DHS PROPOSES NEW H-1B REGULATIONS IN AN EFFORT TO MODERNIZE THE PROGRAM AND DETER FRAUD

On October 20, 2023, the U.S. Department of Homeland Security (DHS) published a Notice of Proposed Rulemaking (NPRM) for the H-1B Specialty Occupation Program. With these proposed rules, DHS hopes to modernize the program “by streamlining eligibility requirements, improving program efficiency, providing greater benefits and flexibilities for employers and workers, and strengthening integrity measures.” The 94-page NPRM revises much of the H-1B program from start to finish, including the registration process that drew almost 800,000 registrations for FY 2024.

H-1B REGISTRATION CHANGES:

The NPRM provides a table showing the number of unique beneficiaries compared to the number of total registrations. Specifically, the number of beneficiaries with multiple entries has increased each year since the registration process started in FY 2021. While acknowledging that a beneficiary who has multiple registrations is not indicative of fraud or misuse, the change in regulations allows for the registration process to be beneficiary-focused and thereby a fairer process.   

In the NPRM, DHS proposes that each individual who has a registration submitted by a U.S. employer on their behalf would be entered into the selection process once. In other words, an individual may have multiple employer registrations entered on their behalf if they have multiple job offers, but they will only get one lottery entry. If selected in the lottery, the beneficiary could then choose which legitimate job offer it accepts of those employer registrations that are accepted by DHS. It allows more freedom or autonomy of the beneficiary in choosing where they want to work and decreases the likelihood that a beneficiary will get selected multiple times, taking away an opportunity from another beneficiary.

In addition to making the H-1B registration more beneficiary-focused, the proposed regulations aim to reduce the misuse and fraud that has happened in years past by prohibiting related entities from submitting multiple registrations for the same beneficiary.

H-1B CHANGES IN “SPECIALTY OCCUPATION”, DEFERENCE, AND WHEN TO AMEND A PETITION:

In the current statutory and regulatory definition for specialty occupation, an individual is required to have a bachelor’s or higher degree in the specific specialty, or its equivalent. The new, proposed regulation adds language requiring that there be a “direct relationship between the required degree field(s) and the duties of the position.”  It acknowledges that a specialty, such as market research analyst or operations research analyst, might have more than one acceptable degree field, but that a general degree, such as business administration or liberal arts, is not sufficient. In other words, the degree must have a specialization, and that specialization must be directly related to the position and the duties stated. In addition, a position that requires a bachelor’s degree in any field or a wide range of fields that have no correlation with the position will not be accepted as a “specialty occupation.”

The proposed regulations also provide a definition for the term “normally.” Under 8 CFR 214.2(h)(4)(iii)(A)(1), a qualifying position must meet one of four criteria. Two of those criteria require a showing that the degree is “normally” required either by the occupation itself or by the employer. The proposed regulations now clarify that normally DOES NOT mean always.  Rather, normally will be defined as “‘conforming to a type, standard, or regular pattern’’ and is ‘‘characterized by that which is considered usual, typical, common, or routine.’’

With respect to when to amend an already approved H-1B petition, the proposed regulations clarify that any change in an employee’s work location that requires a new Labor Condition Application (LCA) is considered a material change and therefore necessitates the filing of an amended petition before the employee can begin working at the new location. This change is to promote efficiency in the system. Currently, while this requirement already exists, individuals must look to various sources to find the answer for what constitutes a material change and when an amended petition must be filed. With the new regulations, DHS helps to consolidate this information and relevant requirements into one. The proposed regulation confirms that when there is a change in the place of employment to a different or new geographical area, therefore requiring a new LCA, that constitutes a material change and requires an amended or new petition to be filed with USCIS. In addition, the new or amended petition must be filed before the H–1B worker may begin work at the new place of employment. Importantly, this regulation confirms that if the change in workplace location occurs within the same geographical or MSA, then an amended petition is not required if no other changes exist.

In addition, short term changes of less than 30 days, or in some cases 60 days, do not require a new LCA or amended petition.

In another move towards efficiency and modernization, USCIS’s proposed regulations codify its existing deference policy, which gives deference to prior determinations involving the same parties and facts and no material changes. It codifies when adjudicators should show deference to petitions filing for extensions of status that are essentially the same as the initial application, promoting fairness, consistency, and predictability.

Note – this deference codification would apply to all nonimmigrant petitions using Form I-129.

H-1B CAP-EXEMPT QUALIFICATIONS:

Currently, an H–1B nonimmigrant worker is exempt from numerical limitations (the cap) if they are employed by: (1) an institution of higher education; (2) a nonprofit entity related to or affiliated with such an institution; (3) a nonprofit research organization; or (4) a governmental research organization. See 8 CFR 214.2(h)(8)(iii)(F)(1) through (3). The individual may also be exempt even if not “directly employed” by such an organization if 1) the majority of the worker’s work time will be spent performing job duties at a qualifying institution, organization, or entity; and (2) the worker’s job duties will directly and predominately further the essential purpose, mission, objectives or functions of the qualifying institution, organization or entity. See 8 CFR 214.2(h)(8)(iii)(F)(4). To benefit on this exemption, the petitioner must show a nexus between the work being performed at the qualifying organization and the essential purpose of the qualifying organization.

The proposed regulations aim to broaden the eligibility requirements for cap-exempt organizations.  First, they clarify that majority means at least half of their time, so at least 50%. It also seeks to clarify that the work does not need to be performed on-site, but can be performed remotely for the qualifying organization. 

Second, the proposed regulations also remove the word “predominantly” to show that as long as the work directly contributes to an activity that furthers an organization’s mission, it qualifies. It will no longer need to also predominantly further the mission and broadens the scope of qualifying work.

Finally, the proposed regulations amend the definition of nonprofit research organization and governmental research organization. Currently, the definition of "nonprofit research organization" is an organization "primarily engaged in basic research and/or applied research." See 8 CFR 214.2(h)(19)(iii)(C). A "Governmental research organization," is a Federal, State, or local entity "whose primary mission is the performance or promotion of basic research and/or applied research." Id.

The proposed regulations change the word primary to fundamental to align itself with the requirements for affiliation agreements as well as to show understanding that such organizations may have multiple, fundamental activities.

AUTOMATIC EXTENSION OF AUTHORIZED EMPLOYMENT FOR F-1 STUDENTS (CAP–GAP) AND START DATE FLEXIBILITY:

 The regulations propose to revise the automatic extension of duration of status and post-completion OPT or 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.

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.

Similarly, the proposed regulations also eliminate the limitations on the requested start date. If the new regulations go into effect as-is, the petitioner could request on the H-1B petition a start date of October 1 or later within the fiscal year, so long as the start date does not exceed six months beyond the filing date of the petition. This is more consistent with the rest of the regulations for H-1B, USCIS policy, and other nonimmigrant petitions.

Please note that this blog only covers some of the NPRM as it is a 94 page document with many minor and major changes to the regulations!

You can find the full set of proposed H-1B regulations HERE. You can submit a formal comment to the regulations HERE.

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.