US Department of Homeland Security Publishes H-1B Modernization Rule
On December 18, 2024, the Biden administration’s Department of Homeland Security published its final rule to overhaul several aspects of the H-1B visa program. This final rule, which takes effect 30 days after publication, is designed to enhance the H-1B program's efficiency, flexibility, and integrity while providing clearer guidelines and protections for US workers. The changes are intended to modernize the program, add certain benefits and flexibilities, and improve program integrity.
This alert summarizes key provisions of this new rule.
Specialty Occupation. The H-1B professional work visa status has always required a job offer from a US employer in a “specialty occupation.” This new rule now specifically clarifies that “specialty occupation” means that the required education (bachelor’s degree) must be “directly related” to the offered job. The rule further clarifies that this means there must be a “logical connection” between the offered position and degree. In practice, this part of the rule doesn’t change current practice and is essentially codifying the current practice in not accepting a generalized degree as a qualifier for “specialty occupation.” The new rule also recognizes and codifies the current practice of allowing for a range of degree fields to qualify for the position as long as these fields are “directly related” to the job duties. This is further clarified to confirm that the degree requirement does not mean that the “normal” requirement of a related degree must “always” be required.
Amended H-1B Petitions. The new rule now codifies prior case law to confirm that an amended H-1B petition must be filed if a new Labor Condition Application (LCA) is required. Most commonly, this will impact H-1B employees who change worksites to a location that is beyond commuting distance from the current H-1B job location. In those situations, a new LCA is required to cover the employment at the new worksite, so consequently, an amended H-1B petition must be filed.
Deference to Prior H-1B Approvals. For many years, USCIS recognized a deference policy to prior approvals. This meant if an H-1B petition was previously approved, USCIS should defer to that prior approval when an H-1B extension petition is filed under the same or similar facts. This policy was in place for many years, but only as a matter of practice rather than law. The previous Trump administration eliminated this policy and the Biden administration re-implemented it, but again, only as a matter of policy. Now, this deference policy becomes a rule that must be followed by USCIS adjudicators. Should the new Trump administration want to change this again, new regulations to specifically eliminate deference will be required.
Maintenance of Status. Consistent with current practice, the rule requires H-1B petitioners to submit evidence of the employee’s maintenance of current US status for eligibility for a change of status to H-1B, extension of status, or H-1B amended filings.
Elimination of Itinerary Requirement. Before this rule, some H-1B petitions required submission of an itinerary of work locations, especially if the H-1B employee would be working at multiple locations or client site locations. This requirement has been eliminated, but the requirement to list all known work locations on both the LCA and H-1B petition is still in place. And, as indicated above, a change of work location that requires a new LCA, also requires an amended H-1B filing.
Validity Period Adjustments. This part of the rule now allows petitioners to amend initially requested validity periods if the end of the validity period expires before adjudication. This will be a rare situation, but sometimes H-1B adjudication is lengthy enough that by the time of approval, the validity period has already expired. With this new rule, amended validity periods can be requested in conjunction with a motion to reconsider or appeal, to ensure that with an approval, the H-1B validity continues. Note that all H-1B validity periods must be supported by a certified LCA.
H-1B Cap Exemptions. Certain employers are exempt from the annual numerical H-1B quota of 85,000, including institutions of higher education and nonprofit and governmental research organizations. USCIS had implemented guidance on a variety of H-1B cap-exemption criteria and now some of these are codified in this rule. The new rule includes modernized definitions to confirm that cap-exempt H-1B petitions are permitted even if the H-1B worker is not directly employed by the cap-exempt organization, as long as the H-1B worker is performing work that is part of the “fundamental activity” of that organization. This “fundamental activity” replaces prior language that required the H-1B employee to be “primarily engaged” in the “primary mission” of the organization.
Automatic Extension of F-1 OPT. This part of the rule revises the automatic “cap-gap” extension of the F-1 OPT employment authorization end date from October 1 to April 1 of the following year (a six-month extension). Many times, USCIS does not approve the selected H-1B petitions before October 1. This can mean that an F-1 employee on OPT with validity that expires prior to October 1 would have to stop employment on October 1 and not be eligible to resume employment until the H-1B petition is approved. This new rule adds six months validity to the F-1 OPT “cap-cap” extension, thus allowing for additional time for ongoing employment while the cap-subject H-1B petition is adjudicated.
Bona Fide Job Offer in a “Specialty Occupation.” This part of the rule codifies USCIS’s practice of requiring petitioning employers to provide evidence that a position meeting the criteria for H-1B “specialty occupation” is available for the beneficiary on the requested start date. The rule confirms that USCIS has the authority to request contracts, agreements, or other similar evidence to make this determination. Furthermore, the LCA must support and properly correspond to the H-1B position.
H-1B Beneficiary – Owners. It has always been possible for an H-1B beneficiary to also be a minority owner of the petitioning employer as long as an “arms-length” employer/employee relationship continues to exist. For example, an H-1B employee may have a minority equity interest in a company but also have a key skill needed by that company. Generally, USCIS would approve these as long as the H-1B beneficiary held a minority interest and the company retained the power to hire or terminate the H-1B part-owner. This new rule now clarifies that an H-1B petition is possible even if the beneficiary has a controlling interest in the H-1B petitioning employer. The rule also outlines some specific parameters for eligibility.
Site Visits. Through its Fraud Detection and National Security (FDNS) Directorate, USCIS conducts site visits of petitioning employers to confirm information in the H-1B petition. Petitioners pay an additional $500 fee with initial H-1B petitions to help fund these site visits. The new rule now codifies USCIS’s authority to conduct these site visits and that refusal to comply may result in denial or revocation of the H-1B petition. The rule also confirms that these site visits can occur at a third-party work location.
Third Party Placement. Placement of an H-1B employee at a petitioner’s client site or other similar site not fully controlled by the petitioner has always been possible. This new rule clarifies that when an H-1B worker is staffed at a third-party site, USCIS will look at that third party’s requirements for the position rather than the petitioner’s stated requirements. This rule is to ensure that even in these unique situations, the H-1B position is one that meets the “specialty occupation” criteria for the work to be performed at the third-party site. As indicated above, this rule also confirms that USCIS has the authority to request contracts, agreements, or other similar evidence to make this determination. These contracts or agreements may also help USCIS to understand that a proper employer-employee relationship exists between the H-1B employee and the petitioning employer.
The rule does not attempt to end third-party staffing situations for H-1B eligibility, but it does clarify the circumstances under which third-party placements are permissible. The rule distinguishes between staffing companies that place workers at a third-party worksite to fill a role at the company; and companies that place workers at a client site temporarily to provide services to a third party.
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