New H1B Rules - Definition Change - One year Approvals others Info

New H1B Rules – Definition Change, 1 Year Approvals, Site Visits Changes

In H1B Visa by KumarUpdated : 41 Comments

As some of you know DHS submitted Strengthen H1B Visa Program Rule as interim final stage rule for OMB to review. On October 8th, 2020 DHS published the rule in Federal Register. There are quite a few new changes that are part of the new interim final rule that is published by DHS. In this article we will cover all these aspects and give official rule text for your understanding and clarity, including when it will be effective, who it will apply to.

It is always important to understand the background of why a rule is put forward by someone to have full context. Let’s look those details.

Background – Why changes to H1B Rules?

The new H1B regulation document is about 147 pages. It has a detail analysis of why they are planning to change, cost analysis and some data points for the changes. Below are the some of the key reasons DHS has mentioned why there is a need for changes to H1B Visa program :  

  • President EO – Buy American Hire American asking for new rules, guidance
  • H1B Program has displaced US workers
  • H1B program has led to reduced wages in various Industries in US
  • President Proclamation suspending entry of H1B workers
  • To improve integrity of H1B program

Some stats that were quoted by DHS in the background are below :

  • From FY 2018 to 2018, 71% of  H1B petitions in H1B Industry involved third party workers.
  • DOL has received many complaints about staffing companies.
  • IT Workers on H1B grew by 75% in recent years (compared from FY 2003 to FY 2019). But, the wage levels have been flat in IT fields.
  • IT wage was 189% of national average in 2003 vs 182% in FY 2019.
  • As of Sep 30, 2019, there are about 583,420 workers and the huge number of H1B workers will impact US workers jobs.

DHS talks about various other stats and gaps in the H1B program and says COVID-19 has caused the gaps to be felt more for US workers. The goal of these changes is to protect US workers and integrity of the H1B program.

Now that we know the background, let’s look at the high-level summary of the changes that are proposed in this regulation.

Overview of the all changes to H1B Program in new Regulation

Below are the overall changes that are part of the new H1B regulation that is published by DHS on a very high level.  Think of these as index, we will discuss them in detail later in the article.  

  • Revised definition for H1B Specialty Occupation
  • Specialty occupation requirements, Evidence like Contracts
  • Changes to Employer-Employee Relationship requirements
  • Eliminating Itinerary requirements for H1B positions
  • Limiting maximum H1B time to 1 year for third party placements
  • Written explanation for H1B short term decisions
  • Additional rules for verification, Site visits.  H1B Revocations, if no cooperation.

Let’s dive into each of the above listed topics now.

Change in H1B Specialty Occupation Definition

DHS is changing the definition of the H1B Specialty occupation to align with the actual requirement set by Congress in statue.

  • The key change is that they are really placing emphasis on having a bachelors or higher degree in the specialty occupation.
  • They say, you cannot just have a general bachelor’s degree and work in a specialty occupation that is not related to your bachelor’s degree.  
  • Employer has to demonstrate that the duties of the position are related to the specific specialty or education degree.

Example & Rationale for Specialty Occupation:  DHS logic in the regulation is that, if you are doctor, you would get a degree in medicine and if you are a lawyer you would get a degree in Law.  So, it should be easy to prove the same.  For instance, they say that general engineering degree would not meet the requirements for a Software Developer as it does not satisfy the specific specialty requirement. So, logically, if you are going to be a Software Developer, they are expecting you to have a degree in Computer Science or have done supporting course work on the same.

Below are the exact requirements as per the regulatory text.  

Speciality Occupation H1B Definition Revised 2020
Speciality Occupation H1B Definition Revised 2020

Bachelor’s Degree requirements in Specialty Occupation for H1B Position

Criteria for Speciality Occupation H1B Program 2020
Criteria for Speciality Occupation H1B Program 2020

Changes to Employer-Employee Relationship Requirements

Earlier this year, DHS changed H1B employer-employee relationship clauses as they lost the court case with IT Serve. Now, they are pretty much bringing back all the old rules in other format asking for contracts, work orders, etc. to prove the employer employee relationship.

DHS says they are going to use the standard of “conventional master-servant relationship”, which is explained as per Supreme court that “the hiring party has right to control for the job at hand (whatever it is like product building or any task)”. They say that there is no one set of standard rules that define the employer-employee relationship, but rather it would be look holistically. 

In short, DHS says that the employer filing H1B should able to control work, evaluate work done by the H1B holder, hire, pay that person, given equipment for work,  claim them as employee for tax purposes, they deliver the product or service related to H1B sponsor’s line of work, etc.  It is technically going back to Neufeld Memo on Employer-employee Relationship from 2010, but just with some wording changes.  

Below is the actual regulation text that USCIS will consider evaluating Employer-employee relationship. 

H1B Employer Employee Relationship New Rules 2020
H1B Employer Employee Relationship New Rules 2020

Evidence to Prove H1B Specialty Occupation Work, Third-Party Workers

DHS is making it clear that there should be a bona fide (genuine) specialty occupation work for the H1B worker. They will review the job duties for the H1B position to make sure, it belongs to specialty occupation. As this part is very difficult in third-party worksite situations, DHS will require additional evidences as listed below to prove the same. Depending on the contract types, one or more of the below documents would be required :  

  • Master Service Agreement (MSA), related work orders (WO)
  • Statement of Work (SOW), Supplier Agreements
  • Any other similar legally binding agreements.
  • Client letters signed by end client responsible person, where the H1B worker would work.
  • Technical documentation related to Specialty work  – Milestone tables, market research reports, brochures, funding documents, etc.

Below is the actual regulation text for proof of specialty work.

USCIS Proof of Speciality Occupation - Third Party Placement 2020
USCIS Proof of Speciality Occupation – Third Party Placement 2020

H1B Validity of 1 year for Third Party Placements

DHS as part of regulation will set at one-year maximum validity for H1B petitions that are filed as third-party worksite petitions. If you work in the same role or contract for more than a year, they say that you can file a new LCA or re-use the old approved 3 years H1B LCA for extensions. They say that this will incur more filing costs for certain petitioners, but it will reduce the fraud and non-compliance.

 DHS rationale is that most of the third-party contracts at usually around 6 months to one year, based on their experience. Giving a 3-year approval for third party worksite petitions will create more chance for fraud as USCIS cannot monitor properly.  With 1-year limit, they can reduce the fraud as the application would be reviewed again and checked for compliance, including site visits and other verifications.

Below is the actual regulatory text that says the validity would be 1 year.

H1B Petition Validity to 1 year for Third party placements 2020
H1B Petition Validity to 1 year for Third party placements 2020

Explanation for H1B Approvals – Shorter Duration

DHS says that they will give explanation for the shorter duration of approvals of H1B, if any. This is in situations where the H1B employer is asking for 3 years and USCIS gives shorter duration like in third party placements or other cases. The goal is for H1B employers to know the reason for shorter approvals.

See below the actual regulation text.

Shorter Duration H1B explanation
Shorter Duration H1B explanation

Itinerary Requirement Removed for H1B petitions

As mentioned earlier, there was a court case, where DHS lost on the employer-employee relationship and the itinerary requirement. To make that decision implemented properly, they are amending the regulation saying that itinerary requirement will not apply to the H1B petitions.  Basically, in the past, they were asking for day to day activities or work activities schedule like work duration by location and dates. Now, that requirement is not applicable anymore for H1B category petitions.

Below is the actual regulatory text for the Itinerary requirement not applicable to H1Bs

Itinerary Requirement for H1B petition Removed 2020
Itinerary Requirement for H1B petition Removed 2020

New Site Visits Rules, Refusal to cooperate – Revoke H1B

DHS has outlined a new set of rules to conduct site visits, inspections, verifications and evaluations. DHS can conduct inspections over phone, electronically or physical on-site inspections (site visit).  They can do these verifications, site visits before or after the approval of H1B petition.

The new rules include on-site visit to H1B sponsors’ facilities, interviews with officials, review of the company records to be compliant with Immigration laws.  Also, interviews with any other individuals or facts related to the case to verify the H1B petition, employer for compliance.

DHS can visit H1B employer’s headquarters, satellite location, where the H1B employee works, including third party worksites. If USCIS is unable to verify the facts or if petitioner or third-party does not cooperate with site visit, USCIS can deny or revoke H1B petition.   

Below is the actual H1B regulation text on site visits, verification process.

USCIS Rules on Site Visits - Inspections Before and after
USCIS Rules on Site Visits – Inspections Before and after

USCIS Reason for Not going through Rule Making process.

USCIS says that the reason for not going through the full 9 Steps Rule Making regulatory process with full public notice periods, comments is due to the gravity of the situation with COVID-19, the large number of H1B workers currently in US (583,420 as of Sep 30, 2019), rising unemployment rate in general and also unemployment rate in the Information sector where most of H1B holders are employed. 

They say that the current issued H1B regulation may be changed based on feedback and comments in the next 60 days. Even though this regulation is economically significant, DHS says that OIRA waived the review of this regulation.

New H1B Rules Effective Date, Applicable to All

All the above H1B program changes in the regulation will be effective 60 days after publication of the rule in federal register. So, as the rule is published on Federal register on Oct 8th, the above changes will be effective from December 6th, 2020.

The H1B changes in this regulation will be applicable to all H1B petitions that are filed on or after the effective date of the new regulation, which is December 6th, 2020.  It applies to below listed types of H1B petitions.

  • New H1B Petitions
  • H1B Extensions
  • H1B Transfers
  • H1B Amendments.

New H1B Rules Not Applicable to : The new rules does not apply to currently pending H1B petitions, previously approved H1B petitions, either by reopening or opened after NOIR.

Will there be lawsuit ?

These changes announced today would have a lot of impact on big and small companies. The reality is that, we have many software engineers in the industry without having a degree in computer science (like history, mathematics, arts, etc.). Also, the one-year approvals is going to really squeeze a lot on the outsourcing companies and huge overhead for them. Looking at the overall impact of changes, there are many aspects that may be challenged in court.  Also, getting a waiver from OIRA without getting analysis is also another point that someone can go to court.  It will be interesting to see, how this will play out… Stay tuned for updates.

What do you think of the new H1B Regulations? Will they be effective or courts will block them ? Share your thoughts in comments.

You can check the official H1B regulation on FederalRegister.gov

   

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Comments ( 41 )

  1. Vinay Nani

    I graduated this may 2020 and started working for an MNC. I am on OPT and I got selected for h1b in second lottery. My case was filled on October 1st. I want to go for an internal transfer to another team which is under different entity in same company, Hence I have to wait for H1B approval and needed an ammendment. I want to go for premium processing as i want to shift to another team as fast as I can, but haven’t received the receipt number yet. Is there a way to move forward with premium processing fastly?Will there be any problems should I have to worry about?

  2. Anna

    Finally after long waiting, now I have received my H1B approvals with around 10 months of validity. Kumar and all experienced members please provide your suggestion on my current situation. I would definitely recommend adding the last name because if she only applies for Visa with one name it would be more complex here.

  3. Prasanna

    If a businessman with no law degree or background can become a politician overnight and rule a country for 4 years and gain a lot of supporters, why not a electrical engineer with some foundation on computer science still not work as a computer engineer despite the experience he gained over so many years of actual work.. it might at least count years of experience in the platform for which H1 is applied for.
    Computer science is a skill that can be learnt unlike medical or a law degree that for sure needs a school to teach.

    1. Freddy

      DHS argument is the same as yours , If anyone can do it , then Employer should find US citizen rather a foreigner. Which is true , I am sure lot of Americans working at cash registers in Retail stores can do the Business Analyst positions which H1bs are qualified for. By the way I think DHS . DOL all know the standards of Indian Engineering colleges standards. Most of the graduates cleared the degree with C grades.

  4. abc

    How will it impact approved h1b petitions and 221g cases. My company has sent client letters and all supportive documents by March 2020 and received an acknowledgement . Just awaiting for the ban to be lifted and constellates to open. Will this impact 221g?

  5. xyz

    How will it impact approved h1b petitions and 221g cases. My company has sent client letters and all supportive documents by March 2020 and received an acknowledgement . Just awaiting for the ban to be lifted and constellates to open. Will this impact 221g?

  6. ash

    So if your past H1B extensions were approved under Level 4 wages and future H1B extensions is applied under level 3 wages will that be an issue? Can someone clarify if the min wage requirement to get H1B extension should be above Level 2?

  7. Titly

    So my Bachelor’s degree was in Engineering from a US school but my current line of work is in IT. I have 5 years of work experience already relating to my current job role, and also have additional certifications directly relating to my line of work. Will the work experience and additional certifications be enough to prove that my current line of work matches my degree/experience, or would I still need to show a Bachelors/Masters Degree from the same line of work while applying for H1B extension/transfer?

    And if it is that I still need to have a related BSc/MSc, then is it enough to be enrolled into a related course while applying for the H1B extension/transfer, or do I have to show that I have already graduated from the said course for it to be applicable?

    1. Give the best

      Not to discourage… but bill is more stressing on directly related to Graduation or PG, but this bill is not final, still 2 more months to implement and it has to pass legal hurdles and there may be exceptions for already working people or bill may never be implemented,
      For your second question..It looks like you have to have Degree before applying the Visa or extension.

    1. Give the best

      Bill did not really talk about that.
      here is the full bill. https://public-inspection.federalregister.gov/2020-22347.pdf
      see if you can find info around that.

  8. Teja

    Hi, Kindly correct the below mentioned typo error.

    “From FY 2018 to 2018, 71% of H1B petitions in H1B Industry involved third party workers”

  9. Amit

    There shouldn’t be much worry around this new rule. If it becomes a law and you still stays here then you’ll be getting more salary and that is good in all the ways. If you’re a legit guy and really qualify for the job you do and back that with your qualification (CSE and higher) and have professional experience then don’t get anxious. Flip side is just ONE year approval that will require you to file an extension every year even though your project is multi year long.

    Every country has the full right to protect their peoples’ jobs by means of doing something that they see fit and there is nothing wrong in that. If you don’t like that here and still want to be somewhere outside India, if you’re from India, then better explore other options, there are plenty or get a nice paid job in India itself.

      1. M23RR

        Wow, its true that truth hurts,but why people starts abusing others when they know its truth but still don’t want to accept.. If we can have riots in Mumbai for Bihari’s to work there, even in the same country, cant they do what they want to feel better protected from outsiders in their own country?? Seriously.. an educated guy loosing temper over a fact makes them the reason for such laws to bring and implemented at the first place..

    1. DIpa

      There is no dearth of nice paying job in India Many good engineers dont even come to USA rather prefer Bangalore or other countries..US basically requires skilled proff bcoz they lack.One shud understand there are several aspects of software engineering which requires excellent problem solving skills and that can be satisfied by Engineers not ltd to CSE.Even Sundar Pichai had a degree in Metallurgy and Material Science.There are reasons why Silicon Valley Companies pay fat salary to their employees .Not w/o any reasons these companies hire generic engineers with high salaries if it can only be satisfied by CSE

  10. PK

    What about L1 visa and modifying it so that they don’t abuse EB1 category and get free green cards for their family ? US government should make sure that there are fake managers who get EB1 and then genuine professionals with masters, PhD are waiting in line for decades.

    1. Give the best

      Minimum wages already raised drastcially, like Previous L2 is 88000, now they are at least 115000. check the labour site for details.

  11. Akshay B

    I have worked as contractor in the past. This will force companies to hire fulltime workers and pay more. It may not seen. It will help us get better pay and better jobs. Many companies today walk away with no benefits and less pay by hiring contractors.

  12. Sagar

    H1B visa is so handicapped it has no govt. benefits. They always work hard, pay taxes and live in fear. It is used for political gain to the core and will be used in future too. They are easy targets and readily available scape goats for every scenario.

    Want jobs – screw H1
    Pandemic – screw H1
    Want easy money – screw H1
    Increase premium
    Political gain – screw H1
    Anything else – screw H1
    Frustrated with this biased playing.

    They are the people entering with proper legal documents and have proper number of entries .

    There are millions entering illegally and nobody bats an eye.

    Hope this comes to an end.

    1. Give the best

      All right.. calm down…It is their county, and we come here by abiding certian rules they put in. we have our country to go back all ways.
      some of the companies realized new law coming and lodged massive LCAs last month and this week with old pays to avoid high pays for next 3 years.
      Hoepfully It come to end when new rules taken by everyone in 1 year time.
      Are you skilled and competent? Yes
      Does your company ready to take you because their country people not available? Yes
      Here you go.. you are needed for this country to fill the skill gap.

    2. Freddy

      I wish you asked all these tough questions to the govt of the country you belong , all the benefits , laws , reforms. You are in the wrong place and asking the questions the wrong people. They don’t owe you anything. Be happy that you have a job. Lot of H1bs forget the fact that its a Guest worker program, not a guaranteed ticket to US Citizenship. Sorry to say that !

  13. Trumpet

    This visa is meant for specialized, experienced professionals, but those greedy Indians misused it to the core. Hope this new rule will eliminate those fake, less paid labors out there. They should be kicked out of this country ASAP.

  14. H1B

    I am concerned about the new prevailing wage rule. It is way too expensive and the company will not be able to apply for my visa if it becomes effective next year.

    In your opinion, will the new prevailing requirement become effective?

  15. kumar88

    i’ve read in other websites that the prevailing wage change will take effect immediately Oct 8th, NOT Dec 8th. while other changes regarding specialty occupation will be Dec 8th. which is true? my specific case is that i have prevailing wage currently pending for PERM. thank you

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