On December 18, 2024, the U.S. Department of Homeland Security (DHS) published its final H-1B Modernization Rule, which goes into effect today, January 17, 2025. With the publication of the final rule, DHS hopes to “modernize and improve the efficiency of the H–1B program, add benefits and flexibilities and improve integrity measures.”
Here are some key takeaways from the final rule:
REVISED FORM I-129
To account for the new rules, DHS is issuing a revised Form I-129, Petition for a Nonimmigrant Worker, that must be used for ALL nonimmigrant filings requiring I-129 as of January 17, 2025. Unlike other form revisions, there will be no grace period for using this revised Form I-129. USCIS has confirmed that the current edition for Form I-129 (edition date 04/01/2024) must be used for any filings received by the agency before January 17, 2025. For any filings received on or after January 17, 2025, the new, revised form I-129 must be used.
SPECIALTY OCCUPATION CLARIFIED
In the final rule, USCIS acknowledges that it received several comments regarding important phrases in the proposed rule that were problematic. In revising the language for the final rule, USCIS notes the importance of the beneficiary’s actual course of study and not simply the title of the degree.
USCIS revised the definition and criteria for “specialty” occupation to clarify that the degree must be directly related to the specialized knowledge required for the occupation.
Because of concerns with the language “directly related”, the final rule clarifies that there must be a logical connection between the degree (or its equivalent) and the duties of the position. It also clarifies that where multiple qualifying degrees could qualify for a specific position, each field must be directly related to the position.
Where a petitioner is required to show that the degree is “normally” required for the position, the final rule clarifies that the petitioner does not have to show that it is always required, but rather must show that it is “usual, typical, common or routine.”
BENEFICIARY-OWNER PERMITTED
Under the final rule, a beneficiary-owner may petition for the H-1B. The intent of these provisions is to allow access for entrepreneurs, start-up entitles and other beneficiary-owned businesses to apply for an H-1B for the owner. The rule, however, sets conditions on the H-1B petition for when the beneficiary owns a “compelling interest” in the entity. The final rule defines “compelling interest” as when the beneficiary owns more than 50% of the petitioning company or has majority voting rights in the petitioning company.
These conditions are as follows:
- The requirement that the beneficiary will perform specialty occupation duties authorized under the petition a majority of the time,
- Non-specialty occupation duties must be directly related to owning and directing the petitioner’s business, and
- Limiting the validity period for the initial petition and first extension of such a petition to eighteen (18) months each.
CAP EXEMPT EXPANDED
Currently under the H-1B regulations, a “nonprofit research organization”, or a governmental one, must be “primarily engaged” in research or have the research be the primary mission. Under the new regulations, the research must be a “fundamental” activity of the organization. While fundamental is not defined directly in the regulations, the proposed rule and the final rule’s responses indicate that the fundamental activity must be “an important and substantial activity, although it need not be the organization’s principal or foremost activity.”
As such, while the rule purports to expand the definition of who may qualify for cap-exemption, it will still be the petitioner’s burden to demonstrate that research constitutes an important and significant activity in the overall mission or business plan of the organization.
In addition, the rule confirms that work performed “at” a qualifying institution, includes telework, remote work, or off-site work.” The focus will be on the job duties actually performed instead of where they are physically performed. This change will help benefit those who may not be directly employed by a qualifying organization and the various organizational and staffing structures that currently exist. However, the beneficiary must “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.”
Finally, the regulations removed the requirement that the 501(c)(3), (c)(4), or (c)(6) organization also be approved by the IRS for tax-exempt status for research or education purposes. It is sufficient that they are approved for the 501(c)(3), (c)(4), or (c)(6) purpose.
CAP GAP EXTENSION
The Final Regulation kept the proposal to revise the automatic extension of duration of status, post-completion OPT, and the 24-month extension of post-completion OPT (STEM OPT) until April 1 of the relevant fiscal year for which the H-1B petition is filed. Currently, the cap-gap extension is only valid until October 1, which means that for those applications not decided by October 1, the individual must stop working. This final rule allows students to avoid disruptions in lawful status and employment authorization while the H-1B is pending
By extending the cap-gap extension to April 1, the regulations allow for more flexibility for students, employers, and USCIS to avoid disruption in lawful employment.
H-1B REGISTRATION
Finally, as a reminder, the rules relating to the H-1B registration purpose were finalized in February 2024. DHS chose not to add or finalize regulation relating to multiple registrations from related organizations as it found in the FY2025 lottery, with the beneficiary-centric approach, they had much less abuse of the process by companies using multiple entities to petition for the beneficiary.
For more information on the H-1B program, or if you want our firm’s assistance with the registration for new H-1Bs, please reach out to Kolko & Casey, P.C. at (303) 371-1822.
