H1-B Visa Updates: Lottery System Revised to Wage-Based Allocation

For employers hoping to hire foreign nationals for specialty occupations, the process for a worker to obtain an H1-B visa can be quite a journey. This year, the USCIS published a new regulation changing the former “lottery” system awarding H1-B visas to a wage-based allocation system, instituting new challenges for employers.

Each year, there is a cap maximum of H1-B visas available for specialty occupations that require a bachelor’s degree, and a separate cap for positions requiring a graduate degree from a United States university. Previously, a lottery system distributed additional visas to employers picked at random. On January 7, 2021, a final rule was issued revising the lottery system into a four-tiered list based on wages, with employers offering the highest wages preferred over those offering lower wages.

Specifically, employers must offer H1-B Visa employees a prevailing wage as set by certain salary surveys, most frequently used are those issued by the U.S. Department of Labor (DOL). Employers offering the highest wages (level 4) will have first priority, descending down the wage levels until all 85,000 visas are exhausted.  Employers who do not utilize the DOL surveys will be classified in the lowest tier (level 1) regardless of the wage actually offered.

The final rule was set to go into effect March 9, 2021. However, with the advent of the new White House administration, the rule’s effective date has been extended to December 31, 2021 to give adequate time for implementation and further evaluation of the rule. Continue to look for updates on this topic.

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