Immigration

United States | Finalized H-1B rule published and takes effect in January 2025

Summary

The Department of Homeland Security (DHS) published its final rule on December 18, 2024, implementing changes to the H-1B visa regulations as part of its modernization plan. This new rule will take effect on January 17, 2025 and includes a number of material changes.

The detail

On December 18th, DHS published its 147-page final H-1B modernization rule that builds off the beneficiary-centric H-1B registration rule it issued last January. Material changes to the H-1B program will include the following:

• Speciality Occupation :
  The new rule seeks to clarify the level of connection needed to meet the ‘‘directly related’’ requirement by specifying that ‘‘directly related’’ means that there is a logical connection between the required degree, or its equivalent, and the duties of the position.

• Bona Fide Employment:
  Petitioners must establish that the specialty occupation position offered to the beneficiary is a bona fide position available as of the requested start date; the role cannot be speculative. USCIS might request documentation of bona fide employment such as contracts, work orders, etc.

• Expanded Workplace Site Visits:
  The new rule codifies the authority of USCIS to conduct inspections and impose penalties for failure to comply. USCIS is authorized to conduct site visits with no prior notice at the petitioner’s worksite, neutral locations, and other places where H-1B work will be performed, including third-party customer locations and the private residence of the H-1B beneficiary if work is remotely performed in the home.

• Expansion for Amended Petition Filings:
  The H-1B final rule includes expanded requirements for the filing of amended I-129 petitions before material changes arise.
  • It incorporates the content of the Matter of Simeio Solutions policy memo, which requires the filing of an amended petition when the H-1B beneficiary’s work is to be performed at a new area of intended employment not listed on the previously filed Labor Condition Application (LCA).
  • The new regulation provides exemptions from filing an amended H-1B petition where a new LCA is not required such as for a new job location within the same area of intended employment as listed on the prior LCA, 30-or 60-day short-term placements, employee development opportunities, and worksite changes that are “peripatetic,” involving occasional travel for short periods on a casual, non-recurring basis.
  • Note that the beneficiary is not authorized to work under the materially changed terms and conditions of employment until the new or amended H-1B petition is approved and takes effect, unless the beneficiary is eligible for H-1B portability.

• Third-Party Placement:
  The new rule confirms that third-party placement arrangements are permissible under the Immigration and Nationality Act (INA) and differentiates between when a beneficiary will be staffed to fill a position with an end-client’s organization and where the beneficiary will participate on the employer’s project for end-client organizations. When a beneficiary is staffed to fill a position with an end-client’s organization, USCIS will determine whether the offered position qualifies as a specialty occupation based upon the end-client’s requirements for the position (not the employer’s requirements). USCIS indicates that employers should be able to provide evidence of the end-client’s requirements through documents generated in the “normal course of the relationship,” such as Master Services Agreements, Statement of Work, end-user letters or similar documentation. Where H-1B a worker is contracted to fill a position at a third party’s organization, the work must be in a specialty occupation and the requirements of the third party, not the petitioner, are most relevant to determine if the position is a specialty occupation.

• Deference:
  The new rule codifies the deference guidance set forth in the April 2021 policy memo, which directs officers to give deference to prior determinations of eligibility when adjudicating an extension of petition validity.

• Cap Gap for F-1 Beneficiaries:
  Under the current rule, cap gap expires on September 30 as the earliest H-1B status can take effect is October 1, the beginning of the US government’s fiscal year. Since H-1B cap petitions are not always adjudicated prior to October 1, the new rule extends cap gap work authorization to April 1 of the following year to enable F-1 students maintain their status while USCIS is processing their cap petitions.

• New Form I-129 Forthcoming:
  To implement the final regulation, a new edition of the Form I-129 will be required for all petitions beginning January 17, 2025. As of the date of this alert, USCIS has not yet provided a form preview.

What this means

The effects of the new H-1B modernization rule will likely impact the H-1B program by streamlining the approvals process, increasing its flexibility to better allow employers to retain talented workers, and improving the integrity and oversight of the program. The rule builds on previous USCIS policy memoranda to ensure the labor needs of businesses were met while reducing processing times. The new rule also expands authority and compliance requirements for H-1B site inspections, which could mean that businesses may see an increase in H-1B site inspections. Vialto will continue to monitor the implementation of the new modernization rule and provide further commentary.

Contact us

For a deeper discussion on the above, please reach out to your Vialto Partners point of contact, or alternatively:

Manish Daftari
Partner

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