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Federal Register / Vol. 86, No. 5 / Friday, January 8, 2021 / Rules and Regulations
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This final rule may primarily affect prospective petitioners seeking to file H1B cap-subject petitions with a proffered wage that corresponds to OES
wage level II, I, and below.196 As Table 13 shows, this final rule is expected to result in a reduced likelihood that registrations for level II will be selected, as well as the likelihood that registrations for level I and below wages will not be selected. A prospective petitioner, however, could choose to increase the proffered wage, so that it corresponds to a higher wage level.
Another possible effect is that employers will not fill vacant positions that would have been filled by H1B
workers. These employers may be unable to find qualified U.S. workers, or may leave those positions vacant because they cannot justify raising the wage to stand greater chances of selection in the H1B cap selection process. That, in turn, could result in fewer registrations and H1B capsubject petitions with a proffered wage that corresponds to OES wage level II
and below.
DHS acknowledges that this final rule might result in more registrations or petitions, if registration is suspended with a proffered wage that corresponds to level IV and level III OES wages for H1B cap-subject beneficiaries. DHS
believes a benefit of this final rule may be that some petitioners may choose to increase proffered wages for H1B capsubject beneficiaries, so that the petitioners may have greater chances of selection. This change will, in turn, benefit H1B beneficiaries who ultimately will receive a higher rate of pay than they otherwise would have in the absence of this rule. However, DHS
is not able to estimate the magnitude of such benefits. DHS acknowledges the change in the selection procedure 196 DOL uses wage levels to determine the prevailing wage based on the level of education, experience including special skills and other requirements, or supervisory duties required for a position; however, USCIS would use wage levels to rank and select registrations or petitions, as applicable based on the rate of pay for the wage level that the proffered wage were to equal or exceed. More information about DOL wage level determinations can be found at U.S. Department of Labor, Employment and Training Administration, Prevailing Wage Determination Policy Guidance, Nonagricultural Immigration Programs Revised Nov. 2009, https www.dol.gov/sites/dolgov/files/
ETA/oflc/pdfs/NPWHC_Guidance_Revised_11_
2009.pdf; and at U.S. Department of Labor, Foreign Labor Certification Data Center, Online Wage Library, https www.flcdatacenter.com/ last visited Dec. 15, 2020. DHS acknowledges that varying wage levels correspond to varying skill levels. In analyzing the economic effects of this final rule, DHS recognizes that prospective petitioners may offer wages exceeding the wage levels associated with the skills required for given positions to increase their chances of selection under the ranked selection process.

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resulting from this final rule will create distributional effects and costs. DHS is unable to quantify the extent or determine the probability of H1B
petitioner behavioral changes.
Therefore, DHS does not know the portion of overall impacts of this rule that will be benefits or costs.
As a result of this final rule, costs will be borne by prospective petitioners that would hire lower wage level H1B capsubject beneficiaries, but are unable to do so because of a reduced chance of selection in the H1B selection process compared to the random lottery process.
Such employers also may incur additional costs to find available replacement workers. DHS estimates costs incurred associated with loss of productivity from not being able to hire H1B workers, or the need to search for and hire U.S. workers to replace H1B
workers. Although DHS does not have data to estimate the costs resulting from productivity loss for these employers, DHS provides an estimate of the search and hiring costs for the replacement workers. Accordingly, based on the result of the study conducted by the Society for Human Resource Management SHRM in 2016, DHS
assumes that an entity whose H1B
petition is denied will incur an average cost of $4,398 per worker in 2019
dollars 197 to search for and hire a U.S.
worker in place of an H1B worker during the period of this economic analysis. If petitioners cannot find suitable replacements for the labor H
1B cap-subject beneficiaries would have provided if selected and, ultimately, granted H1B status, this final rule primarily will be a cost to these petitioners through lost productivity and profits.
DHS also acknowledges that some petitioners might be impacted in terms of the employment, productivity loss, search and hire costs, and profits resulting from labor turnover. In cases where companies cannot find reasonable substitutes for the labor H
1B beneficiaries would have provided, affected petitioners also will lose profits 197 Society for Human Resource Management SHRM, 2016 Human Capital Benchmarking Report, at 16, https www.shrm.org/hr-today/
trends-and-forecasting/research-and-surveys/
Documents/2016-Human-Capital-Report.pdf last visited Oct. 21, 2020. The study was based on data collected from 2,048 randomly selected human resource professionals who participated in the 2016
SHRM Human Capital Benchmarking Survey. The hiring cost is reported as $4,129 per worker in 2016
dollars and converted to 2019 dollars in this analysis. The hiring cost includes third-party agency fees, advertising agency fees, job fairs, online job board fees, employee referrals, travel costs of applicants and staff, relocation costs, recruiter pay and benefits, and talent acquisition system costs.

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from the lost productivity. In such cases, employers will incur opportunity costs by having to choose the next best alternative to fill the job prospective H
1B workers would have filled. There may be additional opportunity costs to employers such as search costs and training.
Such possible disruptions to companies will depend on the interaction of a number of complex variables that constantly are in flux, including national, state, and local labor market conditions, economic and business factors, the type of occupations and skills involved, and the substitutability between H1B workers and U.S. workers. These costs to petitioners are expected to be offset by increased productivity and reduced costs to find available workers for petitioners of higher wage level H1B
beneficiaries.
DHS uses the compensation to H1B
employees as a measure of the overall impact of the provisions. While DHS
expects wages paid to H1B
beneficiaries to be higher in light of this final rule, DHS is unable to quantify the benefit of increased compensation because not all of the wage increases will correspond with productivity increases. This final rule may indirectly benefit prospective petitioners submitting registrations with a proffered wage that corresponds to OES wage Level I and II registrations. The indirect benefit will be present during the COVID19 pandemic and the ensuing economic recovery if the prospective petitioners are able to find replacement workers accepting a lower wage and factoring in the replacement cost of $4,398 per worker in the United States.
Similarly, prospective petitioners that will be submitting registrations with a proffered wage that will correspond to OES wage level I and II and that substitute toward unemployed or underemployed individuals in the U.S.
labor force will create an additional indirect benefit from this rule. This will benefit those in the U.S. labor force if petitioners decide to select a U.S.
worker rather than a prevailing wage level I or II H1B worker. DHS notes that, although the COVID19 pandemic is widespread, the severity of its impacts varies by locality and industry, and there may be structural impediments to the national and local labor market. Accordingly, DHS cannot quantify with confidence, the net benefit of the redistribution of H1B cap selections detailed in this analysis.
DHS also is changing the filing procedures to allow USCIS to deny or revoke approval of a subsequent new or amended petition filed by the petitioner,
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