UPDATE: Feb 1, 2019: The U.S. Department of Homeland Security finalized rule changes to the H-1B visa program lottery system this week. Proposed in December, the new rules will take effect April 1 for the FY2020 filing year.

Dive Brief:

• The Department of Homeland Security wants to shake up the order of the H-1B lottery selection and select cap-subject petitions prior to the advanced degree exemptions, according to a U.S. Citizenship and Immigration Services (USCIS) proposed rule released Friday. The change would "increase the chances" of USCIS awarding H-1B visas "to the most-skilled and highest-paid beneficiaries," the agency said.

• Under the proposed rule, all H-1B petitions would first count against the 65,000 cap. Once the cap is met, USCIS would select petitions for the 20,000 advanced degree exemption slots. USCIS says reversing the selection order would increase the number of selected H-1B visa holders with a master's degree or higher from U.S. schools by up to 16%.

• The agency wants to change how H-1B visa petitions are filed. Petitioners would register electronically with USCIS, according to the announcement. Those selected under the cap would then file paperwork — requiring physical, paper copies — to the agency rather than accepting "hundreds of thousands" H-1B petitions with supporting documentation prior to the cap selection.  

Dive Insight:

There is a question of timing with the proposed H-1B rule changes. USCIS is accepting public comments on the proposed rule until Jan. 2, 2019 and with registration opening on April 1, rule implementation would have to happen quickly, according to Justin Storch, counsel, government affairs policy at Society for Human Resource Management (SHRM).

The agency will likely receive comments that are going to make an impact and require a response, Storch said. If the rule requires testing and vetting, the agency could suspend the rule and run the cap as before this year, implementing it instead for April 2020 filings.

USCIS has shown its intent to shake up H-1B policy, but limited by existing Congressional laws, rule changes are its only recourse. In April 2017, President Donald Trump signed the "Buy American, Hire American," executive order, which suggested reforms and rules to prioritize U.S.-born and -educated workers.

Such policy changes are the "minimal thing" the agency can do under existing laws, Storch said.

Tweaked policies can have a chilling effect on the H-1B program, introducing hurdles to the already complex application system. Changes to the H-1B system can have a direct and negative impact on the economy, spelling trouble for those reliant on the system to bring in foreign workers. This has a particular impact on the tech workforce, which makes up the majority of the H-1B visa holders.

This year, the agency received fewer petitions than in years past, but demand has stayed persistent even with restrictions on spousal visas tied to the program.

With a proposed rule in progress, employers and those looking to file H-1B petitions don't know how to prepare for the coming cap season, Storch said. People should look to USCIS for guidance soon. And if the rule does go into effect by April 1, there is going to be a new system to learn in a short time.