The U.S. Department of Homeland Security (DHS) has introduced a final regulation that contains significant changes to the H-1B visa program, which governs the entry of foreign specialty workers into the U.S. The overhaul, aimed at modernizing and improving the program, was first proposed in October 2023, with portions already in effect since March 2024.
What’s Happening
The final regulation is set to take effect on January 17, 2025, just days before the change in presidential administration. The new regulation includes several key modifications aimed at streamlining processes, tightening eligibility standards, and enhancing flexibility for H-1B employers and workers, while also strengthening enforcement. The key provisions of the final regulation are summarized below:
Qualification for Specialty Occupations: The definition of “specialty occupation” has been revised to offer more flexibility but also potentially narrowing eligibility. Occupations that “normally” require a bachelor's degree may still qualify, but employers must demonstrate a direct relation or “logical connection” between the degree and job duties. This final regulation also removes previous proposed provisions that would have limited eligibility for those with general degrees (e.g., business administration or liberal arts).
Third Party Placement: The final regulation includes a provision for certain off-site placements, stating that when a beneficiary is “staffed” to a third party, the third party's requirements—not the petitioner's—will be used to determine if the position qualifies as a specialty occupation. The final rule defines “staffing” as when a foreign national is contracted to fill a role within the third party’s organization and becomes part of its organizational structure, rather than simply providing services to the third party.
Deference to Prior Approvals: The rule codifies the USCIS policy of deferring to previous USCIS visa approvals, ensuring greater predictability for employers when filing visa extensions or amendments. The provision will also help to reduce processing delays and avoid unnecessary requests for evidence or case denials. The new regulation also expands deference stating that the regulatory provision applies to all Form I-129 adjudications by USCIS, not just requests for extensions of stay. This policy was previously rescinded under the Trump administration and DHS’s decision to codify it in the new regulation will make it more difficult to rescind during Trump’s next term.
F-1 Student Cap-Gap Protections: The new rule extends Cap-Gap protections for F-1 visa holders with timely filed H-1B change of status petitions by up to an additional 6 months (from October 1 to as late as April 1 of the following calendar year), significantly reducing the risk of gaps in their employment authorization. Current Cap-Gap protections extend student F-1 work authorization only until the end of the applicable fiscal year on September 30th. If an H-1B change of status petition remains pending beyond that date, it can result in a gap in an F-1 student’s employment authorization.
Eligibility for Business Founders/Owners: The regulation clarifies that business founders with a controlling interest in their company can qualify for H-1B status, provided they perform specialty occupation duties most of the time. However, initial approvals and first extension will be limited to 18 months rather than the typical three-year validity period.
Amendment of Petitions for Location Changes: The new regulation codifies what is commonly referred to as the longstanding USCIS “Simeo Policy” in which employers must amend their petitions when there are changes in the employment location of an H-1B worker, except in cases where the new location is within the area listed in the original Labor Condition Application (LCA), in which case only an LCA reposting is required.
Bona Fide H-1B Employment: The new regulation shifts the focus from proving an employer-employee relationship to establishing a bona fide job offer. It also codifies the agency's practice of requesting contracts as evidence, while removing the itinerary requirement for H-1B petitions. The rule clarifies that petitioners need not provide detailed day-to-day assignments for the entire petition period. It also requires H-1B petitioners to have legal presence in the U.S. and be subject to service of process in the U.S.
Cap-Exempt Organizations: The regulation slightly expands the scope of H-1B cap exemptions for nonprofit and governmental research organizations. These organizations no longer need to prove that research is their primary activity, as long as it is one of their fundamental activities.
Site Visit Program: The rule strengthens the USCIS Fraud Detection and National Security (FDNS) unit’s site visit program, enabling site visits at work locations, including third-party worksites, to ensure compliance. Employers refusing site visits could face petition denials or revocations.
Changes to Petition Processing and Amendments: New provisions will allow employers to amend petitions if the requested employment validity period has passed before the petition is adjudicated. Employers must provide an updated LCA and meet prevailing or actual wage if the LCA expiration is prior to the end of the requested amended validity period.
What you Need to Know:
Potential disruptions to H-1B case processing can be expected once the rule takes effect as a result of the introduction of a new, mandatory Form I-129. In addition, given some of the significant ways in which the new rule will change eligibility requirements, USCIS adjudicators may face a learning curve as new policy guidance on the implementation of the new regulations is pushed down from USCIS leadership. It will also be critical for employers to work with immigration counsel to ensure compliance with the new regulatory requirements.
Overall, the rule aims to make the H-1B program more predictable and efficient, addressing concerns around delays and compliance issues while maintaining protections for U.S. workers and streamlining the process for employers seeking to hire foreign talent. While the Biden administration has finalized the rule, it remains uncertain whether the incoming administration under President-elect Donald Trump will attempt to alter or withdraw the regulation after taking office in January 2025 (a process which, itself, would take at least several months).