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Between March 1 and March 20, 2020, 275,000 individuals were entered into USCIS’ new electronic pre-registration system to obtain an H-1B for the 2020-2021 fiscal year. This is a nearly 25% increase over last year’s filings.

While it is hard to judge what led to the apparent increase in demand, the change may be a reflection of the ease of entering into the lottery, and low unemployment during the first quarter. Employers no longer are required to complete and submit full H-1B filings, but rather simply enter the individuals they wish to sponsor into the system and pay a $10.00 fee per worker. This is an enormous benefit since filing full H petitions has become much more complex under the current Administration’s focus on enforcement. More documentation is needed to try to avoid the now ubiquitous Requests for Evidence (RFEs). Last year more than 60% of H-1B cases received RFEs.

USCIS required very little information about each applicant, but it collected such information as whether the individuals hold U.S. advanced degrees and the citizenship of each applicant. USCIS has announced that about 43% of this year’s pre-registrations were for individuals holding U.S. advanced degrees (Master’s Cap cases). Eighty-one percent of the pre-registrations were for Indian (68%) and Chinese (13%) nationals. The companion figures for the cases that “won” the lottery have not been released. But the lottery system generally favors those with advanced degrees. Last year, 63% of the selected petitions were for beneficiaries with U.S. Master’s degrees.

Many petitioners have been notified which of their cases were selected in the pre-registration lottery. Those cases must be filed over the next 90 days. USCIS explained that all submitted cases will remain in the system for possible selection until the end of the fiscal year (September 30, 2020). From now until then, more cases may be selected in the lottery. Whether or not this happens may depend upon the appetite of the employers whose cases have already been selected for filing. Will COVID-19 play a role in determining how many employers will move forward and file full Cap H-1B petitions?

Jackson Lewis attorneys will continue to follow and report on developments.

USCIS has announced on Twitter that there was an 11% increase from FY 2019 in H-1B advanced degree petitions selected in the FY 2020 lottery.

This year, USCIS reversed the lottery selection process. Master’s cap petitions were first entered into the regular lottery and then those left over were entered into a master’s-cap-only lottery. USCIS had originally forecast a 16% increase.

USCIS spokesperson Jessica Collins said, “Our efforts to improve the H-1B program are working and increasing the number of U.S. advanced degree holders who are selected for the limited number of visas subject to the annual H-1B cap.”

Last year, according to reports, 56% of the master’s cap petitions were selected. This year, 63% were selected. The 11% increase may be due in part to the fact that the absolute number of petitions increased from 190,098 to 201,011 and the percentage of petitions filed on behalf of holders of advanced degree also increased. For those who filed regular H-1B cap cases, last year, 44% of the “regular” cap cases were accepted, but this year, that percentage is down to 37%.

Being selected in this year’s lottery is just the first hurdle. With request-for-evidence (RFE) rates rising to 60% during the first quarter of FY 2019, simply “winning” the lottery does not mean the case will be approved.

Please contact Jackson Lewis with any questions.

United States Citizenship and Immigration Services (“USCIS”) adjudicators have been giving heightened scrutiny to U.S. employers’ I-129 Petitions for L-1B status on behalf of “intracompany transferees.”   These individuals are employees of U.S. employers’ foreign-based affiliates, subsidiaries or parent companies who possess “specialized knowledge.” Such knowledge is defined as particularized knowledge “of the organization’s product, service, research, equipment, techniques, management, or other interests and its application in international markets,” or “an advanced level of knowledge or expertise in the organization’s processes and procedures.”  USCIS adjudicators review U.S. employers’ petitions and have the authority to approve or deny those them, thus having the authority over employers’ ability to employ selected foreign national employees in the U.S.

Recent data shows that USCIS has continued its aggressive review of employers’ L-1B petitions.  In FY 2006 and FY 2007, respectively, the denial rate for such petitions was 6% and 7%.  The denial rate then spiked dramatically to 22% in FY 2008 – a new, unmistakable indictor of   stricter agency  review of L-1B petitions.  In FY 2011, the denial rate had risen to a whopping 27%, meaning that more than one quarter of L-1B petitions filed were denied.  Remarkably, USCIS has managed to increase those numbers.  New data shows that in FY 2012 and FY 2013, respectively, denials rose to 30% and 34%.

In addition, U.S. employers can continue to expect costly and time-consuming requests for evidence (RFE) from USCIS in response to their petitions.  USCIS adjudicators issue RFEs to obtain additional, purportedly necessary information prior to reaching a final decision on  L-1B petitions, and were issued in 63% of cases in FY 2011.  After a backlash from U.S. employers and practitioners, RFE rates have dropped to 43% and 46%, respectively, in FY 2012 and FY 2013.  Still, employers can count on receiving RFEs for roughly half of the petitions they file, and thus must plan for delays, interruptions, or cancellations of important projects or initiatives in the absence of their needed and scheduled workforce.

Because U.S. employers select carefully qualified intracompany transferees who will satisfy the L-1B specialized knowledge standard, the USCIS denial and RFE rates are viewed by many as  staggeringly high and suggest that USCIS may be imposing heightened standards in  disregard of the language and purpose of the  applicable regulations.  But those rates persist.  Just over one-third of all L-1B petitions are denied.  Furthermore, employers receive RFEs in nearly half of their cases, delaying company plans and increasing costs.  Before assuming employees will be able to work in L-1B status and making definitive staffing plans as to company projects, U.S. employers should consult with counsel regarding  the chances of approval and potential employment start dates in particular cases.

The National Foundation for American Policy (NFAP), a non-profit, non-partisan public policy research organization, recently released an analysis of U.S. Citizenship and Immigration Services (USCIS) data on the number of H-1B and L-1 petition denials issued by the Agency in each fiscal year from 2003 to 2011. The results reveal a significant increase in the number of H-1B and L-1 denials beginning in FY2008 and continuous increase through FY2011, with a significant spike in FY2009, during which every visa category had a dramatic increase in denials.

The denial rate for L-1B visa petitions increased from 9% in FY2003 to 27% in FY2011. The denial rate for H-1B visa petitions increased from 12% in FY2003 to 17% in FY2011, peaking at 29% in FY2009. The data also shows that if a company received approval of its visa petition, it likely had to first overcome a Request for Evidence (RFE). In the past, RFEs were issued when USCIS case officers needed clarification or additional information to adjudicate a petition. Based on the statistics, it appears either the majority of employers have abruptly stopped filing complete petitions, or, more likely, USCIS has decided that they require more information than actually set forth in the regulations to adjudicate a case.

Most alarming is the increase in the number of RFEs issued for L-1B and L-1A cases, in particular. RFEs for L-1B cases more than tripled from FY2003 to FY2011, from 16% to 63%. Similarly, RFEs for L-1A cases went from 12% to 51% over the same period. Employers now are statistically guaranteed that one in every two L-1 petitions they file will be issued an RFE.

As there has been no significant change in the regulatory criteria for H-1B and L-1 status approval, this increase in petition denials and RFE issuance is an indication that USCIS adjudicators have changed their internal standards of review to make it more difficult for skilled foreign nationals to obtain work authorization in the United States.

The data also shows that USCIS denies more L-1B petitions for Indian nationals than any other country. Whether this is indicative that the Agency has targeted Indian nationals is unclear; however, employers who seek skilled Indian employees should be prepared for additional scrutiny. L-1 visa issuance declined at U.S. Consulates in India in FY2011, but actually rose overall for the rest of the world.

The NFAP study confirms what many U.S. employers already know: it is now more difficult than ever to hire or transfer critical foreign national employees whose presence is required to ensure continued product development and profitability. Jackson Lewis attorneys have experience in addressing and overcoming RFEs and visa denials on behalf of U.S. employers. We will continue to monitor and report USCIS trends and policy changes.