DHS Releases Final H-1B Rule 

The Department of Homeland Security (DHS) announced the final rule, Modernizing H-1B Requirements, Providing Flexibility in the F-1 Program, and Program Improvements Affecting Other Nonimmigrant Workers. The rule, while released, will not officially be published until Wednesday, December 18, 2024. The new rule will take effect on January 17, 2025.

Key Provisions of the New Rule

• Clarifying Requirements and Improving Program Efficiencies
  • DHS is: (1) revising the regulatory definition and criteria for a position to be deemed a “specialty occupation”; (2) clarifying that “normally” does not mean “always” within the criteria for a specialty occupation; and (3) clarifying that the petitioner may accept a range of qualifying degree fields as sufficient to qualify for the position, but the required field(s) must be directly related to the job duties in order for the position to be deemed a specialty occupation.
  • DHS is also updating the regulations governing when an amended or new petition must be filed due to a change in an H-1B worker’s place of employment to be consistent with current policy guidance.
  • DHS is codifying its current deference policy to clarify that, when adjudicating a Form I-129, Petition for Nonimmigrant Worker, involving the same parties and the same underlying facts, adjudicators generally should defer to a prior USCIS determination on eligibility, unless a material error in the prior approval is discovered or other material change or information impacts the petitioner’s, beneficiary’s, or applicant’s eligibility.
  • DHS is also updating the regulations to expressly require that evidence of the beneficiary’s maintenance of status must be included with a petition seeking an extension or amendment of stay. This policy impacts all employment-based nonimmigrant classifications that use Form I-129, Petition for Nonimmigrant Worker.
  • DHS is also eliminating the itinerary requirement, impacting all H classifications.
  • DHS is updating the regulations to allow petitioners to amend the initially requested validity periods (i.e., dates of employment) in cases where the petition is deemed approvable after the requested end date for employment has passed.
• Providing Greater Benefits and Flexibilities: DHS is modernizing regulatory definitions to provide additional flexibilities for nonprofit and governmental research organizations and petitions for certain beneficiaries who are not directly employed by a qualifying organization.
  • DHS is changing the definition of “nonprofit research organization” and “governmental research organization” by replacing the terms “primarily engaged” and “primary mission” with “fundamental activity” to permit nonprofit entities or governmental research organizations that conduct research as a fundamental activity, but are not primarily engaged in research or where research is not a primary mission, to meet the definition of a nonprofit research entity or governmental research organization for purposes of establishing exemption from the annual statutory limit on H-1B visas.
  • DHS is revising the regulations to recognize that certain beneficiaries may qualify for H-1B cap exemption when they are not directly employed by a qualifying organization, but still spend at least half of their time providing essential work that supports or advances a fundamental purpose, mission, objective, or function of the qualifying organization.
  • DHS is also providing flexibility to students seeking to change their status to H-1B by automatically extending the duration of their F-1 status, and any employment authorization granted under 8 CFR 274a.12(c)(3)(i)(B) or (C), until April 1 of the relevant fiscal year to avoid disruptions in lawful status and employment authorization while a petition requesting a change of status to H-1B is pending.
• Strengthening Program Integrity: DHS is strengthening the integrity of the H-1B program through this rulemaking by: (1) requiring that the petitioner establish that it has a bona fide position in a specialty occupation available for the beneficiary as of the requested start date; (2) codifying its authority to request contracts or similar evidence to determine if the position is bona fide; (3) ensuring that the LCA supports and properly corresponds to the petition; (4) revising the definition of “United States employer” by codifying current DHS policy that the petitioner have a bona fide job offer for the beneficiary to work within the United States as of the requested start date; and (5) adding a requirement that the petitioner have a legal presence and be amenable to service of process in the United States.
  • DHS is also clarifying that certain owners of the petitioning entity may be eligible for H-1B status (“beneficiary-owners”), while setting reasonable parameters around H-1B eligibility when the beneficiary owns a controlling interest in the petitioning entity.
  • DHS is also codifying USCIS’ authority to conduct site visits and clarifying that refusal to comply with site visits may result in denial or revocation of the petition.
  • DHS is clarifying that if an H-1B worker will be staffed to a third party, meaning they will be contracted to fill a position in the third party’s organization, the work to be performed by the beneficiary for the third party must be in a specialty occupation, and it is the requirements of that third party, and not the petitioner, that are most relevant when determining whether the position is a specialty occupation.

Summary of Changes from the Notice of Proposed Rulemaking 

This final rule adopts many of the provisions proposed in the NPRM, with revisions as described below.

1. Specialty Occupation Definition and Criteria: In response to commenters’ concerns, DHS is modifying the definition of specialty occupation from the proposed definition, “[t]he required specialized studies must be directly related to the position,” as this language may be misread to conclude that USCIS would only consider a beneficiary’s specialized studies in assessing whether the position is a specialty occupation. DHS is, however, retaining the “directly related” requirement in the definition of “specialty occupation” and related criteria, and is adding language clarifying that “directly related” means there is a logical connection between the degree or its equivalent, and the duties of the position. DHS is removing the references to “business administration” and “liberal arts.” These changes recognize that the title of the degree alone is not determinative and that degree titles may differ among schools and evolve over time.
2. Bar on Multiple Registrations Submitted by Related Entities: DHS will not finalize the proposed change to expressly state in the regulations that related entities are prohibited from submitting multiple H-1B registrations for the same individual. On February 2, 2024, DHS published a final rule, “Improving the H-1B Registration Selection Process and Program Integrity,” 89 FR 7456 (Feb. 2, 2024), creating a beneficiary-centric selection process for registrations by employers and adding additional integrity measures related to the registration process to reduce the potential for fraud in the H-1B registration process. In that final rule, DHS states that it “intends to address and may finalize this proposed provision [expressly stating in the regulations that related entities are prohibited from submitting multiple registrations for the same individual] in a subsequent final rule,” but that “[m]ore time and data will help inform the utility of this proposed provision.” 89 FR 7456, 7469 (Feb. 2, 2024). Initial data from the FY 2025 H-1B registration process show a significant decrease in the total number of registrations submitted compared to FY 2024, including a decrease in the number of registrations submitted on behalf of beneficiaries with multiple registrations. This initial data indicate that there were far fewer attempts to gain an unfair advantage than in prior years owing, in large measure, to the implementation of the beneficiary-centric selection process. As such, DHS has decided not to finalize the proposed change pertaining to multiple registrations submitted by related entities.
3. Contracts: In response to stakeholder comments, DHS is revising to state that USCIS may request contracts or similar evidence “showing the bona fide nature of the beneficiary’s position,” rather than “showing the terms and conditions of the beneficiary’s work” as stated in the NPRM. This revision is intended to clarify that USCIS will review contracts or similar evidence to determine if the position is bona fide.
4. Non-speculative or Bona Fide Employment: In response to a number of comments expressing concern with the term “nonspeculative,” DHS is replacing “non-speculative” with “bona fide,” so that new 8 CFR 214.2(h)(4)(iii)(F) will state, in relevant part, “[a]t the time of filing, the petitioner must establish that it has a bona fide position in a specialty occupation available for the beneficiary as of the start date of the validity period as requested on the petition.” This is not intended to be a substantive change, but to clarify what DHS meant by “nonspeculative.” DHS is also adding to this provision, “A petitioner is not required to establish specific day-to-day assignments for the entire time requested in the petition.” While this was previously noted in the preamble to the NPRM, DHS believes adding this clarification to the regulatory text will help allay commenters’ concerns and avoid future confusion.
5. Beneficiary-Owners: In response to commenters’ concerns about the term “controlling interest” in the regulatory text for beneficiary-owners, DHS is clarifying the term by defining it in the regulatory text, rather than only in the preamble. DHS is adding that a controlling interest means that the beneficiary owns more than 50 percent of the petitioner or that the beneficiary has majority voting rights in the petitioner.

What they’re saying: 

• “These improvements to the program provide employers with greater flexibility to hire global talent, boost our economic competitiveness, and allow highly skilled workers to continue to advance American innovation,” said Secretary of Homeland Security Alejandro N. Mayorkas.
• “The H-1B program was created by Congress in 1990, and there’s no question it needed to be modernized to support our nation’s growing economy,” said USCIS Director Ur M. Jaddou. “The changes made in today’s final rule will ensure that U.S. employers can hire the highly skilled workers they need to grow and innovate while enhancing the integrity of the program.”

What’s next: In order to implement this rule, a new edition of Form I-129, Petition for a Nonimmigrant Worker will be required for all petitions beginning Jan. 17, 2025, which is the rule’s effective date. USCIS will soon publish a preview version of the new Form I-129 edition on uscis.gov.

Erickson Insights and Analysis

Erickson Immigration Group will continue to monitor developments and share updates as more news is available. Please contact your employer or EIG attorney if you have questions about anything we’re reporting above or case-specific questions.