Client Alert

Playing the Lottery: The New H-1B Visa Electronic Registration Process

On January 9, 2020, U.S. Citizenship and Immigration Services (USCIS) formally announced that the much-anticipated H-1B electronic registration process will be implemented for this year’s “H-1B cap” cycle. Accordingly, employers and prospective employers of foreign national employees in the U.S. will need to follow a new process in petitioning for H-1B employment visas and must take note of important updates to filing deadlines.

What is an H-1B Visa?

  • In the realm of U.S. nonimmigrant employment visas, the H-1B is perhaps the most common and coveted. This is likely attributed in large part to the very limited number of U.S. employment visa options available to foreign nationals, including recent STEM graduates of U.S. universities who comprise a coveted talent pool.
  • The H-1B is appropriate for foreign nationals who will work in “specialty occupation” positions in the U.S. (i.e. professional-level roles requiring at least a bachelor’s degree or equivalent in a specific field of study). While there is no bulletproof list of qualifying positions, accountant, lawyer and scientist roles (requiring a degree in accountancy, law and science, respectively) might make a strong specialty occupation case; whereas roles in market research, computer programming and management consulting are likely to receive more scrutiny as to whether a specific degree at the bachelor’s level or higher could be considered a bona fide requirement.

The H-1B “Lottery”

  • Each fiscal year there are 65,000 new H-1B visas available plus an additional 20,000 reserved for holders of U.S. Master’s degrees or higher.
  • Given this numerical limitation, the number of annual applications for the visa from petitioning employers for their employees/prospective employees (“H-1B petitions”) typically greatly exceeds the supply. Indeed, for last year’s H-1B cycle, USCIS received over 200,000 petitions for the 85,000 available visas.
  • Accordingly, H-1B petitions are regularly subject to a randomized lottery conducted by USCIS wherein only a portion of petitions received will be selected for further processing. This visa limit and lottery process are also commonly referred to as the “H-1B cap.”
  • H-1B petitions selected for processing in the lottery then need to undergo a formal adjudication process wherein the merits of the H-1B petition—including the qualification of the offered position as a specialty occupation—will be assessed by USCIS under the “preponderance of evidence” standard. Ultimately, petitions selected in the lottery can either be approved or denied; H-1B denials have increased at a significant rate in recent years.

What is Changing?

  • Historically, petitioning employers were required to submit full hard-copy H-1B petition filing packages within the first few days of April to the appropriate USCIS Service Center. Complete H-1B petitions typically consist of government filing fees, numerous forms completed and signed by the petitioner, a detailed supporting statement outlining the specialty position and the employee beneficiary’s qualifications, and a host of supporting documentation. Assuming USCIS received more petitions than visas available during the first five business days in April, the filing window would then close and the lottery would be run. Petitions that were not selected in the randomized lottery would be returned to employers (or their legal counsel) unadjudicated.
  • Now under the new filing scheme, in lieu of mailing complete H-1B petition filing packages to USCIS in early April, employers (or legal counsel) must electronically register each individual H-1B application it seeks to enter into the lottery between March 1 and March 20, 2020. In the unlikely event ample registrations are not received by March 20, the registration window will be extended.
  • The information collected by USCIS during the new electronic registration process will be limited to basic information pertaining to the petitioning company and employee beneficiary.
  • Assuming ample registrations are received within the aforementioned window, which seems likely, the randomized lottery will then be conducted, and only cases selected in the lottery should then be mailed in full to USCIS for adjudication.

Practical Considerations

  • While many employers may have early April engrained in their head as the standard annual H-1B filing deadline, it is most important to mark March 20, 2020 as the likely drop-dead deadline for entry into the H-1B lottery.
  • Employers should also consider at what point within this window to file their registration(s) for applicable employees. While many may rush to file on March 1, government systems are far from immune to standard IT glitches, and some may prefer to take a wait-and-see approach for any issues that may pop up in early March with this new electronic system.
  • It is most common to issue spot any problems with H-1B petitions through the preparation process. For example, if the job duties of the role can realistically be considered “professional” or if the employee possesses the requisite credentials to qualify for the specialty occupation. Given that minimal information will be collected during the electronic registration process, employers will need to consider how much time to invest in diligence upfront prior to submitting the registrations.
  • While one of the clear benefits of the new electronic registration process is that employers may save the time/costs of preparing voluminous H-1B filing packages that would ultimately not be selected in the lottery for review, employers may nevertheless see benefit in preparing the petitions at present in the background, so they are ready to file the petition with USCIS quickly upon learning of a positive outcome from the lottery.

Ultimately preparation is key, and employers should consider this new process and impact to its workforce now in order to determine a plan of action, manage employee expectations and prepare for any hiccups during this inaugural year of the electronic registration process.

Try To Restrain Yourself: California Is Temporarily Restrained From Enforcing Arbitration Ban

Remember California’s new ban on mandatory workplace arbitration agreements? The Eastern District of California has put it on ice, granting a temporary restraining order against the ban’s enforcement. As a refresher, and as we wrote about here, on October 10, 2019, California Governor Gavin Newsom signed into law California’s latest afront on workplace arbitration—AB 51. Under AB 51, employers may not, “as a condition of employment, continued employment, or the receipt of any employment-related benefit, require an applicant or employee to waive any right, forum, or procedure” for FEHA and Labor Code claims. Violations of the new statute carry hefty consequences, including criminal penalties. Many employers see arbitration agreements as necessary to manage employment disputes and an outright ban on this efficient process strongly affects their bottom line. The ban was scheduled to go into effect on January 1, 2020, but the TRO put enforcement on hold for now. READ MORE

The Year of Dynamex: Navigating California’s Assembly Bill 5

On September 18, 2019, California Governor Gavin Newsom signed into law Assembly Bill 5 (A.B. 5). A.B. 5 relates to whether workers are employees or independent contractors. With this bill the California Legislature codified the ABC test set forth by the California Supreme Court’s decision in Dynamex Operations West, Inc. v. Superior Court of Los Angeles, 4 Cal. 5th 903 (2018) and expanded its applicability. It expands the ABC test for independent contractor vs. employee classification to the California Labor Code and the California Unemployment Insurance Code.

A.B. 5 adds section 2750.3 and amends section 3351 to the California Labor Code and amends sections 605.5 and 621 to the California Unemployment Insurance Code.

Dynamex and the ABC test

For the last 30 years, California courts have addressed independent contractor v. employee classification using the test set forth in S.G. Borello & Sons, Inc. v. Department of Industrial Relations, 48 Cal. 3d 341 (1989). Under the Borello test, determining whether a worker was an employee or an independent contractor hinged on a number of factors and primarily focused on the alleged employer’s control over the manner and means by which the work is performed. On April 30, 2018, the California Supreme Court decided Dynamex, announcing a significant departure from the Borello test. The Dynamex decision adopted the so-called 3-part “ABC” test for determining whether an individual is considered an independent contractor or an employee under the wage orders, which govern many aspects of wages and working conditions in covered industries. Under the new 3-part ABC test, a worker is properly considered an independent contractor to whom a wage order does not apply only where the hirer establishes:

  1. The worker is free from the control and direction of the hiring entity in connection with the performance of the work;
  2. The worker performs work that is outside the usual course of the hiring entity’s business; and
  3. The worker is customarily engaged in an independently established trade, occupation, or business.

For more background information on the Dynamex decision, please see our May 9, 2018 blog post.

A.B. 5

A.B. 5 codifies and expands the Dynamex 3-part ABC test, making it apply not only to claims arising out of the wage orders, but also apply to the California Labor Code and Unemployment Insurance Code. The new law also includes a provision that empowers the California Attorney General and city attorneys of cities with populations greater than 750,000 to seek injunctive relief to prevent the continued misclassification of employees as independent contractors. See California Labor Code section 2750.3(j).

In passing the bill, the legislature stated that it intended “to ensure workers who are currently exploited by being misclassified as independent contractors instead of recognized as employees have the basic rights and protections they deserve under the law, including a minimum wage, workers’ compensation if they are injured on the job, unemployment insurance, paid sick leave, and paid family leave.” The legislature further stated that “by codifying the California Supreme Court’s landmark, unanimous Dynamex decision, this act restores these important protections to potentially several million workers who have been denied these basic workplace rights that all employees are entitled to under the law.”

A.B. 5 includes carveout exemptions from the ABC test for various occupations and business relationships (such as lawyers, veterinarians, commercial fishermen, investment advisors, licensed private investigators and specified professional services providers) if the hiring entity can prove the specific requirements for exemption are met. See Cal. Lab. Code section 2750.3 (b)-(h). If the exemption applies, the Borello test governs the worker classification issue.

The application of the ABC test to the California Labor Code and Unemployment Insurance Code takes effect on January 1, 2020, with the applicability to workers’ compensation going into effect on July 1, 2020.

Next Steps

Under A.B. 5, the number of individuals who are considered employees in California for purposes of the wage orders, California Labor Code, and Unemployment Insurance Code will almost certainly increase. Now is the time to review your company’s practices related to independent contractors and talk to counsel for advice. We will continue to monitor any developments and are here to help.

It’s Heating Up: Several California Cities Prepare For Mid-Summer Minimum Wage Increases

We are halfway through 2019, and while many employees prepare for summer vacation, California employers in various cities should brace themselves for an additional round of minimum wage increases on July 1, 2019.

Another raise, already?

As you may recall, on January 1, 2019, California raised the statewide minimum wage rate to $12.00 per hour for employers with 26 or more employees, and $11.00 per hour for employers with 25 or fewer employees. And the California minimum wage is set to increase to $15.00 per hour for all employers by January 2023. READ MORE

AB 5 and AB 71: CA Legislature Dukes It Out Over Dynamex and Borello

The battle between Dynamex and Borello continues. Two competing bills – Assembly Bill 5 (“AB 5”) and Assembly Bill 71 (“AB 71”) – each seek to codify the respective worker classification tests. On May 29, 2019, the California State Assembly overwhelmingly passed AB 5, a bill seeking to codify Dynamex Operations West, Inc. v. Superior Court of Los Angeles, which adopted the three-factor “ABC” test to determine a worker’s classification for wage order claims. Now the bill is headed to the state Senate. Meanwhile, AB 71, a bill seeking to codify S.G. Borello & Sons, Inc. v. Dept. of Industrial Relations, has thus far not enjoyed the same success. READ MORE

A Gig Can be a Gig: US DOL Opinion Letter Breathes New Life into the Gig Economy Independent Contractor Model

On April 29, 2019, the U.S. Department of Labor (“DOL”) issued an opinion letter finding that “on-demand” service providers working for a virtual marketplace company are independent contractors under the Fair Labor Standards Act.

The opinion letter comes almost two years after the DOL withdrew informal guidance on independent contractors issued under the Obama administration, in which the DOL concluded that “most workers are employees under the FLSA.” The new opinion letter signals an approach more friendly to “gig economy” virtual marketplace companies (or “VMCs”), online and/or smartphone-based referral services that connect consumers with service providers providing a wide variety of services, such as transportation, delivery, shopping, moving, cleaning, plumbing, painting, and household services. READ MORE

Must-See Viewing: NYC Sexual Harassment Video Training Released

The New York City Commission on Human Rights (“NYCCHR”) released its long anticipated model anti-sexual harassment training on April 1, 2019.  The City’s model training satisfies all of the training requirements under both New York State and City laws, although the training is geared to educate viewers as to the broader sexual harassment protections afforded to workers by the New York City laws.  READ MORE

Confidentiality Optional: New Jersey Nixes NDAs and Arbitration for Discrimination and Harassment Claims

In the wake of the #MeToo movement, lawmakers nationwide proposed legislation with expressed goals of preventing future sexual harassment scandals. Many proposed bills expired in committee and only a select few became law. New Jersey’s Senate initially proposed S-121 in January 2018. Governor Phil Murphy just signed it into law on March 18, 2019 (full text here). READ MORE

Closing the Gender Pay Gap in France: Get Ready

Equality between men and women has been declared in France a “great national cause” of Emmanuel Macron’s Presidency in the wake of the #MeToo movement.

In March 2018, the French government unveiled an action plan for gender equality in the workplace consisting of ten measures aiming at reducing the gender pay gap and five measures to fight sexual and gender based violence. READ MORE

New York State and New York City Ring in the New Year With More Gender Protections

Last year, in the immediate aftermath of the #MeToo movement, both New York State and New York City passed sweeping legislation that sought to provide additional protections for individuals from sexual harassment (see our prior blog posts here). Perhaps most notable was legislation requiring all New York State employers to adopt a sexual harassment prevention policy by October 2018 and to conduct annual sexual harassment prevention training beginning no later than October 2019, among other things. Neither the State nor City legislatures appear to be slowing down – already this year, both have enacted additional worker protections. READ MORE