USCIS Final Rule: Changes to H-1B Programs Effective January 2025 – Key Updates for Employers & Workers

USCIS has just released the December 18, 2024 final rule “Modernizing H-1B Requirements, Providing Flexibility in the F-1 Program, and Program Improvements Affecting Other Nonimmigrant Workers” which seeks to “modernize” the H-1B program by introducing some improvements to the process and allowing certain flexibilities.   While some of the changes are simply codification of existing policies, many of the upcoming changes are very significant for certain H-1B employers and workers.  The rule will become effective on January 17, 2025.   See below for our analysis and review of the new provisions.

Specialty Occupation Definition Revision

The new final rule revises the regulatory definition and criteria of “specialty occupation” to clarify that “normally” requiring a bachelor’s degree in a specific field related to the job duties does not mean “always” requiring such a degree.     Also, a petitioner may accept a range of qualifying fields of study as long as these fields of study are related to the job duties.

CILG Take:   USCIS has been applying this policy over the past few years so this is not new substance; but now that are codifying this practice into the federal regulations so that it will be harder to deviate from them in the future.  As always, an H-1B position should have very carefully drafted position requirements.

Clarification as to When an H-1B Amendment is Needed Due to Worksite Location Change

USCIS is codifying the requirement for H-1B employers to have to file an H-1B amendment petition prior to making material changes to the terms of employment, including worksite location changes to an area that normally requires a new LCA.

CILG Take:  This is not a new requirement — this is simply the Simeio H-1B amendment requirement put into the regulations.

Petition Extensions Without Significant Changes Given Deference

USCIS is codifying the policy of deference given to (extension) petitions where the terms remain unchanged.    When a petition involves  the same parties and the same underlying facts as a prior H-1B, adjudicators generally should defer to a prior USCIS approval unless there is material error or there is  material change.    Similarly, petitions for extension or amendment of status must include evidence of valid status (such as recent pay records, etc.).

CILG Take:  Not a new requirement or change; but this this provisions gives an advantage to H-1B extensions to have lower scrutiny in case a new administration wants to scrutinize petitions.   The requirement to include evidence of status is not new at all.

Itinerary No Longer Required for Third-Party Placement Petitions

USCIS is removing the requirement to provide an itinerary as part of H-1B petitions.

CILG Take:  this is a notable change in the regulations and will benefit third-party placement H-1B employers who generally have had to provide an itinerary of the anticipated clients or locations where an H-1B worker is expected to work during the entire requested H-1B term.

Changes of Requested Validity Dates on Pending Petitions

USCIS creates a flexibility in somewhat limited circumstances where the H-1B petition’s requested validity ends before USCIS can adjudicate it (generally, due to long processing time).   In these circumstances and, generally, when the adjudicator believes that the there is eligibility for an H-1B extension, USCIS is allowed to issue an RFE  and to ask the petitioner whether they wish to amend and extend the requested validity date of the pending petition.    This is intended to prevent petitions from being approved with a past validity date when there may be an eligibility for an extension.

CILG Take:   our view is that, while this is going to be very helpful for affected individuals, the circumstances in which it applies may be rare.   Also, just because the USCIS adjudicator has the option of inquiring the petitioner about their eligibility and wish to amend the validity term, it does not mean that they will be doing so every time (due to training or other issues).

H-1B Cap-Exempt Employers:  Definition Change of Nonprofit Research Organization

USCIS is revising and expanding the possibility of a nonprofit employer to qualify as a cap-exempt employer.  USCIS is changing the definition of “nonprofit research organization” and “government research organization” by replacing the terms ‘‘primarily engaged’’ and ‘‘primary mission’’ (under the current rules) with ‘‘fundamental activity”   This will allow nonprofit entities or governmental research organizations that conduct research as a fundamental activity, but are not primarily engaged in research or where research is not a primary mission, to meet the definition of a nonprofit research entity.

CILG Take:  this expansion of the definition of nonprofit research organization will allow an additional number of nonprofit organizations to make a stronger case for cap-exempt H-1B petition based on research being a fundamental activity even if the research does not constitute a primary purpose.  This is a new and significant expansion of the cap-exempt employer eligibility.  See our Guide to H-1B Cap Exempt Employers for more details.

Cap-Exempt Placement AT a University/Non-Profit Research Organization

The regulations are being revised to allow for an cap-exempt H-1B filing to be done by a non-cap-exempt employer for beneficiaries who spend at least half of their time providing working AT a cap-exempt employer in a role that supports or advances a fundamental purpose, mission, objective, or function of the cap-exempt placement organization.

CILG Take:  this clarification may actually be restrictive for many cap-exempt beneficiaries who now must ensure that at least half of their time is spent in a specific work.   The lack of clarity in the prior rule allowed many cap-exempt placements to work a minimum number of hours.     See our Guide to H-1B Cap Exempt Employers for more details.

Automatic OPT Cap-Gap Term Extended Until From October 1 to The Following April 1

For students who are selected in the H-1B cap lottery and have a pending H-1B cap petition, the new rule extends the automatic OPT cap-gap work authorization by six months from October 1st until April 1st of the fiscal year in order to avoid disruptions caused by having to stop working on October 1.

CILG Take:  this is great news and welcome change to F-1 OPT workers who are waiting for a cap H-1B petition to be approved.   Given that some H-1B cap petitions are not filed until late summer,  the prior October 1 cap-gap extension term was insufficient for many applicants.   Getting an additional six-month OPT cap-gap extension will help many F-1 OPT workers and their employers (and save money by not having to file H-1B cap petitions using premium processing in certain cases).     Please see our OPT Cap-Gap Rule page for more details.

(Fairly Minor) H-1B Certain Compliance Changes

USCIS is clarifying its authority to review certain aspects of an H-1B petition, including its ability to request contracts or other documents to establish the bona fide nature of the position or an end-client placement.       Employers must have a US presence and this means that foreign employers without US presence may not be able to petition for H-1B.   USCIS is codifying its ability to conduct site visits and specifying that refusal to comply with the site visit may result in a denial or revocation.    Also, when the placement is at a third-party worksite,  the specialty occupation analysis is based on the end client’s position requirements.

CILG Take: these are not new requirements; this has been the current USCIS practice and we do not anticipate much changes as a result of these new provisions.

H-1B Workers With Controlling Ownership Interest – Significant Rule Change

USCIS is clarifying that H-1B workers who have a controlling ownership interest may still be sponsored by the employer with certain limitations.   Under the new rule, an H-1B worker who has a controlling ownership interest in the employer (generally 50% or more of the petitioner or has majority voting rights) can still obtain H-1B but the validity term will be limited to 18 months.     The first extension (including an amendment with a request for extension) will also be limited to 18 months.     The six-year H-1B limit still applies so the second extension can be for up to 3 years.

CILG Take:  this is a significant change and a new opportunity for entrepreneurs and worker/owners to obtain H-1Bs through an entity in which they have significant (controlling) interest.    Under the prior rule, each employer had to demonstrate right of control over the beneficiary which essentially meant that a worker with controlling interest may not be able to qualify for H-1B.    This rule opens possibilities for H-1Bs for entrepreneurs.

Proposed Bar on Multiple Registrations by Related Entities REMOVED From Final Rule

A very interesting omission from the proposed and the final rule is that USCIS has chosen NOT to include the explicit bar on multiple registrations by related entities.    This is mainly due to the February 2, 2024 rule which set to create a beneficiary-centric H-1B lottery selection process.       Since multiple registrations for the same beneficiary are now counted as one registration for lottery purposes, USCIS is taking the position that a specific ban on multiple registrations by related entities is no longer needed.

CILG Take:   as a result of this non-inclusion, USCIS is essentially allowing related entities to submit multiple H-1B cap registrations for the same beneficiary.   Under the beneficiary-centril selection process this may not be beneficiary and we generally do not recommend it unless there are specific circumstances such as multiple job offers that may make it beneficial to file multiple registrations.    This also should alleviate the concern of many H-1B candidates when seeking job offers from employers who may be related.

Attorney Assistance with H-1B Preparation and Submission

Our office will be happy to provide consultations or assistance with preparing and submitting H-1B petitions.

We offer flat fees to handle the entire application and you can contact us or request a flat fee quote. Alternatively, if you would like to schedule a consultation with an attorney to discuss a specific case (but perhaps without engaging us to help with the actual filing ), we offer phone consultations.

Conclusion

We welcome the outgoing Biden administration’s effort on putting many of the current policies into rules.   Having rules (as opposed to policies) will make it harder for a subsequent administration to change them and will allow at least some level of certainty to H-1B employers and candidates. We invite you to subscribe to our free weekly newsletter to obtain further news and developments on this topic.