On March 3, 2011, the DHS will publish a proposed regulation in the Federal Register outlining changes that the agency would like to implement for filing H-1B cap subject petitions during the initial designated filing period of each fiscal year. Jackson & Hertogs has received an advance copy of this proposed rule making.

The proposed rule would require employers to first file an electronic registration with USCIS during the designated registration period. If USCIS then anticipates that the H-1B cap will not be reached by the first day that petitions may be filed for that particular fiscal year, USCIS would notify all registered petitioners that they may file their H-1B petitions and USCIS would continue to accept H-1B petitions until the H-1B cap is reached. If, however, the number of electronic registrations indicates that the H-1B cap would be filled during the initial filing window, USCIS would close the registration before such date and randomly select a sufficient number of filings from the timely filed registrations to meet the applicable cap.

Under this proposal, the petitioner would have to identify the foreign national beneficiary as part of the registration process and would only be eligible to subsequently file an H-1B petition that was selected for the particular beneficiary named in the registration. This means that petitioners would not be able to simply file random registrations, but must identify the specific foreign nationals whom they wish to sponsor. USCIS would then create a waitlist from some or all of the remaining electronic registrations in order to have a pool of potential petitions to pull from until all cap numbers are used. Employers who are "waitlisted" would be notified that they were waitlisted and later notified if they have been selected and are eligible to file. Employers whose registrations are not selected for either processing or for waitlisting would receive notification that they were not selected to file an H-1B petition in that fiscal year.

The main idea behind this proposed rule is to alleviate the administrative burden on the agency and the associated costs to employers who currently must spend significant time and resources preparing and filing H-1B petitions that may or may not be accepted under the cap.

As stated in the proposed legislation,

USCIS has found that when it receives a significant number of H-1B petitions (e.g., 100,000 or more) within the first few days of the H-1B filing period, it is difficult to handle the volume of petitions received in advance of the H-1B random selection process. Further, after expending USCIS resources to ensure proper processing of these petitions, USCIS must reject and return to the petitioning employer those petitions and associated fees that are not randomly selected as eligible for an H-1B cap number. U.S. employers are also adversely affected by the current petition process. Preparing and mailing H-1B petitions, with the required filing fee, can be burdensome and costly for employers, if the petition must ultimately be returned because the cap was reached and the petition was not selected in the random selection process.

The proposed rule allows for the establishment of a mandatory Internet-based electronic registration process for U.S. employers seeking to file H-1B petitions under either the regular H-1B cap or under the H-1B "Master's" cap exemption. This electronic registration process would be in advance of the start of the period during which actual petitions can be filed for a new fiscal year (i.e., immediately prior to April 1). If selected, the employer would proceed with the LCA process and then the preparation and filing of the H-1B petition.

USCIS anticipates that it will take employers approximately 30 minutes to register each beneficiary into the electronic system. The registration period would begin no later than March of each fiscal year and would be open for a minimum two week period. USCIS would announce the registration period in advance and all registrations would have to be completed during the registration period in order to be included in the random selection process. Employers would have to register each year -- i.e., registration in one fiscal year would not carry over to a subsequent fiscal year.

The employer would be required to file individual registrations for each intended H-1B petition, and, according to the proposed rule, the minimum information that the employer would have to submit on each registration would include:

1. the employer's name, employer identification number (EIN), and employer's mailing address;
2. the authorized representative's name, job title, and contact information (telephone number and email address);
3. the beneficiary's full name, date of birth, country of birth, country of citizenship, gender and passport number; and
4. any additional information requested by the registration or USCIS.

Interestingly, this list of necessary information to submit fails to include any information that would assist USCIS in ascertaining whether the beneficiary qualifies under the Master's cap exemption or the regular cap.

The employer would be furnished with an "acceptance" receipt for a validly submitted registration. Duplicate registrations by the same employer for the same employee would not be allowed and if discovered would result in the duplicate registration being eliminated from the lottery process.

In those years when the registration numbers are below the available H-1B cap numbers, USCIS would continue to accept registrations until the cap is reached. In other words, employers would always register online before filing an H-1B even in a year when the cap will not be reached during the initial filing window. This will enable the USCIS to perform the regulatory required random selection for registrations received on the day that the cap is reached.

The proposed rule states that employers would have at least 60 days from the date notified of selection to submit its H-1B petition on behalf of the employee. The applicable deadline for submission would be on the face of the notification of selection. If the employer fails to submit the petition during the set filing window, the petition would be rejected as untimely filed. The filing window for a given registration would also help to determine the validity start date of the filed petition:

The proposed minimum 60-day filing period in which a selected registrant may opt to file a petition on behalf of the named beneficiary would be read consistently with the existing regulation providing that a petitioner may file no earlier than six months before the date of actual need for the beneficiary's services or training. 8 CFR 214.2 (h)(9)(i)(B). In other words, while the proposed minimum 60-day filing window would provide a cutoff date for filing a petition, selected registrants would still be able to file a petition up to six months prior to the date of stated need. If, for example, an employer's selection notice dated March 31, 2010 contains a 60-day filing period, and the requested start date is October 1, 2010, the petition must be filed no later than May 30, 2010 or USCIS will reject the petition. Another example is if an employer receives the selection notice dated May 1, 2010 with a 60-day filing period, then the petition must be filed no later than June 30, 2010. If the H-1B petition is filed on June 30, 2010, the requested start date may be no later than December 30, 2010, which is six months after the filing date.

The USCIS will accept comments from the public for 60 days from the date of publication (March 3, 2011). As this change is being published as a proposed rule, as opposed to an interim regulation, we note that this rule will not go into effect until after the comments have been reviewed, and a final rule published. The means that this rule will not impact the filing of H-1B cap petitions for the upcoming fiscal year, which USCIS will begin accepting on April 1, 2011. Jackson & Hertogs will provide more updates on the rule as they become available.

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