The Department of Homeland Security (DHS) has proposed a rule to amend H-1B requirements and oversight for H-1B specialty occupation workers and F-1 students with timely filed H-1B Cap subject petitions. The Title of the proposed rule is “Modernizing H-1B Requirements and Oversight and Providing Flexibility in the F-1 Program.” The proposed rule is currently under review at the Office of Management and Budget (OMB). While any change to these regulations is likely a year away, publication of this notice allows employers to be ready to contribute to the public comment that shapes the final regulatory language.
OMB is examining regulatory changes in the following areas:
Clarifying the definition of “employer-employee relationship.”
Among other requirements, an H-1B employer must establish the existence of a valid employer-employee relationship. For H-1B purposes, the employer-employee relationship tends to be scrutinized more closely when an employer intends to assign an employee to work at one or more third-party worksites (often an issue for contractors, and companies that utilize such services). A third-party worksite is a worksite, other than the beneficiary’s residence, that is not owned, leased or operated, by the petitioning employer. To determine whether there is an employer-employee relationship in such cases, USCIS will typically review how the employee is supervised while working off-site. Factors such as the ability to hire, pay and fire the employee, who assigns the employee projects and the right to control the work of the employee are critical factors in this assessment. When an H-1B employee works for an employer and may be placed at one or more third-party worksites, the employer should submit evidence of the employer-employee relationship. Such evidence can include work contracts or work orders, to establish that there is actual work available for the H-1B employee. Revisions to the current guidance regarding employer-employee relationship determinations are likely to provide clearer guidance for third-party arrangements.
Implement new requirements and guidelines for site visits, including for petitions filed by H-1B dependent employers and where there is suspicion of fraud.
USCIS may conduct on-site visits to verify information contained in the H-1B petition, in order to ensure compliance with H–1B petition requirements. If USCIS is unable to verify the required information or conflicting information is provided during a site visit, this may result in the revocation of an H–1B petition. Changes to requirements and guidelines for USCIS site visits could clarify USCIS’s statutory authority and further define site-visit procedures.
Bolster the H-1B Cap registration process to reduce the possibility of misuse and fraud in the H-1B registration system and ensure fairness in the process.
Employers/Petitioners that wish to sponsor H-1B cap-subject petitions for employees must electronically register and pay a $10 registration fee for each registered beneficiary. USCIS has announced that during the registration period for the FY 2024 H-1B cap, they found there was a significant increase in the number of registrations submitted compared to prior years. USCIS also reported an increase in the number of registrations submitted on behalf of beneficiaries with multiple registrations. USCIS has noted that the “large number of eligible registrations for beneficiaries with multiple eligible registrations” raised concerns regarding the abuse of the current registration process and whether bona-fide job offers truly existed. USCIS has confirmed that they are committed to deterring and preventing abuse of the registration process. The proposed rule may implement changes to the H-1B registration process in order to ensure that all applicants are treated equally in the selection process.
Address “cap-gap” issues.
Upon graduation from a higher education degree program, an F-1 student visa holder may be eligible for employment through F-1 OPT work authorization. The “Cap-gap” is the period between the expiration of an F-1 student’s OPT or STEM OPT work authorization and the October 1 start of an H-1B CAP petition. If an F-1 visa holder’s H-1B CAP petition was filed prior to the expiration date on their Employment Authorization Document (EAD), the F-1 visa holder may be eligible to have their F-1 status and EAD extended through September 30 of that year. If USCIS approves the H-1B CAP petition and the accompanying change of status request, the earliest date that the student can change to H-1B employment is Oct. 1, but the beneficiary’s OPT employment authorization may expire before the H-1B start date. Cap–Gap Extension is an automatic extension of F-1 OPT status that may be granted to F-1 students who need to “bridge the gap” between the expiration of their OPT or STEM EAD and the start date of their approved H-1B. The proposed rule may address cap-gap related issues such as entitlement to such relief and timing concerns.
New guidance on filing amended H-1B petitions.
An H-1B amendment is currently required when there will be a material change in the terms and conditions of H-1B employment. Material changes in employment can include a change in worksite location outside of the current geographic area of employment, a significant change in job duties, or a change in work hours. The failure to file an amendment could result in a determination that the H-1B employee has not maintained lawful nonimmigrant status as well as revocation of the H-1B petition. Therefore, employers should carefully assess changes to the terms of employment and file an H-1B amendment prior to the implementation of a material change. Though the specifics are not yet clear, the proposed rule is expected to further clarify the job changes that will require an H amended H-1B filing.
Provide flexibility on employee start dates (in limited circumstances).
Proposed regulations are subject to a public notice and comment period of approximately 30 to 60 days to allow for the public to provide feedback before the rule is published as a final rule. DHS has set a target date of December 2023 to publish the proposals in further detail. Employers should monitor these developments closely and be prepared to provide comments, in order to ensure positive changes to the final rule.
Please contact your Klasko Law attorney with any questions regarding this client alert.
The material contained in this alert does not constitute direct legal advice and is for informational purposes only. An attorney-client relationship is not presumed or intended by receipt or review of this presentation. The information provided should never replace informed counsel when specific immigration-related guidance is needed.
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