Positive Changes for Business Immigration: The H-1B Modernization Rule
Highlights
- A final rule that provides a variety of updates to the H-1B program goes into effect on Jan. 17, 2025. The final rule includes revisions to the definition of a "specialty occupation," protections for certain F-1 students, codification of a long-standing deference policy and the provision of additional enforcement measures aimed at protecting the integrity of the program.
- Employers should prepare for an increase in enforcement efforts under the second Trump Administration, including high-profile and high-volume enforcement events, as well as more frequent requests for additional evidence, a substantial amount of additional scrutiny and unpredictability in adjudications.
- This Holland & Knight alert examines how the H-1B rule and other factors might affect employers seeking to fill their workforces through non-immigrant labor.
The U.S. Department of Homeland Security (DHS) recently announced a final rule (Rule) that modernizes the H-1B program. The H-1B non-immigrant program is utilized by U.S. employers to employ professional foreign workers in specialty occupations. Holland & Knight expects this Rule to impact a variety of U.S. employers in various industries, in addition to academic institutions that enroll foreign students under the F-1 student visa.
Sections of the Rule related to the H-1B cap lottery initially went into effect in March 2024 and will remain in effect during the upcoming H-1B lottery process that is expected to begin in February 2025. However, the remaining and seemingly more impactful portions of the Rule are set to take effect on Jan. 17, 2025.
The Rule provides a variety of updates to the H-1B program, including revisions to the definition of a "specialty occupation," protections for certain F-1 students, codification of a long-standing deference policy and the provision of additional enforcement measures aimed at protecting the integrity of the program.
Below are more detailed explanations of several provisions in the Rule.
- Definition of "Specialty Occupation." For an H-1B position to qualify as a specialty occupation, employers must prove that the role "normally" requires a bachelor's degree in a specific field of study. Under the Rule, DHS clarifies that an H-1B position may not "always" require a bachelor's degree to qualify as a specialty occupation. Moreover, DHS clarifies that the field(s) of study that are acceptable for a specialty occupation must be "directly related" to the duties of the H-1B position. Employers may find the revised definition provides more flexibility in identifying qualifying occupations.
- Enforcement. More rigorous worksite visit protocols and compliance measures are being implemented to ensure adherence to the H-1B program's rules. Through the U.S. Citizenship and Immigration Services' (USCIS) Fraud Detection and National Security (FDNS) unit, site visits can be conducted at the location(s) where the H-1B employee works, has worked or will work, including third-party worksites. Refusals to comply with site visits may result in the denial or revocation of previously approved H-1B petitions. Employers should prepare to see an increase in site visits moving forward. Increased compliance and enforcement measures may impact the transportation industry through administrative burdens, potential penalties and fines for noncompliance, as well as raids or audits that could disrupt operations.
- Deference. The Rule codifies a deference policy that was rescinded during the first Trump Administration. This policy instructs USCIS officers to give deference to prior Form I-129 approvals except in cases where there has been a material change in circumstances or eligibility requirements, a material error in the prior approval or new material adverse information. The codification of this policy should provide employers more predictability during the H-1B extension process for these employees.
- Entrepreneurs. The Rule provides increased flexibility for entrepreneurs aiming to facilitate the launch and growth of startup businesses by foreign nationals in the U.S. Even those with a controlling interest in a U.S. company may be eligible for H-1B status, assuming that 1) the other H-1B requirements are met and 2) the individual will spend a majority of the time performing specialty occupation duties. For established or budding entrepreneurs in any sector, this flexibility may provide additional pathways to seek U.S. work authorization.
- Bona Fide Employment. The H-1B program requires employers to establish an employer-employee relationship as evidence of a bona fide job offer to the H-1B-sponsored employee. Though USCIS may still require contracts or other related evidence, the Rule clarifies that formal itineraries will no longer be required to establish a bona fide job offer.
- F-1 Student Protections. Academic institutions and U.S. employers who enroll or employ F-1 students, respectively, will also benefit from the Rule. Moving forward, F-1 students who have a timely filed H-1B change of status petition can benefit from longer "cap-gap" protections to help ensure continued work authorization while a change of status application is pending with USCIS. This update will provide more continuity in the employment of these individuals and potentially attract more foreign students to studying in the U.S.
Holland & Knight is closely monitoring implementation of the remaining portions of the Rule and expects to see additional updates to immigration processes under the incoming Trump Administration.
Anticipated Immigration-Related Impacts to U.S. Employers
As noted above, employers should prepare for an increase in enforcement efforts under the new administration, including high-profile and high-volume enforcement events. In addition, the new administration may terminate or stop processing new applications for protection under several humanitarian parole programs, many of which also provide U.S. work authorization. At present, there are various humanitarian programs in place for nationals of Afghanistan, Burma, Cameroon, El Salvador, Ethiopia, Haiti, Honduras, Lebanon, Nepal, Nicaragua, Sudan, Syria, Cuba, Somalia, Ukraine and other countries.
Employers should also expect to see more frequent requests for additional evidence, a substantial amount of additional scrutiny and unpredictability in adjudications. The anticipated changes may result in higher costs, slower processing times, and more challenges and obstacles in securing work authorization for the foreign national population. Finally, employers should also be prepared for their employees to face delays and backlogs in processing of visa applications abroad and exercise more caution when foreign workers travel internationally.
For additional information or questions, please contact the authors or a member of Holland & Knight's Immigration, Nationality and Consular Team.
Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.