A federal district court Sept. 15 struck down a Trump administration rule that would have given high-wage positions priority in the H-1B selection process, replacing the lottery-based process currently in use.

The final rule, “Modification of Registration Requirement for Petitioners Seeking to File CapSubject H-1B Petitions,” was issued by the Department of Homeland Security on Jan. 14. It followed an October 2020 proposed rule that was struck down in December along with a proposed H-1B rule from the Department of Labor meant to establish a minimum wage for H-1B visa allocations.

The rule would have had an adverse effect on companies looking to sponsor H-1B petitions for entry-level professionals positions with corresponding entry level wages, including petitions for recent foreign student graduates from US universities, according to an article from JD Supra. Nonprofit institutions, including many hospitals and small businesses, would also be at a disadvantage. Institutions of higher learning would also be affected. Testimony presented to the court said “the opportunity to participate in the H-1B visa program is a factor that international students take into consideration when deciding where to study. … the changes to the H-1B visa program … would deter international students from enrolling in universities and other institutions of higher learning, which would negatively impact those institutions financially and socially.”

The court determined the rule must be set aside because Chad Wolf, who was serving as acting secretary of the agency at the time of the rule’s establishment, was not lawfully appointed to that role. The court did not address the plaintiff’s argument that the rule is inconsistent with the Immigration and Nationality Act.