The H-1B Lottery Debrief—Insights and Observations

Grace Shie: Welcome to The Inside Track. My name is Grace Shie and I'm joined today by my partner Max Del Rey. The last time Max and got together, we talked prospectively about this year's H-1B registration process and what the lottery would look like this year. Now that the lottery registration process has closed and we have selection results, Max and I wanted to talk to you about what this years’ experience was like, what was different, what was unexpected and how to plan for the petition filing process this year. So Max, in our last episode together, we talked, you talked quite a bit about the regulation and some of the analysis that Homeland Security put into the new requirements and the time and the analysis that it would take for attorneys of record or for petitioners to register each candidate. Maybe just very briefly, if you can just refresh us on what were the new data points that were required and whether in fact we found ourselves in a position where we spent 20 minutes per registration.

Maximillian Del Rey: For sure. So this year we had a different lottery system than in previous years. The previous system was a simple two-tiered lottery selection process. One preferred tier for US master's degree holders and above, and then everybody else. So that system was replaced by what becomes in essence an eight-tiered system based on wage level. So based on the offered salary wage to an individual and how that fits in the Department of Labor's four-tiered wage level system. So you have kind of four tiers for your master's degree holders, four tiers for everybody else, creating eight tiers. So, you know, that is the difference this year. And in terms of the work we had to do to register individuals, it involved collecting more information upfront from clients in terms of the type of work somebody would do of course, but also their their salary prospectively as of October 1st of this year and then also of course their geographic location and then making all of those numbers work and to optimize lottery selection rates so, you know that is what went into this process in terms of you know, the final rule predicted how much time was it take per registration? I think it was pretty accurate what the final rule described in terms of, I think it was like 15 or 20 minutes extra per registration because we did, you know, that was in kind of small bursts. It was a little bit more to collect information, a little bit more to enter the data, a little bit more to review the data, a little bit more strategy on our end to make sure everything looked right. So I do think it was pretty accurate. It definitely took more time per registration, but it bore fruit and we can talk about that.

Grace Shie: That's great. Well, the registration window closed March 19th and we all eagerly awaited for registration results to be published knowing that the filing window would open on April 1. So tell us a little bit about the timing.

Maximillian Del Rey: So the last registrations we saw selected through kind of the online portal we have access to were Sunday afternoon. And then we had the official announcement, I believe yesterday, that the lottery window was closed and no further selections would be made at this time. So that's the cadence. We made it before, it was two days ago, it was Tuesday. We made it before April 1st.

Grace Shie: Yes, yes. And for those who have not personally accessed the system before, how are selection results published?

Maximillian Del Rey: You know, it's not exactly a publication. It's kind of a login where an attorney or a client can, can view those individuals they registered, you know, by name and then a second column basically saying, selected or, or not. So that's kind of the basic view. Ultimately you can download much more data, you download most importantly, a selection notice which is a required document for filing the H-1B petition, which is the next step.

Grace Shie: So now that this lottery has closed and the selections, at least in this, what I'm calling the first round, has concluded, we here at Mayer Brown have evaluated and sliced and diced our data in lots of different ways. And I'm interested in what you would like to share on your initial review of the lottery results.

Maximillian Del Rey: Yeah, this was the most fun part for me. I had a lot of fun going through the numbers, but I think big picture, the results were just very different. And we have more data to kind of slice and dice as you said, right? So we're not just looking at whether someone has a master's degree or not and kind of dividing the pool that way. We're also going into wage level, right? So in terms of that, the selection rates overall, at least for our client base, were much higher than they had been in recent previous years. Frankly, double or more than we had seen in recent previous years. And that is especially true at your higher wage levels, right? That was the goal, I think, of the final rule. And so we saw that bear fruit, as I said. Just in terms of level four registrations.

Grace Shie: The highest level.

Maximillian Del Rey: Yeah, the highest level, we saw a selection rate over 70%, which is really, really high. It's very positive. It's good news for so many people, right, who were selected in this lottery. you know, wage level wasn't a thing previously. You just looked at, you know, master’s degree holders, US master’s degree holders, and everybody else. And that rate, 70%, exceeds anything we've seen in terms of a selection rate previously for any kind of subpopulation of people. So that's great.

Grace Shie: And some of that is tied into level four wage registrations were entered into the lottery four times.

Maximillian Del Rey: Basically right, exactly right. And if they had a master's degree, it's a multiple of that, right? So exactly.

Grace Shie: Okay, any other statistics or numerical results that would be interesting to share?

Maximillian Del Rey: Yeah, I'll say selection rates were way up at level three as well. And even at level two, the only place where I think industry-wide we saw kind of similar results to previous recent lotteries is level one wages, your lowest wage category. And so, you know, on our previous podcast, Grace, we talked about the Department of Homeland Security's predictions for how each wage level would be selected. And I was a little skeptical, I got to admit, about the forecasting done by DHS, but it was pretty accurate, maybe even underestimated selection rates at the higher levels. For many clients of ours, it was a really, really positive year, one that I know exceeded some clients' expectations, as we discussed earlier today with the client.

Grace Shie: and it really helps with talent retention and filling skills gaps. And the skills gaps at a higher wage level will presumably be more significant for employers.

Maximillian Del Rey: Yeah, what I was saying with that client earlier today, Grace and you were there, was, you know, I'm really optimistic moving forward that the H-1B lottery doesn't become such a, isn't such a bottleneck as it has been for talent in previous years. And that, you know, with this new rule, we'll actually have outcomes that really benefit a lot of employers.

Grace Shie: I think there were some questions about whether the $100,000 fee announced last fall would be a deterrent to employers registering. But the way that the analysis has shaped out, it actually wasn't a deterrent for certain employer profiles hiring certain employees.

Maximillian Del Rey: Right, exactly. I don't know if we have final data on how many registrations were submitted. So, yeah, so, you know, we can break that down when we have it. I wouldn't be surprised if the overall number of registrations is down from previous years. It's just my forecasting, you know, but yeah, yeah, but we'll see. And I'm really interested as to whether DHS will release more data. We have more data in the system. I'm wondering if they'll give us more data out of that system. I'd love to know, for instance, how many of these registrations were submitted and how many of those were at the level four, right? Was it a disproportionate number, for instance? Was it a different number than maybe they had anticipated? So I'm really looking forward to a bit more data. I'm hopeful that we'll get it really soon.

Grace Shie: Yeah, usually, I'm not sure if it's later in the spring, but I think it's before October 1. We see the agency publish data on hard data on that year's lottery, the total number of registrations, the total number selected. And they usually provide a comparison to prior, the most recent, I think, five years so that we can see whether there was growth or a drop. And frankly, over the past five years, I think there's only been mostly growth over the past five years. So this year, with the new regulations, with the $100,000 fee, I think where things landed will be, it'll be very significant. So now that we are in the three month cap filing window, April 1 to June 30th, all those people who've been selected, now those employers are getting ready to prepare and file those cap petitions. How will this year, how will that process also be different this year in your view?

Maximillian Del Rey: Well, you know, there, there is more data required on, on the H-1B petition, which I think Grace, you've discussed on another podcast coming soon so I won't kind of go over all of that again, but what I'll say is, you know, we're just in the first couple of days of this and I feel further ahead in our case preparation than I did a year ago. And a big reason for that is we've done a lot of wage data, wage level analysis, occupational classification analysis that wasn't required for lottery registrations in previous years. And so that gives you just kind of a step forward that you would otherwise be doing now after you receive the lottery selections. So we're working on our labor condition application, those LCAs, and we've prepared and provided our clients with some of those for posting already when in previous years we may still be kind of collecting and working with our clients to aggregate that data.

Grace Shie: Yeah, and I did read in the March 31st announcement by USCIS, their press release that the lottery had closed, that they had selected enough to fill the annual quota. There was a cautionary line about petitioners relying on, in the petition, on the same data that they had used in the registration process. Do you want to talk a little bit about that?

Maximillian Del Rey: Yes. Okay, so we talked about this in our previous podcast, but ultimately, right, the lottery was the lottery designed to favor individuals at higher wage levels, favor registrants at higher wage levels, right. So, you know, that data was submitted in the lottery registration for individuals, that same data must remain relevant and true for your H-1B petition for a selected individual. So if an employer confirmed in the H-1B lottery registration that someone would be in a specific occupation making a certain wage level. That must still be true for filing of the petition. The ultimate LCA labor condition application that I mentioned can actually use a lower wage level, but the raw salary amount, the raw actual wage provided to the person must still equal or exceed the wage level that was listed on the registration. So it carries over is the basic way to say that the data you used in the registration has to still be true.

Grace Shie: And that speaks to the prep work that you talked about. Was prep work required for the registration? So we are already that far ahead at the cap addition process. I guess maybe I'll just close out one of the final points that some clients have been asking about is this shift by the agency to a beneficiary-centric registration rather than the employer's registration on behalf of someone. So it is a person who is selected in the lottery and that person has a two different job audit offers with company A and company B and both companies register that person in the lottery. The selection is of the person, not of an individual employer's registration. So what are the choices or the sort of some of the possible variations that we might see over the next three months?

Maximillian Del Rey: So, you know, for your lucky selected beneficiaries of this process, those that have multiple registrations done by different employers will have a choice to make in some cases, right? They may have multiple offers of employment, multiple opportunities to choose from, and ultimately, they will have to choose. I'm not necessarily saying they have to choose right now today, but in the future, when the H-1B process plays out, they will have to select an employer to work for come the H-1B start date of October 1st. So I know that's a choice for some people that they're going through right now. And let me say that was also true of last year's lottery as well. That could have happened as well. And I'm very well aware that there are some of those individuals among the selections we have for our clients. So we'll be working with those individuals, making sure they understand what the risks and consequences and benefits of this process are. And ultimately looking forward to those people making a choice as I know our clients are as well.

Grace Shie: That's terrific. Well, I think that concludes our initial analysis of H-1B registration results this year. The lottery was just concluded, so Max and I wanted to immediately discuss our initial findings. And I would not be surprised if we got together again in the coming weeks as we learn more information from the agency and from benchmarking on what this year's cap environment has been like. Any final thoughts Max?

Maximillian Del Rey: No, I think it was an exciting and productive cap year with really good results for our clients and I'm so happy for them and for all of those individuals who were selected.

Grace Shie: Okay, well with that we will conclude this episode of The Inside Track. Thank you for joining us.