[Federal Register Volume 86, Number 24 (Monday, February 8, 2021)]
[Rules and Regulations]
[Pages 8543-8548]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-02665]



========================================================================
Rules and Regulations
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains regulatory documents 
having general applicability and legal effect, most of which are keyed 
to and codified in the Code of Federal Regulations, which is published 
under 50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by the Superintendent of Documents. 

========================================================================


Federal Register / Vol. 86, No. 24 / Monday, February 8, 2021 / Rules 
and Regulations

[[Page 8543]]



DEPARTMENT OF HOMELAND SECURITY

8 CFR Part 214

[CIS No. 2680-21; Docket No: USCIS 2020-0019]
RIN 1615-AC61


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

AGENCY: U.S. Citizenship and Immigration Services (USCIS), U.S. 
Department of Homeland Security (DHS).

ACTION: Final rule; delay of effective date; request for comments.

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

SUMMARY: On January 8, 2021, DHS published a final rule, Modification 
of Registration Requirement for Petitioners Seeking To File Cap-Subject 
H-1B Petitions (H-1B Selection Final Rule) amending 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. The Department is delaying the rule's 
effective date until December 31, 2021, because USCIS will not have 
adequate time to complete system development, thoroughly test the 
modifications, train staff, and conduct public outreach needed to 
ensure an effective and orderly implementation of the H-1B Selection 
Final Rule by the time the initial registration period will be open for 
the upcoming fiscal year (FY) 2022 H-1B cap season. During the delay, 
while USCIS works through the issues associated with implementation, 
DHS leadership will also evaluate the January 8th rule and its 
associated policies, as is typical of agencies at the beginning of a 
new Administration.

DATES: As of February 8, 2021, the effective date of the final rule 
published January 8, 2021, at 86 FR 1676, is delayed to December 31, 
2021. DHS is accepting public comments on this delay until March 10, 
2021.

ADDRESSES: You may submit comments on the entirety of this final rule 
package, identified by DHS Docket No. USCIS-2020-0019, through the 
Federal eRulemaking Portal: http://www.regulations.gov. Follow the 
website instructions for submitting comments. Comments submitted in a 
manner other than the one listed above, including emails or letters 
sent to DHS or USCIS officials, will not be considered comments on this 
final rule and may not receive a response from DHS. Please note that 
DHS and USCIS cannot accept any comments that are hand-delivered or 
couriered. In addition, USCIS cannot accept comments contained on any 
form of digital media storage devices, such as CDs/DVDs and USB drives. 
Due to COVID-19, USCIS is also not accepting mailed comments at this 
time. If you cannot submit your comment by using http://www.regulations.gov, please contact Samantha Deshommes, Chief, 
Regulatory Coordination Division, Office of Policy and Strategy, U.S. 
Citizenship and Immigration Services, Department of Homeland Security, 
by telephone at 240-721-3000 for alternate instructions.

FOR FURTHER INFORMATION CONTACT: Charles L. Nimick, Chief, Business and 
Foreign Workers Division, U.S. Citizenship and Immigration Services, 
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 number above via TTY by 
calling the toll-free Federal Information Relay Service at 1-877-889-
5627 (TTY-TDD).

SUPPLEMENTARY INFORMATION:

I. Public Participation

    DHS invites all interested parties to participate in this 
rulemaking by submitting written data, views, comments, and arguments 
on all aspects of this final rule. DHS also invites comments that 
relate to the economic, environmental, or federalism effects that might 
result from this final rule. Comments must be submitted in English, or 
an English translation must be provided. Comments that will provide the 
most assistance to DHS in implementing these changes will: reference a 
specific portion of the final rule; explain the reason for any 
recommended change; and include data, information, or authority that 
supports such a recommended change. Comments submitted in a manner 
other than those listed in the ADDRESSES section, including emails or 
letters sent to DHS or USCIS officials, will not be considered comments 
on the final rule. Please note that DHS and USCIS cannot accept any 
comments that are hand-delivered or couriered. In addition, USCIS 
cannot accept mailed comments contained on any form of digital media 
storage devices, such as CDs/DVDs and USB drives.
    Instructions: If you submit a comment, you must include the agency 
name (U.S. Citizenship and Immigration Services) and the DHS Docket No. 
USCIS-2020-0019 for this rulemaking. Regardless of the method used for 
submitting comments or material, all submissions will be posted, 
without change, to the Federal eRulemaking Portal at http://www.regulations.gov, and will include any personal information you 
provide. Therefore, submitting this information makes it public. You 
may wish to consider limiting the amount of personal information that 
you provide in any voluntary public comment submission you make to DHS. 
DHS may withhold information provided in comments from public viewing 
that it determines may impact the privacy of an individual or is 
offensive. For additional information, please read the Privacy and 
Security Notice available at http://www.regulations.gov.
    Docket: For access to the docket and to read background documents 
or comments received, go to http://www.regulations.gov, referencing DHS 
Docket No. USCIS-2020-0019. You may also sign up for email alerts on 
the online docket to be notified when comments are posted or a final 
rule is published.

[[Page 8544]]

II. Background

    On January 8, 2021, DHS published the H-1B Selection Final Rule, 
Modification of Registration Requirement for Petitioners Seeking To 
File Cap-Subject H-1B Petitions, amending regulations governing the 
process by which 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). Under the rule, USCIS would 
generally select H-1B registrations based on proffered wages and 
corresponding prevailing wage levels. Specifically, USCIS would first 
select registrations with proffered wages that meet or exceed the 
highest OES prevailing wage level for the relevant SOC code and area(s) 
of intended employment.\1\
---------------------------------------------------------------------------

    \1\ 86 FR 1676. The H-1B Selection Final Rule was approved by 
Chad F. Wolf in his capacity as Acting Secretary of Homeland 
Security. DHS is aware that multiple courts have indicated or held 
that Mr. Wolf did not have valid authority to act, and, therefore, 
did not have authority to sign rules in that capacity. DHS also is 
aware that, following issuance of the rule, Peter T. Gaynor and Mr. 
Wolf took steps to ratify the H-1B Selection Final Rule. See DHS 
Delegation No. 23028, Delegation to the Under Secretary for 
Strategy, Policy, and Plans to Act on Final Rules, Regulations, and 
Other Matters (Jan. 12, 2021); Chad F. Wolf, Ratification (Jan. 14, 
2021). By issuing this rule, DHS states no position on Mr. Gaynor's 
or Mr. Wolf's actions or authority.
---------------------------------------------------------------------------

    The H-1B Selection Final Rule is currently scheduled to go into 
effect on March 9, 2021. As discussed in greater detail below, after 
further consideration, USCIS has determined that the final rule's 60-
day effective date does not afford USCIS sufficient time between the 
publication of the rule on January 8, 2021, and March 9, 2021, to 
complete the development and thoroughly test the modifications needed 
in the H-1B registration system to sufficiently minimize technical 
risks that result from a compressed testing schedule, as well as to 
amend policies and train staff to ensure the effective and orderly 
administration of the cap under the H-1B Selection Final Rule. By this 
action, DHS is delaying the H-1B Selection Final Rule until December 
31, 2021, and is applying the regulations currently in place (random 
selection) to the initial registration period, and, most likely, any 
subsequent registration period for the FY 2022 registration process.
    DHS expects that delaying the rule to December 31, 2021, will 
provide USCIS sufficient time to develop, thoroughly test, and 
implement the modifications to the registration system and selection 
process and give stakeholders sufficient time to adjust to new 
procedures arising from the new rule. The publication of the final rule 
on January 8, 2021, finalized a new selection process requiring, from a 
technical standpoint, that a new algorithm be developed, thoroughly 
tested, and implemented in the form of an electronic registration tool. 
The publication date of the final rule only affords six weeks of 
development time, and less than two weeks to complete internal end-to-
end testing and external performance testing with DHS OneNet, the DHS 
network. The selection logic is a fundamental part of the registration 
tool, and the H-1B Selection Final Rule created more complexity in the 
logic calculation by adding several versions of lotteries that must be 
developed, thoroughly tested and implemented. This additional 
complexity essentially requires a complete rebuilding of the 
registration tool that was developed for the FY 2021 selection 
process.\2\ In light of these technical challenges, DHS now believes 
that there is not adequate time to develop and thoroughly test the new 
H-1B registration system, conduct training and provide outreach on such 
changes to the regulated public prior to the start of the FY22 initial 
registration period.\3\
---------------------------------------------------------------------------

    \2\ Development of the new system has been ongoing since 
publication of the final rule, however current estimates indicate 
that development work will not be complete before February 19, 2021. 
Testing of the system may commence upon completion of system 
development, which only leaves one to two weeks (depending on when 
the initial registration period opens), in a best case scenario, to 
test the system, identify any bugs, conduct additional development 
to resolve identified bugs, complete additional testing to ensure 
proper functionality, conduct internal training, and provide 
outreach to the public.
    \3\ The Registration Requirement for Petitioners Seeking to File 
H-1B Petitions on Behalf of Cap-Subject Aliens Final Rule, 84 FR 888 
(Jan. 31, 2019), made clear that implementation of the registration 
tool requires significant development, testing and stakeholder 
outreach that cannot reasonably happen in a few weeks. As a result, 
DHS delayed implementation of the initial registration process for a 
full year to develop, test, and conduct stakeholder outreach. The H-
1B Selection Final Rule would also benefit from a similar delay to 
develop, thoroughly test, and conduct stakeholder training on the 
modified registration tool, including training on identifying the 
wage level that should be used for selection. While there was an 
aspirational hope that the H-1B Selection Final Rule could be 
implemented in time for the FY 22 selection process, that hope has 
proven misguided.
---------------------------------------------------------------------------

    As indicated below, DHS wants to ensure the orderly and efficient 
administration of the H-1B numerical allocations and wants to avoid 
disruption to the regulated public by affording itself sufficient time 
to fully modify and thoroughly test the changes to the H-1B 
registration system, minimize technical risks that result from a 
compressed testing schedule, and provide the regulated public enough 
time to become familiar with those changes to facilitate full 
compliance with the new regulatory requirements.
    While DHS considered other alternatives, including a shorter term 
delay (such as a delay of 60 days, or a delay to the start of the next 
fiscal year, October 1, 2021), DHS believes that a longer delay is 
needed to avoid the confusion and disparate treatment of registrants 
that would result if a new rule took effect during the initial 
registration period, or a subsequent registration and selection period, 
for the FY 2022 numerical allocations, particularly if USCIS needs to 
open a subsequent registration period later this year to ensure full 
utilization of the FY 2022 numerical allocations. DHS cannot predict, 
with full certainty, the demand for H-1B visas for FY 2022 given the 
current state of the U.S. economy, the continued COVID-19 public health 
emergency, and efforts to address it in the United States and abroad. 
Thus, DHS cannot predict whether it will be necessary to continue to 
accept registrations after the initial registration period for the FY 
2022 numerical allocations closes, or whether USCIS will need to reopen 
the H-1B registration period later in the 2021 calendar year to 
generate the number of H-1B cap petitions projected as needed to reach 
the FY 2022 numerical allocations. Should USCIS need to open a 
subsequent registration period and the H-1B Selection Final Rule is in 
effect at that time, that would mean that H-1B registrations for the 
same fiscal year would be selected under two different standards, thus 
causing confusion and disparate treatment among H-1B registrants for FY 
2022. Further, if USCIS needed to select additional registrations after 
the H-1B Selection Final Rule takes effect, but must continue to select 
from among those submitted before the H-1B Selection Final Rule takes 
effect (e.g. submitted during the initial registration period), the 
submitted registrations would not contain the necessary data to make a 
wage level selection as such data would only be collected after the H-
1B Selection Final Rule, and associated revisions to data collection, 
take effect. The H-1B Selection Final Rule does not have a mechanism 
whereby USCIS could request additional information from registrants in 
order to apply a new regulatory scheme. Furthermore, applying a new 
regulation to registrations submitted under the current regulations 
would lead to disparate treatment of registrants who submitted 
registrations during the same initial registration period and would

[[Page 8545]]

have the potential to disturb their reliance interests.
    After determining that there is not adequate time for USCIS to 
complete the development and thoroughly test the modifications to the 
H-1B registration system, train staff, and conduct outreach on the H-1B 
Selection Final Rule, DHS also considered an alternative to delaying 
the H-1B Selection Final Rule, i.e. having USCIS suspend the 
registration process for FY 2022 under 8 CFR 214.2(h)(8)(iv) and apply 
the new rule to the petition-based selection process. However, USCIS 
determined that suspending the registration process would have 
deleterious impacts on the FY 2022 selection process, as applying the 
new selection methodology to a petition-based selection process would 
be exceedingly difficult and require even more time to operationalize, 
particularly given COVID-19 and the difficulty the agency would face in 
staffing up to pivot to in-person intake, sorting, and selection 
process. For example, last year USCIS experienced significant 
difficulty staffing the Service Centers with contract staff to intake 
petitions during the petition filing season, even considering that the 
registration-based selection process significantly reduced the number 
of petitions filed at one time. Initial hiring of sufficient contractor 
staff to support USCIS petition intake was incredibly difficult and, 
due to COVID-19, data entry was significantly delayed. It took several 
weeks to complete data entry and reject petitions that did not meet the 
regulatory requirements (e.g. those filed with incorrect fees), which 
eliminated the ability of some petitioners to refile their petitions 
within the assigned filing window because of this delay. Suspending the 
registration process entirely for FY 2022 would mean that, during the 
first week of April, USCIS would receive petitions from all employers 
seeking cap-subject H-1B workers (i.e., not only those whose 
registrations are selected in advance) through a paper-based process 
(e.g. U.S. mail, commercial courier), and would require a significant 
ramping up in contractor staffing. Arranging timely contractor staffing 
typically requires several months of advanced planning (e.g. announcing 
positions, receiving applications, running background checks on 
applicants, onboarding, and training), and therefore cannot be achieved 
in a timely manner if USCIS were to retain the March 9, 2021 effective 
date.\4\
---------------------------------------------------------------------------

    \4\ As indicated above, until very recently, USCIS had hoped 
that it would be able to modify and thoroughly test the H-1B 
registration system in time to implement the H-1B Selection Final 
Rule on March 9, 2021. In reliance on that hope, and given COVID-19 
related challenges, as well as ongoing budget constraints, USCIS has 
not initiated steps to staff up for a possible suspension of the FY 
2022 registration process, which would be the first in many steps 
required to utilize this alternative for implementing the H-1B 
Selection Final Rule. Therefore, this is not a viable option for 
USCIS.
---------------------------------------------------------------------------

    Furthermore, because the selection process would be dependent on 
wage level, the scope of work for contractor staff would require not 
only initial review of petitions for completeness and correct filing 
fees, but also to identify the wage levels that would be used to rank 
them for purposes of the selection process. Petitions that do not 
contain required wage information would have to be rejected. Because 
the scope of intake work would significantly expand, the time to 
complete intake would be lengthened.
    Moreover, reverting to a paper-based selection process would re-
introduce additional uncertainties into the H-1B selection process that 
the electronic registration process eliminated. For example, in order 
to conduct the paper-based selection process, USCIS would likely have 
to suspend premium processing of H-1B petitions which would further 
delay the processing of petitions.
    The aforementioned problems are significantly aggravated by the 
COVID-19 pandemic. In particular, to ensure sufficient physical 
distancing of staff on premises, USCIS has already made plans to evenly 
distribute the H-1B petition adjudication workload for FY 2022 between 
four Service Centers: California Service Center, Nebraska Service 
Center, Texas Service Center, and Vermont Service Center. If USCIS were 
to suspend the electronic registration process in order to implement 
the H-1B Selection Rule to conduct the FY 2022 selection process, USCIS 
would require a significant amount of time to staff up and train staff 
at the Nebraska and Texas Service Centers because those Service Centers 
had never previously conducted petition-based intake and selection. 
Additionally, because USCIS has already made plans to evenly distribute 
the H-1B petition adjudication workload for FY 2022 between four 
Service Centers, current budget and planning for the California Service 
Center and Vermont Service Center does not provide enough resources 
required for those two centers to handle the entire workload and to 
quickly pivot to a petition-based filing system.
    Finally, the petition-based process would require time for the 
public to pivot and prepare H-1B petitions, including obtain certified 
Labor Condition Applications (LCAs) from the U.S. Department of Labor 
(DOL) for submission during the first week of April. This change could 
impact DOL operations because a far larger number of LCAs than 
anticipated with the registration-based system would be filed in a 
compressed time period, and DOL would need to ensure they are processed 
in accordance with the statutory and regulatory processing timeframe of 
7 working days. 20 CFR 655.730(b). This is additional cost for the 
public to prepare and submit petitions when they do not have notice as 
to whether they are or will be selected. For these several reasons, 
USCIS determined that reverting to a paper-based selection process in 
order to implement the H-1B Selection Final Rule during FY 2022 was not 
a viable alternative.
    Therefore, to ensure USCIS will not be incapable of administering 
the H-1B cap selection process and both avoid concerns associated with 
reverting to a paper-based selection process, as well as applying two 
separate regulatory schemes to the H-1B selection process, DHS believes 
that delaying the effective date of the H-1B Selection Final Rule until 
December 31, 2021, will provide sufficient time to complete the 
selection process for the FY 2022 numerical allocations, thus avoiding 
unnecessary confusion and possible inequitable results as well as more 
time for USCIS to modify and test its systems, train staff, and conduct 
public outreach. During the period of the delayed effective date, while 
DHS works through the issues associated with implementation, DHS 
leadership will also evaluate the January 8th rule and its associated 
policies, as is typical of agencies at the beginning of a new 
Administration.
    Given the longer delay, USCIS expects that it will select from 
among all of the registrations properly submitted toward the FY 2022 H-
1B numerical allocations based on the current (random selection) 
regulations that will be in effect when USCIS first begins accepting 
registrations or petitions toward the FY 2022 numerical allocations.
    DHS also believes that December 31, 2021, while most likely to 
extend beyond when USCIS has determined that it has received enough 
petitions projected as needed to reach the FY 2022 numerical 
allocations, also balances the competing need to ensure that the 
regulated public has sufficient advance notice and certainty as to the 
rules that will be in effect for the FY 2023 H-1B numerical 
allocations.

[[Page 8546]]

III. Statutory and Regulatory Requirements

A. Administrative Procedure Act

    This rule is being issued without prior notice and opportunity to 
comment and with an immediate effective date pursuant to 5 U.S.C. 
553(b)(B) and (d). The Administrative Procedure Act (APA), 5 U.S.C. 551 
et seq., authorizes an agency to issue a rule without prior notice and 
opportunity to comment when the agency, for good cause, finds that 
those procedures are ``impracticable, unnecessary, or contrary to the 
public interest.'' \5\ Similarly, the APA requires agencies to provide 
at least a 30-day delayed effective date for substantive rules,\6\ 
except where the agency provides good cause to forgo this requirement. 
DHS has good cause to delay the H-1B Selection Final Rule's effective 
date without advance notice and comment because immediate 
implementation would be impracticable. Implementing the H-1B Selection 
Final Rule on March 9, 2021, would require USCIS to make and test major 
H-1B registration system modifications, revise internal procedures, 
train staff, and offer training to the regulated public, before the 
March 2021 start of FY 2022 H-1B cap filing season. While USCIS 
initially assessed that it would have sufficient time to undertake 
these changes and advised the regulated public accordingly in the H-1B 
Selection Final Rule,\7\ upon further review, USCIS has determined that 
it will not have sufficient time to ensure an orderly and effective 
implementation of the changes to the H-1B registration system in time 
for the FY 2022 H-1B cap season, including time to make and thoroughly 
test system modifications, train staff, and conduct outreach. In 
addition and as discussed in detail above, DHS determined that USCIS 
suspending the registration process and instead applying the H-1B 
Selection Final Rule through a paper-based petition selection process 
is not a viable alternative because it would have deleterious effects 
on both the regulated public and the agency.
---------------------------------------------------------------------------

    \5\ 5 U.S.C. 553(b)(B).
    \6\ 5 U.S.C. 553(d).
    \7\ 86 FR at 1710.
---------------------------------------------------------------------------

    In addition, DHS recognizes that commenters responding to the H-1B 
Selection Notice of Proposed Rulemaking requested that DHS delay 
implementation of the H-1B Selection Final Rule because of insufficient 
time for them to adapt to a new regulatory regime. Commenters indicated 
that immediate implementation would impose an unreasonable burden on 
prospective petitioners and beneficiaries because changes so close to 
the beginning of that cap season would adversely impact U.S. employers 
and would create uncertainty and confusion. Multiple commenters said 
companies already have 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. Some commenters disagreed, stating that there 
was sufficient time for DHS, employers, and others to adjust to the 
changes.\8\
---------------------------------------------------------------------------

    \8\ 86 FR at 1710.
---------------------------------------------------------------------------

    Upon further consideration of these comments, in addition to 
concerns that USCIS lacks adequate time to make and thoroughly test 
system modifications, revise internal procedures, train staff, and 
offer training to the regulated public, and concerns that reverting to 
a paper-based selection process also would have adverse effects on the 
regulated public and the agency, DHS believes that providing the 
regulated public with only 60 days (with a current effective date of 
March 9, 2021) to adapt to new regulatory requirements and 
modifications of the H-1B registration system before the FY 2022 H-1B 
cap registration season would cause confusion and very likely would 
significantly disrupt the orderly administration of the H-1B cap. This 
is particularly so since, as described above, USCIS believes it can 
neither stand-up, thoroughly test, and therefore deploy the H-1B 
registration system changes and thus would not be able to conduct 
outreach on such changes to the regulated public in advance of 
implementation based on the current March 9, 2021 effective date, nor 
can it successfully revert to a paper-based petition selection process 
on this timeline. In addition, DHS believes that the possibility of 
having two different regulatory schemes apply to the same fiscal year 
would create significant confusion for the regulated public that would 
not have been reasonably foreseeable; the same is true for reverting to 
a paper-based petition selection process. Similarly, reverting to a 
paper-based petition process in order to implement the H-1B Selection 
Final Rule, with so little lead time to develop a process for sorting 
and selecting from among potentially two hundred thousand petitions, 
hiring temporary contract staff during the national health emergency to 
handle intake of the petitions, and train staff on how to conduct a new 
wage-based selection process in this context, as well as no lead time 
to offer outreach to the regulated public, would similarly disrupt the 
expectations of the regulated public, and adversely affect the ability 
of at least some petitioners to participate in the selection process 
for FY 2022. Therefore, DHS is delaying the effective date of the H-1B 
Selection Final Rule to December 31, 2021.
    Current regulations at 8 CFR 214.2(h)(8)(iii)(A)(3) require that 
the registration period start at least 14 calendar days before the 
earliest date on which H-1B cap-subject petitions may be filed for a 
particular fiscal year (i.e., April 1, 2021, or shortly thereafter for 
FY 2022). Therefore, USCIS must open the registration period some time 
in early- to mid-March. Delaying the effective date of the H-1B 
Selection Final Rule beyond March 9, 2021, necessarily requires that 
USCIS apply the random selection regulations currently in place to the 
FY 2022 initial registration period. As discussed above, DHS aims to 
ensure an orderly and effective administration of the FY 2022 H-1B 
numerical allocations. Because of this delay rule, the initial FY 2022 
registration period will be administered under the current regulations. 
DHS believes that it is best for the public that the same legal 
standard is also applied to all of the FY 2022 H-1B numerical 
allocations. If the H-1B Selection Final Rule were to take effect 
during the initial registration period, or any subsequent registration 
period during FY 2022, USCIS believes it would not be operationally 
able to administer the H-1B numerical allocations under two different 
regulatory standards.
    Therefore, DHS is delaying the effective date of the H-1B Selection 
Final Rule to December 31, 2021, to better ensure that the H-1B 
Selection Final Rule will not take effect while USCIS is still 
administering the FY 2022 numerical allocation selection process. This 
delay and the application of the current regulations to the initial 
registration period for the FY 2022 numerical allocations will provide 
DHS with more time to modify and test the changes to the H-1B 
registration system that will be needed to implement wage-level-based 
selection, and to provide the regulated public with time to adapt to 
new procedures arising from the new legal requirements and system 
modifications.
    DHS is aware that some prospective petitioners and beneficiaries 
already may have changed their behavior in reliance on the H-1B 
Selection Final Rule. However, given the short amount of time that has 
passed since this rule was published on January 8, 2021, DHS

[[Page 8547]]

believes that any reliance is minimal and that such reliance interests 
do not outweigh the need for DHS to ensure that USCIS has sufficient 
time to implement the new regulations, and that the regulated public 
has enough time to adjust to the new registration selection process.
    Because it would be impracticable to provide for notice and comment 
and a delayed effective date in advance of the March 9, 2021, effective 
date, DHS is proceeding with this final rule. Accordingly, the 
effective date of the H-1B Selection Final Rule, FR Doc. 2021-00183, 
published on January 8, 2021, at 86 FR 1676, is delayed to December 31, 
2021.

B. Executive Order 12866, Regulatory Planning and Review, Executive 
Order 13563 (Improving Regulation and Regulatory Review)

    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. E.O. 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 (OMB) determined that this rule is ``economically 
significant'' under E.O. 12866 and has reviewed this regulation.

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 605(b), 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 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. A regulatory flexibility analysis is not required when a rule 
is exempt from notice and comment rulemaking. This final rule is exempt 
from notice and comment rulemaking, as stated in the Administrative 
Procedure Act, section of the preamble.

D. Unfunded Mandates Reform Act

    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 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. The inflation-
adjusted value equivalent of $100 million in 1995 adjusted for 
inflation to 2019 levels by the Consumer Price Index for All Urban 
Consumers (CPI-U) is approximately $168 million based on the Consumer 
Price Index for All Urban Consumers.
    Because the H-1B Selection Final Rule that is being delayed by this 
final rule may result in the expenditure of more than $100 million by 
the private sector annually, OIRA has determined that this rule may as 
well. However, neither the H-1B Selection Final Rule nor this 
rulemaking is a ``Federal mandate'' as defined for UMRA purposes. The 
cost of preparation of H-1B petitions (including required evidence) and 
the payment of H-1B nonimmigrant petition fees by petitioners or other 
private sector entities is, to the extent it could be termed an 
enforceable duty, one that arises from participation in a voluntary 
Federal program, petitioning for classification of the beneficiary as 
an H-1B nonimmigrant. This final rule does not contain such a mandate. 
The requirements of Title II of UMRA, therefore, do not apply, and DHS 
has not prepared a statement under UMRA. Therefore, no actions were 
deemed necessary under the provisions of the UMRA.

E. Congressional Review Act

    The Office of Information and Regulatory Affairs determined that 
the H-1B Selection final rule was a major rule as defined by 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, 110 Stat. 847, 868-874, and codified 
at 5 U.S.C. 801-808. Therefore, OIRA has determined that this rule 
should have a ``major'' rule designation because its practical impact 
is that it is delaying the implementation of a major rule to FY 2023. 
The CRA requires that major rules have a 60-day delayed effective date. 
5 U.S.C. 801(a)(3). However, pursuant to 5 U.S.C. 808(2), DHS is 
forgoing the 60-day delayed effective date for the reasons articulated 
in the Administrative Procedure Act section above. This final rule will 
take effect immediately upon publication. 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).

F. Executive Order 13132 (Federalism)

    This final rule would 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.

G. 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.

H. 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.

I. 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 components use to comply with NEPA and 
the Council on Environmental Quality (CEQ) regulations for implementing 
NEPA, 40 CFR parts 1500-1508.

[[Page 8548]]

    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).\9\ 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.\10\
---------------------------------------------------------------------------

    \9\ See 40 CFR 1507.3(b)(2)(ii), 1508.4.
    \10\ Instruction Manual section V.B(2)(a)-(c).
---------------------------------------------------------------------------

    As discussed in more detail throughout this final rule, DHS is 
issuing this final rule to delay the effective date and postpone the 
implementation of the H-1B Selection Final Rule. That rule is amending 
regulations governing the selection of registrations or petitions, as 
applicable, toward the annual H-1B numerical allocations based on the 
wage level that equals or exceeds the proffered wage based on 
occupational classification and area of intended employment.
    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, if not completely, 
speculative. The same applies to a rule delaying the effective date of 
such a rule that does not change the rule's substance, but only 
postpones its effective date, and consequently pushes out the date on 
which it will be implemented. This final rule does not alter the 
statutory limitations on the numbers of nonimmigrants who may be issued 
initial H-1B visas or granted initial H-1B nonimmigrant status, or 
those who consequently will be admitted into the United States as H-1B 
nonimmigrants, or those who will be allowed to change their status to 
H-1B, or will extend their stay in H-1B status. DHS does not believe, 
and cannot reasonably estimate whether, the delay in a rule that 
establishes a 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 delaying 
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 only delays another final rule and will 
maintain the current human environment. 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.

IV. Paperwork Reduction Act

    DHS is delaying the implementation of all changes to the H-1B 
Registration Tool (OMB Control number 1615-0144) and Form I-129, 
Petition for a Nonimmigrant Worker (Form I-129) (OMB Control number 
1615-0009), associated with the H-1B Selection Final Rule until 
December 31, 2021.

Alejandro N. Mayorkas,
Secretary, U.S. Department of Homeland Security.
[FR Doc. 2021-02665 Filed 2-4-21; 4:15 pm]
BILLING CODE 9111-97-P