Ask Sophie™: What H-1B and other immigration changes are ahead this year?

Dear Sophie,

I help several startups with HR. I heard the application fees for many visas and green cards are going to substantially increase. 

When will those increases go into effect? Are there any other immigration-related changes coming this year? Any H-1B updates?

— Passionate People Person

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Dear Passionate,

Thanks for reaching out! Looking into my crystal ball (as well as federal records and drawing on my own decades of experience), I’m happy to provide some thoughts on likely immigration developments ahead. For H-1Bs specifically, it might get easier for founders, including CEOs, to qualify for H-1Bs! And, for the latest on the upcoming 2023 H-1B lottery registration process (new government details below!), listen to my podcast with attorney Lynda Hagerty on how to get started now.

Overall, the Biden administration is aiming to reduce case processing delays and backlogs while increasing opportunities for international students educated at American universities and entrepreneurs. The immigration fee increases proposed by the U.S. Department of Homeland Security (DHS), which oversees U.S. Citizenship and Immigration Services (USCIS), and the Department of State, which oversees consular processing, as well as the Department of Labor’s proposal to raise prevailing wage categories could potentially hinder the growth of startups but have the potential to help reduce long-standing backlogs in processing times.

Before I dive in further, here are the details for the recently announced timeline for this year’s H-1B registration and lottery. Here are important dates to be aware of:

• Starting on Feb. 23, at 9 a.m. Pacific companies or their legal representative can create a USCIS online account if they don’t already have one at myUSCIS.
• From March 1, at 9 a.m. Pacific, to March 17, at 9 a.m. Pacific, companies can register H-1B candidates for this year’s lottery and pay the registration fee (currently $10) for each candidate.
• By March 31, USCIS will notify companies whose candidates have been selected in the lottery
• This kicks off the traditional cycle of preparing and filing the full petition to seek an H-1B start date of October 1, 2023.

Now, let me dive into the immigration changes that may be coming this year.

Good news for founder H-1Bs?

According to the federal regulatory agenda, DHS is working on a proposal that would affect H-1B petitions filed on behalf of both startup founders and F-1 students on OPT or STEM OPT. The details of the proposed changes are unclear, but DHS is aiming to issue the proposed rule in October 2023. 

The proposal seeks to revise the regulations that require employer sponsors to demonstrate an employer-employee relationship between a startup and a startup founder for the H-1B specialty occupation visa and “provide flexibility” for startup founders. Again, it’s unclear just what this proposed rule change will entail, but it’s very exciting!

As background, the two things that most startups typically find challenging in demonstrating an employer-employee relationship for a founder H-1B are having to:

• The requirement to be supervised by someone at the company who can fire a startup founder on an H-1B
• And this leads to a common formulation (not always necessary for various reasons) that it’s often most convenient for founders to reduce their equity stake in their startup to 50% or less to have a strong argument in case of RFE.

The DHS proposal will also address cap-gap issues. With cap gap, F-1 students on OPT or STEM OPT whose EAD is scheduled to expire before the H-1B start date of Oct. 1, will automatically get their EAD extended through Sept. 30, with a pending or approved H-1B petition.

Faster Dependent Work Permits

The recent settlement of a class action lawsuit means that USCIS will return to processing initial applications for an employment authorization document (EAD)—also known as a work permit—at the same time as the primary H-1B beneficiary files a green card petition (Form I-140). (The spouse of an H-1B visa holder is only eligible to apply for a work permit if the H-1B visa holder has a pending or approved green card petition.) During the Trump administration, USCIS began processing employment authorization applications (Form I-765) separately from visa applications, which resulted in long delays for work permits—sometimes as long as two years—making it impossible for many to remain employed. 

As part of a settlement in a separate class action lawsuit, the spouses of H-1B visa holders get an automatic extension of their employment authorization for 180 days after it expires if USCIS fails to process an extension before expiration.

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Premium processing

USCIS continues to expand premium processing for more immigration benefits, which will have a big impact on immigration applications. Recently, the agency made 45 calendar-day premium processing available for all EB-1C green cards for Multinational Managers and Executives and EB-2 NIW (National Interest Waiver) green cards.

For an additional fee, premium processing guarantees that USCIS will issue a decision or issue a request for evidence within the expedited time frame. Fifteen calendar-day premium processing is available for the EB-1A extraordinary ability green card and most work visas including H-1B specialty occupation visa, L-1 visa for intracompany transferees, O-1 extraordinary ability visa, and TN (Treaty National) visa for Canadians and Mexicans.

And here is some great news for international students! Next month, USCIS plans to begin extending premium processing EAD applications (Form I-765) filed by F-1 students with Optional Practical Training (OPT) or STEM OPT extension. We have long waited for premium processing for EADs! USCIS will begin with offering premium processing for certain OPT and STEM OPT EAD applications that have already been filed with USCIS. In April, USCIS will expand premium processing to all F-1 students seeking OPT or STEM OPT employment authorization (work permit). It’s unclear how long the premium processing timeframe will be for employment authorization applications. 

Premium processing times may increase if the proposed rule that DHS issued in January—the same one that proposed increasing filing fees for certain immigration benefits—is finalized. DHS is proposing to revise the premium processing timeframes from calendar days to business days.

Prevailing wage increases

The U.S. Department of Labor (DOL) is planning to publish a proposed rule in October 2023 that would change how it sets the prevailing wage levels that impact Labor Condition Applications for H-1B, H-1B1, and E-3 visas and PERM applications for EB-2 and EB-3 green cards. This change will likely increase the wages that employers must pay to the beneficiaries of these visas and green cards, but the changes could also be affected by recent layoffs in certain geographical areas where technology companies are common, such as Silicon Valley metropolitan areas.

Immigration fee increases

Let me provide a bit of context about the fee increases being proposed. The steep immigration fee increases DHS proposed in January will significantly impact startups, making it more expensive to hire international talent. The State Department, which oversees the processing of visas and green cards at U.S. embassies and consulates, is also planning to raise immigration fees for work visas. 

Both USCIS and the State Department are heavily reliant on fees. The drop in immigration applications during the pandemic resulted in a 40% drop in income for USCIS and a 41% drop in fee revenue for the State Department. 

USCIS contends that if it cannot raise fees, it would suffer an annual shortfall and case processing times and backlogs will continue to increase. Meanwhile, at the State Department, consular fees have stopped fully funding consular operations since fiscal year 2020. A 2022 report from the Government Accounting Office projected that State Department revenue “may not be sufficient” to cover immigration costs through fiscal year 2026.

The State Department started the process of increasing consular fees more than a year before DHS. The State Department published a proposed rule in December 2021 to raise the processing fees for nonimmigrant work visas. After soliciting public comments on the proposal, the State Department submitted a final rule on fee increases to the White House Office of Management and Budget (OMB), which is the last step in the rulemaking process. According to the regulatory agenda, the State Department intends to publish the final rule for increasing visa processing fees in March 2023. Typically, a final rule will go into effect 30 days after it is published in the Federal Register.

Here are the proposed processing fees for select nonimmigrant visas at a U.S. embassy and consulate when applying from outside the U.S.: 

The fee increases sought by DHS/USCIS are significantly higher than those sought by the State Department, but there’s a slight discount on filing an application electronically. Here are the fees and proposed fee increases being proposed by DHS/USCIS for some of the immigration benefits commonly used by startups:

Make Your Voice Heard

DHS is accepting public comments on its fee increases proposal through March 6, 2023. I would urge you—and the startups you work—with to submit a comment to DHS, describing how the fee increases would impact business and growth.

The administration’s regulatory agenda does not indicate the timing for the publication of a final rule. Once DHS reviews the public comments, it could make changes before releasing the final rule, which would take several months. Typically, the final rule will go into effect 30 days after it’s published in the federal register unless a lawsuit is filed challenging the fee increases, which happened in 2020, the last time DHS/USCIS attempted to increase fees. I’ll keep you posted here if that happens.

All my best to you in 2023!

— Sophie

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