IES Blog

What You Need to Know About the New H-1B Rules

Posted on March 30th, 2021 Read time: 3 minutes

Woman filling out visa application

Many industries are facing a crisis: finding workers to fill ever widening skills gaps. In fact, in February 2021, 51% of business owners reported having “few or no qualified applicants” for open positions. One way to close the gap is to hire “nonimmigrant aliens,” the term used to refer to tourists, students, business travelers, and temporary workers.

Temporary workers can receive work authorization from the United States Citizenship and Immigration Services (USCIS) by applying for one of many types of work visas depending on their situations, skills, and objectives. One work visa that is popular among employers for highly specialized skills is the H-1B visa.


What Is H-1B?

The H-1B visa program was created to fill highly specialized roles with nonimmigrant aliens that otherwise can’t be filled by members of the U.S. workforce. The USCIS issues a temporary visa that enables the holder to live and work in the country lawfully. The current process requires employers to prepare and submit a complicated application in hopes that it will be approved through a lottery system.

This seems straightforward enough, but in September 2020, the Department of Homeland Security (DHS) proposed changes to the H-1B visa program that will affect employers who’ve already hired H-1B workers or plan to in the future.


The Main Changes to the H-1B Visa Program

The proposed H-1B rules will change the previous lottery-style system. Instead, the H-1B visa program will be based on merit and salary. This change aims to incentivize employers to offer higher wages to foreign workers and improve employers’ abilities to plan their hiring while reducing any negative impact on U.S. workers. It’s a significant change, considering that 60% of H-1B visa holders were paid below the median wage for their roles in 2019, according to an analysis by the Economic Policy Institute.

Initially, the revised program was set to take effect on March 9, 2021. However, the Biden administration delayed these changes to the H-1B visa program until December 31, 2021, in order to gather more feedback from the public and test the updates to the H-1B registration system. Therefore, the old lottery rules will remain in place until a final ruling is made.

In the meantime, employers should work to understand what the new H-1B regulations will mean for them. For example, the proposed rules require employers to register for a petition electronically before completing the full application. According to the Department of Labor (DOL), petitions from employers looking to fill roles at the highest wage level will be prioritized. Level 4 employees — those “well-qualified” and “with enough experience to plan, modify, and approve standard procedures” — will be offered visas first, followed by Levels 3, 2, and finally 1.

The main advantage of the new H-1B visa program is that it will protect workers both domestically and abroad and ensure they’re paid more fairly for their contributions. Another advantage is that the process will allow employers to plan better for the talent they need, without relying on a lottery system. The changes to the H-1B visa program aim to solve these discrepancies and better help employers find the specialized workers they need to fill the skills gap.


Learn more about how our Global Workforce Solutions can help you stay compliant with upcoming rules and regulations here.


Written by: Tania Fiero , Chief Human Resources Officer

Tania Fiero is the Chief Human Resources Officer at Innovative Employee Solutions (IES), a leading global employer of record in more than 150 countries that specializes contingent workforce solutions such as outsourced payrolling, independent contractor compliance, and contractor management services. Founded in 1974, IES has grown into one of San Diego’s largest women-owned businesses and has been named one of the city’s “Best Places to Work” for 10 years in a row.

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