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Federal Register / Vol. 86, No. 24 / Monday, February 8, 2021 / Rules and Regulations
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II. Background On January 8, 2021, DHS published the H1B Selection Final Rule, Modification of Registration Requirement for Petitioners Seeking To File Cap-Subject H1B Petitions, amending regulations governing the process by which USCIS selects H1B
registrations for the filing of H1B capsubject petitions or H1B petitions for any year in which the registration requirement is suspended. Under the rule, USCIS would generally select H1B registrations based on proffered wages and corresponding prevailing wage levels. Specifically, USCIS would first select registrations with proffered wages that meet or exceed the highest OES prevailing wage level for the relevant SOC code and areas of intended employment.1
The H1B Selection Final Rule is currently scheduled to go into effect on March 9, 2021. As discussed in greater detail below, after further consideration, USCIS has determined that the final rules 60-day effective date does not afford USCIS sufficient time between the publication of the rule on January 8, 2021, and March 9, 2021, to complete the development and thoroughly test the modifications needed in the H1B
registration system to sufficiently minimize technical risks that result from a compressed testing schedule, as well as to amend policies and train staff to ensure the effective and orderly administration of the cap under the H1B Selection Final Rule. By this action, DHS is delaying the H1B
Selection Final Rule until December 31, 2021, and is applying the regulations currently in place random selection to the initial registration period, and, most likely, any subsequent registration period for the FY 2022 registration process.
DHS expects that delaying the rule to December 31, 2021, will provide USCIS
sufficient time to develop, thoroughly test, and implement the modifications to the registration system and selection process and give stakeholders sufficient time to adjust to new procedures arising from the new rule. The publication of 1 86 FR 1676. The H1B Selection Final Rule was approved by Chad F. Wolf in his capacity as Acting Secretary of Homeland Security. DHS is aware that multiple courts have indicated or held that Mr.
Wolf did not have valid authority to act, and, therefore, did not have authority to sign rules in that capacity. DHS also is aware that, following issuance of the rule, Peter T. Gaynor and Mr. Wolf took steps to ratify the H1B Selection Final Rule.
See DHS Delegation No. 23028, Delegation to the Under Secretary for Strategy, Policy, and Plans to Act on Final Rules, Regulations, and Other Matters Jan. 12, 2021; Chad F. Wolf, Ratification Jan. 14, 2021. By issuing this rule, DHS states no position on Mr. Gaynors or Mr. Wolfs actions or authority.

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the final rule on January 8, 2021, finalized a new selection process requiring, from a technical standpoint, that a new algorithm be developed, thoroughly tested, and implemented in the form of an electronic registration tool. The publication date of the final rule only affords six weeks of development time, and less than two weeks to complete internal end-to-end testing and external performance testing with DHS OneNet, the DHS network.
The selection logic is a fundamental part of the registration tool, and the H1B Selection Final Rule created more complexity in the logic calculation by adding several versions of lotteries that must be developed, thoroughly tested and implemented. This additional complexity essentially requires a complete rebuilding of the registration tool that was developed for the FY 2021
selection process.2 In light of these technical challenges, DHS now believes that there is not adequate time to develop and thoroughly test the new H1B registration system, conduct training and provide outreach on such changes to the regulated public prior to the start of the FY22 initial registration period.3
As indicated below, DHS wants to ensure the orderly and efficient administration of the H1B numerical allocations and wants to avoid disruption to the regulated public by affording itself sufficient time to fully modify and thoroughly test the changes to the H1B registration system, minimize technical risks that result from a compressed testing schedule, and provide the regulated public enough time to become familiar with those 2 Development of the new system has been ongoing since publication of the final rule, however current estimates indicate that development work will not be complete before February 19, 2021.
Testing of the system may commence upon completion of system development, which only leaves one to two weeks depending on when the initial registration period opens, in a best case scenario, to test the system, identify any bugs, conduct additional development to resolve identified bugs, complete additional testing to ensure proper functionality, conduct internal training, and provide outreach to the public.
3 The Registration Requirement for Petitioners Seeking to File H1B Petitions on Behalf of CapSubject Aliens Final Rule, 84 FR 888 Jan. 31, 2019, made clear that implementation of the registration tool requires significant development, testing and stakeholder outreach that cannot reasonably happen in a few weeks. As a result, DHS delayed implementation of the initial registration process for a full year to develop, test, and conduct stakeholder outreach. The H1B Selection Final Rule would also benefit from a similar delay to develop, thoroughly test, and conduct stakeholder training on the modified registration tool, including training on identifying the wage level that should be used for selection. While there was an aspirational hope that the H1B Selection Final Rule could be implemented in time for the FY 22
selection process, that hope has proven misguided.

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changes to facilitate full compliance with the new regulatory requirements.
While DHS considered other alternatives, including a shorter term delay such as a delay of 60 days, or a delay to the start of the next fiscal year, October 1, 2021, DHS believes that a longer delay is needed to avoid the confusion and disparate treatment of registrants that would result if a new rule took effect during the initial registration period, or a subsequent registration and selection period, for the FY 2022 numerical allocations, particularly if USCIS needs to open a subsequent registration period later this year to ensure full utilization of the FY
2022 numerical allocations. DHS cannot predict, with full certainty, the demand for H1B visas for FY 2022 given the current state of the U.S. economy, the continued COVID19 public health emergency, and efforts to address it in the United States and abroad. Thus, DHS cannot predict whether it will be necessary to continue to accept registrations after the initial registration period for the FY 2022 numerical allocations closes, or whether USCIS
will need to reopen the H1B
registration period later in the 2021
calendar year to generate the number of H1B cap petitions projected as needed to reach the FY 2022 numerical allocations. Should USCIS need to open a subsequent registration period and the H1B Selection Final Rule is in effect at that time, that would mean that H1B
registrations for the same fiscal year would be selected under two different standards, thus causing confusion and disparate treatment among H1B
registrants for FY 2022. Further, if USCIS needed to select additional registrations after the H1B Selection Final Rule takes effect, but must continue to select from among those submitted before the H1B Selection Final Rule takes effect e.g. submitted during the initial registration period, the submitted registrations would not contain the necessary data to make a wage level selection as such data would only be collected after the H1B
Selection Final Rule, and associated revisions to data collection, take effect.
The H1B Selection Final Rule does not have a mechanism whereby USCIS
could request additional information from registrants in order to apply a new regulatory scheme. Furthermore, applying a new regulation to registrations submitted under the current regulations would lead to disparate treatment of registrants who submitted registrations during the same initial registration period and would
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