The final details of the Department of Homeland Security’s (DHS) long-awaited H-1B modernization rule, which was first suggested in October 2023, have been approved. The rest of the regulation will be published in the Federal Register tomorrow and will go into effect on January 17, 2025, whereas the H-1B cap provisions went into force in March of this year. With a few changes that are mostly in favor of employers, the final rule is almost exactly the same as the agency’s proposed rule.
Some of the final regulation’s most important clauses are as follows:
- An H-1B specialized occupation is defined differently under the rule. While some of the changes broaden the definition, others may make it more restrictive. The regulation specifically makes it clear that just because a profession “typically” calls for a bachelor’s degree, it does not necessarily follow that it “always” does. It further explains that if an employer accepts a variety of degree disciplines that qualify, a position may still be considered a specialized profession as long as those fields are “directly related” to the responsibilities of the H-1B employment. DHS included an acceptable definition of “directly related” to the final rule, meaning that the phrase refers to a “logical connection” between the tasks of the H-1B post and the necessary degree.
- The proposed rule included a clause that would have restricted H-1B eligibility for individuals with more generic degree titles, such business administration or liberal arts, but the final rule crucially leaves it out.
- In order to provide businesses with more predictability when submitting a Form I-129, the rule codifies and modestly extends USCIS’s existing policy of deference to its earlier adjudications. According to the rule, USCIS should follow its previous I-129 approval when deciding a Form I-129 involving the same parties and the same underlying facts, unless there has been a significant change in the eligibility requirements or circumstances, a significant mistake in the previous approval, or new material adverse information. The regulatory provision is applicable to all Form I-129 adjudications by USCIS, not only requests for extensions of stay, in contrast to the current approach.
- In the event that an H-1B worker’s place of employment materially changes, the regulation codifies the long-standing obligation of the U.S. Citizenship and Immigration Services (USCIS) that an employer modify a nonimmigrant petition. The amendment must be filed prior to the change occurring. The rule also specifies when a change in location would not necessitate an amendment, such as where the change takes place within the area of expected employment specified in the DOL labor condition application (LCA) that supports the current petition.
- In contrast to the standard H-1B maximum petition validity period of three years, the regulation makes it clear that H-1B beneficiaries who hold a controlling interest in the petitioning entity may be eligible for H-1B status, provided that the beneficiary will perform H-1B-caliber specialty occupation duties for the majority of the time. The initial and first extension of such petitions will be limited to 18 months.
- In addition to codifying the agency’s long-standing practice of requesting contracts and other proof of a bona fide job offer, the rule removes the itinerary requirement for H-1B petitions and refocuses the focus from the current regulation’s requirement to demonstrate an employer-employee relationship to proving the existence of a bona fide job offer. The final regulation incorporates a new clause that clarifies that a petitioner is not obligated to set up precise daily assignments for the whole duration of the period requested in the H-1B petition, in response to public comments. Additionally, the rule stipulates that the H-1B petitioner must be able to be served with process in the United States and have a legal presence there.
- For F-1 students who are the beneficiaries of timely filed, nonfrivolous applications to convert status to H-1B, the final rule extends the cap-gap protection period from October 1 to possibly as late as April 1 of the next calendar year. To enable eligible F-1 status holders avoid status and work authorization lapses while awaiting a change to H-1B status, the regulation extends status and employment authorization for up to six months.
- According to the new rule, if the requested non-immigrant employment validity term has already elapsed by the time the petition is adjudicated, USCIS may provide H-1B employers with the option to change it. The company will have to give a new LCA and pay the higher of the current prevailing or actual salary if the current one does not cover the new validity period. They will also not be allowed to lower the offered rate below the wage specified in the first petition.
- In addition to strengthening and codifying the long-standing site visit program of the Fraud Detection and National Security (FDNS) section at USCIS, the final rule makes it clear that noncompliance with a site visit may lead to the denial or revocation of a petition. Among other places connected to the H-1B employment, the rule also formalizes DHS’s right to visit the site where the H-1B employee works, has worked, or plans to work, including third-party workplaces.
- The scope of several H-1B cap exemptions would be slightly expanded by the final regulation. The updated regulations allow for cap exemption even if research or education is not the organization’s primary activity or mission, provided that it is one of its fundamental activities. This is done to acknowledge that qualifying cap-exempt nonprofit and governmental research organizations, as well as nonprofits affiliated with higher education institutions, may have more than one fundamental activity or mission.
When the new H-1B regulation goes into effect on January 17, employers should be ready for some possible disruptions to the processing and adjudication of H-1B cases. A new Form I-129 will be needed in accordance with the rule, and it will be required on January 17. It can take some time for USCIS adjudicators to learn the new rules and regulations. To comprehend and get ready for the transition, employers should consult with their immigration attorney. It is unclear at this time if the next administration would attempt to amend or repeal the rule, which goes into effect just days before President-Elect Donald Trump takes office on January 20. Any such action would need to be announced and give the public a chance to comment, which usually takes many months.
Please contact us directly if you need help sponsoring workers for H1B visas.
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Sincerely,
Luke Bowman
The Law offices of Luke Bowman