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Federal Register / Vol. 86, No. 5 / Friday, January 8, 2021 / Rules and Regulations low-income areas, depend on new or inexperienced physicians at the level I
or level II wage rate and would be unable to compete for H1B cap slots for these employees under the proposed rule. An employer wrote that rural healthcare providers would not be able to meet the wage rates necessary to attract workers on H1B visas, and, as a result, the proposed rule would decrease the supply of healthcare labor to rural communities.
Response: The rule takes the geographic area into account when ranking registrations or petitions, and, therefore, DHS does not agree that this rule will harm employers in rural or other areas where wages often are lower.
Particularly, as stated in the proposed rule, USCIS will select H1B
registrations or petitions, as applicable, based on the highest OES prevailing wage level that the proffered wage equals or exceeds for the relevant SOC
code and areas of intended employment emphasis added. The prevailing wage already accounts for wage variations by location.
Additionally, this rule does not treat foreign workers who work for smallsized entities differently than those who work for large companies.

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3. The Response of the Agency to Any Comments Filed by the Chief Counsel for Advocacy of the Small Business Administration in Response to the Rule, and a Detailed Statement of Any Change Made to the Final Rule as a Result of the Comments DHS did not receive comments on this rule from the Chief Counsel for Advocacy of the Small Business Administration.
4. A Description of and an Estimate of the Number of Small Entities to Which This Final Rule Will Apply or an Explanation of Why No Such Estimate Is Available For this analysis, DHS conducted a sample analysis of historical Form I129
H1B petitions to estimate the number of small entities impacted by this final rule. DHS utilized a subscription-based online database of U.S. entities, ReferenceUSA, as well as three other open-access, free databases of public and private entities, Manta, Cortera, and Guidestar, to determine the North American Industry Classification System NAICS code,203 revenue, and employee count for each entity in the sample. To determine whether an entity is small for purposes of the RFA, DHS
203 U.S. Census Bureau, North American Industry Classification System, http www.census.gov/eos/
www/naics/ last visited Oct. 21, 2020.

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first classified the entity by its NAICS
code and, then, used SBA size standards guidelines 204 to classify the revenue or employee count threshold for each entity. Based on the NAICS codes, some entities were classified as small based on their annual revenue, and some by their numbers of employees. Once as many entities as possible were matched, those that had relevant data were compared to the size standards provided by the SBA to determine whether they were small or not. Those that could not be matched or compared were assumed to be small under the presumption that non-small entities would have been identified by one of the databases at some point in their existence.
Using FY 2020 internal data on actual filings of Form I129 H1B petitions, DHS identified 24,111 205 unique entities. DHS devised a methodology to conduct the small entity analysis based on a representative, random sample of the potentially impacted population.
DHS first determined the minimum sample size necessary to achieve a 95
percent confidence level estimation for the impacted population of entities using the standard statistical formula at a 5 percent margin of error. Then, DHS
created a sample size greater than the minimum necessary to increase the likelihood that our matches would meet or exceed the minimum required sample.
DHS randomly selected a sample of 473 entities from the population of 24,111 entities that filed Form I129 for H1B petitions in FY 2020. Of the 473
entities, 406 entities returned a successful match of a filing entity in the ReferenceUSA, Manta, Cortera, and Guidestar databases; 67 entities did not return a match. Using these databases revenue or employee count and their assigned North American Industry Classification System NAICS code, DHS determined 312 of the 406 matches to be small entities, 94 to be non-small entities. Based on previous experience 204 DHS utilized a subscription-based online database of U.S. entities, ReferenceUSA, as well as three other open-access, free databases of public and private entities, Manta, Cortera, and Guidestar, to determine the North American Industry Classification System NAICS code, revenue, and employee count for each entity. Guidelines suggested by the SBA Office of Advocacy indicate that the impact of a rule could be significant if the cost of the regulation exceeds 5 percent of the labor costs of the entities in the sector. Small Business Administration, Office of Advocacy, A Guide for Government Agencies, How to Comply with the Regulatory Flexibility Act Aug. 2017, at 19, https www.sba.gov/sites/default/files/advocacy/
How-to-Comply-with-the-RFA-WEB.pdf.
205 Source: USCIS, Office of Policy and Strategy, Policy Research Division PRD, Form I129H1B, Claims 3, IRFA data Aug. 18, 2020 & USCIS
Analysis.

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conducting RFAs, DHS assumes filing entities without database matches or missing revenue/employee count data are likely to be small entities. As a result, to prevent underestimating the number of small entities this rule will affect, DHS conservatively considers all the non-matched and missing entities as small entities for the purpose of this analysis. Therefore, DHS conservatively classifies 379 of 473 entities as small entities, including combined nonmatches 67, and small entity matches 312. Thus, DHS estimates that 80.1%
379 of 473 of the entities filing Form I129 H1B petitions are small entities.
In this analysis DHS assumes that the distribution of firm size for our sample is the same as the entire population of Form I129. Thus, DHS estimates the number of small entities to be 80.1% of the population of 24,111 entities that filed Form I129 under the H1B
classification, as summarized in Table 19 below. The annual numeric estimate of the small entities impacted by this final rule is 19,319 entities.206

TABLE 19NUMBER OF SMALL ENTITIES FOR FORM I129 FOR H1B, FY 2020
Population
Number of small entities
Proportion of population percent
24,111

19,319

80.1

Following the distributional assumptions above, DHS uses the set of 312 small entities with matched revenue data to estimate the economic impact of this final rule on each small entity. The economic impact on each small entity, in percentages, is the sum of the impacts of the final rule divided by the entitys sales revenue.207 DHS constructed the distribution of economic impact of the final rule based on the sample of 312
small entities. Across all 312 small 206 The annual numeric estimate of the small entities 19,319 = Population 24,111 Percentage of small entities 80.1%.
207 The economic impact, in percent, for each small entity i = Cost of one petition for entity i
Number of petitions for entity i 100. The cost of one petition for entity i $75.60 is estimated by adding the two cost components per petition of this final rule $75.60 = $32.59 + $43.01. The first component $32.59 is the weighted average additional cost of filing a petition, and is calculated by dividing total cost by the number of petitions $32.59 = $3,457,401/106,100 from Table 14. The second component $43.01 is the weighted average cost of submitting information on the registration and is calculated by dividing total cost by the number of baseline petitions $43.01 = $11,795,997/
274,237 from Table 15. The number of petitions for entity i is taken from USCIS internal data on actual filings of I129 H1B petition. The entitys sales revenue is taken from ReferenceUSA, Manta, Cortera, and Guidestar databases.

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