USCIS announces New Rule on H-1B about Specialty Occupation definition, Cap-exempt H-1B, enterpreneur-based H-1B, and other changes

Washington, D.C. Today U.S. Citizenship and Immigration Services (USCIS), an agency within U.S. Department of Homeland Security (DHS) has published a final rule governing H-1B with the following changes:

• Beneficiary owning H-1B Petitioner/Employer: DHS is codifying a petitioner’s ability to qualify as a U.S. employer even when the beneficiary possesses a controlling interest (more than 50%) in that petitioner. DHS proposes some limitations, first and the second H-1B petition durations to be of 18 months only instead of standard 36 months. 2nd Extension (i.e. 3rd filing) could be for a full 36 months duration. (a big deal!).

The beneficiary must work majority of time in that controlling stake petitioner, H–1B beneficiary could seek authorization to work for a business in which they have a controlling interest while concurrently working for another employer authorized to employ the beneficiary as an H–1B nonimmigrant. Standard H-1B requirements still apply such as the requirement of specialty occupation, offered wage rate to be higher or equal to the prevailing wage rate, etc.

For such an enterpreneur, it will involve forming a business entity, preparing right set of legal documents and compliance policies, and for business entity to bear the costs and expenses involved in filing the petition and ability to compensate the enterpreneur for the H-1B specialty occupation work.

• Specialty Occupation Definition and Criteria: DHS codifies and clarifies the specialty occupation standard, including by: Clarifying that “normally” does not mean “always” within the criteria for a specialty occupation; codifying the “directly related” requirement in the definition and criteria, and clarifying this as meaning “a logical connection”; codifying current practice that a generalized degree is not sufficient. codifying current practice that a position may allow for a range of qualifying degree fields.
• Deference to prior decision: Codifies exisiting policy to give deference to previously approved H-1B petition unless some material issues in previous petition.
• H-1B Cap Exemptions: DHS is revising the requirements: to qualify H-1B Cap exemption when a beneficiary is not directly employed by a qualifying institution, organization, or entity. DHS is revising the definition of “nonprofit research organization”, “governmental research organization” and “non-profit or tax exempt organization.
• H-1B Amedment: Codies files that an H-1B Amendment Petition will be necessary when the worksite change is outside the normal commuting distance from previously approved petition as this treats worksite changes as material changes.
• Evidence of Maintenance of Status: DHS clarifies that evidence of maintenance of status is required (e.g. pay stubs, W-2, work products, etc.) for petitions where there is a request to extend or amend the beneficiary’s stay.
• Eliminating the Itinerary Requirement: DHS eliminates the H programs’ itinerary requirement.
• Validity Expires Before Adjudication: DHS allows H-1B petitions to be approved or have their requested validity period dates extended if USCIS adjudicates and deems the petition approvable after the initially requested validity period end date, or the period for which eligibility has been established, has passed. This typically will happen if USCIS deems the petition approvable upon a favorable motion to reopen, motion to reconsider, or appeal.
• Automatic Extension of Authorized Employment “Cap-Gap”: DHS is revising the automatic cap-gap extension end date from October 1 to April 1 of the fiscal year for which H-1B status is being requested for F-1 holders in H-1B Cap-Gap period. This will give DHS more flexibility to adjudicate the petition later or employee to continue to have their OPT/STEM EAD work authorization get automatically extended till then.
• Bona Fide Job Offer for a Specialty Occupation Position: DHS is codifying USCIS’ authority to request contracts, work orders, or similar evidence “showing the bona fide nature of the beneficiary’s position,” rather than “showing the terms and conditions of the beneficiary’s work” as stated in the Notice of Proposed Rulemaking (NPRM).
• Site Visits: DHS is modifying the H-1B regulations to codify its existing authority to conduct site visits and clarify the scope of inspections and the consequences of a petitioner’s or third party’s refusal or failure to fully cooperate with these inspections.
• Third-party placement (Codifying Defensor): In this provision, when the beneficiary will be staffed to a third party, USCIS will look at the third party’s requirements for the beneficiary’s position, rather than the petitioner’s stated requirements, in assessing whether the proffered position qualifies as a specialty occupation.

Over the years, the attorneys at Adhikari Law PLLC have been arguing in its H-1B filings for its clients that the above provisions are "inherent" in the Immigration and Nationality Act (INA) governming H-1B work visa program; and USCIS should give deference to the intended purpose of the law and that the regulations and Congressional Act should be interpreted coherently instead of imposing criteria which are not found in the immigration laws. It was high time that the government should have agreed to above "common sense" policy and now decided to reform in the regulations and its adjuducatory practices without a change the immigration statute. These were what we were advocating for our clients before!

These reformed policies will be effective from January 17, 2025.

The H-1B nonimmigrant visa program allows U.S. employers to temporarily employ foreign workers in specialty occupations, defined by statute as occupations that require highly specialized knowledge and a bachelor’s or higher degree in the specific specialty, or its equivalent. With above changes, the government hopes to provide flexibilities for employers and workers by modernizing the definition and criteria for specialty occupation positions as well as for nonprofit and governmental research organizations that are exempt from the annual statutory limit on H-1B visas. Government claims that these changes will help U.S. employers hire the employees they need to meet their business needs and remain competitive in the global marketplace.

The above rule also extends certain flexibilities for students on an F-1 visa seeking to change their status to H-1B to avoid disruptions in lawful status and employment authorization. This final rule will allow USCIS to more quickly process applications for most individuals who had previously been approved for an H-1B visa.

Importantly, the final rule will allow H-1B beneficiaries with a controlling interest in the petitioning organization to be eligible for H-1B status, subject to reasonable conditions.?

2025 H-1B Cap Season for FY 2026 Cap Season

USCIS will accept H-1B eletronic regulations for the 2025 H-1B Cap season in March 2025 and will accept receiving H-1B petition filing from April 1st, 2025 for the Fiscal Year (FY) 2026 Cap. For more Information Please schedule a meeting to speak with one of our attorneys.

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If you want to learn more about this topic or Cap-Subject or Cap-exempt H-1B in general or about our legal services for the preparation and the filing H-1B petition do contact us at (+1) 202 600 7745, or email us at [email protected]