The Department of Homeland security (DHS) is finalizing plans to further restrict H-1B visas. DHS has already sent the new regulation to the Office of Management and Budget (OMB) for final review, and it will likely be published in the near future. 

Over the past few years, the H-1B visa has undergone more changes than it has in its lifetime. In FY 2015, the denial rate for the H-1B was 6%. By the second quarter of FY 2020, it had ballooned to 29%. If this upcoming regulation is put into effect, H-1B employers and beneficiaries should expect acquiring a visa to become more difficult.

What the Regulation Entails

Since the news about the new regulation was released, it has attracted attention from the media as well as legal practitioners across the country. This is because, apart from the proposed restriction, the regulation may be published in the interim final rule, which is unusual and may not favor the general public. Here are the three main elements of the proposed regulation:

1. Interim Final Rule

If a regulation is published in the interim final rule, it means it will go into effect immediately without allowing public input. Usually, before any regulation becomes effective, it will be subject to public comment and stakeholders will have the chance to submit their views about it. 

In the past, the United States Citizenship and Immigration Services (USCIS) had lost a court case when it rolled out a STEM OPT regulation as an interim final rule. Some immigration experts believe this proposed interim final H-1B rule will likely be challenged in the courts as well and may not stand the test of time, just like the STEM OPT case. 

2. Restriction of the Definition of a Specialty Occupation

One of the core elements of the regulation is the plan by DHS to revise the definition of specialty occupation. The summary of the View Rule reads, “DHS will propose to revise the definition of specialty occupation to increase focus on obtaining the best and the brightest foreign nationals via the H-1B program.” Additionally, the proposal will include revising the definition of employment as well as what constitutes an employer-employee relationship. The reason, according to DHS, is to better protect U.S. workers and wages.

The rules surrounding the adjudication of H-1B visas are mainly based on the definitions of a specialty occupation and qualifying employer-employee relationship. These rules were implemented in 1991 and remain unchanged to date. 

Over the past few years, USCIS has attempted to narrow the interpretation of what qualifies as an H-1B specialty occupation. Earlier this year, the agency lost different lawsuits in this attempt to deny some H-1B applicants their visas based on whether they met the specialty occupation requirements for the position through which they were applying. 

3. Restriction on H-1B Work at Third-Party Client Sites

The existing H-1B rule allows employers to assign their H-1B workers to work at third-party client worksites. This is more common among IT firms that consult for other companies, as long as they can continue to maintain an employer-employee relationship, despite being at the third-party customer site. An employer-employee relationship means an employer is in control of the work of an H-1B worker. In other words, the employer can hire, pay, fire, and supervise the employee’s work, even while at a third-party client site.

The planned rule will likely introduce a new policy that will restrict or prevent organizations that send their H-1B workers to such third-party site jobs from obtaining visas. This has been looming since 2018 when USCIS started denying H-1B petitions based on the fact that a contractor doesn’t meet the definition of an employer when an H-1B professional works at a client’s site. If this goes into effect, it will greatly affect the IT firms whose major software needs are outsourced and prefer to have the assigned tech professionals come on-site for cybersecurity reasons.

How Will the Rule Affect H-1B Employers and Employees?

It might be too early to categorically quantify the impact of the upcoming rule on H-1B visa adjudication and employment. If allowed to go into effect, these regulations will make it more difficult to qualify for an H-1B visa, and, according to an immigration expert, may increase the “trend of [U.S.] employers sending high-value technology work offshore.”

However, from all indications, it will likely be challenged at the court, especially given its proposed “interim” status. So, it is safe to say that H-1B beneficiaries and employers shouldn’t panic yet. However, it is best to talk to your immigration attorney to see what effect this could have on your current or future cases.