On June 28, 2021, more than 500 foreign nationals filed a lawsuit (Liu et al v. Mayorkas et al) against the Department of Homeland Security (DHS), and the United States Citizenship & Immigration Services (USCIS), challenging the validity of the electronic pre-registration system USCIS implemented in 2020 to administer the annual H-1B visa lottery. Plaintiffs allege that the pre-registration system disadvantages good faith employers, encourages speculative H-1B registrations, and is unlawful because it contradicts the manner of visa allocation set out by the Immigration and Nationality Act (INA).
Before 2020, USCIS opened the H-1B quota for filings each April 1st and would accept filings on a “first come, first serve” basis, monitoring available numbers and allocating the available visas “by the alien” as submissions were received. However, in 2007, that approach had to change to meet the US labor market’s increasing demand for skilled workers. Allocating H-1B numbers on a rolling basis became impossible when USCIS received more H-1B petitions on the first day than the annual FY2008 quota allowed for the entire year.
Seeking an equitable solution, USCIS implemented a strict filing window: the first five business days of every April. During this period, USCIS would accept all properly filed petitions and would count the petitions against the “cap” allocation (i.e. quota), announcing whether it has received enough submissions to fill its quotas at the end of each period. If either quota (bachelor’s degree or advanced degree quota) was not reached, USCIS would continue accepting petitions until the annual quota was met. Conversely, if USCIS had more than the required number of filings, it would conduct a lottery to select the H-1B recipients in both H-1B caps would be. As there are two separate cap allocations, USCIS would first draw for the 20,000 visas available exclusively to advanced US degree holders. Then, it would add the unselected US advanced degree-based petitions to the general H-1B pool and would draw for the remaining 65,000 visa allotments.
One key to the USCIS lottery system was the effort needed to submit a petition seeking an H-1B employee: prior to April 1, an employer had to identify a worker, obtain a Labor Condition Application from the Department of Labor for the position, and prepare a physical H-1B petition with USCIS forms and required supporting documents. In 2020, the Trump administration created a mechanism for the H-1B lottery that required much less effort on the part of employers who identified a potential H-1B employee. Rather than submitting an entire petition, employers are now required to pre-register electronically and pay a nominal fee ($10) for every candidate they plan to file a petition for. The pre-registration process opens for a specific period each March. Employers only need to provide basic biographical information about each intended H-1B beneficiary and specify the cap designation (bachelor’s or advanced degree) each worker would be eligible for if selected. Once the registration period ends, USCIS draws the H-1B lottery from the pre-registrations, and employers with selected employees have a 90-day window to file the H-1B petitions.
It is this most recent iteration of the lottery system that the Plaintiffs in Liu v. Mayorkas challenge. The primary argument focuses almost exclusively on the way the new H-1B lottery system was implemented, alleging that the government’s action constitutes improper rulemaking. Plaintiffs assert that the new registration requirements contradict the plain language of the INA as available visas are no longer allocated by “alien” but rather, by “registration.” The practical effect of this selection process is to allow and even promote multiple registrations for the same beneficiary by several companies, thus increasing the potential for abuse and fraud. The complaint points to the fact that allocating registrations presumably allows for the same individual to be selected several times, which in effect would mean that in a given fiscal year fewer than 65,000 individuals may be granted H-1B visas under the regular cap.
To further drive its point, Plaintiffs compare filing and registration data for the past three years. For example, in 2019, the last year without a pre-registration process, USCIS received 201,001 petitions. In 2020, the first year that required advanced registration, USCIS received a total of 274,237 registrations. From this total, USCIS selected 106,100 registrations projecting the drawing would be sufficient to allocate the available H-1B visas. The projections were erroneous, and in August 2020, USCIS selected an additional 18,315 registrations to fill both caps. Plaintiffs assert that the need for a second drawing of the lottery, and the overall increase in the number of “potential H-1B candidates” was largely because some foreign nationals were able to have multiple employers enter registrations on their behalf, even though there may not have been a bona fide job offer available in the event of selection. (The plaintiffs do not mention the significant pandemic-related changes in US employment patterns between March of 2020, when registrations were submitted, and June of 2020, when employers needed to submit their H-1B petitions for selected registrations.)
The data for the 2021 registrations and selection rates raise further questions. According to the complaint, the data serve as further proof that the current iteration of the H-1B system is susceptible to fraud and abuse, harming foreign nationals and smaller businesses that comply with the program requirements. Specifically, the total number of registrations for 2021 is 308,613, reflecting an increase of 12% from the registrations entered in 2020. Despite this steep increase, USCIS has so far selected only 87,500 registrations (or 28% of the total for the season) to fill the H-1B quota for the year. Plaintiffs hypothesize that the reason behind this low selection rate is a high volume of duplicative registrations for individual beneficiaries entered by companies that do not have genuine offers for the foreign workers. Plaintiffs provide several job postings to corroborate this assertion, depicting a deeply disturbing pattern of unlawful practices: companies that offer to submit multiple H-1B registrations and file H-1B petitions for the selected entrants for a fee, conduct that is prohibited by Department of Labor regulations.
The court will still need to deal with potential issues of standing, deference, and even more importantly, what relief is available to foreign nationals whose ability to remain in the United States is dependent on winning a lottery. And while the plaintiffs may face an uphill battle, Liu v. Mayorkas nonetheless has the potential to afford immigration practitioners, the public, and foreign nationals alike greater transparency and deepen our understanding of the ever-evolving flaws in the current H-1B system.
The material contained in this article does not constitute direct legal advice and is for informational purposes only. An attorney-client relationship is not presumed or intended by receipt or review of this presentation. The information provided should never replace informed counsel when specific immigration-related guidance is needed.
Reprinted with permission from the July 14, 2021 edition of The Legal Intelligencer© 2021 ALM Media Properties, LLC. All rights reserved. Further duplication without permission is prohibited. ALMReprints.com – 877-257-3382 – reprints@alm.com.
