A new federal rule intended to favor more highly educated applicants and streamline the application process for the controversial H-1B visa has been finalized.
One of the two elements of the new rule will change the way the lottery-based application system works to boost the proportion of H-1B visas awarded to foreign citizens with a master's degree or higher from a U.S. school, according to the Department of Homeland Security. The visa, intended for jobs requiring specialized knowledge, requires a bachelor's degree or higher.
"The change will result in an estimated increase of up to 16 percent (or 5,340 workers) in the number of selected petitions for H-1B beneficiaries with a master's degree or higher from a U.S. institution of higher education," Homeland Security said in a statement Wednesday.
That part of the new rule will take effect April 1, the date for filing H-1B applications for fiscal year 2020.
The second element imposes a new requirement that any company applying for an H-1B for a worker must register with U.S. Citizenship and Immigration initially instead of applying for the visa. Only those companies whose registrations are selected may apply for the visa. That change, intended to reduce costs for employers and make the system more cost effective and efficient, has been suspended for fiscal year 2020 as a result of "public feedback," Homeland Security said.
Once that element is put in place, the collective savings for companies with unapproved registrations will amount to $47.3 million to $75.5 million, according to Homeland Security.
While the registration suspension is in place, the new lottery system will still select from H-1B applications, not registrations, Homeland Security said.
The H-1B has become a flashpoint in America's immigration debate, with tech companies, including in Silicon Valley, lobbying for an increase to the annual 85,000 cap on new visas, arguing that they need more H-1B visas to secure the world's top talent. Critics point to reported abuses and argue that outsourcing companies and tech firms use the visa to supplant American workers with cheaper foreign labor.
The new rule grew out of President Donald Trump's "Buy American and Hire American" executive order. Trump, while campaigning in 2016, declared that there was "rampant, widespread H-1B abuse," and he has attacked outsourcing of American jobs.
A spokesman for NASSCOM, an Indian organization representing IT consulting and outsourcing firms, said the lottery change would shut out an important portion of America's tech work force.
"It's going to... put the government in the role of deciding what industry needs in terms of talent," spokesman Jeff Lande said. "We've got school systems around the country, tech companies, hospitals, etc. that are not going to have access to 5,000 to 6,000 H-1Bs who are best suited for the talent they need."
Workers with master's degrees or PhDs aren't always more qualified than bachelor's degree holders for every job, Lande added. "People with years of experience and cutting-edge skills will be coming in line behind the people with the advanced degrees who may not be as experienced," Lande said.
Homeland Security said it would publish the new rule Thursday, on a web page that on Wednesday linked to an unpublished PDF of the rule.
Prioritizing master's degree holders via the lottery change should "very modestly" tilt the odds for obtaining an H-1B visa in favor of companies that tend to hire graduates from U.S. schools, and against those often hiring from abroad, including the outsourcers that receive the lion's share of H-1B visas, said Howard University professor Ron Hira, a frequent critic of the H-1B program.
"But it is hardly the major fix that U.S. workers expected Trump to deliver based on his promises," Hira said.
A change benefiting companies including Google, Facebook and Microsoft is not necessarily good for American workers in general, Hira added, citing recent claims in a lawsuit against Redwood City software giant Oracle by the federal government, alleging the firm favored hiring non-citizen graduates of U.S. colleges over American graduates.
Hira said he would like to see the H-1B lottery replaced with a system based on salary to be paid to a foreign worker.
The Semiconductor Industry Association, which represents chip makers including Intel and Marvell, had said in a January letter to Homeland Security that it supported the lottery change, which was a proposal at the time.
"Many of the scientific and engineering positions in the semiconductor industry require an advanced degree, and a bachelor's degree is often insufficient," the group said.
The Information Technology Industry Council, which represents tech giants including Google and Facebook, and outsourcers including Cognizant and Accenture, said it was reviewing the lottery change, and applauded the suspension of the registration requirement.
Cognizant, based in New Jersey, plus Indian outsourcers Tata and Infosys, are the three top recipients of H-1B visas, with the vast majority of them obtained for workers with bachelor's degrees.