular cap, USCIS will 
determine whether there is a sufficient number of remaining petitions 
to meet the H-1B advanced degree exemption numerical limitation. When 
calculating the number of petitions needed to meet the H-1B advanced 
degree exemption numerical limitation USCIS will take into account 
historical data related to approvals, denials, revocations, and other 
relevant factors. USCIS will monitor the number of petitions received 
and will announce on its website the date that it receives the number 
of petitions projected as needed to meet the H-1B advanced degree 
exemption numerical limitation (the ``final receipt date''). The date 
the announcement is posted will not control the final receipt date. If 
the final receipt date is any of the first five business days on which 
petitions subject to the H-1B advanced degree exemption may be received 
(in other words, if the numerical limitation is reached on any one of 
the first five business days that filings can be made), USCIS will 
select from among all the petitions properly submitted during the first 
five business days the number of petitions deemed necessary to meet the 
H-1B advanced degree exemption numerical limitation. If USCIS has 
received more petitions than necessary to meet the numerical limitation 
for the H-1B advanced degree exemption, USCIS will rank and select the 
petitions received on the basis of the highest Occupational Employment 
Statistics (OES) wage level that the proffered wage equals or exceeds 
for the relevant Standard Occupational Classification (SOC) code in the 
area of intended employment, beginning with OES wage level IV and 
proceeding with OES wage levels III, II, and I. Where there is no 
current OES prevailing wage information for the proffered position, 
USCIS will rank and select petitions based on the appropriate wage 
level that corresponds to the requirements of the proffered position. 
If the proffered wage is below an OES wage level I, USCIS will rank the 
petition in the same category as OES wage level I. USCIS will rank the 
petition in the same manner even if, instead of obtaining an OES 
prevailing wage, a petitioner elects to obtain a prevailing wage using 
another legitimate source (other than OES) or an independent 
authoritative source. If USCIS receives and ranks more petitions at a 
particular wage level than necessary to meet the numerical limitation 
for the H-1B advanced degree exemption, USCIS will randomly select from 
among all eligible petitions within that particular wage level a 
sufficient number of petitions needed to reach the numerical 
limitation.
* * * * *
    (10) * * *
    (ii) Notice of denial. The petitioner shall be notified of the 
reasons for the denial and of the right to appeal the denial of the 
petition under 8 CFR part 103. The petition may be denied if it is 
determined that the statements on the registration or petition were 
inaccurate. The petition will be denied if it is determined that the 
statements on the registration or petition were fraudulent or 
misrepresented a material fact. A petition also may be denied if it is 
not based on a valid registration submitted by the petitioner (or its 
designated representative), or a successor in interest, for the 
beneficiary named in the petition. A valid registration must represent 
a legitimate job offer. USCIS also may deny a subsequent new or amended 
petition filed by the petitioner, or a related entity, on behalf of the 
same beneficiary, if USCIS determines that the filing of the new or 
amended petition is part of the petitioner's attempt to unfairly 
increase the odds of selection during the registration or petition 
selection process, as applicable, such as by reducing the proffered 
wage to an amount that would be equivalent to a lower wage level than 
that indicated on the original petition. USCIS will not deny such an 
amended or new petition solely on the basis of a different proffered 
wage if that wage does not correspond to a lower OES wage level than 
the wage level on which the registration or petition selection, as 
applicable, was based. There is no appeal from a decision to deny an 
extension of stay to the alien.
    (11) * * *
    (iii) * * *
    (A) * * *
    (2) The statement of facts contained in the petition; the 
registration, if applicable; or on the temporary labor certification or 
labor condition application; was not true and correct,

[[Page 1735]]

inaccurate, fraudulent, or misrepresented a material fact; or
    (3) The petitioner, or a related entity, filed a new or amended 
petition on behalf of the same beneficiary, if USCIS determines that 
the filing of the new or amended petition is part of the petitioner's 
attempt to unfairly increase the odds of selection during the 
registration or petition selection process, as applicable, such as by 
reducing the proffered wage to an amount that would be equivalent to a 
lower wage level than that indicated on the registration, or the 
original petition if the registration process was suspended. USCIS will 
not revoke approval of such an amended or new petition solely on the 
basis of a different proffered wage if that wage does not correspond to 
a lower OES wage level than the wage level on which the registration or 
petition selection, as applicable, was based; or
* * * * *
    (24) * * * (i) The requirement to submit a registration for an H-1B 
cap-subject petition and the selection process based on properly 
submitted registrations under paragraph (h)(8)(iii) of this section are 
intended to be severable from paragraph (h)(8)(iv) of this section. In 
the event paragraph (h)(8)(iii) is not implemented, or in the event 
that paragraph (h)(8)(iv) is not implemented, DHS intends that either 
of those provisions be implemented as an independent rule, without 
prejudice to petitioners in the United States under this section, as 
consistent with law.
* * * * *

Ian J. Brekke,
Senior Official Performing the Duties of the General Counsel, U.S. 
Department of Homeland Security.
[FR Doc. 2021-00183 Filed 1-7-21; 8:45 am]
BILLING CODE 9111-97-P