USCIS Proposes Significant Changes to the H-1B Program

The H-1B program may undergo significant changes as early as October 1, 2024. The Department of Homeland Security U.S. Citizenship and Immigration Services (USCIS) recently published a 94-page proposed rule to “modernize” the H-1B program.  

The H-1B is a temporary (nonimmigrant) visa category for employers to petition for workers in “specialty occupations.” A “specialty occupation” requires the use of a body of highly specialized knowledge and at least a bachelor’s degree or the equivalent in a specific specialty. Jobs in STEM fields—science, technology, engineering, or mathematics—frequently qualify. 

Congress caps the limits on annual H-1B visa numbers to 65,000 with 20,000 additional visas for people who graduate with a master’s or Ph.D. degree from a U.S. institution of higher education, plus certain exemptions to the cap. 

For years, demand for H-1B visa numbers has exceeded the annual limit. In fiscal year 2021, USCIS required a U.S. employer to register electronically each noncitizen for whom the employer intended to file an H-1B petition. Electronic registration replaced submitting a complete H-1B petition with supporting documentation, which was more burdensome for the employers and the agency. However, concerns were expressed about the potential for abuse and the possibility that smaller employers with fewer job openings would be at a disadvantage. In fiscal year 2024, USCIS for the first time received more eligible multiple registrations, meaning more than one registration filed on behalf of a noncitizen, than single registrations. USCIS expressed “serious concerns” about whether this was due to abuse of the registration system, which it seeks to address by changing the registration selection process. 

USCIS now proposes a “beneficiary centric” registration, in which multiple unrelated employers may submit a registration for the same noncitizen, but USCIS will only select the noncitizen once. The agency plans to notify each employer that registered the noncitizen, and each employer would have the opportunity to file an H-1B petition for the noncitizen. While the agency thinks this may provide the noncitizen with greater bargaining power, it also may result in a scenario where the noncitizen does not disclose multiple offers, and some employers, likely smaller ones, may incur the expense of petitioning only to have the noncitizen decline after approval. 

USCIS has emphasized that it may issue multiple final rules at different times. USCIS has expressed particular interest in changing the registration system in time for the fiscal year 2025 selection. However, since this would require the agency to issue a final rule and have a functional system by the spring of 2024, it seems more likely that USCIS could finalize a rule but delay the start date for the new registration system until a later fiscal year. 

The following is a sampling of other changes included in the proposed rulemaking. 

Change to Extending Status and Work Authorization for Eligible F-1 Students 

USCIS proposes to extend status and work authorization for F-1 students for whom a U.S. employer files an H-1B petition that includes a change of status request (from F-1 to H-1B). Currently, the maximum extension an F-1 student eligible for “cap-gap” protection may receive is until October 1, the start of the fiscal year for which the U.S. employer requested the H-1B classification. But that often does not allow enough time for the H-1B petition to be decided or to accommodate a later proposed start date. As proposed, if a U.S. employer timely files a non-frivolous H-1B petition with change of status for an eligible F-1 student, the student would receive an automatic extension of status and work authorization until either April 1 of the applicable fiscal year or the start date of the approved H-1B petition, whichever is earlier (or unless USCIS denies the H-1B petition). This is a welcome, common-sense change that will help U.S. employers recruit competitive foreign students entering the workforce.  

Changes to the Definition of “U.S. Employer”  

USCIS has proposed several revisions to the definition of “United States employer.” Only a “U.S. employer” is allowed to file an H-1B petition. USCIS proposes adding “beneficiary-owners” to the definition. As proposed, if the noncitizen owns at least 51% of the U.S. employer or has “majority voting rights,” the noncitizen may perform duties “directly related” to owning and directing the business. They may also carry out incidental activities like office tasks but must perform specialty occupation duties at least 51% of the time. USCIS views this change as clarifying its position that ownership of the petitioner does not prevent a person from receiving H-1B status and to encourage more entrepreneurs to obtain H-1B status.  

It is not clear, however, whether the proposal will improve or hinder use by entrepreneurs. Will adjudicators understand that duties “directly related” to business operations are also part of the specialty occupation duties—or will they draw unreasonable lines resulting in denials? Another disadvantage is USCIS’ proposed limit of 18 months for a new and first extension H-1B, as compared with the usual three-year validity period. 

Changes to the Definition of “Specialty Occupation” 

USCIS also can expect pushback on its proposed amendments to the regulatory definition of specialty occupation and criteria for demonstrating that the job offered is in a specialty occupation. USCIS tried to enact some of these proposals through a 2020 rulemaking, which was vacated on procedural grounds because the agency did not provide prior notice and an opportunity to comment.  

Now, the agency is again proposing the U.S. employer demonstrate that the field(s) of study required are “directly related” to the position offered. This addition, not found in the statutory definition of “specialty occupation” could result in greater denials as adjudicators may rigidly look at formulaic similarities between degrees and jobs, such as an architecture degree for an architect, rather than understanding that a “body of highly specialized knowledge” and a “specific specialty” may be necessary to perform the job without such an obvious relationship.  

Other proposals likely to raise significant concerns include the placement of workers at third party sites and site inspections. 

USCIS has only provided until December 22, 2023 for comments. Given the serious implications of the many changes USCIS has proposed, interested parties should weigh in and not be dissuaded by the timeframe. 

FILED UNDER: H1-B