USCIS Publishes New Modernization Rule

On December 18, 2024, USCIS published a final rule to enact changes to the H-1B nonimmigrant visa category. The new rule is effective just before the end of the Biden Administration, on January 17, 2025.

The rule is intended to consolidate Agency practices, taking into account recent court decisions and months of public comment in order to “modernize and improve the efficiency of the H-1B program”. These are welcome changes.

Importantly, for Employers that hire significant H-1B workers each year, the rule change will go into effect before the new H-1B preregistration period opens in March 2025. Hence, all new H-1B registrations should be weighed against these “modernized” standards. In many cases, this is beneficial.

For “existing” H-1B employers, including companies that seek to extend H-1B employees or amend their petitions, these rules have many favorable aspects.

The new rule is 147 pages, and therefore, there are many interesting aspects. However, key to my clients will be the following:

USCIS Published New Modernization Rule Full Article PDF

How USCIS will analyze whether a position qualifies for H-1B status as a “Specialty Occupation”

➢ The USCIS has outlined a more flexible analysis that will not require such rigid conformity to the degree field listed on a foreign national’s diploma.

➢ The USCIS has adopted a more common-sense approach to determine whether a foreign national’s education is sufficiently related to the H-1B occupation.

➢ The USCIS has finally clarified for their officers that a degree that is a “normal” requirement does not mean “always” required.

Attorney Note: USCIS’ adherence to rigid standards in their interpretation of many of these key H-1B terms has become increasingly problematic as new technologies and industries emerge. In practice, skilled immigration attorneys have been able to achieve favorable outcomes from arguing these same points, but often only in the context of time-consuming and hence costly responses to Requests for Evidence. The new standards set forth by USCIS should therefore avoid some of these needless additional submissions and are welcome common-sense changes.

H-1B Cap Exemption Possible Expansion

➢ The Rule changes the requirement that a nonprofit research organization or a governmental research organization be “primarily engaged” in research or have a “primary mission” to perform research.

➢ The new requirement is that research must be a “fundamental activity” of the organization to qualify as a nonprofit research organization or a governmental research organization for cap exemption purposes.

Attorney Note: USCIS anticipates that these changes will impact less than 1% of H-1B petitioners. We agree it is a beneficial change but only for a very small subset of nonprofit or government research organizations.

What can be asked and by whom re the Employer and Employee relationship

➢ USCIS has refined what they require from the relationship between the US Employer and Employee, including a requirement that the petitioner has a bona fide job offer for the beneficiary to work. While eliminating the requirement that employees that are off-site must submit long-term itineraries, the USCIS has reserved the right to ensure that off-site assignments are not speculative. This includes authority to request contracts, statements of work, and client letters.

➢ Further, for H-1B workers that are put in positions as staff members to a third party, USCIS will look to the requirements of the third party, not the employer/petitioner, when determining whether the position is qualified for H-1B.

Attorney Note: This rule change will likely have a significant impact on H1B staffing agencies, requiring them at a minimum to reassess where H-1B workers are placed, and may reduce their use of the H-1B program.

➢ In this Rule, the USCIS has explicitly written their intention to encourage foreign nationals who are business owners to use the business to petition for an H-1B on their behalf. For owners with a controlling interest in the business, as a fraud countermeasure, the initial H-1B period of stay and the first extension of the H-1B are limited each to 18 months. The Rule also codifies the reality that a business owner may be required to perform incidental duties relating to owning and directing their company, and this remains permissible for an H-1B owner so long as they spend less than a majority of the time on those “non [H-1B] qualifying” duties.

Attorney Note: This rule change with regards to small business owners could be very good for many. However, the 18-month validity makes these H-1Bs (even more) expensive. Nonetheless for well-financed new businesses, this will be very attractive.

Site Visits

➢ The Rule contains expanded authority and compliance requirements for H-1B site inspections. USCIS affirms their authority to conduct site visits at the petitioner’s worksite, as well as at neutral locations, and other places where H-1B work will be performed. Significantly, this is outlined to include the private residence of the H-1B beneficiary, in situations where the H-1B worker’s home is listed as a worksite.

➢ If USCIS is unable to verify facts, including situations in which the petitioner or a third party refused or declined to cooperate in an inspection, USCIS is authorized to deny or revoke H-1B petitions. At the same time, USCIS outlines the right of parties to reschedule or be represented by counsel.

Attorney Note: I don’t anticipate this will lead to a change in enforcement for employers that are “playing by the rules”. For those that are not, combined with likely increases in the occurrence of enforcement, this rule puts them on notice on how far the USCIS intends to expand their investigations.

Amended Petitions

➢ The Rule consolidates guidance for when to file H-1B amended petitions but contains no substantive changes from existing policy.

Deference

➢ The Rule codifies that USCIS will generally defer to prior determinations involving the same parties and underlying facts unless there is a material error, material change in circumstances or eligibility requirements, or new material information adversely impacting eligibility. This equates generally to a presumption of approvability for H-1B extensions when done for the same role.

Attorney Note: This is significant and will allow for greater predictability for employers and employees. During the last Trump Administration deference in these decisions was removed and the chaos that ensued for long-time H-1B workers and their employers will be avoided going forward.

H-1B Cap-Gap Extensions

➢ A significant benefit for employers that file H-1B petitions for employees with student work permits is the extension of the “cap gap” provided for under this Rule. For students with work permits expiring before a new H-1B can go into effect, previous rules granted a “cap gap” extension of the work permit only until September 30. If the H-1B was not approved before that date, students would have to be removed from payroll or employers would have to pay an exorbitant fee to premium process. The new Rule extends the validity of the “cap gap” EAD by several months to April 1 of the following year.

Attorney Note: This small change will have large impacts and is a very common-sense change.

H-1B Validity Period

➢ The new rule deals with the situation where a short duration on H-1B status is requested, and the USCIS adjudication is not complete until after the full term has elapsed. In that situation, USCIS may send the Employer a notice offering them to amend the dates.

Attorney Note: This change is actually quite significant as it authorizes post-petition changes which are generally disallowed across immigration. Although it’s impact may be on a small number of petitioners, it is one that is very welcome.

In order to effectuate the changes, USCIS is revising the relevant immigration form (I-129) and its instructions. The new form will be required starting on January 17, 2025.

At Law Office of Adrienne J. Vaughan LLC, we do not anticipate any negative outcomes for our clients resulting from this Modernization Rule. Some petitions may be easier, and a few may require some additional evidence, but overall, this should be seamless to the great majority of clients. In summation, this Rule in many important aspects solidifies the way we have always done cases, and we anticipate only greater benefits. During the last Trump Administration there were several rules put forth to restrict H-1Bs. This modernization rule may be a parting gift from the Biden administration in an effort to minimize disruptions on businesses and employees.