United States: Lawsuits Question Procedure And Substance Of H-1B Lottery

Last Updated: August 23 2016
Article by Cassie M. Ramos

Most Popular Article in United States, August 2016

Late this spring, two lawsuits were filed against the U.S. Department of Homeland Security and U.S. Citizenship and Immigration Services (USCIS) seeking information about and challenging the administration of the H-1B visa lottery process.

The first lawsuit was filed by two immigration organizations – American Immigration Lawyers Association (AILA) and the American Immigration Council (AIC) – who "teamed up" to file a lawsuit requesting information about the lottery process.

The second lawsuit is a class action filed on behalf of two companies and their employees. This lawsuit claims that the H-1B lottery process is illegal because the language of the statute does not allow for a lottery.

Background on the H-1B Cap and Lottery

U.S. companies use the H-1B program to employ foreign workers in occupations that require at least a bachelor's degree in a specific field. It is the most commonly used work-authorized visa category due to its versatility. As a result, many companies want to file for an H-1B, but there is a statutory cap to the number of new H-1B visas that can be issued each fiscal year. Only 65,000 new H-1B visa numbers are available every year, with an additional 20,000 reserved for individuals with at least a master's degree from a U.S. institution. When more petitions are filed than available in these two categories, USCIS employs a computer-generated random selection process, or lottery, to select which petitions it will adjudicate on the merits. The agency then returns the H-1B petitions not selected, along with the filing fees. It is important to note that this lottery does not apply to those individuals who have previously been counted against the H-1B cap or will work for an institution that is exempt from the cap.

USCIS determined that the lottery system is the fairest way to decide which petitions are reviewed, but that may not be true in all situations. This year alone, USCIS announced that 236,000 H-1B cap-subject petitions were filed within the first five business days of April, when petitions could be first filed, after which no further petitions were accepted. That means that each petition had about a 30% chance of selection. For master's degree holders from U.S. institutions, this statistic is slightly higher because if a master's cap petition is not selected out of the 20,000 lottery, then it gets put into the lottery pool of 65,000.

I became a lawyer because math is not my strong suit, but even I know that 1 in 3 odds are not very good. And the projections are that next year, the odds will be 1 in 4. The unfairness is that applying multiple years in a row does not offer a better chance of selection. This makes it difficult for companies and their employees to plan for the future. Petitioning employers have to be very strategic and lucky when filing an H-1B cap-subject petition to account for all possible scenarios. At Mintz Levin, our team makes sure that all clients have contingency plans even before the petition is submitted so they know how they will proceed in the event of non-selection.

The AILA/ AIC Lawsuit

The first lawsuit seeks to clarify and challenge the lottery-based H-1B system, as this is the fourth year in a row that there has been a lottery. AILA, an organization whose mission is to "promote justice, advocate for fair and reasonable immigration law and policy, advance the quality of immigration and nationality law and practice, and enhance the professional development of its members", and AIC, an organization that "works to strengthen America by honoring our immigrant history and shaping how America thinks about and acts towards immigrants and immigration" filed a suit in May. This lawsuit requested that a court force USCIS to disclose its lottery process.

AILA has been attempting to obtain this information since November 2014 via a Freedom of Information Act (FOIA) request. In particular, the suit seeks more details on how the electronic random selection process works, what causes a petition to be rejected and not eligible for lottery at all, and how USICS determines how many petitions to select in the lottery. This last piece is most interesting. USCIS selects more petitions than the statutory cap allows, anticipating rejection, denial, or revocation based on historical data. But the agency has never revealed how many more it selects or how it determines that number.

While this suit will not bring about any actual changes in how the process is administered, it will allow companies and employees to make more sound decisions on proceeding with H-1B cap-subject petiton, based on the odds.

The Class Action Employer/ Employee Lawsuit

Another suit was filed on behalf of two companies and their employees. This lawsuit claims that the H-1B lottery process is illegal because the language of the statute does not allow for a lottery. INA § 214(g)(3) states, "Aliens who are subject to the numerical limitations of paragraph (1) shall be issued visas (or otherwise provided nonimmigrant status) in the order in which petitions are filed for such visas or status." [Emphasis added] To remedy this unlawful distribution system, the lawsuit argues, USCIS should implement a filing date priority system where petitioners and beneficiaries are given a place in line, similar to the priority date system for immigrant visa numbers.

The relief this lawsuit is seeking makes sense theoretically and would likely be similar to the way green cards are allocated under the green card quota system. It would allow petitioners and beneficiaries to know that they have a place in line, so it becomes a question of when the H-1B visa will be issued rather than whether selection will happen at all. Companies can plan properly when to expect an employee to have secure employment authorization.

However, this solution is not practically viable. If 236,000 people apply in one year for a cap-subject H-1B petition, and only 85,000 are going to get a number at one time, it will take about 2 years for beneficiaries to receive an H-1B visa number. In the meantime, what happens if the petitioner's job is no longer available to the beneficiary? Does the beneficiary still get the benefit of having applied with a different employer? Not only that, how does the beneficiary remain in the U.S. and continue working for those two years? There are limited options for continued employment authorization, hence the allure of the H-1B visa. If the beneficiary is a STEM graduate, then the individual may be eligible for 36 months, or three years, of post-completion employment authorization. But what about those beneficiaries who did not graduate with a STEM major? They have only one year of post-completion work authorization, and then they have to find another way to remain in the U.S. It seems circular to apply for the H-1B just to get a spot in line, but then still have to find alternative employment authorization options for about two years while waiting.

For the relief in this lawsuit to make sense, USCIS would have to provide a mechanism for H-1B beneficiaries to extend their employment authorization while they wait. It could be as simple as extending the Cap Gap provision, which allows F-1 students to continue working through September 30th to bridge the gap between an EAD expiring and the effective date of their cap-subject H-1B petition. A provision like this could eliminate the need for post-completion OPT to bridge the gap. At the same time, this would not resolve the other question of what happens when a beneficiary leaves the petitioner's employ.


These lawsuits highlight not only the flaws in the H-1B lottery system, but they also reveal that there is no right answer to the best way to distribute the limited number of H-1B visas. The lottery process is a game of chance, while a priority date system raises questions about what happens to a beneficiary's employment authorization while they have a long wait. Of course, the best solution is for Congress to raise the statutory number of H-1B visas allowed, making it easier for employers to retain the best and the brightest coming out of U.S. educational institutions.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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