More Lawsuits and Restrictions for H-1B Visa in 2020?

The year 2020 is expected to bring more restrictions for companies that hire foreign-born scientists and highly-skilled workers on H-1B visas.

An H-1B visa is the only real way for an international student or highly-skilled foreign national, educated here or abroad, to work long-term in the United States. Under the Trump administration, denial rates for H-1B petitions for initial employment (primarily new employees) quadrupled, “rising from 6% in FY 2015 to 24% through the third quarter of FY 2019,” according to a National Foundation for American Policy analysis. “The 12% denial rate for continuing employment [mostly for existing employees] is also historically high – 4 times higher than the denial rate of only 3% for H-1B petitions for continuing employment as recently as FY 2015.”

A few developments in 2020 may affect H-1B visas. First, U.S. Citizenship and Immigration Services (USCIS) has announced it will implement an electronic registration for “petitioners seeking to file H-1B cap-subject petitions.” A $10 fee will be charged for each registration. Employers would list each professional and he or she would be entered into the “lottery” held in April each year for 65,000 H-1B petitions and the 20,000-exemption from the annual limit for foreign nationals with advanced degrees from U.S. universities. The initial registration period will be from March 1st through March 20th, 2020.

Since the government has not been entirely clear about the post-selection process and timing, it is likely that a scramble to complete and file petitions will ensue, creating significant time pressure on employers and attorneys.

This assumes the system is implemented in 2020.

A second development in 2020 is the potential impact of a new H-1B regulation. USCIS plans to publish a rule that would “revise the definition of specialty occupation . . . and revise the definition of employment and employer-employee relationship.” Employers should anticipate a far-reaching rule.

USCIS may place into regulation the theory behind a March 31, 2017 internal document now used in adjudications that excludes computer programmers from qualifying as a specialty occupation. What would that mean? That means adjudicators could deny a position qualifies as a specialty occupation “where the [DOL] Occupational Outlook Handbook does not specify that the minimum requirement for a particular position is normally a bachelor’s or higher degree in a specific specialty,” according to the USCIS internal document. This could introduce even more uncertainty into the adjudications process.

The second part of the regulation – revising the definition of employment and employer-employee” – could also present problems for many companies and their customers. Information technology (IT) services companies and other businesses that place employees at customer locations have already experienced much higher H-1B denial rates than other companies. USCIS will likely attempt to “lock in” its current practices through a regulation.

To understand what that part of a regulation would include, one can look at the 2019 lawsuit against USCIS that contends the agency violated the Administrative Procedure Act by denying many H-1B petitions on the grounds a valid employer-employee relationship does not exist.

In ITServe Alliance v. Cissna, the plaintiff argued that a February 2018 USCIS memo on “Contracts and Itineraries Requirements for H-1B Petitions Involving Third-Party Worksites” contradicts its own regulations (8 C.F.R. Sec. 214.2(h)(4)(ii)). The plaintiff asserted USCIS has ignored that a “contractor” can be an employer. The agency did this by stating a contractor must have actual control of the H-1B professional while he or she performs work.

According to the lawsuit, USCIS believes a contractor is not an “employer” if it does not have actual and exclusive “control” over the day-to-day activities of the contractor’s employees at a third-party site – even if the contractor can “hire, pay, fire” the employee. That is why USCIS has denied many H-1B petitions based on its contention a bona fide employer-employee relationship does not exist in many contracting relationships.

Companies filed at least 62 lawsuits against USCIS related to H-1B visas in 2019, and 29 such lawsuits in 2018, based on a National Foundation for American Policy analysis of the database of H-1B lawsuits developed by Sinduja Rangarajan in impressive research for Mother Jones/Reveal. In comparison to the 93 H-1B lawsuits filed in 2018 and 2019, fewer than 10 such lawsuits appear in the database for the years 2015 and 2016.

The year 2020 will likely bring more denials and restrictive policies for employers that hire foreign-born scientists and engineers on H-1B visas – and more lawsuits against Trump administration policies.

The good news is a properly prepared H-1B filed petition may still face some challenges, but if not involving a 3rd party employer situation, case approval is greatly enhanced.

For questions or assistance with your H-1B petition, call us at: (650) 424-1902.

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