Updated Regulations on Modernizing H-1B Requirements: Key Changes and What They Mean

On December 18, 2024, the U.S. Department of Homeland Security (DHS) issued a final rule titled “Modernizing H-1B Requirements, Providing Flexibility in the F-1 Program, and Program Improvements Affecting Other Nonimmigrant Workers. ” This rule (“new rule”), effective January 17, 2025, introduces several positive changes aimed at enhancing the efficiency and integrity of the H-1B program. Below are some of the key updates:

1. Clarification on the Definition of Specialty Occupation

One of the critical updates in the new rule is the revised definition of a “specialty occupation.” The term “normally” is clarified to mean “not always,” allowing for a range of qualifying degree fields directly related to job duties. The new rule clarifies that the degree should be related to the role and that USCIS should look to the beneficiary’s transcripts and courses to help determine whether a degree is related to the sponsored position. This should reduce the amount of USCIS requests on specialty occupation-based Request for Evidence (RFE), thereby leading to more efficiently adjudicating H-1B petitions.

1. Consistency and Efficiency in H-1B Adjudication

Codification of Prior Deference Policy: The updated regulations codifies the policy that USCIS should defer to prior decisions made on an H-1B extension filed without a change in circumstances from the prior H-1B filing. This will allow USCIS to process applications more consistently and quickly for individuals who have previously been approved for an H-1B visa.

Less Paperwork: The new rule also eliminates outdated requirements, such as the submission of itineraries with H-1B petitions, which previously added to the paperwork burden, and highlights how the electronic H-1B lottery registration system has proven to be cost effective for employers and efficient in streamlining the H-1B lottery process.

1. Updates to “Cap-Gap” provision:

The cap-gap provision allows F-1 students with a pending or approved change of status to H-1B cap petition to remain in F-1 status during the period between the end of their F-1 status and the start of their H-1B status. The new rule will automatically extend F-1 status and corresponding OPT or STEM OPT employment authorization for students changing status to H-1B. Previously the Cap-Gap provision allowed for extension of the F-1 and work authorization status until October 1 of the following fiscal year. The new rule extends the cap-gap provision beyond Oct 1, until April 1, which is one year from the typical initial cap filing start date. The new rule states that this accounts for USCIS’ competing operational considerations and would enable the agency to balance workloads more appropriately for different types of petitions

1. H-1B Employer – Employee Updates

The new H-1B rule revises the definition of a “United States employer” to provide clarity and additional flexibilities.

Bona Fide Job Offer : The petitioner must establish that they have a bona fide position in a specialty occupation available for the worker as of the requested start date. This job offer can include telework, remote work, or other off-site work within the United States. The new rule states that Petitioners must provide sufficient evidence to demonstrate that the job offer is genuine and that the beneficiary will be employed in a specialty occupation. This may include detailed job descriptions, contracts, and other relevant documentation and the new rule codifies the authority to request contracts or similar evidence to determine if the position is bona fide.

H-1Bs for those with controlling interest in Petitioning Entity: The new rule provides greater flexibility for entrepreneurs and business owners who wish to work in the United States under the H-1B program. H-1B beneficiaries with a controlling interest in the petitioning organization can be eligible for H-1B status. This means that even owners of the petitioning entity can be sponsored and approved for the H-1B, however there are limitations, such as the validity period is limited to 18 months, rather than 3 years.

1. USCIS Authority for Site Visits

The new rule codifies USCIS’ authority to conduct inspections and impose penalties for non-compliance. During site visits, USCIS officers may request evidence to verify the information provided by the petitioner in the H-1B filing, confirm eligibility, and ensure compliance with the terms and conditions of the petition. The new rule also clarifies that petitioners who do not comply with site visits could have pending petitions denied and previously approved petitions revoked.

1. Expansion of Cap- Exempt

Definition update: The new H-1B rule expands the criteria for beneficiaries eligible for cap exemption, providing more flexibility for certain types of employment. The new rule updates the terms “primarily engaged” and “primary mission” with “fundamental activity.” This change allows nonprofit entities or governmental research organizations that conduct research as a fundamental activity, but are not primarily engaged in research, to qualify for cap exemption.

Indirect Employment: Certain beneficiaries who are not directly employed by a qualifying organization can still qualify for H-1B cap exemption. Work performed “at” the qualifying institution can include telework, remote work, or other off-site work. USCIS will focus on the job duties performed rather than the physical location of the work. These beneficiaries must spend at least half of their work time performing job duties at a qualifying institution, organization, or entity. The job duties must directly further an activity that supports or advances one of the fundamental purposes, missions, objectives, or functions of the qualifying institution, organization, or entity, such as higher education, nonprofit research, or government research.

The 406-page rule codifies many of the informal policies already in practice by USCIS while also adding updates that help employers retain talent through the H-1B program with more flexibility and consistency moving forward.

If you are an employer looking to sponsor a candidate for the H-1B, schedule a no cost consultation with our knowledgeable business immigration attorneys.

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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