The U.S. Department of Homeland Security ("DHS") issued a final rule, entitled Modernizing H-1B Requirements, Providing Flexibility in the F-1 Program, and Program Improvements Affecting Other Nonimmigrant Workers (hereinafter "modernization rule"),that took effect on Friday, January 17, 2025. The stated goals of the final rule are "to modernize and improve the efficiency of the H-1B [visa] program, add benefits and flexibilities, and improve integrity measures."1 The provisions of the final rule significantly amend the regulations governing H-1B specialty occupation workers, as well as provide effective amendments to other non-immigrant visa classifications.
This article will focus on how the H-1B Modernization Rule will affect the FY2026 H-1B Cap Season. The annual H-1B cap season begins on March 7, 2025, Eastern Time (ET) to March 24, 2025 ET. The provisions of the modernization rule will thus be applicable to the 2026 H-1B cap season.
As a reminder, please note that the registration fee for each individual has been raised from $10 to $215. Cap-subject H-1B petitioners and their representatives must use a USCIS organizational account online to register beneficiaries and pay the required fees.
The H-1B cap season has seen significant changes in the past several years including the creation of an online registration system, the switch to a 'beneficiary-centric' selection process, and a sharp increase of fees the latter of which went into effect in January 2024. The modernization rule builds upon these changes in an effort to improve the H-1B selection process. Some of the key takeaways include:
Specialty Occupation Definition and Criteria
The updated rule clarifies and codifies the requirements for H-1B specialty occupations:
- A bachelor's degree must now have adirect relationship to the duties of the position.
- A general degree (e.g., business administration) does not qualify unless it includes specialized coursework relevant to the job duties.
- Pro-Tip: U.S. employers should determine if the Beneficiary's degree is directly related to the H-1B job offer. If an employer accepts a range of qualifying degree fields for the job, then the employer must establish thateachacceptable field of study is "directly related" to the duties of the offered position.
Definition of US Employer and Increased Scrutiny
The final rule revises the definition of ''United States employer'' by codifying current DHS policy that the Petitioner have a bona fide job offer for the Beneficiary to work within the US as of the requested start date.
- The rule adds a new requirement that the Petitioner have a legal presence in the US and be amenable to service of process in the US.
- Pro-tip: U.S. employers should expect scrutiny from the US Citizenship and Immigration Services (USCIS) as to whether their job offers are bona fide. Such scrutiny can be in the form of requesting contracts, work orders and related evidence documentation to verify a bona fide position and general legal compliance on the part of the employer.
Non-Speculative or Bona Fide Employment
In response to a number of comments expressing concern with the term "non-speculative," DHS is replacing "non-speculative" with "bona fide," so that new 8 CFR 214.2(h)(4)(iii)(F) states, in relevant part:
[a]t the time of filing, the petitioner must establish that it has a bona fide position in a specialty occupation available for the beneficiary as of the start date of the validity period as requested on the petition."
This change is intended to clarify what DHS means by "non-speculative." This provision is also consistent with current policy guidance that an H-1B petitioner must establish that the purported employment exists at the time of filing the petition and that it will employ the beneficiary in a specialty occupation.
USCIS can request contracts or related evidence to verify the legitimacy of the proposed H-1B position.
DHS codifies its authority to conduct site visits at the Petitioner's office or at third-party worksites, even residential worksites. The consequences of refusing to cooperate with the site visits include denial and/or revocation of the I-129 Petition.
A Petitioner is not required to establish specific day-to-day assignments for the entire time requested in the I-129 Petition.
Elimination of the Itinerary Requirement but Increased Site Visits
Petitioners are no longer required to submit an itinerary for H-1B petitions with multiple work locations.
- This reduces administrative burdens, particularly for employers with project-based or rotational workforces.
- Pro-tip: Although the itinerary requirement has been eliminated, U.S. employers should anticipate scrutiny of third-party worksites. They should make sure that the worksites listed in the I-129 petition (Part 5) are complete and accurate. This is especially important because the modernization rule has codified DHS' authority to conduct site visits. U.S. employers must show that the work to be performed at a third-party location is a specialty occupation. Thus, when determining compliance, USCIS will analyze the qualifications of the third party where the beneficiary will work, not those of the employer petitioning for the employee. If USCIS cannot verify the facts provided in the underlying H-1B petition, USCIS can deny or revoke the petition for any H-1B worker assigned to the location that could not be verified through the USCIS site visit.
CAP Gap Extensions for F-1 Students
DHS is providing flexibility to F-1 students seeking to change their status to H-1B by automatically extending the duration of their F-1 status and the validity of their work authorization until April 1 of the relevant fiscal year (i.e. April 1 of the following calendar year) or until approval of the H-1B petition, whichever is earlier. Formerly, the cap-gap protection extended work authorization for F-1 Optional Practical Training (OPT) holders only until October 1 of the year in which H-1B status was being requested.
Deference
The final rule codifies DHS's current deference policy to clarify that, when adjudicating an extension or amendment of an I-129 petition involving the same parties and the same underlying facts, adjudicators generally should defer to a prior USCIS determination on eligibility, unless:
- a material error in the prior approval is discovered; or
- other material change in facts or new or adverse information impact on the Petitioner's and/or the Beneficiary's eligibility.
- Pro-Tip: This is good news for U.S. employers because it streamlines petition processing. U.S. employers will want to review their previously approved cases with an immigration attorney before submitting an extension/amendment petition to ensure that there are no 'red flags.'
Validity Period Flexibility
- The modernization rule allows petitioners to amend the initially requested validity periods (e.g., dates of employment) in cases where approval/adjudication has been delayed past the originally requested end date.
- If the existing Labor Condition Application (LCA) does not cover the new validity period, the employer must submit a new LCA and ensure compliance with the higher of the current prevailing wage or the actual wage.
- Pro-Tip: In allowing for this flexibility, the modernization rule will help foreign nationals to not lose their H-1B validity during the often lengthy adjudication process.
H-1B for Beneficiary - Owners
H-1B petitions can be filed for employees whoown a controlling interestin the petitioning entity if the Beneficiary-Owner will perform specialty occupation duties of H-1B caliber for the majority of the time.
- However, theinitial petition validityand first extension are limited to18 months each.
- Controlling interestis defined as owningmore than 50%or having majority voting rights.
H-1B Cap Exemptions
The final rule broadens the definitions of ''nonprofit research organization'' and ''governmental research organization'' by allowing 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 still meet the definition of a nonprofit research entity.
Beneficiaries who arenot directly employedby "qualifying organizations" can qualify for the H-1B cap exemption if they spend at least50% of their timeperforming work that supports or advances the organization's fundamental mission or objectives.
Conclusion
The new modernization rule provides many benefits and some challenges to U.S. employers seeking to hire foreign nationals under the H-1B visa program. While there are important advantages such as the recession of the H-1B itinerary requirement and the codifying of 'prior deference', U.S. employers will also need to be more vigilant to ensure that the intended beneficiaries' academic backgrounds directly relate to the duties of the H-1B position and that their job offers are bona fide. U.S. employers should also be prepared for greater scrutiny on both standard H-1B regulations and those introduced in the modernization rule.
Footnotes
1 See page 1, the Summary of the Modernizing H-1B Requirements, Providing Flexibility in the F-1 Program, and Program Improvements Affecting Other Nonimmigrant Workers final rule at Federal Register :: Modernizing H-1B Requirements, Providing Flexibility in the F-1 Program, and Program Improvements Affecting Other Nonimmigrant Workers
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
