A pay-to-play system will soon replace the random lottery
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I’m a grad student currently working on F-1 STEM OPT. The company I work for has indicated it will sponsor me for an H-1B visa this year.
I hear the random H-1B lottery will be replaced with a new system that selects H-1B candidates based on their salaries. How will this new process work?
— Positive in Palo Alto
Thanks for your timely question! The Department of Homeland Security (DHS), which oversees U.S. Citizenship and Immigration Services (USCIS), finalized a new rule last week (Jan. 8), that replaces the random H-1B lottery with a pay-to-play system. There may be litigation that could change things before this year’s selection process, but interestingly, removing the randomness from the H-1B lottery is one point on which both Biden and Trump agree.
To find out more about all the changes that will impact this year’s H-1B process and how to prepare, register for our upcoming webinar on Jan. 20, on how to Get Ready for the H-1B FY2022 Lottery. In the meantime, listen to my recent H-1B podcast in which I discuss what the 2021 lottery will look like, and download our free H-1B guide. Also, check out the podcast episode on What Makes a Strong H-1B Petition.
Under this new wage-based H-1B allocation system, which is slated to go into effect on March 9, USCIS will select H-1B registrants based on the highest relative wages paid, taking into account the job, where it will be done and the job level (think of it like a career stage). This change is aimed at encouraging employers to offer higher salaries and higher-skilled positions to H-1B candidates to better protect the wages and working conditions of U.S. workers and increase the likelihood that H-1B visas will be awarded to the best and the brightest individuals. In a nutshell, this is great news for Silicon Valley companies that have cash and need to remove risk.
While the new rule substantially increases predictability in the “lottery” process, it may make it more difficult for companies that are unfunded, pre-revenue early-stage startups to get H-1B visas for founders or employees, particularly since other forms of compensation, such as equity or stock options, are not considered wages. So the lesson here is to get some predictable revenue or runway prior to Q2 when you need to submit the I-129 petition so you can demonstrate the “ability to pay” at a higher wage level.