New H-1B Rule Pushes Employers to Rethink Workforce Options

Employers will need to reevaluate workforce planning and hiring strategies as the Trump administration replaces the randomized H-1B visa lottery with a selection process that favors highly paid workers.

The new rule, which goes into effect Feb. 27 ahead of the next lottery, gives workers greater odds if they’re placed in the highest of four wage levels.

Immigration advocates and attorneys say the change could lead employers to alter the types of foreign workers they hire, outsource roles to other countries, or turn to other, more limited, visa options.

“With the emphasis on wages, the nature of roles—level of foreign national hires may shift,” said Jill Bloom, an immigration partner at Fragomen, Del Rey, Bernsen & Loewy LLP. “Companies may choose to pass on entry-level or mid-level key talent as the chances of ultimately securing a H-1B decreases.”

Jeremy Neufeld, director of immigration policy at the Institute for Progress, said the rule will disrupt employers’ recruitment pipeline at top US universities since those graduates will now have a decreased chance in the lottery. Those students typically get paid more than other H-1B applicants but are registered at a lower wage level, he noted.

“This rule focuses on seniority rather than on actual wages, and so employers who typically look at US universities as their recruitment pipeline, they’re going to think twice about whether they still want to use or rely on the H-1B,” Neufeld said.

L-1 Visa Option

Employers may increasingly move towards long-term workarounds, including expanded use of the L-1 visa.

The L-1 visa program allows companies to temporarily transfer certain employees from their foreign offices to US offices.

Unlike H-1B visas that are capped at 85,000 per year, the L-1 visas don’t have a numerical limit.

“That might not even come into play this lottery cycle, but might take place down the road the following year,” said Neufeld.

However, the L-1 visa program faces key limitations, such as applying to fewer types of jobs and being specifically designed for businesses operating in multiple countries.

It also has shorter maximum stay and stricter review.

Potential Outsourcing

H-1B visas are used most by the tech industry, whose leaders say there’s not enough qualified applicants with the skills needed in the US. The temporary visas last up to six years but can be extended indefinitely if workers have made sufficient progress in applying for an employer-sponsored green card.

“The new weighted selection will better serve Congress’ intent for the H-1B program and strengthen America’s competitiveness by incentivizing American employers to petition for higher-paid, higher-skilled foreign workers,” Matthew Tragesser, a spokesman for USCIS, said in a statement to Bloomberg Law Tuesday.

Charles Kuck, managing partner of Kuck Baxter, said larger employers going forward will simply outsource jobs to workers abroad who won’t pay US taxes or pay into the social systems of the US.

“It’s a huge swing [and] a miss by the Trump administration to make H-1B visas basically unattainable,” said Kuck, who anticipates a legal challenge to the rule will likely come in early January.