The U.S. Department of Homeland Security (DHS) has announced it will issue a new Final Rule on January 31, 2019, reversing the order by which the USCIS will select H-1B applications submitted under the statutory/numerical cap and introducing an electronic registration requirement for employers filing H-1B cap-subject petitions. The reverse-selection provisions of the rule will go into effect on April 1, 2019. The electronic registration requirement will go into effect at some point in the future and will not be required for FY2020 cap petitions.

“The new registration system, once implemented, will lower overall costs for employers and increase government efficiency,” stated USCIS Director L. Francis Cissna. “As a result, U.S. employers seeking to employ foreign workers with a U.S. master’s or higher degree will have a greater chance of selection in the H-1B lottery in years of excess demand for new H-1B visas.”

Effective April 1, 2019, the USCIS announced it will first select H-1B petitions submitted on behalf of all beneficiaries. It will then select from the remaining eligible petitions, a number projected to reach the advanced degree exemption. The USCIS estimates this will cause a 16 percent increase (5,340 workers) in the number of “Masters Cap” applications selected for processing.

The USCIS also indicated itwill notimplement the electronic registration requirement for the FY2020 cap season. However, once effective, petitioners will need to first electronically register with USCIS during a designated timeframe. Only those whose registrations are selected will be eligible to file an H-1B cap-subject petition. The USCIS stated it expects that the electronic registration requirement, once in place, will reduce costs for employers and create a more efficient and cost-effective H-1B cap petition process for both it and petitioners.

The USCIS has announced it will provide advance notice when it will begin requiring the registration process at least 30 days in advance of it being required.

We at Dykema expect these changes will be challenged in Federal Court and will continue to provide updates as things develop.