As published in Lexisnexis.com on January 16, 2025
As published in the Immigration Daily on January 22, 2025
USCIS’s second part of the H-1B proposed regulations, “Modernizing H-1B Requirements, Providing Flexibility in the F-1 Program, and Program Improvements Affecting Other Nonimmigrant Workers”, finalized on December 18, 2025, https://www.federalregister.gov/documents/2024/12/18/2024-29354/modernizing-h-1b-requirements-providing-flexibility-in-the-f-1-program-and-program-improvements goes into effect on January 17, 2025, three days before President-elect Donald Trump’s inauguration. The following are most of the changes with numbers in parentheses referring to the specific pages of the 400+ page rule:
- Deference to prior adjudications is in and the rule accords deference to any Form I-129 petition – not just extension requests as DHS agreed with the benefits of applying it to all nonimmigrants using form I-129 involving the same parties and the same underlying facts, not just to those seeking extension of stay – “Those seeking a change of status, amendment or extension of stay, or consular notification of approval warrant the same deference unless there is a material error involved with the prior approval, material change in circumstances or eligibility requirements, or new, material information adversely impacting the petitioner’s, applicant’s, or beneficiary’s eligibility.” (122). However, when there has been a material change in eligibility requirements, USCIS adjudicators do not need to give deference. (123-124). Also, the deference policy will not be grandfathered in when changes in eligibility of the specialty occupation occur including the revised definition of and criteria for “specialty occupation” promulgated in this rule. (128). Further for amendments, DHS declined to give deference saying that if the change in client location requires a new LCA, the new location would constitute a material change. (129).
- For “nonprofit research organizations”, the regulation recognizes that qualifying organizations may have more than one fundamental purpose and the final rule expands the definition of “nonprofit research organizations” to include entities with research as a fundamental activity, even if it is not their primary mission by replacing “primarily engaged” and “primary mission” with “a fundamental activity”. It would still have to be an important and substantial activity, although it need not be the organization’s principal or foremost activity. DHS declined to state that later stages of research, such as technology development and transfer, qualify for the exemption which is for basic and applied research (166). Documentation to prove nonprofit or tax-exempt status are tax returns, tax exemption certificates, references to the organization’s listing in the IRS most recent list of tax-exempt organizations, articles of incorporation, bylaws, or other similar documentation. It can of course be in the form of an IRS letter. (167). Use of a Professional Employer Organization (PEO) will not, standing alone, negate an employer’s cap-exempt qualification as USCIS will consider all relevant factors and review the totality of the evidence for each petition using the preponderance of the evidence standard to determine cap-exempt status (169).
USCIS also recognized in this context that beneficiaries may qualify for an exemption when not directly employed by a qualifying organization but still spending at least half of their time providing essential work supporting or advancing a fundamental purpose, mission, objective, or function of the qualifying organization (171-172).
- Clarification that “normally” does not mean “always” in deciding specialty occupation degree is in. DHS backed away from reliance on the Occupational Outlook Handbook (OOH) and declined to define the word to mean “more often than not” saying the such a change would essentially require the petitioner to demonstrate a specific percentage of positions that require a bachelors degree and could potentially make it more difficult for petitioners to demonstrate eligibility if the evidence that they submitted such as the OOH does not specify a percentage. It also said that it declined to be wholly reliant on O*Net data to demonstrate a degree requirement as there are gaps in the data, particularly as the data does not provide information on whether the degrees required must be in a specific specialty directly related to the occupation and may also be lacking for new and emerging fields of technology or occupations not covered in detail. It emphasized that no one factor alone, including O*Net, is determinative on whether a particular position qualifies as a specialty occupation (91).
- Range of qualifying degrees may have to be explained. However, also in is that although petitioners may accept a range of qualifying degree fields as qualifying, the required fields must be directly related to the job duties. It reiterated that “each of the fields must be directly related to the duties of the position.” “To only require the petitioner to justify that the degree of the beneficiary relates to the occupation conflates these two requirements. DHS does not agree that it is overly burdensome for the petitioner to establish how each field of study is in a specific specialty providing ‘a body of highly specialized knowledge’ that directly relates to the duties and responsibilities of the particular position….” (87-88).
- Cap-gap extension is extended until April 1 of the next year.
- A petitioner must establish that it has a bona fide position in the specialty occupation available as of the requested start date – this shocked many in the IT consulting industry and other staffing company advocates as seen in the rule’s comments and responses. To the concern that employers should assume the risk of finding sufficient productive work for an employee to perform and that USCIS has repeatedly confused speculative employment with a speculative project, and that the provisions are “individually and collectively incompatible with the entire practice of contracting specialized IT services”, USCIS did not agree that codifying the requirement of bona fide employment would eliminate IT staffing companies and countered that the position must be there at the time of filing the I-129 and without having the job there, there was no way to see if it is a specialized occupation (201-206). USCIS continued that it has long held that the H-1B classification is not intended as a vehicle for person to engage in a job search within the United States, or for employers to bring in temporary foreign workers to meet possible workforce needs arising from potential business expansions with the expectation of potential new customers or contracts (208). It further added that it was not proposing to require non-speculative projects for the entire validity period requested, but as noted in the proposed rule, the petitioner must demonstrate that at the time of filing, it has a nonspeculative position in a specialty occupation available to the beneficiary as of the start date of the validity period as requested on the petition (221).
- Where the beneficiary is being staffed to a third party, the work to be performed by the beneficiary for the third-party must be in a specialty occupation and it is the requirements of the third party and not the petitioner that are the most relevant. A commenter complained that the provision for staffing companies to prove job requirements would place the staffing company in an impossible position if the end customer is unwilling to provide the necessary information; that there may be difficulty in obtaining necessary documents where there are second and third level staffing companies in between the petitioner and the end customer; and that customers may want no involvement with attesting to the requirements of the positions stating that these noncustomers have concerns over joint employment liability – to which DHS said that it remains the petitioner’s burden to establish eligibility for the benefit sought and stated the type of evidence that the petitioner could produce, e.g. master services agreement or statement of work, or documents reasonably obtainable from the third-party, e.g. letter from the client. (282).
- Beneficiary-owners will be allowed to file, but USCIS will limit the validity of the initial H-1B petition and first extension to 18 months each. The final rule removes the reference to an employer-employee relationship requirement since it is now allowing beneficiary owners with more than 50% or with majority voting rights to qualify with 18 months on initial and extension petitions and further extensions in three year increments as long as they are performing specialty occupation duties the majority of the time although they may perform duties that are directly related to owning and directing the business. Commenters had concerns about the wage to be paid. For beneficiary owners, this would be a combination of occupations, and DHS said that the higher prevailing wage determination must be used, even when the beneficiary owner is performing nonspecialty occupation duties as authorized by USCIS in accordance with the final rule. (245). On commenters requesting flexibility on prevailing wage requirements reasoning that many startups may not see positive cash flow for a long period of time making it challenging for owners to both adhere to wage requirements and make investments to grow their business, and that LCA wage requirements force many entrepreneurs to take on entry level roles, as startups have limited cash reserves to pay market rate salaries for CEO and other C suite roles, DHS emphasized that it does not have the authority to alter statutory requirements or DOL regulations related to LCA’s and cannot provide any exceptions. (254).
- Specialty occupation is changed from requiring a degree “in the specific specialty” to a degree “in a directly related specific specialty” and the definition of “directly related” is “a logical connection between the required degree, or its equivalent, and the duties of the position.” On a trade association suggestion that USCIS issued guidance that any engineering degree would support any engineering position in meeting the definition of specialty occupation, the response was that USCIS regularly approves H-1B petitions for qualified beneficiaries who are to be employed as engineers. (83) DHS further emphasized on software developers that the petitioner would have the burden to establish how the fields of study within any engineering degree provide a body of highly specialized knowledge directly relating to the duties and responsibilities of the software developer position (83).
- The regulation revamps the language of the one in four criteria that a petitioner must meet to prove specialty occupation–
- The degree or equivalent is normally the minimum requirement to enter the occupation with USCIS now defining normally as characterized by that which is considered usual, typical, common, or routine – and that normally does not mean always.
- Clarifies that parallel positions among similar organizations is in the employer’s industry in the United States.
- The occupation normally requires a bachelors degree to perform the job duties of the position instead of the old definition “for the position”. Also if placing the H-1B by contract at a third party, the “normally” required refers to the third-party.
- The knowledge required for filling the specific duties of the proffered position are so specialized, complex, or unique that the knowledge required to perform is normally associated with the now revised degree or equivalent requirements.
- The regulation also requires that the LCA “supports and properly corresponds to” the H-1B petition and comments and responses strongly indicate that DHS will be exercising its expanded codified authority in this area. To a commenter inquiry whether USCIS would now assert that a position should be wage level II or wage level III when the petitioner has followed DOL guidance in determining a wage level I position, or if USCIS would now assert the SOC code is not correct on the LCA after the petitioner has reviewed the SOC codes and selected the one that they feel is best aligned with the position, USCIS gave an example that “if the petitioner and other supporting documentation indicates that the beneficiary’s position and associated job duties requires a wage level 2 or wage level 3 per DOL guidance, but the LCA is certified for a wage level 1 position, that may call into question whether the petition is supported by an LCA that properly corresponds to the petition or whether the offered position was accurately described in the petition. Similarly, USCIS may find a material discrepancy in cases where the SOC code on the LCA is inconsistent with the job duties as described in the H-1B petition” (227).
- The rule codifies USCIS authority to conduct site inspections and impose penalties for failure to comply with unannounced worksite visits, enter businesses and homes without a warrant to question, obtain information and use it against the applicant. Comments were raised concerning the authority or desirability of FDNS to enter employees’ homes and third-party companies. DHS said that it declined to restrict USCIS officers from going to homes as to do otherwise would create a loophole wherein any petitioner may exempt themselves from their evidentiary burden simply by locating workers at the residences (265-266). FDNS can also inspect third-party locations, DHS saying that there is no requirement that a petitioner place a beneficiary at a third party location – but if a petitioner chooses to petition for a beneficiary that is placed at a third party location, it remains the petitioner’s burden to demonstrate eligibility, meet all requirements of the H-1B petition, and employ the H-1B worker consistent with the terms of the approved petition. (268). It cited the same loophole strategy for not exempting beneficiaries at third-party locations.
The regulation was finalized in the last weeks of the Biden Administration, and it is difficult to predict whether it will stand or be rescinded by the incoming Trump team. It cannot be undone by Executive Order but could be under the Congressional Review Act which allows a joint resolution of Congress by majority vote to nullify regulations finalized in the last 60 days of the legislative session if such is done in the first 60 legislative days of the new Congress. On the plus side for not canceling it are that the changes are mostly conservative and that the President-elect in the recent war of words in the Republican camp over the H-1B program supported Elon Musk and Vivek Ramaswamy, his nominees for heading up The Department of Government Efficiency (DOGE), both supporters of the H-1B program, saying in a phone interview that “I have many H-1B visas on my properties. I’ve been a believer in H-1B. I have used it many times. It’s a great program.” https://www.cnn.com/2024/12/28/politics/trump-musk-foreign-worker-visas-backlash/index.html On the negative side are that it is a Biden regulation and Mr. Trump is loath to give credit to him for anything, and it does not go nearly as far as his proposals in his previous term to change the H-1B program.
So we will see.
(For further information on the regulation when first proposed, see the author’s articles Proposed Changes to the Evidence Required for Establishment of H-1B “Specialty Occupation” Continued Reliance on OOH Expanded Authority of DHS To Compare LCA Position With H-1B Petition Etc Mean Tightened Adjudication Standards https://discuss.ilw.com/articles/articles/498435-article-proposed-changes-to-the-evidence-required-for-establishment-of-h1b-specialty-occupation-continued-reliance-on-ooh-expanded-authority-of-dhs-to-compare-lca-position-with-h1b-petition-etc-mean-tightened-adjudication-standards-by-alan-lee-esq and Clear Beneficial Changes to the H-1B Program in the Proposal https://discuss.ilw.com/articles/articles/498821-article-clear-beneficial-changes-to-the-h-1b-program-in-the-proposal-by-alan-lee-esq