What’s Happening?
On October 23, 2023, USCIS published a proposed rule to modernize the H-1B program. The proposed rule primarily aims to address abuse of the H-1B cap registration system and to streamline requirements for the H-1B program. The proposed rule would revise the definition of an H-1B specialty occupation, clarify the definition of employer-employee relationship, extend the duration of F-1 OPT cap gap work authorization, and take various measures to enhance the integrity of the H-1B cap registration system, among other things. The proposed provisions will not take effect until finalized and the agency clarified that the proposed rule, especially the amendments to the H-1B registration process, may be finalized in stages and may or may not be implemented in time for the upcoming FY2025 H-1B registration window.
USCIS will accept public comments submitted online on or before December 22, 2023. Following the public comment period, the agency will review all comments and ultimately publish a final rule formally amending the H-1B regulations.
Proposed Changes to the H-1B Program and Regulations
H-1B Cap Registration System Selection
Under the proposed rule, USCIS would change the selection process from a registration-based selection process to a unique beneficiary-based selection process. Under the new process employers would still submit registrations on behalf of beneficiaries but the lottery would be run based on unique beneficiary rather than based on each registration, with the aim of leveling the playing field by providing each unique beneficiary the same statistical chance of selection in the lottery regardless of how many registrations are filed on their behalf. The change seeks to safeguard against attempts to raise a beneficiary’s odds by submitting multiple registrations, noting that the agency data found that in prior fiscal years some beneficiaries had as many as 85 registrations submitted on their behalf. The amendments to the registration process also seek to strengthen measures barring related entities from submitting multiple registrations where no legitimate business reason exists to do so.
USCIS notes that it cannot confirm whether this part of the proposed rule will be finalized in time for the FY2025 registration window and does not want to rush the rollout without sufficient testing by USCIS of the new unique beneficiary-based selection process.
Bona Fide Offer Requirement
The proposed rule would codify USCIS’s authority to request contracts and other evidence that a bona fide, non-speculative job offer exists for each beneficiary. In addition, the proposed rule would require that the petitioner have a legal presence and be amenable to service of process in the U.S., eliminate the itinerary requirement for H-1Bs involving third party placement, and add language clarifying that a bona fide job offer may include telework, remote work, or other off-site work within the United States.
Specialty Occupation Definition
USCIS proposes to revise the definition and criteria of “specialty occupation” in the H-1B context, both granting greater flexibility to the definition and tightening the required relationship between a position’s duties and degree fields. The proposed rule would clarify that an occupation that “normally” requires a bachelor’s degree need not “always” require one, and that a position may qualify as an H-1B specialty occupation even if the employer allows a range of degrees. However, where the employer allows a range of degrees, there must be a direct relationship between the job duties and each of the degree fields; a general degree, like an MBA, without further specialization would be insufficient.
The proposed rule also seeks to clarify where the beneficiary will be employed by a third party, it is the job requirements of the third party, not the petitioner, that determine whether the position is a specialty occupation.
Location Changes and Amended Petitions
The proposed rule would clarify the requirement that an employer file an amended or new H-1B petition due to material changes in the place of employment by codifying the guidance from its 2015 Policy Memorandum USCIS Final Guidance on When to File an Amended or New H–1B Petition After Matter of Simeio Solutions, LLC,’’ PM–602–0120 (July 21, 2015). Specifically, any change of work location that requires a new LCA also requires the petitioner to file an amended or new H-1B petition before the change takes place.
F-1 Cap-Gap Protection Period
USCIS proposes to extend the authorized employment cap-gap period for those with F-1 status by up to six months. Currently, the automatic extension is valid only until October 1 of the fiscal year for which H-1B status is being requested. The proposed rule would change the automatic extension end date from October 1 to April 1 of the applicable fiscal year.
Requested Start Date
The proposed rule would clarify that petitioners may request start dates that are after October 1 of the relevant fiscal year, so long as the requested start date is six months or less from the date the petition is filed.
Beneficiary-Owners
The proposed rule would clarify that beneficiaries who are owners of a petitioning entity may be eligible for H-1B status, but that certain conditions will apply where the beneficiary owns a controlling (over 50%) interest in the petitioning entity, including that such beneficiary owners must spend a majority (more than 50%) of their time performing specialty occupation work and limiting the validity period of the initial petition and first extension to 18 months each.
Exemptions
The proposed rule would update the definition of H-1B cap-exempt employers to include nonprofit and governmental research organizations that conduct research as a fundamental activity, even if it is not their primary mission. The proposed rule would also update the requirements for cap-exempt beneficiaries to exempt beneficiaries who provide essential work to a qualifying organization, even if the organization does not directly employ the beneficiary, and even if the beneficiary’s duties do not further one of the organization’s essential purposes.
Other proposed changes to the H-1B regulations include:
Codifying USCIS’s ability to deny or revoke an H-1B petition where the underlying registration contained a false statement or was otherwise invalid;
Codifying USCIS’s authority to conduct site visits;
Allowing petitioners to amend the validity period dates requested on their H-1B petitions if the requested validity period has passed by the time USCIS adjudicates the petition (noting this may require the submission of an update LCA and may not be possible where material changes have occurred);
Codifying USCIS’s deference to its prior adjudications where there has been no material change in the underlying facts, which would apply to all I-129 requests for extension of status; and
Expressly requiring that evidence of maintenance of status be included with petitions seeking an extension or amendment of stay, which would apply to all I-129 requests for extensions or amendments of status.
Please note that the above is for informational purposes only and does not constitute legal advice. For specific questions about how the proposed regulations may affect your specific circumstances or about submitting a public comment, please contact your team at D&S.