Federal Register, Volume 89 Issue 243 (Wednesday, December 18, 2024)

[Federal Register Volume 89, Number 243 (Wednesday, December 18, 2024)]
[Rules and Regulations]
[Pages 103054-103200]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-29354]

[[Page 103053]]

Vol. 89

Wednesday,

No. 243

December 18, 2024

Part II

Department of Homeland Security

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8 CFR Part 214

Modernizing H-1B Requirements, Providing Flexibility in the F-1
Program, and Program Improvements Affecting Other Nonimmigrant Workers;
Final Rule

Federal Register / Vol. 89 , No. 243 / Wednesday, December 18, 2024 /
Rules and Regulations

[[Page 103054]]

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DEPARTMENT OF HOMELAND SECURITY

8 CFR Part 214

[CIS No. 2766-24; DHS Docket No. USCIS-2023-0005]
RIN 1615-AC70

Modernizing H-1B Requirements, Providing Flexibility in the F-1
Program, and Program Improvements Affecting Other Nonimmigrant Workers

AGENCY: U.S. Citizenship and Immigration Services, Department of
Homeland Security (DHS).

ACTION: Final rule.

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SUMMARY: The U.S. Department of Homeland Security (DHS) is issuing this
final rule to modernize and improve the efficiency of the H-1B program,
add benefits and flexibilities, and improve integrity measures. These
provisions mainly amend the regulations governing H-1B specialty
occupation workers, although some of the provisions narrowly impact
other nonimmigrant classifications, including: H-2, H-3, F-1, L-1, O,
P, Q-1, R-1, E-3, and TN.

DATES: This final rule is effective January 17, 2025.

FOR FURTHER INFORMATION CONTACT: Charles L. Nimick, Chief, Business and
Foreign Workers Division, Office of Policy and Strategy, U.S.
Citizenship and Immigration Services, U.S. Department of Homeland
Security, 5900 Capital Gateway Drive, Camp Springs, MD 20746; telephone
(240) 721-3000.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Executive Summary
A. Purpose of the Regulatory Action
B. Summary of the Major Provisions of the Regulatory Action
1. Clarifying Requirements and Improving Program Efficiencies
2. Providing Greater Benefits and Flexibilities
3. Strengthening Program Integrity
C. Summary of Costs and Benefits
D. Summary of Changes from the Notice of Proposed Rulemaking
1. Specialty Occupation Definition and Criteria
2. Bar on Multiple Registrations Submitted by Related Entities
3. Contracts
4. Non-speculative or Bona Fide Employment
5. Beneficiary-Owners
6. Additional Changes
II. Background
A. Legal Authority
B. The H-1B Program
C. The F-1 Program
D. NPRM and Final Rules
III. Response to Public Comments on the Proposed Rule
A. Summary of Public Comments on the Proposed Rule
B. DHS/USCIS Statutory and Legal Issues
C. General Comments
1. General Support for the Rule
2. General Opposition to the Rule
3. Other General Comments on the Rule
D. Modernization and Efficiencies
1. General Comments on the Proposed Modernization and
Efficiencies Provisions
2. Specialty Occupation Definition and Criteria
i. General comments on the proposed changes to ``specialty
occupation''
ii. Amending the Definition of ``Specialty Occupation''
iii. Amending the Criteria for ``Specialty Occupation''
3. Amended Petitions
4. Deference
5. Evidence of Maintenance of Status
6. Eliminating the Itinerary Requirement for H programs
7. Validity Expires Before Adjudication
E. Benefits and Flexibilities
1. H-1B Cap Exemptions
2. Automatic Extension of Authorized Employment Under 8 CFR
214.2(f)(5)(vi) (Cap-Gap)
3. Other Comments on Benefits and Flexibilities
F. Program Integrity
1. Provisions to Ensure Bona Fide Job Offer for a Bona Fide
Specialty Occupation Position
i. Contracts
ii. Bona Fide Employment
iii. LCA Properly Corresponds with the Petition
iv. Revising the Definition of U.S. Employer
v. Employer-Employee Relationship
vi. Bona Fide Job Offer
vii. Legal Presence and Amenable to Service of Process
2. Beneficiary-Owners
3. Site Visits
4. Third-Party Placement (Codifying Policy Based on Defensor v.
Meissner (5th Cir. 2000))
5. Other Comments on Program Integrity and Alternatives
G. Request for Preliminary Public Input Related to Future
Actions/Proposals
1. Use or Lose
2. Beneficiary Notification
H. Other Comments on the Proposed Rule
I. Out of Scope
J. Statutory and Regulatory Requirements
1. Administrative Procedure Act
2. Comments on the Regulatory Impact Analysis (RIA) (E.O. 12866
and E.O. 13563)
K. Severability
IV. Statutory and Regulatory Requirements
A. Executive Order 12866 (Regulatory Planning and Review) and
Executive Order 13563 (Improving Regulation and Regulatory Review)
1. Summary of Changes from NPRM to Final Rule
2. Background
3. Costs, Transfers, and Benefits of the Final Rule
i. Specialty Occupation Definition and Criteria
ii. Amended Petitions
iii. Deference to Prior USCIS Determinations of Eligibility in
Requests for Extensions of Petition Validity
iv. Evidence of Maintenance of Status
v. Eliminating the Itinerary Requirement for H Programs
vi. Validity Period Expires Before Adjudication
vii. H-1B Cap Exemptions
viii. Automatic Extension of Authorized Employment ``Cap-Gap''
ix. Provisions to Ensure Bona Fide Job Offer for a Specialty
Occupation Position
a. Contracts
b. Bona fide Employment
c. LCA Corresponds with the Petition
d. Revising the Definition of U.S. Employer
e. Employer-Employee Relationship
x. Beneficiary-Owners
xi. Site Visits
xii. Third-Party Placement (Codifying Policy Based on Defensor
v. Meissner (5th Cir. 2000))
4. Alternatives Considered
5. Total Quantified Net Costs of the Final Regulatory Changes
B. Regulatory Flexibility Act
C. Final Regulatory Flexibility Act (FRFA)
1. A statement of the need for, and objectives of, the rule
2. A statement of the significant issues raised by the public
comments in response to the IRFA, a statement of the assessment of
the agency of such issues, and a statement of any changes made in
the proposed rule as a result of such comments
3. The response of the agency to any comments filed by the Chief
Counsel for Advocacy of the Small Business Administration in
response to the proposed rule, and a detailed statement of any
change made to the proposed rule in the final rule as a result of
the comments
4. A description and an estimate of the number of small entities
to which the rule will apply or an explanation of why no such
estimate is available
5. A description of the projected reporting, recordkeeping, and
other compliance requirements of the rule, including an estimate of
the classes of small entities that will be subject to the
requirement and the types of professional skills necessary for
prepration of the report or record
6. A description of the steps the agency has taken to minimize
the significant economic impact on small entities consistent with
the stated objectives of applicable statutes, including a statement
of the factual, policy, and legal reasons for selecting the
alternative adopted in the final rule and why each of the other
significant alternatives to the rule considered by the agency was
rejected.
D. Unfunded Mandates Reform Act of 1995 (UMRA)
E. Congressional Review Act
F. Executive Order 13132 (Federalism)
G. Executive Order 12988 (Civil Justice Reform)

[[Page 103055]]

H. Executive Order 13175 (Consultation and Coordination with
Indian Tribal Governments)
I. National Environmental Policy Act (NEPA)
J. Paperwork Reduction Act

Table of Abbreviations

AC21--American Competitiveness in the Twenty-first Century Act
ACWIA--American Competitiveness and Workforce Improvement Act of
1998
BLS--Bureau of Labor Statistics
CEQ--Council on Environmental Quality
CFR--Code of Federal Regulations
CMSA--Consolidated Metropolitan Statistical Area
COS--Change of Status
CPI-U--Consumer Price Index for All Urban Consumers
DHS--U.S. Department of Homeland Security
DOL--U.S. Department of Labor
DOS--U.S. Department of State
FDNS--Fraud Detection and National Security
FR--Federal Register
FY--Fiscal Year
HR--Human Resources
HSA--Homeland Security Act of 2002
ICE--Immigration and Customs Enforcement
IMMACT 90--Immigration Act of 1990
INA--Immigration and Nationality Act
INS--legacy Immigration and Naturalization Service
IRFA--Initial Regulatory Flexibility Analysis
IRS--Internal Revenue Service
LCA--Labor Condition Application
MSA--Metropolitan Statistical Area
AICS--North American Industry Classification System
NEPA--National Environmental Policy Act
NOID--Notice of Intent to Deny
NPRM--Notice of Proposed Rulemaking
OIRA--Office of Information and Regulatory Affairs
OMB--Office of Management and Budget
OP&S--Office of Policy and Strategy
OPT--Optional Practical Training
PM--Policy Memorandum
PMSA--Primary Metropolitan Statistical Area
PRA--Paperwork Reduction Act
PRD--Policy Research Division
Pub. L.--Public Law
RFA--Regulatory Flexibility Act of 1980
RFE--Request for Evidence
RIA--Regulatory Impact Analysis
RIN--Regulation Identifier Number
SBA--Small Business Administration
SEVP--Student and Exchange Visitor Program
SOC--Standard Occupational Classification
Stat.--U.S. Statutes at Large
TLC--Temporary Labor Certification
UMRA--Unfunded Mandates Reform Act
U.S.C.--United States Code
USCIS--U.S. Citizenship and Immigration Services

I. Executive Summary

DHS is amending its regulations by finalizing many of the
provisions proposed in the ``Modernizing H-1B Requirements, Providing
Flexibility in the F-1 Program, and Program Improvements Affecting
Other Nonimmigrant Workers,'' notice of proposed rulemaking (NPRM),
published in the Federal Register on October 23, 2023 (88 FR 72870).
DHS previously finalized portions of the NPRM relating to H-1B
registration in a separate final rule, ``Improving the H-1B
Registration Selection Process and Program Integrity,'' published in
the Federal Register on February 2, 2024 (89 FR 7456).

A. Purpose of the Regulatory Action

The purpose of this rulemaking is to modernize and improve the H-1B
program by: (1) clarifying the requirements of the H-1B program and
improving program efficiency; (2) providing greater benefits and
flexibilities for petitioners and beneficiaries; and (3) strengthening
program integrity measures.

B. Summary of the Major Provisions of the Regulatory Action

1. Clarifying Requirements and Improving Program Efficiencies
Through this rule, DHS is: (1) revising the regulatory definition
and criteria for a position to be deemed a ``specialty occupation'';
(2) clarifying that ``normally'' does not mean ``always'' within the
criteria for a specialty occupation; and (3) clarifying that the
petitioner may accept a range of qualifying degree fields as sufficient
to qualify for the position, but the required field(s) must be directly
related to the job duties in order for the position to be deemed a
specialty occupation. See new 8 CFR 214.2(h)(4)(ii) and (h)(4)(iii)(A).
DHS is also updating the regulations governing when an amended or new
petition must be filed due to a change in an H-1B worker's place of
employment to be consistent with current policy guidance. See new 8 CFR
214.2(h)(2)(i)(E).
Additionally, DHS is codifying its current deference policy to
clarify that, when adjudicating a Form I-129, Petition for Nonimmigrant
Worker, 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 or information impacts the
petitioner's, beneficiary's, or applicant's eligibility. See new 8 CFR
214.1(c)(5). DHS is also updating the regulations to expressly require
that evidence of the beneficiary's maintenance of status must be
included with a petition seeking an extension or amendment of stay. See
new 8 CFR 214.1(c)(6). This policy impacts all employment-based
nonimmigrant classifications that use Form I-129, Petition for
Nonimmigrant Worker. DHS is also eliminating the itinerary requirement,
impacting all H classifications. See new 8 CFR 214.2(h)(2)(i)(B) and
(F). Additionally, DHS is updating the regulations to allow petitioners
to amend the initially requested validity periods (i.e., dates of
employment) in cases where the petition is deemed approvable after the
requested end date for employment has passed. See new 8 CFR
214.2(h)(9)(ii)(D).

2. Providing Greater Benefits and Flexibilities

DHS is modernizing regulatory definitions to provide additional
flexibilities for nonprofit and governmental research organizations and
petitions for certain beneficiaries who are not directly employed by a
qualifying organization. These changes better reflect modern
organizational and staffing structures for both nonprofit and
nongovernmental research organizations. Specifically, through this
rulemaking, DHS is changing the definition of ``nonprofit research
organization'' and ``governmental research organization'' by replacing
the terms ``primarily engaged'' and ``primary mission'' with
``fundamental activity'' to permit 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 meet the definition of a nonprofit research entity
or governmental research organization for purposes of establishing
exemption from the annual statutory limit on H-1B visas. Additionally,
DHS is revising the regulations to recognize that certain beneficiaries
may qualify for H-1B cap exemption when they are not directly employed
by a qualifying organization, but still spend at least half of their
time providing essential work that supports or advances a fundamental
purpose, mission, objective, or function of the qualifying
organization. See new 8 CFR 214.2(h)(8)(iii)(F)(2)(iv),
(h)(8)(iii)(F)(4), (h)(19)(iii)(B)(4), and (h)(19)(iii)(C). DHS is also
providing flexibility to students seeking to change their status to H-
1B by automatically extending the duration of their F-1 status, and any
employment authorization granted under 8 CFR 274a.12(c)(3)(i)(B) or
(C), until April 1 of the relevant fiscal year to avoid disruptions in
lawful status and employment authorization while a petition requesting
a change of status to

[[Page 103056]]

H-1B is pending. See new 8 CFR 214.2(f)(5)(vi)(A).
3. Strengthening Program Integrity
DHS is strengthening the integrity of the H-1B program through this
rulemaking by: (1) requiring that the petitioner establish that it has
a bona fide position in a specialty occupation available for the
beneficiary as of the requested start date; (2) codifying its authority
to request contracts or similar evidence to determine if the position
is bona fide; (3) ensuring that the LCA supports and properly
corresponds to the petition; (4) revising 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
United States as of the requested start date; and (5) adding a
requirement that the petitioner have a legal presence and be amenable
to service of process in the United States. See new 8 CFR
214.2(h)(4)(i)(B)(1), (h)(4)(ii), and (h)(4)(iv)(C) and (D).
DHS is also clarifying that certain owners of the petitioning
entity may be eligible for H-1B status (``beneficiary-owners''), while
setting reasonable parameters around H-1B eligibility when the
beneficiary owns a controlling interest in the petitioning entity. For
example, USCIS will limit the validity of the initial H-1B petition and
first extension to 18 months each. See new 8 CFR 214.2(h)(9)(iii)(E).
DHS is also codifying USCIS' authority to conduct site visits and
clarifying that refusal to comply with site visits may result in denial
or revocation of the petition. See new 8 CFR 214.2(h)(4)(i)(B)(2).
Additionally, DHS is clarifying that if an H-1B worker will be staffed
to a third party, meaning they will be contracted to fill a position in
the third party's organization, the work to be performed by the
beneficiary for the third party must be in a specialty occupation, and
it is the requirements of that third party, and not the petitioner,
that are most relevant when determining whether the position is a
specialty occupation. See new 8 CFR 214.2(h)(4)(i)(B)(3).

C. Summary of Costs and Benefits

DHS analyzed two baselines for this final rule, the no action
baselines and the without-policy baseline. The primary baseline for
this final rule is the no action baseline. For the 10-year period of
analysis of the final rule, DHS estimates the annualized net cost
savings of this rulemaking will be $333,835 annualized at a 2 percent
discount rate. DHS also estimates that there will be annualized
monetized transfers of $1.4 million from newly cap-exempt petitioners
to USCIS and $38.8 million from employers to F-1 workers, both
annualized at a 2 percent discount rate.

D. Summary of Changes From the Notice of Proposed Rulemaking

Following careful consideration of public comments received, this
final rule adopts many of the provisions proposed in the NPRM, with
revisions as described below.
1. Specialty Occupation Definition and Criteria
In response to commenters' concerns, DHS is modifying the
definition of specialty occupation from the proposed definition. After
carefully considering the comments, DHS is not finalizing the proposed
regulatory text, ``[t]he required specialized studies must be directly
related to the position,'' as this language may be misread to conclude
that USCIS would only consider a beneficiary's specialized studies in
assessing whether the position is a specialty occupation. DHS is,
however, retaining the ``directly related'' requirement in the
definition of ``specialty occupation'' and related criteria, and is
adding language clarifying that ``directly related'' means there is a
logical connection between the degree or its equivalent, and the duties
of the position.
The specialty occupation definition also clarifies that although
the position may allow for a range of qualifying degree fields, each of
the fields must be directly related to the duties of the position.
To address commenters' concerns about the potential for
adjudicators to inappropriately rely solely on degree titles, DHS is
removing the references to ``business administration'' and ``liberal
arts.'' These changes recognize that the title of the degree alone is
not determinative and that degree titles may differ among schools and
evolve over time.
DHS is also making some minor, non-substantive revisions to 8 CFR
214.2(h)(4)(iii)(A), which include: changing the word ``are'' to ``is''
in 8 CFR 214.2(h)(4)(iii)(A)(4); revising 8 CFR 214.2(h)(4)(iii)(A)(2)
from ``United States industry'' to ``industry in the United States'';
and revising 8 CFR 214.2(h)(4)(iii)(A)(2) and (3) by adding ``to
perform the job duties for'' rather than just the word ``position.''
2. Bar on Multiple Registrations Submitted by Related Entities
DHS will not finalize the proposed change at 8 CFR
214.2(h)(2)(i)(G) to expressly state in the regulations that related
entities are prohibited from submitting multiple H-1B registrations for
the same individual. On February 2, 2024, DHS published a final rule,
``Improving the H-1B Registration Selection Process and Program
Integrity,'' 89 FR 7456 (Feb. 2, 2024), creating a beneficiary-centric
selection process for registrations by employers and adding additional
integrity measures related to the registration process to reduce the
potential for fraud in the H-1B registration process. In that final
rule, DHS states that it ``intends to address and may finalize this
proposed provision [expressly stating in the regulations that related
entities are prohibited from submitting multiple registrations for the
same individual] in a subsequent final rule,'' but that ``[m]ore time
and data will help inform the utility of this proposed provision.'' 89
FR 7456, 7469 (Feb. 2, 2024). Initial data from the FY 2025 H-1B
registration process show a significant decrease in the total number of
registrations submitted compared to FY 2024, including a decrease in
the number of registrations submitted on behalf of beneficiaries with
multiple registrations.\1\ This initial data indicate that there were
far fewer attempts to gain an unfair advantage than in prior years
owing, in large measure, to the implementation of the beneficiary-
centric selection process.\2\ Under the beneficiary-centric selection
process, individual beneficiaries do not benefit from an increased
chance of selection if related entities each submit a registration on
their behalf. As such, DHS has decided not to finalize the proposed
change pertaining to multiple registrations submitted by related
entities.
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\1\ USCIS, ``H-1B Electronic Registration Process,'' https://www.uscis.gov/working-in-the-united-states/temporary-workers/h-1b-specialty-occupations-and-fashion-models/h-1b-electronic-registration-process.
\2\ USCIS, ``H-1B Electronic Registration Process,'' https://www.uscis.gov/working-in-the-united-states/temporary-workers/h-1b-specialty-occupations-and-fashion-models/h-1b-electronic-registration-process.
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3. Contracts
In response to stakeholder comments, DHS is revising 8 CFR
214.2(h)(4)(iv)(C) to state that USCIS may request contracts or similar
evidence ``showing the bona fide nature of the beneficiary's
position,'' rather than ``showing the terms and conditions of the
beneficiary's work'' as stated in the NPRM. This revision is intended
to clarify that USCIS will review contracts or similar evidence to
determine if the position is bona fide.

[[Page 103057]]

4. 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) will state, 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 is not intended to be a substantive
change, but to clarify what DHS meant 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.
DHS is also adding to this provision, ``A petitioner is not
required to establish specific day-to-day assignments for the entire
time requested in the petition.'' While this was previously noted in
the preamble to the NPRM, DHS believes adding this clarification to the
regulatory text will help allay commenters' concerns and avoid future
confusion.
5. Beneficiary-Owners
In response to commenters' concerns about the term ``controlling
interest'' in the regulatory text for beneficiary-owners, DHS is
clarifying the term by defining it in the regulatory text, rather than
only in the preamble. Specifically, DHS is adding to new 8 CFR
214.2(h)(4)(ii) and (h)(9)(iii)(E), that a controlling interest means
that the beneficiary owns more than 50 percent of the petitioner or
that the beneficiary has majority voting rights in the petitioner.
6. Additional Changes
Additionally, in 8 CFR 214.1(c)(1), DHS is revising the reference
to the fee regulation from 8 CFR 103.7 to 8 CFR 106.2, to align with
the updated regulatory changes made by the USCIS Fee Schedule Final
Rule.\3\
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\3\ See ``U.S. Citizenship and Immigration Services Fee Schedule
and Changes to Certain Other Immigration Benefit Request
Requirements,'' 89 FR 6194 (Jan. 31, 2024).
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II. Background

A. Legal Authority

The authority of the Secretary of Homeland Security to make these
regulatory amendments is found in various sections of the Immigration
and Nationality Act (INA or the Act), 8 U.S.C. 1101 et seq., and the
Homeland Security Act of 2002 (HSA), Public Law 107-296, 116 Stat.
2135, 6 U.S.C. 101 et seq. General authority for issuing this rule is
found in section 103(a) of the INA, 8 U.S.C. 1103(a), which authorizes
the Secretary to administer and enforce the immigration and nationality
laws and establish such regulations as the Secretary deems necessary
for carrying out such authority, as well as section 102 of the HSA, 6
U.S.C. 112, which vests all of the functions of DHS in the Secretary
and authorizes the Secretary to issue regulations.\4\ Further authority
for these regulatory amendments is found in:
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\4\ Although several provisions of the INA discussed in the NPRM
refer exclusively to the ``Attorney General,'' such provisions are
now to be read as referring to the Secretary of Homeland Security by
operation of the HSA. See 6 U.S.C. 202(3), 251, 271(b), 542 note,
557; 8 U.S.C. 1103(a)(1), (g), 1551 note; Nielsen v. Preap, 586 U.S.
392, 397 n.2 (2019).
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Section 101(a)(15) of the INA, 8 U.S.C. 1101(a)(15), which
establishes classifications for noncitizens who are coming temporarily
to the United States as nonimmigrants, including the H-1B
classification, see INA sec. 101(a)(15)(H)(i)(b), 8 U.S.C.
1101(a)(15)(H)(i)(b);
Section 214(a)(1) of the INA, 8 U.S.C. 1184(a)(1), which
authorizes the Secretary to prescribe, by regulation, the time and
conditions of the admission of nonimmigrants;
Section 214(c) of the INA, 8 U.S.C. 1184(c), which, inter
alia, authorizes the Secretary to prescribe how an employer may
petition for nonimmigrant workers, including certain nonimmigrants
described at sections 101(a)(15)(H), (L), (O), and (P), 8 U.S.C.
1101(a)(15)(H), (L), (O), and (P); the information that an employer
must provide in the petition; and certain fees that are required for
certain nonimmigrant petitions;
Section 214(e) of the INA, 8 U.S.C. 1184(e), which
provides for the admission of citizens of Canada or Mexico as TN
nonimmigrants;
Section 214(g) of the INA, 8 U.S.C. 1184(g), which, inter
alia, prescribes the H-1B numerical limitations, various exceptions to
those limitations, and the period of authorized admission for H-1B
nonimmigrants;
Section 214(i) of the INA, 8 U.S.C. 1184(i), which sets
forth the definition and requirements of a ``specialty occupation'';
Section 235(d)(3) of the INA, 8 U.S.C. 1225(d)(3), which
authorizes ``any immigration officer'' . . . ``to administer oaths and
to take and consider evidence of or from any person touching the
privilege of any alien or person he believes or suspects to be an alien
to enter, reenter, transit through, or reside in the United States or
concerning any matter which is material and relevant to the enforcement
of [the INA] and the administration of [DHS]'';
Section 248 of the INA, 8 U.S.C. 1258, which authorizes a
noncitizen to change from any nonimmigrant classification to any other
nonimmigrant classification (subject to certain exceptions) if the
noncitizen was lawfully admitted to the United States as a nonimmigrant
and is continuing to maintain that status, and is not otherwise subject
to the 3- or 10-year bar applicable to certain noncitizens who were
unlawfully present in the United States;
Section 274A(h)(3) of the INA, 8 U.S.C. 1324a(h)(3), which
recognizes the Secretary's authority to extend employment authorization
to noncitizens in the United States;
Section 287(b) of the INA, 8 U.S.C. 1357(b), which
authorizes the taking and consideration of evidence ``concerning any
matter which is material or relevant to the enforcement of the [INA]
and the administration of [DHS]'';
Section 402 of the HSA, 6 U.S.C. 202, which charges the
Secretary with ``[e]stablishing and administering rules . . . governing
the granting of visas or other forms of permission . . . to enter the
United States'' and ``[e]stablishing national immigration enforcement
policies and priorities''; see also HSA sec. 428, 6 U.S.C. 236; and
Section 451(a)(3) and (b) of the HSA, 6 U.S.C. 271(a)(3)
and (b), transferring to USCIS the authority to adjudicate petitions
for nonimmigrant status, establish policies for performing that
function, and set national immigration services policies and
priorities.

B. The H-1B Program

The H-1B nonimmigrant visa program allows U.S. employers to
temporarily employ foreign workers in specialty occupations, defined by
statute as occupations that require the theoretical and practical
application of a body of highly specialized knowledge and a bachelor's
or higher degree in the specific specialty, or its equivalent. See INA
secs. 101(a)(15)(H)(i)(b) and 214(i), 8 U.S.C 1101(a)(15)(H)(i)(b) and
1184(i). Through the Immigration Act of 1990, Public Law 101-649,
Congress set the current annual cap for the H-1B visa category at
65,000,\5\ which limits the

[[Page 103058]]

number of beneficiaries who may be issued an initial H-1B visa or
otherwise provided initial H-1B status each fiscal year.\6\ Congress
provided an exemption from the numerical limits in INA sec.
214(g)(1)(A), 8 U.S.C. 1184(g)(1)(A), for 20,000 initial H-1B visas, or
grants of initial H-1B status, each fiscal year for foreign nationals
who have earned a master's or higher degree from a U.S. institution of
higher education (``advanced degree exemption'').\7\ Congress also set
up exemptions to the annual H-1B cap for workers who will be employed
at an institution of higher education (as defined in section 101(a) of
the Higher Education Act of 1965, as amended) or a related or
affiliated nonprofit entity, and workers who will be employed at a
nonprofit or governmental research organization. These exemptions are
not numerically capped. See INA sec. 214(g)(5)(A)-(B), 8 U.S.C.
1184(g)(5)(A)-(B).
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\5\ Up to 6,800 visas are set aside from the 65,000 each fiscal
year for the H-1B1 visa program under terms of the legislation
implementing the U.S.-Chile and U.S.-Singapore free trade
agreements. See INA secs. 101(a)(15)(H)(i)(b1), 214(g)(8), 8 U.S.C.
1101(a)(15)(H)(i)(b1), 1184(g)(8).
\6\ The 65,000 annual H-1B numerical limitation was increased
for FYs 1999 through 2003. See INA sec. 214(g)(1)(A), 8 U.S.C.
1184(g)(1)(A), as amended by section 411 of the American
Competitiveness and Workforce Improvement Act of 1998 (ACWIA),
Public Law 105-277, div. C, tit. IV, 112 Stat. 2681, and the
American Competitiveness in the Twenty-first Century Act of 2000
(AC21), Public Law 106-313, 114 Stat. 1251, as amended by the 21st
Century Department of Justice Appropriations Authorization Act,
Public Law 107-273, 116 Stat. 1758 (2002). Subsequent to IMMACT 90,
Congress also created several exemptions from the 65,000 numerical
limitation. See INA sec. 214(g)(5), 8 U.S.C. 1184(g)(5).
\7\ See INA sec. 214(g)(5)(C), 8 U.S.C. 1184(g)(5)(C). This rule
also may refer to the 20,000 exemptions under section 214(g)(5)(C)
from the H-1B regular cap as the ``advanced degree exemption
allocation,'' or ``advanced degree exemption numerical limitation.''
---------------------------------------------------------------------------

C. The F-1 Program

Section 101(a)(15)(F)(i) of the INA, 8 U.S.C. 1101(a)(15)(F)(i),
permits bona fide students to be temporarily admitted to the United
States for the purpose of pursuing a full course of study at an
established college, university, seminary, conservatory, academic high
school, elementary school, or other academic institution or accredited
language training program. Principal applicants are categorized as F-1
nonimmigrants and their spouses and minor children may accompany or
follow to join them as F-2 dependents.
In 1992, legacy Immigration and Naturalization Service (INS)
amended its longstanding regulations relating to an employment program
for students called Optional Practical Training (OPT) such that
students in F-1 nonimmigrant status who have been enrolled on a full-
time basis for at least one full academic year in a college,
university, conservatory, or seminary (which now must be certified by
U.S. Immigration and Customs Enforcement's (ICE) Student and Exchange
Visitor Program (SEVP)) are allowed up to 12 months of OPT to work for
a U.S. employer in a job directly related to the student's major area
of study.\8\ 8 CFR 214.2(f)(10). Employers of F-1 students under OPT
often file petitions to change the students' status to H-1B so that
they may continue working in their current or a similar job after
completion of OPT. Many times, however, an F-1 student's OPT
authorization would expire prior to the student being able to assume
the employment specified in the approved H-1B petition, creating a gap
in employment. In order to remedy this, in 2008, DHS created the ``cap-
gap'' extension to temporarily extend the period of authorized stay and
work authorization of certain F-1 students caught in the gap between
the end of their OPT and the start date on their later-in-time
approved, cap-subject H-1B petition.\9\ 8 CFR 214.2(f)(5)(vi)(A). The
cap-gap extension provides a temporary bridge between F-1 and H-1B
status, allowing students to remain in the United States between the
end of their academic program and the beginning of the fiscal year,
when the student's H-1B visa status commences. DHS subsequently amended
the cap-gap provisions by extending the authorized period of stay and
work authorization of any F-1 student who is the beneficiary of a
timely filed cap-subject H-1B petition that has been granted by, or
remains pending with, USCIS, until October 1 of the fiscal year for
which H-1B visa classification has been requested.\10\ 8 CFR
214.2(f)(5)(vi)(A).
---------------------------------------------------------------------------

\8\ See ``Pre-Completion Interval Training; F-1 Student Work
Authorization,'' 57 FR 31954 (Jul. 20, 1992).
\9\ See ``Extending Period of Optional Practical Training by 17
Months for F-1 Nonimmigrant Students With STEM Degrees and Expanding
Cap-Gap Relief for All F-1 Students With Pending H-1B Petitions,''
73 FR 18944 (Apr. 8, 2008).
\10\ See ``Improving and Expanding Training Opportunities for F-
1 Nonimmigrant Students With STEM Degrees and Cap-Gap Relief for All
Eligible F-1 Students,'' 81 FR 13040 (Mar. 11, 2016).
---------------------------------------------------------------------------

D. NPRM and Final Rules

On October 23, 2023, DHS published an NPRM, ``Modernizing H-1B
Requirements, Providing Flexibility in the F-1 Program, and Program
Improvements Affecting Other Nonimmigrant Workers,'' 88 FR 72870. In
the NPRM, DHS stated that it may publish one or more final rules to
codify the proposed provisions after carefully considering public
comments. On February 2, 2024, DHS published, ``Improving the H-1B
Registration Selection Process and Program Integrity,'' which finalized
provisions of the NPRM related to the H-1B registration process.\11\
Specifically, the final rule established a beneficiary centric
selection process for H-1B registrations and new integrity measures,
and provided start date flexibility for certain H-1B cap-subject
petitions. That rule took effect on March 4, 2024, prior to the
beginning of the registration period for the FY 2025 H-1B cap year.
Through this subsequent rulemaking, DHS is finalizing many of the
remaining provisions of the NPRM with the revisions described above and
in the relevant sections below.
---------------------------------------------------------------------------

\11\ See 89 FR 7456.
---------------------------------------------------------------------------

III. Response to Public Comments on the Proposed Rule

A. Summary of Public Comments on the Proposed Rule

In response to the proposed rule, DHS received 1,315 comments
during the 60-day public comment period. Of these, 510 comments were
related to the H-1B registration process and were analyzed and
addressed in the final rule published on February 2, 2024. There were
970 comments related to the remaining provisions that DHS is finalizing
through this rule. Some comments included a discussion of both the
registration process and the provisions being finalized through this
rulemaking. Of the 970 comments analyzed for this rule, 17 comments
were duplicate submissions, 1 comment was not germane to the rule, and
approximately 83 were letters submitted through mass mailing campaigns.
Commenters included individuals (including U.S. workers),
companies, law firms, a federation of labor organizations, professional
organizations, advocacy groups, nonprofit organizations,
representatives from Congress and local governments, universities, and
trade and business associations. Many commenters expressed support for
the rule or offered suggestions for improvement. Of the commenters
opposed to the rule, many commenters expressed opposition to a part of
or all of the proposed rule. Some just expressed general opposition to
the rule without suggestions for improvement. For many of the public
comments, DHS could not ascertain whether the commenter supported or
opposed the proposed rule.
DHS has reviewed and considered all of the public comments received
in response to the proposed rule. In this final rule, DHS is responding
to public

[[Page 103059]]

comments that are related to the provisions that DHS is finalizing
through this final rule. DHS's responses are grouped by subject area,
with a focus on the most common issues and suggestions raised by
commenters.

B. DHS/USCIS Statutory and Legal Issues

Comment: A law firm wrote that the proposed rule reflects USCIS'
commitment to seek opportunities within the bounds of the law to
maximize flexibility for employers and beneficiaries. A joint
submission by a professional association and an advocacy group
commended USCIS for seeking to modernize the H-1B program by creating
``opportunities for innovation and expansion'' in alignment with the
American Competitiveness and Workforce Improvement Act of 1998 (ACWIA)
and the American Competitiveness in the Twenty-first Century Act of
2000 (AC21). The commenters articulated the importance of these
statutes and the congressional intent behind them as multiple countries
(e.g., Canada, the United Kingdom (UK), Australia, and Germany) have
implemented new immigration programs to attract high-skilled workers.
Response: DHS agrees with these commenters that this rule will,
among other things, provide benefits and flexibilities for petitioners
and beneficiaries.
Comment: Some commenters perceived certain aspects of the proposed
rule to be unlawful or stated that the proposed provisions would
undermine prevailing statutes or Executive orders (E.O.). For example,
a professional association wrote that DHS's proposed revisions would
``fundamentally alter immigration laws that exceed [its] authority.''
Specifically, the association said that the proposed revisions would
``directly undermine INA sections 101(a)(15)(H) and 214(c)(1)(i) (sic)
and 8 CFR 214.2(h)(4)(B) (sic) via changing the definition of who
qualifies as an H-1B visa holder. . . .''
A business association asserted that certain proposed provisions in
the NPRM are unlawful as written, including the proposed specialty
occupation definition, non-speculative employment requirement, third-
party placement provisions, site visit authorities, and USCIS'
authority to review LCAs. The association further remarked that these
provisions would hinder the objectives of E.O. 14410 to develop
artificial intelligence (AI) capabilities in the United States. As
such, the association urged DHS to issue supplemental notices to
withdraw these provisions or propose substantial changes to address
their legal deficiencies, providing the public with the opportunity to
comment on the revisions to the proposed rule. A trade association
wrote that the proposed changes to visa qualifications and review
processes would undermine E.O. objectives to ``attract and retain
talent in AI and other critical and emerging technologies in the United
States economy'' by jeopardizing the ability of H-1B nonimmigrants to
renew their visas.
A trade association wrote that DHS has neglected the congressional
purpose of the H-1B program and has exceeded its statutory authority.
Citing various examples found in statute and case law related to split
enforcement powers and agency jurisdiction, the association stated that
DOL has a greater share of authority and enforcement powers in the H-1B
program compared to DHS's statutory carve-out. For example, the
commenter asserted that while Congress delegated to DOL the authority
to set wages, conduct investigations and enforcement actions, and
protect U.S. labor interests (e.g., through setting the prevailing wage
and requiring the same conditions for H-1B workers and U.S. workers),
DHS's authority, codified at 8 U.S.C. 1184(i), focuses on determining
whether the petitioner seeks to employ a professional in a ``specialty
occupation.'' The association concluded that the authority to regulate
the area of employment and definition of employer belongs to DOL, not
DHS, and suggested that DHS constrain its regulatory scheme to the
areas intended by Congress, applying DOL's definitions of key terms
associated with the H-1B program. A professional association generally
encouraged DHS to improve the legal integrity of H-1B regulations and
advance policy goals that align with congressional intent.
Response: DHS disagrees with the commenters' assertions that the
proposed changes that are being finalized in this rule are ultra vires.
DHS will not issue a supplemental notice to withdraw the proposed
changes, or propose substantial changes as commenters suggested. The
changes being made by this final rule are within the broad authority
delegated to DHS by statute. The changes enhance the integrity of the
H-1B program and provide needed clarification to existing rules,
policies, and practices so that petitioners have greater clarity,
transparency, and predictability as to the requirements for the H-1B
classification.
DHS's authority to regulate in the H-1B context is not limited, as
some commenters asserted, to INA section 214(i), 8 U.S.C. 1184(i). That
section pertains solely to the definition of ``specialty occupation.''
Rather, as explained in the proposed rule and in this final rule, DHS's
authority is also derived from various provisions in the INA and HSA,
including, but not limited to: INA section 101(a)(15)(H)(i)(b), 8
U.S.C. 1101(a)(15)(H)(i)(b); INA section 103(a), 8 U.S.C. 1103(a); INA
section 214(a)(1), 8 U.S.C. 1184(a)(1); INA section 214(c), 8 U.S.C.
1184(c); INA section 214(g), 8 U.S.C. 1184(g); INA section 235(d)(3), 8
U.S.C. 1225(d)(3); INA section 287(b), 8 U.S.C. 1357(b); HSA section
112, 6 U.S.C. 112; HSA section 402, 6 U.S.C. 202; and HSA section
451(a)(3) and (b), 6 U.S.C. 271(a)(3) and (b). Collectively, these
various provisions provide DHS with broad authority to promulgate
regulations to administer and enforce the H-1B nonimmigrant
classification.
DHS disagrees with some commenters' assertions that the proposed
changes to the definition of specialty occupation are ultra vires
because the statute does not contain the term ``directly related.''
While commenters are correct that INA section 214(i), 8 U.S.C. 1184(i),
does not use the term ``directly related,'' the statute does refer to
application of a body of highly specialized knowledge and attainment of
a bachelor's or higher degree in the specific specialty (or its
equivalent) as a minimum for entry into the occupation. DHS interprets
the ``specific specialty'' requirement in INA section 214(i)(1)(B), 8
U.S.C. 1184(i)(1)(B), to relate back to the body of highly specialized
knowledge requirement referenced in INA section 214(i)(1)(A), 8 U.S.C.
1184(i)(1)(A), required by the specialty occupation in question. The
``specific specialty'' requirement is only met if the degree in a
specific specialty or specialties, or equivalent, provides a body of
highly specialized knowledge directly related to the duties and
responsibilities of the particular position as required by INA section
214(i)(1)(A). Because an occupation may involve application of multiple
bodies of highly specialized knowledge, ``specific specialty'' is not
limited to one degree field, or its equivalent, but may include
multiple degree fields, or equivalents, that provide the body of highly
specialized knowledge to be applied when performing the occupation. The
requirement that each degree field, or its equivalent, be directly
related to the position is the best interpretation of the statutory
text

[[Page 103060]]

and consistent with existing USCIS practice.\12\
---------------------------------------------------------------------------

\12\ See, e.g., Madkudu Inc. v. USCIS, No. 5:20-cv-2653-SVK
(N.D. Cal. Aug. 20, 2021) Settlement Agreement at 4 (``[I]f the
record shows that the petitioner would consider someone as qualified
for the position based on less than a bachelor's degree in a
specialized field directly related to the position (e.g., an
associate's degree, a bachelor's degree in a generalized field of
study without a minor, major, concentration, or specialization in
market research, marketing, or research methods . . ., or a
bachelor's degree in a field of study unrelated to the position),
then the position would not meet the statutory and regulatory
definitions of specialty occupation at 8 U.S.C. 1184(i)(1) and 8 CFR
214.2(h)(4)(ii).''), https://www.uscis.gov/sites/default/files/document/legal-docs/Madkudu-settlement-agreement.pdf (last visited
Oct. 23, 2024).
---------------------------------------------------------------------------

DHS disagrees with the assertion of some commenters that USCIS does
not have authority to review the contents of an LCA. The authority
provided to DOL under INA section 212(n), 8 U.S.C. 1182(n), does not
deprive DHS of authority to administer and enforce the H-1B
nonimmigrant classification. Congress provided DHS with broad authority
to administer and enforce the H-1B nonimmigrant classification, in
addition to the authority provided to DOL to administer and enforce
requirements pertaining to LCAs. See ITServe Alliance, Inc. v. U.S.
Dep't of Homeland Sec., 71 F.4th 1028, 1037 (D.C. Cir. 2023) (the
authorities provided to DOL under 8 U.S.C. 1182(n) ``are not by their
terms exclusive, so as to oust USCIS from its own authority over the H-
1B petition process. And the INA strongly suggests that the agencies'
respective authorities are complementary rather than exclusive. . .
.''). As the U.S. Court of Appeals for the D.C. Circuit explained, INA
section 103(a)(1), 8 U.S.C. 1103(a)(1), independently provides DHS with
authority to administer and enforce the INA, including a petitioning
employer's compliance with the terms of an LCA. Id.
Commenters' assertions that DHS does not have authority to regulate
the area of employment and definition of employer are similarly
misplaced. As explained in the preamble to the proposed rule and in
this final rule, DHS's authority in the H-1B context is not solely
derived from INA section 214(i), 8 U.S.C. 1184(i). That provision only
addresses the definition of ``specialty occupation.'' But the broad
authority delegated or otherwise provided to DHS, which includes the
authority to regulate the area of employment and definition of employer
for purposes of provisions enforced by DHS, is provided in various
other provisions, including, but not limited to: INA section 103(a), 8
U.S.C. 1103(a), which authorizes the Secretary to administer and
enforce the immigration and nationality laws and establish such
regulations as the Secretary deems necessary for carrying out such
authority; INA section 214(a)(1), 8 U.S.C. 1184(a)(1), which authorizes
the Secretary to prescribe, by regulation, the time and conditions of
the admission of nonimmigrants; and INA section 214(c)(1), 8 U.S.C.
1184(c)(1), which authorizes the Secretary to prescribe how an employer
may petition for an H-1B worker and to prescribe the form and
information required in an H-1B petition. Commenters' assertion that
DHS does not have the authority to regulate who may qualify as an H-1B
employer because INA section 214(i), 8 U.S.C. 1184(i), does not include
the term ``employer,'' is contrary to the express reference to
``employer'' in INA section 214(c)(1), 8 U.S.C. 1184(c)(1), and the
authority delegated or otherwise provided to DHS therein.\13\
---------------------------------------------------------------------------

\13\ Other H-1B related provisions in the statute also refer
specifically to the petitioning employer, employment, or being
employed as an H-1B worker. See, e.g., INA secs. 214(c)(9), (10),
(12), and (g)(5) and (6); 8 U.S.C. 1184(c)(9), (10), (12), and
(g)(5) and (6).
---------------------------------------------------------------------------

DHS disagrees with commenters' assertion that it lacks authority to
conduct on-site inspections through the USCIS Fraud Detection and
National Security Directorate (FDNS). In 2004, USCIS established FDNS
in response to a congressional recommendation to establish an
organization ``responsible for developing, implementing, directing, and
overseeing the joint USCIS-Immigration and Customs Enforcement (ICE)
anti-fraud initiative and conducting law enforcement/background checks
on every applicant, beneficiary, and petitioner prior to granting
immigration benefits.'' \14\
---------------------------------------------------------------------------

\14\ See Conference Report to accompany H.R. 4567 [Report 108-
774], ``Making Appropriations for the Department of Homeland
Security for the Fiscal Year Ending September 30, 2005,'' p. 74
(Oct. 9, 2004), https://www.gpo.gov/fdsys/pkg/CRPT-108hrpt774/pdf/CRPT-108hrpt774.pdf.
---------------------------------------------------------------------------

The site visits and inspections conducted by FDNS are authorized
through multiple legal authorities. Congress delegated to the Secretary
of Homeland Security the authority to administer and enforce the
immigration laws. INA sec. 103(a)(1), 8 U.S.C. 1103(a)(1). The
Secretary may confer this authority to any Department of Homeland
Security (DHS) employee, including USCIS employees, to the extent
permitted by law. INA sec. 103(a)(4), 8 U.S.C. 1103(a)(4); HSA sec.
102(b)(1), 6 U.S.C. 112(b)(1); 8 CFR 2.1.\15\ Moreover, under 6 U.S.C.
112(a)(3), all functions of officers, employees, and organizational
units of [DHS] are vested in the Secretary. The Secretary of Homeland
Security delegated to USCIS the authority to administer the immigration
laws, including the authority to investigate civil and criminal
violations involving applications or determinations for benefits.\16\
Following the dissolution of the INS and the creation of DHS on March
1, 2003, authority to ``administer the immigration laws'' was delegated
to USCIS.\17\
---------------------------------------------------------------------------

\15\ Pursuant to 8 CFR 2.1, all authorities and functions of the
Department of Homeland Security to administer and enforce the
immigration laws are vested in the Secretary of Homeland Security.
The Secretary of Homeland Security may, in the Secretary's
discretion, delegate any such authority or function to any official,
officer, or employee of the Department of Homeland Security,
including delegation through successive redelegation, or to any
employee of the United States to the extent authorized by law. Also,
because INA sec. 103(a)(4) refers to ``Service'', i.e. Legacy INS,
see also 8 CFR 1.2 which defines Service as ``U.S. Citizenship and
Immigration Services, U.S. Customs and Border Protection, and/or
U.S. Immigration and Customs Enforcement, as appropriate in the
context in which the term appears.''
\16\ Delegation to the Bureau of Citizenship and Immigration
Services, Department of Homeland Security Delegation Number 0150.1,
Issue Date: 06/05/2003. The Bureau of Citizenship and Immigration
Services was the initial name for USCIS following the dissolution of
the Immigration and Naturalization Service.
\17\ See Delegation 0150.1(II)(H) (June 5, 2003).
---------------------------------------------------------------------------

USCIS was delegated the ``authority to investigate alleged civil
and criminal violations of the immigration laws, including, but not
limited, to alleged fraud with respect to applications or
determinations within the USCIS, and make recommendations for
prosecutions, or other appropriate action when deemed advisable.'' \18\
USCIS also has the ``authority to interrogate aliens and issue
subpoenas, administer oaths, take and consider evidence, and
fingerprint and photograph aliens under sections 287(a), (b), and (f)
of the INA, 8 U.S.C. 1357 and under 235(d) of the INA, 8 U.S.C.
1225(d).'' \19\
---------------------------------------------------------------------------

\18\ See Delegation 0150.1(II)(I) (June 5, 2003).
\19\ See Delegation 0150.1(II)(S) (June 5, 2003).
---------------------------------------------------------------------------

USCIS and ICE were granted concurrent authority to investigate
immigration benefit fraud.\20\ Through

[[Page 103061]]

written agreement, ICE agreed to take the lead on criminal and other
enforcement investigations and USCIS agreed to focus on detecting and
combating fraud associated with adjudicating applications and
petitions.\21\ The Homeland Security Act of 2002, Public Law 107-296,
116 Stat. 2135, granted the Secretary of Homeland Security the
authority to administer and enforce provisions of the INA, as amended,
INA sec. 101, 8 U.S.C. 1101 et seq. The Secretary, in Homeland Security
Delegation No. 0150.1, delegated certain authorities to USCIS. FDNS's
activities fall squarely within this delegation.
---------------------------------------------------------------------------

\20\ In section (II)(I) of DHS Delegation Number 0150.1,
Delegation to the Bureau of Citizenship and Immigration Services,
and in section 2(I) of DHS Delegation Number 7030.2, Delegation of
Authority to the Assistant Secretary for the Bureau of Immigration
and Customs Enforcement, USCIS and ICE received concurrent authority
to investigate fraud involving immigration benefits available under
the INA. In their respective delegations, USCIS and ICE were further
directed by the Secretary of Homeland Security to coordinate the
concurrent responsibilities provided under these Delegations. A
memorandum of agreement was undertaken to advance the coordination
between USCIS and ICE, as authorized by these Delegations. The
Secretary of Homeland Security has properly delegated authority to
immigration officers, including immigration officers who work for
FDNS.
\21\ Memorandum of Agreement between USCIS and ICE on the
Investigation of Immigration Benefit Fraud, September 25, 2008; see
also Memorandum of Agreement between USCIS and ICE Regarding the
Referral of Immigration Benefit Fraud and Public Safety Cases (Dec.
15, 2020).
---------------------------------------------------------------------------

Further, regulations support the FDNS activities that are described
in this rule. For example, 8 CFR 1.2, defines ``immigration officer''
to include a broad range of DHS employees including immigration agents,
immigration inspectors, immigration officers, immigration services
officers, investigators, and investigative assistants. As duly
appointed immigration officers, FDNS immigration officers may question
noncitizens based on the authority delegated to them by the Secretary
of Homeland Security. Furthermore, INA sec. 287(a)(1), 8 U.S.C.
1357(a)(1), provides any officer or employee of the Service with the
authority (pursuant to DHS regulations) to, without warrant,
``interrogate any alien or person believed to be an alien as to his
right to be or remain in the United States.'' See also 8 CFR 287.5. The
regulation at 8 CFR 287.8(b) specifically sets out standards for
interrogation and detention not amounting to arrest, wherein
immigration officers can question an individual so long as they do not
restrain the freedom of the individual. Further, the Board of
Immigration Appeals has recognized that the reports produced by FDNS
based on site visits and field investigations are ``especially
important pieces of evidence.'' \22\ These investigations and resulting
reports help ensure that adjudicative decisions are made with
confidence by providing information that would otherwise be unavailable
to USCIS.
---------------------------------------------------------------------------

\22\ Matter of P. Singh, 27 I&N Dec. 598, 609 (BIA 2019)
(``Detailed reports from on-site visits and field investigations are
especially important pieces of evidence that may reveal the presence
of fraud.'').
---------------------------------------------------------------------------

Lastly, DHS disagrees that this final rule is inconsistent with the
Executive Order on Artificial Intelligence.\23\ That Executive order,
among other things, directed DHS to ``continue its rulemaking process
to modernize the H-1B program and enhance its integrity and usage,
including by experts in AI and other critical and emerging
technologies. . . .'' DHS satisfied this part of the Executive order
through its continued work to complete and publish this final rule. As
explained throughout this preamble, this final rule, along with the
final rule published on February 2, 2024,\24\ modernizes the H-1B
program and enhances its integrity and use by, among other things,
providing greater clarity, transparency, and predictability regarding
eligibility for the H-1B classification. As explained further below,
DHS disagrees that requiring a direct relationship between the required
degree field(s), or their equivalents, and the duties of the position
is inconsistent with E.O. 14110 or creates additional hurdles for
foreign nationals seeking to work in AI or other science, technology,
engineering, and math (STEM) fields. As stated previously, DHS is
codifying and clarifying long-standing USCIS practice to provide
greater clarity and predictability for employers and foreign nationals,
including those seeking to work in AI or other STEM fields.
---------------------------------------------------------------------------

\23\ E.O. 14110, ``Executive Order on Safe, Secure, and
Trustworthy Development and Use of Artificial Intelligence.''
\24\ ``Improving the H-1B Registration Selection Process and
Program Integrity'', 89 FR 7456 (Feb. 2, 2024).
---------------------------------------------------------------------------

C. General Comments

1. General Support for the Rule
Comment: Several individual commenters expressed support for the
proposed rule without rationale, with some expressing ``strong''
support. A couple of individual commenters thanked USCIS for
modernizing the H-1B program. An individual commenter wrote that,
``this is life changing,'' and another commenter wrote that, ``this is
a great and substantial improvement.'' Another commenter applauded
various specific measures of the rule, including those pertaining to
deference, evidence of job offers, oversight, and streamlining the H-1B
process.
Response: DHS agrees that the provisions in this rule will
modernize and improve the H-1B program.
Comment: Several commenters expressed general support for the
proposed rule because of positive impacts on program operability,
oversight, integrity, and government efficiency. Many commenters
expressed support for the proposed rule, reasoning that it would foster
fairness in the H-1B program, reduce abuse and promote program
integrity, and create a more efficient system. A few commenters
expressed support for the proposed rule, reasoning it would improve
program efficiency and reduce administrative burdens, and could result
in smoother, more streamlined procedures that are easier to follow. A
commenter wrote that the proposed rule is a ``significant step towards
creating a more inclusive and efficient immigration system.''
Response: DHS agrees with these commenters that the provisions in
this rule will have positive impacts on program operability and
integrity. Many of the provisions being finalized through this rule are
intended to promote program integrity and create a more efficient
system.
Comment: Several commenters, including a joint submission,
expressed support for the proposed rule on the basis that it would have
positive impacts on prospective beneficiaries. A commenter wrote that
the proposed rule has the potential to provide highly skilled
professionals with the chance to secure employment in and make
meaningful contributions to the United States. A commenter said that it
is crucial to protect nonimmigrant workers' rights and ensure that they
are treated fairly, and that this proposed rule is a ``significant step
in the right direction.'' The commenter urged USCIS to fully implement
the proposed rule. Another commenter expressed their agreement with the
proposed changes, having seen their colleagues leave the United States
every year due to losing their valid visa status. A commenter expressed
support for the proposed rule, writing that providing greater
flexibility for beneficiaries is a ``much-needed change.'' The
commenter added making the visa renewal process easier could
significantly reduce hurdles and uncertainties that foreign workers
face.
Response: DHS agrees with these commenters that the provisions in
this rule will have positive impacts on prospective beneficiaries and
provide beneficiaries with greater flexibility. DHS's intent is to make
the H-1B process more efficient and fairer by reducing administrative
hurdles and uncertainties through this rulemaking, such as codifying
USCIS' deference policy to make it clear that, if there has been no
material change in the underlying facts, adjudicators generally should
defer to a prior determination involving the same parties and
underlying facts, and giving USCIS officers the discretion to issue
RFEs to allow petitioners to request amended validity periods where the
initial

[[Page 103062]]

requested validity period expires before adjudication.
Comment: Many commenters, including a trade association, a company,
and a joint submission, expressed support for the proposed rule,
reasoning that it would strengthen the U.S. job market and economy. A
trade association commented that streamlining the H-1B program
requirements and improving program integrity would enable the United
States to retain valuable international talent. A company said that
they appreciate DHS's effort to improve the H-1B system, adding that a
modern H-1B program that reflects today's economy would keep the United
States attractive to global talent and ensure that U.S. employers can,
``maintain a comprehensive workforce.'' An advocacy group wrote that
the proposed provisions aimed at modernizing and streamlining the H-1B
program would ``strengthen the nation's capacity to attract and retain
essential global talent'' in artificial intelligence and other fields
in emerging technology.
A commenter expressed strong support for the proposed rule, writing
that it would ``bolster the nation's competitive edge'' and promote
economic growth. A couple of other commenters similarly wrote that the
proposed changes to the H-1B program would give the United States a
global competitive advantage and attract the brightest minds from
around the world. One of these commenters added that streamlining the
visa process could benefit the U.S. economy and encourage innovation.
Another commenter also expressed their support for the proposed rule
for similar reasons, writing that the proposed changes to improve the
H-1B program would create jobs and benefit not only U.S. employers but
also professionals who want to contribute to the United States'
success. A few commenters expressed support for the proposed rule on
the basis that, under the current H-1B policies, many talented
individuals are leaving the United States, and the proposed rule would
prevent this from continuing. One of these commenters wrote that
modernizing the H-1B program is essential for retaining top talent and
allowing the United States to become ``competitive once again on the
global stage.''
Response: DHS agrees with these commenters that clarifying the H-1B
program requirements and improving program integrity will help enable
the United States retain valuable international talent. Through the
provisions in this rulemaking, DHS's goal is to keep the United States
attractive to global talent, benefit the U.S. economy, and encourage
innovation.
2. General Opposition to the Rule
Comment: Several commenters, including an advocacy group, expressed
opposition to the proposed rule on the basis that it would undermine
the program's integrity and increase fraud. An individual commenter
stated that the regulations do not satisfactorily address their
perceived problems of the H-1B program.
Response: DHS disagrees with these commenters that the provisions
in this rulemaking will undermine the H-1B program or increase fraud.
DHS is finalizing several provisions that aim to increase program
integrity, such as codifying its authority to request contracts,
requiring that the petitioner establish it has an actual, bona fide
position in a specialty occupation available for the beneficiary as of
the requested start date, and codifying USCIS' authority to conduct
site visits, to name a few.
Comment: Numerous commenters said the rule would negatively impact
U.S. citizen workers by incentivizing the hiring of H-1B workers. In
particular, commenters stated that the proposed rule would harm and
undermine American workers, particularly those in the technology
industry; does not adequately safeguard American workers and makes it
easier for American companies to obtain foreign labor; would benefit
large employers, while putting American job seekers at a disadvantage;
and would incentivize employers to hire ``cheaper foreign labor'' and
avoid taxes at the expense of U.S. citizens.
A commenter urged USCIS to make the H-1B program stricter, stating
that the Federal Government should work towards improvements for U.S.
citizens, rather than immigrant labor. A couple of commenters,
including a professional association, wrote that American students that
have graduated with specialty degrees are unable to gain employment.
Response: DHS disagrees that this rulemaking would undermine
American workers or put American job seekers at a disadvantage. The
existing H-1B statutory and regulatory requirements include protections
for U.S. workers and this rulemaking does not remove or diminish any
protections or place U.S. workers at a disadvantage in the job market.
The goal of this rulemaking is to modernize and improve the integrity
of the H-1B program. In fact, this final rule will improve H-1B
integrity and build upon the existing protections for U.S. workers by
clarifying that the LCA must properly correspond to the H-1B petition,
and codifying the authority of USCIS to conduct site visits and take
adverse action against employers who are not complying with the terms
of the H-1B petition approval or who refuse to comply with a site
visit.
Comment: A few commenters noted that the proposed rule could make
it more difficult for small and medium-sized consulting companies to
navigate the H-1B process. More specifically, a few commenters,
including a couple of trade associations and a law firm, stated that
the U.S. information technology (IT) industry's ability to hire
reliable foreign talent would be negatively affected, which would harm
the competitiveness of American businesses, research facilities,
medical institutions, and other important economic drivers. A few
commenters, including a company, remarked that the proposed rule would
make it difficult for IT consulting companies to utilize the H-1B visa,
which would cause the economy to suffer. A business association
articulated concerns among its members that various proposals would
cause significant disruptions to their operations across industries. In
addition, a commenter stated that the proposed rule would hamper
companies' ability to serve their customers given labor shortages,
inflation, and budgetary constraints.
Response: DHS disagrees with these commenters that the provisions
in this rulemaking will make it more difficult for certain companies to
navigate the H-1B process or cause disruptions for certain industries.
Through this rulemaking, DHS is codifying many policies and practices
that are already in place, such as requiring that the LCA properly
correspond to the petition and when to file an amended petition.
Through this rulemaking, DHS's intent is to clarify current policy and
add transparency and greater predictability to the adjudication
process.
3. Other General Comments on the Rule
Comment: An individual commenter, while expressing support for
``the broad goal of modernization and program improvements,'' noted the
importance of measures to prevent the exploitation of foreign workers
and to ensure that they are provided fair wages and working conditions;
prioritizing streamlining and efficiency in program administration,
measures to protect and support international students, and data
collection and analysis; and that DHS should actively engage with
stakeholders to solicit input and feedback during the rulemaking
process.

[[Page 103063]]

Response: While the commenter did not provide any specific feedback
related to the provisions in the NPRM, DHS generally agrees with the
considerations noted by the commenter. As stated previously, the
purpose of this rulemaking is to modernize and improve the efficiency
of the H-1B program, add benefits and flexibilities, and strengthen
integrity measures. The modernization provisions will enhance
efficiencies, and the integrity measures are intended to prevent
exploitation of foreign workers and protect the interests of U.S.
workers. Further, by finalizing the provision to expand cap-gap
protection, this rule supports international students. DHS has also
engaged in extensive data collection and analysis in this rulemaking,
as detailed in the NPRM, the previously published final rule
``Improving the H-1B Registration Selection Process and Program
Integrity,'' and this final rule. In addition, DHS has engaged with
stakeholders by requesting public comments in response to the NPRM.

D. Modernization and Efficiencies

1. General Comments on the Proposed Modernization and Efficiencies
Provisions
Comment: Many commenters supported the proposed modernization
provisions, including a joint submission by commenters who stated
general support for DHS's initiative to modernize the H-1B program. A
couple of commenters regarded the modernization efforts as
``commendable,'' while another commenter said the modernization
measures were ``long overdue.'' This commenter and another commenter
reasoned that the modernization provisions would streamline
administrative tasks and remove disruptions in the program. A commenter
expressed support for the modernization provisions, stating that they
would help prevent artificial manipulation of the job market.
Echoing support for the NPRM's modernization efforts, a company
noted that the United States' outdated immigration laws must be updated
to meet the needs of the economy. A different commenter applauded the
modernization effort and urged its implementation in order to benefit
U.S. economic competitiveness. A trade association similarly endorsed
the H-1B modernization provisions as advancing the United States'
global leadership in specialized fields, such as STEM. Specifically,
the association reasoned that the sustainability of U.S. leadership
depends on semiconductor companies having access to top domestic and
global talent.
Some commenters offered mixed remarks on the modernization
provisions. For example, a commenter urged policymakers to take
immediate action to implement the modernization provisions while
highlighting the importance of balancing between welcoming global
talent and safeguarding the interests of U.S. citizen workers. Another
commenter offered conditional support for the modernization provisions
as long as there is no disruption to existing H-1B visa holders.
A few commenters expressed support for efficiency measures as part
of the proposed rule. For example, a commenter expressed general
approval of DHS's plans to improve clarity and efficiency. Another
commenter said that streamlining the eligibility requirements,
improving program efficiency, and providing greater benefits and
flexibilities for both employers and workers are crucial steps toward
creating a more efficient and responsive immigration system. Another
commenter described the importance of the H-1B visa program to the U.S.
economy and of increased program efficiency, and noted technology,
medicine, and research as particular industries that could benefit from
the modernization provisions.
Response: DHS agrees that modernizing the H-1B program and
increasing program efficiency are important and may help to streamline
administrative tasks. As explained in the NPRM, the purpose of this
rulemaking is to modernize and improve the H-1B regulations by: (1)
clarifying the requirements of the H-1B program and improving program
efficiency; (2) providing greater benefits and flexibilities for
petitioners and beneficiaries; and (3) strengthening H-1B integrity
measures.
2. Specialty Occupation Definition and Criteria
i. General Comments on the Proposed Changes to ``Specialty Occupation''
Comment: Several commenters expressed support for the proposed
changes to the specialty occupation requirements and standards. For
example, a commenter said that the specialty occupation revisions are a
``good step'' for H-1B program modernization. Other commenters
expressed general support for the specialty occupation requirements or
specialized degree requirements for specialized work. Several
commenters generally supported the proposed specialty occupation
requirements noting that they would help curb fraud and abuse by
certain types of companies. A university stated it was hopeful that the
proposed modifications to the specialty occupation requirements would
reduce the number of Requests for Evidence (RFE) that it receives when
filing H-1B petitions for faculty and staff. In addition, a
professional association expressed support for DHS's proposed changes
to clarify the ``special occupation'' standard, codify existing
practice, and align the regulations with the authorizing statute. The
association said that the changes would avoid misapplication of the
regulations in petitions involving new employment.
Response: DHS agrees that the specialty occupation revisions, as
slightly modified from the NPRM to better reflect current practice,
will be beneficial for H-1B program modernization and integrity. DHS
also agrees that clarifying the specialty occupation standard and
codifying existing practice may help reduce unnecessary RFEs, avoid
misapplication of the regulations, better align the regulations with
the authorizing statute, and provide H-1B petitioners with more
certainty as to the applicable adjudication standards.
Comment: Several commenters expressed general opposition to the
proposed specialty occupation changes. For example, a form letter
campaign and another commenter generally stated that they did not
support the proposed specialty occupation provisions, and other
commenters suggested that DHS reconsider the specialty occupation
requirements without providing further rationale. A few commenters
requested that USCIS remove the definition of ``specialty occupation''
from the rule, reconsider its implementation, or modify the definition.
A few other commenters stated that the ``specialty occupation''
definition should be broadened so that individuals are not limited to
positions just within their field of study or degree.
Response: DHS declines to remove the definition of specialty
occupation from the rule but is modifying the definition in response to
comments received. These modifications include removing the references
to general degree titles and defining the term ``directly related.''
DHS declines to broaden the definition of specialty occupation to
specifically state that individuals are not limited to positions within
their field of study, as such language conflates the issue of whether a
position qualifies as a specialty occupation with the issue of whether
the beneficiary is qualified to

[[Page 103064]]

perform the specialty occupation. Further, the proposed definition
already states that a position may allow for a range of qualifying
degree fields, provided that each of those fields is directly related
to the duties of the position.
Comment: Several commenters questioned whether the changes to the
specialty occupation definition and criteria are consistent with DHS's
stated intent to codify existing practices. For instance, an advocacy
group expressed concern that, while the Department views the updated
regulations as a codification of existing practices, the new definition
and criteria could, in practice, change the way petitions are
adjudicated. The group said that the strict application of the
regulatory text, which in its view does not reflect the broader
analysis described in the preamble, could result in an overly narrow
application of the provisions. The group proposed that the Department
either abandon the proposed changes or amend the regulatory text to
reflect the analysis described in the preamble by stating explicitly
that USCIS will conduct fair evaluations of specialized coursework and
training.
Numerous other commenters also expressed concerns with respect to
how USCIS will consider work experience, skills, and demonstrated
competencies to fulfill the specialty occupation degree requirements.
These commenters indicated that the consideration of work experience
and skills would better ensure that USCIS determinations reflect
evolving workforce realities of employer demands for individuals to
fill specialized roles which require professionals to adapt and develop
new skills. Commenters also said that consideration of experience and
skills would accommodate new and emerging technologies and be
consistent with the dynamic nature of industries. The commenters said
that experience should be a factor in determining specialty
occupations, as experience equips individuals with hands-on skills,
industry insights, and problem-solving abilities that are often not
fully captured by academic qualifications alone. A couple of the
commenters added that experience frequently links theoretical and
practical competence, serving as a trustworthy gauge of a candidate's
ability to meet the demands of their line of work. Likewise, a company
expressed support for the updates and simplification of the specialty
occupation definition, but also expressed concern that the proposed
changes would lead to a perfunctory assessment of the relatedness of a
beneficiary's specialty to the position while neglecting the nuances of
the educational backgrounds required for innovation in the technology
sector. The company urged DHS to protect the individualized framework
and improve it by enhancing clarity and preserving flexibility in the
H-1B program, allowing for continual modernization in line with
emerging technological developments.
Several commenters recommended DHS revise the regulatory text to
clarify that USCIS will consider relevant coursework or courses of
study alongside the degree field in its decision-making, consistent
with established preexisting agency practices. A trade association
recommended that DHS rescind the proposed changes or amend the
regulatory text to better codify existing agency practices, for
example, by expressly requiring adjudicators to consider the coursework
underlying a particular degree as well as the petitioner's explanation
as to why the degree is directly related to the relevant occupation. A
company similarly encouraged DHS to revise its definition and criteria
to focus on the courses completed in a degree program, and provided
revised regulatory text to reflect this change.
Several commenters expressed general concern with the use of the
terms ``degrees'' and ``positions'' in the specialty occupation
definition and criteria, reasoning that the proposed language is
misaligned with longstanding agency practices. For example, a Federal
elected official, associations, and a joint submission, suggested
alternative regulatory language, proposing that DHS use the term
``course of study'' instead of ``degree'' in the definition of
``specialty occupation'' at proposed 8 CFR 214.2(h)(4)(ii) and position
criteria requirements at 8 CFR 214.2(h)(4)(iii)(1) through (4). These
commenters also proposed that DHS substitute ``job duties of the
position'' or ``job duties'' for references to ``the position'' in the
specialty occupation definition at 8 CFR 214.2(h)(4)(ii) and position
criteria requirements at 8 CFR 214.2(h)(4)(iii)(A)(1) through (4).
Additionally, commenters claimed that DHS should use the terms
``degrees'' or ``positions'' in reference to the statutory standard,
but the modernized regulations should reflect longstanding agency
practices by omitting degree references (e.g., business administration)
and incorporating references to courses of study and job duties. A
Federal elected official wrote that while the proposed rule seeks to
clarify existing agency practices for specialty occupation
adjudications, the use of the terms ``degrees'' and ``positions''
instead of ``courses studied'' and ``duties of the position'' fails to
capture longstanding agency policy, creating unreasonable requirements
for employers and professionals. The official warned that focusing on
degree titles and positions would deviate from existing policy and
preclude those who would otherwise qualify for H-1B classification.
Another commenter expressed particular concern with the proposed rule's
use of terms like ``degrees'' and ``positions'' and their view that the
rule is misaligned with longstanding agency practices.
Additionally, commenters urged DHS to finalize the rule to better
reflect longstanding agency practices by omitting references to
particular types of degrees (e.g., business administration) and
incorporating references to courses of study and job duties within the
specialty occupation definition and criteria. A few commenters wrote
that, although DHS explains that referring to the degree title was for
``expediency'' and the agency separately evaluates the beneficiary's
actual course of study, the ``binding'' regulatory language fails to
capture the realities of preexisting agency practices. A trade
association expressed concern that the proposed regulations, as
written, could significantly narrow the types of degrees that USCIS
would accept for a given occupation, and that the rule fails to codify
existing practices that manufacturers use to demonstrate compliance.
Response: DHS agrees that it is important to improve the H-1B
program by enhancing clarity and preserving flexibility to align with
emerging technological developments and industry requirements. With
this rulemaking, DHS seeks to create a more flexible definition of
specialty occupation that can be adapted to occupations in new and
emerging fields, such as STEM and AI, by clarifying that a position may
allow for a range of qualifying degree fields. DHS also agrees that it
is important to acknowledge the realities of the workforce and the
evolving demands of specialized roles, accommodate new and emerging
technologies, and be consistent with the dynamic nature of industries.
As proposed and finalized, the definition of specialty occupation will
make it clear that DHS will consider a range of qualifying degree
fields and multiple bodies of highly specialized knowledge when
assessing whether a position is a specialty occupation, and that
`normally'' does not mean ``always'' within the context of the
specialty

[[Page 103065]]

occupation criteria. 88 FR 72870, 72871 (Oct. 23, 2023); new 8 CFR
214.2(h)(4)(ii). The changes made to the definition of specialty
occupation and its criteria are intended to codify existing practices
and, as such, are not expected to create new restrictions on
eligibility or lead to significant changes in adjudications.
In response to stakeholder feedback, DHS is making some revisions
to this final rule compared to the NPRM to better reflect DHS's
original intent when proposing the specialty occupation changes. For
example, DHS is not finalizing the sentence, ``The required specialized
studies must be directly related to the position,'' as this sentence
may have erroneously suggested that DHS would not look beyond the
specialized studies or degree when assessing H-1B eligibility.\25\ To
address commenters' concerns about over-reliance on degree titles, DHS
is removing the references to ``business administration'' and ``liberal
arts'' in the final rule. DHS is also clarifying the level of
connection needed to meet the ``directly related'' requirement by
specifying in the final regulatory text that ``directly related'' means
that there is a logical connection between the required degree, or its
equivalent, and the duties of the position. Further, DHS is adding a
reference to the ``duties of the position'' in the specialty occupation
definition and ``job duties'' in the specialty occupation criteria in
response to comments and to assure stakeholders that this practice has
not changed.
---------------------------------------------------------------------------

\25\ While DHS is not finalizing this particular sentence, this
does not indicate an intent to change current practice with respect
to the ``directly related'' requirement. The ``directly related''
requirement will be finalized elsewhere in the specialty occupation
definition and criteria, consistent with current practice and case
law. See, e.g., Caremax Inc v. Holder, 40 F. Supp. 3d 1182, 1187-88
(N.D. Cal. 2014) (holding that a position for which a bachelor's
degree in any field is sufficient to qualify for the position, or
for which a bachelor's degree in a wide variety of fields unrelated
to the position is sufficient to qualify, would not be considered a
specialty occupation as it would not require the application of a
body of highly specialized knowledge).
---------------------------------------------------------------------------

DHS disagrees with comments claiming that the changes to the
specialty occupation provisions are contrary to USCIS's stated
commitment to utilize an individualized framework and allow
adjudicators to discount a beneficiary's coursework, work experience,
and specialized skills. DHS believes that these commenters have
conflated the issue of whether a position qualifies as a specialty
occupation with the issue of whether a beneficiary is qualified to
perform the specialty occupation. The changes to the specialty
occupation provisions do not impact how USCIS evaluates and will
continue to evaluate a beneficiary's qualifications. See 8 CFR
214.2(h)(4)(iii)(C) and (D). DHS confirms that USCIS will continue to
consider work experience, skills, and courses of study in determining
whether a beneficiary meets the qualifications for a specialty
occupation position. As stated in the NPRM, USCIS will continue to
separately evaluate whether a beneficiary's actual course of study is
directly related to the duties of the position, rather than merely
looking at the title of the degree. USCIS will continue to make
individualized determinations in each case, and will consider whether
the beneficiary has the education, specialized training, and/or
progressively responsible experience that is equivalent to completion
of a U.S. baccalaureate or higher degree in the specialty occupation.
See 8 CFR 214.2(h)(4)(iii)(C)(4), (h)(4)(iii)(D). As such, DHS will not
adopt the suggestions to abandon or further amend the regulatory
definition of specialty occupation to specify that ``specialized
coursework and training will be fairly evaluated.'' Such amendments are
unnecessary because of existing regulatory text pertaining to the
beneficiary's qualifications and the other changes finalized in this
rule.
Comment: Multiple commenters specifically discussed alternative
training and certification programs as relevant to ``specialty
occupation'' determinations. For example, a professional association
recommended including alternative training programs, such as
apprenticeships, in the specialty occupation determination, noting that
this approach would better align H-1B rules with the growing importance
of skills-based hiring. Citing a report, the professional association
noted a trend towards ``holistic, well-rounded'' hiring practices
beyond degree attainment. The association concluded that under a
modernized U.S. immigration system, U.S. employers must be able to
assess talent in ways that meet their needs, including by allowing them
to employ nontraditional tactics, such as skills-based hiring and
apprenticeship programs.
Several commenters, including an apprenticeship intermediary
company, trade associations, a large company, and an advocacy group,
expressed a common concern that a company's practice of hiring
registered apprentices for entry-level positions could jeopardize its
ability to obtain H-1B visas for related positions. The commenters
wrote that ambiguity around current H-1B program requirements has
deterred companies from participating in or initiating apprenticeship
programs. The commenters acknowledged the NPRM's efforts to address
this concern, including by clarifying the meaning of ``normally,'' but
urged DHS to consider additional ways to support employers' efforts to
explore apprenticeship programs. Some of the commenters asked DHS to
clarify in the rule that the presence of an apprenticeship program in
an occupation or the employment practices of a petitioner should not be
taken as evidence that an occupation or employer does not normally
require a degree in a specific specialty, or to establish explicit
protections for companies that have engaged Registered Apprenticeship
programs while also petitioning for H-1B beneficiaries.
Similarly, a few trade associations commended DHS for acknowledging
the flexibility needed in making specialty occupation determinations,
but added that DHS should do more to support skills-based hiring
initiatives. The commenters asked that DHS recognize that an employer
can implement a skills-based hiring program without undermining its
ability to sponsor H-1B beneficiaries for the same or similar roles and
encouraged DHS to consider ways to help employers distinguish skills-
based hiring roles from degreed roles at all points in the employment
ecosystem--from recruitment, onboarding, progression in career, and at
the engagement level, stating that additional clarification will enable
employers to broaden skills-based hiring initiatives while balancing
the H-1B standards. One commenter also encouraged DHS to examine degree
equivalency standards and consider new ways employees obtain needed
skills outside the traditional 4-year degree paradigm, including
employer certificate programs, apprenticeship programs, and college-
level courses. A trade association suggested factoring in other ways
that employers can upskill their workforces, such as certificate
programs, reasoning that in not considering these factors, USCIS
creates obstacles for employers who might otherwise expand skills-based
employment practices.
Response: The revisions to the specialty occupation provisions are
not intended to negatively impact skills-based hiring practices and
alternative training programs. Conversely, several provisions, such as
the new definition of ``normally,'' which clarifies that ``normally''
does not mean ``always,'' are intended to help support these programs
and initiatives. As stated in the NPRM, DHS recognizes that as 21st

[[Page 103066]]

century employers strive to generate better hiring outcomes, improving
the match between required skills and job duties, employers have
increasingly become more aware of a skills-first culture, led by the
Federal Government's commitment to attract and hire individuals well-
suited to available jobs. 88 FR 72870, 72871 (Oct. 23, 2023). There is
already flexibility inherent in H-1B adjudications that allows
employers to explore where skills-based hiring is sensible. By
definition, a specialty occupation is one which requires attainment of
a bachelor's or higher degree ``or its equivalent.'' The allowance for
the ``equivalent'' of a degree in a specific specialty recognizes that
the requisite level of knowledge for a particular beneficiary may be
gained through, among other things, additional coursework or training
as suggested by the commenter. Further, the existing regulations at 8
CFR 214.2(h)(4)(iii)(C)(4), (h)(4)(iii)(D)--which are not being changed
in this final rule--already allow USCIS to examine degree equivalency
standards and consider a worker's training, experience, and skills
outside of the traditional 4-year degree paradigm. DHS believes the
finalized regulatory text is sufficiently flexible to allow employers
to explore where skills-based hiring, apprenticeships, and alternative
training programs are sensible, and declines to make the suggested
regulatory text changes to specifically reference apprenticeships and
training programs.
Comment: A few commenters voiced concern that the proposed
specialty occupation provisions conflict with the INA. A form letter
campaign said that DHS should not adopt the proposed revisions to the
definition and criteria for ``specialty occupation,'' arguing that they
conflict with the plain language of the statute and are based on a
rescinded Executive order from the prior administration. A professional
association and an individual commenter said they were disappointed to
see DHS ``recycle'' the same language from the 2020 interim final rule
(IFR) ``Strengthening the H-1B Nonimmigrant Visa Classification
Program,'' 85 FR 63918 (Oct. 8. 2020). Some commenters, including an
advocacy group, said that these changes attempt to ``revive'' or
``resurrect'' invalidated guidance and rules from a prior
administration. The advocacy group referenced an attorney's argument
from a lawsuit against the 2020 IFR, which was later blocked by courts,
and claimed that the NPRM copied the prior rule's restrictive language
which is inconsistent with the INA and current USCIS practice.
Response: DHS does not agree that the revisions to the definition
and criteria for specialty occupation conflict with the plain language
of the statute. As explained in the NPRM, the revised regulatory
definition and standards for ``specialty occupation'' will better align
the regulation with the statutory definition of that term. 88 FR 72870,
728714 (Oct. 23, 2023). For example, in determining whether a position
is a specialty occupation, USCIS interprets the ``specific specialty''
requirement in section 214(i)(1)(B) of the INA, 8 U.S.C. 1184(i)(1)(B),
to relate back to the body of highly specialized knowledge requirement
referenced in section 214(i)(1)(A) of the INA, 8 U.S.C. 1184(i)(1)(A),
required by the specialty occupation in question. The ``specific
specialty'' requirement is only met if the degree in a specific
specialty or specialties, or its equivalent, provides a body of highly
specialized knowledge directly related to the duties and
responsibilities of the particular position as required by section
214(i)(1)(A) of the INA, 8 U.S.C. 1184(i)(1)(A). Therefore, clarifying
the definition of specialty occupation to state that ``each . . .
qualifying degree field is directly related to the duties of the
position'' more closely aligns the regulatory text with the statutory
definition.\26\
---------------------------------------------------------------------------

\26\ See Vision Builders, LLC v. USCIS, No. 19-CV-3159, 2020 WL
5891546, at *4 (D.D.C. Oct. 5, 2020) (finding that USCIS logically
read the regulatory criteria together with the statutory definition
of specialty occupation ``to find that the term `degree' in the
specialty-occupation criteria, 8 CFR 214.2(h)(4)(iii)(A), means one
`in a specific specialty that is directly related to the proffered
position.' '').
---------------------------------------------------------------------------

Nor does DHS agree that the changes to the definition of and
criteria for ``specialty occupation'' are based on a rescinded
Executive order or the 2020 IFR. While some of the changes finalized
here are similar to changes attempted through the 2020 IFR, neither
this rule nor the IFR relied on a rescinded Executive order as
authority for the changes. Rather, the IFR, similar to this rule,
explained that the changes to the definition and criteria for specialty
occupation were based on the INA and longstanding agency practice.\27\
Further, there are some notable changes in the specialty occupation
provisions finalized in this rule compared to those in the IFR, such as
the addition and clarification of the word ``normally'' to the
specialty occupation criteria and clarifying that a position may allow
for a range of qualifying degree fields.
---------------------------------------------------------------------------

\27\ ``Strengthening the H-1B Nonimmigrant Visa Classification
Program,'' 85 FR 63918, 63925 (Oct. 8. 2020) (noting that the
requirement of a ``direct relationship'' between the required degree
fields and duties of the position was ``consistent with the
statutory requirement that a degree be ``in the specific specialty''
and has long been the position of DHS and its predecessor,
Immigration and Naturalization Service (INS)'').
---------------------------------------------------------------------------

DHS also disagrees that the specialty occupation changes seek to
``revive invalidated guidance and rules.'' In June 2020, USCIS
rescinded two policy memoranda that impacted certain computer
occupations.\28\ In February 2021, USCIS rescinded a 2017 policy
memorandum relating to the December 22, 2000 guidance memo on H-1B
computer-related positions.\29\ These memoranda remain rescinded. In
fact, the other changes to the specialty occupation provisions,
including the clarification that ``normally does not mean always,'' are
consistent with USCIS' rescission of those prior policy memoranda.
---------------------------------------------------------------------------

\28\ USCIS, Policy Memorandum PM-602-0114, Recission of Policy
Memoranda, https://www.uscis.gov/sites/default/files/document/memos/PM-602-0114_ITServeMemo.pdf (June 17, 2020).
\29\ USCIS, Policy Memorandum PM-602-0142.1, Rescission of 2017
Policy Memorandum PM-602-0142, https://www.uscis.gov/sites/default/files/document/memos/PM-602-0142.1_RescissionOfPM-602-0142.pdf (Feb.
3, 2021).
---------------------------------------------------------------------------

Comment: A trade association, citing the Executive Order on the
Safe, Secure, and Trustworthy Development and Use of Artificial
Intelligence \30\ and Executive Order 13932, Modernizing and Reforming
the Assessment and Hiring of Federal Job Candidates,\31\ stated that
several of the proposals relating to specialty occupation in the NPRM
contradict executive branch policy directives to increase access to
international talent by ``modernizing and streamlining visa criteria,
interviews, and reviews'' and to give increasing preference and support
to skills-based hiring. The association expressed concern that the
proposed rule, including the specialty occupation definitions and
requirements, would limit access to H-1B visas.
---------------------------------------------------------------------------

\30\ Executive Order 14110, Safe, Secure, and Trustworthy
Development and Use of Artificial Intelligence, 88 FR 75191 (Oct.
30, 2023).
\31\ Executive Order 13932, Modernizing and Reforming the
Assessment and Hiring of Federal Job Candidates, 85 FR 39457 (June
26, 2020).
---------------------------------------------------------------------------

Response: DHS is cognizant of the goals of the Executive Order on
the Safe, Secure, and Trustworthy Development and Use of Artificial
Intelligence and has taken a number of actions consistent with the
executive order. These not only include publishing new web page content
for noncitizen STEM professionals and entrepreneurs with guidance on
both the nonimmigrant and immigrant options to work in the United

[[Page 103067]]

States, but also publishing updated policy guidance for the O-1A
nonimmigrant classification for persons of extraordinary ability, the
EB-1 extraordinary ability and outstanding professor or researcher
immigrant classifications, EB-2 national interest waivers for advanced
degree professionals or persons of exceptional ability, and the
International Entrepreneur Parole.\32\ The changes to specialty
occupation finalized in this rule will also further the goals of the
Executive order to ``attract and retain talent in AI and other critical
and emerging technologies in the United States economy'' by clarifying
that ``normally'' does not mean ``always'' within the criteria for a
specialty occupation; clarifying that a position may allow for a range
of qualifying degree fields, although there must be a direct
relationship between the required field(s) and the duties of the
position; and clarifying that ``directly related'' means a logical
connection between the required degree (or its equivalent) and the
duties of the position. These changes better align the regulatory
definition of specialty occupation with the statutory definition of
that term, and provide greater certainty by codifying current policy
and practice into the regulation. Beyond the changes to specialty
occupation, other provisions in this final rule also support the goals
of the executive order, including the provisions relating to cap-
exemption and the provisions relating to beneficiary-owners. Therefore,
DHS disagrees that the changes in this final rule contradict executive
branch policy directives.
---------------------------------------------------------------------------

\32\ See USCIS, Options for Noncitizen STEM Professionals to
Work in the United States (last updated Aug. 27, 2024), https://www.uscis.gov/working-in-the-united-states/options-for-noncitizen-stem-professionals-to-work-in-the-united-states; USCIS, Options for
Noncitizen Entrepreneurs to Work in the United States (last updated
Aug. 27, 2024), https://www.uscis.gov/working-in-the-united-states/options-for-noncitizen-entrepreneurs-to-work-in-the-united-states;
USCIS, Policy Alert, O-1 Nonimmigrant Status for Persons of
Extraordinary Ability or Achievement (Jan. 21, 2022), https://www.uscis.gov/sites/default/files/document/policy-manual-updates/20220121-ExtraordinaryAbility.pdf; USCIS, Policy Alert, Evaluating
Eligibility for Extraordinary Ability and Outstanding Researcher
Visa Classifications, Sept. 12, 2023, https://www.uscis.gov/sites/default/files/document/policy-manual-updates/20230912-ExtraordinaryAbilityOutstandingProfessor.pdf; USCIS, International
Entrepreneur Rule (last updated Oct. 11, 2024), https://www.uscis.gov/working-in-the-united-states/international-entrepreneur-rule; USCIS Policy Alert, International Entrepreneur
Parole, Mar. 10, 2023, https://www.uscis.gov/sites/default/files/document/policy-manual-updates/20230310-InternationalEntrepreneurParole.pdf.
---------------------------------------------------------------------------

Comment: A few commenters expressed concerns about administrative
burdens resulting from the proposed changes to ``specialty
occupation.'' For example, a form letter campaign said that the
proposed revisions to the definition and criteria for ``specialty
occupation'' add unnecessary burdens for employers. A couple of
commenters wrote that the broad application of specialty occupation
could lead adjudicators to overlook skills and experience, resulting in
more RFEs. An advocacy group commented that the proposal could lead to
unreasonable denials of H-1B visas and burdensome RFEs. A trade
association agreed, adding that issuances of notices of intent to deny
(NOIDs) would also increase administrative difficulties. Another
commenter wrote that the proposed changes to ``specialty occupation''
would incentivize USCIS examiners to issue RFEs, creating burdens for
employers.
Response: DHS disagrees that amending the definition of specialty
occupation will add administrative burdens for employers. As discussed
in the NPRM, these changes are largely a codification of existing
policies and practice. 88 FR 72870, 72874 (Oct. 23, 2023). For example,
it is the current practice of USCIS to require the petitioner to
demonstrate that the required degree field(s) are directly related, as
defined in this rule, to the duties of the position.\33\ DHS does not
expect that there will be an increase in RFEs or NOIDS as a result of
codifying existing USCIS practices and providing clarification with
respect to the definition of and criteria for a specialty occupation.
It is also the current practice for USCIS to examine skills and
experience in the course of determining a beneficiary's qualifications,
and nothing in this rule changes this current practice. USCIS does not
anticipate that these clarifications will cause changes for petitioners
or add an administrative burden. Rather, codifying current practices
adds transparency to the adjudication process and should help to
prevent unnecessary evidence requests and delays.
---------------------------------------------------------------------------

\33\ See, e.g., Madkudu Inc. v. USCIS, No. 5:20-cv-2653-SVK
(N.D. Cal. Aug. 20, 2021) Settlement Agreement at 4 (``if the record
shows that the petitioner would consider someone as qualified for
the position based on less than a bachelor's degree in a specialized
field directly related to the position (e.g., an associate's degree,
a bachelor's degree in a generalized field of study without a minor,
major, concentration, or specialization in market research,
marketing, or research methods . . ., or a bachelor's degree in a
field of study unrelated to the position), then the position would
not meet the statutory and regulatory definitions of specialty
occupation at 8 U.S.C. 1184(i)(1) and 8 CFR 214.2(h)(4)(ii).''),
https://www.uscis.gov/sites/default/files/document/legaldocs/Madkudu-settlement-agreement.pdf (last visited Oct. 23, 2024).
---------------------------------------------------------------------------

Comment: Numerous commenters expressed concern about the potential
negative economic impacts associated with the specialty occupation
provisions. For instance, a joint submission reasoned that the proposed
specialty occupation provisions could limit the available talent pool
and negatively impact the innovation ecosystem by imposing more
stringent degree requirements. Another commenter similarly wrote that
letting the ``specialty occupation'' assessment be determined by the
semantics of a degree specialization would hinder innovation, research,
and business growth. The commenter said that the modern job market and
education system have allowed for fluid specialties and learning
opportunities, and the ``disruptive rate of technological advancement''
has changed the talent pool such that being an expert in one field
leads one to become an expert in another.
Several commenters commented that the proposal could negatively
impact industries' access to talent in emerging STEM fields, as multi-
disciplinary educational backgrounds are common in these settings. An
advocacy group referenced an attorney's argument that ``the narrowing
of eligibility'' for specialty occupations would impact research
positions in ``burgeoning cross-disciplinary fields.'' A professional
association expressed concern with the ``cross-cutting impact'' of the
proposed regulatory changes to 8 CFR 214.2(h)(4)(ii) and (iii),
particularly on the science and technology sectors, which the commenter
regarded as critical research areas for U.S. economic competitiveness
and national security. A business association and a trade association
commented that negative impacts to businesses' hiring would also
contravene the administration's goals to strengthen the U.S. workforce
and, in particular, to attract professionals in the AI field.
Additionally, other commenters said the provision would not adequately
deal with changes in technology, and could harm individuals in IT who
contribute to the economy but have non-IT bachelor's degrees.
Response: DHS disagrees that codifying existing USCIS practices by
revising the regulatory definition and standards for a ``specialty
occupation'' to better align with the statutory definition of that term
will have a negative effect on the economy or will hinder innovation,
research, or business growth. DHS also disagrees that this provision
will have a negative effect on various industries in the technology and

[[Page 103068]]

science sectors or limit these industries' access to talent trained in
emerging STEM fields or possessing multi-disciplinary educational
backgrounds. In clarifying the specialty occupation definition and
criteria, DHS aims to add transparency and predictability to the
adjudication process, not to impose more stringent degree requirements
or standards. Overall, the changes to the specialty occupation
provisions as revised from the proposed regulatory language--including
clarifying the word ``normally,'' and codifying current practice to
allow for a range of qualifying degree fields--recognize that there is
``flexibility inherent in H-1B adjudications'' \34\ to accommodate
emerging technological developments.
---------------------------------------------------------------------------

\34\ See 88 FR 72870, 72871 (Oct. 23, 2023).
---------------------------------------------------------------------------

Comment: Some commenters noted concerns across industries that the
proposed changes to the specialty occupation definition and criteria
would create uncertainty for H-1B professionals and their dependent
family members, international students at U.S. higher education
institutions, and employers both in academia and industry. The
commenters cited to DOL permanent labor certification (PERM) data from
FYs 2019 to 2023 showing that a sizeable percentage of H-1B holders
with employers sponsoring them for permanent residence hold jobs that
USCIS has ``confirmed are specialty occupations'' where: (a) the
minimum requirements are the type of knowledge obtained through
completion of any engineering degree; or (b) they entail job duties for
which a business administration degree is expected. Based on this data,
the commenters concluded that these are among the beneficiaries that
could be ``excluded'' under the proposed regulatory text, belying DHS's
suggestion that it is merely codifying current practice through the
proposed rule. Similarly, an advocacy group referenced the same PERM
application data and stated that over 20 percent of employers seeking a
permanent labor certification accepted either a business, liberal arts,
social studies, or any kind of engineering degree. The commenter noted
that because this data excluded EB-1 and EB-2 National Interest
Waivers, this was likely an undercount; and, as a result, the actual
impact of the proposed change would be larger than implied by the
figures referenced. Based on this data, the group concluded that the
proposed change ``would likely be a major deviation from current policy
of USCIS.''
A union cited data from the 2021 National Survey of College
Graduates and analysis by the National Foundation for American Policy
showing that a notable percentage of U.S.-born individuals and
temporary visa holders working in computer, biology, and mechanical
engineering occupations have a degree other than in computer science or
electrical engineering, health or biological sciences, and mechanical
engineering, respectively. The union further noted a trend in academic
departments and research centers, and in industry alike, to establish a
diverse, interdisciplinary staff team that allows for a broad range of
expertise and skills to pursue research projects and grants that cross
traditional fields. A commenter urged DHS to continue to consider the
combination of education and experience, even if the degree is not in a
directly related field. Referencing the same data and a news article
described above, a commenter said it was concerned with the ``directly
related specific specialty'' requirement.
Response: DHS disagrees that these changes to the specialty
occupation provisions would negatively impact or create uncertainty for
H-1B petitioners, beneficiaries (and their families), and prospective
beneficiaries. As stated in the NPRM and in this final rule, the
changes to the specialty occupation definition and criteria are
intended to capture current USCIS practices. For instance, it is the
current practice for USCIS to examine skills and experience in the
course of determining a beneficiary's qualifications and make
individualized determinations in each case, and nothing in this rule
changes this current practice.
With respect to the comments based upon DOL PERM data, DHS cannot
speak specifically to the accuracy of the conclusions drawn by the
commenters because the commenters did not provide the methodology used
in examining the DOL PERM data. Further, DHS cautions against drawing
broad conclusions about H-1B eligibility based on DOL PERM data, as
such data are for immigrant-based classifications that have different
eligibility criteria than H-1B specialty occupations and may be for
different positions with different minimum requirements. For example,
the commenters' references to positions where ``the minimum
requirements are the type of knowledge obtained through completion of
any engineering degree'' and positions that ``entail job duties for
which a business administration degree is expected'' are unclear and do
not necessarily speak to the degree requirements for the beneficiary's
specialty occupation position nor support the commenters' assertion
that these beneficiaries would be ``negatively impacted'' by the
changes made in this final rule. Finally, DHS notes that the current
practices codified by this rule were in place even during the period
covered by the data reviewed by the commenters (FY2019-FY2023). There
is no reason to think that codification of these practices would result
in different adjudicative outcomes.
Regarding the commenter's concern that data show that workers in
various computer, engineering, and science fields have degrees outside
of these fields, DHS notes that it is USCIS' current practice to
examine whether there is a direct relationship between the qualifying
degree fields and the duties of the position when determining whether
the position is a specialty occupation. This is separate from the
determination of whether a beneficiary qualifies for the proffered
position. As is currently the case, a beneficiary may qualify for the
specialty occupation through a combination of education, training, and/
or work experience. The changes to the specialty occupation provisions
do not impact how USCIS evaluates and will continue to evaluate a
beneficiary's qualifications. See 8 CFR 214.2(h)(4)(iii)(C) and (D).
Comment: Some commenters argued that the NPRM failed to address
reliance interests that would be impacted by the proposed changes to
the specialty occupation definition. For example, one commenter said
the failure to address reliance interests is arbitrary and capricious.
A trade association said that the proposed language would result in
arbitrary and capricious adjudications, cause uncertainty for employers
and beneficiaries, and prevent employers from obtaining needed talent
and cross-training employees. Other commenters added that the rule
would upset the reliance interests of IT consulting companies in
particular and disrupt their ability to fill domestic labor shortages
and meet technology needs.
Response: The finalized specialty occupation definition and
criteria, as slightly modified from the NPRM, codify existing USCIS
adjudication practices. Since these provisions are consistent with
current USCIS practices, DHS does not agree that they will upset
serious reliance interests.
ii. Amending the Definition of ``Specialty Occupation''
Comment: Several commenters provided general comments in support of
the ``directly related'' requirement. For example, a union generally
supported requiring a direct relationship between degrees and
occupations, clarifying that general degrees are insufficient to
support H-1B

[[Page 103069]]

petitions, and placing the burden on H-1B petitioners to demonstrate
the relationship between degrees and occupations. A research
organization wrote that the proposal that each qualifying degree be
directly related to a proffered position is consistent with the INA and
caselaw. A commenter expressed support for requiring a ``direct
relation'' between a beneficiary's education and the occupation.
Similarly, a commenter said that requiring a ``direct correlation''
between the position and degree would ensure a ``more precise match''
of position duties to the skills of candidates. Another commenter
generally stated that stricter scrutiny is required to ensure that
beneficiaries are working in fields matching their skills. Another
commenter generally suggested that the job that an H-1B worker is doing
should be relevant to the degree obtained.
A commenter expressed support for the ``directly related''
requirement, reasoning that it is necessary to ensure that individuals
with specialized skills, such as those with degrees in pharmaceutical
sciences, could work in the United States. The commenter said that the
current ``high intake'' of individuals with undergraduate degrees in
engineering and master's degrees in IT disadvantages these groups and
that the proposed change would help address that disadvantage. Another
commenter similarly stated that the ``directly related'' requirement
would ensure that applicants with a degree that has a direct
relationship to the position would have a chance to become employed,
and that the requirement would regulate the job market and prevent
applicants from trying to obtain an H-1B visa for work that is not
related to their degree. A commenter expressed support for the
``directly related'' requirement, stating that it would ensure that
foreign workers who intentionally choose to pursue a degree that is
related to a specific occupation can fill employment gaps without
disrupting the U.S. job market. The commenter added that the proposed
requirement would further program integrity and ensure the H-1B program
serves its statutory purpose.
Response: DHS agrees that requiring the degree field(s) to be
directly related to the duties of the position is consistent with the
INA and caselaw,\35\ supports program integrity, and continues to
ensure that the H-1B program serves its statutory purpose by providing
a regulatory definition of specialty occupation that is consistent with
the existing standard. While these changes are not intended to benefit
a particular occupation or industry, DHS believes they are generally
beneficial for all petitioners and beneficiaries.
---------------------------------------------------------------------------

\35\ Royal Siam Corp. v. Chertoff, 484 F.3d 139, 147 (1st Cir.
2007) (describing ``a degree requirement in a specific specialty''
as ``one that relates directly to the duties and responsibilities of
a particular position''); Caremax Inc. v. Holder, 40 F. Supp. 3d
1182, 1187-88 (N.D. Cal. 2014) (``A position that requires
applicants to have any bachelor's degree, or a bachelor's degree in
a large subset of fields, can hardly be considered specialized.'').
---------------------------------------------------------------------------

Comment: Numerous commenters expressed concern that the proposed
changes would be too restrictive by ignoring that individuals may have
work experience in addition to their degree, and make it difficult for
individuals with experience to qualify for H-1B status. A few
commenters added that the proposed changes could discourage potential
H-1B candidates from contributing their knowledge outside their field
of study, noting that a highly qualified individual may have acquired
skills through job experience outside his/her field of study/degree.
Several commenters expressed concern that the addition of the
``directly related'' requirement could narrow the eligibility of
potential beneficiaries. Specifically, a commenter said that the
proposed requirement could result in individuals with experience in a
given field being deemed ineligible while new college graduates with
degrees in relevant fields to qualify for H-1B status. While commenting
on the impact of the proposed specialty occupation regulations on
highly experienced individuals, a commenter urged DHS to leave the
regulations in their current form.
Several commenters suggested that USCIS also consider work
experience. These included recommendations to consider work experience
as an equivalent to the degree name, and allowing experience as an
alternative to the field of study. A couple of commenters were
concerned that the proposed requirements would not provide sufficient
flexibility for individuals who have acquired skills while on the job.
A trade association and a few other commenters said that the ``directly
related'' requirement would not provide leeway for individuals who are
highly educated but want to change sectors in the middle of their
careers. A commenter said that it understood the rationale behind the
proposed requirement but suggested that USCIS take care in implementing
it, as some individuals ``shine'' in positions not related to their
educational backgrounds. A trade association referenced an example of a
position that required expertise in programming languages but did not
always require a specific degree, which the commenter said would likely
make the position ineligible for H-1B initial approval or renewal,
resulting in the position being sent ``offshore.'' Similarly, another
commenter said that the requirement would ``stifle the diverse
professional growth that fuels innovation,'' potentially diverting
global talent to other destinations, as career flexibility is
``crucial.''
Response: Through this rulemaking, DHS is codifying existing USCIS
practice requiring a direct relationship between the qualifying degree
field(s) and the duties of the position. This is consistent with USCIS'
long-standing practice and interpretation that the ``specific
specialty'' requirement in section 214(i)(1)(B) of the INA, 8 U.S.C.
1184(i)(1)(B), relates back to the body of highly specialized knowledge
requirement referenced in section 214(i)(1)(A) of the INA, 8 U.S.C.
1184(i)(1)(A). DHS disagrees with the comments that these changes are
overly restrictive and that they will negatively impact eligibility,
whether for H-1B beneficiaries who are renewing their status or
potential beneficiaries with specialized experience or skills, because
the specialty occupation determination is separate from the
determination of whether a beneficiary qualifies for the proffered
position.
As discussed above, it is already current practice for USCIS to
examine skills and experience in the course of determining a
beneficiary's qualifications, and nothing in this rule changes this
current practice. USCIS will continue to make individualized
determinations in each case. As explained in the NPRM, USCIS will
consider whether the beneficiary has the education, specialized
training, and/or progressively responsible experience that is
equivalent to completion of a U.S. baccalaureate or higher degree in
the specialty occupation. See 8 CFR 214.2(h)(4)(iii)(C)(4).
After carefully considering the comments, DHS is not finalizing the
proposed regulatory text of ``[t]he required specialized studies must
be directly related to the position,'' as this language could be
misread as stating that USCIS would only consider a beneficiary's
specialized studies. The ``directly related'' requirement is, however,
being retained in the definition of ``specialty occupation'' and in the
criteria, as explained in more detail below.
Comment: Several commenters were concerned that the proposed rule
might

[[Page 103070]]

render individuals currently eligible for H-1B classification
ineligible under the new specialty occupation definition and requested
clarification on when or to whom the new definition will apply. A group
of Federal elected officials requested clarification on how the amended
definition of specialty occupation will be implemented consistently
with current practice to ensure that individuals who comply with
current H-1B regulations can remain in compliance under the new
definition. The commenters warned against changing the requirements on
those already granted H-1B status, as such a change would create an
unpredictable adjudication environment and could lead to foreign-born
professionals having to leave the country and U.S. companies losing
employees and talent. The commenters commended the codification of
USCIS' deference policy, and urged DHS to clarify how it will apply its
deference policy when adjudicating H-1B petitions moving forward, given
the proposed rule's amended definition of specialty occupation.
Alternatively, the commenters strongly recommended that, if the new
specialty occupation definition does in fact represent a significant
departure from current practice, any new H-1B eligibility requirements
that result from the proposed rule's new amended definition of
specialty occupation only apply to individuals whose initial H-1B
petitions are filed after the proposed rule is finalized.
Multiple commenters, including a form letter campaign, suggested
that DHS only apply the revised specialty occupation regulations to new
petitions, or not apply the rule to current H-1B holders or extensions.
Similarly, a few commenters articulated concerns about beneficiaries in
the immigrant visa backlog who would no longer be able to continue
their H-1B status, and others noted that it could displace individuals
with H-1B status already in the United States. Several commenters
expressed concern with the potential impact of the requirement on
current H-1B beneficiaries who are already in the United States, in
backlogs, and might experience denials as a result of not having a
degree ``directly related'' to the position. Some commenters requested
clarification about whether these individuals would be excluded from
the application of the proposed requirement.
Response: The changes being finalized in this rule become effective
30 days after this final rule is published in the Federal Register.
They will apply to any H-1B petition filed on or after this date,
whether it is a petition seeking an initial grant of H-1B status or
extension of H-1B status. Commenters did not specify why they think the
changes to the specialty occupation definition and criteria would
result in current H-1B nonimmigrants being unable to continue their H-
1B status or otherwise negatively impact current H-1B nonimmigrants. As
stated previously, the changes to the specialty occupation provisions
codify existing practices; they are not intended or expected to result
in current H-1B nonimmigrants no longer being eligible for H-1B status
based on employment that has already been found to be a specialty
occupation. They also do not narrow or otherwise change the existing
standards for how a beneficiary may qualify for the specialty
occupation through a combination of education, training, and/or work
experience. To the extent there is concern about any changes to
eligibility because of the inclusion of ``directly related'' in the new
regulatory text, the new language added in this final rule further
clarifies that USCIS is not changing eligibility standards for
assessing whether a position is a specialty occupation. Therefore, DHS
does not believe it is necessary to apply this final rule only to H-1B
petitions requesting an initial grant of H-1B status that are filed on
or after the effective date of this rule.
In addition, the codification of the deference policy should allay
some of the commenters' concerns. By codifying the deference policy,
USCIS will continue to defer to prior determinations involving the same
parties and underlying facts, except in case of material error,
material change in circumstances or eligibility requirements, or new
material information adversely impacting eligibility. As stated, H-1B
eligibility requirements, including the requirement to qualify as a
specialty occupation, will apply to any H-1B petition filed on or after
the effective date of this rule. However, DHS emphasizes again that the
revisions to the regulatory language for the definition and criteria
for a specialty occupation do not represent a change in policy, but
rather codify existing adjudication practices and are intended to
provide greater clarity and predictability to petitioners and
beneficiaries. A position previously determined to meet the definition
of a specialty occupation generally should continue to do so and a
beneficiary previously determined to be qualified for such an
occupation generally should remain so qualified, absent material error
or a change in material facts.
To the extent that commenters are worried that current H-1B
beneficiaries who were not eligible for H-1B status in the first place
would no longer be eligible for an extension of status under this final
rule, this is not persuasive. USCIS is not, and has never been,
required to approve a petition ``where eligibility has not been
demonstrated merely because of prior approvals that were erroneous.''
\36\
---------------------------------------------------------------------------

\36\ Matter of Church Scientology Int'l, 19 I&N Dec. 593, 597
(Comm'r 1988); accord Ochoa-Castillo v. Carroll, 841 F. App'x 672,
674-75 (5th Cir. 2021).
---------------------------------------------------------------------------

Comment: Several commenters discussed the potential negative impact
of the ``directly related'' requirement on hiring practices, stating
that it would likely ``aggravate'' and extend the hiring process, or
even eliminate the ability of companies to consider employees with
``hands-on'' experience. A joint submission stated that the ``directly
related'' requirement would prevent employers from establishing that an
emerging body of knowledge was acquired through a degree in the
``specific specialty'' or ``its equivalent.'' The commenters stated
that an interdisciplinary approach to hiring is often required to
attain the necessary ``highly specialized knowledge'' associated with a
position although that knowledge might not have a specific field of
study associated with it. A trade association said that because most
employers hire skilled workers based on their coursework and
experience, it would be irrelevant to show a direct relationship
between degree and job duties. Similarly, a commenter said that the
requirement was illogical because there is no longer a relationship
between degrees and job duties.
Some commenters discussed the impact on hiring practices in
specific industries or fields, particularly in fields such as AI and
IT. For instance, commenters stated that it is often ``indispensable''
to hire individuals with ``complementary specialties'' to ``form
diverse, interdisciplinary teams.'' The joint submission added that
employers would face additional hurdles when conducting on-campus
recruitment as a result of the ``directly related'' requirement. A
trade association noted that the specialized expertise required when
hiring for roles that integrate AI across various sectors challenged
USCIS' assumptions regarding the ``direct relevance'' of degrees.
Another commenter stated that employers have trended towards hiring
individuals with degrees and skills from various backgrounds,
specifically for the AI workforce, because they need employees with
industry knowledge,

[[Page 103071]]

not just with the traditionally associated academic background. Other
commenters expressed concern that the proposed requirement would limit
the ability of IT consulting firms to fill certain roles and sponsor
foreign workers, particularly workers with work experience but degrees
in various fields.
A trade association expressed concern with the potential impact of
the proposed changes to the definition of ``specialty occupation'' on
the higher education community. The commenter stated that the proposed
definition could hinder the ability of higher education institutions to
hire faculty in broad departments that might include many
subspecialties. The commenter also said that the proposed change would
negatively impact the pipeline for growth in fields of emerging
technology, education, research, and the economy, and deter students
from studying in the United States. Similarly, another commenter
expressed concern that the proposed requirement could force academic
institutions to narrow their hiring scope, potentially diminishing
their ability to recruit talented employees. Another trade association
said the proposed provision would hinder the ability of educational
institutions to hire faculty because universities organize their
programs by broad disciplines which have departments with
subdisciplines, and, as such, typically hire faculty that have broad
training within a discipline in addition to knowledge across several
subdisciplines.
Response: As stated previously, DHS is codifying existing USCIS
practice that there must be a direct relationship between the required
degree field(s) and the duties of the position. As this is consistent
with current USCIS practice, petitioners generally should not
experience a major shift in hiring due to this rule. The specialty
occupation changes are not intended to disadvantage any particular
industry or occupation, nor any H-1B beneficiaries already authorized
to work in a specialty occupation.
These provisions also should not hinder the ability of companies to
consider employees with experience. USCIS analyzes whether the
proffered position is a specialty occupation (including determining if
there is a direct relationship between the required degree(s) and the
duties of the position) separately from its analysis of a beneficiary's
qualifications. The final regulations will maintain the flexibility of
the H-1B program to adapt to new and emerging technologies, education,
and research fields, and allow companies to recruit talented workers.
As noted in the NPRM, when applicable, USCIS also will consider whether
the beneficiary has the education, specialized training, and/or
progressively responsible experience that is equivalent to completion
of a U.S. baccalaureate or higher degree in the specialty occupation.
See 8 CFR 214.2(h)(4)(iii)(C)(4), (h)(4)(iii)(D). The changes to codify
the ``directly related'' requirement do not, in any way, preclude
petitioners from recruiting workers to form a diverse,
interdisciplinary team.
Comment: Several commenters expressed concerns that the ``directly
related'' requirement would require an exact match between degree and
occupation titles. A commenter requested removing the ``specifically
related'' term that requires a match between the job title and degree
name. Similarly, a couple of commenters said that there is never a
direct match between degree names and the skills required to perform
the duties of a position. A company stated that the ``directly
related'' section of the proposed rule assumes a level of uniformity in
naming degree fields across colleges and universities that does not
exist. Another commenter stated that it would be ``highly subjective
and dangerous'' to include the requirement, as names of degrees are
``archaic in nature'' compared to current job titles because degree
names do not evolve as fast as certain fields. The commenter said that
this could result in the disqualification of certain individuals
despite their possession of specialized knowledge. A professional
association commented that the proposed definition would impose a
faulty process of matching educational qualifications to occupations,
reasoning that educational qualifications and occupations rarely have
direct matches. The professional association stated that because
colleges and universities have autonomy over naming and criteria,
basing an evaluation on the name of a degree could minimize the
qualifications of knowledgeable graduates. The commenter noted that
these ``matching exercises'' between degrees and occupations would be
arbitrary because they would not reflect the reality of skills required
for positions. Other commenters stated that because the proposal would
allow adjudicators to use their discretion to determine an exact match
between job position and degree, many current H-1B workers might not
meet the new criteria. A company added that adjudicators might look
exclusively for a one-to-one match between the degree listed on a
diploma and the relevant occupation without considering a beneficiary's
underlying studies.
Response: There is no requirement for a direct, exact, or one-to-
one match between the degree field(s) and job titles now, or with
respect to this final rule. DHS acknowledges that degree field names
may change over time and differ between universities and emphasizes
that USCIS does not look merely at the name of the degree field. The
changes to the definition of specialty occupation codify current
practices and do not impose a new requirement for an ``exact match''
between degree field(s) and job titles or otherwise narrow eligibility
for a specialty occupation.
DHS further reiterates that the requirement of a direct
relationship between a degree in a specific specialty, or its
equivalent, and the duties of the position should not be construed as
requiring a singular field of study. As explained in the NPRM, these
changes merely codify existing practices. 88 FR 72870, 72874 (Oct. 23,
2023). In some cases, the direct relationship between the degree
field(s) that would qualify someone for the position and the duties of
the position may not be apparent, and the petitioner may have to
explain and provide documentation to meet its burden of demonstrating
the relationship. As in the past, to establish a direct relationship,
the petitioner would need to provide information regarding the
course(s) of study associated with the qualifying degree field(s), or
its equivalent, and the duties of the proffered position, and
demonstrate the connection between the course of study and the duties
and responsibilities of the position. Under new 8 CFR 214.2(h)(4)(ii),
as amended, the petitioner will continue to have the burden of
demonstrating that there is a direct relationship between the required
degree in a specific specialty and the duties of the position. DHS is
also adding regulatory text to clarify the level of connection needed
to meet the ``directly related'' requirement.
Comment: A few commenters expressed concern with language in the
NPRM which referred to ``educational credentials by the title of the
degree for expediency.'' Referencing this language, which was contained
in footnote 25 of the NPRM, a professional association and a law firm
stated that USCIS' explanation that the use of degree titles was a
matter of ``expediency'' and that adjudicators would still evaluate the
relationship between the course of study and the duties of the position
was of ``little comfort.'' The commenter reasoned that the proposed
rule does not reflect this clarification or direct

[[Page 103072]]

adjudicators to look at the relationship between the duties of the
position and the course of study, which the commenter stated ``includes
the classes taken, skills and training acquired, and knowledge
obtained.'' An advocacy group similarly expressed concern that, despite
the NPRM's acknowledgment in footnote 25, the ``binding regulation''
fails to conform with current USCIS policy and include correct
references to courses of study and job duties, instead referring to
degree labels and names of positions. An advocacy group and company
stated that USCIS' proposal to disqualify positions that require a
``general degree'' based on the title of the position and degree
program, without further consideration of job duties or course of study
content, would be inconsistent with the agency's acknowledgment in
footnote 25 of the NPRM. Another advocacy group also referenced
footnote 25 and suggested that the clarification be reflected in the
regulatory language.
Response: DHS acknowledges the commenters' concerns about referring
to ``the title of the degree for expediency.'' In recognition that the
title of a degree is not determinative, and to be responsive to these
comments, DHS is not finalizing the phrase ``such as business
administration or liberal arts'' from the proposed regulatory text.
While this rule finalizes the regulatory text stating that, ``A
position is not a specialty occupation if attainment of a general
degree, without further specialization, is sufficient to qualify for
the position,'' the deletion of the specific references to ``business
administration or liberal arts'' signals that USCIS will continue to
separately evaluate whether the beneficiary's actual course of study is
directly related to the duties of the position, and will not merely
look to the title of the degree, consistent with current practice. When
applicable, USCIS also will consider whether the beneficiary has the
education, specialized training, and/or progressively responsible
experience that is equivalent to completion of a U.S. baccalaureate or
higher degree in the specialty occupation, consistent with current
practice and regulations. See 8 CFR 214.2(h)(4)(iii)(C)(4) and (5).
Comment: Multiple commenters stated that it would be difficult to
show an ``exact correspondence'' between degree fields and occupations
in emerging technical fields, such as AI and cybersecurity. Similarly,
an advocacy group and a law firm said that focusing on degree titles
alone would not account for all of the skills that are needed to work
in new and emerging technology fields. The commenters said that this
could limit employers' ability to fill positions and remain competitive
in the global marketplace. A few commenters further stated that new
occupations or areas of study might be created as a result of
innovation that could lead to an unclear consensus on how to classify a
role or determine what field of study a role might require.
Response: As with any industry, not every position in emerging
fields will meet the definition of a specialty occupation. However, DHS
believes that the specialty occupation provisions codified in this rule
sufficiently accommodate emerging fields, including AI and
cybersecurity. DHS understands that many occupations, including those
in new and emerging fields, may not always have a singular degree
requirement to meet the needs of the position. As stated in 8 CFR
214.2(h)(4)(ii), a position may allow for a range of qualifying degree
fields, provided that each of those fields is directly related to the
duties of the position. The petitioner is not required to show an
``exact correspondence'' between degree field(s) and the occupation. As
finalized in this rule, ``directly related'' means that there is a
logical connection between the degree, or its equivalent, and the
duties of the position. See new 8 CFR 214.2(h)(4)(ii). Furthermore, as
stated above, DHS agrees that the title of a degree is not
determinative. Rather than looking only to the title of the degree,
USCIS will continue to separately evaluate whether the underlying
course of study is directly related to the duties of the position. The
regulatory text, as finalized, offers flexibility to the specialty
occupation determination, including to occupations in emerging fields,
while better aligning with the statutory requirements for a specialty
occupation.
Comment: An advocacy group disputed the NPRM's assertion that an
engineering degree field's title must exactly match the title of an
engineering position for the two to be related. The commenter reasoned
that companies hire individuals with STEM degrees based on the
knowledge and skill sets gained through the STEM programs. A law firm
stated that computer science and computer engineering courses are an
essential component of every engineering field of study. As such, the
commenter suggested that any engineering degree that included computer
science or computer engineering courses be considered ``directly
related'' to a software developer occupation.
Response: Regarding the commenter's concern about employers
accepting engineering degrees, DHS is not suggesting that employers
cannot accept any engineering degree for their positions. Rather, DHS
is clarifying that a petition listing a requirement of any engineering
degree in any field of engineering for a position such as a software
developer would generally not satisfy the statutory requirement, as it
is unlikely the petitioner could establish how the fields of study
within any engineering degree provide a body of highly specialized
knowledge directly relating to the duties and responsibilities of the
software developer position. This is because an engineering degree
could include, for example, a chemical engineering degree, marine
engineering degree, mining engineering degree, or any other engineering
degree in a multitude of seemingly unrelated fields. If an individual
could qualify for a petitioner's software developer position based on
having a seemingly unrelated engineering degree, then it generally
cannot be concluded that the position requires the application of a
body of highly specialized knowledge and a degree in a specific
specialty, because someone with an entirely or largely unrelated degree
may qualify to perform the job.\37\ Similarly, assertions that a
position can be satisfied based on studies in any STEM degree field
would generally indicate that the position does not require a ``body of
highly specialized knowledge'' but, rather, general mathematical or
analytical skills. In such scenarios, the requirements of INA sections
214(i)(1)(A) and (B), 8 U.S.C. 1184(i)(1)(A) and (B), would not be
satisfied. The critical element is not the title of the position, but
whether the position requires the theoretical and practical application
of a body of highly specialized knowledge, and the attainment of a
bachelor's or higher degree in the specific specialty, as the minimum
for entry into the occupation as required by the INA.
---------------------------------------------------------------------------

\37\ These examples refer to the educational credentials by the
title of the degree for expediency. However, USCIS separately
evaluates whether the beneficiary's actual course of study is
directly related to the duties of the position, rather than merely
the title of the degree. When applicable, USCIS also will consider
whether the beneficiary has the education, specialized training,
and/or progressively responsible experience that is equivalent to
completion of a U.S. baccalaureate or higher degree in the specialty
occupation. See 8 CFR 214.2(h)(4)(iii)(C)(4).
---------------------------------------------------------------------------

Comment: Several commenters discussed the proposed ``directly
related'' requirement's relationship with the INA, stating that the
requirement defies the INA because the INA does not include any mention
of the degree being

[[Page 103073]]

``directly related'' to the position. An attorney stated that there
were no ambiguities within the statutory definition of ``specialty
occupation'' that has been in use since 1990 that necessitated the
addition of a ``direct relationship'' element to the definition.
A few commenters stated that the proposed requirement did not
``faithfully interpret'' the INA. A couple of trade associations and a
joint submission stated that the ``directly related'' requirement would
not be in alignment with longstanding USCIS practices. An advocacy
group stated that the requirement that a beneficiary's degree be
related to the position was not equivalent to the ``long-established''
interpretation of the INA, which the commenter said has been focused on
adjudicating H-1B petitions based on skills and knowledge gained from
courses of study and the job duties of the position, not the name of
their degree, or the name of the position.
Another advocacy group referenced an attorney's argument that
expressed concern with the proposed definition of ``specialty
occupation,'' reasoning that there was no requirement in INA sec.
214(i)(1) that specialized studies must be directly related to the
position. The attorney added that while a lawyer would qualify as a
specialty occupation under the proposed language, that INA section
reads more broadly, and as such, a marketing analyst should also
qualify despite the occupation requiring degrees in more diverse
fields. Referencing the same argument, another commenter stated that no
requirement under the INA matches the new definition of specialty
occupation. An advocacy group and another commenter stated that
requiring a degree to be in a ``directly related specific specialty''
was absent from the INA. Another professional association specifically
stated that the ``directly related specific specialty'' standard
rewrote the authorizing statute through regulation by calling for a
precise match between the degree and the occupation that is not found
in statute.
A joint submission expressed opposition to the NPRM's use of the
undefined terms ``specialized studies'' and ``directly related,''
stating that the ``directly related'' requirement would exceed the
statutory authority provided in the definition of a ``specialty
occupation'' in INA sec. 214(i)(1). Specifically, the commenters stated
that Congress created the ``body of highly specialized knowledge''
requirement when defining the H-1B category, and when doing so, also
limited the fields of study that comprise the ``specific specialty'' or
its ``equivalent.'' The commenters said that in practice, occupations
that do not have degrees typically associated with them instead accept
a variety of different fields of study that all provide the ``highly
specialized knowledge'' required by the occupation.
A trade association and a law firm stated that the ``directly
related'' requirement in the proposed definition of ``specialty
occupation'' exceeds the statutory requirements of the INA.
Specifically, the commenters stated that the INA definition provides a
``substantially broader standard'' by stating that the requirement of a
degree in the specialty or ``its equivalent'' can form the basis of a
specialty occupation. The commenters added that ``equivalent'' was
interpreted by a district court in Tapis Int'l v. INS \38\ to encompass
``various combinations of academic and experience-based training'' and
that it ``defies logic'' to limit the degree requirement of ``specialty
occupation'' to only positions where a specific degree is offered.
Therefore, the commenters stated that Tapis precludes the
``impermissible limitations'' that USCIS seeks to impose through the
``directly related'' requirement in the NPRM and that the statutory
language permits a position to qualify as a specialty occupation when
it requires a non-specialized degree combined with specialized
experience, training, or coursework that is ``the equivalent'' of a
specialized degree. The commenters concluded that the ``directly
related'' standard contradicts the ``clear language of the statute''
and is, thus, ultra vires, impermissible, and must be removed to ensure
that the regulatory language remains consistent with INA sec.
214(i)(1). Similarly, several commenters referenced INA sec. 214(i)(1)
and said that the phrase ``or its equivalent'' broadens the requirement
for a bachelor's degree to also encompass ``not only skill, knowledge,
work experience, or training . . . but also various combinations of
academic and experience-based training,'' and thus an occupation that
requires a generalized degree but also specialized experience or
training should be considered a specialty occupation. Similarly, a
professional association and a law firm stated that the ``directly
related specific specialty'' requirement contradicted the INA,
reasoning that the INA does not specify that a degree must be directly
related to a specific specialty. As such, the commenters stated that
the proposed language ``impermissibly narrows'' the language of
``specialty occupation'' under INA sec. 214(i)(1). Referencing Tapis
Int'l v. INS, the commenters stated that the knowledge and skills
obtained through the degree, not the title of the degree, is what is
important in the consideration of a ``specialty occupation,'' but that
the language of the proposed rule fails to consider the skills that
beneficiaries gain through the attainment of a bachelor's degree and
industry experience. The professional association concluded that the
proposed language would narrow the types of positions that can qualify
as a specialty occupation, including positions currently held by H-1B
workers, potentially nullifying the proposed deference provisions.
---------------------------------------------------------------------------

\38\ 94 F. Supp. 2d 172, 175-76 (D. Mass. 2000).
---------------------------------------------------------------------------

Response: DHS disagrees that the ``directly related'' requirement
is inconsistent with or exceeds the statutory requirements of the INA.
DHS further disagrees that this requirement would be inconsistent with
longstanding USCIS practice. While INA section 214(i)(1) does not
contain the exact phrase ``directly related,'' consonant with INA
section 214(i)(1), USCIS has consistently interpreted the term
``degree'' to mean not just any baccalaureate or higher degree, but one
in a specific specialty that is directly related to the proffered
position. See Royal Siam Corp. v. Chertoff, 484 F.3d 139, 147 (1st Cir.
2007) (describing ``a degree requirement in a specific specialty'' as
``one that relates directly to the duties and responsibilities of a
particular position''). To demonstrate that a job requires the
theoretical and practical application of a body of highly specialized
knowledge as required by INA section 2l4(i)(l), a petitioner must
establish that the position requires the attainment of a bachelor's or
higher degree in a specialized field of study or its equivalent. USCIS
has long required there to be a close correlation between the required
specialized studies and the position.
The ``directly related'' requirement does not mean that a specialty
occupation position cannot accept degrees in a variety of different
fields of study, provided that each field of study provides the
``highly specialized knowledge'' required by the occupation. While the
statutory ``the'' and the regulatory ``a'' are both interpreted to
denote a singular ``specialty,'' this should not be misconstrued with
necessarily requiring a singular academic major or field of study. In
cases where the petitioner lists multiple disparate fields of study as
the minimum entry requirement for a position, the petitioner must
establish how each field of study is in a ``specific specialty'' that
is directly related to the duties and responsibilities of the

[[Page 103074]]

particular position (i.e., the applied body or bodies of highly
specialized knowledge), consistent with the statutory definition.
Further, DHS disagrees that the ``directly related'' requirement
conflicts with Tapis Int'l v. INS.\39\ It appears the commenters have
conflated the issue of a position's qualification as a specialty
occupation with the issue of a beneficiary's qualification for the
position. A beneficiary's credentials to perform a particular job are
relevant only when the job is first found to qualify as a specialty
occupation. Cf. Matter of Michael Hertz Assocs., 19 I&N Dec. 558, 560
(Comm'r 1988) (``The facts of a beneficiary's background only come at
issue after it is found that the position in which the petitioner
intends to employ him falls within [a specialty occupation].'').
---------------------------------------------------------------------------

\39\ In any event, USCIS is not bound to follow the published
decisions of a district court, even in cases arising in the same
judicial district. See, e.g., Matter of Rosales Vargas, 27 I&N Dec.
745, 749 n.7 (BIA 2020); Matter of K-S-, 20 I&N Dec. 715, 718-19
(BIA 1993).
---------------------------------------------------------------------------

Comment: Several commenters discussed USCIS' consideration of
specialized experience, skills, and training in addition to degree
requirements with respect to the ``directly related'' requirement. Many
commenters suggested that rather than focusing on degree titles alone,
USCIS should evaluate potential beneficiaries on their overall
education, including course of study, extracurricular, and skill
development. A couple of commenters suggested that instead of requiring
a ``direct relationship'' between the degree and position, USCIS should
ensure that individuals have the required skill set for the job. Many
commenters stated that the definition should be expanded to include
consideration of direct work experience. Similarly, many commenters
urged DHS to consider adding language that allows USCIS to consider
coursework and ``courses of study,'' along with an employer's
explanation of how a degree is directly related to a position. Another
commenter requested that USCIS clarify that ``courses of study'' are
relevant rather than the degree field, and that ``job duties'' are
relevant rather than the job title of the position. Other commenters
urged USCIS to consider the candidate's certifications as a better
indicator of their skill level instead of relying on the degree
obtained.
A law firm expressed concern that the proposed ``direct
relationship'' requirement might cause adjudicating officers to
exercise ``unintended'' discretion in their willingness to look at the
totality of a beneficiary's educational studies. The commenter
suggested that the Department could codify existing practice and
eliminate future ambiguity by modifying the proposed definition of
``specialty occupation'' to include a provision at the end that states,
``The relatedness of specialized studies may be established through an
evaluation of the coursework (and applications of that coursework) that
comprise the degree.''
Response: DHS is codifying existing USCIS practice that there must
be a direct relationship between the required degree field(s) and the
duties of the position. Codifying the ``direct relationship''
requirement does not impact existing current practices that already
allow for consideration of a beneficiary's coursework, experience, and
skills, which is a separate issue pertaining to a beneficiary's
qualifications for a specialty occupation. As explained above, USCIS
will continue to separately evaluate whether the beneficiary's actual
course of study is directly related to the duties of the position,
rather than merely the title of the degree. USCIS also will continue to
consider whether the beneficiary has the education, specialized
training, and/or progressively responsible experience that is
equivalent to completion of a U.S. baccalaureate or higher degree in
the specialty occupation. See 8 CFR 214.2(h)(4)(iii)(C)(4),
(h)(4)(iii)(D).
That said, DHS recognizes that the proposed regulatory text may
have been confusing in some regards and is making some changes to
address these concerns. First, DHS will not finalize the sentence,
``The required specialized studies must be directly related to the
position,'' as this particular sentence may have incorrectly suggested
that USCIS would only look to the degree even when evaluating a
beneficiary's qualifications to perform the specialty occupation
instead of considering a beneficiary's experience, training, and other
pertinent skills.\40\ See new 8 CFR 214.2(h)(4)(ii). DHS is also
deleting references to ``business administration'' and ``liberal arts''
so as to not suggest that degree titles are determinative in the
specialty occupation assessment. See id. DHS is also incorporating
language to refer to the ``duties of the position'' to allay
commenters' concerns about the importance of examining the job duties
of the position in addition to the degree title. Id. Consistent with
current practice, USCIS will continue to separately evaluate whether
the beneficiary's actual course of study is directly related to the
duties of the position, rather than merely the title of the degree.
When applicable, USCIS also will continue to consider whether the
beneficiary has the education, specialized training, and/or
progressively responsible experience that is equivalent to completion
of a U.S. baccalaureate or higher degree in the specialty occupation.
See 8 CFR 214.2(h)(4)(iii)(C)(4). Further, DHS is amending the proposed
sentence, ``A position may allow a range of degrees or apply multiple
bodies of highly specialized knowledge, provided that each of those
qualifying degree fields is directly related to the position,'' to
state that ``A position may allow for a range of qualifying degree
fields, provided that each of those fields is directly related to the
duties of the position.'' New 8 CFR 214.2(h)(4)(ii). This revision is
intended to better codify longstanding USCIS practice of interpreting
the degree requirement ``in a specific specialty'' as ``one that
relates directly to the duties and responsibilities of a particular
position.'' \41\ DHS is also adding regulatory text to clarify the
level of connection needed to meet the ``directly related''
requirement.\42\
---------------------------------------------------------------------------

\40\ Not finalizing this sentence, however, does not indicate a
change to deviate from current practice, and the ``directly
related'' requirement will be finalized elsewhere in the specialty
occupation definition and criteria, consistent with current practice
and case law.
\41\ See Royal Siam Corp. v. Chertoff, 484 F.3d 139, 147 (1st
Cir. 2007) (describing ``a degree requirement in a specific
specialty'' as ``one that relates directly to the duties and
responsibilities of a particular position'').
\42\ See id.
---------------------------------------------------------------------------

Comment: Several commenters asked DHS to clarify the standard for
``directly related,'' or alternatively, recommended that USCIS remove
the ``directly related'' requirement from the ``specialty occupation''
definition altogether. A joint submission expressed concern that the
proposed regulatory text would change adjudications such that the
agency would no longer focus on job duties and courses of study as
required by statute. One commenter suggested that either the Department
issue a supplemental notice withdrawing the ``directly related''
provision from the revised definition of ``specialty occupation,'' or,
at a minimum, that it issue a supplemental notice that ``cur[es] the
specific identified deficiencies'' and provides the public with
adequate time to submit additional comments. Similarly, a legal
services provider stated that while it accepted the requirement that a
degree be ``related'' to the position, the inclusion of ``directly'' as
a qualifier might limit eligibility for H-1B petitions, introduce more
subjectivity among adjudicators, and lead to a rise in RFEs and
denials. As such, the

[[Page 103075]]

commenter concluded that USCIS should remove ``directly'' from the
definition, as maintaining the requirement that a degree be ``related''
would be sufficient.
Some commenters provided alternative language to better clarify the
standard for ``directly related.'' A professional association suggested
that if USCIS were to include a term to dictate the level at which a
degree must be related to the duties of the position, it should use
``rationally related'' instead of ``directly related.'' The commenter
reasoned that the flexibility provided in the term ``rationally
related'' is needed to adapt to today's environment where occupations
for certain specialties require diverse sets of expertise. An attorney
also said that the proposed rule does not precisely define ``direct
relationship.'' Referencing the NPRM's text on page 72875 describing
how petitioners would establish a ``direct relationship,'' the
commenter requested that DHS clarify what ``connection'' means in the
text. Referencing the sentence ``The `specific specialty' requirement
is only met if the degree . . . provides a body of highly specialized
knowledge directly related to the duties and responsibilities of the
particular position'' on page 72875 of the NPRM, a professional
association suggested USCIS replace ``degree'' with ``education'' and
remove the word ``directly'' from the sentence. The commenter stated
that these suggestions would be more consistent with the statutory
definition of ``specialty occupation'' found in INA secs.
101(a)(15)(H)(i)(b) and 214(i)(l).
Response: To provide clarity on the level of connection needed to
meet the ``directly related'' requirement, DHS is adding regulatory
text to state that, `` `[d]irectly related' means that there is a
logical connection between the degree, or its equivalent, and the
duties of the position.'' New 8 CFR 214.2(h)(4)(ii).
Considering this explanation, DHS declines to remove the ``directly
related'' requirement from the specialty occupation definition.
Moreover, the requirement to show that there is a direct relationship
between the required degree in a specific specialty and the duties of
the position is not a new requirement. Rather it is consistent with
USCIS' long-standing practice. This requirement helps maintain program
integrity and DHS believes that reducing this to a lower standard by
removing the ``directly related'' standard altogether could open
loopholes in the program.
Comment: Several commenters discussed the evidentiary requirements
associated with the ``directly related'' requirement for petitioners. A
company said DHS should clarify how an employer can demonstrate the
beneficiary would fill a specialty occupation. Another company urged
DHS to clarify the types of evidence that could be used to establish
how a degree relates to an occupation. A few commenters similarly
stated that the final rule should detail what additional evidence--such
as coursework, transcripts, explanations of job duties, records of
practical training, and credentials--could be submitted to demonstrate
that beneficiaries are sufficiently qualified to complete the duties of
the position. A company stated that the proposed rule provides no
specific detail or criteria related to the level of connection that
would be sufficient to demonstrate a direct relationship between the
required degree field(s) and the duties of the position. The commenter
asked DHS a variety of questions about the information that petitioners
would be required to provide related to core coursework, technical
skills and proficiencies, electives, and other topics. Specifically,
the commenter asked if the connection is established by showing
foundational relevance of coursework to the occupation's duties, or if
it requires connecting a specific set of technical skills and
proficiencies gained from coursework to those used in day-to-day
responsibilities. The commenter further asked if is appropriate to show
coursework in technical skills and proficiencies that are essential
precursors to those used on the job, whether the connection is relevant
only if it involves the core curriculum, or whether electives carry
equal weight. The commenter also asked what percentage of the
beneficiary's coursework must have the requisite connection, and how
much explanation is necessary to properly establish any of these
potential dimensions of connection.
A commenter expressed concern that the proposed requirement would
incentivize USCIS adjudicators to issue additional RFEs, thus
increasing the burden on employers. An attorney expressed similar
concern that the ``direct relationship'' requirement would make the H-
1B program more burdensome and inefficient by creating an additional
evidentiary element. The commenter stated that certain occupations are
open to individuals with various degrees, but that the ``direct
relationship'' requirement would require employers to both show that
the beneficiary possesses a relevant degree and provide documentation
of how each degree field relates to the proposed job. The commenter
said USCIS did not explain how this would increase efficiency or how
employers could meet this requirement. An attorney said that instead of
requiring petitioners to show a ``direct relationship'' between the
degree and duties of the position, USCIS should accept attestations
from employers that a beneficiary's skill set was obtained through
their education. The commenter reasoned that the proposed requirement
would create an additional burden on employers and waste USCIS time by
requiring adjudicators to verify the connection between the job duties
and the degree attained. The commenter concluded that USCIS should keep
the current policy in place or provide more flexibility to employers.
Response: As noted above, DHS is adding regulatory text to clarify
that ``directly related'' means ``a logical connection between the
degree, or its equivalent, and the duties of the position.'' The burden
of proof remains on the petitioner to demonstrate, by a preponderance
of the evidence, a logical connection between the qualifying degree
field(s) and the duties of the position. As in the past, the petitioner
would need to provide information regarding the course(s) of study
associated with the required degree(s) (or its equivalent), and the
duties of the proffered position, and demonstrate the connection
between the course of study and the duties of the position. Relevant
supporting evidence could include, but is not limited to, information
about the established curriculum of courses leading to the specified
degree(s), course descriptions or syllabi, and information explaining
how such a curriculum and coursework is necessary to perform the duties
of the position. DHS reiterates that each petition is reviewed on a
case-by-case basis taking into consideration the totality of the
evidence, and, therefore, DHS will not require any specific type of
evidence or an exact percentage of coursework to establish the
requisite connection.
Commenters also asked whether relevant evidence of whether a
position is a specialty occupation could include transcripts listing
the beneficiary's coursework, records of the beneficiary's practical
training, professional certificates, and other credible evidence
demonstrating the beneficiary's technical skills and proficiencies.
USCIS may consider such evidence relevant if the petitioner were able
to demonstrate that the submitted evidence were representative of the
typical coursework, skills, and/or proficiencies needed to attain the
required degree(s). Generally, however,

[[Page 103076]]

these types of evidence are more relevant to the determination of the
beneficiary's qualification for the offered position, which is a
separate issue from whether the petitioner's offered position qualifies
as a specialty occupation. Further, a general attestation from the
employer that a beneficiary's skill set was obtained through their
education, without any additional evidence, may be insufficient to
establish that a beneficiary is qualified to perform the duties of the
position.
Comment: Several other commenters expressed concern with the
``directly related'' requirement because it would effectively require a
degree in a further ``subspecialty'' (such as chemical engineering)
rather than a degree within a broader specialty field (such as
engineering). The commenters stated that this change would not be
supported by the INA, as the ``directly related'' requirement does not
exist within the statutory text of the INA, as reaffirmed in
InspectionXpert Corp. v. Cuccinelli, 2020 WL 1062821 (M.D.N.C. Mar. 5,
2020). In that case, the commenters stated, the court held that the INA
defines ``professions,'' which are the basis of the specialty
occupation requirement, at the ``categorical level'' rather than the
subspecialty level and ``specifically includes'' that ``an engineering
degree requirement meets the specialty occupation requirement.'' The
commenters said that the proposed rule repeats the same error as the
previous rule, specifically in its treatment of engineering degrees. As
a result, the commenters concluded that the proposed rule conflicts
with the INA. One of the commenters added that the proposed rule's
``caution'' that the ``directly related'' requirement is not construed
as ``requiring a singular field of study'' did not align with
InspectionXpert Corp., as it ``does not cure the error of imposing a
subspecialty requirement in the first place.''
A trade association and a law firm had significant concerns with
the NPRM's discussion of engineering degrees, saying such language was
``impermissibly narrow'' and inconsistent with InspectionXpert Corp.'s
holding ``that the statute does not require specialty occupations to be
subspecialties.'' These commenters urged USCIS to recognize ``the long-
standing practice of allowing employers to build a record to establish
the specialized needs of their positions to qualify as specialty
occupations, including those where the employer believes that the
requirements of a particular position include a number of engineering
degrees or a non-specified engineering degree.''
Response: With this final rule, DHS is adding language to the
definition of ``specialty occupation'' clarifying that the required
specialized studies must be directly related to the position. While
commenters are correct that INA section 214(i), 8 U.S.C. 1184(i), does
not use the term ``directly related,'' the statute does refer to
application of a body of highly specialized knowledge and attainment of
a bachelor's or higher degree in the specific specialty (or its
equivalent) as a minimum for entry into the occupation. DHS interprets
the ``specific specialty'' requirement in section 214(i)(1)(B) of the
INA, 8 U.S.C. 1184(i)(1)(B), to relate back to the body of highly
specialized knowledge requirement referenced in section 214(i)(1)(A) of
the INA, 8 U.S.C. 1184(i)(1)(A), required by the specialty occupation
in question. The ``specific specialty'' requirement is only met if the
degree in a specific specialty or specialties, or equivalent, provides
a body of highly specialized knowledge directly related to the duties
and responsibilities of the particular position as required by INA
214(i)(1)(A). See Royal Siam Corp. v. Chertoff, 484 F.3d 139, 147 (1st
Cir. 2007) (describing ``a degree requirement in a specific specialty''
as ``one that relates directly to the duties and responsibilities of a
particular position''); Caremax Inc. v. Holder, 40 F. Supp. 3d 1182,
1187-88 (N.D. Cal. 2014) (``A position that requires applicants to have
any bachelor's degree, or a bachelor's degree in a large subset of
fields, can hardly be considered specialized.''). Because an occupation
may involve application of multiple bodies of highly specialized
knowledge, ``specific specialty'' is not limited to one degree field,
or its equivalent, but may include multiple degree fields, or
equivalents, that provide the body of highly specialized knowledge to
be applied when performing the occupation. The requirement that each
degree field, or its equivalent, be directly related to the position is
the best interpretation of the statutory text and consistent with
existing USCIS practice.\43\
---------------------------------------------------------------------------

\43\ See, e.g., Madkudu Inc. v. USCIS, No. 5:20-cv-2653-SVK
(N.D. Cal. Aug. 20, 2021) Settlement Agreement at 4 (``if the record
shows that the petitioner would consider someone as qualified for
the position based on less than a bachelor's degree in a specialized
field directly related to the position (e.g., an associate's degree,
a bachelor's degree in a generalized field of study without a minor,
major, concentration, or specialization in market research,
marketing, or research methods . . ., or a bachelor's degree in a
field of study unrelated to the position), then the position would
not meet the statutory and regulatory definitions of specialty
occupation at 8 U.S.C. 1184(i)(1) and 8 CFR 214.2(h)(4)(ii).''),
https://www.uscis.gov/sites/default/files/document/legal-docs/Madkudu-settlement-agreement.pdf (last visited Oct. 23, 2024).
---------------------------------------------------------------------------

DHS does not agree with commenters that the requirement that the
specialized studies must be directly related to the position is
inconsistent with the district court's unpublished decision in
InspectionXpert v. Cuccinelli.\44\ In that case, the court found that
USCIS' interpretation of the term ``degree'' in 8 CFR
214.2(h)(4)(iii)(A)(1) as ``requiring a degree in one singular
subspecialty'' was not entitled to deference. Again, this final rule
revises 8 CFR 214.2(h)(4)(iii)(A)(1) so that it no longer ambiguously
refers to ``a . . . degree'' and codifies that a position may allow for
a range of qualifying degree fields, which is consistent with the
court's holding in InspectionXpert.\45\ DHS acknowledges that the
district court in InspectionXpert also held that ``in contrast to a
liberal arts degree, which the Service deemed ``an [in]appropriate
degree in a profession'' because of its ``broad[ness],'' . . . an
engineering degree requirement meets the specialty occupation degree
requirement.'' \46\ DHS is not suggesting that engineering, or any of
the various fields of engineering, are not specific specialties. Nor is
DHS suggesting that employers could never establish that ``any
engineering degree'' is sufficient to qualify for some positions. But
DHS is revising the regulation to clarify that the petitioner must
establish how each qualifying degree field provides a body of highly
specialized knowledge that is directly related to the position. In some
instances, such as the quality engineer position in InspectionXpert, it
may be that any engineering degree provides the body of highly
specialized knowledge needed to perform the job. But that does not mean
that in all cases, accepting ``any engineering degree'' as sufficient
to qualify for the position would provide a body of highly specialized
knowledge directly related to the duties and responsibilities of the
particular position as required by INA 214(i)(1)(A). Where a petitioner
will accept a range of qualifying degree fields, the petitioner must
establish that each of those fields is directly related to the duties
of the position. This final rule balances the District Court for the

[[Page 103077]]

Middle District of North Carolina's unpublished decision in
InspectionXpert with other court decisions, including those of the
District Court for Northern District of California in Caremax and the
First Circuit Court of Appeals in Royal Siam, to revise the criteria at
8 CFR 214.2(h)(4)(iii)(A) so that it reflects the best interpretation
of the statute and provides greater clarity, transparency, and
predictability for petitioners and USCIS officers.
---------------------------------------------------------------------------

\44\ 2020 WL 1062821 (M.D.N.C. Mar. 5, 2020), report and
recommendation adopted, 2020 WL 3470341 (Mar. 31, 2020).
\45\ InspectionXpert, 2020 WL 1062821, at *26 (noting ``the
Agency's longstanding construction, which recognizes that a position
can qualify as a specialty occupation even if it permits a degree in
more than one academic discipline''), report and recommendation
adopted, 2020 WL 3470341 (Mar. 31, 2020).
\46\ Id.
---------------------------------------------------------------------------

Comment: A commenter stated that additional emphasis should be
given in the final regulation for beneficiaries with degree minors (or
other equivalents) in the subject matter to qualify for H-1B status, as
allowed by the ``Madkudu settlement.'' Specifically, the commenter
expressed concern that the reference to the ``Madkudu settlement'' in
footnote 18 was a negative remark from the settlement agreement. The
commenter concluded that it appeared as if USCIS wanted to ``bury the
implications of Madkudu.''
Response: DHS declines to codify an additional emphasis for degree
minors. However, this does not mean that a minor cannot serve as
further specialization for a general degree or in other circumstances.
As stated in the Madkudu Inc. v. USCIS settlement agreement, if the
record shows that the petitioner would consider someone as qualified
for the position based on less than a bachelor's degree in a
specialized field directly related to the position (e.g., an
associate's degree, a bachelor's degree in a generalized field of study
without a minor, major, concentration, or specialization in market
research, marketing, or research methods, or a bachelor's degree in a
field of study unrelated to the position), then the position would not
meet the statutory and regulatory definitions of specialty occupation
at 8 U.S.C. 1184(i)(1) and 8 CFR 214.2(h)(4)(ii).\47\ Conversely, if
the petitioner identifies a general degree with an official major,
minor, concentration, or specialization, and establishes how that
general degree plus the major, minor, concentration, or specialization
equates to a bachelor's degree in a specific specialty directly related
to the duties and responsibilities of the position, the position may
qualify as a specialty occupation. Further, DHS is finalizing
regulatory text stating that, ``a position is not a specialty
occupation if attainment of a general degree, without further
specialization, is sufficient to qualify for the position.'' 8 CFR
214.2(h)(4)(ii). As this additional regulatory text is in line with the
Madkudu settlement agreement,\48\ DHS disagrees with the commenter's
allegation that it is ``burying the implications of Madkudu'' or that
further revisions are needed.
---------------------------------------------------------------------------

\47\ See Madkudu Inc. v. USCIS, No. 5:20-cv-2653-SVK (N.D. Cal.
Aug. 20, 2021) Settlement Agreement at 4, https://www.uscis.gov/sites/default/files/document/legal-docs/Madkudu-settlement-agreement.pdf (last visited Oct. 23, 2024).
\48\ See Madkudu Inc. v. USCIS, No. 5:20-cv-2653-SVK (N.D. Cal.
Aug. 20, 2021) Settlement Agreement at 4, https://www.uscis.gov/sites/default/files/document/legal-docs/Madkudu-settlement-agreement.pdf (last visited Oct. 23, 2024).
---------------------------------------------------------------------------

Comment: Numerous commenters discussed the ``directly related''
requirement's relationship with E.O. 14110, ``Safe, Secure, and
Trustworthy Development and Use of Artificial Intelligence.'' A
commenter stated that the ``directly related'' requirement was a
``direct violation'' of E.O. 14110, and suggested USCIS needed to
instead expand the definition to achieve the goals of the E.O. A
professional association expressed concern that while the E.O. calls
for ``modernizing immigration pathways for experts in AI,'' the
proposed rule would potentially exclude experts from H-1B eligibility
by focusing on the name of their degree and not the ``sum total of
their courses of study and experience.'' The commenter referenced an
article stating that adjudicators could deny H-1B petitions where the
degree does not match what adjudicators believe is required to perform
the role, but that in ``fast-evolving jobs like those in AI,'' the
requirements to perform the role could change quickly. The professional
association concluded by referencing examples of how these issues
``have already been highlighted in previous litigation involving
similar regulatory proposals.'' A Federal elected official also
expressed concern that the requiring proof that a degree is ``directly
related'' to the duties of a position created unnecessary hurdles for
employers that contradicted trends in hiring across emerging technology
fields, and thus, would contravene the directive of E.O. 14110. Another
commenter added that this provision would deprive the economy of the
AI, technology, and national security talent that E.O. 14110 aimed to
attract.
An advocacy group stated that the proposed language violated E.O.
14110 by limiting what degrees and positions could qualify for
specialty occupations, preventing individuals from working in the
United States, and therefore making it less likely the United States
could remain a top destination for the world's talent. The commenter
stated that the proposed rule could have the ``exact opposite effect''
of E.O. 14110 by allowing adjudicators to deny H-1B petition where the
degree field does not ``precisely match'' what adjudicators believe is
required to perform the role. The commenter added that currently USCIS
often looks at actual coursework rather than the degree field, which
would likely change if the proposed language took effect in its current
form. Similarly, a trade association stated that the ``directly related
specific specialty'' language ran counter to E.O. 14110 and would
encourage adjudicators to deny H-1B petitions where the degree field
does not match what they believe is required to perform the role.
A company stated that the proposed ``directly related'' requirement
would not allow a path for skills or relevant coursework to supplement
what the specific degree title might be missing. The commenter stated
that this seems to run counter to E.O. 14110, as employees seeking to
fill positions in emerging technology, and specifically AI, may not
have a degree with a ``directly related'' name if they have completed
extensive coursework that has resulted in the acquisition of highly
specialized knowledge. A professional association and a joint
submission expressed concern with the ``directly related'' degree
requirement on the basis that it would make it ``less likely, if not
impossible'' for E.O. 14110 to be satisfied. Both commenters also
expressed opposition to the proposed rule's ``cautioning'' to employers
about ``requiring the type of quantitative and problem-solving skills
developed in an engineering degree as unlikely to be `directly related'
to a qualifying H-1B position.'' The joint submission further stated
that because ``emerging technologies change much faster than degree
programs'' and the primary degrees typically required for core AI job
duties are business administration, computer science, engineering,
mathematics, and statistics, the proposed change might result in
individuals who are hired to integrate AI into other fields not having
degrees that adjudicators presume to be ``directly related'' to their
offered position. As a result, the professional association and the
joint submission said the ``directly related'' proposals in both the
definition and criteria would make it difficult for DHS to achieve
section 5.1 of E.O. 14110's goal of attracting and retaining foreign-
born STEM experts working in emerging technologies. A company similarly
stated that the Department's ``insistence'' on a ``direct
relationship'' appeared to contradict the directives of section 5.1 of
E.O. 14110. Another

[[Page 103078]]

commenter expressed concern that adjudicators would deny H-1B petitions
in situations where an individual's degree does not match what the
adjudicators think are the requirements to perform the position. The
company added that because emerging technologies might not yet have a
degree program in existence, the ``direct relationship'' requirement
might create uncertainty for employers in these fields when deciding
whether to sponsor individuals for H-1B status.
Similarly, a law firm stated that the proposed language would make
it more difficult for foreign nationals seeking to be employed in STEM
fields to qualify for an H-1B visa. Specifically, the commenter said
that it was a common industry standard for most occupations in STEM
fields to consider specialized experience or training in addition to a
generalized degree, which would not be permitted under the proposed
rule. The commenter stated that this would undermine the
administration's efforts to attract and retain foreign talent in STEM
fields.
A law firm and another commenter referenced an attorney's argument
that the ``direct-relatedness requirement'' requirement would force the
company to ``elevate form over substance'' and inhibit their company's
recruitment for multi-disciplinary teams, such as those in AI,
resulting in a loss of productivity, creativity, and innovation. The
commenters stated that this outcome would be ``precisely opposite'' of
the administration's goals as stated in E.O. 14110 because they would
restrict an immigration program that would attract global talent in the
AI space. The commenters further stated that the provision was
incompatible with the business model of the IT consulting industry and
would negatively impact American businesses. Similarly, a professional
association stated that the mandate of E.O. 14110 for DHS to update the
H-1B program could be obstructed by the ``direct relationship''
requirement. The commenter concluded that such a requirement would
impede not only the AI initiatives outlined in E.O. 14110 but also
other initiatives needed to ensure ``American competitiveness and
security.'' A business association said that the proposed language
would prevent employers from obtaining needed talent and cross-training
employees and undermine the goal of attracting and retaining talent in
AI and other emerging technologies.
Response: DHS disagrees that requiring a direct relationship
between the required degree field(s) and the duties of the position
would violate E.O. 14110 or create additional hurdles for foreign
nationals seeking to work in the AI or STEM fields. As stated
previously, and further clarified with additional regulatory text in
this final rule, DHS is codifying and clarifying long-standing USCIS
practice. Regarding the specific degrees, the examples in the NPRM
referred to the educational credentials by the title of the degree for
expediency. However, USCIS will continue to make individualized
determinations in each case. Furthermore, this rule does not change
current USCIS practice to examine skills and experience in the course
of determining a beneficiary's qualifications. USCIS will continue to
evaluate whether the beneficiary's actual course of study is directly
related to the duties of the position, rather than merely the title of
the degree. When applicable, USCIS also will consider whether the
beneficiary has the education, specialized training, and/or
progressively responsible experience that is equivalent to completion
of a U.S. baccalaureate or higher degree in the specialty occupation.
See 8 CFR 214.2(h)(4)(iii)(C)(4), (h)(4)(iii)(D).
Comment: Multiple commenters said that the regulatory text
regarding a ``general degree'' would lead USCIS to not evaluate the
actual coursework and other specializations that underlie degrees and
instead exclude many degrees based solely on their titles,
contradicting current USCIS practices. For instance, a multi-
association submission stated that the proposed regulation fails ``to
accurately capture the contours of preexisting agency practices'' and
urged DHS to revise the regulatory text to ensure that adjudicators
``examine the job duties of the position offered by the employer and
the courses completed in a degree-granting program (U.S. baccalaureate
or higher, or equivalent) to confirm that a specific body of knowledge
is required to perform the job duties and that the beneficiary has
attained that body of knowledge.''
A law firm stated that due to specialized concentrations and
relevant coursework, degrees like business administration that might
appear as a ``general degree'' could contain highly specialized
coursework that should be deemed directly related to a position. The
commenter added that there should be explicit guidance recognizing that
specialized knowledge for a specialty occupation is obtained from
coursework, as shown in a transcript, and might not be obvious from the
face of the degree itself. Specifically, the commenter suggested that
DHS allow certain positions to accept and require that ``highly
specialized knowledge'' can be attained from general degrees through
specialized coursework, so long as the knowledge is ``directly
relevant'' to the specific job requirements. Similarly, a law firm
suggested that petitioners be provided the opportunity to establish a
relationship between the duties of the position and the beneficiary's
course of studies or work experience. An advocacy group stated that
implementing the proposed change without directly clarifying this
relationship could establish a confusing legal standard.
Several commenters concluded that USCIS should allow for the
demonstration of specialized knowledge through coursework, skills,
experience, and other means. A union stated that if an occupation
requires a generalized degree in addition to specialized experience or
training it should still qualify as a specialty occupation. Similarly,
an advocacy group referenced an attorney's argument, which stated that
an occupation requiring ``a generalized degree but specialized
experience or training'' should still qualify as a specialty
occupation. An individual commenter additionally encouraged DHS to
clarify the extent to which coursework can count toward equivalence to
a degree in a specific specialty, reasoning, for example, that degrees
in math, physics, chemistry, biology, or social sciences may involve
courses found in computer science programs. The commenter said that
these courses should be considered when determining whether a
beneficiary meets the specialty occupation requirements.
A trade association stated that many degree programs do not allow
for a specific specialization to be declared, and thus, demonstrate
through coursework and other means their level of specialization.
Another commenter suggested that USCIS consider accepting on-the-job
training and clarify whether petitioners have to seek a combination of
education and experience to meet the ``general degree'' requirement.
Response: DHS is finalizing the regulatory text to state that, ``A
position is not a specialty occupation if attainment of a general
degree, without further specialization, is sufficient to qualify for
the position.'' New 8 CFR 214.2(h)(4)(ii). In response to comments, DHS
has decided not to finalize the references to ``business
administration'' and ``liberal arts'' so as not to suggest that a
degree's title is determinative. However, USCIS will continue to
analyze the ``specific specialty'' requirement to determine if the
proffered position is a specialty occupation. If the minimum entry

[[Page 103079]]

requirement for a position is a general degree without further
specialization (such as a major, minor, concentration, or
specialization) or an explanation of what type of degree is required,
the ``degree in the specific specialty (or its equivalent)''
requirement of INA section 214(i)(1)(B), 8 U.S.C. 1184(i)(1)(B), would
not be satisfied. The opposite is also true: if a position requires a
general degree with specialization, the position may qualify as a
specialty occupation.
DHS disagrees with the comments that codifying the regulatory text
regarding a ``general degree'' would lead USCIS to ignore coursework
and other means to demonstrate specialization and instead exclude
degrees based solely on their titles. As with current practice, USCIS
will not rely on a degree title and will continue to consider
coursework in determining if a degree is a specialized degree and if
the position is a specialty occupation. USCIS will also consider
coursework to evaluate whether the beneficiary is qualified for the
position, which is a separate determination from the specialty
occupation determination.
Comment: A commenter stated that the ``general degree'' language
could become problematic in situations where professionals in emerging
technologies, such as AI, have general degrees that are not specialized
in the emerging field. Similarly, a trade association suggested that
the proposed exclusion of general degrees be adjusted to accommodate
situations where a person's general degree does in fact qualify them
for a specialty occupation. The commenter stated that almost half of
individuals with STEM degrees work in non-science and engineering
occupations, and it is thus apparent that STEM expertise is prevalent
across various job types. A different trade association suggested that
USCIS include language in the final rule emphasizing that maximum
flexibility should be applied in cases where the petitioner intends to
employ an individual involved in AI or other emerging technologies.
A law firm stated that the definition of ``specialty occupation''
must account for the rise of interdisciplinary programs that are
augmenting traditional degrees and fields of study. The commenter
suggested that USCIS should recognize these programs are also
``specialized.''
Response: DHS declines to create a carve out or regulatory language
to ``emphasize maximum flexibility'' specifically for AI and emerging
technologies. As stated previously, if the minimum entry requirement
for a position is a general degree without further specialization or an
explanation of what type of degree is required, the ``degree in the
specific specialty (or its equivalent)'' requirement of INA section
214(i)(1)(B), 8 U.S.C. 1184(i)(1)(B), would not be satisfied.
USCIS separately evaluates the beneficiary's qualifications,
including whether the beneficiary's actual course of study is directly
related to the duties of the position, rather than merely the title of
the degree. When applicable, USCIS also will consider whether the
beneficiary has the education, specialized training, and/or
progressively responsible experience that is equivalent to completion
of a U.S. baccalaureate or higher degree in the specialty occupation.
See 8 CFR 214.2(h)(4)(iii)(C)(4). Therefore, if a petitioner can
demonstrate that the beneficiary has specialized experience and
training in the specific specialty, such as AI or STEM fields, then the
petitioner may be able to demonstrate that the beneficiary qualifies
for the proffered position.
Comment: A trade association said the ``general degree'' language
would lead to inconsistent adjudications, higher rates of RFEs, and a
potential increase in denials. The commenter suggested that USCIS
clarify in the final rule that the revised language should not result
in a narrowing of eligibility.
Response: Since this language merely codifies current practice and
longstanding case law, DHS does not anticipate that the revised
language will significantly impact or restrict who is eligible for an
H-1B or result in an increase in RFEs or denials.
Comment: Numerous commenters discussed the inclusion of specific
references to ``business administration or liberal arts'' degrees in
the proposed definition of ``specialty occupation.'' Several commenters
requested that USCIS remove references that identify particular types
of degrees or courses of study. A law firm and a professional
association stated that the final rule should not single out any degree
type. Similarly, a university stated that because colleges and
universities have autonomy in the naming of degree programs and their
curricula, it would be problematic and unnecessary to name specific
fields of study as too broad or general to qualify for a position in a
specialty occupation.
Numerous commenters expressed concern with the classification of a
business administration degree as a ``general degree.'' A few
commenters suggested that DHS remove the reference to ``business
administration'' in the proposed ``general degree'' requirement. An
advocacy group expressed concern that the proposed language would
disqualify individuals with a Master of Business Administration (MBA)
for ``arbitrary and capricious'' reasons.
Numerous commenters said that business degrees should not be
considered ``general'' because they include specialized coursework and
provide individuals with skills that are sought after by employers and
required to perform job duties. A commenter requested that USCIS
clarify that a degree in ``business administration'' could be
sufficient for a specialty occupation, as companies need certain
skills, such as business strategy, that can only be obtained through a
business degree. A legal services provider recommended against a
blanket stance on degree requirements in the proposed definition,
citing the potential for ``multi-faceted'' positions that may call for
a broad-based business administration degree rather than a more
specialized degree. A university stated that the ``general degree''
language drew a ``false equivalenc[y]'' between liberal arts degrees
and business administration degrees. The commenter said that while
positions that require liberal arts degrees could be reasonably argued
to seek a level of general intellectual skill, the same could not be
said of positions that require a degree in business administration. The
commenter added that the proposed rule includes ``business
specialties'' within the list of ``[bodies] of highly specialized
knowledge in fields of human endeavor,'' and, thus, it would be
inconsistent to suggest that a degree in business administration was
not sufficient to qualify for a specialty occupation.
A few commenters said that the exclusion of business degrees from
the ``specialty occupation'' definition was misguided and based on
outdated notions of business degrees being too generalized to qualify
for H-1B classifications. A couple of these commenters suggested that
USCIS allow employers to establish that a beneficiary's qualifications
meet the specialty occupation standards by maintaining a business
degree with a formal concentration, specialized coursework, or
professional experience. A professional association said that degrees
such as business administration should not be excluded from the
definition of a ``specific specialty,'' as business administration
degrees are generally characterized by depth and complexity, which
provide their graduates with relevant specialized knowledge and are
highly sought-after by U.S. employers. The association expressed
concern that the proposed language was not in conformity with

[[Page 103080]]

how employers view degrees when assessing applications.
Some commenters, including a joint submission, a law firm, and an
advocacy group, stated that the characterization of business
administration degrees as a ``general degree'' would be inconsistent
with trends in MBA recruitment and employment. Referencing data, the
commenters said that 94 percent of individuals with MBAs work in
management or management-related occupations related to their degree.
As such, the commenters stated that business administration is a
specialized field of study, and thus, it is incorrect to consider
business administration a ``general degree.'' A couple of these
commenters added that the proposed language would cause economic harm
by removing the ability for companies to hire these individuals and by
discouraging foreign nationals from attending MBA programs in the
United States.
Referencing the proposed rule's example that a ``general business
degree for a marketing position would not satisfy the specialty
requirement,'' a company said that this example offers an incorrect
assessment of how a business degree and the coursework entailed
``directly relates'' to a marketing position. The commenter further
noted that employers typically view a business degree as a normal
requirement for a marketing position, universities offer business
degrees with core requirements that are directly related to marketing
roles, and occupation guides reference marketing jobs as potential
careers for individuals with business degrees.
A law firm stated that numerous district court decisions have held
that a bachelor's degree in business administration was a ``general-
purpose degree that did not satisfy the ``specialty occupation''
definition. However, the commenter stated that because an MBA is a
graduate degree, MBA holders should not be required to document
``further specialization.''
A joint submission suggested that DHS not codify the presumption
against business administration degrees because the statutory
definition covers the attainment of a ``body of highly specialized
knowledge'' through a major, minor, concentration, or coursework, and
as such, business administration degrees should be treated the same as
other degree programs.
Response: In response to these comments, DHS has decided not to
include the references to ``business administration'' and ``liberal
arts'' in the final regulatory text regarding generalized degrees.
These changes recognize that degree titles may change over time and
singling out specific degrees by their title alone may cause confusion.
DHS confirms that it does not consider a master's degree in
business administration (MBA) generally to be a general degree, and DHS
does not equate a master's degree in business with a general degree in
business administration. When DHS referenced business administration
and liberal arts degrees in the NPRM this was meant to reference a
bachelor's degree in business administration, not a master's degree.
Note, however, that even though DHS is not codifying ``business
administration'' in the final regulatory text, this does not mean that
DHS views an unspecified bachelor's in business administration degree
as a specialized degree. Instead, the decision not to codify ``business
administration'' as an example of a general degree represents DHS's
acknowledgement that the title of the degree alone is not determinative
and that titles may differ among schools and evolve over time. This is
also reflected in the regulatory text and the inclusion of ``without
further specialization,'' as that language is intended to reflect that
some degrees that may otherwise be considered as a general degree could
rise to the level of a specialized degree if the course of study
includes a major, minor, concentration, or other specialization in a
specialized field of study and the petitioner establishes how that
general degree plus the major, minor, concentration, or specialization
equates to a bachelor's degree in a specific specialty, and how each
identified specialization provides a body of highly specialized
knowledge that is directly related to the duties and responsibilities
of the position.
Comment: A few commenters discussed the ``general degree''
requirement in relation to engineering degrees. Citing a case as
indicating that engineering requires ``a body of highly specialized
knowledge,'' a trade association concluded that general engineering
degrees should be sufficient to support H-1B petitions. The commenter
stated that Congress intended H-1B visas to be responsive and flexible
to accommodate industry needs and that the proposal would be unduly
restrictive.
A few commenters referenced the example in the proposed rule that
``any engineering degree in any field of engineering for a position of
software developer would generally not satisfy the statutory
requirement.'' Some commenters stated that this language was
inconsistent with the INA, which defines the term ``profession'' to
include ``engineers'' at a ``categorical level.'' A law firm said that
the U.S. Bureau of Labor Statistics Occupational Outlook Handbook (OOH)
references an engineering degree as a degree in a related field for a
software developer position. The commenter stated that although
universities offer distinct engineering majors, and, thus, it would be
unlikely for employers to consider an applicant with a general
engineering degree for a software developer (or other specialized
role), depending on the coursework and other knowledge attained by the
applicants, an individual with a general engineering degree could meet
the requirements of the position. The commenter concluded that
possession of a general degree in engineering should not automatically
be deemed insufficient for a specialty occupation.
A trade association suggested that USCIS issue guidance confirming
that any engineering degree would support any engineering position in
meeting the definition of ``specialty occupation.'' The commenter
reasoned that this would reduce the monetary costs and time associated
with RFEs. The commenter further stated that employers of engineers are
aware of the requirements needed for the roles for which they are
hiring, that these roles are specialty occupations, and that, without
this guidance, employers would not be able to find the talent they
require.
Response: USCIS regularly approves H-1B petitions for qualified
beneficiaries who are to be employed as engineers. However, DHS
declines to codify or otherwise state that any position requiring any
engineering degree or what the commenter describes as ``a general
engineering degree'' will generally qualify as a specialty occupation.
In explaining in the NPRM that the requirement of any engineering
degree in any field of engineering for a position of software developer
would generally not satisfy the statutory requirement, DHS is not
saying that engineering degrees are not acceptable for specialty
occupations. Rather, DHS is explaining that the petitioner would have
the burden to establish how the fields of study within any engineering
degree provide a body of highly specialized knowledge directly relating
to the duties and responsibilities of a software developer position.
This is because the requirement of any engineering degree could
include, for example, a chemical engineering degree, marine engineering
degree, mining engineering degree, or any other engineering degree in a
multitude of

[[Page 103081]]

seemingly unrelated fields. Conversely, if the petition requires an
engineering degree with a specific specialty, such as a major, minor,
concentration, or specialization, that is directly related to the
duties of the position, the petitioner may be able to satisfy the
statutory and regulatory requirement.
DHS acknowledges that INA section 214(i) includes ``engineers'' as
one of the occupations listed as requiring the theoretical and
practical application of a body of highly specialized knowledge in
fields of human endeavor. However, this does not mean that all
positions that state that any engineering degree would be acceptable to
qualify for the position means that the position is an engineer. DHS is
not suggesting that engineering, or any of the various fields of
engineering, are not specific specialties. Nor is DHS suggesting that
employers could never establish that ``any engineering degree'' is
sufficient to qualify for some positions. Rather, DHS acknowledges that
an engineering degree is a specialized degree. However, just because an
engineering degree is a specialized degree does not mean that it is
always directly related to the position, which is a different issue.
DHS is revising the regulation to clarify that the petitioner must
establish how each qualifying degree field provides a body of highly
specialized knowledge that is directly related to the position. In some
instances, such as the quality engineer position in InspectionXpert, it
may be that any engineering degree provides the body of highly
specialized knowledge needed to perform the job. But that does not mean
that in all cases, accepting ``any engineering degree'' as sufficient
to qualify for the position would provide a body of highly specialized
knowledge directly related to the duties and responsibilities of the
particular position as required by INA 214(i)(1)(A). The critical
element is whether the position actually requires the theoretical and
practical application of a body of highly specialized knowledge, and
the attainment of a baccalaureate or higher degree in the specific
specialty as the minimum for entry into the occupation, as required by
the INA.
Comment: Several commenters discussed the legal authority of naming
specific degrees, such as business administration or liberal arts
degrees, as insufficient for H-1B status. A law firm and trade
association added that disfavoring specific degrees would contradict
the administration's National Security guidance, strategy, and E.O.
14110. A university stated that singling out business administration as
a degree that is insufficient to qualify for a specialty occupation
contradicts the statutory definition of ``specialty occupation'' in
section 214(i) of the INA and the purpose of the NPRM.
A law firm stated that specifically referencing business
administration or liberal arts degrees by name as insufficient to
qualify for a specialty occupation violates precedent case law. The
commenter referenced Residential Finance Corporation v. USCIS, which
held that degree field names could not control whether an individual
qualifies for H-1B status, and that USCIS must consider the ``highly
specialized knowledge'' obtained through the courses taken to earn the
degree. A joint submission stated that none of the cases referred to
throughout the NPRM to justify the inclusion of ``business
administration'' in the ``general degree'' language serve as the
precedent case for this assertion or explain its origin. A law firm and
joint submission stated that the cases cited by USCIS can be traced to
Matter of Ling, 13 I&N Dec. 35 (Reg. Comm'r 1968), but noted that both
Ling and Matter of Michael Hertz Assocs., 19 I&N Dec. 558, 560 (Comm'r
1988) preceded the development of the ``specialty occupation'' concept
and that neither decision references the terms ``H-1B'' or ``specialty
occupation.'' The commenters further stated that Ling does not state
that a business administration degree is a ``generalized degree,'' but
instead that the profession of business administration is a generalized
field that must be analyzed by the ``Ling test''--that the degree is a
``realistic prerequisite'' for entry into that field. The commenters
concluded that a business administration degree could act as a
``realistic prerequisite'' for a position and, thus, that the proposed
rule's provision that a business administration degree could not
support H-1B eligibility was not found in legal precedent.
Response: In response to commenters' concerns, DHS is not
finalizing the specific references to ``business administration and
liberal arts'' in the regulatory text. The decision not to finalize
this language recognizes the commenters' concerns about not relying on
a degree's title, consistent with the District Court for the Southern
District of Ohio's observation in Residential Finance Corporation v.
USCIS that ``[t]he knowledge and not the title of the degree is what is
important.'' \49\ However, the decision not to finalize the references
to ``business administration and liberal arts'' should not be
misinterpreted as indicating a change in USCIS' longstanding practice
not to recognize a bachelor's degree in business administration or
liberal arts, without further specification, as a specialized
degree.\50\ Consistent with longstanding agency practice and legal
precedent, although a general-purpose bachelor's degree, such as a
degree in business or business administration, may be a legitimate
prerequisite for a particular position, requiring such a degree,
without more, will not justify a conclusion that a particular position
qualifies for classification as a specialty occupation. See, e.g.,
Royal Siam Corp., 484 F.3d 139, 147 (1st Cir. 2007) (``The courts and
the agency consistently have stated that, although a general-purpose
bachelor's degree, such as a business administration degree, may be a
legitimate prerequisite for a particular position, requiring such a
degree, without more, will not justify the granting of a petition for
an H-1B specialty occupation visa.''); Shanti, Inc. v. Reno, 36 F.
Supp. 2d 1151, 1162-1164 (D. Minn. 1999) (the former INS did not depart
from established policy or precedent when concluding that a general
degree, such as a business administration degree, without more, does
not constitute a degree in a specialized field); Raj & Co. v. USCIS, 85
F. Supp. 3d 1241, 1246 (W.D. Wash. 2015) (it is ``well-settled in the
case law and USCIS's reasonable interpretations of the regulatory
framework'' that ``a generalized bachelor['s] degree requirement is
[in]sufficient to render a position sufficiently specialized to qualify
for H-1B status.''); Vision Builders, LLC v. USCIS, No. 19-CV-3159,
2020 WL 5891546, at *6 (D.D.C. Oct. 5, 2020) (citing Raj).
---------------------------------------------------------------------------

\49\ 839 F. Supp. 2d 985, 997 (S.D. Ohio 2012).
\50\ Note, however, that USCIS generally recognizes a master's
or higher level of degree in business administration as a
specialized degree.
---------------------------------------------------------------------------

Further, these cases are consistent with Matter of Ling, 13 I&N
Dec. 35, 36 (Reg'l Comm'r 1968) (characterizing ``business
administration'' as ``a broad field'') and Matter of Michael Hertz
Assocs., 19 I&N Dec. 558, 560 (Comm'r 1988) (recognizing a bachelor's
degree in business administration, without further specialization, as
``a degree of generalized title.''). Although these cases predate the
current specialty occupation framework enacted by the Immigration Act
of 1990 (IMMACT), Public Law 101-649 (Nov. 29, 1990), they are relevant
to the extent that they demonstrate the agency's longstanding view that
``business administration'' is a generalized field, which has since
been reaffirmed in numerous court cases as cited above.\51\
---------------------------------------------------------------------------

\51\ With respect to Matter of Michael Hertz Assocs., INS' prior
requirements for members of the professions that were in effect at
the time of that case mirrors the current definitions and standards
for specialty occupation. See ``Temporary Alien Workers Seeking
Classification Under the Immigration and Nationality Act,'' 56 FR
31553, 31554 (July 11, 1991) (proposed rule) (proposing to change
all references from ``profession'' to ``specialty occupation,'' but
explaining that ``the same standards'' will apply and that ``[t]he
definition and standards for an alien in a specialty occupation
mirror the Service's current requirements for aliens who are members
of the professions''); see also ``Temporary Alien Workers Seeking H-
1B, O, and P Classifications Under the Immigration and Nationality
Act,'' 57 FR 12179 (Apr. 9, 1992) (interim final rule) (finalized
the current definition of ``specialty occupation'' at 8 CFR
214.2(h)(4)(ii)).

---------------------------------------------------------------------------

[[Page 103082]]

Comment: Multiple commenters suggested that USCIS remove the
``general degree'' requirement in its entirety from the proposed
definition of ``specialty occupation.'' An advocacy group stated that
the Department should abandon narrow regulatory language asserting that
generalized degrees are insufficient to qualify for a specialty
occupation.
A trade association suggested that the language within the
``specialty occupation'' definition that restricts qualifications to
specific degrees or specialties be removed and updated with language
that requires ``general degrees'' to be accompanied by documented
experience. Similarly, an advocacy group suggested DHS add language
codifying current practices, including requiring adjudicators to
consider the underlying coursework of a degree along with an employer's
explanation of how a degree is directly related to a position. Another
trade association expressed concern with the impact of the proposed
``general degree'' requirements on educational institutions.
Specifically, the commenter said that USCIS' proposal to exclude
``general'' programs from H-1B eligibility would devalue institutions'
degree programs and harm students who have diversified their studies
through course selection and other opportunities. The commenter
suggested that, alternatively, USCIS could codify existing practices
that allows for generalized degrees in addition to specialized
experience and training in order to qualify for specialty occupations.
Response: In response to commenters' concerns, DHS is not
finalizing the reference to the specific degrees of ``business
administration and liberal arts'' in the regulatory text. However, DHS
declines to adopt the other suggested revisions, such as removing the
``general degree'' regulatory text in its entirety.
Regarding the suggestions that the regulation allow USCIS to
consider coursework or allow for generalized degrees in addition to
specialized experience and training in order to qualify for specialty
occupations, DHS reiterates that the changes to the specialty
occupation definition do not impact how USCIS evaluates a beneficiary's
qualifications for a specialty occupation. USCIS will continue to
consider the underlying coursework of a degree, as well as specialized
experience and training, along with the employer's explanation of how a
degree is directly related to a position.
Comment: Several commenters expressed support for allowing a broad
range of degrees, but also expressed concern about the requirement to
demonstrate that each of those qualifying degree fields must be
directly related to the proffered position. An advocacy group
recommended that the proposed provision require that the range of
degrees supporting an H-1B position be directly related to the
occupation through the coursework involved in obtaining the degree,
rather than simply by the degree itself. A law firm agreed, stating
that particular coursework within a business degree, for example, could
provide the specialized knowledge sufficient to support an H-1B
petition. A research organization likewise stated that particular
coursework could be especially relevant to occupations within AI
development because of the relevance to AI of disciplines outside of
computer science such as physics, philosophy, and linguistics.
Response: In explaining that a range of qualifying degrees in
multiple disparate fields of study may be listed as the minimum entry
requirement for a position, DHS did not intend to discount coursework
that may have been involved in obtaining the degree. DHS again
reiterates that USCIS will continue to separately evaluate whether the
beneficiary's actual course of study is directly related to the duties
of the position, rather than merely the title of the degree. When
applicable, USCIS also will consider whether the beneficiary has the
education, specialized training, and/or progressively responsible
experience that is equivalent to completion of a U.S. baccalaureate or
higher degree in the specialty occupation. See 8 CFR
214.2(h)(4)(iii)(C)(4), (h)(4)(iii)(D). The petitioner has the burden
of establishing how each field of study is in a specific specialty
providing ``a body of highly specialized knowledge'' directly related
to the duties and responsibilities of the particular position.
Comment: Several commenters stated that requiring petitioners to
delineate how multiple degrees may support a specialty occupation is
overly burdensome. The commenters recommended that petitioners only be
required to justify why the degree of a potential beneficiary in a
particular case relates to the occupation at issue.
Response: In requiring that the petitioner demonstrate that the
required specialized studies are directly related to the position, DHS
is further clarifying the definition of specialty occupation to better
align with the statutory definition of that term. As explained in the
NPRM, a position may allow a range of degrees or apply multiple bodies
of highly specialized knowledge, provided that each of those qualifying
degree fields or each body of highly specialized knowledge is directly
related to the position. 88 FR 72870, 72876 (Oct. 23, 2023).
Determining whether the position is a specialty occupation is a
separate analysis from determining whether the beneficiary is qualified
for the position. The petitioner is required to do both. To only
require the petitioner to justify that the degree of the beneficiary
relates to the occupation conflates these two requirements. DHS does
not agree that it is overly burdensome for the petitioner to establish
how each field of study is in a specific specialty providing ``a body
of highly specialized knowledge'' directly relates to the duties and
responsibilities of the particular position, as is current agency
practice, and as required by the INA and the regulatory definition.
iii. Amending the Criteria for ``Specialty Occupation''
Comment: A commenter voiced appreciation for clarifying the
specialty occupation criteria, which will alleviate confusion among
U.S. employers and their employees. A company expressed general support
for several modifications to 8 CFR 214.2(h)(4)(iii)(A). Another company
also expressed support for clarifying the four regulatory prongs found
at 8 CFR 214.2(h)(4)(iii)(A), writing that the proposed text eliminates
redundancy between the second and fourth prongs.
Response: DHS appreciates the feedback and agrees that these
revisions will provide clarity on the criteria for ``specialty
occupation,'' alleviate confusion for many petitioners, and eliminate
redundancy between the second and fourth prongs.
Comment: A trade association said that stringent criteria for
evaluating specialty occupations could result in increased documentary
burdens for petitioners and employers. A law firm generally stated that
the proposed

[[Page 103083]]

amendments to the specialty occupation criteria would reduce H-1B
approval rates and negatively impact the biotechnology, information
technology, space technology, and financial services sectors.
Response: Since DHS is codifying current practice through this
provision, DHS does not anticipate that amending the criteria for
specialty occupations will create additional documentary burdens for
employers, reduce approval rates, or negatively impact particular
industries or sectors. The revisions are intended to codify and clarify
current practices and provide H-1B petitioners with more certainty as
to the adjudication standards that apply to their petitions.
Comment: Several commenters expressed general support for the
proposed definition of ``normally.'' A couple of law firms cited Innova
Sols., Inc v. Baran, in supporting the proposed definition of
``normally.'' An advocacy group commented that the proposed definition
of ``normally'' would be an improvement and cited the previous
definition of ``normally'' to mean ``always'' as a misinterpretation of
the term that the proposal would guard against. A company agreed and
stated that it has received numerous RFEs regarding H-1B petitions
based on the misinterpretation of ``normally'' to mean ``always.'' A
trade association supported the proposal as establishing a clear
guideline for adjudicators, aligning the regulations with current
agency practices and legal precedents, and ensuring a ``more nuanced
approach'' for when the variety and complexity of the roles do not fit
within a rigid framework for specific degrees. The trade association
noted that change would be especially beneficial to higher education
institutions.
Response: DHS agrees that the new definition of ``normally'' to
clarify that ``normally'' does not mean ``always'' \52\ is an
improvement that helps to ensure flexibility in adjudications. DHS also
agrees that this change will help establish a clear guideline for
adjudicators and align the regulations with current agency practices
and legal precedents.
---------------------------------------------------------------------------

\52\ See Innova Solutions, Inc. v. Baran, 983 F.3d 428, 432 (9th
Cir 2020) (``Normally does not mean always.'').
---------------------------------------------------------------------------

Comment: Several commenters expressed support for the change to
clarify ``normally,'' particularly as employers increasingly look to
consider skills-based hiring practices without running the risk that
such practices would negatively impact their ability to obtain H-1B
workers. For example, while expressing support for the proposed
definition of ``normally,'' a law firm expressed appreciation for
USCIS' responses to its questions around recruitment documentation in a
recent public engagement and requested that those responses also be
included in the proposed rule. As part of its responses, the commenter
stated that USCIS recognized ``that no one factor alone, such as formal
recruitment documentation, is determinative as to whether or not a
particular position qualifies as a specialty occupation.'' A commenter
from academia agreed and requested that the definition of ``normally''
specify that ``[n]o one factor alone, such as formal recruitment
documentation, is determinative as to whether a particular position
qualifies as a specialty occupation.'' Another law firm agreed and
recommended several other changes to the proposed definition of
``normally'' to ensure that skills-based hiring initiatives and H-1B
employment do not conflict.
Response: DHS agrees that the clarification of ``normally'' will
allow petitioners to explore skills-based hiring programs and
apprenticeship programs, where appropriate. As mentioned in the NPRM,
DHS understands the importance of attracting and hiring individuals who
possess certain skills. 88 FR 72870, 72871 (Oct. 23, 2023). The
flexibility inherent in H-1B adjudications to identify job duties and
particular positions where a bachelor's or higher degree in a specific
specialty, or its equivalent, is normally required allows employers to
explore where skills-based hiring is sensible. Further, DHS recognizes
that an employer that has adopted skills-based hiring initiatives may,
depending on the particular facts, still be able to establish that the
particular position in which the beneficiary will be employed is a
specialty occupation. DHS also agrees that no one factor alone, such as
formal recruitment documentation, is determinative of whether a
particular position qualifies as a specialty occupation but declines to
codify this or similar language. By defining ``normally'' in the
regulations, DHS's intent is to clarify that the petitioner does not
have to establish that a bachelor's degree in a specific specialty or
its equivalent is always a minimum requirement for entry into the
occupation in the United States. DHS believes that defining
``normally'' in the regulations is sufficient to provide H-1B
petitioners with more certainty as to the adjudication standards that
apply to their petitions.
Comment: A professional association and a law firm expressed
support for the proposed definition of ``normally'' but recommended, to
improve clarity, that 8 CFR 214.2(h)(4)(iii)(A)(1) be amended to
replace ``normally'' with ``usually'' or ``typically.'' The commenters
cited a case as holding that ``normally'' and ``typically'' impose
identical standards as used in regulations. A legal services provider
requested that USCIS define ``normally'' to mean ``more often than
not,'' writing that the agency could rely on ``O*Net'' data to
demonstrate degree requirement rates for a position and improve clarity
in the proposal.
Response: While DHS agrees that ``normally'' and ``typically''
impose identical standards as used in 8 CFR 214.2(h)(4)(iii)(A)(1), DHS
declines to replace ``normally'' with ``usually'' or ``typically'' in
this provision. As stated in the NPRM, for these purposes there is no
significant difference between the synonyms ``normal,'' ``usual,''
``typical,'' ``common,'' or ``routine,'' and DHS does not interpret
these words to mean ``always.'' 88 FR 72870, 72876 (Oct. 23, 2023).
DHS further declines to define ``normally'' to mean ``more often
than not.'' Such a change would essentially require the petitioner to
demonstrate a specific percentage (more than 50%) of positions that
require a bachelor's degree and could potentially make it more
difficult for petitioners to demonstrate eligibility under this
criterion if the evidence they submit for this criterion, such as the
OOH, does not specify a percentage. DHS also declines to wholly rely on
O*NET data to demonstrate a degree requirement. While O*NET can be an
informative source of general occupational information and data,\53\
there are gaps in the data, particularly as O*NET data does not provide
information on whether the degrees required must be in a specific
specialty directly related to the occupation. O*NET data may also be
lacking for new and emerging fields of technology, or occupations not
covered in detail. DHS again emphasizes that no one factor alone,
including O*NET, is determinative as to whether or not a particular
position qualifies as a specialty occupation.
---------------------------------------------------------------------------

\53\ DOL, ETA, O*NET, O*NET OnLine, https://www.onetonline.org/
(last visited Dec. 9, 2024).
---------------------------------------------------------------------------

Comment: An advocacy group recommended that the term ``normally''
be removed from 8 CFR 214.2(h)(4)(iii)(A) so as to require that H-1B
specialized positions always require a degree, citing the INA in
support of their position. A research organization agreed, citing the
definition of a specialty occupation in INA sec. 214(i)(1) and the 2020
IFR as

[[Page 103084]]

consistent with the commenter's interpretation. A union also stated
that, for nursing in particular, only positions that always required a
bachelor's degree should be eligible for H-1B classification. A
commenter generally stated that stricter criteria for specialty
occupation eligibility should be adopted and that many people who do
not qualify for H-1B status are currently working on an H-1B visa.
Response: DHS declines to remove ``normally'' from new 8 CFR
214.2(h)(4)(iii)(A) so as to require that H-1B specialized positions
always require a degree. DHS disagrees that this new definition is
inconsistent with the INA and notes that the 2020 IFR was vacated. The
inclusion of the word ``normally'' in the criteria for specialty
occupations is not new. The specialty occupation criteria included
``normally'' prior to IMMACT90, which created the specialty occupation
definition and did not change the criteria. Additionally, subsequent
regulations implementing IMMACT90 did not change the criteria or remove
the term ``normally.'' \54\ DHS also declines to add additional
requirements or scrutiny for particular occupations or adopt a stricter
criterion for specialty occupation eligibility.
---------------------------------------------------------------------------

\54\ See DOJ, INS, ``Temporary Alien Workers Seeking
Classification Under the Immigration and Nationality Act,'' 56 FR
61111-01 (Dec. 2, 1991); see also ``Registration Requirement for
Petitioners Seeking To File H-1B Petitions on Behalf of Cap-Subject
Aliens,'' 84 FR 888 (Jan. 31, 2019).
---------------------------------------------------------------------------

Comment: A trade association commented that defining ``normally''
in terms of ``usual, typical, common, or routine'' would retain
vagueness and lead to RFEs, NOIDs, and denials. The commenter stated
that this would have especially negative impacts in STEM fields.
Response: DHS disagrees that defining ``normally'' will lead to
more RFEs and denials, or negatively impact certain industries.
Defining ``normally'' to mean ``typical,'' ``common,'' or ``routine''
is consistent with both USCIS' current practice and, by codifying this
practice, DHS seeks to provide H-1B petitioners with more certainty as
to what adjudication standards apply to their petitions.
Comment: A company commented that the proposal could lead to
confusion and inconsistent adjudications because, the commenter
reasoned, the criteria under paragraph (h)(4)(iii)(A) operate to refine
the definition at 8 CFR 214.2(h)(4)(ii). The commenter recommended
deleting the term ``also'' from paragraph (h)(4)(iii)(A) to reduce
confusion as to what is required to satisfy the standard at paragraph
(h)(4)(ii). A couple of trade associations agreed that the proposed
language for paragraph (h)(4)(iii)(A) would lead to an inconsistent
application of regulatory standards with one trade association
referring to the current ``one of the following'' standard as producing
the same result and leading to confusion and administrative burdens. A
trade association agreed and stated that the proposed standard would
result in a ``totality of the circumstances'' test similar to one
provided in Kazarian v. USCIS, 596 F.3d 1115 (9th Cir. 2010). A legal
services provider also agreed and added that the proposal may
effectively raise the standard for specialty occupations.
Response: DHS disagrees that the word ``also'' or the phrase ``one
of the following'' in new 8 CFR 214.2(h)(4)(iii)(A) could lead to
confusion and declines to make changes in response to these commenters.
As explained in the NPRM, this language clarifies that meeting one of
the regulatory criteria is a necessary part of--but not always
sufficient for--demonstrating that a position qualifies as a specialty
occupation. 88 FR 72870, 72876 (Oct. 23, 2023). In other words, to
qualify as a specialty occupation, a position must meet one of the
criteria at 8 CFR 214.2(h)(4)(iii)(A) and also must meet the definition
of a specialty occupation as a whole. Furthermore, as pointed out in
the NPRM, this is not new. 88 FR 72870, 72877 (Oct. 23, 2023). USCIS
has a long-standing practice of reading and construing the criteria at
8 CFR 214.2(h)(4)(iii)(A) in harmony with and in addition to other
controlling regulatory provisions and with the statute as a whole.\55\
Therefore, DHS disagrees with the commenters that this change will
somehow raise the standard or create a new standard for specialty
occupation adjudications.
---------------------------------------------------------------------------

\55\ Numerous AAO non-precedent decisions spanning several
decades have explained that the criteria at 8 CFR
214.2(h)(4)(iii)(A) must logically be read together with section
214(i)(1) of the Act and 8 CFR 214.2(h)(4)(ii), and that the
regulatory criteria must be construed in harmony with the thrust of
the related provisions and with the statute as a whole. See, e.g.,
In Re.--, 2009 WL 4982420 (AAO Aug. 21, 2009); In Re.--, 2009 WL
4982607 (AAO Sept. 3, 2009); In Re. 15542, 2016 WL 929725 (AAO Feb.
22, 2016); In Re. 17442092, 2021 WL 4708199 (AAO Aug. 11, 2021); In
Re. 21900502, 2022 WL 3211254 (AAO July 7, 2022).
---------------------------------------------------------------------------

Comment: A professional association expressed particular concern
about the proposed change at 8 CFR 214.2(h)(4)(iii)(A)(3), which would
require that an H-1B employer normally require a ``U.S. baccalaureate
or higher degree in a directly related specific specialty, or its
equivalent, for the position.'' The commenter stated that this
provision may not be in conformity with how hiring managers view those
particular degrees when assessing a candidate's application. The
commenter added that, because U.S. employers must show that its hiring
practices for H-1B beneficiaries and American workers are identical,
``this restriction will impose artificial and unnecessary burdens on
the hiring of both U.S. workers and H-1B beneficiaries.'' The commenter
concluded that ``USCIS should not seek to restrict educational
requirements beyond what was intended in the INA and in a manner that
is inconsistent with specific content ordinarily included in these
degree programs.'' A company stated, without elaboration, that ``USCIS
should also consider the ``anti-discrimination impact'' on companies
when drafting job descriptions.''
Response: In the NPRM, DHS proposed to add ``U.S.'' to
``baccalaureate'' to clarify that a baccalaureate degree must be a U.S.
degree or its foreign equivalent, and that a foreign baccalaureate is
not necessarily an equivalent to a U.S. degree. 88 FR 72870, 72877
(Oct. 23, 2023). DHS believes that these commenters misunderstood the
proposed changes to mean that an individual must have earned a degree
in the United States to be eligible for H-1B nonimmigrant
classification. That is not the case. This revision reflects
longstanding practice and a consistent standard that will better align
the regulation discussing the position requirement at 8 CFR
214.2(h)(4)(iii)(A) with the statutory requirement of ``a bachelor's or
higher degree in the specific specialty (or its equivalent) as a
minimum for entry into the occupation in the United States'' at INA
section 214(i)(1)(B), 8 U.S.C. 1184(i)(1)(B), as well as the regulatory
requirement that an H-1B beneficiary must have a U.S. baccalaureate
degree, or its equivalent, at 8 CFR 214.2(h)(4)(iii)(C)(1). Therefore,
DHS declines to make any changes in response to these comments and will
finalize the regulatory language as proposed.
Comment: A few commenters discussed the proposed criterion's
references to the DOL's OOH. An attorney suggested that any reference
to the OOH should be removed from the provisions since it never was
meant to establish minimum requirements and should never be used for
any legal purpose. The commenter stated that the information in the OOH
should also not be used to determine if an applicant is qualified to
enter a specific job in an occupation. A company similarly expressed
their concern with the proposed changes and agency usage of

[[Page 103085]]

the OOH to determine if a position qualifies as a specialty occupation.
The company reasoned that the OOH only provides a general description
and is not intended to be used to define a specialty position. The
company recommended a more flexible approach and also cited the OOH's
statement that it should never be used for any legal purposes. A law
firm suggested that the agency make it clear that the OOH is not the
exclusive source of minimum education requirements and that expert
opinions by professors in the field of study and by veterans in the
particular occupation should be included as ``reliable and informative
sources.''
Response: There is no reference to the DOL's OOH in either the
proposed or the final regulatory text. DHS referenced this resource in
the preamble of the NPRM when discussing how it reviews the specialty
occupation criteria, noting that it will continue its practice of
consulting the OOH and other reliable and informative sources, such as
information from the industry's professional association or licensing
body, submitted by the petitioner. 88 FR 72870, 72877 (Oct. 23, 2023).
The OOH is not determinative. Rather, it is an informative source, that
may be used among others, to analyze a position's duties and whether a
position qualifies as a specialty occupation.\56\
---------------------------------------------------------------------------

\56\ See Royal Siam Corp., 484 F.3d at 146 (``In its review of
petitions for nonimmigrant work visas, [US]CIS frequently--and
sensibly--consults the occupational descriptions collected in the
Handbook. Subject only to caveats at the outer fringes, the choice
of what reference materials to consult is quintessentially within an
agency's discretion . . . .'').
---------------------------------------------------------------------------

Comment: A commenter expressed support for the addition of the
``degree in a directly related specific specialty'' language in 8 CFR
214.2(h)(4)(iii)(A)(3). The commenter reasoned that because H-1B visas
are designed for individuals with specific specialty degrees, the
requirement would ensure that H-1B visas are awarded to people who have
chosen their degrees and studied for a specific occupation. The
commenter further stated that USCIS should not be constrained in
recognizing a position as a specialty occupation.
Conversely, several commenters discussed general concerns with the
``directly related specific specialty'' requirement in the specialty
occupation criteria. A joint submission expressed opposition to the
inclusion of a ``directly related'' requirement in the criteria for a
``specialty occupation.'' The commenters stated that it opposed the
language for the same reasons described in its comment on the
``directly related'' requirement in the definition of ``specialty
occupation.''
Response: Similar to the definition of ``specialty occupation''
that uses the term ``directly related,'' the addition of the phrase
about a ``degree in a directly related specific specialty'' within the
criteria merely reinforces the existing requirements for a specialty
occupation, in other words, that the position itself must require a
directly related specialty degree, or its equivalent, to perform its
duties. In determining whether a position involves a specialty
occupation, USCIS currently interprets the ``specific specialty''
requirement in section 214(i)(1)(B) of the INA, 8 U.S.C. 1184(i)(1)(B),
to relate back to the body of highly specialized knowledge requirement
referenced in section 214(i)(1)(A) of the INA, 8 U.S.C. 1184(i)(1)(A),
required by the specialty occupation in question. The ``specific
specialty'' requirement is only met if the degree in a specific
specialty or specialties, or its equivalent, provides a body of highly
specialized knowledge directly related to the duties and
responsibilities of the particular position as required by INA
214(i)(1)(A).
Comment: A couple of joint submissions and an advocacy group said
that the proposed requirement of a ``directly related specific
specialty'' degree would exclude those with relevant experience and
coursework, restricting the pool of qualified candidates employers
could consider. A joint submission from industry associations urged
codifying existing practices that allow demonstrating how a degree or
coursework relates to a position, in order to maintain U.S. leadership
in emerging technologies and promote effective H-1B usage.
Response: Similar to the definition of ``specialty occupation''
that uses the term ``directly related,'' 8 CFR 214.2(h)(4)(iii)(A)
should not hinder the ability of companies to consider employees with
experience. USCIS analyzes whether the proffered position is a
specialty occupation (including determining if there is a direct
relationship between the required degree(s) and the duties of the
position) separately from its analysis of a beneficiary's
qualifications. When applicable, USCIS also will consider whether the
beneficiary has the education, specialized training, and/or
progressively responsible experience that is equivalent to completion
of a U.S. baccalaureate or higher degree in the specialty occupation.
See 8 CFR 214.2(h)(4)(iii)(C)(4), (h)(4)(iii)(D).
Comment: A professional association stated that the proposed
changes to the criteria requiring a ``degree in a directly related
specific specialty'' would restrict eligibility for H-1B status in a
manner that was inconsistent with both statute and Federal court
precedent. Specifically, the commenter referenced Tapis Int'l v. INS,
Residential Finance Corp. v. USCIS, and Raj & Co. v. USCIS, which it
said held that ``the body of specialized knowledge acquired pursuant to
the degree,'' and not the degree itself, qualifies an individual for a
specialty occupation. The commenter stated that despite this precedent,
the NPRM focuses exclusively on the degree title and not on the
underlying body of knowledge. Citing Residential Finance, the commenter
added that while there is no requirement that specialized studies be in
a single academic discipline, the NPRM does not consider the
``specialized course of study'' necessary to perform the job duties of
a position and whether it could be obtained through degrees in a
variety of fields. The commenter said that instead, the NPRM relies on
Caremax Inc. v. Holder, which it said did not establish the complexity
of the position or provide evidence of the beneficiary's qualifying
body of specialized knowledge.
Response: DHS disagrees that requiring a ``degree in a directly
related specific specialty'' will restrict eligibility for H-1B
beneficiaries or that this is inconsistent with the statute. This
provision codifies existing USCIS practice that there must be a direct
relationship between the required degree field(s) and the duties of the
position. Further, this aligns with the statute, which states that
attainment of a bachelor's or higher degree in the specific specialty
(or its equivalent) is the minimum for entry into the occupation in the
United States. See section 214(i)(1) of the INA, 8 U.S.C. 1184(i)(1).
DHS also disagrees that this provision is contrary to case law.
While the NPRM referred to degrees by their titles, it also explained
that it was referring to the educational credentials by the title of
the degree for expediency. However, USCIS separately evaluates whether
the beneficiary's actual course of study is directly related to the
duties of the position, rather than merely the title of the degree.
When applicable, USCIS also will consider whether the beneficiary has
the education, specialized training, and/or progressively responsible
experience that is equivalent to completion of a U.S. baccalaureate or
higher degree in the specialty occupation. See 8 CFR
214.2(h)(4)(iii)(C)(4). It appears the commenter may have conflated the
issue of a position's qualification as a specialty occupation with the
issue of a

[[Page 103086]]

beneficiary's qualification for the specialty occupation. A
beneficiary's credentials to perform a particular job are relevant only
when the job is first found to qualify as a specialty occupation. USCIS
is required to follow long-standing legal standards and determine
first, whether the proffered position qualifies as a specialty
occupation, and second, whether the beneficiary was qualified for the
position at the time the nonimmigrant visa petition was filed.\57\ DHS
referenced Caremax Inc. v. Holder in the NPRM because it discusses
whether the position is a specialty occupation,\58\ rather than
beneficiary qualifications.
---------------------------------------------------------------------------

\57\ Cf. Matter of Michael Hertz Assocs., 19 I&N Dec. 558, 560
(Comm'r 1988) (``The facts of a beneficiary's background only come
at issue after it is found that the position in which the petitioner
intends to employ him falls within [a specialty occupation]'').
\58\ See Caremax Inc v. Holder, 40 F. Supp. 3d 1182, 1187-88
(N.D. Cal. 2014) (explaining that a position for which a bachelor's
degree in any field is sufficient to qualify for the position, or
for which a bachelor's degree in a wide variety of fields unrelated
to the position is sufficient to qualify, would not be considered a
specialty occupation as it would not require the application of a
body of highly specialized knowledge).
---------------------------------------------------------------------------

Comment: Several commenters discussed suggested revisions to the
language of the ``directly related specific specialty'' requirement,
with some recommending that USCIS remove it from proposed 8 CFR
214.2(h)(4)(iii)(A)(1) through (4). A professional association
suggested that the ``directly related specific specialty'' language be
replaced throughout the criteria with ``a body of specialized knowledge
obtained pursuant to a U.S. baccalaureate or higher degree in a
specific specialty, or its equivalent.'' The commenter reasoned that
the language would be consistent with statute, affirm the importance of
specialized courses of study, and eliminate the need to rely on the
OOH.
Response: As previously stated, DHS is slightly revising its
regulatory language in the definition of specialty occupation. The
definition clarifies that a position may allow for a range of
qualifying degree fields, provided that each of those fields is
directly related to the duties of the position. The regulatory language
also includes a definition of ``directly related.'' DHS believes the
regulatory language as revised in this final rule more clearly reflects
and codifies current practice. As a result, DHS does not anticipate
this provision will have a negative impact on any particular
occupations and declines to make the suggested revisions to the
regulatory text.
Comment: An advocacy group expressed their support for the need to
amend the criteria for a specialty occupation but also provided
recommended changes to the criteria. Specifically, the advocacy group
suggested the inclusion of an acknowledgment of ``modern education
which includes multidisciplinary majors and minors'' where the criteria
reference a ``U.S. baccalaureate'' degree. The group also suggested
recognition of the value of industry experience by including industry
experience in the specialty occupation consideration.
Response: DHS declines to make the suggested changes because the
regulatory provisions as finalized sufficiently address the commenter's
concerns. The criteria for determining whether a position qualifies as
a specialty occupation allow for the equivalent of a U.S. baccalaureate
or higher in a directly related specialty. The petitioner bears the
burden to demonstrate equivalency. More importantly, it appears the
commenter may be conflating beneficiary qualifications, enumerated at 8
CFR 214.2(h)(4)(iii)(C), with the standards for specialty occupation
positions, enumerated at 8 CFR 214.2(h)(4)(iii)(A). When assessing a
beneficiary's qualifications, USCIS also will consider, as applicable,
whether the beneficiary has the education, specialized training, and/or
progressively responsible experience that is equivalent to completion
of a U.S. baccalaureate or higher degree in the specialty occupation.
See 8 CFR 214.2(h)(4)(iii)(C)(4), (h)(4)(iii)(D).
Comment: A company highlighted the use of the word ``are'' and
recommended changing it to ``is'' in 8 CFR 214.2(h)(4)(iii)(A)(4). The
company also recommended changing the term ``United States industry''
to ``industry in the United States'' at 8 CFR 214.2(h)(4)(iii)(A)(2)
for improved clarity.
Response: DHS agrees that the word ``are'' should be ``is'' in 8
CFR 214.2(h)(4)(iii)(A)(4), and will make this non-substantive revision
in the final regulatory text. DHS also agrees that ``industry in the
United States'' is clearer than ``United States industry'' and will
make this non-substantive revision in the final regulatory text at 8
CFR 214.2(h)(4)(iii)(A)(2). Additionally, DHS is revising 8 CFR
214.2(h)(4)(iii)(A)(2) and (3) by adding ``to perform the job duties''
to qualify the requirements of the position and clarify that DHS looks
not just at the title of the position, but at the position's duties.
Comment: In the criteria at 8 CFR 214.2(h)(4)(iii)(A)(2), a legal
services provider disagreed with the proposal to change the current
wording ``in parallel positions at similar organizations'' to ``in
parallel positions at similar organizations within the employer's
industry in the United States.'' The commenter stated that this
proposed change would narrow the focus more than is necessary or
relevant. The commenter emphasized the importance of focusing on the
specific duties of the position instead of the industry in which the
petitioner operates, as this important distinction would make
adjudications more efficient. The commenter cited an example where the
agency determined that a small information technology company was not a
``similar organization'' to a 1,000-employee information technology
company through numerous RFEs, negatively impacting all parties.
Response: DHS disagrees that the revisions to 8 CFR
214.2(h)(4)(iii)(A)(2) will narrow or otherwise limit the focus of this
criterion. The regulatory text of 8 CFR 214.2(h)(4)(iii)(A)(2) prior to
this final rule has always focused on the employer's industry; that
version of the regulatory text specifically stated, ``The degree
requirement is common `to the industry' in parallel positions among
similar organizations.'' The change to add a reference to the
employer's industry in the United States is a non-substantive change
and is not expected to increase RFEs and denials.
Comment: A joint submission voiced specific concern about the
inclusion of the word ``staffed'' in the third prong of the regulatory
criterion, stating that, in the ``overwhelming majority'' of
circumstances, where H-1B petitioning employers place their beneficiary
employees at third party sites, they are--by the terms and definition
of the proposed regulation itself--not staffing companies. The
commenters said that they are instead corporate entities with which
another entity has engaged for the delivery of professional/specialty
occupation services. The commenters acknowledged that USCIS in the
preamble expressed its intent to narrow the definition of ``staffed''
to apply only where a beneficiary employee would be employed at a
third-party worksite ``to fill a position in the third party's
organization'' but said that the wording of the proposed criterion does
not sufficiently narrow the definition to achieve the professed intent.
Response: DHS declines to strike the language at 8 CFR
214.2(h)(4)(iii)(A)(3) relating to a beneficiary staffed to a third
party. This language provides necessary guardrails to ensure that
beneficiaries who provide staffing to a third party sufficiently meet
the specialty occupation requirements. As clarified in

[[Page 103087]]

the NPRM, a beneficiary who is ``staffed'' to a third party becomes
part of that third party's organizational hierarchy by filling a
position in that hierarchy, even when the beneficiary technically
remains an employee of the petitioner. 88 FR 72870, 72908 (Oct. 23,
2023). By contrast, for example, a beneficiary would be providing
services to a third-party where they were providing software
development services to a third party as part of the petitioner's team
of software developers on a discrete project, or employed by a large
accounting firm providing accounting services to various third-party
clients. In these examples, USCIS would generally not consider the
beneficiary to be ``staffed'' to the third-party because the third-
party does not have employees within its organizational hierarchy
performing those duties in the normal course of its business and does
not have a regular, ongoing need for the work to be performed.
d. Equivalencies
Comment: Several commenters suggested DHS consider 3 years of
experience as equivalent to 1 year in college, stating that experience
should be considered valuable for a job. Some of the commenters wrote
that under the current definition of ``specialty occupation,'' 12 years
of work experience in an occupation equates to a bachelor's degree in
that occupation but expressed that the proposed rule is ambiguous as to
whether this standard would still apply.
Another commenter recommended ``a more flexible analysis'' to
consider whether a noncitizen is qualified for a specialty occupation.
A commenter said that the current 8 CFR 214.2(h)(4)(iii)(D)(5) is
``overly restrictive'' in requiring 3 years of work experience to
substitute for every 1 year of college-level training lacking. The
commenter said a more flexible analysis would recognize the reality
that some individuals, despite not possessing a degree in the specific
specialty and not having 12 years of experience, may be able to perform
a specialty occupation at the same level as someone who has the
normally required a 4-year degree and would take into account the rigor
of the noncitizen's past work experience.
Response: DHS did not propose changing 8 CFR 214.2(h)(4)(iii)(D) or
any other provisions with respect to how USCIS determines whether the
beneficiary possesses the equivalent to the required degree and any
suggestions to change this standard are beyond the scope of this rule.
For purposes of determining equivalency to a baccalaureate degree in
the specialty under 8 CFR 214.2(h)(4)(iii)(D), USCIS will continue to
require 3 years of specialized training and/or work experience to be
demonstrated for each year of college-level training the noncitizen
lacks.
Comment: A commenter suggested that USCIS allow individuals with a
degree and 5 or more years of work experience to qualify for a
specialty occupation, noting that many of these individuals face long
waits for immigrant visas. Another commenter suggested that USCIS
consider individuals that have 10 or more years of experience as a
computer programmer or software engineer as eligible under the
``specialty occupation'' definition. Other commenters suggested carve
outs for individuals, such as allowing an individual with a master's
degree in telecom networks to qualify for software engineering roles
inside networking companies, or establishing a different definition of
``specialty occupation'' for new H-1B petitions for individuals who
have spent years working while waiting for an immigrant visa to become
available.
Response: DHS declines to create specific clauses or carve-outs
(such as those with 5 or 10 years of experience or with a master's
degree, or for individuals waiting for an immigrant visa to become
available) for beneficiaries to qualify for a specialty occupation. As
with current practice, USCIS will continue to make individualized
determinations of whether a beneficiary is qualified to perform the
specialty occupation offered by the employer.
Comment: A commenter said that ``the proposed changes relative to
the college degree requirement'' are important and that USCIS should
explicitly describe the meaning and requirements of these provisions as
it relates to foreign equivalent degrees.
Response: 8 CFR 214.2(h)(4)(iii)(A), enumerating standards for a
specialty occupation, adds ``U.S.'' to baccalaureate, which clarifies
that a baccalaureate degree must be a U.S. degree or its foreign
equivalent and that a foreign baccalaureate is not necessarily
equivalent to a U.S. baccalaureate. Furthermore, existing 8 CFR
214.2(h)(4)(iii)(C), enumerating beneficiary qualification criteria,
indicates in part that the individual may ``[h]old a foreign degree
determined to be equivalent to a United States baccalaureate or higher
degree required by the specialty occupation from an accredited college
or university.'' DHS believes these provisions sufficiently clarify
that a position must require a U.S. baccalaureate or its equivalent,
which may include a foreign degree that is equivalent to the required
U.S. degree, and that a beneficiary may qualify based on possession of
a foreign degree determined to be equivalent to a U.S. baccalaureate
degree.
Comment: A nonprofit legal organization suggested that DHS
incorporate an ``objective threshold'' into the definition of a
``specialty occupation'' that 75 percent of U.S. workers in that
occupation must have a college degree. The commenter suggested that if
an occupation did not meet this threshold, it should not be considered
a specialty occupation.
Response: DHS declines to add a threshold to the definition of a
``specialty occupation'' that a certain percentage of U.S. workers in
the occupation must have a college degree. There is no statutory
requirement for such threshold. DHS also notes that the commenter did
not provide supporting data or rationale to explain how it came to a
75% threshold. Establishing a threshold of U.S. workers in an
occupation with a college degree is not necessary to meet the statutory
definition of ``specialty occupation.'' The regulatory provisions as
finalized in this rule sufficiently outline requirements to meet the
specialty occupation definition.
Comment: A research organization suggested that DHS further
strengthen the definition of ``specialty occupation'' by requiring that
a noncitizen have at least a bachelor's degree that meets the statutory
requirement from a single education institution, rather than having
multiple, lesser degrees that USCIS might cumulatively consider to be
equivalent to the required bachelor's degree. The commenter reasoned
that this would conform more closely to the requirement in the statute
and ensure that H-1B workers with qualifying levels of education are
more likely to access the program, benefiting employers and the
economy. Similarly, an advocacy group proposed that DHS include a
provision in the final rule requiring a single source degree, as
opposed to the current practice of allowing a combination of lesser
degrees to qualify as ``equivalent to a U.S. bachelor's degree.''
A commenter advocated requiring that H-1B beneficiaries earn
degrees in the United States as a way to promote development at U.S.
educational institutions and social integration of H-1B beneficiaries.
Another commenter endorsed the idea that H-1B recipients should have
obtained their degrees in the United States, which the commenter

[[Page 103088]]

said would incentivize international students to pursue their education
within the United States, promoting growth for American educational
institutions and facilitating integration into American society, as
well as ``guarantee[ing]'' that the H-1B program benefits individuals
who are well-acquainted with the American academic and professional
environments.
Response: DHS declines to require a single source degree, i.e.,
requiring that a beneficiary must possess a bachelor's degree from a
single educational institution. DHS also declines to require a
beneficiary to possess a degree obtained in the United States. The
commenters have not explained how such requirements would be more
consistent with the statute, given that INA sec. 214(i)(1), 8 U.S.C.
1184(i)(1), expressly allows for a bachelor's or higher degree in the
specific specialty ``or its equivalent,'' and INA sec. 214(i)(2), 8
U.S.C. 1184(i)(2), expressly allows for ``experience in the specific
specialty equivalent in the completion of such degree, and []
recognition of expertise in the specialty through progressively
responsible positions relating to the specialty'' in lieu of completion
of the degree described in INA sec. 214(i)(1), 8 U.S.C. 1184(i)(1).
e. Applicability of Proposed Changes to Specialty Occupation to
Specific Industries or Fields
Comment: Several commenters offered recommendations to further
restrict specialty occupation requirements with respect to certain
industries. For example, a commenter supported the proposed changes but
said that ``specialty occupation'' needs to be stricter, particularly
for technology occupations. An individual commenter said that software
developer positions must require a graduate degree in computer science
or computer applications/information systems. This commenter said that
making education requirements stringent would make international
students more attractive to the United States and provide them a
greater opportunity to find employment. A couple of commenters
requested that DHS exclude IT positions from the specialty occupation
classification and Schedule A, with one commenter reasoning that it is
challenging for U.S. citizens to obtain an IT job.
Response: DHS declines to revise the provisions to make the
specialty occupation criteria more restrictive in general. The purpose
of the revisions to the definition and criteria of specialty occupation
are to codify current practice and better align the regulatory
definition with the statutory definition.
DHS will not adopt the suggestions to require a graduate degree for
certain IT positions. There is no statutory support for such a
requirement, as the statutory definition of ``specialty occupation'' is
based on a minimum requirement of ``a bachelor's or higher degree in
the specific specialty (or its equivalent).'' Section 214(i) of the
INA, 8 U.S.C. 1184(i). DHS will not adopt the suggestion to exclude IT
positions from qualifying as specialty occupations as there is no
statutory support for such a broad exclusion.
Comment: A commenter recommended DHS consider providing ``dedicated
resources for noncitizens specializing in AI and other strategic
fields, such as a `concierge service' or fast-track process,'' in order
to inform adjudicators about the particularities of AI jobs, employers,
and degree programs and reduce processing delays.
Response: DHS declines to create a ``concierge service'' or ``fast-
track process'' for noncitizens specializing in any given field. USCIS
officers are trained to adjudicate petitions for all industries.
Additionally, DHS believes it would be unfair to prioritize any
specific field over others. Petitions for individuals in AI and other
``strategic fields'' will continue to be processed through standard
adjudication channels.
Comment: Several commenters opposed the ``directly related''
language, citing negative impacts on start-ups and beneficiary-owners.
For instance, an advocacy group expressed concern that the proposed
language could impact startups because many startups exist in ``new and
burgeoning fields'' that do not have ``directly related'' degrees. The
commenter said that the proposed definition change would cause talent,
research, and development activities to leave the United States. A
joint submission expressed concern that the ``directly related''
requirement would require beneficiary-owners to prove that their
``majority of the time'' duties are ``directly related'' to their
specific specialties and that this change would lead to beneficiary-
owners encountering more RFEs and increasing the likelihood of denial
for founders. Another joint submission expressed opposition to the
codification of the ``directly related specific specialty'' requirement
within the specialty occupation criteria, reasoning that beneficiary-
owners who have degrees in a technical field but whose role evolves
into an executive role might not be able to qualify for specialty
occupation visa categories under the new criterion. This joint
submission said there might be a potential for disagreements among
adjudicators over duties considered to be ``directly related'' to
owning or directing a start-up and requested additional guidance be
provided through regulation or the USCIS Policy Manual to facilitate
consistent decision-making by adjudicators.
Response: The changes to the specialty occupation definition are
not intended to disadvantage start-ups and beneficiary-owners. DHS
believes that specialty occupation provisions codified in this rule
sufficiently accommodate start-ups and beneficiary-owners. DHS
understands that, as in many positions, many beneficiary-owners and
those in start-up companies may seek positions in new or emerging
fields for which there may not be a singular degree requirement to meet
the needs of the position. As stated in new 8 CFR 214.2(h)(4)(ii), a
position may allow for a range of qualifying degree fields. The
petitioner must demonstrate how each of those degree fields is directly
related to the duties of the position. The petitioner is not required
to show an ``exact correspondence'' between degree field(s) and the
occupation; as finalized in this rule, ``directly related'' means there
is a logical connection between the degree, or its equivalent, and the
duties of the position.
For beneficiary-owners, it is true that, while the beneficiary may
perform duties directly related to owning and directing the
petitioner's business, the beneficiary must perform specialty
occupation duties authorized under the petition a majority of the time.
See new 8 CFR 214.2(h)(4)(ii). The burden is on the petitioner to
demonstrate that the qualifying degree field(s) is or are directly
related to those specialty occupation duties of the position. Codifying
this requirement affords petitioners with greater clarity on the
documentation necessary to include with their petitions, thereby
reducing the likelihood of RFEs. DHS believes the regulatory text as
finalized accommodates start-ups and beneficiary-owners while aligning
with the statutory requirements for a specialty occupation.
Comment: A couple of commenters expressed the need to consider
physicians in the specialty occupation requirements. For example, a
professional association wrote that H-1B physicians deserve the
specialty occupation designation, as they require education and
training that ``far exceeds an undergraduate degree.'' The commenter
cautioned USCIS to ensure that the ``directly related'' requirement is
not interpreted in a way that would disadvantage physicians, who
graduate with a general Doctor of Medicine (MD) or a Doctor of
Osteopathic Medicine

[[Page 103089]]

(DO) degree and then specialize during their residency. The commenter
added that physicians meet the education requirements of the proposed
rule and the statutory ``highly specialized knowledge'' requirement,
and as such, deserve the specialty occupation designation.
Additionally, the association reasoned, that physicians undergo years
of residency to expand their knowledge in a specialized area of
medicine. The association cautioned the Department against construing
``specialty occupation'' too narrowly in a way that would disqualify
physicians, who are critical to filling U.S. workforce gaps. A joint
submission, echoing the statements on the educational and experiential
qualifications of physicians, recommended that DHS clarify in the final
rule that the amended requirements do not disadvantage or change
physicians' specialty occupation status.
Response: DHS confirms that the regulatory text regarding ``a
general degree'' does not refer to a Doctor of Medicine or a Doctor of
Osteopathic Medicine and should not impact higher-level degrees. While
specialty occupation determinations are made on a case-by-case basis,
the regulatory text regarding ``a general degree'' generally applies to
four-year bachelor-level degrees, because higher-level degrees require
more specialization than those at a bachelor's level.
Comment: A professional association urged the Department to accept
as precedent that pilots are not a ``specialty occupation.'' The
association expressed concern that U.S. air carriers have increasingly
misused H-1B, E-3, and H-1B1 visas to fill pilot positions, raising
concerns about wage distortion in the U.S. pilot labor market. Thus,
the association said that adopting the interpretation that this
profession does not qualify as a ``specialty occupation,'' would
facilitate the consistent application of the standard across agencies,
serve the Department's interests in fidelity to the statutory and
regulatory standard, allow for fair program administration, and reduce
administrative burdens from meritless petition filings. The
professional association also urged DHS to limit the proposed specialty
occupation regulations to petitions for new employment only, citing the
``critical fairness and reliance interests'' that would be at stake for
existing pilot visa holders, their employers, and crewmembers should
DHS disrupt prior eligibility determinations. Specifically, the
commenter suggested that the changes should not be used to revoke or
reconsider the eligibility of existing H-1B, E-3, or H-1B1 pilot visa
holders, or deny petitions or applications for existing pilot visa
holders to continue their current employment, make changes to their
previous employment with their current employer, obtain concurrent
employment, or change employers. Conversely, a commenter suggested that
the H-1B program should permit professional certifications outside of a
bachelor's degree, including certifications for commercially rated
pilots. The commenter reasoned that there are trained, experienced
pilots in other countries who could address the U.S. shortage of
commercially rated pilots in rural regions for charter and agricultural
applications.
Response: DHS declines to create separate criteria for particular
industries or occupations, or to declare through this rulemaking that
certain occupations are or are not specialty occupations. The revisions
to the definition and criteria for specialty occupations are not
intended to disadvantage or advantage any particular groups.
f. Other Comments on Specialty Occupation
Comment: A commenter said it was unclear how the changes to the
specialty occupation definition would add protections for U.S. workers,
as employers demonstrate there are no U.S. workers with relevant skills
in the LCA.
Response: DHS did not state that changing the definition of
specialty occupation would add protections for U.S. workers, but DHS
believes that better aligning the regulatory definition and standards
for a ``specialty occupation'' with the statutory definition will
improve program integrity by providing added clarity on which positions
meet eligibility requirements. DHS also highlights that matters of H-1B
program integrity are directly addressed and enhanced by other
provisions of this rule, including provisions on the bona fide job
offer requirement, non-speculative employment, and site visits.
Furthermore, DHS notes, while deferring to Department of Labor (DOL)
authority, that the LCA process generally does not include a showing
that there are no qualified U.S. workers for the position. Nor does the
LCA process serve as a guardrail to ensuring that a position qualifies
as a specialty occupation and is not determinative of such
qualification.\59\
---------------------------------------------------------------------------

\59\ See, e.g., Xpress Grp., Inc. v. Cuccinelli, 2022 WL 433482,
at *5 (W.D.N.C. Feb. 10, 2022) (``DOL certification of a LCA is not
determinative as to whether the position is in fact a `specialty
occupation.' Rather, the specialty occupation determination is made
by USCIS in accordance with section 214(i)(1) of the INA. . . .''
(citation omitted)).
---------------------------------------------------------------------------

Comment: A joint submission suggested adding ``a comparable
evidence criterion'' (similar to the concept for EB-1 outstanding
researchers) so that, if none of the listed regulatory criteria clearly
apply to the evidence the petitioner intends to submit, the petitioner
could submit comparable evidence to establish that the offered job is a
specialty occupation. The commenter stated that that this alternative
would allow petitioners to submit alternate, but qualitatively
comparable, evidence where evidence does not fit neatly into the
enumerated list. The commenters emphasized the importance of this
recommendation by highlighting the proposed change in 8 CFR
214.2(h)(4)(iii)(A)(3), where petitioners are limited to showing
evidence of an established recruiting or hiring practice. Similarly, an
advocacy group expressed their support for the need to amend the
criteria for a specialty occupation to give due consideration to
research or publications.
Response: As part of qualifying as a specialty occupation, the
position must meet one of the criteria enumerated at 8 CFR
214.2(h)(4)(iii)(A)(1) through (4). DHS declines to add regulatory
language stating that the petitioner may submit ``comparable evidence''
to establish that a position qualifies as a specialty occupation in
lieu of meeting one of the criteria, and also declines to amend the
criteria to consider research or publications. Meeting one of the
enumerated criteria is necessary to ensure the position satisfies the
definition of a specialty occupation.\60\ Additionally, DHS notes that
a beneficiary's research or publications are likely applicable in
determining beneficiary qualifications to perform the occupation,
rather than determining whether a position qualifies as a specialty
occupation. Petitioners may submit any evidence to demonstrate that the
position satisfies one of the criteria at 8 CFR 214.2(h)(4)(iii)(A)(1)
through (4). As noted by a commenter, and as acknowledged in the NPRM,
petitioners might not be able to demonstrate eligibility under 8 CFR
214.2(h)(4)(iii)(A)(3) when seeking to fill a position for the first
time. However, as stated in the NPRM, first-time hirings are not
precluded from qualifying under one of the other criteria listed at 8
CFR 214.2(h)(4)(iii)(A). DHS believes the criteria finalized in this
rule, in

[[Page 103090]]

conjunction with the revised definition of specialty occupation, afford
petitioners sufficient flexibility while adhering to statutory
requirements.
---------------------------------------------------------------------------

\60\ While meeting one of the criteria stated in 8 CFR
214.2(h)(4)(iii)(A) is necessary, it is not necessarily sufficient
to meet the statutory and regulatory definition of specialty
occupation.
---------------------------------------------------------------------------

3. Amended Petitions
Comment: Several commenters, including a trade association and a
company, expressed support for DHS's clarification related to amended
petitions. The trade association said that it would enhance processing
efficiency and an individual commenter said it would reduce
administrative uncertainties and complexities. The company said that
stakeholders would benefit from the clarity provided by codifying and
consolidating several sources of guidance and practices, and that the
simplification would alleviate administrative burdens by reducing the
frequency of RFEs and NOIDs.
Response: DHS agrees that codifying and consolidating requirements
on when an amended or new H-1B petition must be filed due to a change
in an H-1B worker's place of employment will offer clarity and reduce
uncertainty. Existing requirements on the need to file an amended or
new H-1B petition due to a change in work location appear in various
sources, including DHS regulations, a precedent decision interpreting
the existing DHS regulation, USCIS policy guidance, DOL regulations,
and DOL guidance. DHS agrees that codifying and consolidating existing
requirements for amended or new petitions will better serve petitioners
in complying with these requirements. DHS also agrees that the clear
standard reflected in this provision may mitigate the need for RFEs and
NOIDs, particularly on H-1B petitions filed subsequent to the change in
work location. DHS agrees that providing a clear, codified standard
will further alleviate administrative burdens for employers when
contemplating a new work location that may impact H-1B eligibility.
Comment: A few commenters, including trade associations and a joint
submission, expressed opposition to requiring an amended or new
petition when a worker's place of employment is changed. The commenters
elaborated that it would add an unnecessary burden for both the
petitioner and USCIS, thus impeding the goals of increasing efficiency,
filling labor shortages, and creating opportunities for innovation and
expansion of the economy.
Response: This rule does not create new filing requirements for
petitioners. New 8 CFR 214.2(h)(2)(i)(E)(2) codifies current USCIS
practice as articulated in its policy memorandum ``USCIS Final Guidance
on when to File an Amended or New H-1B Petition After Matter of Simeio
Solutions, LLC,'' which implemented a precedent decision, Matter of
Simeio Solutions, LLC, 26 I&N Dec. 542 (AAO 2015).\61\ DHS generally
recognizes the additional procedures and cost incurred by employers in
filing amended petitions. However, these are existing requirements, and
DHS is not increasing petitioners' filing burdens through this
provision. Providing clearer regulations on when a new work location
requires the filing of an amended H-1B petition, in line with existing
requirements, reduces uncertainty on whether the ``material change''
threshold requiring an amended filing has been met. With this clearer
standard, employers can better plan accordingly to ensure they and
their employees remain in compliance, thereby potentially preventing
further administrative burdens.
---------------------------------------------------------------------------

\61\ The D.C. Circuit Court of Appeals rejected a challenge to
the lawfulness of Matter of Simeio Solutions in ITServ All., Inc. v.
DHS, 71 F.4th 1028 (D.C. Cir. 2023).
---------------------------------------------------------------------------

Comment: A few trade associations and a business association
recommended clarifying that a change in geographic worksite or end-
client does not constitute a ``material change'' that necessitates an
amended petition. Another trade association stated that the regulatory
definition of a ``material change'' should be limited to the matters
delegated to DHS by Congress in the INA. According to the commenter,
such delegated powers limit the definition of a ``material change'' to
the factors in section 1184(i), which do not include the term ``area of
employment.'' The trade association also indicated that DHS has a
different view of the meaning of ``area of employment'' from that of
DOL.
Response: DHS disagrees with the comment that a change in
geographic location requiring a new LCA does not constitute a
``material change.'' As noted in the NPRM and as held in Matter of
Simeio Solutions, a change in the place of employment of a beneficiary
to a geographical area requiring a corresponding LCA may affect
eligibility for H-1B status, and is therefore a material change for
purposes of 8 CFR 214.2(h)(2)(i)(E) and (h)(11)(i)(A). For example, the
geographic location of employment may impact the prevailing wage for
the occupational classification, as the new employment location may be
in a Metropolitan Statistical Area (MSA) with higher wage requirements.
Per DOL regulations at 20 CFR 655.731, an employer seeking to employ an
H-1B worker in a specialty occupation must attest on the LCA that it
will pay the H-1B worker the higher of either the prevailing wage for
the occupational classification or the actual wage paid by the employer
to similarly situated employees in the geographic area of intended
employment. H-1B petitions for a specialty occupation worker must
include a certified LCA from DOL, and failure to comply with DOL's LCA
requirements may impact eligibility for H-1B status.
DHS also disagrees with the assertion that a material change should
be limited to the factors delineated in section 214(i) of the INA, 8
U.S.C. 1184(i). The Secretary of Homeland Security's authority for
these regulatory amendments is found in various sections of the INA, 8
U.S.C. 1101 et seq., and the Homeland Security Act of 2002 (HSA),
Public Law 107-296, 116 Stat. 2135, 6 U.S.C. 101 et seq. Notably,
section 103(a) of the INA, 8 U.S.C. 1103(a), authorizes the Secretary
to administer and enforce the immigration and nationality laws and
delegates to the Secretary the authority to establish such regulations
as the Secretary deems necessary for carrying out these duties. Section
101(a)(15)(H)(i)(b) of the INA, 8 U.S.C. 1101(a)(15)(H)(i)(b),
establishes the H-1B nonimmigrant classification, section 214(a)(1) of
the INA, 8 U.S.C. 1184(a)(1), authorizes the Secretary to prescribe, by
regulation, the time and conditions of the admission of nonimmigrants,
and section 214(c) of the INA, 8 U.S.C. 1184(c), authorizes the
Secretary to prescribe how an importing employer may petition for H-1B
nonimmigrant workers and the information that an importing employer
must provide in the petition. Section 214(i) of the INA, 8 U.S.C.
1184(i), however, merely sets forth the definition and requirements of
a ``specialty occupation.'' Meeting the statutory definition and
requirements of a specialty occupation is only one component of
establishing H-1B eligibility. Limiting the definition of material
change to factors in section 1184(i) of the INA would significantly
hinder USCIS' ability to administer and enforce the INA, including
adherence to the terms of an approved H-1B petition.\62\
---------------------------------------------------------------------------

\62\ See ITServe All., Inc. v. DHS, 71 F.4th 1028, 1037 (D.C.
Cir. 2023) (``[P]olicing compliance with the terms of an LCA plainly
constitutes `administration and enforcement' of the INA, which
section 1103(a)(1) independently authorizes.'').
---------------------------------------------------------------------------

DHS further disagrees with the claim that DHS's view does not align
with DOL's definition of ``area of intended employment.'' DHS directly
cited DOL's definition of ``area of intended employment'' in the NPRM.
88 FR

[[Page 103091]]

72870, 72878 n.40 (Oct. 23, 2023). DOL regulations govern the
determination of whether a new work location is in a different area of
intended employment as that included on the LCA. DHS is not deviating
from DOL's definition or creating a new definition of this term. Under
new 8 CFR 214.2(h)(2)(i)(E)(2), USCIS will require the petitioner to
submit an amended or new H-1B petition if a new work location requires
a new LCA, as determined by DOL's definition of ``area of intended
employment.''
Comment: A few commenters recommended alternative procedures for
notifying USCIS of a change to an H-1B worker's job location. A trade
association recommended that USCIS obtain a copy of the LCA from the
Department of Labor, or in the alternative, implement a mechanism for
notification of a change of employment location similar to Form AR-11,
Alien's Change of Address Card, without requiring petitioners file a
formal amended petition. One commenter, while expressing opposition to
this provision, suggested that if USCIS will require an amended
petition in the case of a new work location requiring a new LCA, it
should only require submission of Form I-129 with limited evidentiary
requirements. This commenter further suggested there should be
presumptive and automatic approval of the location change and that
USCIS issue an RFE if questions on H-1B eligibility arise. While
discussing situations in which there is no material change in job
duties and requirements after a job location change, a joint submission
proposed that USCIS defer to the prior adjudicator's finding that the
specialty occupation requirements were satisfied, thereby presuming
continued eligibility for H-1B status. The submission proposed that, in
these scenarios, a petitioning employer would provide advance
notification to USCIS of a new work location via a ``new, simplified
online form'' and would include proof of a newly certified LCA and
certain attestations related to the employment. Upon filing of this
form with USCIS, the employee could begin working at the new location,
``consistent with H-1B portability provisions.'' Under this proposal,
USCIS would review the form to determine whether the LCA properly
corresponds with the new location, the wage requirements would be
satisfied, and the job duties remain the same, and an adjudicator could
issue a RFE or NOID if questions of continuing H-1B eligibility arise.
If the petitioner would be deemed by USCIS to have satisfied these
requirements, the beneficiary would be considered to have maintained
nonimmigrant status and continue to be employed with authorization. If
the request is denied, then USCIS would require a new Form I-129, with
fees, to be filed within the 60-day grace period.
Response: DHS declines to adopt these recommendations at this time.
DHS did not propose in the NPRM to adopt new procedures or methods of
evidence submission to notify USCIS of material changes to the
conditions of H-1B employment. As previously established and discussed
in the NPRM, a change in work location requiring a new LCA is a
material change potentially impacting H-1B eligibility, and therefore
requires petitioners file an amended or new petition, with all
evidentiary requirements, under 8 CFR 214.2(h)(2)(i)(E). Submission of
a complete petition allows USCIS adjudicators to conduct a thorough
review of the material change to ensure continued eligibility for H-1B
status.
Comment: A professional association urged DHS to make an additional
exception at 8 CFR 214.2(h)(2)(i)(E)(2), where the source of the
prevailing wage in the initial labor certification is a collective
bargaining agreement governed by the Railway Labor Act, which sets wage
rates nationwide.
Response: DHS recognizes the unique employment circumstances of
workers under collective bargaining agreements. However, DHS declines
to create an exception for positions where the source of the prevailing
wage is a collective bargaining agreement. If a change in employment
location requires a new LCA per DOL standards, then, under 8 CFR
214.2(h)(2)(i)(E), the employer will also be required to submit a new
or amended H-1B petition to USCIS.
Comment: A trade association recommended amending the regulation so
that ``a minor reduction in hours'' does not require a new filing.
Response: DHS declines to amend the regulations to allow for a
certain reduction in hours that would not rise to the level of a
material change. The NPRM did not propose to provide such an amendment.
While the commenter did not define what it considers as a ``minor
reduction,'' the regulated public should have an opportunity to comment
on any such framework.
Comment: Some commenters suggested modification to the required
timeframe for employers submitting amended petitions to reflect a new
place of employment. A trade association, noting the unpredictable
nature of job changes and the rapid response required to ensure that
qualified employees are present where needed, suggested USCIS create a
grace period for employers to file amended petitions following a
``sudden or urgent change in a beneficiary's role,'' coupled with
requiring evidence of increased pay in the interim if the material
change results in a higher required wage. A university recommended
revising the requirement that petitions must be filed before the change
takes effect while leaving in place the ``post-Simeio'' guidance on
changes in employment location, adding specific language allowing for a
grace period after a material change takes place, or allowing for
adjudicatory discretion on the level of material change involved with a
location change. They commented that requiring an amended petition be
filed before the material change takes effect contradicts 8 CFR
214.2(h)(11)(i)(A), which requires that a petitioner ``immediately
notify'' USCIS of changes in the terms and conditions of employment
which may affect eligibility for H-1B classification. They stated that
the requirement to provide immediate notification is more reasonable
than the requirement to file an amended petition before a change takes
effect.
Response: DHS declines to provide a grace period for petitioners to
file new or amended H-1B petitions reflecting material changes after
they occur. Requiring amended petitions be filed before material
changes occur is consistent with statutory and regulatory requirements
that beneficiaries maintain status by only working in accordance with
their approved petition. See, e.g., 8 CFR 214.2(h)(2)(i)(H) (describing
the requirements to qualify for H-1B portability, to include not
previously working without authorization); 8 CFR 274a.12(b)(9) (stating
that an H-1B nonimmigrant may only be employed by the employer through
whom the status was obtained, unless authorized to work based on a
pending petition based on H-1B portability). As explained in existing
USCIS policy, petitioners are already required to notify USCIS of
material changes before they occur. USCIS articulated this policy in
its policy memorandum ``USCIS Final Guidance on When to File an Amended
or New H-1B Petition After Matter of Simeio Solutions, LLC,'' which
discusses the ``USCIS position that H-1B petitioners are required to
file an amended or new petition before placing an H-1B employee at a
new place of employment not covered by an existing, approved H-1B
petition.'' \63\ Working in

[[Page 103092]]

a manner or location not previously authorized before submission of a
new or amended petition may constitute a violation of status.
---------------------------------------------------------------------------

\63\ See USCIS, Policy Memorandum, PM-602-0120 USCIS Final
Guidance on When to File an Amended or New H-1B Petition After
Matter of Simeio Solutions, LLC (July 21, 2015), available at
https://www.uscis.gov/sites/default/files/document/memos/2015-0721_Simeio_Solutions_Transition_Guidance_Memo_Format_7_21_15.pdf.
---------------------------------------------------------------------------

DHS disagrees with the comment that this requirement is
inconsistent with 8 CFR 214.2(h)(11)(i)(A), under which a petitioner
must ``immediately notify'' USCIS of changes which may affect H-1B
eligibility. Rather, new 8 CFR 214.2(h)(2)(i)(E)(2) adds needed
specificity to this requirement, which may otherwise be unclear as to
what ``immediately'' means. Further, 8 CFR 214.2(h)(11)(i)(A) is a
broader provision that applies to situations other than when an amended
or new petition must be filed, such as when the petitioner no longer
employs the beneficiary. Thus, new 8 CFR 214.2(h)(2)(i)(E)(2) adds
specificity in the narrower context of where there is a material change
requiring an amended or new petition.
Comment: A legal services provider recommended clarifying that
workers may continue to work after the filing, and they do not have to
wait for approval to take effect. The commenter recommended the
following regulatory language: ``The beneficiary may begin working
under the materially changed terms and conditions of employment upon
the filing of the amended or new petition, assuming all other
requirements and terms of eligibility are met.''
Response: DHS declines to edit the proposed regulatory text as
suggested by this commenter. However, DHS reiterates that if the
beneficiary is eligible for H-1B portability pursuant to 8 CFR
214.2(h)(2)(i)(H), the beneficiary would not need to wait for a final
decision on the amended or new petition to begin working at the new
place of employment. Such change may occur upon the filing of an
amended or new petition with USCIS. Under H-1B portability, if an
employer is filing an amended petition for the same employee and that
employee meets the definition of an ``eligible H-1B nonimmigrant''
under 8 CFR 214.2(h)(2)(i)(H)(1), then the eligible H-1B nonimmigrant
is authorized to work for that same employer in the new employment
until the petition is adjudicated. This approach aligns with and
codifies current USCIS practice, as clarified in USCIS policy
memorandum ``USCIS Final Guidance on When to File an Amended or New H-
1B Petition After Matter of Simeio Solutions, LLC.'' \64\
---------------------------------------------------------------------------

\64\ See USCIS, Policy Memorandum, PM-602-0120 USCIS Final
Guidance on When to File an Amended or New H-1B Petition After
Matter of Simeio Solutions, LLC (July, 21, 2015), available at
https://www.uscis.gov/sites/default/files/document/memos/2015-0721_Simeio_Solutions_Transition_Guidance_Memo_Format_7_21_15.pdf.
---------------------------------------------------------------------------

Comment: A university proposed that USCIS address that hybrid work
arrangements are included in the definition of peripatetic work or are
otherwise excluded from the definition of ``worksite.'' According to
the commenter, this would alleviate some privacy concerns associated
with disclosing the address and compensation in the LCA notice of
filing, assuming the remote work location is within normal commuting
distance to the employer's office. Similarly, a form letter campaign
recommended clarifying ``that a beneficiary's change of residential
address that is unrelated to any business decision of the employer is
not ``a new job location'' and would not trigger the requirement to
file an amended petition.'' An individual commenter reasoned that a
hybrid employee's personal decision to change locations is factually
different from the situation in Matter of Simeio Solutions and should
be recognized by USCIS as such.
Response: DHS acknowledges the concerns expressed by commenters
related to remote and hybrid workers. However, DHS is not deviating
from or expanding beyond DOL regulations through this rule. As noted in
the NPRM, 20 CFR 655.715 includes definitions and examples of ``place
of employment'' and ``worksite'' or ``non-worksite.'' 88 FR 72870,
72879 (Oct. 23, 2023). If an employee's home residence constitutes a
worksite under DOL definitions, employer obligations related to the LCA
apply. For example, if a beneficiary's home is their worksite as
determined under DOL regulations, and they move to a new residential
address in a different area of intended employment with higher wage
obligations, whether at the employee's choice or that of the employer,
the employer is obligated to meet those higher wage obligations. This
move would constitute a material change requiring a new LCA and
submission of an amended or new H-1B petition. DHS declines to
promulgate a provision under which a beneficiary's remote work location
is categorically excluded from the definition of a worksite,
potentially conflicting with DOL regulations.
Comment: Some commenters suggested modifications related to
proposed short-term placement provisions, under which H-1B workers may
be placed at a worksite not listed on the approved petition or
corresponding LCA for up to 30 or 60 days if certain conditions are
met, without requiring an amended H-1B petition. At proposed 8 CFR
214.2(h)(2)(i)(E)(2)(ii) and (iii), a healthcare provider urged DHS to
clarify and define the terms ``substantial'' and ``employee
development'' so organizations can ensure compliance with the rule. A
professional association and a joint submission urged DHS to allow
temporary, short-term placements for physicians beyond 30 or 60 days,
thereby allowing physicians to provide care during public health
emergencies such as natural disasters.
Response: DHS declines to adopt these suggestions. As stated in the
NPRM, new 8 CFR 214.2(h)(2)(i)(E)(2) does not codify all relevant
considerations related to when to file an amended petition, and
stakeholders should still consult DOL regulations and policy when
considering if a new LCA is required. 88 FR 72870, 72879 (Oct. 23,
2023). New 8 CFR 214.2(h)(2)(i)(E)(2) is consistent with DOL
regulations at 20 CFR 655.735, under which short-term placements of
less than 30 days, or in some cases 60 days, do not require a new LCA
or an amended or new petition, provided there are no material changes.
Regarding the request to clarify and define specific terms, DHS also
reiterates that existing DOL regulations set forth criteria and
guidance in connection with short-term placements. For example, as
noted in the NPRM, 20 CFR 655.715 defines what would constitute an
``employee developmental activity'' and what would constitute a ``place
of employment'' or ``worksite'' for purposes of requiring a new LCA. 88
FR 72870, 72879 (Oct. 23, 2023). As an additional example, 20 CFR
655.735(e) clarifies when it may be inappropriate to use the short-term
placement provisions in lieu of filing a new LCA, and also clarifies
when these provisions may offer flexibility in assignments to afford
enough time to obtain an approved LCA for an area where an employer
intends for H-1B nonimmigrants to have a continuing presence. In
proposing new 8 CFR 214.2(h)(2)(i)(E)(2), DHS did not purport to expand
or further define short-term placement requirements as they exist in
DOL regulations. Rather, this rule confirms that changes in work
locations that meet DOL definitions of short-term placement do not on
their own require

[[Page 103093]]

an amended or new H-1B petition be filed with USCIS.
4. Deference
Comment: A couple of commenters expressed opposition to the
proposal to codify USCIS' existing deference policy. An advocacy group
expressed concern that codifying deference to prior petition approvals
would allow USCIS adjudicators to ``cut corners'' and appease employers
by approving petitions faster. The group cited remarks from a 2017
USCIS Policy Memorandum, which rescinded the deference policy on the
basis that continued scrutiny of H-1B petitions was warranted, as the
burden of proof in establishing eligibility lies with the employer, not
the government. The advocacy group echoed USCIS' previous position that
deference was impractical and costly to implement, and the agency's
authority should not be constrained by prior approvals but, rather,
based on the merits of each case.
A research organization similarly voiced concern that the
codification of deference would constrain USCIS officers' fact-finding
authority. The organization said that, under the proposed regulations,
an officer would either have to assume no material error, change, or
new information, or ``merely take an applicant or petitioner's word.''
The organization wrote that this ``leap of faith'' would be unnecessary
and constitute ``a reckless abdication of authority.'' Furthermore,
while citing Matter of Church Scientology International, 19 I&N Dec.
593, 597 (Comm'r 1988), the organization said that adjudicators are not
bound to approve subsequent petitions where eligibility has not been
demonstrated, merely because of a prior, potentially erroneous,
approval. The organization also concurred with USCIS' concern expressed
in a 2017 policy memorandum \65\ that the deference policy would shift
the burden of proof for establishing eligibility from the petitioner to
the government. Therefore, the organization urged DHS to rescind the
NPRM's proposed deference codification and the corresponding 2021 USCIS
Policy Manual update and require USCIS officers to confirm all material
facts before granting any request filed on Form I-129. The organization
reasoned that such an approach would serve as a fraud detection
mechanism and deterrent, and officers should not be constrained in
requesting additional evidence in the adjudication process, consistent
with existing USCIS policy.
---------------------------------------------------------------------------

\65\ See USCIS, ``Rescission of Guidance Regarding Deference to
Prior Determinations of Eligibility in the Adjudication of Petitions
for Extension of Nonimmigrant Status,'' PM-602-0151 (Oct. 23, 2017).
---------------------------------------------------------------------------

Response: DHS disagrees with these commenters. Deference to prior
approvals involving the same parties and the same underlying facts does
not equate to a lack of USCIS review of the petition. Petitioners
continue to have the burden to present all required and relevant
evidence to USCIS and to establish eligibility for the requested
classification. DHS, however, agrees with the commenters that officers
are not bound to approve subsequent petitions or applications seeking
immigration benefits where eligibility has not been demonstrated
strictly because of a prior approval, and USCIS decides each matter
according to the evidence of record on a case-by-case basis.\66\ USCIS
will give close consideration before deviating from a prior approval
involving the same parties and the same underlying facts. In exercising
deference, adjudicators will not defer to prior approvals if: there was
a material error involved with the prior approval; there has been a
material change in circumstances or eligibility requirements; or there
is new, material information that adversely impacts the petitioner's,
applicant's, or beneficiary's eligibility. See new 8 CFR 214.1(c)(5).
If USCIS discovers that the petitioner or beneficiary engaged in fraud
or willful misrepresentation of a material fact, the petition would not
receive deference as that is new material information that adversely
impacts the petitioner's, applicant's, or beneficiary's eligibility.
---------------------------------------------------------------------------

\66\ Matter of Church Scientology Int'l, 19 I&N Dec. 593, 597
(Comm'r 1988).
---------------------------------------------------------------------------

DHS further disagrees that the deference policy is costly and
impractical. Since the rescission of the deference policy in 2017,
which some commenters suggested DHS reinstate, technological
advancements--such as electronic filing and enhancements to the USCIS
Electronic Immigration System (ELIS)--have improved ease of access to
case records such that the pulling and reviewing of prior petitions is
not an added burden in exercising deference. Additionally, commenters
should note that through this rule, DHS is removing the sentence:
``Supporting evidence is not required unless requested by the
director'' from 8 CFR 214.2(h)(14) and from 8 CFR 214.2(o)(11) and
(p)(13). Petitioners have the burden to present required evidence with
each filing, even with deference in place. As such, DHS does not agree
that deference is a costly and impractical policy.
Comment: Numerous commenters expressed support for DHS's
codification and clarification of its existing deference policy on
prior determinations. A couple of commenters stated general approval of
the codification of USCIS' deference policy. Other commenters supported
deference to a prior decision when the underlying facts of a filing are
unchanged and regarded this as a ``smart,'' ``sensible,'' and ``common-
sense'' approach.
Many commenters regarded the codification of the deference policy
as a positive development for upholding predictability, reliable and
fair outcomes, consistent adjudications, and efficiency. For example, a
joint submission concurred with DHS's statement that deference has
``helped promote consistency and efficiency for both USCIS and its
stakeholders,'' while an advocacy group said that deference reduces the
Department's workload and ensures consistent and fair adjudications. A
few companies welcomed the codification of USCIS' deference policy,
reasoning that it would bring stability and ``peace of mind'' to
employers and employees. One of the companies added that deference
promotes consistency and efficiency for both the agency and
petitioners, while another company reasoned that ``predictability of
outcomes is a fundamental aspect of the rule of law.'' Another company
supported the codification on the basis that this measure, in concert
with other proposed provisions, would improve the availability of H-1B
visas, support innovative companies, provide greater certainty, and
reduce burdens in the visa process.
A joint submission added that the proposed language would add
clarity regarding the application of deference for petitioners, legal
services providers, and adjudicators, which may be relied upon for
personal and business planning purposes. A trade association
additionally reasoned that codifying the deference policy would provide
certainty to employers and reduce the need for extensive RFEs.
Moreover, in addition to providing predictability and ameliorating
inconsistencies in adjudications, a form letter campaign said that the
codification of deference would close the officer training gap that
further exacerbates disparities between decisions. Echoing the above
remarks, a company regarded the proposed codification of the existing
deference policy as a ``key lever of efficiency'' as USCIS focuses on
sustaining operational effectiveness, achieving reasonable processing
times, and upholding the

[[Page 103094]]

integrity of U.S. immigration programs amid resource constraints. The
company reasoned that USCIS should not expend adjudicatory resources to
conduct a full de novo review of the same underlying facts and
circumstances for eligibility. Furthermore, the company agreed that the
application of deference would allow for predictable, consistent, and
faster determinations ``without compromising the level of scrutiny
needed for substantive assessment.''
A few commenters remarked on the benefits of USCIS' proposed
deference codification for specific employment sectors. For example, an
association remarked that the policy would reduce the administrative
burden for higher education institutions in the USCIS filing process. A
trade association remarked that the clarification around deference
would streamline processing, reduce backlog stress, and improve the
``well-being of the scientific workforce.''
Many commenters acknowledged that the proposed rule would codify
longstanding USCIS policy, which was reinstated in 2021 through USCIS
Policy Manual guidance. For example, a form letter campaign supported
the codification, reasoning that the deference policy has essentially
been ``in effect since 2004.'' An advocacy group said that the 2021
Policy Manual guidance, which instructed USCIS officers to defer to
prior determinations when adjudicating extension requests unless there
was a material error, change, or new circumstance, reversed 2017 policy
rescinding deference and resulted in more work and extension denials
for experienced technology employees. Citing a 2020 AILA Policy Brief,
another advocacy group said that the 2017 rescission of the deference
policy illustrated the benefits of this policy, as the rescission led
to increased delays and backlogs, administrative burdens for employers,
and no clear improvement to the integrity or efficiency of the H-1B
program. A couple of trade associations and a business association
similarly commended DHS for codifying the deference policy given the
negative outcomes associated with its absence in the past, including
``significant business disruptions'' to companies and impacts to
companies, employees, and families following the 2017 rescission. The
business association cited these challenges as justification for
bolstering the longstanding deference policy through regulation. An
association wrote that the codification of deference aligns with the
agency's policy before its rescission in 2017. The association cited
its comments on a 2021 Notice (86 FR 20398, Apr. 19, 2021) in which it
commended USCIS for reinstating the longstanding policy of deferring to
prior approvals when no error or material change in fact has occurred.
In light of the above, commenters encouraged DHS to proceed with
formalizing or codifying the existing deference policy in regulations.
Response: DHS agrees that codification of the deference policy will
help ensure consistent and efficient adjudications and provide greater
predictability to the visa petition process without, as noted by one
commenter, compromising the level of scrutiny needed for substantive
assessment. This provision may also reduce the need for RFEs, saving
time for both USCIS and stakeholders. DHS recognizes that certain
commenters find this provision beneficial for their specific employment
sectors. New 8 CFR 214.1(c)(5) brings agency regulations in line with
longstanding deference policy, as implemented in a 2004 memorandum,
rescinded in 2017, and reinstated in 2021 in the USCIS Policy Manual.
DHS agrees with the noted benefits of codifying this longstanding
policy.
Comment: A few commenters, including a form letter campaign,
expressly supported the change in regulatory language that would allow
deference for any Form I-129 petition--not just extension requests. The
campaign said that the acknowledgment that a petition may be filed with
the same parties and underlying facts, other than for the purpose of an
extension, would benefit everyone. A company endorsed the broadened
scope of deference to include all requests filed on Form I-129 as an
``appreciated acknowledgment that these efficiencies can also exist in
other types of Form I-129 filings involving the same parties and
underlying facts.'' A joint submission, citing statements from the
current USCIS Policy Manual, agreed that this change would ensure that
the deference policy would not be misread as limiting deference to
extensions and excluding other types of requests involving the same
parties and material facts. To provide additional clarity on this
point, the joint commenters encouraged DHS to replace the current title
of 8 CFR 214.1(c) with ``Extensions of Stay and Other Requests Filed on
Form I-129.''
Response: DHS agrees with the benefits of new 8 CFR 214.1(c)(5)
applying to all nonimmigrants using Form I-129 involving the same
parties and the same underlying facts, not just to those seeking an
extension of stay. Those seeking a change of status, amendment or
extension of stay, or consular notification of approval warrant the
same deference unless there is a material error involved with a prior
approval, material change in circumstances or eligibility requirements,
or new, material information adversely impacting the petitioner's,
applicant's, or beneficiary's eligibility. DHS would also note that
nothing in this provision modifies general eligibility requirements for
a change or extension of status. Extending deference to any request
filed on Form I-129 involving the same parties and underlying facts
broadly enhances efficiency and consistency.
DHS declines to replace the title of current 8 CFR 214.1(c) with
``Extensions of Stay and Other Requests Filed on Form I-129.'' DHS
acknowledges that the current title of 8 CFR 214.1(c) (``Extensions of
stay'') may initially create confusion as to the applicability of the
deference provisions to I-129s other than those requesting an extension
of stay. However, DHS would also note that the commenter's proposed
title revision may also create confusion, as current 8 CFR 214.1(c)
does not exclusively pertain to requests filed on Form I-129. For
instance, 8 CFR 214.1(c)(2) pertains to extensions filed on Form I-539,
and 8 CFR 214.1(c)(3) lists classifications ineligible for extension of
stay. DHS believes this provision is most appropriately placed under 8
CFR 214.1(c) as proposed.
Comment: A professional association said it understood, as part of
DHS's proposed codification, that deference would not apply in cases of
past USCIS eligibility determinations involving the same employer and
position but a different beneficiary. The association concurred that
deference would not be appropriate in such contexts.
Response: DHS agrees that deference should not be afforded to
determinations involving the same employer and position but a different
beneficiary.
Comment: Several commenters raised concerns with the proposed
regulatory language limiting deference when there has been a material
change in eligibility requirements and the potential impact on future
adjudications. For example, a couple of companies said it is unclear
whether the term ``eligibility requirements'' refers to the employer's
role requirements or the substantive requirements for H-1B eligibility,
with one company stating that the latter interpretation could allow the
Department to change the rules ``midgame'' and deny future extensions
to individuals already on H-1B status. The companies, therefore, urged
DHS to amend the regulatory text to state

[[Page 103095]]

clearly that the change in eligibility requirements refers to an
employer's requirement for the role, not other regulatory or
administrative changes. Similarly, a university expressed concern that
USCIS would not grant deference to long-time H-1B holders where there
is a change in eligibility (e.g., due to the degree requirement), even
when the position and position requirements remain unchanged. The
university, therefore, suggested that DHS remove the change in
eligibility from the proposed deference regulation, or, alternatively,
create an allowance for current H-1B holders, particularly if they are
beneficiaries of an employment-based immigrant visa petition. While
also expressing concerns about the potential impacts of the new
requirements on those with approved H-1B visas, an association
suggested that DHS remove the phrase ``or eligibility requirements''
from the proposed deference provision.
Similarly, a joint submission expressed concern with the inclusion
of the term ``material change in circumstances or eligibility
requirements'' in the description of factors that would lead to a
decision to decline to give deference to a prior adjudication. See
proposed 8 CFR 214.1(c)(5). The commenters wrote that many H-1B
beneficiaries and their accompanying family members have been waiting
for an immigrant visa to become available for ``well over a decade,''
and these individuals justifiably rely on the ability to obtain future
extensions of stay as long as the facts and circumstances of employment
remain the same. Specifically, the joint commenters cautioned that the
proposed changes to ``specialty occupation'' would jeopardize future
extensions of stay for those who are ``established and respected
members of their professional and local communities.'' Moreover, the
commenters said it would be ``intrinsically inequitable'' to subject
individuals who have acted in good faith to maintain legal status to
unpredictable policy interpretations of changing administrations.
Accordingly, the commenters urged DHS to amend the proposed description
of the factors that would preclude an exercise of deference by removing
the reference to ``changing eligibility requirements.''
Response: DHS declines to remove the reference to ``eligibility
requirements'' from new 8 CFR 214.1(c)(5). Under 8 CFR 103.2(b)(1), an
applicant or petitioner must establish eligibility for the requested
benefit at the time of filing the benefit request. It is unclear how
USCIS adjudicators could determine eligibility for the requested
benefit if they defer to prior determinations made under different
eligibility requirements. It is important to note that inclusion of
``eligibility requirements'' in this provision does not mean that a
beneficiary previously found eligible will necessarily be found
ineligible in future filings. Rather, as implemented at new 8 CFR
214.1(c)(5), when there has been a material change in eligibility
requirements USCIS adjudicators ``need not give deference'' and will
fully review the facts and regulations in place at the time of filing.
With respect to the specific concern over provisions related to the
specialty occupation determination, DHS reiterates that revisions to
the regulatory language codify and better reflect adjudication
practices. A position that was previously correctly determined to meet
the definition of a specialty occupation should continue to do so and a
beneficiary that was previously correctly determined to be qualified
for such occupation should remain so qualified.
Comment: Many other commenters expressed particular concern with
the intersection of the deference codification and the proposed changes
to the definition and criteria of ``specialty occupation.'' One such
commenter said that attorneys had observed a limitation in the
deference policy: that deference is ``irrelevant'' unless a
professional first qualifies under the revised specialty occupation
standards. A university similarly wrote that the changes to the
definition of specialty occupation constitute material changes that
would eliminate USCIS' deference to a prior petition, thereby
eliminating predictability and forcing employers to demonstrate anew
that the position qualifies as a specialty occupation. A business
association also highlighted the ``tension'' between the two
provisions, stating that USCIS cannot defer to a prior decision if a
job no longer qualifies as a specialty occupation. As such, the
association warned that the deference policy would not promote
certainty and efficiency for those who have been ``caught up'' in the
immigration process and who rely on long-standing definitions; rather,
it would lead to ``substantial business disruptions,'' harming its
member companies, employees, and their family members.
A professional association said that in cases where a specialty
occupation eligibility determination has already been made, the
fairness and reliance interests would be particularly acute in the
airline pilot industry, which involves extensive training and requires
extended time horizons for planning, scheduling, and service decisions.
In this context, the association continued, reversing prior eligibility
determinations could disrupt the airline industry, causing harm to
pilot visa holders, their families, employers, crewmembers, and U.S.
airline consumers. The association additionally noted that the same
fairness and reliance interest would be implicated where DOS made the
prior eligibility determination, rather than by USCIS itself.
A trade association supported the intent to codify USCIS' existing
deference policy but said that, given the scope of changes contained in
the proposed rule, it would be necessary for USCIS to outline how it
would address changes in requirements during the intervening period
between an initial H-1B approval and the time for when a new Form I-129
is filed.
Echoing the above concerns, many commenters encouraged DHS to
proceed with codifying the deference policy while requesting
clarification that any modifications to program requirements and
standards would only apply to initial petitions filed after the rule's
effective date. A joint submission urged DHS to adopt this approach to
ensure that the codification of USCIS' deference policy fulfills the
proposed rule's goal of creating ``predictability for petitioners and
beneficiaries and . . .fairer and more reliable outcomes.'' The
commenters added that if the agency were to apply the changes for
requirements or standards to individuals already in the immigration
process, it would increase burdens and lead to unpredictable outcomes,
harming employees, their families, and employers. A trade association
cautioned that, as proposed, the provision would not protect employees
already in the immigration process. The association urged DHS to
clarify that changes to H-1B eligibility requirements would not apply
to nonimmigrants who are in the immigrant visa backlog, reasoning that
such individuals have relied on the current requirements for many
years, and applying new standards could result in their loss of status
or removal from the United States. The association thus encouraged DHS
to protect employees and their families by ensuring that the new
eligibility requirements would only apply to beneficiaries of initial
petitions filed after the rule's effective date--not current H-1B
beneficiaries who are already in the process. Another association,
echoing these comments, reasoned that this clarification would

[[Page 103096]]

ensure fair and consistent adjudications. The association added that
changing the requirements for individuals who have already been granted
H-1B status before the final rule takes effect would harm its member
companies' employees and their families while creating an ``extremely
unpredictable adjudication environment.''
In line with the above recommendations, a business association
proposed--outside of abandoning the specialty occupation changes--that
DHS clarify that any deference policy would not apply new eligibility
criteria to beneficiaries and families residing and working in the
United States prior to the promulgation of the new standards. Instead,
the association wrote, the new H-1B eligibility criteria should only
apply to those whose initial petition was filed after the rule's
finalization, and USCIS should delay the implementation of the
requirements by at least 6 months to provide stakeholders with
sufficient time to adapt and adjust their business practices
accordingly. A professional association, expressing support for
deference, additionally urged DHS to limit deference to petitions
involving new employment and not use the policy to revoke or reconsider
the eligibility of existing H-1B, E-3, or H-1B1 pilot visa holders or
deny petitions for pilot visa holders to continue their current
employment, make changes to their employment with their current
employer, obtain concurrent employment, or change employers.
Several commenters proposed that DHS extend deference to the
initial petitions of current H-1B holders. For example, a trade
association suggested that DHS clarify that deference would be applied
``liberally'' to avoid re-adjudication under changed requirements
during routine H-1B extensions or renewals. The association reasoned
that H-1B beneficiaries often have resided in the United States for
many years as they await the finalization of the immigrant visa
process, and denying extensions based on new requirements would cause
significant harm to visa holders, their employers, ongoing company
projects, and the U.S. economy. The association added that changing
program requirements without a correspondingly strong deference policy
could harm families who have spent decades establishing their lives in
the United States. A company similarly expressed concern about ensuring
the opportunity to leverage deference for long-term H-1B visa holders
due to the immigrant visa backlogs. The company said that these
employees, who may have earned their bachelor's degrees long before the
existence of today's specialized degree fields, have a strong case for
deference given the number of times USCIS has reviewed their
circumstances in prior petitions under the same employer. Thus, the
company concluded that longstanding H-1B holders should not be given
less certainty than others about the ability to maintain their status
while awaiting an immigrant visa, and urged DHS to clarify that
deference can and should apply in such circumstances. Another company
similarly encouraged DHS to extend deference to H-1B holders who could
otherwise be impacted by other proposed changes, such as the revisions
to the definition of ``specialty occupation.'' A trade association
likewise proposed that DHS specify in the final rule that deference
would be based on the same standards and language contained in the
original H-1B approval.
In line with the above remarks, an advocacy group urged the
Department to ``grandfather in'' petitions that were approved before
the finalization of key changes, such as the proposed definition of
``specialty occupation.'' In the absence of such a policy, the advocacy
group warned that previously approved petitions could be subject to
full adjudication, undermining the improved efficiencies promised by
the deference provision. The advocacy group additionally expressed
concern that holding petitions subject to a stricter standard than when
they were approved would lead to denials, resulting in those with
longstanding H-1B status being forced to leave their jobs and the
United States. In light of these concerns, the commenter encouraged DHS
to clarify that deference can apply to filings that were approved
before the definition changes.
Response: DHS acknowledges the concerns expressed by various
commenters pertaining to the deference policy and its intersection with
H-1B eligibility requirements, including the revised definition of and
criteria for ``specialty occupation'' promulgated in this rule.
However, DHS reiterates that an applicant or petitioner must establish
eligibility for the requested benefit at the time of filing the benefit
request. DHS also reiterates that the deference provision codified in
this rule applies to all requests on Form I-129 involving the same
parties and underlying facts, not only to H-1B petitions. It is unclear
how USCIS could create an exception to this requirement when
adjudicating H-1B petitions, nor did DHS propose to do so in the NPRM.
It is conceivable that future regulatory changes impacting other
nonimmigrant visa classifications may occur which require petitioners
to reestablish eligibility for the classification upon renewal. It
seems that what commenters are requesting, with respect to deferring to
eligibility determinations under previous regulatory requirements
rather than those in place at the time of filing, goes beyond the scope
of this rule and has much larger implications for all petitions and
applications filed with USCIS.
DHS also reiterates that the specialty occupation provisions of
this rule codify current USCIS policy. Because regulatory changes to
the definition and criteria for specialty occupations are codifying
current USCIS adjudication practices, a position that was previously
correctly determined to meet the definition of a specialty occupation
should continue to do so and a beneficiary that was previously
correctly determined to be qualified for such occupation should remain
so qualified.
Comment: Several commenters suggested changes to the language
related to material error and general circumstances where deference
would not apply. For example, a trade association and a joint
submission welcomed the codification of deference but requested that
DHS modify the ``material error'' standard to specify ``pure errors of
law.'' While stating the need for ``more strength and clarity'' in the
regulations, the association reasoned that the ``material error''
standard is too broad and could create confusion for adjudicators.
Response: DHS declines to revise the first enumerated exception to
the deference policy at new 8 CFR 214.1(c)(5) from ``material error''
to ``pure errors of law.'' This proposed exception would too greatly
narrow the level of discretion needed by USCIS adjudicators, such that
consideration of material errors of fact, which may significantly
impact eligibility for the requested classification or action, would be
precluded.
Comment: A trade association urged DHS to explicitly state in the
regulation that deference to prior adjudications applies to petitions
involving changes in client locations, provided there are no other
substantive changes in the role. Providing examples, the association
said that when there is a change in client location, there often is no
significant change in the worker's job duties. The association
concluded that deference to prior adjudications where the role itself
has not materially changed, would streamline the process and reflect
the realities of modern consulting and technology roles.

[[Page 103097]]

Response: DHS declines to explicitly state in the regulation that
deference to prior adjudications applies to petitions involving changes
in client locations when there are no other substantive changes in the
role. If a change in client location requires a new LCA, as determined
by DOL regulations, the new location would constitute a material
change. As such, DHS declines to codify in the regulations a blanket
application of the deference policy for changes in client locations.
Comment: While endorsing the proposed codification, a company
suggested that DHS clarify the circumstances where deference would not
apply. In particular, to safeguard the intent behind the proposed
codification and encourage the accurate application of the policy, the
company requested that DHS clarify what constitutes ``a material error
involved with a prior approval;'' ``a material change in circumstances
or eligibility requirements;'' and ``material information that
adversely impacts the petitioner's, applicant's, or beneficiary's
eligibility.'' The company additionally proposed that USCIS provide
examples for adjudicators and petitioners, and if such circumstances
are already defined in other regulations, these should be included in
the rule as a point of reference. A form letter campaign also suggested
further clarification around what would constitute a material change
(e.g., a change in SOC code, a change in worksite address within the
same Metropolitan Statistical Area (MSA), or a more than 50-percent
difference in job duties).
Response: DHS declines to identify specific scenarios that would
definitively fall under the enumerated exceptions to the deference
policy, as USCIS decides each matter according to the evidence of
record on a case-by-case basis. DHS notes generally that the exceptions
to deference due to material error, material change in circumstances or
eligibility requirements, or new material information, are intended to
account for legal and factual errors, changes, or new information that
impacts eligibility for the requested benefit or classification. A fact
is material if it would have a natural tendency to influence or is
predictably capable of affecting the decision.\67\
---------------------------------------------------------------------------

\67\ See Kungys v. United States, 485 U.S. 759, 770-72 (1988).
---------------------------------------------------------------------------

An example of a material error of fact may include an incorrect
determination that a beneficiary had earned the required licensure for
their occupation. A material error of law involves the misapplication
of an objective statutory or regulatory requirement to the facts at
hand. As held in Matter of Simeio Solutions, LLC, a change in
geographic area of employment that would require a new LCA is
considered a material change. For example, a change in location may
impact eligibility if the new location is in an MSA with a higher wage.
DHS declines to identify a specific percentage of job duties that must
remain the same for deference to apply, such as 50 percent as suggested
by commenter. There could be scenarios where only one job duty changes,
but that job duty is the core function of the position and would
constitute a material change. Because the possibilities and types of
duties for each occupation are numerous, each case will be decided on
its merits and on the evidence provided. A material change in
eligibility requirements may include a change in statute or regulation
that implements new requirements to qualify for the requested
classification. New material information that adversely impacts the
petitioner's, applicant's, or beneficiary's eligibility includes
information not previously available that would impact eligibility. An
example may include information that the beneficiary's license, which
is required to perform the job, has been revoked by the licensing
authority. New material information impacting eligibility also includes
information that affects national security or public safety garnered
from security checks conducted on beneficiaries and petitioners.
Likewise, USCIS officers do not defer to a prior approval when there
are indicators of potential fraud or willful misrepresentation of a
material fact as that is new material information that adversely
impacts eligibility.\68\
---------------------------------------------------------------------------

\68\ See USCIS Policy Manual, Volume 2, ``Nonimmigrants,'' Part
A, ``Nonimmigrant Policies and Procedures,'' Chapter 4, ``Extension
of Stay, Change of Status, and Extension of Petition Validity,''
https://www.uscis.gov/policy-manual/volume-2-part-a-chapter-4.
---------------------------------------------------------------------------

Comment: A form letter campaign, expressing support for the
deference policy, said that the proposed regulations fail to define
what is considered the ``same parties,'' citing, for example a company
going through a corporate restructuring and renaming but having the
same FEIN, or a merger in which the company is acquired under a new
FEIN.
Response: The term ``same parties'' in this context refers to the
same petitioner and the same beneficiary. DHS declines to identify
changes to the petitioning employer which definitively impact the
``same parties'' determination. However, DHS notes that a mere name
change of the petitioner generally would not result in the petitioner
being considered a different party. Similarly, where an amended
petition is not required under INA sec. 214(c)(10), 8 U.S.C.
1184(c)(10), the parties would generally be considered the same for
purposes of deference. Conversely, if a petitioner is acquired under a
new FEIN in a corporate restructuring and the terms and conditions of
employment have changed, the petitioner would not generally be
considered the same party for purposes of deference.
Comment: A form letter campaign requested further guidance on what
an adjudicating officer must prove if they decide not to defer to prior
determinations.
Response: DHS is codifying current USCIS deference policy, which
requires the officer who determines that deference is not appropriate
to acknowledge the previous approval(s) in the RFE, NOID, or denial.
The officer must articulate the reason for not deferring to the
previous determination (e.g., due to a material error, material change
in circumstances, or new adverse material information). Officers will
generally provide the petitioner an opportunity to respond to the new
information. See 8 CFR 103.2(b)(16)(i).
Comment: While expressing support for the proposed codification of
the current deference policy, a few commenters encouraged DHS to extend
the provision to include deference to H-1B cap exemption
determinations.
A professional association remarked that the proposed codification
of the deference policy would be helpful but is insufficient to address
deference to prior cap exemption determinations. The association
reported situations where practitioners received different outcomes on
petitions requesting cap exemption filed by the same employer with
identical evidence to the same USCIS Service Center. Thus, to increase
efficiency and predictability, the association suggested that DHS also
apply deference to cap exemption determinations and suggested some
modifications to proposed 8 CFR 214.1(c)(5).
To provide additional certainty to employers on cap exemption
determinations, the association suggested that DHS adopt other
measures, such as annotated approval notices, a lookback policy for
establishing the validity of previous cap-exemption determinations, and
requirements for petitioners to update USCIS with current evidence
confirming their eligibility for cap exemption.
The association added that USCIS could foster greater
predictability and

[[Page 103098]]

transparency by publishing a list of cap-exempt employers, to be
updated periodically, which the commenter said would aid employers in
planning and would assist H-1B workers who may not always be aware of
whether they have been counted against the cap when contemplating a
move to a different employer. The commenter proposed adding regulatory
text in line with these suggestions.
An association of local government agencies similarly conveyed
concerns from its members about ``inconsistent and perplexing''
decisions on cap exemption and proposed that once USCIS determines that
an organization is exempt from the cap, it should defer to that
determination ``for a reasonable period of time.'' The association
suggested that USCIS define the duration of that reasonable period and
annotate Forms I-797A and I-797B approval notices to confirm the grant
of a cap exemption. The association reasoned that the current approach
leads to ``unpredictable'' and ``unfair'' results when separate
petitions containing identical information result in different
determinations. The association further stated that the current
adjudication process is inefficient and costly both for USCIS and
nonprofit employers, as the process involves the review of extensive
evidence by multiple officers, inconsistent decisions, RFEs, and NOIDs.
The association added that deference to prior cap exemption
determinations would align with the proposed rule's replacement of
deference in the case of ``an extension of petition validity'' with
deference to a prior ``request filed on Form I-129.''
In line with other commenters, a local government agency expressed
concern about inconsistent decisions on cap exemption by USCIS and
administrative burdens associated with RFEs and NOIDs. The agency
recommended, in giving H-1B program stakeholders more predictability,
that the Department state in the final rule that cap exemptions are
within the ambit of the deference policy that the NPRM proposes to
codify.
An advocacy group, expressing support for the deference
codification, suggested that DHS implement a blanket cap-exemption
approval system for nonprofit research organizations. The group
reasoned that providing a blanket approval of an organization's status
as a nonprofit research organization for 1 or 2 years would streamline
the application process for individual visas while preserving
adjudicatory resources.
Response: DHS recognizes these commenters' concerns and the need
for consistent and predictable determinations of cap-exempt status.
However, DHS declines to expand the deference provision to include cap
exemption determinations on petitions not involving the same parties
and the same underlying facts. DHS did not propose through the NPRM to
defer to prior cap-exempt determinations as a standard adjudicative
practice. DHS further did not propose to establish a new, separate
blanket approval process for the status of nonprofit research
organizations or otherwise implement new operating procedures relating
to cap exemption determinations. New 8 CFR 214.1(c)(5) codifies USCIS
deference policy with respect to I-129 petitions involving the same
parties and the same underlying facts. This approach strikes an
appropriate balance to ensure fact specific adjudication. Furthermore,
through this rule DHS is revising H-1B cap exemption provisions to
provide additional flexibility to petitioners. These revisions may
allay many of these commenters' concerns by leading to greater
consistency and clarity and potentially reducing the issuance of RFEs
and NOIDs involving cap-exempt status.
DHS disagrees with the commenters' statements that extension of the
deference policy to any new request filed on Form I-129, not just
limited to those requesting an extension of stay, suggests that
deference may be extended to a petitioner's cap exemption eligibility
even with different beneficiaries. New 8 CFR 214.1(c)(5) explicitly
states that the same parties and same underlying facts must be involved
for deference to apply.
Comment: A trade association and business association requested
that DHS clarify the application of the deference policy in scenarios
involving more than one adjudicating agency, such as the blanket L-1
visa process. The commenters suggested that additional clarity in this
area would reduce burdens on employers and their employees while
improving efficacy in the adjudicatory process.
Response: DHS reiterates that, under current policy, USCIS officers
consider, but do not defer to, previous eligibility determinations on
petitions or applications made by U.S. Customs and Border Protection
(CBP) or DOS. Officers make determinations on the petition filed with
USCIS and corresponding evidence on record. This rule codifies and does
not change this existing policy.
Comment: A legal services provider agreed with the codification of
the existing deference policy and requested that DHS extend deference
to portions of a petition that have not changed, such as in cases where
a petitioner obtains L-1B approval based on specialized knowledge and
subsequently files a petition to change to L-1A status with the same
company to assume a management position. The commenter acknowledged
that the material change with the U.S. position prevents USCIS from
deferring to the entire prior approval but suggested that USCIS should
give deference to the previous determination that the beneficiary's
employment abroad met the requirements for L-1 status.
Response: DHS declines to codify deference to portions of
petitions. The NPRM proposed to codify existing USCIS deference policy,
which requires the same parties and the same underlying facts. DHS
believes this approach improves efficiency and consistency while
ensuring that officers conduct necessary fact specific determinations
in adjudications.
5. Evidence of Maintenance of Status
Comment: A couple of commenters expressed general support for the
proposed provisions related to the evidence of maintenance of status. A
commenter stated that requiring such evidence streamlines the process
and ensures compliance. A trade association expressed appreciation for
DHS's clarification of policies related to maintenance of H-1B status.
Response: DHS agrees that new 8 CFR 214.1(c)(6) will streamline and
clarify the process and help ensure compliance.
Comment: Several commenters expressed general opposition to the
proposed evidence of maintenance of status provision. A commenter
expressed dissatisfaction with the proposal, adding that prior
companies are unlikely to provide the forms USCIS is requesting, such
as tax returns. Another commenter remarked that the proposed provision
adds complexity to the process, potentially resulting in delays and
increased compliance costs. A commenter called the proposal a
``dramatic change'' in the way nonimmigrant applications can be
appealed in the event of a denial, adding that it is beyond the
statutory authority granted by Congress and should be withdrawn. An
advocacy group called the proposed provision ``troubling,'' stating it
appears USCIS is seeking to punish employees whose employers have not
paid full wages, which in turn undermines the ability of the Department
of Labor to compel wage payment. A trade association objected to the
proposal, stating the new requirement creates a situation where the
approval of a petition may be

[[Page 103099]]

contingent on the beneficiary's ability to produce evidence that may be
unavailable at the time of filing.
Response: New 8 CFR 214.1(c)(6) provides a non-exhaustive list of
documents which may be submitted as evidence of maintenance of status.
Petitioners are not required to submit every item listed and may submit
alternate documentation not listed. DHS disagrees that this provision
adds complexity, delay, or increased compliance costs. Rather, DHS
expects that explicitly requiring evidence of maintenance of status at
the time of petition filing will likely mitigate delay, by reducing the
need to request additional evidence through RFEs or NOIDs. Based on
USCIS experience, documents that evidence maintenance of status are
often readily available in the normal course of business and are
regularly and voluntarily submitted with extension petitions. DHS
disagrees that this is a dramatic change in how denials can be
appealed, noting that the language in this provision already exists. As
noted in the preamble of the NPRM, new 8 CFR 214.1(c)(7) contains the
same language as current 8 CFR 214.1(c)(5) except with added references
to an ``amendment'' of stay and other non-substantive edits. 88 FR
72870, 72882 (Oct. 23, 2023). DHS rejects the claim that USCIS is
seeking to punish employees whose employers have not paid full wages.
This rule does not preclude employees from filing a wage-related
complaint with DOL (or another governmental entity). By including a
non-exhaustive list at new 8 CFR 214.1(c)(6), petitioners are given
flexibility in the types of documentation which may be submitted to
evidence maintenance of status. DHS also recognizes that there may be
scenarios where evidence of maintenance of status is not available at
the time of petition filing. This rule clarifies at new 8 CFR
214.1(c)(4) that USCIS may, in its discretion, excuse the late filing
of an extension or amendment of stay request in certain circumstances.
Comment: Multiple commenters provided mixed feedback on the
proposed provision. A company expressed general support for the
proposal, elaborating that it would provide helpful clarity to
evidentiary requirements, assist adjudicators in conducting efficient
reviews, and would likely decrease the instance of RFEs or NOIDs.
Additionally, the company expressed support for the modernization of
regulatory language and the proposed amendment to 8 CFR 214.2(h)(14) to
remove the sentence ``[s]upporting evidence is not required unless
requested by the Director.'' The company also suggested a modification,
stating that petitioners that fail to provide sufficient evidence of
maintenance of status with the initial filing should be afforded an
opportunity for correction through a RFE, rather than resulting in
immediate denial of the petition.
While expressing agreement with the intent of the regulations to
minimize the need for RFEs or NOIDs, an attorney remarked that the list
of acceptable documents may embolden officers to expect and request
more than what is typically required for approval. The attorney
recommended using ``or'' instead of ``and'' in the final regulations. A
law firm expressed that specification of the types of maintenance of
status evidence that should be initially included with extension and
amended petitions should advance the goal of reducing the issuance of
RFEs and NOIDs. Additionally, the law firm provided a suggestion to
specify that a change in an H-1B worker's remote work location is not a
material change. A trade association commended DHS for proposing to
codify evidentiary requirements, stating it provides certainty for
employers and may result in a speedier adjudication process. However,
the association suggested that DHS remove contracts and work orders in
its list of evidence adjudicators may request, reasoning it would be
unnecessarily onerous and subject to abuse.
Response: DHS agrees that this provision will provide clarity on
evidentiary requirements, assist with efficient review, and likely
decrease the need for RFEs and NOIDs. This rule does not implement a
requirement under which failure to provide sufficient evidence of
maintenance of status with the initial filing will result in immediate
denial. The requirement at new 8 CFR 214.1(c)(6) to provide evidence of
maintenance of status with Form I-129 requesting extension or amendment
of stay will not change USCIS policy that generally provides for
issuance of an RFE, or for notice and an opportunity to respond, prior
to the denial of a petition. Furthermore, the list of documents
included at new 8 CFR 214.1(c)(6) provides examples of individual
documents which may be provided, either on their own or in conjunction
with other documents, to meet this requirement. DHS does not believe
amending this proposed provision to read ``or'' instead of ``and'' is
necessary, nor is removing specific document types from this list
necessary. DHS would also note that this provision does not define what
constitutes a material change to a beneficiary's employment. Rather, as
clarified in the NPRM, providing evidence of maintenance of status will
assist USCIS in determining whether the beneficiary was being employed
consistent with the prior petition approval or whether there might have
been material changes in the beneficiary's employment. 88 FR 72870,
72881 (Oct. 23, 2023).
Comment: A few commenters expressed concern that the proposal is
ambiguous and potentially unduly burdensome. Despite the NPRM requiring
proof that status had been maintained ``before the extension of stay
request was filed,'' the commenters said that the NPRM does not provide
a specific temporal reference for this evidence. The commenters added
the NPRM implies that evidence covering two pay periods may be long
enough, yet this reference does not appear in the text of the proposed
regulation. As a result, the commenters said this suggested temporal
limitation may be disregarded, and adjudicators may issue RFEs or NOIDs
if a petitioning employer submits proof of salary payments for only two
pay periods. The commenters urged USCIS not to send current petitioners
and the agency's own adjudicators ``down a rabbit hole'' of long-past
activities requiring unattainable proof of a beneficiary's past
engagements, associations, and activities involving prior employers.
The commenters suggested regulatory language expressly stating that the
petitioner would only be required to provide evidence of the last two
pay periods while employed by the petitioner and clarifying that a
determination that a beneficiary has failed to maintain prior status
would not preclude an adjudicator from favorably exercising discretion
to restore status.
A legal services provider expressed agreement with the added
regulatory language stating that an amendment or extension must include
proof the beneficiary has maintained status, reasoning it is current
practice and necessary for USCIS to determine maintenance of status.
The provider noted that USCIS sometimes issues RFEs for pay stubs
covering a larger period, despite the I-129 instructions stating the
beneficiary may provide the ``last two pay stubs.'' An advocacy group
thanked the Department for the clarification on evidence of maintenance
of status, while also expressing the need for an exception for
documentation in the event a medical condition resulting in leave of
absence for the beneficiary.
Response: DHS declines to codify specific temporal parameters on
evidence of maintenance of status under

[[Page 103100]]

new 8 CFR 214.1(c)(6). Petitioners should adhere to these regulations
in conjunction with USCIS form instructions, which state that the
petitioner may submit copies of the beneficiary's last 2 pay stubs,
Form W-2, and other relevant evidence. Additionally, DHS recognizes
that different employment positions have different pay structures and
timelines, so codifying more specificity into this provision may be
needlessly restrictive. 8 CFR 103.2(b)(8) already provides USCIS with
the discretion to request missing required initial evidence or
additional evidence to establish eligibility. DHS believes this
provision strikes the balance of clarifying the requirement for
evidence of maintenance of status with retaining flexibility for both
petitioners and adjudicators. DHS also recognizes that employees may
face circumstances necessitating a leave of absence from their
employer. Current 8 CFR 103.2(b)(8) and 8 CFR 214.1(c)(6) as finalized,
in conjunction with existing regulations and policies governing
issuance of RFEs and NOIDs, allow for discretion in these situations.
Comment: A commenter expressed concern with the following sentence
found at 8 CFR 214.2(l)(14)(i), stating ``[An L-1] petition extension
generally may be filed only if the validity of the original petition
has not expired.'' Specifically, the commenter expressed concern that
this sentence would negatively impact the ability of L-1 beneficiaries
to extend their nonimmigrant status if they pursued an immigration
benefit allowed by INA section 248 during the 3-year look-back period
or entered the United States pursuant to a grant of advance parole.
Thus, the commenter urged USCIS to remove the sentence from the
regulatory text, which the commenter said would ``needlessly and
unjustly'' prevent otherwise law-abiding L-1 petitioners and
beneficiaries from accessing the intracompany transferee nonimmigrant
visa classification in instances where a previously approved L-1
petition had expired.
Response: DHS did not propose to add a sentence to 8 CFR
214.2(l)(14)(i) as described by the commenter. Current 8 CFR
214.2(l)(14)(i) already includes the statement, ``A petition extension
may be filed only if the validity of the original petition has not
expired.'' As explained in the NPRM, through this final rule DHS is
adding the word ``generally'' to this existing sentence to account for
untimely filed extensions that are excused consistent with 8 CFR
214.1(c)(4) and deleting the preceding sentence from current 8 CFR
214.2(l)(14)(i) which states, ``Except in those petitions involving new
offices, supporting documentation is not required, unless requested by
the director.'' 88 FR 72870, 72881 (Oct. 23, 2023). This rule also did
not change general requirements for eligibility to change or extend
nonimmigrant status. Someone who was previously in L-1 status and seeks
to change back to L-1 status while requesting an extension of stay may
still do so, assuming they are qualified under existing requirements.
New 8 CFR 214.1(c)(6) adds the requirement that such a request must
include evidence that the beneficiary has maintained the previously
accorded nonimmigrant status before the extension request was filed.
Nothing in this rule precludes L-1 petitioners and beneficiaries from
continuing to access the L-1 visa classification in instances where a
previously approved L-1 petition has expired, assuming they are
otherwise qualified under existing regulations and policies.
6. Eliminating the Itinerary Requirement for H Programs
Comment: Several commenters stated their support for the
elimination of the H program's itinerary requirement as it would
eliminate administrative hurdles, unnecessary paperwork, duplicative
content, would promote a more efficient adjudication process, and would
lessen burdens on employers and employees.
In voicing support for the removal of H program's itinerary
requirement, an attorney reasoned that it would reduce the workload and
burden of USCIS officers in issuing RFEs requesting missing
itineraries. A trade association mentioned that it would be especially
helpful for graduates performing medical residencies in H-1B status
since they may be working at different sites. A university stated its
removal would provide clarity, consistency and predictability to
employers and beneficiaries alike. A legal services provider reasoned
that it is difficult to provide an exact, accurate itinerary due to the
varying schedule over the course of the requested H-1B period.
Response: DHS agrees with the commenters that removing the
itinerary requirement will help reduce unnecessary burdens and
duplication of work for both petitioners and USCIS. As noted in the
NPRM, and as further described below, the information provided in an
itinerary is largely duplicative of information already provided in the
LCA for H-1B petitions and the temporary labor certification (TLC) for
H-2 petitions. 88 FR 72870, 72882 (Oct. 23, 2023).
Comment: In contrast to the above remarks, a couple of commenters
expressed their opposition to the removal of the H program's itinerary
requirement and included reasoning to support their decision. An
advocacy group stated that the itinerary requirement was intended to
deter and detect fraud. The advocacy group cited a report from the
Office of the Inspector General that stated, ``in many cases, the
projects provided within the petition are non-existent which allows
beneficiaries to arrive in the country and not work in accordance with
the H-B agreements'' and concluded that eliminating the itinerary
requirement ``will encourage more fraud.'' A research organization
reasoned that itineraries provide agency officers easy access to
important information that can be used to uncover fraud and abuse in
the H-1B program. The research organization suggested rather than
eliminate the itinerary requirement, petitioners should provide more
detailed itineraries to demonstrate that the petitioner has non-
speculative employment.
Response: DHS disagrees that eliminating the itinerary requirement
compromises the integrity of the H-1B program. Information that has
historically been provided on an itinerary is provided elsewhere with
the petition and required documentation. For example, the LCA and TLC
require the petitioner to list the name and address where work will be
performed, as well as the name and address of any secondary entity
where work will be performed. The Form I-129 also requires the
petitioner to provide the address where the beneficiary will work if
different from the petitioner's address listed on the form. Further,
DHS is proposing other measures to improve the integrity of the H-1B
program, including codifying its authority to conduct site visits. In
fact, the Office of the Inspector General report cited by one of the
commenters relates to site visits, which DHS is addressing and
strengthening through this rule and does not mention the itinerary
requirement as an integrity or anti-fraud measure. Finally, eliminating
the itinerary requirement is consistent with USCIS policy memorandum
PM-602-0114 following the decision of the U.S. District Court for the
District of Columbia in ITServe Alliance, Inc. v. Cissna, 443 F. Supp.
3d 14, 42 (D.D.C. 2020) (``the itinerary requirement in the INS 1991
Regulation [codified at 8 CFR 214.2(h)(2)(i)(B)] . . . has been
superseded by statute and may not be applied to H-1B visa
applicants''). See also Serenity Info Tech, Inc. v.

[[Page 103101]]

Cuccinelli, 461 F. Supp. 3d 1271, 1285 (N.D. Ga. 2020) (citing
ITServe).
7. Validity Expires Before Adjudication
Comment: Several commenters expressed general support for proposed
8 CFR 214.2(h)(9)(ii)(D)(1) and (2) allowing petitioners to amend
requested validity periods where the validity expires before
adjudication. A commenter expressed that the proposed provision
provides flexibility and avoids unnecessary re-filing in case of
delays. A trade association commended USCIS on providing necessary
flexibility when adjudication surpasses the dates of intended
employment, while a law firm remarked that USCIS should be granted the
flexibility as outlined in this provision. Another trade association
commended DHS for providing flexibility for member companies, while
adding that the proposed provision would also reduce filing costs.
A company expressed support for DHS's proposal, noting that when
validity periods are not updated after the initially requested validity
period has passed, serious consequences for the beneficiary can result.
The company concluded that the proposed provision ``simply'' and
``elegantly'' solves the issue.
A legal services provider stated that the proposed provision would
solve the issue of validity periods expiring before a petitioner wins
an appeal by allowing the petitioner to modify the requested dates. An
attorney commended the agency for the ``creative'' and ``appreciated''
provision. A trade association expressed favorable support for the
option for petitioners to adjust the requested validity period if the
petition is deemed approvable after the initially requested validity
period expires. A joint submission expressed support for the proposed
provision, noting the provision increases efficiency.
Response: DHS agrees with the commenters that allowing petitioners
to request amended validity periods where the validity period expires
before adjudication will increase flexibility and efficiency for
stakeholders. DHS appreciates the comments noting the anticipated time
and cost savings associated with this change.

E. Benefits and Flexibilities

8. H-1B Cap Exemptions
Comment: Several commenters expressed general support for the
proposed H-1B cap exemption provisions at 8 CFR
214.2(h)(8)(iii)(F)(2)(iv), (h)(8)(iii)(F)(4), (h)(19)(iii)(B)(4), and
(h)(19)(iii)(C). A trade association applauded the proposed changes and
said the changes will be a positive development to expand and
strengthen the technology workforce. A professional association agreed
and stated that the proposal would provide needed flexibilities to
physicians and their employers as well as H-1B physician researchers. A
company and a trade association stated that the proposal would be
beneficial to public-private partnership programs between industry and
nonprofits or universities. The trade association cited the CHIPS and
Science Act of 2022 to indicate Congressional support for such
collaborations. A university commented that the proposal would support
international students and the growth of artificial intelligence,
cybersecurity, education, and medicine sectors. An advocacy group
stated that the proposal would support nonprofit contributions to
public health, technological advancement, national security, and other
national interests. A joint submission agreed that the proposal would
support entrepreneurship and technological innovation, describing the
commenters' partnerships with State governments for entrepreneurship
programs. A joint submission wrote that the proposal would help legal
services providers enlist needed H-1B labor.
Response: DHS agrees that the changes to the H-1B cap exemption
provisions will benefit a variety of industries, occupations, and
petitioner populations.
Comment: A legal services provider expressed general support for
the proposed changes but also doubted that these changes would
substantially increase the number of cap-exempt petitions.
Response: DHS acknowledged in the NPRM that it does not have data
to precisely estimate how many additional petitioners would qualify for
the expanded cap exemptions, but estimates that a fairly small
population, between 0.3 percent and 0.8 percent of annual petitioners,
may no longer be required to submit H-1B registrations as a result of
the changes to the cap exemption provisions. 88 FR 72870, 72934 (Oct.
23, 2023). The NPRM specifically invited public comment regarding the
number of additional petitioners that would qualify for cap exemption
based on the modified standard as well as the percentage of current
registrants (prospective petitioners that are cap subject) that may no
longer have to submit a registration for the H-1B cap. The commenter
did not provide data or cite to any research in support of their
comment, nor did any other commenters provide data or research to
specifically address DHS's estimate. DHS did not make any changes to
its final analysis as a result of this comment.
Comment: Some commenters opposed the changes to the cap exemption
provisions. An advocacy group stated that they oppose the exemptions
for universities, nonprofit research entities, and government research
programs and recommended that ``[t]he caps should be lowered on visa
programs and their benefits to employers should be removed.'' A few
commenters generally stated that the proposal would increase abuse of
the H-1B program through loopholes for outsourcing companies to bypass
the cap, with one commenter noting that this change will ``flood'' H-1B
visas to non-profit organizations.
Response: DHS disagrees that these changes would provide loopholes
to bypass the statutory cap. Congress set the current annual number of
noncitizens who may be issued H-1B visas or otherwise provided H-1B
status at 65,000, as well as the ``advanced degree exemption'' of an
additional 20,000 H-1B visas for noncitizens who have earned a master's
degree or higher from a U.S. institution of higher education. See INA
sec. 214(g)(1), (5), 8 U.S.C. 1184(g)(1), (5). Congress also
established the exemptions to the annual H-1B cap for workers who will
be employed at an institution of higher education (as defined in
section 101(a) of the Higher Education Act of 1965, as amended) or a
related or affiliated nonprofit entity, and workers who will be
employed at a nonprofit or governmental research organization.\69\
These exemptions are not numerically capped. See INA sec. 214(g)(5)(A)-
(B), 8 U.S.C. 1184(g)(5)(A)-(B). No provisions adopted in this final
rule allow DHS to exceed the statutory limitation on the number of H-1B
visas issued per fiscal year. Nor do the provisions allow DHS to create
a new type of cap exemption.

[[Page 103102]]

Instead, these provisions are intended to clarify and simplify
eligibility for the existing cap exemptions at INA sec. 214(g)(5), 8
U.S.C. 1184(g)(5). The commenters did not provide data or cite to
research to support their assertions concerning abuse of these current
cap exemptions and how the new changes would significantly increase
abuse of these cap exemptions. DHS does not expect these changes will
increase abuse because the revised cap exemptions still contain
meaningful limitations, such as the requirement that research is a
fundamental activity of the petitioning entity.
---------------------------------------------------------------------------

\69\ Congress did not define the terms ``nonprofit research
organization'' and ``governmental research organization'' in INA
sec. 214(g)(5), 8 U.S.C. 1184(g)(5). Because Congress did not define
these terms and has delegated discretionary authority to DHS, DHS
may reasonably define the terms consistent with their ordinary
meanings and the overall statutory scheme. See Loper Bright
Enterprises v. Raimondo, 144 S. Ct. 2244, 2263 (2024) (explaining
that a statute's meaning may be that the agency is authorized to
exercise a degree of discretion and empowered to prescribe rules to
fill in statutory gaps based on ``reasoned decision making.''). In
addition, DHS has express delegated authority to administer the
immigration laws and issue regulations pursuant to INA section
103(a), 8 U.S.C. 1103(a), and to issue regulations pertaining to the
admission of nonimmigrants, and set conditions for nonimmigrant
petitions pursuant to INA section 214(a) and (c), respectively, 8
U.S.C. 1184(a) and (c).
---------------------------------------------------------------------------

Comment: A commenter wrote that increasing cap exemptions without
expanding immigrant visa limits would exacerbate backlog issues and be
unfair to H-1B workers currently waiting for employment-based permanent
residence in the United States.
Response: DHS notes that Congress sets limits on the number of
immigrant visas that can be issued each year and that DHS does not have
the statutory authority to increase these limits. To the extent the
commenter is requesting an increase in the number of immigrant visas,
that request is beyond the scope of this rulemaking. While DHS is
unable to precisely estimate how many additional petitioners will now
qualify for cap exemption, the increase is expected to be small, and
the commenter has not provided any evidence to the contrary. Further,
not every beneficiary of a cap-exempt H-1B petition will ultimately
seek an immigrant visa. Additionally, nothing prohibits a noncitizen
from applying for an immigrant visa while outside the United States
based on a qualifying family relationship, offer of employment, or
another applicable basis. The order of consideration for immigrant
visas is based on the applicable priority date, preference category,
and country of chargeability. 8 U.S.C. 1152, 1153(e). The fact that a
small number of additional noncitizens may be provided H-1B status
annually is unlikely to materially impact overall demand for immigrant
visas or cause those currently applying for an immigrant visa or
adjustment of status to wait longer. Thus, DHS believes that impacts to
immigrant visa processing or retrogression are speculative and, to the
extent there is an impact, it is likely to be small. Further, DHS notes
that USCIS has taken a number of steps to assist individuals who may be
waiting for an ``immediately available'' immigrant visa.\70\ As
explained in the NPRM and in this final rule, the intent of the changes
to the regulations related to H-1B cap exemption is to clarify,
simplify, and modernize eligibility for cap-exempt employment, and to
provide additional flexibility to petitioners to better implement
Congress's intent to exempt from the annual H-1B cap certain H-1B
beneficiaries who are to be employed at a qualifying institution,
organization, or entity. 88 FR 72870, 72883 (Oct. 23, 2023). Therefore,
DHS believes that the benefits of these changes outweigh the potential
impacts, if any, on immigrant visa backlogs.
---------------------------------------------------------------------------

\70\ See USCIS, ``FAQs for Individuals in H-1B Nonimmigrant
Status,'' https://www.uscis.gov/working-in-the-united-states/temporary-workers/h-1b-specialty-occupations-and-fashion-models/uscis-actions-to-support-adjustment-of-status-applicants-who-are-in-h-1b-status-in-the-united-states.
---------------------------------------------------------------------------

Comment: A few commenters generally supported revising the
requirements for beneficiaries who are not directly employed by a
qualifying organization, reasoning that the changes acknowledge the
value of their contributions and ensures that essential work, even if
not directly related to the organization's core mission, is recognized
and supported, leading to a more efficient and productive research
ecosystem. A professional association supported the proposal to treat
H-1B holders who contribute to the missions of qualifying organizations
as cap-exempt, reasoning that doing so is consistent with Congressional
intent to keep graduates and educators in the United States. The
commenter also stated that the cap would be needed to facilitate
expanding public-private partnerships between universities and
industry. A law firm also supported the proposal as consistent with
congressional intent and promoting flexibility, transparency, and more
equitable outcomes.
Response: DHS appreciates these commenters' support for the
requirements to qualify for H-1B cap exemption when a beneficiary is
not directly employed by a qualifying institution, organization, or
entity. DHS believes these provisions add flexibility while retaining
necessary guardrails to cap exemption determinations.
Comment: An advocacy group opposed the proposal contending it would
formalize a practice the commenter claimed nonprofits and companies
already use to avoid H-1B caps on for-profit employees. The commenter
referenced as examples a university's entrepreneur program and another
similar entrepreneur program through which entrepreneurs may be exempt
from the H-1B cap. A union cited the same article as the advocacy
group, expressing concern about partnerships between research or
nonprofit institutions and other entities seeking to qualify for cap-
exempt H-1B visas and stating they should be publicly disclosed to
prevent abuse and exploitation of loopholes. The union also referenced
a case where, the commenter wrote, an exploitative staffing agency was
able to use the H-1B system by falsely claiming that school districts
that would be employing H-1B visa holders had partnerships with public
universities, and also referenced visa fraud litigation against another
university. Likewise, a research organization wrote that the proposal
would allow for-profit organizations to benefit from the cap exemption.
The commenter referenced a 2016 letter from Senator Chuck Grassley as
highlighting cases of universities abusing the H-1B program to evade
cap limitations and stated that the proposal would contravene INA sec.
214(g)(5). The research organization commented that USCIS failed to
adequately address these concerns in the proposed rulemaking, and that
USCIS did not justify the proposed changes or demonstrate the
congressional intent for broad inclusion of beneficiaries who are not
directly employed by qualifying employers and are ``splitting their
time'' to conduct non-qualifying work. In line with these comments, the
research organization urged DHS to withdraw proposed 8 CFR
214.2(h)(8)(iii)(4) and (h)(19)(iii)(C), stating they unlawfully expand
the positions and employers who may petition for a cap-exempt worker.
Response: DHS acknowledges the stated concerns but disagrees with
these commenters. Exemption from the H-1B cap for those employed at
qualifying institutions is a feature of the H-1B program established by
Congress. Congress established cap exemptions for H-1B workers who are
petitioned for or employed at an institution of higher education or its
affiliated or related nonprofit entities, a nonprofit research
organization, or a government research organization. INA sec.
214(g)(5), 8 U.S.C. 1184(g)(5). Some of the references cited by the
commenter contain no evidence of abuse of the H-1B program or a use of
the program that is contradictory to existing rules. Additionally, DHS
did not propose to publicly disclose partnerships between research or
nonprofit institutions and other entities seeking to qualify for cap-
exempt H-1B visas and declines to do so through this final rule.
More generally, DHS recognizes the potential for program abuse and
bad actors, but, false representations are not an issue limited to cap
exemption. H-

[[Page 103103]]

1B program integrity is a matter of serious importance to DHS, and
USCIS is continuously monitoring for potential fraud and abuse in the
program. For example, through USCIS' Administrative Site Visit and
Verification Program (ASVVP), immigration officers in the Fraud
Detection and National Security Directorate (FDNS) make unannounced
site visits to collect information as part of a compliance review to
ensure petitioners and beneficiaries follow the terms and conditions of
their petitions.\71\ USCIS takes a more targeted approach to site
visits for certain employers and petitions and also encourages anyone
to report suspected fraud or abuse in the H-1B program through the
existing ICE Tip Form or other tip forms, as appropriate.\72\
---------------------------------------------------------------------------

\71\ See USCIS, ``Administrative Site Visit and Verification
Program,'' https://www.uscis.gov/about-us/organization/directorates-and-program-offices/fraud-detection-and-national-security-directorate/administrative-site-visit-and-verification-program (last
reviewed/updated Mar. 6, 2023).
\72\ See USCIS, ``Combating Fraud and Abuse in the H-1B Visa
Program,'' https://www.uscis.gov/scams-fraud-and-misconduct/report-fraud/combating-fraud-and-abuse-in-the-h-1b-visa-program (last
reviewed/updated Feb. 9, 2021). The ICE Tip Form is available online
at https://www.ice.gov/webform/ice-tip-form (last visited Dec. 9,
2024). Anonymous tips may alternately be reported to ICE via the
toll-free ICE Tip Line, (866) 347-2423.
---------------------------------------------------------------------------

The ability of USCIS to pursue and take action when fraud is found
is enhanced by other provisions of this rule, including provisions
requiring a bona fide job offer and bona fide employment and the site
visit provisions. Additionally, DHS believes that H-1B cap exemption
provisions, as finalized in this rule, contain sufficient guardrails to
protect against abuse, particularly in the context of beneficiaries who
are not directly employed by a qualifying institution, organization, or
entity, as raised by the commenter. Notably, 8 CFR
214.2(h)(8)(iii)(F)(4) governs the quantity and nature of work that
must be performed to qualify for H-1B cap exemption when not directly
employed by a qualifying institution, organization, or entity.
Additionally, 8 CFR 214.2(h)(19)(iii) outlines specific requirements
for qualifying institutions, organizations, and entities, including
those with which petitioning employers may be affiliated. DHS believes
that these provisions, in conjunction with other provisions related to
H-1B program integrity, serve as adequate safeguards against abuse. The
changes in this rule better implement Congress's intent to exempt from
the annual H-1B cap certain H-1B beneficiaries who are employed at a
qualifying institution, organization, or entity, while still protecting
the integrity of the H-1B program, including the numerical allocations.
Comment: A research organization requested that USCIS eliminate the
allowance of cap exemptions for beneficiaries not ``directly'' employed
by a qualifying institution by rescinding current 8 CFR
214.2(h)(8)(iii)(F)(4), stating that doing so would reduce fraud and
abuse.
Response: DHS declines to eliminate the allowance of cap exemptions
for beneficiaries not directly employed by a qualifying institution and
did not propose to do so through the NPRM. Congress chose to exempt
from the numerical limitations in INA sec. 214(g)(1) noncitizens who
are employed ``at'' a qualifying institution, which is broader than
being employed ``by'' a qualifying institution. USCIS interprets the
statutory language as reflective of congressional intent that certain
noncitizens who are not employed directly by a qualifying institution
may nonetheless be treated as cap-exempt by virtue of the nature of
their job duties.\73\ USCIS therefore allows a petitioner to claim
exemption on behalf of a beneficiary if the beneficiary will spend the
majority of their work time performing job duties at a qualifying
institution that will further an activity that supports or advances one
of the fundamental purposes, missions, objectives, or functions of the
qualifying entity. New 8 CFR 214.2(h)(8)(iii)(F)(4). The burden remains
on the petitioner to establish the qualifying work being performed by
the beneficiary, and that one of the fundamental purposes, missions,
objectives, or functions of the qualifying institution is either higher
education, nonprofit research, or government research.
---------------------------------------------------------------------------

\73\ See S. Rep. No. 106-260 (April 11, 2000) (stating,
regarding S. 2045, the bill that was enacted into AC21, that
individuals should be considered cap exempt ``. . . by virtue of
what they are doing'' and not simply by reference to the identity of
the petitioning employer).
---------------------------------------------------------------------------

Comment: A joint submission supported the proposed amendment but
recommended that, in light of difficulty in measuring the ``at least
half'' standard, USCIS clarify that the standard be measured over the
course of the petition's validity period, rather than a smaller unit of
time. Similarly, an advocacy group recommended that USCIS provide an
alternative standard of hours per week to clarify when a position
qualifies under the ``at least half'' standard. Another joint
submission supported the proposal as recognizing remote or hybrid work
structures.
Response: DHS appreciates the commenters' support for this change
to 8 CFR 214.2(h)(8)(iii)(F)(4) and agrees that it will increase
flexibility for employers and beneficiaries. DHS declines to specify
that the standard be measured over the course of the petition's
validity period. Codifying such specificity could potentially open the
door for abuse of the requirements to qualify for H-1B cap exemption.
For example, if a petitioning employer submits an H-1B petition
requesting a 3-year period of employment, with the first 18 months of
work to be conducted wholly at any otherwise cap subject employer, the
beneficiary could conceivably change employment and never work at the
qualifying cap-exempt institution. DHS also declines to specify a
number of hours per week that will enable beneficiaries to qualify for
H-1B cap exemption. Doing so would be impractical given varying work
schedules. Furthermore, DHS believes such specificity is unnecessary
because the ``at least half'' standard provides sufficient clarity.
USCIS will continue to review each petition on a case-by-case basis to
determine eligibility for H-1B cap exemption.
Comment: A commenter wrote that the proposal would negatively
impact U.S. workers in the technology and IT sectors, stating that
these workers are currently facing mass layoffs. A research
organization commented that the proposed ``at least half'' standard
lacks rationale or adequate evaluation on the number of cap-exempt
positions the proposal would create. The commenter wrote that the
proposal would facilitate abuse of the H-1B program, referencing a case
from a university as showing a qualifying entity requiring U.S. workers
to train H-1B replacements for their positions.
Response: DHS disagrees with these commenters' concerns with
respect to these cap exemption provisions. The submission noting
Americans in the technology and IT sector facing severe reductions in
the job market did not provide data or resources to support this claim.
DHS also notes that a revision from ``majority'' to ``at least half''
does not reflect a significant change in this requirement. Under
existing regulations, a beneficiary could meet the ``majority''
standard by spending just a little more than 50% of their time working
at a cap-exempt institution, organization, or entity. The new rule
requires ``at least half'' of time, meaning 50% or more, which is not a
significant change. Regarding the comment that the rule did not provide
an adequate evaluation on

[[Page 103104]]

the number of cap-exempt positions the proposal would create, DHS notes
that the NPRM generally projected a likely increase in the population
of petitioners eligible for cap exemption but could not precisely
estimate how many additional petitioners would now qualify. 88 FR
72870, 72934 and 72915 (Oct. 23, 2023) (Table 12. Summary of Provisions
and Impacts of the Proposed Rule). Evaluating such impact with
specificity is not practically feasible as DHS does not have data on
the number of petitions requesting cap exemption that were previously
denied because they did not meet the prior ``majority of'' standard but
would now be approvable because they would meet the new ``at least
half'' standard.
DHS acknowledges the commenter's concerns about potential abuse of
the H-1B program. However, it is unclear from the sources cited by the
commenter whether and how such abuses stem from existing cap exemption
requirements, or whether such abuse would be further increased by
revisions to cap exemption requirements as codified in this rule. The
commenter claims without evidence that certain H-1B workers were
previously subject to the cap. They further claim without basis that
these same workers would be cap-exempt under the changes in this rule;
such cap exemption status cannot be projected on a generalized level,
as USCIS determines eligibility on a case-by-case basis.
Comment: A form letter campaign wrote that the proposed ``at least
half'' standard is an improvement but still exceeds statutory
requirements. The campaign stated that H-1B employees may spend less
than half of their time working for the qualifying entity while still
being essential to that entity, additionally reasoning that measuring
the ``at least half'' standard would impose administrative burdens. The
campaign recommended that the regulatory text remove this standard.
Response: DHS declines to remove the regulatory text requiring a
beneficiary spend ``at least half'' of their time working at a
qualifying institution to be eligible for cap exemption. Removing this
requirement would effectively allow beneficiaries who spend any amount
of time whatsoever at a qualifying institution, however minimal, to
qualify for H-1B cap exemption. Such allowance would leave the door
open for potential abuse of H-1B cap requirements. Additionally, DHS
believes that allowing for H-1B cap exemption based on any time working
at a qualifying institution would not align with congressional intent.
DHS recognizes that Congress chose to exempt from the H-1B cap
beneficiaries who are employed ``at'' a qualifying institution. DHS
interprets this statutory language as reflective of Congressional
intent that certain beneficiaries who are not directly employed by a
qualifying institution may be treated as cap-exempt based on the nature
of their job duties.\74\ DHS believes that the ``at least half''
standard implemented at 8 CFR 214.2(h)(8)(iii)(F)(4) helps ensure that
individuals are effectively furthering an activity in support of one of
the fundamental purposes of the qualifying institution.
---------------------------------------------------------------------------

\74\ See USCIS, ``Guidance Regarding Eligibility for Exemption
from the H-1B Cap Based on 103 of the American Competitiveness in
the Twenty-First Century Act of 2000 (AC21)'' (Pub. L. 106-313)
(June 6, 2006) (``Congressional intent was to exempt from the H-1B
cap certain alien workers who could provide direct contributions to
the United States through their work on behalf of institutions of
higher education and related nonprofit entities, or nonprofit
research organizations, or governmental research organizations.''),
https://www.uscis.gov/sites/default/files/document/memos/ac21c060606.pdf.
---------------------------------------------------------------------------

Regarding the comment about administrative burdens, it is true that
petitioners will continue to bear the burden of establishing
eligibility for cap exemption. However, employers should be able to
clearly document their H-1B beneficiaries' job duties and the typical
work schedule. The requirement that a beneficiary spend at least half
of their time at a qualifying institution strikes a reasonable balance
between offering flexibility while maintaining program guardrails.
Comment: A couple of joint submissions supported the proposed text
as recognizing that an organization may have more than one fundamental
purpose, mission, objective, or function and the cap-exempt petitioner
need not show the beneficiary's work contributes to all these purposes.
Response: This change updates the availability of cap exemptions to
include beneficiaries whose work directly contributes to, but does not
necessarily predominantly further, the qualifying organization's
fundamental purpose, mission, objectives, or functions, which DHS
believes to be a more reasonable standard. Further, this change
reflects the modern reality that a qualifying organization may have
more than one fundamental purpose, mission, objective, or function,
which should not preclude an H-1B beneficiary from being exempt from
the H-1B cap.
Comment: A form letter campaign stated that the proposed text is
burdensome, unclear, and unduly restrictive. The campaign recommended
that ``namely, either higher education, nonprofit research, or
government research'' be stricken, providing an example as indicating
where an H-1B employee could perform duties at a hospital that are
essential but clinical rather than focused on higher education or
research.
Response: DHS declines to adopt this commenter's recommendation.
Under new 8 CFR 214.2(h)(8)(iii)(F)(4), an H-1B beneficiary must spend
at least half of their work time performing job duties which directly
further an activity that supports or advances one of the fundamental
purposes, missions, objectives or functions of the qualifying
institution, organization, or entity. The petitioner must demonstrate
that the beneficiary's job duties directly further a purpose, mission,
objective, or function related to higher education, nonprofit research,
or government research, as applicable. Removing the language requested
by the commenter (``namely, either higher education, nonprofit
research, or government research'') would expand cap exemption
eligibility too broadly and beyond congressional intent. INA sec.
215(g)(5)(A)-(B) specifically requires that the beneficiary be employed
at a qualifying institution of higher education or a related or
affiliated nonprofit entity, a nonprofit research organization, or a
governmental research organization; taking out the references to
``higher education, nonprofit research, or government research'' from 8
CFR 214.2(h)(8)(iii)(F)(4) would be inconsistent with the clear
language of the statute. Congressional intent was to exempt from the H-
1B cap certain workers who could provide direct contributions to the
United States through their work on behalf of institutions of higher
education and related nonprofit entities, or nonprofit research
organizations, or governmental research organizations.\75\ As noted in
the NPRM, DHS is revising ``the'' to ``an'' to acknowledge that a
qualifying organization may have more than one fundamental purpose,
mission, objective, or function, and that this fact should not preclude
an H-1B beneficiary from being exempt from the H-1B cap. 88 FR 72870,
72884 (Oct. 23, 2023). If a beneficiary's job duties at the qualifying
organization are unrelated to higher education, nonprofit research, or
government research, they would not be

[[Page 103105]]

eligible for cap exemption under 8 CFR 214.2(h)(8)(iii)(F)(4).
---------------------------------------------------------------------------

\75\ See USCIS, ``Guidance Regarding Eligibility for Exemption
from the H-1B Cap Based on 103 of the American Competitiveness in
the Twenty-First Century Act of 2000 (AC21)'' (Pub. L. 106-313)
(June 6, 2006) (citing S. Rep. No. 106-260 (April 11, 2000)),
https://www.uscis.gov/sites/default/files/document/memos/ac21c060606.pdf.
---------------------------------------------------------------------------

Comment: An advocacy group recommended that the proposed text be
supported with examples, including that a worker's duties further a
fundamental objective of a qualifying institution if those duties
pertain to their employer's role in a regional innovation effort that
includes the qualifying institution, and that the text clarify that
advancing regional innovation is a ``normal, primary, or essential
purpose'' of any organization officially participating in a federally
sponsored regional innovation initiative.
Response: DHS declines to adopt this recommendation. If the
beneficiary will not be directly employed by a qualifying institution,
organization, or entity identified in INA section 214(g)(5)(A) or (B),
to qualify for an exemption under such section they must spend at least
half of their work time performing job duties at a qualifying
institution, organization, or entity and those 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, namely, either higher education,
nonprofit research, or government research. If a beneficiary meets the
above requirements, they will be eligible for H-1B cap exemption under
8 CFR 214.2(h)(8)(iii)(F)(4). DHS is unable to make a blanket
determination that beneficiaries working as part of a regional
innovation effort will meet the definitional requirements as requested
by the commenter. USCIS adjudicators will continue to review each
petition on a case-by-case basis to determine whether the beneficiary
is eligible for cap exemption.
Comment: A form letter campaign supported the proposed change,
reasoning that the nexus requirement was burdensome and resulted in
unnecessary RFEs. A joint submission also supported the proposal and
stated that the current nexus requirement is unnecessary.
Response: The revisions to 8 CFR 214.2(h)(8)(iii)(F)(4), as
finalized by this rule, require the petitioner to establish that the
beneficiary's duties further an activity that supports one of the
fundamental purposes, missions, objectives, or functions of the
qualifying entity, namely, either higher education, nonprofit research,
or government research. DHS agrees this language renders the ``nexus''
requirement redundant and unnecessary.
Comment: A professional association generally supported expanding
recognition for telework, especially in the field of telehealth, in the
proposed rule. The commenter recommended that USCIS expand 8 CFR
214.2(h)(8)(iii)(F)(4) to explicitly provide for telehealth work. A
form letter campaign, another commenter, and a joint submission also
expressed support for recognizing telework and hybrid work arrangements
under the proposed rule. An advocacy group and a joint submission
supported the proposal and stated that H-1B regulations should focus on
duties performed rather than location of work performed.
Response: As stated in the NPRM, DHS is aware that many positions
can be performed remotely. 88 FR 72870, 72884 (Oct. 23, 2023). However,
DHS declines to expand 8 CFR 214.2(h)(8)(iii)(F)(4) to explicitly
provide for telehealth. Before promulgation of this rule, 8 CFR
214.2(h)(8)(iii)(F)(4) was silent on the matter of remote work
arrangements. As proposed and finalized, 8 CFR 214.2(h)(8)(iii)(F)(4)
states, ``When considering whether such a position is cap-exempt, the
proper focus is on the job duties, rather than where the duties are
performed.'' The regulation, as proposed and finalized, further states
that work performed at the qualifying institution may include work
performed in the United States, ``through telework, remote work, or
other off-site work.'' This language sufficiently clarifies that the
location where job duties are performed does not, on its own, determine
cap-exempt status and would not, on its own, preclude telehealth. DHS
reiterates that nothing in this rule changes DOL's administration and
enforcement of statutory and regulatory requirements related to labor
condition applications. See 8 U.S.C. 1182(n); 20 CFR part 655, subparts
H and I. These requirements are unaffected by this rule and continue to
apply to all H-1B employers. Additionally, nothing in this provision
changes other statutory or regulatory requirements governing an
occupation.
Comment: A union opposed the proposed changes to 8 CFR
214.2(h)(8)(iii)(F)(4) as a potential loophole that could allow abuse
by private third-party employers, including staffing companies, through
falsely claiming partnerships with school districts and higher
education. The commenter also expressed concerns about a perceived
``lower threshold for cap exemption under the proposed rule'' and
stated that the facilitation of remote work for H-1B beneficiaries
could be used to facilitate the offshore transfer of work. The
commenter further stated that the proposal would create a loophole for
beneficiaries in locations with low prevailing wages to perform work
for an entity with an onsite location in a geographical area with
higher prevailing wages.
Response: DHS disagrees that the proposed change from ``the
majority of'' to ``at least half'' will open a loophole for abuse by
third-party employers. While changing the terminology may slightly
expand who is eligible for the cap exemption, it will still require an
employer to demonstrate that the beneficiary's duties ``directly
further an activity that supports or advances one of the fundamental
purposes, missions, objectives, or functions of the qualifying
institution, organization, or entity, namely, either higher education,
nonprofit research, or government research.'' New 8 CFR
214.2(h)(8)(iii)(F)(4). This is still a meaningful limiting standard
that not every third-party employer that simply places its employees
``at'' a qualifying institution will be able to meet. Further, this
provision does not expand or afford the cap exemption outside of
congressional intent, but instead clarifies, simplifies, and modernizes
eligibility for cap-exempt H-1B employment
DHS also disagrees that this provision will be a potential loophole
that will provide for lower wages and lead to outsourcing work
overseas. The physical location where duties are performed is not
determinative of H-1B cap exemption eligibility. However, this rule
does not change the fact that the physical location where duties are
performed is relevant for wage requirements, as governed by DOL
regulations. DHS also disagrees that the clarification that work
performed ``at'' a qualifying institution may include work performed in
the United States through telework, remote work, or other off-site work
will facilitate the offshore transfer of work. The commenter did not
explain why it believed this to be the case, and DHS notes that there
is nothing currently in the H-1B regulations prohibiting remote work.
DHS also notes that the revised definition of ``United States
employer,'' which requires the employer to have ``a bona fide job offer
for the beneficiary to work within the United States, which may include
telework, remote work, or other off-site work within the United
States,'' may help to alleviate the commenter's concern. See new 8 CFR
214.2(h)(4)(ii) (emphasis added).
Comment: A commenter requested DHS to allow cap-exemption for
beneficiaries who are conducting research in a for-profit institution
but

[[Page 103106]]

have their salary mostly paid by projects funded by non-profit
organizations.
Response: DHS notes that a petitioner filing for a beneficiary as
cap-exempt, where the beneficiary will not be directly employed by a
qualifying institution, is required to establish that the beneficiary's
duties will further an activity that supports or advances one of the
fundamental purposes, missions, objectives, or functions of the
qualifying entity. DHS declines to make any additional changes to the
provision being finalized through this rulemaking. DHS places the focus
on the work being performed by the beneficiary, rather than who pays
the beneficiary for that work.
Comment: Citing INA sec. 214(g)(5), a professional association
asserted that both the current regulation and the proposed rule exceed
statutory authority by distinguishing H-1B beneficiaries on the basis
of their employment at qualifying entities or with other entities at
the same workplace. The commenter stated that any H-1B beneficiary at
an exempt workplace should be exempted from the H-1B cap, citing
legislative history in support of their position. The commenter stated
that USCIS should make no distinction between H-1B beneficiaries
employed ``at'' or ``by'' a qualified entity. While initially proposing
more limited revisions to 8 CFR 214.2(h)(8)(iii)(F)(4), the commenter
then stated that 8 CFR 214.2(h)(8)(ii)(F)(4) should be rescinded in its
entirety, stating the only regulatory standard required to implement
the affiliation-based cap exemption provision of the statute is that
found at 8 CFR 214.2(h)(8)(ii)(F)(2). The commenter also stated that it
is imperative for qualifying physicians to be exempt from the H-1B cap,
given the difficulties that arise in the employment of H-1B physicians
due to differences in academic and DHS's fiscal year calendars.
Response: DHS disagrees with the assertion that the current and
final rules exceed statutory authority. DHS further notes that certain
regulations cited by the commenter, namely 8 CFR 214.2(h)(8)(ii)(F)(4)
and (2), do not exist; based on the context of the comment, DHS will
assume the commenter is referring to Sec. 214.2(h)(8)(iii)(F)(4) and
(2), respectively. The statute's reference to ``employed at'' is
ambiguous, as it is not clear if ``at'' is meant to refer to a physical
location or to the employer. Notably, this same ambiguity allows for
DHS to provide for telework, remote work, and work at other off-site
locations to be included in this final rule and for which the commenter
expressed support. The longstanding regulation and the changes made by
this final rule provide the best interpretation of an ambiguous statute
and are consistent with the intent of Congress. If, as the commenter
implies, the only determinative factor is the physical location of the
work to be performed, that interpretation would be contrary to
congressional intent because Congress intended to exempt foreign
national workers who would directly contribute to the research or
education missions of institutions of higher education or certain
research organizations \76\ and, thus, would lead to anomalous results.
For example, a business employing workers who will be physically
located at a university or research organization that provides access
to its facilities (e.g., a university that simply rents out office
space on its campus), would qualify for cap exemption based on the
commenter's interpretation, even if the work performed is independent
of, and entirely unrelated to, the mission of the university or
research organization. That would be inconsistent with congressional
intent which is to provide cap exemption to certain H-1B beneficiaries
``by virtue of what they are doing.'' \77\ Providing for cap exemption
based solely on the location where the work is performed would also
increase the risk of abuse.\78\
---------------------------------------------------------------------------

\76\ See S. Rep. No. 106-260 (Apr. 11, 2000) (providing that
individuals should be considered cap exempt because ``by virtue of
what they are doing, people working in universities are necessarily
immediately contributing to educating Americans'' and not simply
referencing the identity of the petitioning employer or the physical
location where the work is performed for purposes of permitting cap
exemption).
\77\ Id.
\78\ See, e.g., U.S. Dep' of Justice, U.S. Attorney's Office,
``Wright State University Agrees to Pay Government $1 Million for
Visa Fraud'' (university agreed to use its cap exempt status to
apply for H-1B visas for a privately held software company's
employees, falsely claiming that these employees would physically
work at the university's school campus), https://www.justice.gov/usao-sdoh/pr/wright-state-university-agrees-pay-government-1-million-visa-fraud.
---------------------------------------------------------------------------

DHS acknowledges that the period of post-graduate employment for
physicians generally does not align with DHS's fiscal year, under which
periods of employment for cap-subject H-1B nonimmigrants fall. Such
discrepancy between employment dates and the October 1 fiscal year
start date may occur for other occupations or employers as well.
However, DHS declines to rescind current 8 CFR 214.2(h)(8)(iii)(F)(4)
or to revise it in a manner other than that proposed in the NPRM. The
regulations allowing for H-1B cap exemption, as proposed in the NPRM
and finalized in this rule, strike a necessary balance between
providing flexibility to petitioners and beneficiaries and ensuring
that Congress' aims in exempting certain workers from the H-1B cap
based on their contributions at qualifying institutions, organizations
or entities are not undercut by employment that is peripheral to those
contributions.
Comment: A joint submission provided strong support for this
provision, specifically in relation to start-up and entrepreneurships,
noting the ``major difficulties'' with the current structure and
process for both immigrant entrepreneurs and key hires, particularly
involving the inability to definitively rely on being selected for the
H-1B lottery. The joint submission also notes how ``the cap-exempt visa
pathway has emerged as a critical channel for immigrant entrepreneurs
to grow their business[es] in the U.S., boosting new business
formation, attracting venture capital, and driving American job
creation.'' The submission also stated that USCIS should support and
encourage use of H-1B cap exemption by codifying best-practices for
individuals to pursue entrepreneurial or otherwise economically
valuable activity, stating that the standard usage of cap-exemption to
promote entrepreneurship involves a cap-exempt entity sponsoring an
initial, primary petition and a beneficiary-owner sponsoring a
secondary petition in relation to a startup.
Response: DHS appreciates the support expressed by the commenters
and agrees the provision provides flexibility and clarity, including
for beneficiary-owners who are also affiliated with a qualifying
organization. DHS declines to codify in this rule best practices for
entrepreneurs seeking H-1B cap exemption as requested by the commenter.
Current 8 CFR 214.2(h)(8)(iii)(F)(6) details the parameters under which
an H-1B beneficiary may be exempt from the cap if they are concurrently
employed by a cap-exempt and a nonexempt employer. Specifically, when
petitioning for concurrent cap-subject H-1B employment, the petitioner
must demonstrate that the H-1B beneficiary is employed in valid H-1B
status under a cap exemption under INA section 214(g)(5)(A) or (B), the
beneficiary's employment with the cap-exempt employer is expected to
continue after the new cap-subject petition is approved, and the
beneficiary can reasonably and concurrently perform the work described
in each employer's respective positions. If the cap-exempt employment
ends, the individual becomes cap-subject unless previously

[[Page 103107]]

counted. The parameters and requirements relating to concurrent
employment with a cap-exempt and nonexempt employer outlined in 8 CFR
214.2(h)(8)(iii)(F)(6) apply to all H-1B petitioners and beneficiaries,
including entrepreneurs. Furthermore, regulatory codification of best
practices is not appropriate because employment scenarios include
unique, specific fact patterns and must be addressed on a case-by-case
basis. Petitioners bear the burden to establish eligibility for the
requested classification, to include eligibility for cap exemption and
beneficiary ownership.
Comment: A joint submission and a law firm expressed general
support for the proposed ``nonprofit research organization'' and
``governmental research organization'' definitions as providing clarity
in current regulations and to create more flexibility for the
beneficiaries and entities affected by the revision. A couple of
advocacy groups, trade associations, and other commenters supported
exempting higher education, nonprofit, and government research
organizations from annual numerical limits on H-1B availability. A
professional association and a company wrote that the proposed
definitions would diversify international postdoctoral graduates'
available career paths.
Response: DHS appreciates these comments and agrees that revising
the definitions of nonprofit entity, nonprofit research organization,
and government research organization will increase clarity and
flexibility for a variety of petitioners and beneficiaries.
Comment: An advocacy group cited 8 U.S.C. 1184(g)(5)(B) in stating
that the proposed definition for nonprofit research organizations would
bring H-1B regulations into alignment with congressional intent.
Response: DHS agrees that the new definition for nonprofit research
organizations better aligns with congressional intent. DHS recognizes
that Congress chose to exempt from the numerical limitations in INA
section 214(g)(1) beneficiaries who are employed ``at'' a qualifying
institution, which is a broader category than beneficiaries employed
``by'' a qualifying institution. Congressional intent was to exempt
from the H-1B cap certain nonimmigrant workers who could provide direct
contributions to the United States through their work on behalf of
institutions of higher education and related nonprofit entities,
nonprofit research organizations, or governmental research
organizations. In effect, this statutory measure ensures that
qualifying institutions have access to a continuous supply of H-1B
workers without numerical limitation.\79\ The definitional changes
finalized in this rule increase flexibility and clarity to better meet
this intent.
---------------------------------------------------------------------------

\79\ See USCIS, ``Guidance Regarding Eligibility for Exemption
from the H-1B Cap Based on 103 of the American Competitiveness in
the Twenty-First Century Act of 2000 (AC21)'' (Pub. L. 106-313)
(June 6, 2006) (citing S. Rep. No. 106-260 (April 11, 2000)),
https://www.uscis.gov/sites/default/files/document/memos/ac21c060606.pdf.
---------------------------------------------------------------------------

Comment: Many commenters generally expressed support for the
proposal to replace the language ``primarily engaged in basic research
and/or applied research'' with ``a fundamental activity of'' basic
research and/or applied research at 8 CFR 214.2(h)(19)(iii)(C). A
professional association agreed and stated that the proposed change is
consistent with congressional intent ``to help keep top graduates and
educators in the country.'' A joint submission wrote that the proposed
language would align regulations with the standard found for formal
written affiliation agreements and reduce confusion. A local government
agency supported the proposed change and expressed its understanding
that a petitioner need not be ``directly and primarily'' engaged in
research and that petitioners would no longer need to prove the
percentage of their staff or budget dedicated to research but would
need to demonstrate instead that research is a ``principal activity''
of the petitioner. A commenter agreed that the proposal furthers
congressional intent behind the H-1B program by focusing on actual work
performed and contributing to the education of Americans. An individual
commenter supported the proposal and wrote that the ``fundamental
activity'' language is sufficiently protective of the program. An
advocacy group expressed support for USCIS' proposed revision as a way
to address this issue and improve regulatory uniformity.
Response: DHS agrees that this proposed change will provide more
clarity, uniformity, and flexibility for those who will not be directly
employed by a qualifying institution, organization, or entity. As noted
in the NPRM, the ``fundamental activity'' standard for formal written
affiliation agreements was codified in DHS regulations at current 8 CFR
214.2(h)(8)(iii)(F)(2)(iv) and (h)(19)(iii)(B)(4) through a final rule
published in 2016, and DHS believes that the changes to new 8 CFR
214.2(h)(19)(iii)(C) to align the standards will enhance clarity.\80\
In addition, in the NPRM DHS acknowledged that it was making changes to
8 CFR 214.2(h)(19)(iii)(C) to effectuate the desired policy with
respect to the H-1B cap exemption. 88 FR 72870, 72885-72886 (Oct. 23,
2023). Because the cap exemption provision in 8 CFR
214.2(h)(8)(F)(2)(iv) cross references the H-1B ACWIA fee exemption in
8 CFR 214.2(h)(19)(iii)(C) for the definitions of nonprofit research
organization and governmental research organization, the definitional
changes were made there. The regulatory parity between the definitional
standards for the H-1B cap exemption and the H-1B ACWIA fee exemption
has been in place since 2016 when DHS first codified its interpretation
of AC21 amendments establishing the H-1B cap exemption for certain
entities, including nonprofit research organizations and governmental
research organizations, and, as proposed, DHS is continuing that parity
with the changes made in this final rule.\81\
---------------------------------------------------------------------------

\80\ DHS recognizes that the definition of ``nonprofit research
organization or government research organization'' at new 8 CFR
214.2(h)(19)(iii)(C) differs from DOL's definition of ``nonprofit
research organization or governmental research organization'' at 20
CFR 656.40(e)(1)(iii). However, DHS definitions are separate from,
and generally serve different purposes than, DOL definitions.
Specifically, the DHS definition of ``nonprofit research
organization or government research organization'' at new 8 CFR
214.2(h)(19)(iii)(C) is used to determine whether an H-1B petitioner
is exempt from the H-1B cap under INA 214(g)(5)(B), 8 U.S.C.
1184(g)(5)(B), and from paying the ACWIA fee under INA 214(c)(9)(A),
8 U.S.C. 1184(c)(9)(A). In contrast, the DOL definition of
``nonprofit research organization or government research
organization'' at 20 CFR 656.40(e) is used for prevailing wage
determinations under INA 212(p)(1)(B), 8 U.S.C. 1182(p)(1)(B). See
also 20 CFR 655.731(a)(2)(vii) (cross-referencing definition at 20
CFR 656.40(e) for purposes of H-1B LCAs).
\81\ See 80 FR 81900, 81919 (Dec. 31, 2015) (proposing to
conform DHS regulations to the then-existing policy pertaining to
the definitions of several terms in INA section 214(g)(5) and the
applicability of those terms to the ACWIA fee exemption provisions
and the AC21 cap exemption provisions). The cross reference between
the provisions was codified in the final rule. See 81 FR 82398,
82486 (Nov. 18, 2016). The provision codified at 8 CFR
214.2(h)(8)(ii)(F) was subsequently redesignated as 8 CFR
214.2(h)(8)(iii)(F). See 84 FR 888, 954 (Jan. 31, 2019). Note,
however, that the policy of extending the definitions from the ACWIA
fee context to the H-1B cap exemption context predates the
codification of that policy. See Mem. from Michael Aytes, Assoc.
Dir. for Domestic Ops., USCIS, Guidance Regarding Eligibility for
Exemption from the H-1B Cap Based on section 103 of the American
Competitiveness in the Twenty-First Century Act of 2000 (AC21)
(Public Law 106-313) (June 6, 2006); https://www.uscis.gov/sites/default/files/document/memos/ac21c060606.pdf.
---------------------------------------------------------------------------

Comment: A company recommended that USCIS provide further guidance
to define ``fundamental activity,'' stating that doing so would support
industry reliance on the new definition and provided several suggested
examples. The commenter noted that DHS offers ``some'' guidance in the
present

[[Page 103108]]

rulemaking by stating that ``a fundamental activity would still have to
be an important and substantial activity, although it need not be the
organization's principal or foremost activity under the current
`primary' construct.'' The commenter also asked DHS to include examples
where the application of the proposed standard would be less clear,
stating there is a lack of guidance on the application of the standard
that would help to ensure consistency while contributing to economic
growth and development within this important segment of the Unites
States economy.
Response: As noted by the commenter and stated in the NPRM, a
``fundamental activity'' is ``an important and substantial activity,
although it need not be the organization's principal or foremost
activity.'' 88 FR 72870, 72885 (Oct. 23, 2023). While this change may
somewhat expand who is eligible for a cap exemption, DHS does not
expect or intend this to be a significant change for petitioners.
Similar to how a petitioner may have demonstrated that it was primarily
engaged in research under the prior standard, a petitioner may
demonstrate that research is one of its fundamental activities by
showing that research constitutes an important and significant activity
within the context of its overall operations. The types of evidence
that may be probative generally remain the same. For example, probative
evidence may include the petitioner's mission statement, descriptions
of the petitioner's research efforts and ongoing research projects, the
petitioner's operating budget dedicated to research as evidenced by
relevant tax forms, and staffing descriptions that indicate the level
of staffing dedicated to research. However, unlike the prior
``primarily'' standard, a petitioner no longer needs to demonstrate
that research is the principal or foremost activity, i.e., that
research constitutes more than 50% of its operations compared to all
its other activities.\82\ While there is not an exact minimum
percentage that would always be required to meet the ``fundamental
activity'' standard, it remains the petitioner's burden to establish
eligibility for cap exemption. USCIS adjudicates each petition on a
case-by-case basis, taking into consideration the totality of the
facts.
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\82\ Cf. Open Soc'y Inst. v. USCIS, 573 F. Supp. 3d 294, 305
(D.D.C. 2021) (``Based on the totality of evidence in the record,
and considering its research activities in proportion to its other
activities, we conclude that the record does not demonstrate that
[Open Society] is directly and principally engaged in research. The
research conducted by [Open Society] is incidental, or, at best,
secondary to its principal activities. . . .''), dismissed No. 21-
5251, 2022 WL 4002149 (D.C. Cir. Aug. 29, 2022) (per curiam).
---------------------------------------------------------------------------

DHS does not believe that it is necessary to provide additional
guidance through this rulemaking but may consider providing additional
guidance in the future through other means such as the USCIS Policy
Manual. DHS declines to provide specific guidance on the examples
provided by the commenter because those examples, without further
context, could support a decision either in favor of or against
granting a cap exemption. For example, ``a company that is at the
outset of starting a research department'' may or may not qualify for
cap exemption depending on all the relevant facts, such as how much of
its resources (including time, money, and personnel) it dedicates to
such research. Similarly, ``a company that pauses its research for a
period of time and then resumes its research activities'' may or may
not qualify depending on all the relevant facts, such as the length of
pause and the resources dedicated to the resumption of its research
activities.\83\ As USCIS adjudicates each petition on a case-by-case
basis, taking into consideration the totality of the facts, USCIS is
not providing additional guidance or examples in response to this
comment.
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\83\ In both of these examples, the company, as with any other
petitioner, would also have to demonstrate it meets all other
eligibility requirements, including having a bona fide job offer for
the beneficiary and meeting the definition of a nonprofit research
organization.
---------------------------------------------------------------------------

Comment: An advocacy group supported the proposed definition but
recommended that USCIS clarify that government-chartered nonprofits
involved in research through regional hubs qualify as nonprofit
research organizations, stating that ``organizations that work on later
stages of technology development should be able to qualify as research
organizations.'' The advocacy group commented that a ``key goal of the
regional hubs is the commercialization of its earlier stage research,''
and that a ``majority of technologies developed through basic and
applied research fail to reach commercialization and subsequently
benefit U.S. citizens.'' The advocacy group recommended that USCIS
define research organizations to include nonprofits and government
entities that conduct research as part of their role in a regional hub.
Response: DHS reiterates its goal of slightly modifying the
definition of employers who are exempt from the H-1B cap in order to
provide additional clarity and flexibility for these types of cap
exemptions. Changing the definition of ``nonprofit research
organization'' and ``governmental research organization'' by replacing
``primarily engaged'' and ``primary mission'' with ``fundamental
activity'' provides potential exemption from the H-1B cap for a
nonprofit entity or governmental research organization that conducts
research as a fundamental activity but is not primarily engaged in
research or where research is not the primary mission. This will create
more flexibility for nonprofit and governmental research organizations
and for beneficiaries who are not directly employed by a qualifying
organization. There is nothing in this final rule that will preclude
nonprofits and government entities that conduct research as part of
their role in a regional hub from potentially qualifying for cap-
exemption. However, it remains the petitioner's burden to demonstrate
eligibility for the benefit sought.\84\ Therefore, DHS declines to
further define research organization or otherwise modify the definition
in this rule.
---------------------------------------------------------------------------

\84\ See INA section 291, 8 U.S.C. 1361; Matter of Simeio
Solutions, LLC, 26 I&N Dec. 542, 549 (AAO 2015) (``It is the
petitioner's burden to establish eligibility for the immigration
benefit sought.''); Matter of Skirball Cultural Center, 25 I&N Dec.
799, 806 (AAO 2012) (``In visa petition proceedings, the burden of
proving eligibility for the benefit sought remains entirely with the
petitioner.'')
---------------------------------------------------------------------------

Comment: An advocacy group recommended that the proposed
regulations explicitly state that a ``nonprofit research organization
or governmental research organization or educational or government
organization may perform or promote more than one fundamental
activity.''
Response: DHS declines to adopt this suggestion. Under this rule,
the definition of a nonprofit research organization or government
research organization at new 8 CFR 214.2(h)(19)(iii)(C) states that
``[a] nonprofit research organization or governmental research
organization may perform or promote more than one fundamental
activity.'' DHS declines to expand this definition to also include
reference to educational or government organizations. This provision
applies explicitly to nonprofit research organizations and governmental
research organizations. DHS also notes that new 8 CFR
214.2(h)(8)(iii)(F)(2)(iv), pertaining to affiliation agreements
between nonprofit entities and institutions of higher education, and
new 8 CFR 214.2(h)(19)(iii)(B)(4), pertaining to exemption from the
American Competitiveness and Workforce Improvement Act (ACWIA) fee
referenced in 8 CFR 106.2 for

[[Page 103109]]

nonprofit entities related to or affiliated with an institution of
higher education, are revised to include a statement that, ``[a]
nonprofit entity may engage in more than one fundamental activity.''
Nothing in this rule precludes an educational or government
organization from qualifying as an affiliated or related non-profit
under 8 CFR 214.2(h)(8)(iii)(F)(2), nor under any of the other cap
exemptions at 8 CFR 214.2(h)(8)(iii)(F). Finally, at new 8 CFR
214.2(h)(8)(iii)(F)(4), addressing H-1B beneficiaries not directly
employed by a qualifying institution, organization, or entity, DHS
removed the requirement that a beneficiary's duties ``directly and
predominately further the essential purpose, mission, objectives or
functions'' of the qualifying institution, organization, or entity and
replaced it with the requirement that the beneficiary's duties
``directly further an activity that supports or advances one of the
fundamental purposes, missions, objectives, or functions'' of the
qualifying institution, organization, or entity. These revisions
sufficiently acknowledge the potential for more than one fundamental
activity, where applicable, of institutions, organizations, and
entities relevant to cap exemption determinations.
Comment: A union opposed the proposed changes to 8 CFR
214.2(h)(19)(iii)(C) as opening a loophole for nonprofit and government
employers not engaged in research to qualify for a cap exemption by
claiming a ``secondary interest in research to qualify as a cap exempt
entity.'' The commenter further stated that ``[t]he lower threshold for
cap exemption under the proposed rule would create an incentive for
nonprofits and government employers to restructure or reconfigure their
operations to qualify for cap exemption.''
Response: DHS disagrees that the proposed change from ``primarily
engaged'' and ``primary mission'' to ``a fundamental activity of'' in 8
CFR 214.2(h)(19)(iii)(C) will open a loophole for nonprofit and
government employers not engaged in research to qualify for a cap
exemption. While changing the terminology may slightly expand who is
eligible for the cap exemption, it would still require that an employer
demonstrate that research is a ``fundamental activity,'' which is a
meaningful limiting standard. A fundamental activity would still have
to be an important and substantial activity, although it need not be
the organization's principal or foremost activity as required under the
current ``primary'' construct.\85\ Therefore, nonprofit and government
employers not engaged in research would still not qualify.
---------------------------------------------------------------------------

\85\ Multiple comments leading to the 2016 final rule also
expressed concern that the ``primary purpose'' requirement was too
restrictive, although in the context of 8 CFR
214.2(h)(8)(ii)(F)(2)(iv) and (h)(19)(iii)(B)(4). 81 FR 82403.
---------------------------------------------------------------------------

Comment: A research organization commented that the proposal to
qualify an organization as cap-exempt if one of its many ``fundamental
activities'' is research ``is so expansive that virtually any nonprofit
organization will become newly eligible for cap-exemption.'' The
commenter stated that USCIS has not clearly defined ``research'' or
``fundamental activity'' and has no expertise in doing so, contrasting
that against the ``primarily'' standard as applied by the National
Science Foundation. The commenter stated that DHS provides ``no
substantive rationale'' for the changes, citing the text from the NPRM
as failing to meaningfully explain the revisions and failing to provide
a ``bright-line criteria to identify eligibility.'' The commenter said
that the changes would create an adjudication and litigation nightmare
for DHS due to lawsuits from denials of cap-exempt claims. The
commenter also cited statistics demonstrating the increase in cap-
exempt petitions and stated that DHS has not adequately shown a
compelling reason to expand those numbers further. The commenter
requested that DHS provide the public with a detailed analysis of how
the changes would impact the H-1B program and the scale of those
impacts at the NPRM stage.
Response: DHS disagrees that the result of this change will
effectively qualify any nonprofit entity as eligible for H-1B cap
exemption. The change to 8 CFR 214.2(h)(19)(iii)(C), as proposed and
finalized, requires establishing that research is one of the
fundamental activities of the nonprofit research organization or
government research organization. Not every activity an organization
engages in would be considered a ``fundamental activity.'' A
fundamental activity would still have to be an important and
substantial activity, although it need not be the organization's
principal or foremost activity. DHS disagrees with the commenter that
virtually any nonprofit claiming to engage in an activity that it
labels or considers as ``research'' would be eligible for cap
exemption. Such a nonprofit would still have to show that research is
one of its fundamental activities. Moreover, the nonprofit must show
that the research being conducted meets the definition of ``basic
research'' and/or ``applied research'' under 8 CFR
214.2(h)(19)(iii)(C). This is another meaningful limitation against a
nonprofit simply claiming to engage in some activity that it labels as
``research.'' Regarding the comment that DHS did not define the terms
``research'' or ``fundamental activity,'' DHS disagrees and notes that
it is revising existing definitions of ``basic research'' as well as
``applied research'' at 8 CFR 214.2(h)(19)(iii)(C).
Regarding the concern that the rule does not provide ``bright-line
criteria to identify eligibility,'' it is not appropriate to provide
``bright-line criteria'' because research activities and employment
scenarios include unique, specific fact patterns and must be addressed
on a case-by-case basis. Petitioners bear the burden to establish
eligibility for the requested classification, to include eligibility
for cap exemption.
Regarding the comment requesting that DHS provide the public with a
detailed analysis of how the changes would impact the H-1B program, the
NPRM generally projected a small increase in the population of
petitioners eligible for cap exemption but could not precisely estimate
how many additional petitioners would now qualify for cap exemption.
See 88 FR 72934, 72915 (Table 12. Summary of Provisions and Impacts of
the Proposed Rule). Evaluating such impact with specificity is not
practically feasible.
With respect to the comment that DHS provided no substantive
rationale for the changes, DHS disagrees. As explained in the NPRM,
changing the regulatory definition to ``fundamental activity'' provides
for a reorientation of cap exemptions for nonprofit research
organizations and governmental research organizations aligning with
current ``fundamental activity'' standard found for formal written
affiliation agreements under 8 CFR 214.2(h)(8)(iii)(F)(2)(iv) and
(h)(19)(iii)(B)(4), which would bring more clarity and predictability
to decision-making, for both adjudicators and the regulated community.
88 FR 72870, 72884 (Oct. 23, 2023).
Comment: A joint submission expressed general support for the
proposed revision at 8 CFR 214.2(h)(19)(iii)(C). An advocacy group
encouraged DHS to ``finalize its proposal insofar as it will again
count indirect research as among the [qualifying] research
activities,'' describing activities such as funding and monitoring the
research of others as activities that would fall under ``indirect
research.'' The group said that the provision acknowledges the full
breadth of nonprofit ``research,'' thereby

[[Page 103110]]

providing additional flexibility and reducing burdens for nonprofit
employers seeking cap exemption. Another advocacy group supported the
proposed changes and recommended that ``qualifying research includes
not only basic and applied research but can also include later stages
of research, such as technology development and transfer.''
Response: DHS generally agrees with the commenter that the revised
requirements to qualify for H-1B cap exemption will provide petitioners
seeking cap exemption additional clarity and flexibility. However, DHS
does not agree with further broadening or changing the proposed
parameters for qualifying activities, as the commenters suggested. DHS
also does not agree with the commenter's characterization of the
proposed changes as allowing ``indirect research.'' In this response,
DHS clarifies that the definition at 8 CFR 214.2(h)(19)(iii)(C), as
proposed and finalized, does not allow for ``indirect research'' in the
sense of allowing cap exemption for a nonprofit organization that
merely funds and monitors the research of others but does not itself
directly conduct any research. DHS reiterates that 8 CFR
214.2(h)(19)(iii)(C) requires the nonprofit organization to engage in
research. Further, 8 CFR 214.2(h)(19)(iii)(C) states that ``basic
research and applied research . . . may include designing, analyzing,
and directing the research of others if on an ongoing basis and
throughout the research cycle.'' While funding and monitoring the
research of others may fall under this provision, the petitioner must
also direct such research on an ongoing basis throughout the research
cycle. In other words, this language is meant to allow the petitioning
entity to qualify for cap exemption only if the petitioner takes an
active, consistent role in designing, analyzing, and directing the
research of others. Simply providing some funds and sporadically
monitoring the research of others, without more, would not be
sufficient to meet new 8 CFR 214.2(h)(19)(iii)(C). Such a low standard
could open a loophole for nonprofit and government employers not
engaged in research or lead to abuse by third-party employers seeking
to qualify for a cap exemption simply by giving funds to a qualifying
non-profit.
Similarly, DHS declines to state in new 8 CFR 214.2(h)(19)(iii)(C)
that ``qualifying research includes not only basic and applied research
but can also include later stages of research, such as technology
development and transfer.'' The phrase ``technology development and
transfer'' is undefined and, without additional specificity, could open
a loophole for nonprofit and government employers not engaged in
research or lead to abuse by third-party employers seeking to qualify
for a cap exemption simply by claiming to be developing and
transferring someone else's research. Thus, DHS declines to
specifically include reference to indirect research or technology
development and transfer in the regulatory text.
Comment: An attorney writing as part of a form letter campaign
supported the proposal to forego the requirement at 8 CFR
214.2(h)(19)(iv)(B) that tax-exempt organizations have an IRS document
evidencing nonprofit status to also state whether the organization is
primarily an educational or research organization. A law firm agreed
that this proposal would align with the changes to research being a
``fundamental activity'' of the qualifying organization or entity. A
local government agency also supported this proposal, reasoning that
some tax-exempt organizations are created through statute and thus may
lack IRS documentation. An advocacy group also supported the proposal,
stating that DHS adjudicators have, in the past, made erroneous
inquiries and denials based on the activities of the commenter as
indicated in its tax forms.
Response: DHS agrees that amending the definition of ``nonprofit or
tax-exempt organization'' to no longer require that the petitioner
provide evidence of its approval by the IRS as a tax-exempt
organization for research or educational purposes will help simplify
and clarify the process for adjudicators and for stakeholders. DHS is
not proposing to eliminate or otherwise change the overarching
requirement that a qualifying nonprofit or tax-exempt petitioner be an
institution of higher education or a related or affiliated nonprofit
entity, or a nonprofit research organization or a governmental research
organization institution, as required by the statute and regulations. A
petitioner will still need to submit documentation to demonstrate that
it is a nonprofit or tax-exempt organization, such as tax returns, tax
exemption certificates, references to the organization's listing in the
IRS's most recent list of tax-exempt organizations, articles of
incorporation, bylaws, or other similar documentation. Through this
rule, DHS is merely clarifying that such documentation does need not to
be in the form of an IRS letter.
Comment: An association of local governmental agencies and an
additional local government agency commented that the American
Competitiveness Act in the Twenty-First Century did not distinguish
types of nonprofit entities. The commenters wrote that the proposal at
8 CFR 214.2(h)(19)(iv) exceeds statutory authority by excluding some
nonprofit organizations from qualifying for cap exemption and
recommended removing references to sections 501(c)(3), (c)(4), and
(c)(6) of the Internal Revenue Code (IRC) to avoid this issue.
Similarly, a professional association commented that distinguishing
nonprofit entities affiliated with an institution of higher education
under section 501(c)(3), (c)(4), or (c)(6) of the IRC lacks statutory
support and recommended that the proposal at 8 CFR 214.2(h)(19)(iv)
include, but not limit, tax-exempt organizations to those defined in
the cited sections 501(c)(3), (c)(4), and (c)(6).
Response: DHS did not propose to substantively change the
longstanding requirement at current 8 CFR 214.2(h)(19)(iv) that the
nonprofit be defined as a tax-exempt organization under section
501(c)(3), (c)(4) or (c)(6) of the IRC.\86\ As explained in the H-1B
NPRM, 8 CFR 214.2(h)(19)(iv) ``would more simply state that a nonprofit
organization or entity `must be determined by the Internal Revenue
Service [to be] a tax-exempt organization under the Internal Revenue
Code of 1986, section 501(c)(3) (c)(4), or (c)(6), 26 U.S.C. 501(c)(3),
(c)(4), or (c)(6).' ''
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\86\ See ``Petitioning Requirements for the H-1B Nonimmigrant
Classification Under Public Law 105-277,'' 63 FR 65657, 65658 (Nov.
30, 1998) (interim final rule with request for comments) (codifying
paragraph (h)(19)(iv) requiring a nonprofit organization or entity
to be qualified as a tax exempt organization under section
501(c)(3), (c)(4), or (c)(6) of the Internal Revenue Code);
``Petitioning Requirements for the H-1B Nonimmigrant Classification
Under Public Law 105-277,'' 65 FR 10678, 10679 (Feb. 29, 2000)
(final rule) (declining a suggestion to allow organizations that are
tax exempt under state or local law to qualify as non-profit
organizations for the purposes of the ACWIA, and declining another
suggestion to expand the definition of the organizations considered
to be nonprofit to include all non-profit organizations (not just
non-profit research organizations), on the basis that there is no
legislative support for either suggestion).
---------------------------------------------------------------------------

DHS disagrees that this longstanding requirement is contrary to
law. Rather, INA sec. 214(g)(5)(A) clearly limits eligibility to those
nonprofit organizations that are ``affiliated'' with an institution of
higher education and INA 214(g)(5)(B) limits eligibility to a
``nonprofit research organization.'' The limitations at paragraph
(h)(19)(iv) relating to tax-exempt organizations under 501(c)(3),
(c)(4), and (c)(6) are consistent with INA 214(g)(5)(A) and (B), and
further promotes the INA's goals of improving economic growth and job
creation by facilitating U.S.

[[Page 103111]]

employers' access to high-skilled workers, particularly at these
institutions, organizations, and entities.\87\ DHS will finalize 8 CFR
214.2(h)(19)(iv) as proposed.
---------------------------------------------------------------------------

\87\ See S. Rep. No. 106-260 (April 11, 2000) (AC21 sought to
help the American economy by, in part, exempting from the H-1B cap
``visas obtained by universities, research facilities, and those
obtained on behalf of graduate degree recipients to help keep top
graduates and educators in the country''); see also ``Retention of
EB-1, EB-2, and EB-3 Immigrant Workers and Program Improvements
Affecting High-Skilled Nonimmigrant Workers,'' 81 FR 82398, 82447
(Nov. 18, 2016) (stating that DHS's policy of allowing cap exemption
for individuals employed `at' and not simply employed `by' a
qualifying institution ``is consistent with the language of the
statute and furthers the goals of AC21 to improve economic growth
and job creation by immediately increasing U.S. access to high-
skilled workers . . . .'').
---------------------------------------------------------------------------

Comment: A joint submission recommended that the proposal at 8 CFR
214.2(h)(19)(iv) clarify that ``[a]n organization with its own tax
filing and payroll can qualify for cap-exemption even if it is part of
a larger nonprofit and uses the parent nonprofit's Federal employer
identification number (FEIN)'' and that ``[a] nonprofit that engages a
Professional Employer Organization (PEO) for human resource and payroll
services may still qualify for cap-exemption even if the taxpayer
identification number of the PEO is used for those functions.''
Response: DHS declines to add the requested language to this
provision. A non-profit organization may be exempt from the cap if it
is determined by the Internal Revenue Service as a tax-exempt
organization under the Internal Revenue Code of 1986, section
501(c)(3), (c)(4), or (c)(6), 26 U.S.C. 501(c)(3), (c)(4), or (c)(6),
thereby meeting the definition of a nonprofit organization or entity as
codified at new 8 CFR 214.2(h)(19)(iv), or if it is primarily engaged
in basic research and/or applied research, thereby meeting the
definition of a nonprofit research organization as codified at new 8
CFR 214.2(h)(19)(iii)(C). USCIS cannot make a generalized assessment as
to whether a particular organization or entity will qualify for cap-
exempt status. However, as USCIS has previously noted,\88\ use of a PEO
will not, standing alone, negate an employer's cap-exempt
qualification. USCIS will consider all relevant factors and review the
totality of the evidence for each petition using the preponderance of
the evidence standard to determine cap-exempt status.
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\88\ USCIS, Electronic Reading Room, H-1B Cap Exemptions--Baker
(Oct. 18, 2023), https://www.uscis.gov/sites/default/files/document/foia/H-1BCapExemptions-Baker.pdf.
---------------------------------------------------------------------------

Comment: A trade association and a local government agency
suggested that USCIS clarify when State and local governments can be
qualifying tax-exempt organizations. Specifically, the trade
association suggested that USCIS clarify that tax-exempt organizations
that can create qualifying affiliations with universities include state
and local governmental and quasi-governmental entities. The local
government agency suggested that 8 CFR 214.2(h)(19)(iv) be revised to
directly reference tax-exempt government entities.
Other commenters voiced concern that the proposed revision would
exclude an entire class of entities that currently meet the current
definition of ``non-profit entity'' but would not meet the definition
in the proposed regulation change. One of these commenters said that
the current definition of ``non-profit entities'' has two parts--first
that the nonprofit organization or entity is ``defined'' as a tax-
exempt organization under IRC 501(c)(3), (c)(4), and (c)(6), and second
that the nonprofit has been ``approved'' as a tax-exempt organization
for research or educational purposes--whereas the proposed regulation
change requires that the nonprofit organization or entity ``must be
determined by the Internal Revenue Service'' as a tax-exempt
organization under IRC 501(c)(3), (c)(4), and (c)(6). This commenter
stated that governmental units, such as local and State governments,
are exempt from income taxation under IRC section 115, but would not be
classified as tax-exempt organizations in the proposed rule and
requested that they be provided for as cap-exempt entities. The
commenter provided an example of a private religious school being cap-
exempt under the proposed rule where a public school would not. The
commenter said that since the H-1B cap exemption requirements mirror
the requirements under the ACWIA, related to exemption of the ACWIA fee
for H-1B employers, the proposed rule should be modified to include
public primary and secondary schools, since nonprofit private primary
and secondary schools would already be covered under the IRC 501(c)(3),
(c)(4), and (c)(6) requirement.
Response: State and local governments that currently qualify as
nonprofit or tax-exempt organizations under 8 CFR 214.2(h)(19)(iv)
should generally continue to qualify as tax-exempt organizations under
new 8 CFR 214.2(h)(19)(iv). In proposing to revise 8 CFR
214.2(h)(19)(iv), DHS's intention was simply to remove the unduly
burdensome requirement under 8 CFR 214.2(h)(19)(iv)(B) that the IRS
letter itself state that the petitioner's approval as a tax-exempt
organization was ``for research or educational purposes.'' 88 FR 72886
(Oct. 23, 2023). It was never DHS's intention to restrict, much less
eliminate, eligibility for state and local governments that currently
qualify as nonprofit or tax-exempt organizations under 8 CFR
214.2(h)(19)(iv). DHS did not propose to eliminate or otherwise change
the other requirements under 8 CFR 214.2(h)(19)(iv). As with current 8
CFR 214.2(h)(19)(iv)(A), new 8 CFR 214.2(h)(19)(iv) will continue to
define nonprofit or tax-exempt organizations based on the Internal
Revenue Service's definition of a tax-exempt organization under the
Internal Revenue Code of 1986, section 501(c)(3), (c)(4), or (c)(6), 26
U.S.C. 501(c)(3), (c)(4), or (c)(6).
DHS declines to further revise 8 CFR 214.2(h)(19)(iv) to directly
reference tax-exempt government entities or public primary and
secondary schools, as requested by the commenters. USCIS cannot make a
generalized assessment as to whether a particular organization or
entity will qualify as a tax-exempt organization under the Internal
Revenue Code of 1986, section 501(c)(3), (c)(4), or (c)(6), 26 U.S.C.
501(c)(3), (c)(4), or (c)(6). As stated above, state and local
governments that currently qualify as nonprofit or tax-exempt
organizations under 8 CFR 214.2(h)(19)(iv) should generally continue to
qualify as tax-exempt organizations under new 8 CFR 214.2(h)(19)(iv).
DHS further reiterates that government entities may still qualify
for cap exemption. State and local governments may qualify for cap
exemption under new 8 CFR 214.2(h)(19)(iii)(B)(4), if the nonprofit
entity has entered into a formal written affiliation agreement with an
institution of higher education that establishes an active working
relationship between the nonprofit entity and the institution of higher
education for the purposes of research or education, and a fundamental
activity of the nonprofit entity is to directly contribute to the
research or education mission of the institution of higher education.
Additionally, they may qualify for cap exemption under new 8 CFR
214.2(h)(19)(iii)(C) if they are a governmental research organization
and a fundamental activity of the organization is the performance or
promotion of basic and/or applied research. They may also qualify under
new 8 CFR 214.2(h)(8)(iii)(F)(4) if they employ a beneficiary who will
spend at least half of their work time performing job duties at a
qualifying institution, organization, or entity and those job duties
directly further an activity that supports or advances one of the
fundamental purposes, missions, objectives, or functions of the
qualifying

[[Page 103112]]

institution, organization, or entity, namely, either higher education,
nonprofit research, or government research. USCIS will consider all
relevant factors and review the totality of the evidence for each
petition using the preponderance of the evidence standard to determine
cap-exempt status.
Comment: A joint submission agreed that the proposal should provide
for government entities that serve research and educational purposes
and requested USCIS provide additional information relating to how it
will adjudicate cap exemptions. The commenter expressed concerns with
the definition of nonprofit organizations, stating it fails to include
specific guidance for government entities that serve research and
educational purposes, such as a community health center or a public
school system. The comment referenced a USCIS letter as indicating that
USCIS would continue to consider these entities for cap exemption on a
case-by-case basis, as well as provide clarifying language specifying
the different ways the cap exemption standard may be met.
Response: USCIS will continue to consider H-1B cap exemption
requests on a case-by-case basis, taking into consideration the
eligibility requirements, as well as any documentation submitted to
establish eligibility. USCIS reviews the totality of the evidence for
each petition using the preponderance of the evidence standard and
cannot make a generalized assessment as to whether a particular
organization or affiliation will qualify for cap-exempt status. While
government entities that serve research and educational purposes may
not qualify for cap exemption by meeting the definition of a nonprofit
entity, as noted by the commenter, such government entities may still
qualify for cap exemption under new 8 CFR 214.2(h)(19)(iii)(C) if a
fundamental activity of the organization is the performance or
promotion of basic and/or applied research. They may also qualify under
new 8 CFR 214.2(h)(8)(iii)(F)(4) if they employ a beneficiary who will
spend at least half of their work time performing job duties at a
qualifying institution, organization, or entity and those job duties
directly further an activity that supports or advances one of the
fundamental purposes, missions, objectives, or functions of the
qualifying institution, organization, or entity, namely, either higher
education, nonprofit research, or government research. Revisions to the
definition of nonprofit or tax-exempt organizations at 8 CFR
214.2(h)(19)(iv) are intended to clarify and streamline evidentiary
requirements for cap exemption eligibility. DHS believes the provisions
in this rule related to H-1B cap exemptions will increase flexibility
and better reflect Congress's intent, as well as better represent
modern employment situations.
Comment: An organization requested that 8 CFR 214.2(h)(19)(iv) be
amended to include language that an organization will not be precluded
from establishing eligibility as a United States employer, under
paragraph (h)(4)(ii), merely because the organization is controlled by
one individual.
Response: DHS does not believe that the requested clarification is
necessary as there is no such preclusion in the regulations, either in
new 8 CFR 214.2(h)(19)(iv) or (h)(4)(ii).
Comment: A professional association cited a 2023 letter from USCIS
\89\ as stating that there is no collaboration time requirement between
a university and an affiliated nonprofit for the purpose of cap
exemption and that USCIS recognized university-government
collaborations for training, education, and research purposes.
---------------------------------------------------------------------------

\89\ USCIS, Electronic Reading Room, H-1B Cap Exemptions--Baker
(Oct. 18, 2023), https://www.uscis.gov/sites/default/files/document/foia/H-1BCapExemptions-Baker.pdf.
---------------------------------------------------------------------------

Response: DHS agrees that there is no statutory or regulatory
requirement for a particular period of prior collaboration between a
university and an affiliated nonprofit for purposes of H-1B cap
exemption eligibility. DHS also recognizes the potential of government
organizations collaborating with universities for training, education,
and research purposes. In the case of affiliations, a government
research entity may qualify for cap exemption if they employ a
beneficiary who will spend at least half of their work time performing
job duties at a qualifying institution, organization, or entity and
those job duties directly further an activity that supports or advances
one of the permissible fundamental purposes, missions, objectives, or
functions of the qualifying institution, organization, or entity,
namely, either higher education, nonprofit research, or government
research. USCIS officers will review the totality of the evidence for
each petition using the preponderance of the evidence standard to
determine whether a particular organization or affiliation will qualify
for cap-exempt status.
Comment: A professional association provided several recommended
amendments to the proposed rule at 8 CFR 214.2(h)(8)(iii)(F)(2),
including:
Specifying that a nonprofit entity is ``operated by'' an
institution of higher education when key personnel of the nonprofit
entity are shared with the institution of higher education, or whether
the institution of higher education controls key decisions and programs
of the nonprofit entity;
Defining ``attached'' to include its common-sense meaning;
and the terms ``member, branch, cooperative, or subsidiary'' to be
consistent with their common legal meaning;
Providing examples of an ``active working relationship''
and confirming that new relationships memorialized through a formal
written affiliation agreement meet the regulatory standard;
Confirming that ``formal written affiliation agreements
entered into between an institution of higher education, and the parent
organization of the petitioner qualify for purposes of 8 CFR
214.2(h)(8)(iii)(F)(2)(iv), so long as the petitioner can provide
documentation to show that petitioner is bound by the terms of the
affiliation agreement.''
A joint submission also recommended definitions for the terms
``active working relationship'' and ``attached.'' These commenters
stated that a definition of the former could clarify the evidence
required to show an active working relationship for cap exemption
purposes and that the latter could address the lack of caselaw or
guidance on the meaning of ``attached'' by including in the definition
``a consistent collaboration with the institution of higher education,
or that the institution of higher education has a vote or key role in
the administration of the nonprofit's program or budget.''
Response: DHS appreciates these suggestions. However, DHS did not
propose to revise 8 CFR 214.2(h)(8)(iii)(F)(2) and declines to do so
through this rulemaking. Regarding the specific suggestions to clarify
when a nonprofit entity is ``operated by'' an institution of higher
education, as reflected in 8 CFR 214.2(h)(8)(iii)(F)(2)(ii), while
shared key personnel and control of key decisions and programs may be
relevant factors, DHS reiterates that USCIS officers will review the
totality of the evidence for each petition using the preponderance of
the evidence standard to determine whether a particular affiliation
will qualify for cap-exempt status. DHS declines to define the terms
``attached'' or ``member, branch, cooperative, or subsidiary'' as they
appear in 8 CFR 214.2(h)(8)(iii)(F)(2)(iii). Whether a nonprofit entity
is attached to an institution of higher education depends on its status
as a member, branch, cooperative, or subsidiary, as is stated in

[[Page 103113]]

the provision, and DHS does not believe these corporate relationships
require further clarification in this regulation. Further, DHS declines
to provide a definition of ``active working relationship'' and declines
to confirm that formal written affiliation agreements between an
institution of higher education and the parent organization of the
petitioner qualify for purposes of 8 CFR 214.2(h)(8)(iii)(F)(2)(iv), as
these relationships will be examined on a case-by-case basis.
Comment: A commenter said that another way to ensure greater levels
of consistency in cap exemption adjudications would be for the agency
to consider a separate rulemaking to establish a distinct adjudication
procedure for determining whether an entity is eligible for a cap
exemption, which the commenter said USCIS already does in other
contexts such as Blanket L petitions. The commenter said that an
advance determination of eligibility for the H-1B cap exemption with
the ability to premium process, would give petitioners greater
certainty in knowing that they must--or may not--file cap-exempt
petitions for H-1B workers. The commenter added that the lack of
consistency in adjudications means that petitioners who have been
previously approved for cap exemption cannot be assured that the
exemption would be honored in the filing of a subsequent petition even
when the underlying facts have not changed.
Response: Under DHS regulations, eligibility for cap exemption is
determined on a case-by-case basis. The NPRM did not propose to create
a new, separate adjudication process for cap exemption determinations
and such a process is not currently operationally feasible. USCIS may
need to create a new form as well as a framework for this new
adjudication. Even if DHS were inclined to adopt the commenter's
suggestion, the regulated public should have an opportunity to comment
on any such process and framework. DHS is unable to adopt this
suggestion through this rule but may consider it in future rulemaking
efforts.
Comment: An advocacy group generally requested that the proposed
regulations provide for educational institutions and U.S. Government
projects as cap-exempt employers. A trade association requested that
the proposal provide for university research parks specifically for cap
exemption purposes.
Response: DHS regulations state that an H-1B nonimmigrant worker is
exempt from the cap if employed by: (1) an institution of higher
education; (2) a nonprofit entity related to or affiliated with such an
institution; (3) a nonprofit research organization; or (4) a
governmental research organization. See 8 CFR 214.2(h)(8)(iii)(F)(1)
through (3). Institutions of higher education are defined in section
101(a) of the Higher Education Act of 1965. If not directly employed by
the qualifying institution or organization, the individual must meet
the requirements outlined in 8 CFR 214.2(h)(8)(iii)(F)(4). USCIS
reviews the totality of the evidence for each petition using the
preponderance of the evidence standard and cannot make a generalized
assessment as to whether a particular organization or affiliation will
qualify for cap-exempt status.
9. Automatic Extension of Authorized Employment Under 8 CFR
214.2(f)(5)(vi) (Cap-Gap)
Comment: Many commenters, including law firms, research
organizations, and trade associations, expressed general support for
the automatic extension of authorized employment under 8 CFR
214.2(f)(5)(vi) (``cap-gap''). A commenter stated that the proposed
provision could help many people, while an advocacy group remarked that
it would be welcomed by students, employers, and universities. Another
commenter expressed that the proposed provision would help many newly
selected H-1B beneficiaries. A university welcomed the proposed
provisions in as much as they would support graduates who are employed
in the United States in industry positions. A union expressed that the
proposed provision would benefit many in the higher education
workforce.
Response: DHS agrees with these commenters that automatically
extending employment authorization for F-1 students during the period
known as the ``cap-gap'' will help prevent the disruptions in
employment authorization that some F-1 nonimmigrants seeking H-1B
change of status have experienced over the past several years. DHS
recognizes the hardships that a disruption in employment authorization
could cause to both affected individuals and their employers and seeks
to prevent potential future disruptions by extending cap-gap relief.
Comment: Many commenters further expressed that the proposed
provision would provide benefits to students, including increased
flexibility, reduced disruption to employment authorization due to
processing delays, and a smooth transition from their educational
pursuits to the workforce. A professional association and a joint
submission expressed support for extending the cap-gap timeframe,
stating it would allow future medical students to remain in the United
States to complete their education, training, and residency. A couple
of commenters, including a university, elaborated that a smoother
transition for students allows industries to benefit from their skills,
enhances the United States' labor market, and strengthens its position
as the premier global destination for higher education. A couple of
commenters added that the proposed provision is crucial for ensuring
fairness, efficiency, and transparency in the H-1B process, thereby
benefitting both applicants and employers. Another commenter remarked
that the added flexibility to the F-1 program would allow students to
gain valuable work experience in the United States, thus creating a
more dynamic, innovative, and inclusive workforce. The commenter
concluded that this would bolster the overall prosperity and
competitiveness of U.S. industries on a global stage. While discussing
the proposed provision's benefits to students, a couple of commenters,
including a professional association, expressed that the current period
of ``limbo'' causes American-trained students not to pursue employment
in the United States. A few commenters, including a trade association
and a professional association, stated that the proposed provision
would greatly improve employees' sense of certainty.
A company expressed general support for the proposed provision,
noting that the proposal would reduce instances of work authorization
gaps for individuals utilizing F-1 OPT in the event of increased
processing times and future unavailability of the premium processing
option for H-1B cap petitions. Similarly, an advocacy group expressed
that the proposed provision would provide ``much-needed'' relief in the
face of delays, including if premium processing is suspended for H-1B
petitions.
Response: DHS agrees that the provisions in this rule will benefit
students, employers, industries, and the United States. Students and
employers will benefit from greater certainty about the maintenance of
their employment authorization. Industries will benefit from the skill
sets of these students. Further, the United States will remain
attractive to global talent and improve its ability to retain such
talent.
Comment: A professional association applauded DHS for taking
actions that improve efficiency and are based on real-world realities
such as the academic calendar, USCIS workload,

[[Page 103114]]

and processing times. Similarly, a trade association applauded USCIS
for the proposed changes to better align status durations and
authorization dates to current conditions as they pertain to
adjudications. Another professional association remarked that the
proposed provision would allow USCIS additional time to process
petitions before the ``deadline.'' A university expressed optimism that
the increased processing window for H-1B petitions could alleviate some
of the delays associated with other benefit applications that USCIS
adjudicates, such as OPT, STEM OPT, or changes of status.
Response: DHS believes that automatically extending employment
authorization for F-1 students during the period known as the ``cap-
gap'' will result in more flexibility for F-1 students and USCIS and
will help to avoid disruptions to U.S. employers that are lawfully
employing F-1 students. In addition to avoiding employment disruptions,
the lengthier extension of F-1 status and post-completion OPT or 24-
month extension of post-completion OPT employment authorization for F-1
students with pending H-1B petitions until April 1, which is one year
from the typical initial cap filing start date, accounts for USCIS'
competing operational considerations and would enable the agency to
balance workloads more appropriately for different types of petitions.
Comment: A few commenters expressed that the proposed provision
would positively impact the U.S. economy. A commenter remarked that the
increased flexibility in the F-1 program would open the door to skilled
students who contribute significantly to the economy. Another commenter
remarked that the proposed provision would have positive impacts on the
U.S. economy, including by ensuring the payment of education fees and
the collection of income taxes from workers. A company commented that
the proposed enhancements would play a pivotal role in attracting and
retaining top global talent that is crucial for propelling U.S.
economic growth.
Response: DHS agrees with this feedback that implementing this
automatic extension until April, rather than October 1, of the relevant
fiscal year will provide stability for F-1 students that will increase
the United States' ability to attract and retain top global talent. DHS
also generally agrees that this provision will have positive impacts on
the U.S. economy, such as by benefiting employers to gain productivity
and potential profits that the F-1 students' continuing employment will
provide, as discussed in section IV(A)(3)(viii) below.
Comment: Multiple commenters stated that the proposed provision
would provide benefits to employers. A few commenters, including a
trade association, a professional association, and a business
association, remarked that the proposed provision would greatly improve
employers' sense of certainty, while a joint submission stated that the
proposal would provide much needed predictability for employers to
lawfully employ F-1 students. A professional association and a trade
association commented that the proposed flexibilities would allow for
better recruitment efforts among U.S. employers. A company expressed
that the proposed improvements would support U.S. companies at the
frontier of innovation. A university stated that the proposed cap-gap
extension would reduce the negative impact on output experienced by
employers, specifically for the jobs in research or technology-related
areas. A trade association remarked that extending the cap-gap coverage
would save company costs since they would not have to file under
premium processing. A legal services provider agreed with the proposed
provision, reasoning it should reduce the instances where employers
have to terminate or place their ``cap-gap'' employees on leave on
October 1 of a given year while their H-1B cap petitions were still
pending.
Response: DHS agrees that expanding the duration of the cap-gap
extension and employment authorization, as applicable, will benefit
employers by providing stability and helping to avoid disruptions
caused by adjudication delays.
Comment: A commenter suggested that USCIS provide F-1 students in
OPT with the option of three to six months of leave to travel, in
addition to the existing 60-day grace period, after graduation. The
commenter added that this would allow students to visit their home
country, travel in case of emergencies, and reduce pressure on the job
market. A commenter suggested that USCIS consider extending OPT to at
least 2 years for all undergraduate and graduate programs, adding that
the U.S. is at a disadvantage compared to other developed markets that
offer more generous employment visa options. Another commenter
requested that USCIS extend validity of STEM OPT automatically until
May of the year in which it expires, thereby providing an additional
opportunity to get into the H-1B lottery and use the cap-gap if
selected.
Response: DHS declines to adopt the commenter's suggestions
concerning OPT and the STEM OPT extension, as such suggestions are
beyond the scope of this rulemaking.
Comment: A commenter asked if the starting criterion for cap-gap
could be March 1 instead of April 1 to address the issue of applicants
who are registered in the lottery but lose work authorization before
the results are announced. A couple of commenters asked that cap-gap
extensions be based on the status of the student applicant at the time
of H-1B registration rather than the status at the time of petition
filing, reasoning the current rule is disadvantageous to applicants
whose OPT status expires during the H-1B filing period.
A company encouraged DHS to further extend cap-gap to all
beneficiaries registered in the H-1B lottery until USCIS concludes the
lottery selection for the fiscal year. A commenter further requested an
automatic extension of F-1 OPT until USCIS officially announces cap
fulfillment or the commencement of the next cap season, stating this
would address challenges faced by students who are not initially
selected but their OPT status expires before the next round of
selection.
Response: DHS declines to adopt the commenters' suggestions to
change the ``starting criterion'' for the automatic extension from
April 1 to March 1, or otherwise to the date that an organization
submits an H-1B registration on a student's behalf. As explained in the
NPRM, DHS was concerned with extending employment authorization and
status because it could reward potentially frivolous filings that would
enable students who may ultimately be found not to qualify for H-1B
status. 88 FR 72870, 72887 (Oct. 23, 2023). DHS does not believe that
the risks of allowing frivolous filings is outweighed by other factors
that might merit extending cap-gap employment or status prior to filing
a petition.
Regarding the suggestions to allow F-1 students remain in lawful
status through the adjudication of H-1B petitions filed on their
behalf, DHS will not make the requested changes to extend F-1 status
and associated employment authorization, as applicable, through the
commencement of the next cap season, when USCIS concludes registration
selection for the relevant fiscal year, or when USCIS announces that
the cap has been reached. DHS does not believe that these changes are
necessary because April 1 of the relevant fiscal year is

[[Page 103115]]

further into the future than those three conditioning events. In the
three most recent H-1B cap seasons, USCIS has commenced the next H-1B
cap season, concluded all registration selection rounds, and announced
that the respective H-1B caps have been fulfilled before April 1 of the
respective fiscal years.
Comment: While expressing general support for the proposal, an
attorney suggested that DHS revise the cap-gap provision to
automatically extend status and employment authorization until
adjudication of the H-1B petition is complete. The attorney added that
there is no guarantee that extending the cap-gap would solve the issue
at hand due to current processing delays and USCIS adjudication
backlogs. A trade association echoed the request for the cap-gap
provision to be extended until final adjudication of the H-1B petition,
reasoning that the risk of fraud would be relatively low.
Response: As noted in the NPRM, according to USCIS data for FY 2016
through 2022, USCIS adjudicated approximately 99 percent of H-1B cap-
subject petitions requesting a change of status from F-1 to H-1B by
April 1 of the relevant fiscal year.\90\ 88 FR 72870, 72887 (Oct. 23,
2023). By automatically extending employment authorization until April
1 of the relevant year, DHS expects USCIS will be able to adjudicate
nearly all H-1B cap-subject petitions requesting a change of status
from F-1 to H-1B by this date.\91\ DHS declines to automatically extend
employment authorization until the final adjudication of the H-1B
petition given the size of the affected population and the subjectivity
of the circumstances surrounding the delay in final adjudication of H-
1B petitions for this population. Further, providing a certain end-date
of employment authorization provides needed clarity with respect to the
verification of employment authorization and reduces the risk of
unauthorized employment.
---------------------------------------------------------------------------

\90\ USCIS, OP&S Policy Research Division (PRD), Computer-Linked
Application Information Management System 3 (C3) database, Oct. 27,
2022. PRD187.
\91\ See 88 FR 72870, 72887.
---------------------------------------------------------------------------

Comment: A joint submission proposed that USCIS eliminate the April
1 outside limit on cap-gap coverage and instead extend status and work
authorization throughout the entire pendency of the petition.
Alternatively, the commenter recommended further clarity regarding the
proposed regulatory term ``until the validity start date of the
approved petition'' and proposed alternative language to refer to a
petition that ``not been finally adjudicated by the requested start
date on the petition.''
Response: DHS declines to adopt the commenters' suggestion to
extend status and work authorization through the adjudication of the
petition for the reasons explained above. Further, DHS believes that
the regulatory text stating that duration of status and employment
authorization will be automatically extended ``until the validity start
date of the approved petition'' is sufficiently clear. The commenters'
suggested language regarding petitions that have not been finally
adjudicated would also allow extensions of status and work
authorization for petitions that have been denied and appealed, which
was not contemplated in the proposed rule. DHS is concerned that such
an expansion could create an incentive for petitioners to file
frivolous appeals in order to obtain extensions of status or work
authorization, and therefore, declines to adopt this suggestion.
Comment: Many commenters provided additional suggestions in
response to the proposed provision. To address the F-1 60-day grace
period in the cap-gap context, a professional association asked DHS to
include language in 8 CFR 214.2(f)(5)(vi) to clarify when the 60-day
grace period would start if an H-1B petition has been denied, revoked,
or withdrawn before April 1 or remains pending on April 1.
Response: As noted in the NPRM, if the H-1B petition underlying the
cap-gap extension is denied before April 1, then, consistent with
existing USCIS practice, the F-1 beneficiary of the petition, as well
as any F-2 dependents, would generally receive the standard F-1 grace
period of 60 days to depart the United States or take other appropriate
steps to maintain a lawful status. 88 FR 72870, 72887 (Oct. 23, 2023)
(citing 8 CFR 214.2(f)(5)(iv)). If the H-1B petition is still pending
on April 1, then the beneficiary of the petition is no longer
authorized for OPT and the 60-day grace period begins on April 1. 88 FR
72870, 72887 (Oct. 23, 2023). Although the F-1 beneficiary may not work
during the 60-day grace period, individuals generally have been allowed
to remain in the United States in an authorized period of stay while a
subsequent H-1B petition and change of status request is pending. While
this is stated in the preamble to the proposed rule, DHS declines add
this language to the regulatory text.
Comment: An advocacy group provided the following suggestions in
response to the proposed provisions:
Extend the 24-month extension of post-completion OPT an
additional 24 months in case the OPT beneficiary is not selected in the
lottery;
Extend OPT to a total of 36 months; and
Increase the grace period to 180 days so that the OPT
holder has adequate time to switch back to F-1 or obtain another
status.
Response: The revision of the cap-gap extension finalized in this
rulemaking is intended to provide greater flexibility and better
prevent disruptions in employment authorization specifically for F-1
students who are beneficiaries of qualifying H-1B cap-subject
petitions. As the suggestions to expand the STEM OPT extension, expand
the period of time during which F-1 students may engage in OPT, and
double the F-1 grace period, are unrelated to the goals of cap-gap
extension, they are beyond the scope of this rulemaking and DHS
declines to adopt the suggestions.
Comment: Several commenters generally opposed the extension of cap-
gap and work authorization. A commenter stated that the cap-gap
extension would hurt American students, while another commenter
expressed that F-1 students should be limited to 90 days to find a job,
as this would take jobs away from citizens who better understand the
culture and workings of the United States.
Response: To qualify for this automatic extension, an F-1 student
must be the beneficiary of a pending, timely-filed, non-frivolous H-1B
cap-subject petition that requests a change of status. See new 8 CFR
214.2(f)(5)(vi)(A). As these F-1 students are necessarily seeking
employment that is subject to annual numerical allocations, and the H-
1B petitions filed on their behalf by a petitioning employer must be
non-frivolous, DHS believes that the eligibility requirements for the
automatic extension are sufficient to ensure that U.S. citizen students
and workers are not adversely affected by the continued ability of
these F-1 students to maintain employment authorization until April 1
of the relevant fiscal year.
Comment: While expressing general opposition, an advocacy group
stated that DHS should deny visas to employers of post-graduate
students until U.S. citizens in similar situations find employment.
Citing an opinion piece on its own website, an organization stated that
the proposed rule does not address the incentives that employers are
given to hire F-1 nonimmigrant visa holders over recent American
graduates. Another commenter asked USCIS to reconsider any changes that
expand access to OPT, reasoning that the system incentivizes

[[Page 103116]]

employers to favor noncitizens over citizens since many OPT employers
and workers are excused from paying the usual Federal payroll taxes. An
advocacy group expressed that the proposed provision is not rooted in
statute nor does it cite any legal justification for the change, thus
the proposed changes are unauthorized by law. Similarly, another
organization urged DHS to rescind all regulations and proposals that
allow F-1 nonimmigrant visa holders to work in the United States
following graduation, stating that OPT is not authorized under Federal
immigration law and creates unlawful competition among workers. The
organization added that allowing F-1 nonimmigrant visa holders to
extend their period of authorized stay for the purpose of working after
they are no longer students violates the scheme Congress created to
regulate the admission of nonimmigrants and employment in the United
States.
Response: DHS acknowledges the concerns of these commenters but
notes that the INA does not contain a requirement that all H-1B
petitioners seeking to employ F-1 nonimmigrants conduct a labor market
test to determine that there are no able, willing, qualified, and
available U.S. workers. DHS declines to impose such a requirement, as
that was not proposed in the NPRM and is beyond the scope of this
rulemaking. Additionally, DHS does not agree that potential short-term
tax incentives employers or workers may experience are a reason to
avoid finalizing revisions to 8 CFR 214.2(f)(5)(vi). DHS is aware that,
under Internal Revenue Service (IRS) rules, some noncitizens, including
F-1 students, may be exempt from paying some Federal taxes for a
certain duration of time. However, it is not certain that every F-1
student who benefits from the automatic cap-gap extension of authorized
employment will qualify for exemption from Federal taxation. DHS does
not believe that potential short-term tax exemption for some F-1
students is a reason to decline to adopt this provision and notes that
changes to IRS rules to extend the same Federal tax obligations to
employers of F-1 students would need to be addressed by the IRS, not
DHS. DHS will proceed with expanding the automatic extension as
proposed.
DHS disagrees that the longstanding cap-gap provisions, or the
proposed changes to the cap-gap provisions as finalized in this rule,
are ultra vires. As stated under the Legal Authority section of the
NPRM, section 214(a)(1) of the INA, 8 U.S.C. 1184(a)(1), authorizes the
Secretary to prescribe, by regulation, the time and conditions of the
admission of nonimmigrants. 88 FR 72872-72873. As the D.C. Circuit
Court of Appeals held, ``[t]he Department's charge to set the
`conditions' of nonimmigrant admission includes power to authorize
employment--a fact that Congress has expressly recognized by statute.''
Wash. All. of Tech. Workers v. Dep't of Homeland Sec., 50 F.4th 164,
190 (D.C. Cir. 2022). Thus, contrary to the commenter's assertion, the
expansion of the cap-gap provisions as finalized in this rule are
consistent with the Secretary's authority under section 214(a)(1) of
the INA, 8 U.S.C. 1184(a)(1) and not ultra vires.
Comment: A professional association recommended that USCIS extend
dual intent to F-1 visas and offer a ``direct route'' for doctoral
candidates to transition from F-1 to H-1B status, as this would help
attract and retain foreign talent and benefit the U.S. economy.
Response: DHS declines to adopt the suggestions. The requirement
that a student have a residence in a foreign country which the student
has no intention of abandoning and to demonstrate nonimmigrant intent
is grounded in statute and beyond the scope of this rulemaking. As to
the request to offer a ``direct route'' for doctoral candidates to
transition from F-1 to H-1B status, it is not clear if the commenter is
requesting a cap exemption, a set aside under the advanced degree
exemption, or a different ``direct route.'' Regardless, DHS declines to
adopt this suggestion. DHS responded to a similar comment in the final
rule, ``Improving the H-1B Registration Selection Process and Program
Integrity,'' published on February 2, 2024. This commenter requested
that DHS introduce degree-based categorizations in the selection
system, reasoning that such an approach would allow more advanced
degrees, like Ph.D.s., to have a unique category to align with the
specialty-based nature of the H-1B classification. 89 FR 7456, 7474
(Feb. 2, 2024). DHS responded to this comment, explaining that in the
NPRM, DHS did not propose to prioritize or give preference to any
registration based on skills, salaries/wages, education, experience,
industry, or any other new criteria and declined to implement this
suggestion. 89 FR 7456, 7474 (Feb. 2, 2024). Similarly, DHS will not
adopt this suggestion.
Comment: A university encouraged USCIS to improve the Computer
Linked Application Information Management System (CLAIMS), so that
correct data flows into the Student and Exchange Visitor Information
System (SEVIS) once USCIS has adjudicated H-1B petitions for which F-1
students are listed as beneficiaries. The university elaborated that if
this solution is not feasible, the Student and Exchange Visitor Program
(SEVP) could be given access to the approval information to increase
communication between USCIS and SEVP.
Response: DHS and component agencies are making continuous
enhancements to these and other systems. However, DHS believes that
further improvements, to the extent they are necessary, can be
accomplished outside of the regulatory process. Therefore, DHS declines
to adopt these suggestions as part of this final rule.
10. Other Comments on Benefits and Flexibilities
Comment: A commenter remarked that the rule should be flexible and
adaptable to changing economic conditions and workforce demands to
ensure that the programs remain responsive to the needs of American
businesses and the global economy. Another commenter encouraged USCIS
to explore solutions for international students who wish to stay and
contribute to the United States by exploring alternative visa pathways
or retention measures.
Response: While DHS values flexibility and adaptability, this
comment lacks specificity about the changes DHS could make to this rule
to promote those values. DHS always strives to balance flexibility and
adaptability with clarity and integrity, and DHS believes this rule
strikes that balance. With respect to exploring solutions for
international students who wish to stay and contribute to the United
States, increasing the automatic extension of duration of status and
authorized employment under 8 CFR 214.2(f)(5)(vi) will allow F-1
students greater flexibility to remain in the United States while their
H-1B petitions are adjudicated. Additional changes as suggested by the
commenter, such as exploring alternative visa pathways or retention
measures, are beyond the scope of this rulemaking.
Comment: A commenter proposed the inclusion of provisions that
allow H-1B visa holders to engage in supplementary income-generating
activities in creative and AI-related fields, reasoning that these
opportunities would foster innovation, job creation, and contribute to
the United States' cultural and technological diversity. Another
commenter suggested that H-1B holders be permitted to switch or work
with multiple employers at the same time.

[[Page 103117]]

Response: It is unclear in what context the commenters propose to
allow H-1B workers to engage in supplementary income-generating
activities, such that existing regulations would not allow for such
arrangements. An H-1B beneficiary may change employers if their new
employer files a new petition requesting H-1B classification and an
extension of stay for the beneficiary, see 8 CFR 214.2(h)(2)(i)(D).
With respect to allowing H-1B beneficiaries to work for multiple
employers, DHS notes that H-1B workers are permitted to change
employers, see 8 CFR 214.2(h)(2)(i)(D), and obtain authorization to
work concurrently for multiple employers, see 8 CFR 214.2(h)(2)(i)(C)
(requiring that a separate petition be filed by each employer). In
either scenario, an eligible H-1B beneficiary may start concurrent or
new employment upon the filing of a non-frivolous H-1B petition or as
of the requested start date, whichever is later. See 8 CFR
214.2(h)(2)(i)(H). Therefore, DHS will not make a change to this rule
resulting from these comments.
Comment: A joint submission requested clarification on immediate
and automatic revocation, specifically on the language stating that
``[t]he approval of an H-1B petition is also immediately and
automatically revoked upon notification from the H-1B petitioner that
the beneficiary is no longer employed.'' While discussing a terminated
worker's ability to rejoin a petitioning company within a 60-day grace
period so long as the petition has yet to be revoked, the commenters
stated that the current requirement to notify USCIS immediately of a
termination, along with the proposed automatic revocation provision,
would effectively nullify this ability.
Response: DHS proposed to amend 8 CFR 214.2(h)(11)(ii) as part of
its effort to modernize and improve the H-1B program, adding benefits
and flexibilities and eliminating unnecessary burdens. Currently, 8 CFR
214.2(h)(11)(i)(A) states that, ``If the petitioner no longer employs
the beneficiary, the petitioner shall send a letter explaining the
change(s) to the director who approved the petition.'' When a
petitioner submits a letter according to 8 CFR 214.2(h)(11)(i)(A),
oftentimes the petitioner does not further request USCIS to take a
specific action on the petition and therefore USCIS has to take the
extra step of issuing an additional notice, such as a Notice of Intent
to Revoke (NOIR) to confirm the petitioner's intent. This is an
inefficient process as the NOIR essentially asks the petitioner to
confirm what was already stated in the letter notifying USCIS that it
no longer employs the beneficiary. New 8 CFR 214.2(h)(11)(ii)
eliminates this redundancy and provides for immediate and automatic
revocation upon notification from the H-1B petitioner that the
beneficiary is no longer employed by the petitioner. The requirement
that the petitioner notify USCIS of any material change, including when
a beneficiary is no longer employed by a petitioner, is not a new
requirement. DHS believes that this slight modification will increase
efficiency for both stakeholders and USCIS, and reduce unnecessary,
time-consuming tasks such as issuing unnecessary notices for which
USCIS rarely receives a response or outcome other than revocation of
the approved H-1B petition.
USCIS also has encountered companies using this technicality in the
regulatory language to allow beneficiaries to retain an approved H-1B
petition for additional time beyond that for which they would otherwise
be eligible. These companies would submit a statement saying the
beneficiary stopped working, thus complying with the existing 8 CFR
214.2(h)(11)(ii) regulatory language, but they would not explicitly
request withdrawal or automatic revocation of the petition to retain
the appearance of a valid petition approval for the beneficiary until a
NOIR, petitioner response, and subsequent revocation could be
completed. The appearance of a valid petition approval, and
corresponding maintenance of status, creates potential confusion,
particularly for other agencies that may rely upon the approval notice
to validate eligibility for certain benefits.
The joint submission also states that finalizing this rule would
``effectively nullify the clear intent'' of an existing USCIS web page
\92\ explaining options for terminated nonimmigrant workers because
that web page indicates that a terminated worker can rejoin a
petitioning company during the 60-day grace period as long as the
petition has not been revoked. However, DHS notes that the web page
further explains ``If your employer notified us of the termination,
thus automatically revoking the petition approval, the employer would
need to file a new petition with us.'' \93\ This is consistent with new
8 CFR 214.2(h)(11)(ii). DHS therefore does not agree that new 8 CFR
214.2(h)(11)(ii) will ``nullify the intent'' of the web page. Further,
DHS believes that finalizing this rule will eliminate redundancy and
promote efficiency in adjudications. Therefore, DHS declines to make
any changes in response to this comment.
---------------------------------------------------------------------------

\92\ See DHS, USCIS, Options for Nonimmigrant Workers Following
Termination of Employment (last reviewed/updated Apr. 1, 2024),
https://www.uscis.gov/working-in-the-united-states/information-for-employers-and-employees/options-for-nonimmigrant-workers-following-termination-of-employment.
\93\ See DHS, USCIS, Options for Nonimmigrant Workers Following
Termination of Employment (last reviewed/updated Apr. 1, 2024),
https://www.uscis.gov/working-in-the-united-states/information-for-employers-and-employees/options-for-nonimmigrant-workers-following-termination-of-employment.
---------------------------------------------------------------------------

F. Program Integrity

11. Provisions To Ensure Bona Fide Job Offer for a Bona Fide Specialty
Occupation Position
i. Contracts
Comment: A joint submission and a trade association stated that
requesting contractual agreements would not help adjudicators in
determining whether the position satisfies the specialty occupation
requirements, as they often do not contain information about the
position's minimum educational requirements. Both commenters added that
these documents do not normally discuss minimum educational
requirements for jobs being performed pursuant to the agreements as
they are not typically relevant to the parties' business interests,
cannot be practicably obtained due to nondisclosure provisions within
those contracts, that the contractual evidence of minimum educational
requirements is not always germane to the specialty occupation
criteria, and that an H-1B petitioner may not have a contract with a
third-party employer. The joint submission stated that when a
petitioner and a client negotiate for a specific deliverable, clients
do not typically seek to impose any minimum educational requirements on
the employees the petitioner might assign to the project as the
satisfactory completion of the project is the overarching objective.
Similarly, a legal services provider voiced concern that most work
orders would not contain the minimum educational requirements outlined
in the proposed rule and that a USCIS officer could deny the petition
even when the minimum educational requirements to perform the duties
are clear from all of the other evidence submitted.
Response: DHS is aware that contracts do not always contain minimum
educational requirements. DHS also recognizes that information that may
be

[[Page 103118]]

relevant to one scenario (e.g., where the beneficiary will be staffed
to fill a position within the end-client's organization) might not be
equally relevant or probative to other scenarios (e.g., where the
petitioner is hired to complete a project for the end-client and
determine necessary staffing allocation to complete the project). DHS
did not propose to require the submission of contracts in all
instances. Rather, DHS proposed to clarify its existing authority to
request contracts, work orders, or similar evidence, in appropriate
cases in accordance with 8 CFR 103.2(b) (USCIS may request additional
evidence if the evidence submitted does not establish eligibility) and
214.2(h)(9) (``USCIS will consider all the evidence submitted and any
other evidence independently required to assist in adjudication.'').
Current 8 CFR 214.2(h)(4)(iv)(A) requires petitioners to submit
evidence to establish that the beneficiary is qualified to perform
services in a specialty occupation and that the services the
beneficiary is to perform are in a specialty occupation. The petitioner
bears the burden of establishing eligibility for an immigration
benefit.\94\ If the required initial evidence submitted by the
petitioner is sufficient to establish that the services the beneficiary
is to perform are in a specialty occupation and that the beneficiary is
qualified to perform services in that specialty occupation, then
additional evidence would not be needed to establish the minimum
educational requirements for the position and would, therefore, not be
requested under new 8 CFR 214.2(h)(4)(iv)(C). However, under existing
USCIS policy, if the petitioner has not satisfied its burden, the
adjudicating officer would generally issue an RFE to request evidence
of eligibility.\95\ The RFE should identify the eligibility
requirement(s) that has not been established and why the evidence
submitted is insufficient; identify any missing evidence specifically
required by the applicable statute, regulation, or form instructions;
identify examples of other evidence that may be submitted to establish
eligibility; and request that the petitioner submit such evidence. The
adjudicating officer should not request evidence that is outside the
scope of the adjudication or otherwise irrelevant to an identified
deficiency.\96\ At the same time, DHS will not limit USCIS' prerogative
to request contracts, work orders, or other similar evidence if it is
determined such evidence would aide adjudicators in ascertaining
whether a position is a specialty occupation, as claimed. Consistent
with this policy, new 8 CFR 214.2(h)(4)(iv)(C) lists examples of
evidence that may be requested by USCIS, and submitted by the
petitioner, to establish eligibility. If evidence, such as contracts or
work orders, is unavailable or does not contain the requested
information, the petitioner may submit alternative evidence to
establish eligibility. Regarding the commenter's concern about
petitions where the position's minimum educational requirements are
clear from all of the other evidence submitted, in such a case, USCIS
would not likely issue an RFE for additional evidence of the position's
minimum educational requirements.
---------------------------------------------------------------------------

\94\ See INA 291, 8 U.S.C. 1361.
\95\ See USCIS Policy Manual, Vol. 1, ``General Policies and
Procedures,'' Part E, ``Adjudications,'' Chap. 6, ``Evidence,''
https://www.uscis.gov/policy-manual/volume-1-part-e-chapter-6.
\96\ See USCIS Policy Manual, Vol. 1, ``General Policies and
Procedures,'' Part E, ``Adjudications,'' Chap. 6, ``Evidence,''
https://www.uscis.gov/policy-manual/volume-1-part-e-chapter-6.
---------------------------------------------------------------------------

Comment: An attorney, writing as part of a form letter campaign,
requested that USCIS retain its current guidance noted in the document
``PM-602-1114 Recission of Policy Memorandum on Contracts and
Itineraries'' which the commenter said, ``does not create extra work
for both the H-1B petitioner and their clients.'' A law firm stated
that the request for contracts would run counter to other streamlining
measures and be contrary to the statements in the proposed rule.
Response: As stated in the NPRM, USCIS already has the authority to
request contracts and other similar evidence. 88 FR 72870, 72901 (Oct.
23, 2023). DHS acknowledges that since USCIS Policy Memorandum PM-602-
0114, ``Rescission of Policy Memoranda,'' was issued in July 2020,
contracts and legal agreements have generally not been requested for H-
1B petitions. DHS further acknowledges, as a result of new 8 CFR
214.2(h)(4)(iv)(C) and other provisions of this final rule, that
petitioners may be requested to submit such documentation in some
cases. However, while USCIS has not generally requested such evidence
in recent years, USCIS retains the authority to request such evidence
and, new 8 CFR 214.2(h)(4)(iv)(C) is a codification of that authority.
Contracts and similar evidence may be helpful to establish the minimum
educational requirements to perform the duties of a position and that
there is a bona fide job offer and a position in a specialty occupation
for the beneficiary, thereby establishing eligibility for H-1B
nonimmigrant classification. Therefore, DHS believes it is appropriate
to codify the authority to request such evidence and put stakeholders
on notice of the kinds of evidence that could be requested to establish
the bona fide nature of the beneficiary's position and the minimum
educational requirements to perform the duties. Further, DHS does not
believe that this provision runs counter to other measures from the
proposed rule because, again, petitioners bear the burden of
establishing eligibility for an immigration benefit \97\ and nothing in
this rule is intended to relieve petitioners of that burden.
---------------------------------------------------------------------------

\97\ See INA 291.
---------------------------------------------------------------------------

In response to stakeholder comments, DHS is revising the contracts
provision at 8 CFR 214.2(h)(4)(iv)(C) in this final rule to state that
USCIS may request contracts or similar evidence ``showing the bona fide
nature of the beneficiary's position'' rather than ``showing the terms
and conditions of the beneficiary's work'' as stated in the NPRM. This
revision is intended to clarify that USCIS will be reviewing contracts
or similar evidence to determine if the position is bona fide, not that
USCIS will be specifically looking at the terms and conditions of the
beneficiary's work, which could include the terms and conditions as
specified by the petition, but would not include the terms and
conditions of the beneficiary's work more generally, which could imply
that officers will be looking for an employer-employee relationship or
the right to control. As explained in the NPRM and elsewhere in this
final rule, DHS is removing the reference to the employer-employee
relationship from the definition of U.S. employer, consistent with
current practice since June 2020 when, following a court order and
settlement agreement,\98\ USCIS formally rescinded its January 2010
policy guidance on the employer-employee relationship.\99\ As a result,
USCIS no longer requires the petitioner to establish a right to control
the beneficiary's work.
---------------------------------------------------------------------------

\98\ See ITServe All., Inc. v. Cissna, 443 F.Supp.3d 14, 19
(D.D.C. 2020) (finding that the USCIS policy interpreting the
existing regulation to require a common-law employer-employee
relationship violated the Administrative Procedure Act as applied
and that the itinerary requirement at 8 CFR 214.2(h)(2)(i)(B) is
ultra vires as it pertains to H-1B petitions).
\99\ See USCIS, ``Rescission of Policy Memoranda,'' PM-602-0114
(June 17, 2020), https://www.uscis.gov/sites/default/files/document/memos/PM-602-0114_ITServeMemo.pdf. This memorandum rescinded the
USCIS policy memorandum ``Determining Employer-Employee Relationship
for Adjudication of H-1B Petitions, Including Third-Party Site
Placements,'' HQ 70/6.2.8 (AD 10-24) (Jan. 8, 2010).
---------------------------------------------------------------------------

As also noted above, the provision provides greater transparency by
putting

[[Page 103119]]

stakeholders on notice of the kinds of evidence that could be requested
to establish the bona fide nature of the beneficiary's specialty
occupation position and the minimum educational requirements to perform
the duties. Such evidence will not be requested in all cases, but only
those where the petitioner has otherwise failed to meet its burden of
proof to establish eligibility by a preponderance of the evidence.
Finally, DHS believes that codification of the authority to request
contracts or other evidence will help enhance the integrity of the H-1B
program, which is a primary goal of this final rule.
Comment: A joint submission and a trade association stated
contracts and work orders specifying minimum educational requirements
are not legally probative in most employment contexts, and in actual
business practice often do not exist at all, and that the proposed
provision ``creates the potential to exclude sectors of the economy
from the H-1B program, as well as place burdensome obligations on
parties not before USCIS.'' The joint submission added that the scope
of the burden for providing documentation would be disproportionate to
the goal of ensuring a bona fide job offer, stating that although the
NPRM does not mandate the submission of contracts, it is strongly
suggested. The commenters requested USCIS give more consideration to
codifying that client contracts would continue to be an optional--but
not necessary--type of evidence to support an H-1B petition.
Joint submission commenters wrote that codifying the ability to
request contracts would be an invitation for adjudicators to view
contracts as a basic requirement for all H-1B petitions, even when such
contracts are legally irrelevant to establishing the existence of a
bona fide job offer, particularly in consideration of the fact that the
burden of proof is a ``preponderance of the evidence'' standard. The
commenters added that the proposed regulation goes far beyond that
which is necessary by establishing a requirement potentially applicable
to all that is only probative in a subset of situations. The joint
submission also stated that the types of evidence envisioned by this
rule are not universal to all business models and arrangements, making
the rule significantly burdensome, if not in some cases impossible. The
commenters said that the proposed regulatory change also fails to
recognize that the petitioning H-1B employer may not have a contract
with the end client at whose business location the H-1B worker would be
placed upon which to draw, which the commenter described as an entirely
common practice. For these reasons, the commenters said that the
proposed regulation fails to recognize the complex and rapidly changing
nature of modern-day business arrangements, and, in so doing, creates
unnecessary and unfair roadblocks to employers who need to access key
talent using the H-1B program.
Response: As noted, new 8 CFR 214.2(h)(4)(iv)(C) is a codification
of DHS's existing authority to request contracts, work orders, or
similar evidence, in appropriate cases in accordance with 8 CFR
103.2(b) (USCIS may request additional evidence if the evidence
submitted does not establish eligibility) and 214.2(h)(9) (``USCIS will
consider all the evidence submitted and any other evidence
independently required to assist in adjudication.''). DHS does not
expect that such evidence will be requested in all cases, and thus
disagrees with commenters that the provision will be unduly burdensome,
create unfair roadblocks for petitioners, or exclude sectors of the
economy. DHS recognizes that information that may be relevant in one
scenario (e.g., where the beneficiary will be staffed to fill a
position within the end-client's organization) might not be equally
relevant or probative in other scenarios (e.g., where the petitioner is
hired to complete a project for the end-client and determine necessary
staffing allocation to complete the project). DHS did not propose to
request the submission of contracts in all instances.
With respect to commenters' concerns that specified documentation
may not exist and that the types of evidence identified in the
regulation ``are not universal,'' DHS notes that, in USCIS's
adjudicative experience, generally, petitioners have been able to
submit written agreements (or business arrangements/requests for
services) between relevant parties in a service transaction and that
such agreements are relevant and probative in certain cases. It is
reasonable to expect petitioners, when relevant and probative, to
continue to submit such documentation, most often in the form of
contracts, work orders, or end-client letters. These documents, when
relevant and probative, often assist DHS in establishing the type of
work to be performed, the bona fide nature of the specialty occupation
position, the skills and resources required to perform the work, and
the bona fide nature of the beneficiary's job offer. Further, new 8 CFR
214.2(h)(4)(iv)(C) provides a non-exhaustive list of documents that may
be requested in order to establish the bona fide nature of the
beneficiary's position and the minimum educational requirements to
perform the duties of the position. However, it is important to note
that new 8 CFR 214.2(h)(4)(iv)(C) does not require or mandate
submission of any specific type of evidence or in any specific format
and, as noted in the NPRM, petitioners may submit other documentation
that is detailed enough to provide a sufficiently comprehensive view of
the position being offered to the beneficiary and the bona fide nature
of the position. 88 FR 72870, 72901 (Oct. 23, 2023). While this
provision does not require petitioners to submit any specific type of
documentation, such as contracts or legal agreements between the
petitioner and third parties, the petitioner must demonstrate
eligibility for the benefit sought.\100\
---------------------------------------------------------------------------

\100\ See USCIS, ``Rescission of Policy Memoranda,'' PM-602-0114
(June 17, 2020), https://www.uscis.gov/sites/default/files/document/memos/PM-602-0114_ITServeMemo.pdf.
---------------------------------------------------------------------------

DHS also disagrees that this codification of USCIS' authority to
request evidence showing the bona fide nature of the beneficiary's
position and the minimum educational requirements to perform the duties
is unduly burdensome for petitioners. Again, new 8 CFR
214.2(h)(4)(iv)(C) does not require the submission of contracts or
similar documents, and DHS does not anticipate that this evidence will
be requested in all cases. In fact, DHS anticipates that in the
majority of cases, petitioners will not be requested to submit
contracts or similar evidence to demonstrate the existence of a bona
fide position in a specialty occupation position. However, DHS believes
that it is important to have clear authority in the regulations so that
officers may request contracts, work orders, or other similar evidence
where the petitioner has not shown that a bona fide position is
available for the beneficiary. For example, uncorroborated statements
about a claimed in-house project for a company with no history of
developing projects in-house, standing alone, would generally be
insufficient to establish the existence of a bona fide position in a
specialty occupation. In such a case, an officer could request
contracts or other similar evidence.
Comment: A joint submission said that many client contracts contain
nondisclosure provisions that prohibit disclosure of the contracts to
third parties, and the language of the proposed regulation would put
these petitioners in a very difficult place where they must choose
between violating a specific contractual provision prohibiting
disclosure or having an H-1B petition for a key

[[Page 103120]]

employee denied. The joint submission said that the implied risk of
denial from noncompliance is made clear in the proposed rule by
stating, ``Although a petitioner may always refuse to submit
confidential commercial information, if it is deemed too sensitive, the
petitioner must also satisfy the burden of proof and runs the risk of
denial.'' \101\
---------------------------------------------------------------------------

\101\ 88 FR 72901 & n.110 (citing Matter of Marques, 16 I&N Dec.
314 (BIA 1997)).
---------------------------------------------------------------------------

The company, along with an individual commenter, stated that
documents could contain ``highly confidential information related to
controlled technology (including those involving government contracts),
restricted from disclosure by government authorities or subject to non-
disclosure agreements'' and would not verify the minimum educational
requirements for the position. The company stated that employers should
not be required to produce records ``irrelevant to the H-1B petition or
sensitive business information when other information is available and
sensitive information could be discoverable through the Freedom of
Information Act,'' adding that ``the same information can also be
provided by letters signed by an authorized company official and
supplier representative.'' The commenter requested that ``at the very
least'' employers be able to redact or omit sensitive information and
that adjudicators not be able to deny H-1B petitions based on
unavailable or inapplicable requested evidence, when the petitioner
provides other probative evidence of the job offer and educational
requirements of the offered position. Similarly, a trade association
requested that USCIS clarify that, due to the highly confidential and
sensitive nature of contracts, work orders, and similar evidence,
redactions do not impact an officer's ability to evaluate the nature of
the relationship between parties. Similarly, an individual commenter
said that the proposed provisions provide no additional assurances of
confidentiality of the documents being provided and do not address how
contracts can be provided when the terms of the contracts specifically
provide that they should not be disclosed to any person or agency.
Response: DHS is aware that contracts and associated documents
could contain confidential or sensitive information. As noted in the
NPRM and in line with current practice, if a petitioner submits
contracts or other requested evidence that may contain trade secrets,
for example, the petitioner may redact or sanitize the relevant
sections to provide a document that is still sufficiently detailed and
comprehensive yet does not reveal sensitive commercial information. 88
FR 72870, 72901 n.110 (Oct. 23, 2023). Alternatively, petitioners may
submit other relevant and probative evidence, such as a letter signed
by the end client. Petitioners will not be required to provide
sensitive information that is irrelevant and does not show the non-
speculative nature of the beneficiary's position or the minimum
educational requirements to perform the duties. However, as the
petitioner bears the burden of establishing eligibility for an
immigration benefit,\102\ it is critical that the submitted evidence
contain all information necessary for USCIS to adjudicate the petition.
Both the Freedom of Information Act and the Trade Secrets Act provide
for the protection of a petitioner's confidential business information
when it is submitted to USCIS. See 5 U.S.C. 552(b)(4), 18 U.S.C. 1905.
Additionally, a petitioner may request pre-disclosure notification. See
``Predisclosure Notification Procedures for Confidential Commercial
Information.'' E.O. 12600, 52 FR 23781 (June 23, 1987).
---------------------------------------------------------------------------

\102\ See INA 291.
---------------------------------------------------------------------------

Comment: A few commenters voiced general concern that requests for
documentation from petitioners and third parties would be burdensome,
especially for smaller IT consulting firms and startups. A company and
an advocacy group voiced concern with codifying an expectation that
USCIS would request contracts, work orders, or similar evidence of the
job offer due to employers being unable to provide complete copies of
statements of work. A professional association and a law firm said the
proposed rule would ``unfairly'' require third party employers to
produce a higher amount of documentation to immigration authorities,
making them more susceptible to ``broad, trivial inquisitions.''
A trade association stated that the requirement would ignore ``the
reality of contract law'' because parties would not want to bind
themselves to something contractually that is not necessary to the
performance of the object and purpose of the contract, and because it
would create contractual obligations to and for persons that are not in
privity with all of the contracting parties, such as the H-1B
beneficiary. The commenter added that such a dynamic could create
burdens for the legal system in the event a contract dispute arises.
Both the joint submission and the trade association said that due to
these factors, requesting contractual evidence in support of a bona
fide job offer would be arbitrary and capricious.
Response: DHS does not agree that this provision will be unduly
burdensome on petitioners and does not agree that it will unfairly
require any petitioner, including those where the beneficiary will
provide service to a third-party, to provide a higher amount of
documentation. Again, in all H-1B visa petition proceedings, it is the
petitioner's burden to establish eligibility for the immigration
benefit sought.\103\ Specifically, a petitioner must establish, among
other things, that the beneficiary will perform services in a specialty
occupation that requires theoretical and practical application of a
body of highly specialized knowledge and attainment of a baccalaureate
or higher degree in the specific specialty (or its equivalent) as a
minimum requirement for entry into the occupation in the United States.
Where the beneficiary will be staffed to a third party, this may be
demonstrated by contracts or other similar evidence to establish the
bona fide nature of the beneficiary's position and the minimum
educational requirement(s) to perform those duties, thus ensuring that
the beneficiary will perform services in a specialty occupation.\104\
While the evidence needed to satisfy the petitioner's burden may differ
from case to case, the essential elements of what the petitioner must
establish remain the same. Therefore, while additional evidence may be
required in some cases, DHS does not agree that this is unfair or
unduly burdensome.
---------------------------------------------------------------------------

\103\ See INA sec. 291, 8 U.S.C. 1361; Matter of Simeio
Solutions, 26 I&N Dec. 542, 549 (AAO 2015) (``It is the petitioner's
burden to establish eligibility for the immigration benefit
sought.''); Matter of Skirball Cultural Center, 25 I&N Dec. 799, 806
(AAO 2012) (``In visa petition proceedings, the burden of proving
eligibility for the benefit sought remains entirely with the
petitioner.''); Matter of Chawathe, 25 I&N Dec. 369 (AAO 2010) (``In
most administrative immigration proceedings, the applicant must
prove by a preponderance of evidence that he or she is eligible for
the benefit sought.'').
\104\ See Defensor v. Meissner, 201 F.3d 384, 387-88 (5th Cir.
2000) (``If only [the employer]'s requirements could be considered,
then any alien with a bachelor's degree could be brought into the
United States to perform a nonspecialty occupation, so long as that
person's employment was arranged through an employment agency which
required all clients to have bachelor's degrees. Thus, aliens could
obtain six year visas for any occupation, no matter how unskilled,
through the subterfuge of an employment agency. This result is
completely opposite the plain purpose of the statute and
regulations, which is to limit H1-B [sic] visas to positions which
require specialized experience and education to perform.'').
---------------------------------------------------------------------------

As stated previously, DHS does not anticipate that this evidence
will be requested in all cases, but there may be cases where additional
evidence is

[[Page 103121]]

needed to establish eligibility. For example, if a petitioner claims
that a beneficiary will be staffed to a third-party yet fails to
provide any documentation to establish the nature of the work to be
performed by the beneficiary or the requirements of the position, then
corroborating evidence may be needed to demonstrate the bona fide
nature of the beneficiary's position and the minimum educational
requirement to perform the duties. When submitted, these documents
should be detailed enough to provide a sufficiently comprehensive view
of the position being offered to the beneficiary. The documentation
should also include the minimum educational requirements to perform the
duties. Documentation that merely sets forth the general obligations of
the parties to the agreement, or that does not provide specific
information pertaining to the actual work to be performed, would
generally be insufficient. If the existing contracts or work orders do
not provide this level of detail, or the petitioner believes that they
are unable to provide such evidence because of confidentiality or non-
disclosure provisions, petitioners could provide other evidence, such
as end-client letters that provide this information or similar evidence
that petitioners think is relevant and probative. Through the proposed
provision, which is being finalized in this rule, DHS is putting
stakeholders on notice of the kinds of evidence that could be requested
to establish the bona fide nature of the beneficiary's position and the
minimum educational requirements to perform the duties.
Furthermore, DHS disagrees that this provision is arbitrary and
capricious. As explained above, DHS is not requesting contracts or
similar evidence in all cases. If the petition includes sufficient
evidence of the bona fide nature of the position and the minimum
educational requirements to perform the job duties, USCIS officers will
not request additional documentation in this regard. Furthermore, DHS
is aware that some contracts may not contain minimum educational
requirements for a position. If contracts are unavailable or do not
include the relevant information, petitioners may submit other reliable
evidence to demonstrate the bona fide nature of the position or the
minimum educational requirements for the proffered position.
Additionally, DHS is revising the regulatory language from what it
proposed such that new 8 CFR 214.2(h)(4)(iv)(C) does not contain the
phrase the ``terms and conditions of the beneficiary's work.'' This
change clarifies that contracts are being requested for limited
purposes and not for the purpose of establishing an employer-employee
relationship.
Comment: A few commenters stated that the proposed provision to
``require employers to show they have existing contracts for projects''
would contradict DOL rules governing a job offer, which the commenters
said converts the LCA into a de facto contract for employment.
Response: DHS does not agree that new 8 CFR 214.2(h)(4)(iv)(C)
requires ``employers to show they have existing contracts for
projects'' in all cases. Rather, as noted above, it is a codification
of DHS's existing authority to request contracts, work orders, or
similar evidence, in appropriate cases in accordance with 8 CFR
103.2(b) (USCIS may request additional evidence if the evidence
submitted does not establish eligibility) and 214.2(h)(9) (``USCIS will
consider all the evidence submitted and any other evidence
independently required to assist in adjudication.''). While the
reference to the LCA being converted ``into a de facto contract for
employment'' is unclear, DHS notes that nothing in new 8 CFR
214.2(h)(4)(iv)(C) conflicts with DOL regulations and reiterates that
this provision is a codification of existing DHS authority. While the
LCA does contain information regarding the proffered position and the
employer, as well as attestations from the employer regarding, among
other things, wages and working conditions, it does not contain
information regarding the specific educational requirements of the
proffered position and thus will not be sufficient to establish that a
position is in a specialty occupation.\105\ Additional evidence may be
needed in order to demonstrate the bona fide nature of the
beneficiary's position and/or the minimum educational requirement to
perform the duties, and new 8 CFR 214.2(h)(4)(iv)(C) clarifies the
authority of USCIS to request such evidence as needed.
---------------------------------------------------------------------------

\105\ DOL's regulation at 20 CFR 655.705(b) specifically
recognizes that ``DHS determines. . .whether the occupation named in
the labor condition application is a specialty occupation.''
---------------------------------------------------------------------------

Comment: A professional association and a law firm stated that
DHS's proposal to request contracts or similar evidence overstepped its
congressional authority, citing the 2020 court case ITServe Alliance,
Inc. The commenters stated that the District Court for the District of
Columbia held that Congress did not intend to give USCIS the broad
authority to request this type of evidence for H-1B visas under the
American Competitiveness and Workforce Improvement Act of 1998 and
wrote that itinerary and contract evidence for proving non-speculative
terms and conditions of the work is ``a total contradiction'' of
providing temporary expertise in a qualifying specialty occupation
position. The commenter stated that terms and conditions of the
beneficiary's daily duties ``change day-to-day to adjust to complex,
unique situations.'' The commenters also stated that general terms and
conditions like educational requirements are already disclosed in
submitted documents like the Labor Condition Application and the I-129,
Petition for a Nonimmigrant Worker. A trade association said that the
codification of the authority to request contracts and similar evidence
would be an unnecessary holdover from the employer-employee
relationship requirement. The commenter, along with a legal services
provider, cited the decision in ITServe Alliance, Inc., as
justification for why USCIS should not finalize the provision granting
DHS the authority to request contracts and similar evidence. The trade
association stated that the proposed rule only makes passing mention of
ITServe Alliance, Inc. and simply repackages prior policies. Similarly,
a legal services provider voiced concern that the proposed provision
would result in the revival of the guidance of the 2018 Policy Memo,
which was overturned in ITServe Alliance, Inc. The commenter stated
concern that USCIS would begin requesting excessive evidence of the
contractual relationship in the ``overreaching way'' that it did before
the 2020 court settlement, which the commenter said would overburden
employers and their clients, and create more work for USCIS in issuing
RFEs.
Response: DHS disagrees with commenters' assertions that it is
seeking to reinstate prior policy guidance from the 2018 memorandum
Contracts and Itineraries Requirements for H-1B Petitions Involving
Third-Party Worksites.\106\ DHS is not suggesting that a contract is
required or that contracts will be requested to accompany every
petition. As explained in the NPRM and above, DHS is codifying USCIS'
authority to request contracts, work orders, or similar evidence, in
accordance with 8 CFR 103.2(b) (USCIS may request additional evidence
if the evidence submitted does not establish eligibility) and
214.2(h)(9) (``USCIS will consider all the evidence submitted and

[[Page 103122]]

any other evidence independently required to assist in
adjudication.'').\107\ With new 8 CFR 214.2(h)(4)(iv)(C), DHS is simply
putting stakeholders on notice of the kinds of evidence that could be
requested. While an H-1B petitioner is not required to submit contracts
or legal agreements between the petitioner and third parties, the
petitioner must demonstrate eligibility for the benefit sought.\108\ By
contrast, the 2018 memorandum stated that petitioners must establish,
among other things, that ``the petitioner has specific and non-
speculative qualifying assignments in a specialty occupation for the
beneficiary for the entire time requested in the petition'' and that
``the employer will maintain an employer-employee relationship with the
beneficiary for the duration of the requested validity period.'' \109\
There are no such requirements in this final rule. Again, new 8 CFR
214.2(h)(4)(iv)(C) codifies USCIS' authority to request contracts and
similar evidence but does not require submission of such evidence in
all cases. Similarly, new 8 CFR 214.2(h)(4)(iii)(F) codifies the
requirement that a petitioner must demonstrate, at the time of filing,
availability of a bona fide position in a specialty occupation as of
the requested start date but does not require petitioners to identify
and document the beneficiary's specific day-to-day assignments for the
entire validity period requested.
---------------------------------------------------------------------------

\106\ USCIS, ``Contracts and Itineraries Requirements for H-1B
Petitions Involving Third-Party Worksites,'' PM-602-0157 (Feb. 22,
2018) (rescinded), https://www.uscis.gov/sites/default/files/document/memos/2018-02-22-PM-602-0157-Contracts-and-Itineraries-Requirements-for-H-1B.pdf.
\107\ See also, INA sec. 214(c)(1), 8 U.S.C. 1184(c)(1) (stating
that an H-1B petition shall be in such form and contain such
information as the Secretary shall prescribe); cf. Pars Equality
Ctr. v. Blinken,--F. Supp. 3d--, 2024 WL 4700636, at *4-6 (N.D. Cal.
Nov. 5, 2024) (observing that similar language in INA sec. 202(a), 8
U.S.C. 1202(a), regarding visa applications confers broad discretion
on the agency with respect to what supporting evidence is required
(citing cases)).
\108\ See USCIS, ``Rescission of Policy Memoranda,'' PM-602-0114
(June 17, 2020), https://www.uscis.gov/sites/default/files/document/memos/PM-602-0114_ITServeMemo.pdf.
\109\ USCIS, ``Contracts and Itineraries Requirements for H-1B
Petitions Involving Third-Party Worksites,'' PM-602-0157 (Feb. 22,
2018) (rescinded).
---------------------------------------------------------------------------

DHS further disagrees with commenters' assertions that this
provision conflicts with the court's findings in ITServe Alliance, Inc.
v. Cissna, 443 F.Supp. 3d 14 (D.D.C. 2020). The district court in that
case found, in pertinent part, that it was arbitrary and capricious for
USCIS to interpret the itinerary requirement at 8 CFR 214.2(h)(2)(i)(B)
to require ``contracts or other corroborated evidence of dates and
locations of temporary work assignments for three future years.'' \110\
Similarly, the court found that the ``requirements that employers (1)
provide proof of non-speculative work assignments (2) for the duration
of the visa period is not supported by the statute or regulation and is
arbitrary and capricious as applied to Plaintiffs' visa petitions.''
\111\ However, the ITServe court did not find that USCIS' general
authority to request corroborating evidence in appropriate cases--which
falls far short of requiring evidence of the dates and locations of
temporary work assignments for the duration of the validity period--to
be impermissible.
---------------------------------------------------------------------------

\110\ 443 F.Supp. 3d at 41.
\111\ Id. at 20.
---------------------------------------------------------------------------

While DHS disagrees with these comments, DHS is making some changes
to the regulatory text to allay some commenter concerns. First, DHS is
adding regulatory text to 8 CFR 214.2(h)(4)(iii)(F) to explicitly state
that the petitioner ``is not required to establish non-speculative day-
to-day assignments for the entire time requested in the petition.''
Further, DHS is not finalizing the ``terms and conditions'' language at
new 8 CFR 214.2(h)(4)(iv)(C) as proposed in the NPRM. As noted above,
this change clarifies that contracts are being requested for limited
purposes and not for the purpose of establishing an employer-employee
relationship. Also, while the definition of ``U.S. employer'' at 8 CFR
214.2(h)(4)(ii) is being amended to codify the existing requirement
that the petitioner have a bona fide job offer for the beneficiary to
work within the United States, the petitioner will not be required to
establish an employer-employee relationship with the beneficiary for
the duration of the requested validity period. Collectively, these
changes will aide in improving the integrity of the H-1B program while
also highlighting that DHS does not intend to reinstate the former
policies and practices that some courts have found invalid.
Comment: An individual commenter and a trade association voiced
concern that the proposed bona fide job offer provisions were
reinstating old policies and stringent measures that could have
detrimental effects on businesses. An individual commenter and a law
firm stated that the provisions designed to ensure bona fide employment
are ``individually and collectively incompatible with the entire
practice of contracting specialized IT services,'' as they would upset
companies' longstanding reliance interests and would be disruptive to
the technology needs of American businesses due to the high demand for
computer and technology specialists, which the commenters stated could
only be met through using international talent. The commenter
additionally said that the rule would ``revive invalidated guidance and
rules'' that were put in place to ```target''' information-technology
companies and would be contrary to the INA as well as arbitrary and
capricious.
Response: DHS does not agree that the provisions to ensure a bona
fide job offer for a specialty occupation position, including the
codification of USCIS' authority to request contracts or other similar
evidence, are contrary to the INA or revive invalidated policies such
as those addressed in the court's decision in ITServe Inc. v. Cissna
and rescinded by USCIS in a June 17, 2020 policy memorandum.\112\ As
discussed above and in the NPRM, new 8 CFR 214.2(h)(4)(iv)(C) is a
codification of USCIS' existing authority to request evidence such as
contracts and similar evidence. This provision is intended to ensure
that there is a bona fide job offer to employ the beneficiary in a bona
fide position in a specialty occupation, which is essential to the
integrity of the H-1B program. Without a requirement to demonstrate
that there is an actual position being offered, there would be no way
for DHS to determine if the position is in a specialty occupation, and
thus no way for DHS to determine whether the statutory definition of an
H-1B nonimmigrant worker as someone who is ``coming temporarily to the
United States to perform services in a specialty occupation. . . .''
has been met. See INA section 101(a)(15)(H)(i)(b), 8 U.S.C.
1101(a)(15)(H)(i)(b).
---------------------------------------------------------------------------

\112\ DHS, USCIS, ``Rescission of Policy Memoranda,'' PM-602-
0114 (June 17, 2020), available at https://www.uscis.gov/sites/default/files/document/memos/PM-602-0114_ITServeMemo.pdf
---------------------------------------------------------------------------

This provision does not require a day-to-day accounting of the
beneficiary's tasks, but requires that the petitioner demonstrate there
is a bona fide offer of employment for the beneficiary and that the
bona fide position in a specialty occupation is immediately available
upon the requested start date on the petition. As explained above, DHS
is making changes to be responsive to concerns raised by commenters,
including adding regulatory text to 8 CFR 214.2(h)(4)(iii)(F) to
explicitly state that the petitioner ``is not required to establish
non-speculative day-to-day assignments for the entire time requested in
the petition.'' This added regulatory text is consistent with ITServe
Inc. v. Cissna and highlights DHS's intent to differentiate this rule
from former policies and practices that some courts have found invalid.
DHS further disagrees that new 8 CFR 214.2(h)(4)(iv)(C), either on
its own or in

[[Page 103123]]

combination with the other integrity measures in this final rule, are
``incompatible with the entire practice of contracting specialized IT
services'' as asserted by the commenter. Again, many of these
provisions are codifications of existing DHS authority and are intended
to provide added clarity regarding the eligibility requirements for the
H-1B classification and to enhance the integrity of the H-1B program.
Further, the changes made in this final rule are applicable to all H-1B
petitioners, not just those that provide IT services. DHS does not
believe that codification of the existing authority to request evidence
such as contracts or similar evidence, either by itself or in
combination with other new integrity provisions in this final rule,
will upset petitioners' reasonable reliance interests or disrupt
American businesses' ability to meet technology needs.
Comment: A trade association said it wanted to ensure that USCIS is
aware of legitimate business reasons integral to infrastructure design
for employees--whether they are U.S. citizens, permanent residents, or
H-1B visa holders--to work at a client site. The commenter provided an
example of such a situation where engineers may have to work on a
project site where the work of an engineer would depend upon the work
of other contractors on the project and there would be better outcomes
if the entire team was together on site. The commenter requested that
``USCIS contemplate these legitimate business reasons for employees,
including H-1B visa holders, to work at a client site before it issues
time-consuming RFEs to the employer.''
Response: DHS is aware that there are legitimate business reasons
for employees to work at a client site and is not limiting or
restricting the ability of H-1B beneficiaries to perform their duties
at third-party worksites. However, entities filing H-1B petitions that
contemplate such scenarios must still satisfy the H-1B specialty
occupation requirements. As explained in the NPRM and in response to
other comments, DHS is codifying USCIS' authority to request contracts,
work orders, or similar evidence, in accordance with 8 CFR 103.2(b).
Similarly, as discussed further below, DHS is codifying the existing
requirements that there be a bona fide position in a specialty
occupation available to the beneficiary as of the start date of the
validity period and that the petitioner have a bona fide job offer for
the beneficiary to work within the United States. DHS does not
anticipate that finalizing these provisions will inhibit the ability of
H-1B beneficiaries to work at third-party worksites, since DHS is
codifying existing authority rather than imposing new requirements with
respect to its ability to request contracts or similar evidence and
requiring a bona fide job offer and a bona fide position in a specialty
occupation available to the beneficiary.
ii. Bona Fide Employment
Comment: Several commenters voiced appreciation for the proposed
provision to require non-speculative employment at the time of H-1B
petition filing. A trade association stated that preventing the H-1B
program from being used to bring in temporary foreign workers for
speculative workforce needs helps improve the H-1B program's integrity
and its role in meeting the immediate and specific needs of U.S.
employers. Several commenters supported the NPRM's clarification that
daily work assignments for the duration of the H-1B validity period are
not required for non-speculative employment, and that DHS does not
intend to limit H-1B validity periods based on contract, work order, or
itinerary terms. One commenter recommended that DHS verify in the final
rule that USCIS adjudicators cannot limit H-1B validity periods based
on contract, work order, or itinerary terms.
Response: DHS agrees that requiring H-1B petitioners to establish
that there is a position in a specialty occupation available for the
beneficiary as of the start date of the validity period as requested on
the petition is an important measure for maintaining program integrity.
As discussed below, a number of commenters expressed concern over the
term ``non-speculative'' and, in response to those comments, DHS is
replacing ``non-speculative'' with ``bona fide,'' so that new 8 CFR
214.2(h)(4)(iii)(F) will state, 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 is not
intended to be a substantive change, but to clarify what DHS meant by
``non-speculative'' and to emphasize that this provision is consistent
with current policy guidance that an H-1B petitioner must establish
that employment exists at the time of filing the petition and that it
will employ the beneficiary in a specialty occupation.\113\ Regarding
daily work assignments, DHS explained in the NPRM, 88 FR 72870, 72902
(Oct. 23, 2023), and is adding to the regulatory text through this
final rule, that petitioners are not required to establish specific
daily work assignments through the duration of the requested validity
period. While DHS does not intend to limit validity periods based on
the end-date of contracts, work orders, itineraries, or similar
documentation, DHS declines to add any limiting language through this
rulemaking. As noted above, DHS is adding the following clarifying
language to new 8 CFR 214.2(h)(4)(iii)(F): ``A petitioner is not
required to establish specific day-to-day assignments for the entire
time requested in the petition.'' As this new language makes clear that
petitioners are not required to establish specific daily assignments,
DHS believes it is sufficiently clear that USCIS will not limit
validity periods based on the end-date of contracts, work orders,
itineraries, or similar documentation.
---------------------------------------------------------------------------

\113\ See USCIS, ``Rescission of Policy Memoranda,'' PM-602-0114
(June 17, 2020).
---------------------------------------------------------------------------

Comment: A few individual commenters and a company said that the
proposed provision would work to eliminate IT staffing companies. A
business association stated that USCIS has repeatedly confused
speculative employment with a speculative project. The commenter said
that employment, and the right to receive pay, are guaranteed in the H-
1B program once an employee enters the country and is available to
start work, therefore making all H-1B employment non-speculative as a
matter of law. The commenter added that, in contrast, all employment is
based on speculative projects regardless of whether a product or
consulting company is employing the H-1B beneficiary. The commenter
recommended allowing employers to assume the risk of finding sufficient
productive work for an employee to perform or suffer a financial
liability if it fails to achieve this aim, in order to be more
consistent with the INA.
Further, the commenter claimed that the proposed rule arises out of
an attempt to curb the already prohibited practice of ``benching
without pay.'' The commenter stated that DOL has already established
rules governing a bona fide job offer that does not revolve around a
non-speculative project, and that according to DOL, a bona fide job
offer is complete when the petition has been approved and the employee
is available for work in the United States. The commenter said that the
statute and regulations do not create a requirement to show actual work
the employee would perform, and in fact creates allowance for an
employee to do no work provided they are paid in accordance with the
employment contract/LCA. The commenter requested

[[Page 103124]]

that DHS consider that enforcement powers for rules against benching
without pay have been explicitly delegated to DOL since 2001, and DHS
``has no such authority codified in the statute.''
Response: DHS does not agree that codifying the requirement of bona
fide employment will eliminate IT staffing companies. Nor does DHS
agree that this provision confuses ``speculative employment'' with a
``speculative project.'' However, to add clarity to the provision, 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
revision does not change the meaning or intent of the provision, which
requires the petitioner to establish that it has a real position in a
specialty occupation available for the beneficiary as of the start date
of the validity period as requested on the petition. A bona fide
position in a specialty occupation exists when the petitioner
demonstrates the substantive nature of the specific position, such that
a specialty occupation determination can be made, and when the
petitioner demonstrates that the specified position in a specialty
occupation exists within the context of its business.
DHS recognizes that employment may be actual, but contingent on
petition approval, and emphasizes that employment that is contingent on
petition approval, visa issuance (when applicable), or the grant of H-
1B status may still be considered bona fide. Further, DHS disagrees
with the commenters that requiring a bona fide position in a specialty
occupation conflicts with DOL regulations regarding LCA requirements
and its prohibition on benching without pay. Requiring a bona fide
position is not the same as prohibiting benching without pay. This rule
does not propose to change guidance on benching, which is generally
prohibited by law to prevent foreign workers from unfair treatment by
their employers and to ensure that the job opportunities and wages of
U.S. workers are being protected.\114\ Nor does DHS agree with the
commenters' assertion that obligations under the LCA such as the right
to receive pay render ``all H-1B employment non-speculative as a matter
of law.'' Although the LCA and DOL regulations impose obligations on
employers, the mere existence of these obligations does not, by itself,
satisfy all statutory requirements for H-1B eligibility. As explained
in the NPRM, the requirement of non-speculative employment derives from
the statutory definition of an H-1B nonimmigrant worker as someone who
is ``coming temporarily to the United States to perform services . . .
in a specialty occupation . . . .'' See INA section
101(a)(15)(H)(i)(b), 8 U.S.C. 1101(a)(15)(H)(i)(b); 88 FR 72870, 72901
(Oct. 23, 2023). Although an employer has wage obligations under the
LCA and DOL regulations, this alone does not establish that the
beneficiary will be performing services in a specialty occupation. DHS
must determine whether the duties of the position normally require the
attainment of a U.S. bachelor's or higher degree in a directly related
specific specialty to qualify the position as a specialty occupation,
and whether the beneficiary has the appropriate qualifications to
perform those duties. DHS is unable to make such determinations where
the employment itself is undetermined. The bona fide employment
requirement is also consistent with current USCIS policy guidance that
an H-1B petitioner must establish that employment exists at the time of
filing the petition and that the petitioner will employ the beneficiary
in a specialty occupation.\115\
---------------------------------------------------------------------------

\114\ There are certain limited circumstances where benching is
not prohibited. See INA section 212(n)(2)(C)(vii) (listing
exceptions to the prohibition on unpaid benching).
\115\ See USCIS, ``Rescission of Policy Memoranda,'' PM-602-0114
(June 17, 2020).
---------------------------------------------------------------------------

Comment: Several commenters voiced opposition to the proposed
requirement for non-speculative employment on the grounds that it
repeats prior DHS policies that lack basis in the INA and have been
overturned by courts. The trade associations stated that the proposed
rule is part of a pattern of DHS activity in contravention of court
rulings and the INA, including a 1998 proposed rule and a 2018 Policy
Memorandum. The commenters said that while the INA limits H-1B visas to
those who would ``perform services . . . in a specialty occupation''
and while the program is not designed to allow individuals to job
search within the United States or allow companies to recruit foreign
workers based on entirely speculative expansion plans or workforce
needs, the proposed rule disregards longstanding Departmental guidance
recognizing that employment with a contracting firm may satisfy those
requirements even without predetermined assignments to third-party
client sites for the entire duration of the visa period. The commenters
stated that, in regards to speculative employment, the INA only
requires a petitioning employer to show that ``the purported employment
is actually likely to exist for the beneficiary,'' suggesting that
adjudicators would invariably issue requests for production, which has
served as the basis for court decisions to invalidate previous attempts
by DHS to demand non-speculative work assignments. A few commenters
cited ITServe Alliance, Inc., where the court addressed challenges to
the 2018 Policy Memo. The commenters stated that in ITServe Alliance,
Inc., the court ruled that the Policy Memo's interpretation of
``specialty occupation,'' which required proof of non-speculative work
assignments for the duration of the visa, was in contravention of the
INA, which the court stated had emphasized ``occupation'' instead of
``job,'' which ``would likely encompass a host of jobs . . . with
concomitant but differing job duties'' and ``[n]othing in [the INA's]
definition requires specific and non-speculative qualifying day-to-day
assignments for the entire time requested in the petition.'' The joint
submission added that the ITServe Alliance, Inc. court held that
``[w]hat the law requires, and employers can demonstrate, is the nature
of the specialty occupation and the individual qualifications of
foreign workers.''
Response: As explained above, 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.'' DHS disagrees with the commenters that the
requirement to establish a bona fide position at the time of filing
lacks a basis in the INA. As explained in the NPRM, this requirement
derives from the statutory definition of an H-1B nonimmigrant worker as
someone who is ``coming temporarily to the United States to perform
services . . . in a specialty occupation . . . .'' See INA section
101(a)(15)(H)(i)(b), 8 U.S.C. 1101(a)(15)(H)(i)(b); 88 FR 72870, 72901
(Oct. 23, 2023). Demonstrating bona fide employment is a basic,
fundamental requirement \116\ and is essential to maintaining the
integrity of the H-1B program. The agency has long held that the H-1B
classification is not intended

[[Page 103125]]

as a vehicle for a person to engage in a job search within the United
States, or for employers to bring in temporary foreign workers to meet
possible workforce needs arising from potential business expansions or
the expectation of potential new customers or contracts.\117\ This
approach is consistent with current USCIS policy guidance that an H-1B
petitioner must establish that employment exists at the time of filing
the petition and that it will employ the beneficiary in a position in a
specialty occupation.\118\
---------------------------------------------------------------------------

\116\ Serenity Info Tech, Inc. v. Cuccinelli, 461 F.Supp.3d 1271
(N.D. GA) (2020) (recognizing that ``[d]emonstrating that the
purported employment is actually likely to exist for the beneficiary
is a basic application requirement.'').
\117\ 63 FR 30419, 30420.
\118\ See USCIS, ``Rescission of Policy Memoranda,'' PM-602-0114
(June 17, 2020) (citing Matter of Chawathe, 25 I&N Dec. 369 (AAO
2010)).
---------------------------------------------------------------------------

The requirement to establish a bona fide position at the time of
filing does not conflict with the court's findings in ITServe Alliance,
Inc. Importantly, DHS is not attempting to require evidence of non-
speculative employment for the entire period of time requested in the
petition. As clearly stated in the NPRM, ``establishing nonspeculative
employment does not mean demonstrating non-speculative daily work
assignments through the duration of the requested validity period.'' 88
FR 72870, 72902 (Oct. 23, 2023). Further, in response to stakeholder
feedback, DHS is clarifying this in the regulatory text by adding, ``A
petitioner is not required to establish specific day-to-day assignments
for the entire time requested in the petition.'' This new regulatory
language makes clear that DHS does not require employers to establish
non-speculative and specific assignments for every day of the intended
period of employment. The ITServe court found, in pertinent part, that
the ``requirement that employers (1) provide proof of non-speculative
work assignments (2) for the duration of the visa period is not
supported by the statute or regulation and is arbitrary and capricious
as applied to Plaintiffs' visa petitions.'' \119\ However, the ITServe
court did not find that a general requirement for bona fide
employment--which falls short of requiring non-speculative work
assignments for the duration of the visa period--to be impermissible.
This requirement is consistent with current USCIS policy guidance that
the petitioner will employ the beneficiary in a specialty occupation
position.\120\
---------------------------------------------------------------------------

\119\ See ITServe All., Inc. v. Cissna, 443 F.Supp.3d 14 (D.D.C.
2020).
\120\ See USCIS, ``Rescission of Policy Memoranda,'' PM-602-0114
(June 17, 2020) (citing Matter of Chawathe, 25 I&N Dec. 369 (AAO
2010)).
---------------------------------------------------------------------------

Comment: A law firm stated that the proposed provision to require
non-speculative employment was arbitrary and capricious, as it
contradicted 1995 policy memoranda advising that ``[t]he submission of
[contracts between the employer and the alien work site] should not be
a normal requirement for the approval of an H-1B petition filed by an
employment contractor. Requests for contracts should be made only in
those cases where the officer can articulate a specific need for such
documentation'' and ``[t]he mere fact that a petitioner is an
employment contractor is not a reason to request such contracts.'' The
commenter stated that DHS did not explain whether or to what extent the
proposed provision represents a departure from these earlier memoranda
and that DHS failed to consider relevant reliance interests on these
earlier memoranda.
Response: DHS notes that the memoranda referenced by the commenter,
a November 13, 1995 memorandum entitled ``Supporting Documentation for
H-1B Petitions,'' and a December 29, 1995 memorandum entitled
``Interpretation of The Term `Itinerary' Found in 8 CFR
214.2(h)(2)(i)(B) as It Relates to the H-1B Nonimmigrant
Classification,'' were rescinded by the 2018 memorandum ``Contracts and
Itineraries Requirements for H-1B Petitions Involving Third-Party
Worksites.'' \121\ Although the 2018 memorandum was itself rescinded by
the ``Rescission of Policy Memoranda'' memorandum published on June 17,
2020,\122\ that memorandum did not reinstate the 1995 memoranda.
Therefore, DHS does not agree that there were any reasonable reliance
interests in these previously rescinded memoranda that DHS failed to
consider. DHS further disagrees that the requirement of a bona fide
position in a specialty occupation is inconsistent with the 1995
memoranda, and notes that the December 29, 1995 memorandum, while
discussing the itinerary requirement, which DHS is eliminating in this
final rule, acknowledged the requirement of non-speculative employment.
The November 13, 1995 memorandum acknowledged that requests for
contracts would be appropriate ``where the officer can articulate a
specific need for such documentation,'' which is consistent with the
codification of USCIS' authority at new 8 CFR 214.2(h)(4)(iv)(C) to
request contracts or similar evidence where needed to establish the
bona fide nature of the beneficiary's work and the minimum educational
requirement to perform the duties. Further, as noted above, new 8 CFR
214.2(h)(4)(iii)(F) is consistent with current USCIS policy guidance
that an H-1B petitioner must establish that employment exists at the
time of filing the petition and that it will employ the beneficiary in
a position in a specialty occupation.\123\ DHS therefore does not agree
that the provisions in this rule contradict previous policy or that DHS
failed to properly consider reasonable reliance interests.
---------------------------------------------------------------------------

\121\ USCIS, Policy Memorandum PM-602-0157, Contracts and
Itineraries Requirements for H-1B Petitions Involving Third-Party
Worksites (Feb. 22, 2018) (rescinded), https://www.uscis.gov/sites/default/files/document/memos/2018-02-22-PM-602-0157-Contracts-and-Itineraries-Requirements-for-H-1B.pdf.
\122\ USCIS, Policy Memorandum PM-602-0114, Recission of Policy
Memoranda (June 17, 2020), https://www.uscis.gov/sites/default/files/document/memos/PM-602-0114_ITServeMemo.pdf.
\123\ See USCIS, ``Rescission of Policy Memoranda,'' PM-602-0114
(June 17, 2020) (citing Matter of Chawathe, 25 I&N Dec. 369 (AAO
2010)).
---------------------------------------------------------------------------

Comment: Some commenters, including a company, a form letter
campaign, a joint submission, and a trade association, supported the
NPRM's clarification that daily work assignments for the duration of
the H-1B validity period are not required for non-speculative
employment, and that DHS does not intend to limit H-1B validity periods
based on contract, work order, or itinerary terms.
Response: DHS is not attempting to require evidence of non-
speculative employment for the entire time requested in the petition.
As clearly stated in the NPRM, ``establishing nonspeculative employment
does not mean demonstrating non-speculative daily work assignments
through the duration of the requested validity period.'' 88 FR 72870,
72902 (Oct. 23, 2023). DHS does not propose to require employers to
establish non-speculative and specific assignments for every day of the
intended period of employment.'' In response to these comments, and to
provide further clarification of the requirements with respect to
establishing non-speculative employment, DHS is clarifying the
regulatory text by adding, ``A petitioner is not required to establish
specific day-to-day assignments for the entire time requested in the
petition.'' See new 8 CFR 214.2(h)(4)(iii)(F). As stated in response to
other comments, DHS is also replacing ``non-speculative'' with ``bona
fide'' in this provision to add clarity.
Comment: A company noted its concern that the NPRM preamble
references non-speculative employment, yet the proposed rule requires a
non-speculative position. The commenter also stated that, ``the NPRM
confirms daily work assignments for the duration of the H-1B validity
period are not required for non-speculative

[[Page 103126]]

employment.'' The commenter encouraged DHS to conform the final rule's
language to the NPRM preamble, requiring ``non-speculative employment''
at the time of filing, reasoning that one offered position should not
be required for H-1B petition approval, as the petitioner can
reasonably sponsor H-1B employment for a future or contingent position.
The commenter stated that sponsored U.S. employment is often the same
as foreign employment for employees transferring from related entities
abroad, whereas the U.S. position may be contingent on changing
business, management, and contract needs. The company added that the
final rule should account for additional contingencies under non-
speculative U.S. employment as employers can file for these non-
speculative contingent positions without harming H-1B program
integrity.
Response: The regulatory text will be finalized to state: ``At 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.''
Although DHS disagrees with the commenter that there is a discrepancy
between the NPRM preamble referencing non-speculative employment and
the proposed regulatory text requiring a non-speculative position, DHS
is replacing ``non-speculative'' with ``bona fide'' to add clarity.
To determine whether the H-1B worker will perform services in a
specialty occupation as required by statute, USCIS must examine the
nature of the services the beneficiary will perform in the offered
position. Where the proposed position is undetermined, USCIS is unable
to properly analyze and determine whether the position is a specialty
occupation, and the petitioner will not be able to establish the nature
of the offered position. Undetermined employment where there is no
defined position precludes the agency from ascertaining whether the
duties of the offered position normally require the attainment of a
U.S. bachelor's or higher degree in a directly related specific
specialty to qualify the position as a specialty occupation, and
whether the beneficiary has the appropriate qualifications to perform
those duties. Conversely, a bona fide position in a specialty
occupation exists when the petitioner demonstrates the substantive
nature of the specific position, such that a specialty occupation
determination can be made, and when the petitioner demonstrates that
the specified position in a specialty occupation exists within the
context of its business.
Regarding the requirement for day-to-day work assignments, as
stated in the NPRM, ``DHS does not require a petitioner to identify and
document the beneficiary's specific day-to-day assignments.'' 88 FR
72902 (Oct. 23, 2023). To make this point clear, DHS is adding the
following regulatory text to new 8 CFR 214.2(h)(4)(iii)(F): ``A
petitioner is not required to establish specific day-to-day assignments
for the entire time requested in the petition.'' DHS acknowledges that
a beneficiary's daily work assignments may vary and that ``very few, if
any, U.S. employers would be able to identify and prove daily
assignments for the future three years for professionals in specialty
occupations.'' ITServe All., Inc. v. Cissna, 443 F. Supp. 3d 14, 39
(D.D.C. 2020). Bona fide employment under new 8 CFR 214.2(h)(4)(iii)(F)
is sufficiently broad to allow for reasonable variations and changes to
the beneficiary's daily work assignments, provided those variations and
changes remain consistent with the petitioner's job description and
other supporting evidence. Ultimately, what new 8 CFR
214.2(h)(4)(iii)(F) requires is for the petitioner to adequately
demonstrate what duties the beneficiary will perform in the proffered
position in order to establish that the beneficiary will, in fact, be
employed in a specialty occupation position.\124\ See ITServe All.,
Inc. v. Cissna, 443 F. Supp. 3d 14, 39 (D.D.C. 2020) (``What the law
requires, and employers can demonstrate, is the nature of the specialty
occupation and the individual qualifications of foreign workers.'').
---------------------------------------------------------------------------

\124\ See ITServe All., Inc. v. Cissna, 443 F. Supp. 3d 14, 39
(D.D.C. 2020) (``What the law requires, and employers can
demonstrate, is the nature of the specialty occupation and the
individual qualifications of foreign workers.'').
---------------------------------------------------------------------------

DHS disagrees with the comment that an H-1B specialty occupation
worker may have a petition filed for a ``future or contingent''
position, where ``future or contingent'' means that the beneficiary's
job duties are undetermined and dependent on changing business,
management, and contract needs. DHS wishes to emphasize that
speculative employment should not be confused with employment in a
position that is contingent on petition approval, visa issuance (when
applicable), or the grant of H-1B status. DHS recognizes that
employment in a specific position may be actual, but contingent on
petition approval, visa issuance, or the beneficiary being granted H-1B
status. However, the petition approval process should not be confused
with the requirement that the beneficiary's employment be in a bona
fide position in a specialty occupation. Employment that is contingent
upon petition approval should not be confused as permitting petitions
for future and contingent positions that lack the specificity or detail
needed to establish eligibility as a specialty occupation.
Comment: A commenter requested additional discussion on the
proposed provision. An attorney writing as part of a form letter
campaign stated that DHS did not provide clear guidance on what it
expects beyond what is already generally submitted with H-1B petitions
to establish the employment is non-speculative. The campaign voiced
concern that this lack of specificity would leave the H-1B petitioner
with the burden of guessing what it needs to prepare, taking up more
administrative time beyond what it is already required in preparing H-
1B petitions. The campaign urged DHS to define required evidence in
future proposals. Similarly, a law firm requested that DHS provide a
definition of ``speculative employment'' to provide petitioners and
adjudicators with further guidance. A couple of commenters similarly
stated that the non-speculative employment requirement failed to
provide articulable standards against which petitioning employers can
plan to provide enough evidence to predictably satisfy adjudicators.
The commenters requested that, at a minimum, DHS provide further
clarification for the ``non-speculative position'' requirement, and
requested that DHS recognize that a petitioning employer can satisfy
the requirement via a ``wide breadth of evidence.'' A joint submission
and a law firm stated that the absence of guidance on what is required
to establish non-speculative employment raises concerns that the
regulatory provision may result in RFEs and NOIDs with open-ended
requests for documents that are difficult for petitioners to provide.
The joint submission said that there was a lack of explanation for how
adjudicators would determine that a qualifying, ``non-speculative
position'' exists without requiring the same evidence of ``specific and
nonspeculative qualifying assignments'' or an ``itinerary,'' which the
ITServe Alliance, Inc. court held USCIS must not require. A trade
association and a business association voiced concern that the NPRM's
lack of specific guidance on acceptable documentation provides no
opportunity for the regulated public to provide constructive feedback
on the practicality of such documentation for employers,

[[Page 103127]]

and recommended that the rule include a non-exhaustive list of
acceptable documentation.
Response: While DHS does not agree that the requirement of non-
speculative employment lacks clarity or specificity, in response to
this and several other comments, DHS is revising this provision to
replace ``non-speculative'' with ``bona fide.'' A bona fide position in
a specialty occupation exists when the petitioner demonstrates the
substantive nature of the specific position, such that a specialty
occupation determination can be made, and when the petitioner
demonstrates that the specified position in a specialty occupation
exists within the context of its business. The agency has long held and
communicated the view that speculative employment is not permitted in
the H-1B program. For example, a 1998 proposed rule documented this
position, stating that, historically, USCIS (or the Service, as it was
called at the time) has not granted H-1B classification on the basis of
speculative, or undetermined, prospective employment.\125\ Examples
provided in that proposed rule are also relevant here. Specifically,
the 1998 proposed rule noted that the H-1B classification was not
intended to allow individuals ``to engage in a job search within the
United States, or for employers to bring in temporary foreign workers
to meet possible workforce needs arising from potential business
expansions or the expectation of potential new customers or
contracts.'' \126\ In such cases, the actual employment would be
undetermined and, therefore, speculative. By contrast, where a position
is bona fide, the petitioner should be able to establish, through the
submission of evidence such as evidence relating to its past employment
practices and evidence relating to its employment plans for the
beneficiary, that the beneficiary will, in fact, commence work in a
specialty occupation immediately upon admission in H-1B
classification.\127\
---------------------------------------------------------------------------

\125\ See ``Petitioning Requirements for the H Nonimmigrant
Classification,'' 63 FR 30419, 30420 (June 4, 1998).
\126\ See ``Petitioning Requirements for the H Nonimmigrant
Classification,'' 63 FR 30419, 30420 (June 4, 1998).
\127\ See ``Petitioning Requirements for the H Nonimmigrant
Classification,'' 63 FR 30419, 30420 (June 4, 1998).
---------------------------------------------------------------------------

Demonstrating bona fide employment in a specialty occupation is a
basic, fundamental requirement \128\ that is derived from the statutory
definition of an H-1B nonimmigrant as someone who is ``coming
temporarily to the United States to perform services . . . in a
specialty occupation . . . .'' See INA section 101(a)(15)(H)(i)(b), 8
U.S.C. 1101(a)(15)(H)(i)(b), and is essential to maintaining the
integrity of the H-1B program. Although the requirement of bona fide
employment is longstanding, DHS acknowledges that since the issuance of
USCIS Policy Memorandum PM-602-0114, ``Rescission of Policy Memoranda''
in July 2020, it has not always been the practice of USCIS to require
petitioners to submit evidence beyond the petitioner's own description
of the position to establish that there is a bona fide position in a
specialty occupation available for the beneficiary as of the start date
of the requested validity period. DHS further acknowledges that
codification of the requirement to establish a bona fide position in a
specialty occupation may result in petitioners providing more evidence
than in recent years. However, with this rule DHS is providing the
transparency necessary for petitioners to meet their burden to
demonstrate eligibility with the information they provide in their
petitions to demonstrate the existence of a bona fide position in a
specialty occupation that is available to the beneficiary. Although DHS
is codifying its authority and clarifying USCIS' current practice, the
requirement of a bona fide position in a specialty occupation is not
new. The evidence used to demonstrate the existence of the bona fide
position in a specialty occupation will vary based on the business of
the petitioner and the specific position being offered. In some cases,
the nature of the petitioner's business and the nature of the offered
job will be credible without further explanation. In other cases, the
evidence provided may not sufficiently explain how the petitioner, as
it describes its own business, would need a worker in the offered
position. Thus, the petitioner would not have met their burden of proof
and would require the petitioner to explain and provide additional
evidence of how it is able to offer employment in the specified
specialty occupation position within the context of its business. In
the later instance, for example, the petitioner could demonstrate that
it has a bona fide position available through contracts, statements of
work, master service agreements, end client letters, and any other
documentation that shows that there is a bona fide position available
on the start date requested on the petition. As explained in the NPRM,
petitioners will not be required to demonstrate non-speculative daily
work assignments or document the beneficiary's specific day-to-day
assignments. 88 FR 72870, 72902 (Oct. 23, 2023). Additionally, in order
to further clarify this point, DHS is revising the proposed regulatory
text to explicitly state that the petitioner is not required to
establish specific day-to-day assignments for the entire time requested
in the petition.
---------------------------------------------------------------------------

\128\ Serenity Info Tech, Inc. v. Cuccinelli, 461 F.Supp.3d 1271
(N.D. GA) (2020) (recognizing that ``[d]emonstrating that the
purported employment is actually likely to exist for the beneficiary
is a basic application requirement.'').
---------------------------------------------------------------------------

Moreover, because this requirement is fundamental to demonstrating
eligibility for H-1B nonimmigrant classification, it is reasonable to
require petitioners to provide evidence of a bona fide position in a
specialty occupation.
Comment: In the case of proving non-speculative employment when a
beneficiary is staffed to a third-party worksite, an individual
commenter and a law firm stated that the proposed rule offers no
guidance on how USCIS would adjudicate an application if the petitioner
does not provide proof of specific third-party assignments for the
duration of the visa period.
The commenters stated that DHS should affirm that a petitioner's
description of the beneficiary's position may show the position is non-
speculative, in line with the guidance in the 1995 Policy Memo stating
that ``in the case of an H-1B petition filed by an employment
contractor, a general statement of the alien's proposed or possible
employment is acceptable . . . [a]s long as the officer is convinced of
the bona fides of the petitioner's intentions.'' The commenters also
stated that another option would be DHS clarifying that evidence of a
consistent need for high-skilled workers in the given specialty may
demonstrate that the position is ``non-speculative,'' adding that, in
such circumstances, the need for the position is proven through
historic evidence and satisfies the INA's only requirement that the
petitioning employer ``[d]emonstrat[e] that the purported employment is
actually likely to exist.'' The commenters stated that, consistent with
the longstanding business models IT service providers have utilized,
the mere fact that the petitioning employer cannot identify at the time
of filing every third-party client for whom the beneficiary would
provide services does not render the offer ``illegitimate''. The
commenters said that it is the historic occurrence of labor shortages
in the IT space and the use of IT services companies to address those
needs that supports any such position's legitimacy.
Response: As stated above, the requirement for bona fide employment
derives from the statutory definition of an H-1B nonimmigrant worker as

[[Page 103128]]

someone who is ``coming temporarily to the United States to perform
services . . . in a specialty occupation'' at INA section
101(a)(15)(H)(i)(b), 8 U.S.C. 1101(a)(15)(H)(i)(b). 88 FR 72870, 72901
(Oct. 23, 2023). Where the proposed position is speculative, the
petitioner will not be able to establish the nature of the offered
position and USCIS will not be able to determine if the position is a
specialty occupation. In the NPRM, DHS explained that petitioners will
not be required to demonstrate non-speculative daily work assignments
through the duration of the requested validity period. 88 FR 72870,
72902 (Oct. 23, 2023). This is equally true for third-party placement--
new 8 CFR 214.2(h)(4)(iii)(F) will not require a petitioner to provide
proof of specific third-party assignments for the duration of the
requested period and, as noted above, DHS is adding that clarification
to the regulatory text in this final rule. Given the discussion in the
NPRM, this final rule, and the inclusion of this language in the final
regulatory text, DHS believes it is clear that the bona fide employment
requirement does not oblige a petitioner to ``identify at the time of
filing every third-party client for whom the beneficiary would provide
services.'' Rather, a petitioner must demonstrate, at the time of
filing, availability of bona fide employment in a specialty occupation
as of the requested start date. That is, the petitioner must show that
the employment in a specialty occupation is ``actually likely to exist
for the beneficiary'' \129\ as of the requested start date.
---------------------------------------------------------------------------

\129\ Serenity Info Tech. v. Cuccinelli 461 F.Supp.3d 1271.
---------------------------------------------------------------------------

DHS declines to state categorically that a description of the
position will, in all cases, be sufficient to establish that a position
is non-speculative and again notes that the 1995 memoranda to which the
commenters cite were rescinded in 2018.\130\ Further, DHS disagrees
that a historic occurrence of labor shortages and consistent need for
workers can act as a substitute for showing that a position is bona
fide, as such general information would not necessarily establish the
existence of a bona fide position with respect to a specific petitioner
and beneficiary. As stated in the NPRM, speculative employment
undermines the integrity and a key goal of the H-1B program, which is
to help U.S. employers obtain the skilled workers they need to conduct
their business, subject to annual numerical limitations, while
protecting the wages and working conditions of U.S. workers. 88 FR
72870, 72901 (Oct. 23, 2023).
---------------------------------------------------------------------------

\130\ USCIS, ``Rescission of Guidance Regarding Deference to
Prior Determinations of Eligibility in the Adjudication of Petitions
for Extension of Nonimmigrant Status,'' PM-602-0151 (Oct. 23, 2017),
https://www.uscis.gov/sites/default/files/document/memos/2018-02-22-PM-602-0157-Contracts-and-Itineraries-Requirements-for-H-1B.pdf.
---------------------------------------------------------------------------

Comment: A trade association and a joint submission said that the
non-speculative work requirement is overly broad and fails to
acknowledge the challenging reality faced by modern businesses that
cannot conduct precise workforce planning months in advance in a
rapidly evolving economic environment.
A company and a trade association stated that the standard duration
of contracts in the IT consulting industry is 6 months long; and, even
if an employer had a contract for the beneficiary's services at the
time of filing, it would expire by the time the employee was able to
enter the country on their initial H-1B visa. The commenters said that
for this reason, establishing a requirement to show non-speculative
projects over a 3-year visa period would be unworkable for petitioners.
The trade association said that given the low odds of lottery
selection, it is not possible for consulting companies to negotiate and
secure contracts for the services of an employee that they have no
guarantee of receiving.
Response: Under new 8 CFR 214.2(h)(4)(iii)(F), DHS will not require
employers to establish non-speculative and specific assignments for
every day of the intended period of employment. Rather, a petitioner
must demonstrate, at the time of filing, availability of a bona fide
position as of the requested start date. In response to stakeholder
feedback, DHS is clarifying this in the regulatory text by adding, ``A
petitioner is not required to establish specific day-to-day assignments
for the entire time requested in the petition.'' As noted in other
comment responses, DHS is also replacing ``non-speculative'' with
``bona fide'' for clarity.
As DHS discussed in the NPRM, speculative employment undermines the
integrity and a key goal of the H-1B program, which is to help U.S.
employers obtain the skilled workers they need to conduct their
business, subject to annual numerical limitations, while protecting the
wages and working conditions of U.S. workers. 88 FR 72870, 72901 (Oct.
23, 2023). New 8 CFR 214.2(h)(4)(iii)(F) is consistent with current
USCIS policy guidance that an H-1B petitioner must establish that
employment exists at the time of filing the petition and that it will
employ the beneficiary in a specialty occupation.
Comment: A trade association said that the proposed rule's narrow
range of evidence of a non-speculative position reaches beyond
statutory requirements to create unnecessary evidentiary restrictions
on petitioners and employers. The commenter stated that while they
recognize that the establishment of non-speculative employment does not
necessarily require the demonstration of non-speculative work
assignments, most adjudicators are unable to make the necessary
distinction between speculative employment and speculative work
assignments, particularly in cases involving third-party placements. A
commenter added that the impact of the non-speculative work requirement
would have negative policy consequences for American businesses,
inconsistent with the Administration's stated goals of fueling
innovation in technology industries and maintaining a globally premier
workforce. A trade association voiced concern that the non-speculative
work requirement was extremely broad and could cause unintended
negative consequences for H-1B workers.
Response: DHS disagrees with the commenter that new 8 CFR
214.2(h)(4)(iii)(F) allows for only a ``narrow range of evidence'' to
establish that a petitioner has non-speculative employment available.
In fact, new 8 CFR 214.2(h)(4)(iii)(F) does not impose any limitations
on the evidence a petitioner may provide; it simply codifies the
requirement, consistent with current USCIS policy, that the petitioner
must establish that it has a bona fide position available as of the
start date of the validity period requested on the petition. As noted
in other comment responses, DHS is replacing ``non-speculative'' with
``bona fide'' to add clarity to this provision. DHS also disagrees that
USCIS adjudicators will be unable to distinguish between speculative
employment and speculative work assignments, as DHS stated clearly in
the NPRM that petitioners will not be required to establish non-
speculative and specific assignments for every day of the intended
period of employment. 88 FR 72870, 72902 (Oct. 23, 2023). Rather, a
petitioner must demonstrate, at the time of filing, availability of a
bona fide position in a specialty occupation as of the requested start
date. Further, as noted above, in response to stakeholder feedback, DHS
is clarifying this in the regulatory text by adding, ``A petitioner is
not required to establish specific day-to-day

[[Page 103129]]

assignments for the entire time requested in the petition.'' DHS also
disagrees that the provision is ``extremely broad'' such that it may
have unintended negative consequences for workers. While the
commenters' concern is not entirely clear, DHS recognizes that
employment may be bona fide even though the beneficiary does not begin
working on the requested start date. However, if DHS determines that
there was a lack of a bona fide position in a specialty occupation as
of the requested start date at the time of filing, or that the
petitioner did not have a bona fide job offer for the beneficiary, then
the petition may be denied or revoked on that basis. Finally, DHS
disagrees that codifying the requirement of a bona fide position will
harm American businesses. To the contrary, speculative employment
undermines the integrity and a key goal of the H-1B program, which is
to help U.S. employers obtain the skilled workers they need to conduct
their business, subject to annual numerical limitations, while
protecting the wages and working conditions of U.S. workers.
Comment: A commenter and a law firm voiced concern that DHS does
not explain whether, or to what extent, it is changing positions with
respect to its historical guidance on how to demonstrate bona fide
employment or consider relevant reliance interests. The commenters
stated that the new proposed rule is arbitrary and capricious for its
failure to acknowledge and explain the departure. A few commenters said
the proposed rule fails to consider or analyze any reliance interests--
including those held by consulting firms whose business models have
long depended in part on sourcing high-skilled foreign labor for
American businesses and businesses that have relied on the H-1B program
to help alleviate shortages in high-skilled domestic labor in the IT
space.
Response: As stated above, the requirement of bona fide employment
codified at new 8 CFR 214.2(h)(4)(iii)(F) derives from the statutory
definition of an H-1B nonimmigrant worker as someone who is ``coming
temporarily to the United States to perform services . . . in a
specialty occupation . . . .'' INA section 101(a)(15)(H)(i)(b), 8
U.S.C. 1101(a)(15)(H)(i)(b); 88 FR 72870, 72901 (Oct. 23, 2023). This
is not a ``departure,'' or a new requirement but rather a codification
of a longstanding requirement.\131\ A bona fide position in a specialty
occupation exists when the petitioner demonstrates the substantive
nature of the specific position, such that a specialty occupation
determination can be made, and when the petitioner demonstrates that
the specified position in a specialty occupation exists within the
context of its business. In response to comments and stakeholder
feedback, DHS is replacing ``non-speculative'' with ``bona fide'' to
add clarity to this provision. Again, DHS reiterates that this
provision simply requires a petitioner to demonstrate, at the time of
filing, availability of a bona fide position in a specialty occupation
as of the requested start date. This is different from requiring
petitioners to demonstrate specific, day-to-day work assignments for
the beneficiary for the duration of the requested validity period, as
may have been common practice prior to the July 2020 recission of the
2018 Contracts and Itineraries memorandum.
---------------------------------------------------------------------------

\131\ USCIS, ``Rescission of Policy Memoranda'' PM-602-0114
(Jun. 17, 2020), https://www.uscis.gov/sites/default/files/document/memos/PM-602-0114_ITServeMemo.pdf (stating ``The petitioner has the
burden of proof to establish that employment exists at the time of
filing and it will employ the beneficiary in the specialty
occupation.''). See also ``Petitioning Requirements for the H
Nonimmigrant Classification,'' 63 FR 30419, 30419-30420 (June 4,
1998) (proposed rule explaining that, historically, USCIS (or the
Service, as it was called at the time) has not granted H-1B
classification on the basis of speculative, or undetermined,
prospective employment).
---------------------------------------------------------------------------

DHS acknowledges that, since the issuance of the July 2020 USCIS
Policy Memorandum PM-602-0114, ``Rescission of Policy Memoranda'', it
has not always been the practice of USCIS to require petitioners to
submit documentary evidence to establish that there is a position in a
specialty occupation available for the beneficiary as of the start date
of the validity period as requested on the petition. As noted above,
DHS is replacing ``non-speculative'' with ``bona fide'' for added
clarity in the provision. The bona fide position requirement derives
from the statutory definition of an H-1B worker and is generally
consistent with current USCIS policy guidance that an H-1B petitioner
``has the burden of proof to establish that employment exists at the
time of filing and it will employ the beneficiary in the specialty
occupation.'' Specifically with respect to statutory requirements, as
stated above, the requirement of a bona fide position derives from the
statutory definition of an H-1B nonimmigrant worker as someone who is
``coming temporarily to the United States to perform services . . . in
a specialty occupation . . . .'' INA section 101(a)(15)(H)(i)(b), 8
U.S.C. 1101(a)(15)(H)(i)(b); 88 FR 72870, 72901 (Oct. 23, 2023). Prior
to the July 2020 policy memorandum, DHS (and previously INS) long held
and communicated the view that speculative employment is not permitted
in the H-1B program. Thus, DHS does not agree that codification of the
bona fide position requirement at 8 CFR 214.2(h)(4)(iii)(F) impairs any
reasonable reliance interests. To the extent that petitioners had any
such reliance interests in the continuation of the recent practice to
not require evidence of a bona fide position in a specialty occupation,
DHS believes that these interests are outweighed by DHS's interest in
maintaining the integrity of the H-1B program and in achieving a key
goal of the H-1B program, which is to help U.S. employers obtain the
skilled workers they need to conduct their business, subject to annual
numerical limitations, while protecting the wages and working
conditions of U.S. workers.
Comment: A company and a trade association stated that once in the
country and available for work, consulting company employers may find
it economically advantageous to swap out employees assigned to a given
project, which the commenter said is allowed by statute and DOL
regulations, but added that a non-speculative project requirement would
prohibit companies from changing projects, which would impede smart
financial decisions and ignore petitioning consulting companies' long-
term need for particular skill sets--focusing exclusively on the end
client's requirements for a short-term project.
Response: The statute explicitly requires that H-1B classification
be approved only for positions that are specialty occupations. Although
companies may find it economically advantageous to move employees
around, if those employees are in H-1B status, the company must
continue to comply with the relevant statutory and regulatory
requirements. These requirements include demonstrating that the
petitioner is offering bona fide employment in a specialty occupation
position and that the beneficiary is qualified for the offered
position. DHS did not propose to require non-speculative projects for
the entire validity period requested. Rather as noted in the proposed
rule, the petitioner must demonstrate that, at the time of filing, it
has a non-speculative position in a specialty occupation available for
the beneficiary as of the start date of the validity period as
requested on the petition. In response to stakeholder feedback, DHS is
replacing ``non-speculative'' with ``bona fide'' in this provision to
add clarity. This new regulation will require the petitioner to

[[Page 103130]]

specify the duties the beneficiary will be performing as of the start
date of the petition, although it will not require the petitioner to
identify every prospective project at the time of filing. However, if
the beneficiary will be placed on projects with different minimum
requirements, or with a different third party, then the new project and
the new third party's requirements may impact the specialty occupation
determination. The petitioner is free to place the beneficiary at a new
project or new third-party site, as long as the petitioner complies
with DOL and DHS requirements to file new or amended LCAs and
petitions.
iii. LCA Properly Corresponds With the Petition
Comment: A company voiced general support for DHS's proposal to
codify its authority to ensure the LCA supports and properly
corresponds with the accompanying H-1B petition and recognized that DHS
should consider the position offered and its relationship to the
occupation listed in the LCA. A professional association stated that
DHS should verify the accuracy of H-1B LCA information. A professional
association agreed that DHS both has the authority and the obligation
to ensure that any DOL-approved LCA actually supports the H-1B
petition, and added that it therefore wholly supports the NPRM's
addition of the proposed text. The commenter stated that for the labor
certification process to serve its intended function of protecting U.S.
workers, DHS must impose consequences on employers that violate it. The
commenter said that particularly with respect companies that use
collective bargaining agreement (CBA) wage rate, USCIS can and should
be empowered to ensure that the resulting certifications truly support
the petition and hold employers accountable for any false statements or
misrepresentations in LCAs.
Response: DHS agrees with these commenters that it is appropriate
for DHS to ensure that the LCA supports and properly corresponds with
the accompanying H-1B petition and is finalizing the text proposed in
the NPRM through this rulemaking. DHS acknowledges the commenter's
concern about CBA wage rates and agrees that petitioners must attest to
the truthfulness and accuracy of the information provided on LCAs,
including the use of an appropriate wage source. If the facts presented
in the H-1B petition or the information on the LCA was inaccurate,
fraudulent, or includes a misrepresentation of a material fact, the
petition may be denied or, if approved, the petition approval may be
revoked. See 8 CFR 214.2(h)(10)(ii) and (h)(11)(iii)(A)(2).
Comment: Several commenters stated that the proposed provision
establishing DHS's authority and obligation to determine whether a
certified LCA supports and properly corresponds with the H-1B petition,
separate and apart from the DOL's power to certify the LCA, would
distort the DOL regulations, and insert a substantive component over
LCAs that exceeds DHS's authority. The trade associations said that
USCIS lacks the expertise to evaluate the LCA and that although the
preamble states that USCIS would not supplant DOL's responsibility with
respect to wage determinations, USCIS could exceed its authority by
reassessing DOL's determinations in the LCA. The joint submission added
that the proposed regulation appears to require--or at least
encourage--USCIS adjudicators to go much further than simply carrying
out their authorities under existing DOL regulations by performing
detailed analyses of each element of an LCA and potentially reject LCAs
altogether if the adjudicator does not agree with one of the many
elements of the underlying LCA. A few commenters said that the LCA
requirement, as framed in the INA and implemented by DOL, is intended
only to protect U.S. and foreign workers, offering grounds for recourse
in case, for example, the petitioner pays the beneficiary below the
prevailing wage. The commenters added that Congress did not create the
LCA requirement to offer substantive proof of a bona fide position in a
specialty occupation, and that such a proposal exceeds DHS's statutory
mandate. Similarly, a trade association said that the INA does not
authorize DHS to take any action with respect to the LCA other than
confirming it ``corresponds'' to the petition, and that DOL has the
responsibility to verify the LCA under DOL regulations. The commenter
added that an LCA does not contain sufficient information to assist an
adjudicator's determination of a specialty occupation, such as the job
duties and educational requirements, that DOL's traditional and
separate role reviewing and enforcing LCAs is already effective, and
that an expansion of DHS authority to perform similar activities is
unwarranted. Several commenters requested that DHS reissue the proposal
or insert a statement in the final rule clarifying that USCIS can do no
more regarding the LCA than simply confirm that it corresponds to the
position described in the H-1B petition, and cannot undermine DOL's
determination or in any way re-adjudicate the LCA. A few commenters
requested that USCIS more clearly state in the rule that the wage level
in the certified LCA is not solely determinative of whether the
position is a specialty occupation and that USCIS would not supplant
DOL's responsibility with respect to wage determinations. One commenter
said that practitioners have noted USCIS nitpicking SOC codes to deny
petitions, noting that it is DOL, not USCIS, which determines questions
of wage level and other matters under 20 CFR 655.705(a).
A joint submission stated that DOL solely possesses the
jurisdiction to verify wage levels and representations listed in an
LCA, and that there is no legitimate purpose for USCIS to investigate
or otherwise examine such information if USCIS does not intend to
investigate an employer's LCA practices. The commenters said that to
determine whether an LCA ``corresponds'' with an H-1B petition, USCIS
need only verify that the certified LCA and the petition at issue do
not materially conflict, but added that with the proposed examination
of the ``wage level (or an independent authoritative source
equivalent),'' USCIS appears to go further than mere comparison and
venture into investigations in the domain of DOL. The commenter wrote
that the required wage is evident on the face of the LCA and reveals
whether the certified LCA comports with the offered salary, but that
the prevailing wage level itself is part of the prevailing wage
determination process, which is exclusively within DOL authority. The
commenter added that the prevailing wage determination is ``in no way''
indicative of the duties the beneficiary would perform, and an
Occupational Employment and Wage Statistics (OEWS) Level 1 wage
determination is wholly consistent with the definition of a specialty
occupation. The commenter stated that because of this, inquiring into
the wage level itself is to examine whether and how the employer
properly applied DOL regulations and guidance, and it is precisely this
authority that INA sec. 101(a)(H) invests in DOL.
A few commenters said that review of an LCA is limited by design,
with DOL certifying an LCA so long as it is complete and not obviously
inaccurate and enforcing the agreement's terms through a post-hoc
complaint process. The commenters stated that, in that way, DOL
recognized ``that Congress . . . intended to provide greater protection
than under prior law for U.S. and foreign workers without interfering
with an employer's ability to obtain the H-1B workers it needs on a
timely basis.'' The commenters noted that DOL

[[Page 103131]]

regulations recognized that other agencies have discrete obligations
vis-[agrave]-vis an LCA, among them being ``DHS accepts the employer's
petition (DHS Form I-129) with the DOL-certified LCA attached. DHS
determines whether the petition is supported by an LCA which
corresponds with the petition.'' The commenters added that DOL
regulations further reiterate DHS's general authority to determine
whether the occupation listed, and the nonimmigrant's qualifications
satisfy the statutory requirements for an H-1B visa. The commenters
stated that, under a plain reading of the regulation, and consistent
with the INA's delegation of LCA authority to DOL, DHS's role is
limited to ensuring the petition (1) is predicated on--or ``is
supported by''--a certified LCA; and (2) the LCA ``corresponds with''
the petition. However, the commenters said that the proposal adds a
substantive component to DHS's review of a DOL-certified LCA that is
absent from the DOL regulation and is contrary to the INA. The
commenters said that this provision represents an unexplained and
unacknowledged change in policy guidance following the rescission of
the 2018 Contracts and Itineraries memo and renders the provision
arbitrary and capricious.
Response: DHS disagrees that ensuring that the LCA supports and
properly corresponds to the accompanying H-1B petition exceeds its
authority. As explained in the NPRM, DHS already has the authority
under INA sections 101(a)(15)(H)(i)(b), 103(a), and 214(a)(1) and
(c)(1), 8 U.S.C. 1101(a)(15)(H)(i)(b), 1103(a), and 1184(a)(1) and
(c)(1), to determine whether the LCA supports and properly corresponds
with the H-1B petition. 88 FR 72870, 72902 (Oct. 23, 2023). As further
stated in the NPRM, these changes do not supplant DOL's responsibility
with respect to wage determinations. 88 FR 72870, 72903 (Oct. 23,
2023). The authority provided to DOL under INA section 212(n), 8 U.S.C.
1182(n), does not deprive DHS of authority to administer and enforce
the H-1B nonimmigrant classification. Congress provided DHS with broad
authority to administer and enforce the H-1B nonimmigrant
classification, in addition to the authority provided to DOL to
administer and enforce requirements pertaining to LCAs. See ITServe
Alliance, Inc. v. U.S. Dep't of Homeland Sec., 71 F.4th 1028, 1037
(D.C. Cir. 2023) (the authorities provided to DOL under 8 U.S.C.
1182(n) ``are not by their terms exclusive, so as to oust USCIS from
its own authority over the H-1B petition process. And the INA strongly
suggests that the agencies' respective authorities are complementary
rather than exclusive. . . .''). As the D.C. Circuit Court of Appeals
explained, INA section 103(a)(1), 8 U.S.C. 1103(a)(1), independently
provides DHS with authority to administer and enforce the INA,
including a petitioning employer's compliance with the terms of an LCA.
Id.
USCIS' review pertains to evaluating whether the information on the
LCA, including, but not limited to, the standard occupational
classification (SOC) code, wage level (or an independent authoritative
source equivalent), and location(s) of employment, sufficiently align
with the information about the offered position as described in the
petition. When conducting this review, USCIS officers consult DOL's
published guidance and other publicly available sources referenced in
DOL's prevailing wage determination policy guidance \132\ to determine
what occupation and corresponding prevailing wage DOL certified so that
USCIS can determine whether the information on the LCA is consistent
with the information in the petition; however, USCIS officers would not
question whether DOL properly certified the LCA.
---------------------------------------------------------------------------

\132\ See ``Prevailing Wage Determination Policy Guidance,''
Employment and Training Administration, Dept. of Labor (Nov. 2009),
https://www.dol.gov/sites/dolgov/files/ETA/oflc/pdfs/NPWHC_Guidance_Revised_11_2009.pdf.
---------------------------------------------------------------------------

DHS disagrees with the assertion that the rule encourages USCIS
adjudicators to perform a detailed analysis of each element of an LCA
or investigate an employer's LCA practices. USCIS does not view the LCA
or wage level as determinative of whether the position is a specialty
occupation. Further, ensuring the LCA corresponds to the petition by
comparing the information contained in the LCA against the information
contained in the petition and supporting evidence is consistent with
current practice. DHS also disagrees with the assertion that it is
trying to impose additional requirements from the 2018 Contracts and
Itineraries Memo, which was rescinded in 2020. As explained in USCIS'
June 2020 policy memorandum ``Rescission of Policy Memoranda,'' the
petitioner has the burden of proof to establish that employment exists
at the time of filing and it will employ the beneficiary in the
specialty occupation.\133\ If the petitioner's attestations and
supporting documentation meet this standard, then the officer will not
request additional evidence, provided all other eligibility
requirements are met by a preponderance of the evidence. If the officer
finds that a petitioner has not established, by a preponderance of the
evidence, statutory or regulatory eligibility for the classification as
of the time of filing, the officer will articulate that basis in
denying the H-1B petition.
---------------------------------------------------------------------------

\133\ See USCIS, ``Rescission of Policy Memoranda,'' PM-602-0114
(June 17, 2020), https://www.uscis.gov/sites/default/files/document/memos/PM-602-0114_ITServeMemo.pdf.
---------------------------------------------------------------------------

Comment: A professional association stated that USCIS' objective
with the proposed amendment to the regulation regarding LCAs is
unclear, given that it ``restates DOL regulations and DOL
jurisdictional considerations.'' A healthcare provider requested that
DHS provide additional clarity around the term ``properly support'' in
the LCA provision, so that organizations can provide documentation that
would be deemed acceptable. A joint submission said that the final rule
should mirror existing DOL regulations in stating that USCIS would
determine ``whether the petition is supported by an LCA which
corresponds with the petition, [and] whether the occupation named in
the [LCA] is a specialty occupation'' and remove ambiguous and
potentially expansive language like ``properly corresponds'' that
appear to broaden USCIS' scope of inquiry regarding LCAs. They further
stated that the proposed rule contains no instructions for how an
adjudicator should determine whether an LCA ``properly corresponds''
with the petition. An attorney writing as part of a form letter
campaign said that it is not clear what USCIS means in its statement
that it would not supplant DOL's responsibility with respect to wage
determinations, inquiring if USCIS would now assert that a position
should be wage level 2 or wage level 3 when the petitioner has followed
DOL guidance in determining a wage level 1 position, or if USCIS would
now assert the SOC code is not correct on the LCA after the petitioner
has reviewed the SOC codes and selected the one which they feel is best
aligned with the position.
Response: As explained in the NPRM, when determining whether the
submitted certified LCA properly corresponds with the petition, USCIS
will consider all information on the LCA, including, but not limited
to, the SOC code, wage level (or an independent authoritative source
equivalent), and location(s) of employment. 88 FR 72870, 72903 (Oct.
23, 2023). USCIS will evaluate whether that information sufficiently
aligns with the offered position, as described in the rest of the
petition and supporting

[[Page 103132]]

documentation. This is consistent with current practice and not
intended to replace DOL's role or responsibility with respect to wage
determinations. As explained in the previous response and in USCIS'
June 2020 policy memorandum ``Rescission of Policy Memoranda,'' the
petitioner has the burden of proof to establish that employment exists
at the time of filing and it will employ the beneficiary in the
specialty occupation.\134\ If the petitioner's attestations and
supporting documentation meet this standard, then the officer will not
request additional evidence, provided all other eligibility
requirements are met by a preponderance of the evidence.
---------------------------------------------------------------------------

\134\ See USCIS, ``Rescission of Policy Memoranda,'' PM-602-0114
(June 17, 2020), https://www.uscis.gov/sites/default/files/document/memos/PM-602-0114_ITServeMemo.pdf.
---------------------------------------------------------------------------

Material inconsistencies between the information certified on the
LCA and contained in the petition and/or other supporting documentation
may raise questions as to whether the petitioner has submitted all
required evidence under the regulations or established eligibility by a
preponderance of the evidence. For example, if the petition and other
supporting documentation indicates that the beneficiary's position and
associated job duties requires a wage level 2 or wage level 3 per DOL
guidance, but the LCA is certified for a wage level 1 position, that
may call into question whether the petition is supported by an LCA that
properly corresponds to the petition or whether the offered position
was accurately described in the petition. Similarly, USCIS may find a
material discrepancy in cases where the SOC code on the LCA is
inconsistent with the job duties as described in the H-1B petition.
However, this is not the same as supplanting DOL's responsibilities
because DOL does not review the information contained in the H-1B
petition and supporting documentation. USCIS' review is limited to
whether the information on the LCA sufficiently aligns with the offered
position as described in the H-1B petition and supporting evidence, and
does not in any way determine whether DOL properly certified the
LCA.\135\
---------------------------------------------------------------------------

\135\ In reviewing the LCA, USCIS uses published DOL guidance
and other publicly available sources referenced in DOL's prevailing
wage determination policy guidance. See ``Prevailing Wage
Determination Policy Guidance,'' Employment and Training
Administration, Dept. of Labor (Nov. 2009), https://www.dol.gov/sites/dolgov/files/ETA/oflc/pdfs/NPWHC_Guidance_Revised_11_2009.pdf.
---------------------------------------------------------------------------

Comment: A few commenters said the proposed rule indicates that DHS
believes the LCA duplicates the preexisting itinerary requirement in
its explanation of its decision to eliminate said requirement. They
said that the proposed rule's listing of the LCA provision as one
designed ``to ensure [a] bona fide job offer for a specialty
occupation'' reinforces that, consistent with DHS's position in the
2018 Policy Memo, the Department currently views the LCA as substantive
proof of whether a petition identifies an H-1B qualifying position--
akin to the former itinerary requirement. The commenters added that, in
context, the LCA-review provision is a ``backdoor'' for USCIS
adjudicators to reimpose a functionally identical itinerary requirement
that was declared unlawful in ITServe Alliance, Inc. The commenters
further stated that the provision suggests or does not foreclose that
adjudicators may treat LCA review just like the itinerary requirement
the rule eliminates, which the commenter said would be arbitrary and
capricious and contrary to the INA. The commenters requested clarity on
the meaning of ``properly support'' stating that nothing in the rule
precludes USCIS from finding that an LCA does not ``properly support''
a petition if it fails to identify every third-party client to whom an
H-1B worker might provide services throughout their tenure, risking
compounding the non-speculative employment provision's ``error.''
Response: DHS does not agree that new 8 CFR
214.2(h)(4)(i)(B)(1)(ii) ``duplicates'' the itinerary requirement that
is being removed in this final rule, or that new 8 CFR
214.2(h)(4)(i)(B)(1)(ii) is a ``backdoor'' to reimpose an itinerary
requirement. As stated in the NPRM and above, new 8 CFR
214.2(h)(4)(i)(B)(1)(ii) codifies DHS's existing authority to ensure
that the LCA supports and properly corresponds with the accompanying H-
1B petition. 88 FR 72870, 72902 (Oct. 23, 2023). As further explained
in the NPRM, in determining whether the submitted certified LCA
properly corresponds with the petition, consistent with current
practice, USCIS will consider all the information on the LCA,
including, but not limited to, the standard occupational classification
(SOC) code, wage level (or an independent authoritative source
equivalent), and location(s) of employment. 88 FR 72870, 72903 (Oct.
23, 2023). USCIS will evaluate whether that information sufficiently
aligns with the offered position, as described in the entire record of
proceeding.\136\ This is different from the itinerary requirement,
which is being removed in this final rule, and which previously
required ``an itinerary with the dates and locations of the services or
training.'' New 8 CFR 214.2(h)(4)(i)(B)(1)(ii) imposes no such
requirements. Rather, this provision codifies USCIS' authority to
compare the information contained in the LCA against the information
contained in the petition and supporting evidence, and to deny or
revoke the petition if the LCA does not properly correspond to the
petition.
---------------------------------------------------------------------------

\136\ 88 FR 72870, 72902-72903 (Oct. 23, 2023).
---------------------------------------------------------------------------

DHS also does not agree that this provision will require
petitioners to identify every third-party client to whom a beneficiary
might provide services throughout their ``tenure.'' As explained in the
NPRM and throughout this final rule, petitioners will not be required
to demonstrate non-speculative or specific daily work assignments
through the duration of the requested validity period. See new 8 CFR
214.2(h)(4)(iii)(F). 88 FR 72870, 72902 (Oct. 23, 2023). Similarly,
petitioners will not be required to identify every third-party client
to whom a beneficiary might provide services throughout the requested
validity period. DOL regulations require employers to list all intended
places of employment on the LCA, 20 CFR 655.730(c)(5); and DOL has
further specified that a worksite should be listed as an intended place
of employment ``if the employer knows at the time of filing the LCA
that it will place workers at the worksite, or should reasonably expect
that it will place workers at the worksite based on: (1) an existing
contract with a secondary employer or client, (2) past business
experience, or (3) future business plans.'' \137\ Thus, neither DOL nor
DHS regulations require a petitioner to list every third-party client
to whom a beneficiary might provide services throughout the requested
H-1B validity period. However, there may be instances where the places
of employment listed on the LCA may be relevant to determining whether
the LCA properly corresponds with the petition. For example, if the
petition indicates that the beneficiary will be placed at a third-party
worksite in Chicago, IL, but the LCA only contains work locations in
Los Angeles, CA, USCIS may issue an RFE to provide the petitioner an
opportunity to explain the discrepancy and to ensure that the LCA
properly corresponds to the petition and covers all work locations for
the beneficiary. Further, DHS notes that a petitioner can make changes
to the beneficiary's place of employment or place the beneficiary

[[Page 103133]]

at new third-party site during the approval period, as long as the
petitioner complies with DOL and DHS requirements, which may include
filing new or amended LCAs and petitions as applicable.
---------------------------------------------------------------------------

\137\ Labor Condition Application for H-1B, H-1B1 and E-3
Nonimmigrant Workers Form ETA-9035CP--General Instructions for the
9035 and 9035E, https://flag.dol.gov/sites/default/files/2019-09/ETA_Form_9035CP.pdf.
---------------------------------------------------------------------------

Comment: A couple of trade associations stated that the provision
to codify USCIS' ability to examine LCAs as evidence of a bona fide job
offer would undermine USCIS' goal of reducing backlogs and improving
efficiencies by requiring adjudicators to consider a new standard that
is outside their expertise and legal purview, slowing down
adjudications and resulting in more RFEs. Another trade association
recommended that due to the ``unnecessary'' additional burden of
paperwork, cost, and time on both the petitioner and USCIS, ``with
little to no benefit for the additional requirement as the agency looks
to streamline and not further complicate the H-1B program,'' DHS should
eliminate the proposal for USCIS to review LCAs as proof of a bona fide
job offer.
Response: As discussed in the NPRM, this provision codifies DHS's
existing authority to ensure that the LCA supports and properly
corresponds with the accompanying H-1B petition. 88 FR 72870, 72902
(Oct. 23, 2023). This is consistent with current practice and not
expected to create additional burdens on petitioners or USCIS
adjudicators.
Comment: A professional association stated that given the
complexity of the H-1B petition, the LCA provision should specify that
denial or revocation of a petition due to USCIS' inability to verify
facts would be limited to its inability to verify material facts rather
than simply relevant facts. The commenter added that such a standard
would provide necessary limits to the scope of USCIS authority and
would be a wiser use of resources. An attorney stated that in the event
that USCIS gives itself regulatory authority to review LCAs, USCIS
should include in the final rule a requirement that USCIS, in any RFE
or NOID, provide the LCA code and/or alternate wage that it believes
applies to the position, and give the petitioner the opportunity to
rebut the designation(s). An attorney writing as part of a form letter
campaign stated that the technical changes such as replacing ``shall''
with ``must,'' ``application'' with ``certified labor condition
application,'' and ``the Service'' with ``USCIS,'' for additional
clarity should not be made because the petitioner already takes the
time to review DOL SOC codes and wage levels.
Response: DHS declines to make any additional changes to the LCA
provision to limit USCIS' authority. As explained in the NPRM, while
the LCA, H-1B petition, and supporting documentation must be for the
same position, the same position does not necessarily mean that all
information describing the position must be identical. 88 FR 72870,
72903 (Oct. 23, 2023). A petitioner may supplement or clarify the
record with additional information about the offered position in
response to an RFE, on motion, or on appeal, and so long as the
supplemental information does not materially change the position
described in the H-1B petition, DHS would consider the position to be
the same. Further, the technical changes are being made to add clarity
to these provisions, not impose a new requirement on petitioners.
iv. Revising the Definition of U.S. Employer
Comment: A company voiced support for DHS's proposal to amend its
definition of U.S. employer to align with current adjudicatory
practices and court rulings. A professional association voiced
appreciation for synchronizing and modernizing the definition of
``employer'' between USCIS and DOL for clarity, consistency, and
entrepreneurship. The commenter stated that the current definition of
``employer'' as well as the requirement to perform only specialty
occupation work, created significant hurdles for physicians who wished
to start a medical practice or incorporate as a solo practitioner for
locum tenens work, such as filling critical shortages or vacancies to
ensure uninterrupted care to patients throughout the country. The
commenter added that the changes would directly support the ability of
foreign physicians to become entrepreneurs, particularly those who
desire to supplement the locum tenens workforce. A legal services
provider added that on top of safeguarding integrity and compliance
with the H-1B program, the changes to the definition would encourage
entrepreneurship and not stifle business or personal growth, and would
allow beneficiary-owners to take on further duties apart from the core
specialty occupation requirement that relate to owning a business.
Response: DHS agrees that the revised definition of U.S. employer
better aligns the definition with current practice. As explained in the
NPRM, this proposed change, which is being finalized as proposed,
largely reflects USCIS' current practices since June 2020, following a
court order and settlement agreement.\138\ 88 FR 72870, 72903 (Oct. 23,
2023).
---------------------------------------------------------------------------

\138\ See ITServe Alliance, Inc. v. Cissna, 443 F. Supp. 3d 14,
19 (D.D.C. 2020) (finding that the USCIS policy interpreting the
existing regulation to require a common-law employer-employee
relationship violated the Administrative Procedure Act as applied
and that the itinerary requirement at 8 CFR 214.2(h)(2)(i)(B) is
ultra vires as it pertains to H-1B petitions).
---------------------------------------------------------------------------

v. Employer-Employee Relationship
Comment: Several commenters supported DHS's proposal to remove the
reference to ``an employer-employee relationship'' from the definition
of U.S. employer, which had previously been a reason for petition
denial. A law firm said that harmonization of DOL's and USCIS'
definition of the ``employer-employee relationship'' is welcome. A
joint submission agreed with USCIS that past policies regarding the
establishment of employer-employee relationships have led to
significant administrative barriers and limited access to key H-1B
talent.
Response: DHS appreciates the feedback. As explained in the NPRM,
removing the employer-employee relationship language from the
regulations promotes clarity and transparency in the regulations and
supports DHS's overall commitment to reducing administrative barriers.
88 FR 72870, 72903 (Oct. 23, 2023).
Comment: An individual commenter said that the elimination of the
employer-employee relationship would make the program ripe for abuse as
anyone could declare themselves an employer and obtain an H-1B visa. A
joint submission noted that DHS confirms that ``[i]t is in DHS's
interests to promote, to the extent possible, a more consistent
framework among DHS and DOL regulations for H-1B, E-3, and H-1B1
petitions and to increase clarity for stakeholders,'' and acknowledges
that USCIS past policy was inconsistent with DOL's regulatory
definition of an employer, which resulted in USCIS deciding a
petitioner was not an H-1B employer when DOL determined the petitioner
was an employer and certified the LCA, which the commenters said
increased the potential for confusion among H-1B stakeholders. The
commenters said that the NPRM purports to significantly redefine DHS's
definition of ``employer'' to exceed and conflict with DOL's regulatory
definition, which would increase confusion and lead to contradictory
results. The commenters stated that ``by focusing on contracts with
third parties to determine whether a role is or is not a specialty
occupation, USCIS is inherently shifting the focus of the

[[Page 103134]]

employer-employee relationship to the contractual relationship that
exists between a company and its customers.'' The commenters
recommended that DHS ``remove the emphasis on contractual relationships
as a general matter and, in particular, any reference that relates to
the definition of an employer-employee relationship.''
Response: DHS disagrees that removing the reference to an employer-
employee relationship from the H-1B regulations will make the program
ripe for abuse. As explained in the NPRM, this change is largely
consistent with current USCIS policy guidance that the petitioner needs
only to establish that it meets at least one of the ``hire, pay, fire,
supervise, or otherwise control the work of'' factors with respect to
the beneficiary to meet the employer-employee relationship test. 88 FR
72870, 72904 (Oct. 23, 2023). However, since H-1B petitioners will
continue to be required to submit an LCA attesting that they will pay
the beneficiary, and a copy of any written contract (or summary of
terms of the oral agreement) between the petitioner and the
beneficiary, which typically affirms that they will hire and pay the
beneficiary, the current employer-employee relationship test is usually
met as a matter of complying with the other H-1B eligibility
requirements. As an additional integrity measure, DHS is codifying
within the definition of ``United States employer'' the existing
requirement that the petitioner have a bona fide job offer for the
beneficiary to work within the United States as well as a new
requirement to have a legal presence in the United States and be
amenable to service of process in the United States.
Further, DHS disagrees that removing the employer-employee
relationship requirement from the definition of ``United States
employer'' exceeds and conflicts with DOL's regulatory definition of
``employer'' at 20 CFR 655.715 \139\ and will increase confusion.
Rather, the revised definition creates a more consistent framework
among DHS and DOL regulations for H-1B, E-3, and H-1B1 petitions and
increases clarity for stakeholders. As explained in the NPRM, USCIS'
previous 2010 policy guidance sometimes caused USCIS to conclude that a
petitioner was not an employer for purposes of the H-1B petition even
though DOL deemed that same petitioner to be an employer for purposes
of the LCA. 88 FR 72870, 72904 (Oct. 23, 2023). DHS also notes that it
is not shifting the focus from the employer-employee relationship to
the contractual relationship that exists between a company and its
customers. As explained above, codifying DHS's authority to request
contracts between the petitioner and a third party is a different
provision and not intended to replace the employer-employee
relationship requirement. Specifically, contracts and other similar
evidence may be requested to show the non-speculative nature of the
beneficiary's position and the minimum educational requirements to
perform the duties, which go to the issue of whether the offered
position qualifies as a specialty occupation and whether the job offer
is bona fide, not whether the petitioner otherwise qualifies as a
United States employer under the previous employer-employee
relationship regulatory text.\140\
---------------------------------------------------------------------------

\139\ Although the commenter referenced 20 CFR 755.715, DHS
assumes the intended citation is to 20 CFR 655.715 which defines
``employer'' as ``a person, firm, corporation, contractor, or other
association or organization in the United States that has an
employment relationship with H-1B, H-1B1, or E-3 nonimmigrants and/
or U.S. worker(s). In the case of an H-1B nonimmigrant (not
including E-3 and H-1B1 nonimmigrants), the person, firm,
contractor, or other association or organization in the United
States that files a petition with the United States Citizenship and
Immigration Services (USCIS) of the Department of Homeland Security
(DHS) on behalf of the nonimmigrant is deemed to be the employer of
that nonimmigrant.''
\140\ This provision does not preclude USCIS from requesting
contracts for other reasons, such as to establish eligibility of
agents as petitioners, and maintenance of status. See 8 CFR
214.2(h)(2)(i)(F) (``An agent performing the function of an employer
must guarantee the wages and other terms and conditions of
employment by contractual agreement with the beneficiary or
beneficiaries of the petition.''); new 8 CFR 214.1(c)(6) (``Evidence
of such maintenance of status may include, but is not limited to:
copies of paystubs, W-2 forms, quarterly wage reports, tax returns,
contracts, and work orders.'').
---------------------------------------------------------------------------

vi. Bona Fide Job Offer
Comment: An attorney writing as part of a form letter campaign
voiced support for DHS's codification in the definition of a U.S.
employer of the existing requirement that the petitioner has a bona
fide job offer for the beneficiary to work within the United States.
Several commenters voiced support for the clarification that a bona
fide U.S. job offer includes ``telework, remote work, or other off-site
work within the United States'' which would bring DHS's definition of
bona fide job offer in line with current U.S. employment practices. The
university stated that it is important to note that many employees who
work remotely may also have more flexible work schedules, such that
their working hours deviate from common business hours.
Response: DHS agrees with commenters that it is important to note
that a bona fide U.S. job offer includes ``telework, remote work, or
other off-site work within the United States,'' which may include more
flexible work schedules.
Comment: An advocacy group stated that while it supports the
recognition of the flexible nature of work via the proposed rule's
support for telework and remote work, DHS should ensure that the
regulation does not eliminate the need for H-1B beneficiaries to
complete some portion of their work in person within the United States.
The commenter added that DOL's labor certification process already
establishes criteria for third-party or offsite H-1B work locations, so
the proposed language could be rewritten to state that an eligible U.S.
employer must have ``a bona fide job offer for the beneficiary to work
within the United States. The job offer may include, but should not be
limited to, telework or remote work within the United States during the
requested petition validity period.'' A law firm stated that a
definition of what constitutes ``bona fide'' is required. A university
stated that while employees may have different types of work
arrangements, the NPRM does not sufficiently address some of the
complexities and challenges that may result from those arrangements. A
trade association said that a bona fide job offer is a concept that is
``completely absent'' from DHS's current regulation or statutorily
delegated powers, which the commenter said raises the question of how
this ``existing requirement'' sprang to life and became in the DHS's
view a binding and enforceable standard.
Response: DHS agrees with the commenters that the bona fide job
offer must be in the United States. The regulatory text at 8 CFR
214.2(h)(4)(ii) clearly states that the U.S. employer in the United
States has a bona fide job offer for the beneficiary to work ``within
the United States,'' which may include telework, remote work, or other
off-site work ``within the United States.'' By repeating ``within the
United States'' several times throughout the provision, DHS believes it
is sufficiently clear that the job opportunity must be in the United
States and the work must be performed in the United States. DHS also
declines to further define the term ``bona fide'' in the regulatory
text, which is used throughout numerous immigration provisions and
follows the standard definition and Latin translation of ``in good
faith.'' \141\ Additionally, DHS does not think it is

[[Page 103135]]

necessary to address various complexities and challenges that may
result from different types of work arrangements. Each case will be
adjudicated on its merits, and it is not possible to cover all possible
types of work arrangements in this rulemaking. Regarding the assertion
that a bona fide job offer is absent from DHS's regulations or
statutorily delegated powers, this basic requirement derives from the
statutory and regulatory requirements that the petitioner be an
``importing employer'' and a ``United States employer'' that will
employ the beneficiary in a ``specialty occupation.'' See INA sec.
214(c)(1), (i)(1); 8 CFR 214.2(h)(4)(i)(A)(1); 8 CFR 214.2(h)(4)(ii).
It is also reflected in current USCIS policy guidance, which states
that the petitioner must establish that ``[a] bona fide job offer . . .
exist[s] at the time of filing,'' \142\ as explained in the NPRM. 88 FR
72870, 72904 (Oct. 23, 2023). This requirement, which is being codified
in DHS regulations in this final rule, is also consistent with DHS's
general authority under section 103(a) of the INA, 8 U.S.C. 1103(a),
which authorizes the Secretary to administer and enforce the
immigration and nationality laws and establish such regulations as the
Secretary deems necessary for carrying out such authority. It is also
consistent with section 214(a)(1) of the INA, 8 U.S.C. 1184(a)(1),
which authorizes the Secretary to prescribe by regulation the time and
conditions of nonimmigrant admission and section 214(c) of the INA, 8
U.S.C. 1184(c), which, inter alia, authorizes the Secretary to
prescribe how an importing employer may petition for nonimmigrant
workers, including H-1B nonimmigrants, and the information that an
importing employer must provide in the petition.
---------------------------------------------------------------------------

\141\ Miriam-Webster Dictionary, ``Bona fide,'' https://www.merriam-webster.com/dictionary/bona%20fide.
\142\ See USCIS, ``Rescission of Policy Memoranda,'' PM-602-0114
(June 17, 2020); see also USCIS, Adjudicator's Field Manual (AFM)
Chapter 31.3(g)(4) at 24, ``H1-B Classification and Documentary
Requirements has been partially superseded as of June 17, 2020,''
available at https://www.uscis.gov/sites/default/files/document/policy-manual-afm/afm31-external.pdf (``The burden of proof falls on
the petitioner to demonstrate the need for such an employee. Unless
you are satisfied that a legitimate need exists, such a petition may
be denied because the petitioner has failed to demonstrate that the
beneficiary will be employed in a qualifying specialty
occupation.''). While USCIS retired the AFM in May 2020, this
example nevertheless illustrates the agency's historical
interpretation.
---------------------------------------------------------------------------

vii. Legal Presence and Amenable to Service of Process
Comment: A law firm said that the legal presence and amenable to
service of process provision is ``not controversial.'' A joint
submission also voiced support for the provision, adding that it would
provide clear guidance to all employers, especially new and emerging
companies, with respect to the minimum legal threshold for establishing
their status as bona fide U.S. employers.
An attorney writing as part of a form letter campaign said that
DHS's proposal to replace the requirement that the petitioner
``[e]ngages a person to work within the United States'' with the
requirement that the petitioner have a legal presence and be amenable
to service of process in the United States is unclear. The commenters
said that while DHS is not proposing to change the requirement of an
employment identification number (EIN), it is making the definition
vague, voicing confusion about the term ``have a legal presence.'' The
commenters inquired whether DHS intended to allow non-U.S. employers to
petition if they have a P.O. box and an EIN, or whether DHS considered
how DOL would interpret this legal presence regarding the use of a P.O.
box when it comes to the labor certification process where there is a
physical address requirement. The commenters stated that ``[i]t does
not make sense to change from the current definition of `United States
employer as a person, firm, corporation, contractor, or other
association, or organization in the United States.' '' Additionally, an
individual commenter requested that a U.S. employer should have an
office and staff in the registered location, including if it is remote
and hybrid within the United States and not elsewhere like offshore or
outside of the United States. The commenter added that the U.S.
employer should process all information in the United States and not
through ``group companies like for [i]nsurance,'' while payroll
processing and benefits could be done by a vendor or third party.
Response: DHS agrees with the commenters who said that requiring
the petitioner to have a legal presence in the United States and be
amenable to service of process in the United States will provide clear
guidance to employers with respect to the minimum legal threshold for
establishing their status as eligible U.S. employers, and disagrees
with the commenters who said this requirement is confusing. As
explained in the NPRM, ``legal presence'' means that the petitioner is
legally formed and authorized to conduct business in the United States,
and ``amenable to service of process'' means that the petitioner may be
sued in a court in the United States. 88 FR 72870, 72905 (Oct. 23,
2023).
To clarify, this is a new requirement at prong two of the
definition of ``United States employer.'' Overall, DHS is removing the
previous requirement that the petitioner ``[e]ngages a person to work
within the United States'' and the employer-employee relationship
requirement, and is adding the requirements that (1) the petitioner
have a bona fide job offer for the beneficiary to work within the
United States, and (2) the petitioner has a legal presence and is
amenable to service of process in the United States. DHS is still
maintaining the part of the definition that a United States employer
means a person, firm, corporation, contractor, or other association, or
organization in the United States.
Regarding the questions of whether, under the legal presence
requirement, DHS intends to allow non-U.S. employers to petition as a
U.S. employer if they have a P.O. box and an EIN or whether such
employers must have a physical address/office in the United States, DHS
believes that this is generally covered by the new requirement that the
petitioner have a legal presence in the United States as well as the
LCA requirements.\143\ Ultimately, however, the answer may depend on
the applicable state(s) laws where the petitioner is legally formed and
authorized to conduct business in the United States. DHS declines to
add additional regulatory requirements that were not proposed in the
NPRM, such as requiring a physical office with staff or specifying
where and by whom various business information must be processed.
---------------------------------------------------------------------------

\143\ See ``Temporary Alien Workers Seeking Classification Under
the Immigration and Nationality Act,'' 56 FR 61111, 61112 (Dec. 2,
1991) (explaining that the requirement to post a notice of the
filing of a labor condition application at the petitioner's place of
employment ``obviously requires the petitioner to have a legal
presence in the United States'').
---------------------------------------------------------------------------

12. Beneficiary-Owners
Comment: A couple of commenters expressed general support for
provisions impacting entrepreneurs, noting that the proposed
regulations would encourage entrepreneurs to start their own businesses
and not stifle business or personal growth. One commenter said that
this would be highly beneficial to the visa holder, the startup
environment, and the United States; and, another commenter said this
would support the entrepreneurial spirit of the United States and would
help improve the economy by enabling entrepreneurs to file as H-1B
petitioners. A professional association wrote that improved H-1B
policies could allow

[[Page 103136]]

postdoctoral researchers to remain in the United States and ``continue
contributing to the U.S. innovation pipeline while cutting red tape.''
Other commenters said that by giving H-1B holders the chance to pursue
entrepreneurship opportunities, the proposed rule would create
employment opportunities for others in the United States, move the H-1B
program in a positive direction, and prevent talented individuals from
leaving the United States for Canada, Australia, and their home
countries. A commenter wrote that they know of people who have
travelled back to their home countries to start their entrepreneurial
journey because of current restrictions in the United States and that
by removing entrepreneurship restrictions for such individuals, the
U.S. economy would benefit from new successful companies.
An advocacy group expressed appreciation for USCIS' exploration of
policies to improve H-1B pathways for startup talent. Another commenter
emphasized the prevalence of immigrants in the startup ecosystem while
expressing concerns about declining U.S. innovation as the United
States becomes a less attractive destination for qualified
entrepreneurs compared to places like the UK, the European Union, and
Canada.
An advocacy group wrote that the definition of an employer-employee
relationship makes it difficult for entrepreneurs to qualify for H-1B
status, which USCIS has recognized deters high-skilled foreign
nationals from starting a company. While citing a report from the
National Foundation for American Policy, the group emphasized that
nearly two-thirds of U.S. billion-dollar companies were founded or co-
founded by immigrants or the children of immigrants, representing what
the U.S. economy loses when restricting foreign-born entrepreneurship.
Response: DHS appreciates the feedback from these commenters and
acknowledges that there are limited pathways for entrepreneurs to come
to the United States under existing regulations. The intent of the
beneficiary-owner provisions is to promote access to the H-1B program
for entrepreneurs, start-up entities, and other beneficiary-owned
businesses while also setting reasonable conditions for when the
beneficiary owns a controlling interest in the petitioning entity to
better ensure program integrity.
Comment: Numerous commenters offered remarks in support of the
measures enabling beneficiary-owners to access and participate in the
H-1B program. One commenter said that the proposed H-1B eligibility
requirements ``hold promise'' for emerging entrepreneurs, while an
advocacy group welcomed steps towards creating pathways for
entrepreneurs to develop and grow businesses in the United States. An
advocacy group supported the regulatory language acknowledging that
beneficiary-owners are ``legitimate and valid participants in the H-1B
program,'' and a research organization said the proposal is an
improvement upon existing rules. A few commenters generally endorsed
the relaxation of ``unreasonable and unnecessary requirements for
founders, while other commenters stated the general need to allow H-1B
holders to start a business.
Numerous commenters endorsed the provision on the basis that
promoting access to H-1B visas for entrepreneurs and start-up owners
would foster innovation, job creation, and economic growth in the
United States. A trade association supported additional pathways for
entrepreneurs and founders, reasoning that their companies represent an
essential part of the U.S. economy. Similarly, a joint submission
described the role of beneficiary-owners in the start-up economy and
ongoing barriers to innovators in the U.S. immigration system. The
commenters supported the rule's provisions allowing founders to launch
and grow companies and slow the drain of start-up talent to other
countries. A form letter campaign wrote that, in addition to job
creation and innovation, the proposed provisions facilitating H-1B
access for start-up founders would drive industry diversity and global
competitiveness. A law firm added that codifying a petitioner's ability
to qualify as a U.S. employer, even when the beneficiary owns a
controlling interest in the petitioner's business, would address
historical barriers for beneficiary-owned businesses in the H-1B
program. The commenter wrote that the changes would encourage more
innovators to utilize the program, leading to increased innovation, job
creation, and new opportunities. While citing a report from the New
American Economy, an advocacy group wrote that immigrant
entrepreneurship is a ``major economic and jobs multiplier'' that keeps
talent in the United States while creating employment opportunities for
U.S.-born workers. The group concurred with DHS's statement in the NPRM
that if more entrepreneurs can obtain H-1B status, the United States
would benefit from the creation of jobs, new industries, and
opportunities. Another commenter added that entrepreneurs bring a
wealth of knowledge that contributes to the growth of various sectors,
including health, technology, and finance. The commenter said that
attracting global talent would encourage the creation of cutting-edge
solutions, products, and services to enhance U.S. competitiveness while
aligning with the principles of a dynamic and inclusive economy.
An advocacy group welcomed DHS's efforts to acknowledge the
contributions of immigrant founders in the start-up and innovation
ecosystem. The advocacy group said that easing barriers for founders to
come to the United States is a ``net positive,'' as the majority of
billion-dollar start-ups have at least one immigrant founder. These
companies, the advocacy group said, create U.S.-based jobs while
strengthening the economy and communities. Additionally, the group said
that encouraging entrepreneurs' participation in the program would
represent an important step in supporting more pathways for immigrant
founders to come to the United States. A law firm remarked that
``liberalizing'' opportunities for founders to obtain H-1B status would
increase the number of companies established by graduates of U.S.
universities. A university wrote that international students often to
pursue entrepreneurial ventures outside of the United States and that
this proposal would create an important opportunity for international
researchers to become entrepreneurs in the United States.
Commenters also supported the clarification around beneficiary-
owners on the basis that it would provide increased certainty to
prospective beneficiaries and other stakeholders in the H-1B program. A
business association thanked DHS for including explicit regulatory
authorization for entrepreneurs to obtain H-1B visas, reasoning that
this approach aligns with its previous recommendations to the agency
and would provide greater certainty for start-up businesses across
industries. A joint submission endorsed efforts to encourage
beneficiary-owner participation in the H-1B program and concurred with
the NPRM's description of problems and uncertainty affecting the
entrepreneurial community. The commenters supported efforts to clarify
longstanding policies and establish practices that facilitate the
inclusion of entrepreneurs, founders, and beneficiary-owned petitioners
in the H-1B visa program. Another joint submission and a form letter
campaign also concurred that USCIS' common-law analysis of the
employer-employee relationship has been an impediment to beneficiary-
owners as a result of the

[[Page 103137]]

legacy of the now-rescinded 2010 guidance and reasoned that the
proposed change would provide much-needed clarity.
Response: DHS agrees that clarifying how the regulations apply to
entrepreneurs will provide greater certainty for entrepreneurs and
start-up business owners. In clarifying this policy, DHS seeks to
encourage more beneficiary-owned businesses to participate in the H-1B
program. As explained in the NPRM, if more entrepreneurs are able to
obtain H-1B status, the United States could benefit from the creation
of jobs, new industries, and opportunities. 88 FR 72870, 72905 (Oct.
23, 2023).
Comment: While expressing support for the proposed measures to
provide H-1B visas to beneficiary-owners, an advocacy group encouraged
DHS to ease pathways--via H-1B and other programs--for start-up
founders who do not have a controlling interest in their companies to
remain in the United States and grow their companies. The group
reasoned that facilitating pathways only for those with controlling
ownership may force founders to decide between expansion, which comes
with relinquishing majority ownership, or retaining equity for visa
purposes, limiting companies' contributions to the U.S. economy.
Response: There is nothing currently, or historically, in the
regulations that prevents an owner with less than a controlling
interest from qualifying for H-1B status. As explained in the NPRM,
historically, USCIS' common law analysis of the employer-employee
relationship has been an impediment for certain beneficiary-owned
businesses (e.g., beneficiaries who are the sole operator, manager, and
employee), to use the H-1B program. 88 FR 72870, 72905 (Oct. 23, 2023).
Through the beneficiary-owner provision, DHS is clarifying its current
policy and encouraging more beneficiary-owned businesses to participate
in the H-1B program. By creating certain conditions--such as the
majority of the time requirement and shortened validity periods--that
would apply when a beneficiary owns a controlling interest in the
petitioner, DHS intends to ensure that the beneficiary will be employed
in a specialty occupation in a bona fide job opportunity. Limiting this
framework to beneficiary-owners who have a controlling interest in
their companies is meant to add integrity protections to the program
and prevent these owners from abusing the H-1B program. This is not
intended to hinder or impede entrepreneurs who do not have a
controlling interest in their companies, to whom the additional
conditions would not apply. DHS seeks to encourage more beneficiary-
owned businesses to participate in the H-1B program, regardless of
whether they have a controlling interest in the petitioning business.
Comment: A few commenters voiced concern about allowing petitioners
to sponsor themselves for an H-1B visa, including a commenter who
generally stated that H-1B visa holders should not be allowed to have
their own businesses or start-ups. A different commenter wrote without
reference to any statutory provisions, or analysis thereof that ``self-
sponsorship'' would be risky and breach H-1B law established by
Congress, while another commenter expressed concerns with program
exploitation associated with self-sponsored visa holders. A different
commenter also expressed concern with abuse associated with the
provisions allowing entrepreneurs to ``self-sponsor'' their H-1B visa.
The commenter said that in the absence of ``proper gating criteria''
for beneficiary-owners, DHS would likely see an increase in ``self-
sponsor'' petitions.
Response: DHS disagrees that the beneficiary-owner provision is
ultra vires. There is nothing in the statute prohibiting a noncitizen
with an ownership interest in a U.S. employer from being the
beneficiary of an H-1B petition filed by that employer and the
commenter did not identify any statutory provisions that preclude a
beneficiary-owned business from qualifying as an employer for H-1B
purposes.
Through this provision DHS is clarifying its current policy, which
has been in place since 2020 \144\ when DHS rescinded its 2010 policy
memorandum \145\ explaining the common law analysis of the employer-
employee relationship. However, like some commenters, DHS is also
concerned with the possibility of beneficiaries exploiting the H-1B
program, which is why DHS is creating certain conditions that must be
adhered to when a beneficiary owns a controlling interest in the
petitioner. These conditions include the requirement that the
beneficiary must perform specialty occupation duties a majority of the
time and shortened validity periods for the initial petition and first
extension of 18 months. These restrictions are meant to act as
safeguards and to better ensure that the beneficiary will be employed
in a specialty occupation in a bona fide job opportunity.
---------------------------------------------------------------------------

\144\ See USCIS, ``Rescission of Policy Memoranda,'' PM-602-0114
(Jun. 17, 2020).
\145\ See USCIS, ``Determining Employer-Employee Relationship
for Adjudication of H-1B Petitions, Including Third-Party Site
Placements,'' HQ 70-6.2.8, AD 10-24 (Jan. 8, 2010) (rescinded).
---------------------------------------------------------------------------

DHS disagrees with the claims that this provision amounts to
``self-sponsorship'' and would be contrary to statute. There is a
difference between allowing a beneficiary-owned business, versus an
individual acting in their individual capacity, to file a petition as a
``United States employer.'' As a general principle of law, a
corporation is a separate and distinct legal entity from its owners or
stockholders.\146\ Therefore, even if a beneficiary is a sole owner of
a business, that business may still file an H-1B petition as a ``United
States employer'' if the business meets all the definitional elements
at new 8 CFR 214.2(h)(4)(ii), i.e., has a bona fide job offer of
employment, has a legal presence in the United States and is amenable
to service of process, has an IRS tax identification number, and, if
the beneficiary has a controlling interest in the petitioner, the
beneficiary will perform specialty occupation duties a majority of the
time, consistent with the terms of the H-1B petition. DHS notes that
the regulatory definition of ``United States employer'' at 8 CFR
214.2(h)(4)(ii)--which has existed since 1991--includes ``a person.''
\147\
---------------------------------------------------------------------------

\146\ See Matter of M, 8 I&N Dec. 24, 50 (BIA 1958, AG 1958);
Matter of Aphrodite Investments Ltd., 17 I&N Dec. 530 (Comm'r 1980);
Matter of Tessel, 17 I&N Dec. 631 (Acting Assoc. Comm'r 1980).
\147\ See 56 FR 61112 (Dec. 2, 1991) (adding a definition of the
term ``United States employer'' in the final rule to include ``a
person''); see also 57 FR 12179 (Apr. 9, 1992) (interim rule)
(maintaining ``a person'' (but eliminating ``which suffers or
permits a person to work within the United States'') from the
definition of ``United States employer'').
---------------------------------------------------------------------------

Comment: Numerous commenters expressed support for the provision
clarifying that the beneficiary may perform duties that are directly
related to owning and directing the petitioner's business, as long as
the beneficiary performs specialty occupation duties authorized under
the petition for a majority of the time. Several commenters reasoned
that the proposal would acknowledge the reality of beneficiary-owners'
responsibilities outside of specialty occupation tasks and allow them
to grow their businesses. For example, a law firm generally stated that
the proposal reflects the duties of entrepreneurs in addition to their
specialty occupation tasks, while an advocacy group said that allowing
beneficiaries to perform duties outside of the scope of their specialty
occupation would be critical for founders, enabling them to engage in
other tasks inherent to building a startup, like seeking out investors.
A

[[Page 103138]]

joint submission, expressing strong support for the NPRM's proposal and
reasoning, similarly wrote that the flexibility would allow
beneficiaries to drive business growth with confidence through
responsibilities not reflected in their specialty occupation duties,
such as by pitching to investors to raise funds and negotiating
contracts. The joint commenters concluded that these business
responsibilities are essential for maintaining the viability of
companies. Likewise, another joint submission wrote that permitting
beneficiaries to perform duties outside the scope of their specialty
occupation would provide them with greater opportunities to grow and
succeed. A professional association similarly supported agency efforts
to clarify that beneficiary-owners may perform non-specialty-occupation
work on a limited basis, reasoning that founders in the medical sector
must perform other duties outside of direct patient care. The
association said that the clarification around non-specialty-occupation
work is a ``reasonable and helpful modification'' to ensure that
physician-owners can carry out necessary administrative tasks for
providing clinical care.
A joint submission expressed support for the proposed changes
establishing a ``majority of the time'' framework on the basis that it
would give clarity to economically significant start-ups and
entrepreneurs and provide a workable framework for beneficiary-owners
to perform their duties in startup entities and as entrepreneurs. The
commenters wrote that the changes could encourage the use of specialty
occupation workers in critical industries and meet USCIS' policy goals
of reducing barriers to entry for startups. The commenters agreed with
DHS's ``commonsense explanations'' around the proposed provision and
wrote that the proposed framework would allow beneficiary-owners to
wear the various ``hats'' that they may undertake. The commenters
commended DHS for moving towards a framework of increased flexibility,
thereby allowing entrepreneurs to consider specialty occupation workers
to develop their businesses while expanding and innovating the U.S.
economy. Echoing the above remarks, another law firm reasoned that the
proposed approach would offer flexibility for beneficiary-owners while
maintaining program requirements, striking a balance between promoting
entrepreneurship and preventing misuse of the H-1B program. Another
commenter generally requested more relaxation on non-specialty
occupation related duties for beneficiary-owners, reasoning that this
would give more opportunities for job creation.
Response: DHS agrees with commenters that it is important to
clarify that the beneficiary may perform non-specialty occupation
duties that are directly related to owning and directing the
petitioner's business to allow beneficiaries to drive business growth
with confidence through responsibilities not reflected in their
specialty occupation duties. DHS acknowledges the reality of
beneficiary-owners' responsibilities outside of specialty occupation
tasks and clarifies that this is permitted as long as the beneficiary
performs specialty occupation duties authorized under the petition
during a majority of the time. As stated in the NPRM, the goal is to
ensure that a beneficiary who is the majority or sole owner and
employee of a company would not be disqualified by virtue of having to
perform duties directly related to owning and directing their own
company. 88 FR 72870, 72906 (Oct. 23, 2023). The ``majority of the
time'' standard is also necessary to ensure that a beneficiary who is
the majority or sole owner and employee of a company would still be
``coming temporarily to the United States to perform services . . . in
a specialty occupation'' as required by INA section
101(a)(15)(H)(i)(b). Therefore, DHS declines to expand this flexibility
any further.
Comment: A joint submission requested clarification on non-
specialty occupation job duties for beneficiary-owners that ``must be
directly related to owning and directing the business'' and expressed
concern over potential disagreement over what are considered to be
directly related to owning and directing a business. The commenters
requested additional guidance as to what duties are considered to be
directly related to owning and directing a business to facilitate
consistent decision making.
Response: As discussed in the NPRM, DHS recognizes that, similar to
other H-1B petitions, a beneficiary-owner may perform some incidental
duties, such as making copies or answering the telephone. 88 FR 72870,
72905 (Oct. 23, 2023). In addition, DHS expects a beneficiary-owner
would need to perform some non-specialty occupation duties when growing
a new business or managing the business. Notwithstanding incidental
duties, non-specialty occupation duties must be directly related to
owning and directing the business. These duties may include, but are
not limited to: signing leases, finding investors, and negotiating
contracts. Other examples might include developing a business plan,
engaging with potential suppliers and other stakeholders, or talent
acquisition. These examples are non-exhaustive and may not apply in
every case. DHS does not believe that additional guidance or
explanation of which duties are ``directly related to owning and
directing the business'' is necessary because it is a fact-specific
determination that will require a case-by-case determination. As stated
in the NPRM, the goal is to ensure that a beneficiary who is the
majority or sole owner and employee of a company would not be
disqualified by virtue of having to perform duties directly related to
owning and directing their own company, while also ensuring that the
beneficiary would still be ``coming temporarily to the United States to
perform services . . . in a specialty occupation'' as required by INA
section 101(a)(15)(H)(i)(b). 88 FR 72870, 72906 (Oct. 23, 2023). Thus,
in each case, USCIS will analyze all of the job duties--specialty
occupation duties and non-specialty occupation duties--which the
petitioner must accurately describe in the petition along with the
expected percentage of time to be spent performing each job duty, and,
for extensions, the time spent performing these duties in the preceding
petition's validity period, to determine whether the job would be in a
specialty occupation and to determine whether the non-specialty
occupation duties are directly related to owning and directing the
business. If the beneficiary would spend a majority of their time
performing specialty occupation duties, and if the non-specialty
occupation duties are directly related to owning and directing the
business, then the position may qualify as a specialty occupation.
DHS emphasizes that nothing in this final rule would change DOL's
administration and enforcement of statutory and regulatory requirements
related to LCAs, including requirements concerning the appropriate
prevailing wage and wage level when the proffered position involves a
combination of occupations. See 8 U.S.C. 1182(n); 20 CFR part 655,
subparts H and I.

[[Page 103139]]

For example, in some cases the petition might involve a combination of
occupations that can affect the petitioner's wage obligation, as
detailed in DOL's wage guidance.\148\ Generally, when an H-1B employer
requests an optional prevailing wage determination from DOL, the
National Prevailing Wage Center will assign to the position the
occupational code that has the higher of the prevailing wages amongst
the combination of occupations. Under this final rule, a petitioner may
be authorized to employ a beneficiary-owner in a combination of
occupations, provided that the petitioner pays the required wage,
consistent with existing DOL wage guidance, even when the beneficiary-
owner is performing non-specialty occupation duties as authorized by
USCIS in accordance with this final rule.
---------------------------------------------------------------------------

\148\ DOL, ``Round 3: Implementation of the Revised Form ETA-
9141 FAQs'' at 1 (July 16, 2021) (When there is a combination of
occupations, the SOC code with the highest wage is assigned.),
https://www.dol.gov/sites/dolgov/files/ETA/oflc/pdfs/NPWC%20Round%203%20Frequently%20Asked%20Questions%20-%20Implementation%20of%20Revised%20Form%20ETA-9141.pdf; DOL,
``Prevailing Wage Determination Policy Guidance Nonagricultural
Immigration Programs Revised November 2009'' at 4 (If the employer's
job opportunity involves a combination of occupations, the National
Prevailing Wage Center should list the relevant occupational code
for the highest paying occupation.), https://www.flcdatacenter.com/download/npwhc_guidance_revised_11_2009.pdf (last visited Oct. 3,
2023).
---------------------------------------------------------------------------

Comment: A joint submission expressed appreciation for the
clarification that beneficiary-owners may seek concurrent H-1B
employment with multiple qualifying specialty occupation roles as long
as the ``majority of the time'' framework applies to those situations.
An advocacy group similarly supported DHS's clarification that
beneficiary-owners are not prohibited from engaging in concurrent
employment. A commenter expressed that H-1B beneficiary owners should
be able to form a C corporation while working with their current
employer. A different commenter suggested an H-1B beneficiary could be
employed by a Fortune 500 company and own a firm, enabling H-1B visa
holders to have a regular job while having the opportunity to engage in
entrepreneurial activities. The commenter also suggested an initial
``filter'' to allow concurrent employment only for limited companies,
such as Fortune 500 companies and those that work with the Federal
Government.
Response: DHS agrees with the commenters that it is helpful to
petitioners to clarify that beneficiary-owners may seek concurrent H-1B
employment with multiple qualifying specialty occupation roles as long
as the ``majority of the time'' framework applies to those situations
where the beneficiary spends time working in the beneficiary-owner
position. While a beneficiary may be able to form and hold a
controlling interest in a business, whether organized as a C
corporation or another type of legal entity, the beneficiary would
generally not be authorized to work for that business until authorized
to do so (e.g., upon approval of a petition filed by that business or,
if eligible for H-1B portability, upon the filing of an H-1B petition
by that business). As explained in the NPRM, the beneficiary-owner
provision does not preclude the beneficiary from being authorized for
concurrent employment with two or more entities (including another
entity where the beneficiary is also an owner with a controlling
interest) so long as each entity has been approved to employ the
beneficiary in a specialty occupation and the individual otherwise
satisfies all eligibility requirements. 88 FR 72870, 72905 (Oct. 23,
2023). Therefore, under these circumstances, an H-1B beneficiary could
seek authorization to work for a business in which they have a
controlling interest while concurrently working for another employer
authorized to employ the beneficiary as an H-1B nonimmigrant. However,
DHS disagrees that initial ``filters'' or limitations are necessary,
such as limiting concurrent employment to working for Fortune 500
companies or companies that work with the Federal Government. The
commenter did not explain the purpose such restrictions would serve and
there is nothing to suggest that restricting the eligibility of
beneficiary-owners in this way would enhance program integrity or
otherwise be beneficial to the H-1B program.
Comment: Several commenters expressed support for limiting the
validity period for initial petitions and extensions to 18 months. For
example, a commenter acknowledged the practicality of the cautionary
rules for a shorter visa extension.
Response: DHS agrees that it is important to add certain safeguards
to prevent program abuse and is limiting the first two validity periods
to 18 months each as a safeguard against possible abuse or fraud.
Comment: Numerous commenters expressed opposition to the proposed
18-month validity period for initial petitions and extensions. A
commenter stated that this provision will enhance exploitation and
outsourcing and that having ``no string attached'' before an 18-month
visa is granted is a long time to inflict substantial damage, while
another commenter suggested that the 18-months validity period is too
short for new start-ups and businesses to become profitable and
generate employment for U.S. citizens. Another commenter said that
there should be no minimum investment since there are other programs
available (like EB-5) to those start-ups, and it would discourage other
individuals from contributing to the U.S. economy. An advocacy group
requested further clarification as to how individuals would continue to
invest in the economy when their initial stay is limited to 18 months
and how entrepreneurs may obtain permanent residency in the United
States through the H-1B program.
A commenter said that the 18-month validity period would not reduce
fraud but would discourage other potential entrepreneurs since they
would have little negotiation power when seeking venture capital. An
advocacy group wrote that the 18-month validity period is unnecessary
and said that start-ups often take long periods of time to become
profitable; requiring founders to renew their visas frequently would
impair them when securing investors. An advocacy group said it would be
detrimental to an H-1B visa holder if they had to leave the United
States to renew their visa, and even more detrimental if they were
simultaneously filling a specialty role at their companies, making it
impossible to secure funding for their start-up. An attorney reasoned
that if all other H-1B requirements remain the same for beneficiary-
owners, the limiting measure is unnecessary and would create an
administrative burden on the agency by requiring more frequent
adjudications and increasing processing times. The attorney also stated
that the areas of potential fraud that the 18-month limit would protect
against are not identified. Another joint submission stated that the
18-month validity period places an undue burden of unnecessary
oversight on beneficiary-owned entities which detrimentally impacts
their operations, and that the validity period does not prevent
fraudulent H-1B petitions. The commenters in the submissions reasoned
that the 18-month limit would be expensive, since an initial petition
can cost up to $4,960. One of the joint submissions additionally noted
that there are other visa categories available to entrepreneurs and the
18-month limit would cause the H-1B visa to be less attractive and
could cause unneeded stress to founders, entrepreneurs, and
petitioners. A research organization

[[Page 103140]]

stated that limiting the first two validity periods to 18 months as a
safeguard against possible fraudulent petitions is not feasible for a
nonprofit entity or a nonprofit research organization that must obtain
approval by the IRS.
A business association wrote that the 18-month validity period
would adversely affect small businesses that have less resources to
comply with the H-1B program's requirements and that there are already
sufficient tools and guardrails in place to combat fraud. The
association also stated that competing firms that have no beneficiary
ownership would only need to apply for an H-1B worker once, while the
beneficiary owned firm would have to petition twice as many times
during the same period. A different commenter stated that limited
validity period would actually discourage founders from focusing on
innovating and founding companies since the H-1B renewal process is
time-consuming, expensive, and adds instability for founders. A couple
of commenters reasoned that the 18-month validity period would be
burdensome, have unnecessary costs, and would generate more petitions
for the agency to adjudicate. A professional association recommended
that only the initial H-1B visa be limited to 18 months and that any
subsequent filings should be granted up to the full 3-year limit. A
joint submission stated that early-stage companies have the least
available bandwidth for effective compliance and any additional legal
and compliance costs would be a burden unique to startups with an
immigrant founder or key early hire.
In light of the above concerns, some commenters proposed
alternative validity periods for beneficiary owners. For example,
commenters suggested that a standard 36-month validity period should be
applied, reasoning that an across-the-board reduction in the validity
period would severely impact founders' ability to innovate, experiment
with new technologies, and secure investment. The commenters also said
that the change to the validity period could encourage start-up
founders to go to other countries. A commenter stated that a longer
visa period and fewer renewals would improve the regulatory process for
startups and recommended that the H-1B program follow the 30-month
period for the International Entrepreneur Parole (IEP) pathway which
allows a longer timeline to support success. A joint submission also
noted that the 30-month timeline for IEP would make it a more
attractive option for entrepreneurs, deterring them from the H-1B
process. A couple of commenters mentioned that the limitation of the
initial visa length and first renewal to 18 months is far too
restrictive and should be retained at 3 years.
Response: DHS understands that filing petitions more frequently may
cause an administrative burden. However, DHS disagrees that limiting
the initial and first extension validity period to 18 months is
unnecessary; rather, it is an important safeguard against possible
abuse or fraud. As stated in the NPRM, while DHS sees a significant
advantage in promoting the H-1B program to entrepreneurs, DHS believes
that guardrails for beneficiary-owner petitions are necessary to
mitigate the potential for abuse of the H-1B program. 88 FR 72870,
72906 (Oct. 23, 2023). Limiting the first two validity periods to 18
months each will allow DHS adjudicators to review beneficiary-owned
petitions more frequently, and limiting the nature of non-specialty
occupation duties that may be performed will deter potential abuse and
help maintain the integrity of the H-1B program. DHS selected 18 months
for the first two validity periods as a balance between promoting
entrepreneurship and maintaining program integrity. As an additional
clarification, while a beneficiary's initial stay is limited to 18
months, they may request an extension for an additional 18 months, and
additional extensions for up to 3 years after that, for a maximum total
of 6 years (unless eligible for an exception to the 6-year period of
authorized admission limitation) like other H-1B workers. Further, DHS
did not propose a minimum investment amount for beneficiary owners and
is not adding one through this rulemaking.
Comment: A few commenters suggested that DHS clarify rules for
beneficiary-owner petitions, suggesting additional clarification around
who is qualified to start a business, the type of businesses allowed,
and who can sponsor themselves for an H-1B visa. A joint submission
noted that the NPRM preamble explained that controlling ownership
interest means ``the beneficiary owns more than 50 percent of the
petitioner or [ ] the beneficiary has majority voting rights in the
petitioner,'' \149\ but expressed concern that ``controlling interest''
lacks a precise regulatory definition in the proposed rule. The joint
commenters suggested that DHS codify the definition within the
regulations to ensure clarity as to which beneficiary-owners would be
subject to this framework, rather than defining this in future USCIS
Policy Manual guidance. The commenters recommended that the definition
of ``control'' align with the alternatives provided in the L-1
intracompany nonimmigrant visa category (e.g., at least 50 percent
ownership; 50 percent ownership in a 50-50 joint venture with equal
control and veto power, and less than 50 percent ownership with a
controlling interest).
---------------------------------------------------------------------------

\149\ 88 FR 72870, 72905.
---------------------------------------------------------------------------

Response: DHS agrees that additional clarification would be
beneficial in the regulatory text and is clarifying in new 8 CFR
214.2(h)(9)(iii)(E) that ``controlling interest'' means that the
beneficiary owns more than 50 percent of the petitioner or when the
beneficiary has majority voting rights in the petitioner. Whether the
beneficiary has majority voting rights in the petitioner will depend on
the bylaws and other governing documents of the petitioning entity
(e.g., if there are preferred shares that give certain owners greater
voting rights than other owners with common shares), but it will
generally reflect who controls the direction and management of the
petitioning entity, including decisions pertaining to the employment of
executives, which could include the beneficiary-owner's employment. DHS
declines to adopt definitions from the regulations relating to the L-1
nonimmigrant classification as those regulations relate to establishing
a qualifying relationship for purposes of establishing eligibility for
L-1 classification and may not readily apply in the context of a
beneficiary-owner. Further, beneficiaries may still qualify as H-1B
nonimmigrants even where they do not have a controlling ownership
interest in the petitioner.
Comment: Another commenter suggested that USCIS clarify the
definition of ``owner'' and ``control,'' reasoning that these terms are
not clear in the context of nonprofit organizations. Specifically, the
commenter said that DHS did not provide clarity regarding for-profits
and nonprofits and how sole ownership of a nonprofit would function
under the proposed rule. The commenter warned that this lack of clarity
could lead to confusion and the inconsistent application of the
proposed regulations. Additionally, a research organization expressed
concern that DHS failed to distinguish between nonprofit and for-profit
corporations and their structures. The commenter said that if owning a
``controlling interest'' is interpreted as ownership of stock or
shares, the proposed rule would not apply to a noncitizen sole director
of a nonprofit corporation that does not issue capital stock or shares
for ownership. The

[[Page 103141]]

commenter requested that DHS expand the definition to include sole
directors who incorporate a nonprofit or nonstock corporation as a
United States employer with an EIN, and suggested a new definition.
A couple of commenters expressed concern that the proposed
provisions and requirements related to ``controlling interest'' do not
account for high-growth companies at the later stages of the startup
lifecycle during which an entrepreneur ``will typically hold smaller
ownership stakes in the company.'' Specifically, a joint submission
said that, at this later stage, the owner's stake shrinks as the start-
up sells equity to investors. The commenters wrote that the LCA wage
requirements force many entrepreneurs to take on entry-level roles, as
start-ups have limited cash reserves to pay market-rate salaries for
CEO and other C-Suite roles. Additionally, the commenters reasoned that
maintaining equity ownership provides greater economic benefit to
owners compared with taking a higher salary. Thus, the joint commenters
encouraged DHS to create a process allowing early-stage, high-growth
entrepreneurs to hold CEO or other C-Suite titles while protecting
against fraud and abuse. The commenters concluded that immigration
processes need to account for start-up growth, reasoning that
incentivizing entrepreneurs to maintain their equity stake to benefit
from the regulations would disincentivize job creation.
Response: As explained in the NPRM, DHS is setting reasonable
conditions for when the beneficiary owns a controlling interest in the
petitioning entity to better ensure program integrity. 88 FR 72870,
72906 (Oct. 23, 2023). These proposed conditions will apply when a
beneficiary owns a controlling interest, meaning that the beneficiary
owns more than 50 percent of the petitioner or when the beneficiary has
majority voting rights in the petitioner. DHS is specifically
addressing situations where a potential H-1B beneficiary owns a
controlling interest in the petitioning entity and is not imposing any
restrictions regarding who is qualified to start a business, or the
type of businesses allowed to petition for a beneficiary-owner.
With respect to non-profit organizations, DHS recognizes that, in
some cases, a beneficiary might not be able to establish a controlling
interest in a non-profit organization, meaning the beneficiary owns
more than 50 percent of the petitioner or has majority voting rights in
the petitioner. However, the non-profit entity may still petition for
the beneficiary as an H-1B nonimmigrant worker even where the
beneficiary does not possess a controlling interest. Thus, DHS does not
believe it is necessary to revise the provisions relating to
beneficiary-owners to account for non-profit organizations.
With respect to ``high growth companies'' where a potential
beneficiary-owner may hold a smaller ownership in the company, DHS
notes that the beneficiary-owner provisions would apply where the
beneficiary has majority voting rights in the petitioner. Further, the
entity may still file an H-1B petition on behalf of the beneficiary
where the beneficiary does not possess a controlling interest in the
petitioning entity. Therefore, DHS does not believe it is necessary to
make changes to the beneficiary-owner provisions in response to this
comment.
Comment: A few commenters suggested additional measures to address
fraud and abuse related to beneficiary-owned H-1B petitions. For
example, a law firm proposed that when a company files an initial
petition for a beneficiary-owner, it must submit a detailed business
plan, and when the company files an extension on behalf of the
beneficiary-owner, it must explain the progress made on the achievement
of the goals specified in the business plan. While expressing concerns
with program abuse by beneficiary-owned H-1B petitioners, another
commenter suggested that beneficiary-owners should be required to pay
the same wages to a minimum of five U.S. citizens in the company and
should not be allowed to have H-1B holders constitute more than 10
percent of the company's workforce. Another commenter suggested that
the beneficiary-owners provisions should be complemented with increased
site visits, with up-front penalties for those violating the program
requirements. To deter program fraud, a commenter proposed that
entrepreneurs receive a 2-year Employment Authorization Document (EAD)
before applying for an H-1B visa, based on the company's performance.
The commenter suggested that success could be measured through capital
raised, U.S. citizens employed, jobs created, and revenue, and there
could be lower thresholds for non-technology startup companies to avoid
skewing applications towards the technology sector.
Response: DHS declines to adopt these additional measures. DHS
believes that the conditions discussed in the proposed rule for when
the beneficiary owns a controlling interest in the petitioning entity
are sufficient to help ensure program integrity. These conditions
include the requirement that the beneficiary will perform specialty
occupation duties authorized under the petition a majority of the time,
that, notwithstanding some incidental duties, non-specialty occupation
duties must be directly related to owning and directing the
petitioner's business, and limiting the validity period for the initial
petition and first extension of such a petition to 18 months each. DHS
also notes that this final rule contains a number of provisions that
are intended to enhance the integrity of the H-1B program, including
provisions on the bona fide job offer requirement, third-party
placement and site visits, and that these integrity provisions will be
applicable to all H-1B petitions, including those involving
beneficiary-owners. However, some of the suggestions, such as expressly
requiring a beneficiary-owned petitioner to employ a certain number of
U.S. citizens, raise a certain amount of capital, or provide proof of
accomplishments towards the business plan, may be too restrictive
especially during a new business's beginning stages when resources may
be scarce and exact business plans may change. DHS also recognizes that
different endeavors may have different capital or personnel needs, and
therefore, setting minimum investment or staffing requirements may be
too restrictive.
Comment: Several commenters discussed concerns with wage
requirements for beneficiary-owners. Specifically, commenters requested
that DHS provide additional flexibility to beneficiary-owners in the
context of DOL's prevailing wage requirements. One such commenter
reasoned that many startups by beneficiary-owners with majority
ownership may not see positive cash flow for a long period of time,
which makes it challenging for owners to both adhere to wage
requirements and make investments to grow their business. A couple of
different commenters, echoing this concern, suggested that the
prevailing wage requirements ``should be relaxed'' and instead the
beneficiary-owner's credentials and expertise should be prioritized in
the formative years of a practice. The commenter reasoned that such an
approach would encourage entrepreneurs with specialized knowledge to
develop their businesses and contribute to the U.S. economy. A
different commenter said that the LCA requirements would complicate the
proposed revisions for beneficiary owners, as startup founders would be
bound to a high base salary despite

[[Page 103142]]

needing 2 to 3 years to become self-funded. Similarly, another
commenter expressed concern that the rule does not go far enough to
address challenges faced by H-1B entrepreneurs, such as minimum salary
requirements. Thus, the commenter urged DHS to consider exempting H-1B
entrepreneurs from the minimum salary requirements, suggesting an
exemption period during the first 2 years of operation. The commenter
also proposed that beneficiary-owners should demonstrate financial
viability through alternative means, such as secured funding
commitments or detailed business plans. The commenter reasoned that
these measures would strengthen the H-1B program and encourage the
creation of businesses that would contribute to long-term economic
prosperity in the United States. Additionally, a joint submission wrote
that the LCA wage requirements force many entrepreneurs to take on
entry-level roles, as startups have limited cash reserves to pay
market-rate salaries for CEO and other C-Suite roles.
Response: DHS emphasizes that nothing in this final rule changes
DOL's administration and enforcement of statutory and regulatory
requirements related to LCAs, including requirements concerning the
appropriate prevailing wage. See 8 U.S.C. 1182(n); 20 CFR part 655,
subparts H and I. DHS does not have the authority to alter statutory
requirements or DOL regulations related to LCAs, including requirements
concerning the required wage, and cannot provide any exceptions to
beneficiary-owners who are unable to adhere those requirements.
Further, the beneficiary-owner provisions in this final rule aim to
promote access for H-1B entrepreneurs while setting reasonable
conditions to help ensure program integrity. DHS believes that allowing
reduced wages for beneficiary-owners, even if lawful, would pose a
significant risk to H-1B program integrity. Petitioners must pay the
required wage, consistent with all statutory and regulatory
requirements.
Comment: Some commenters proposed additional flexibilities for
beneficiary-owners. For example, a commenter suggested additional
flexibility criteria for startups to allow them to adapt to changing
product-market fit or satisfying market demand. A trade association
proposed additional flexibilities through reduced hiring costs and
application fees for legitimate U.S. startups. Finally, a commenter
suggested that beneficiary-owners should not be included under the H-1B
cap.
Response: DHS declines to provide additional flexibilities for
beneficiary-owners. The commenter did not specify any particular
flexibility that would allow petitioners to adapt to changing product-
market fit or better satisfy a strong market demand, but to the extent
that the commenter is suggesting, for example, a relaxation of
requirements relating to amended petitions or maintenance of status,
DHS declines to provide any special accommodations for beneficiary-
owners with respect to these requirements. When there is a material
change in the terms and conditions of employment, the petitioner must
file an amended or new H-1B petition with the corresponding LCA. 8 CFR
214.2(h)(2)(i)(E). A change in the terms and conditions of employment
of a beneficiary that may affect eligibility under section
101(a)(15)(H) of the Act is a material change. Thus, where there is a
material change, USCIS must determine whether the beneficiary will
continue to be eligible for H-1B classification under the materially
changed conditions. This is true whether or not the beneficiary owns a
controlling interest in the petitioner, thus DHS declines to provide
any special flexibility for beneficiary-owners with respect to the
amended petition requirements. Similarly, beneficiaries, including
beneficiary-owners, are required to abide by the terms and conditions
of admission or extension of stay, as applicable. For H-1B
nonimmigrants, this includes working according to the terms and
conditions of the H-1B petition approval on which their status was
granted and not engaging in activities that would constitute a
violation of status, such as working without authorization.
While commenters included additional suggestions regarding reducing
filing fees and not including beneficiary-owners in the cap, DHS is not
adopting these suggestions but notes that the USCIS Fee Schedule Final
Rule provided reduced fees for nonprofits and small employers for
certain applications and petitions.\150\ DHS further notes that
Congress--not DHS--sets the annual 85,000 H-1B cap as well as the
general parameters for cap exemption. See INA sec. 214(g)(1), (5).
---------------------------------------------------------------------------

\150\ See ``U.S. Citizenship and Immigration Services Fee
Schedule and Changes to Certain Other Immigration Benefit Request
Requirements,'' 89 FR 6194, 6208 (Jan. 31, 2024) (explaining that
businesses with 25 or fewer full-time equivalent employees will pay
a $300 Asylum Program Fee instead of $600, and half of the full fee
for Form I-129, but nonprofits will pay $0).
---------------------------------------------------------------------------

13. Site Visits
Comment: A few commenters, including individual commenters,
expressed general opposition to the proposed change in the site visit
provision without providing additional rationale. An individual
commenter stated that site visits are burdensome on businesses. An
individual commenter expressing opposition to the site visit provision
commented that site visits are a ``violation of represented parties''
per the Model Rule of Professional Conduct 4.2, and USCIS is attempting
to ``surprise'' applicants into sharing incriminating information.
Response: As noted in the proposed rule, site visits are important
to maintain the integrity of the H-1B program and to detect and deter
fraud and noncompliance with H-1B program requirements. 88 FR 72870,
72907 (Oct. 23, 2023). Cooperation with these visits is crucial to
USCIS' ability to verify information about employers and workers, and
petitioner's compliance with the terms and conditions of the H-1B
petition. Although DHS recognizes that site visits can be a burden for
petitioners, and take time for USCIS to perform, this rule does not
increase the number of site visits or create any new site visit
programs. Rather the rule is further clarifying the scope of the visits
and consequences of noncompliance with a site visit.
The commenter addressing ``Model Rule of Professional Conduct 4.2''
did not provide context or the text of such rule. To the extent that
the commenter is referring to the rules of representation from the
American Bar Association, DHS notes that those rules are not applicable
to USCIS officers. However, USCIS officers ask permission to speak to a
represented individual before proceeding without a representative
present. If the represented individual wants their representative
present, they can call them and have them present telephonically or
request the site visit be rescheduled to occur when the representative
is available. USCIS will generally honor such request to reschedule,
but if the representative is not present at the agreed upon time and
location, or the individual repeatedly requests to reschedule in an
apparent attempt to avoid compliance with the site visit review, it is
in the officer's discretion to determine if the entity or individual is
not complying with this provision by seeking to not cooperate in the
site inspection.
Comment: A few individual commenters expressed general support for
site visits without providing additional rationale, with some

[[Page 103143]]

specifically encouraging site visits at consulting firms. An individual
commenter generally remarked that the site visit provision would
enhance program transparency, accountability, and integrity. An
advocacy group expressing appreciation for USCIS' authority to conduct
site inspections urged USCIS to mandate site visits for certain
employers, especially when employees are employed at third party work
locations. The advocacy group also recommended ``pre-adjudication site
checks'' for petitioners that depend on H-1B employees.
Response: DHS agrees that site visits are an important part of
ensuring transparency, accountability, and the integrity of the H-1B
program. However, DHS did not propose in the NPRM to make site visits
mandatory for specific petitioners and declines to do so at this time.
Site visits are determined by a number of factors, including both
random visits and those predicated on the existence of risk factors or
fraud indicators.
Comment: While expressing support for site visits, several
commenters stated that USCIS should give employers the opportunity to
rebut, provide additional information, or resolve questions raised
during site visits prior to arriving at an adverse determination. A
couple of these commenters noted that this would be in the best
interest of H-1B beneficiaries. Similarly, a trade association
suggested USCIS clearly detail the process it will follow after
determining a failure or refusal to cooperate. The trade association
stated that there are situations in which USCIS' inability to verify
facts during a site visit does not necessarily equate to a petitioner
intentionally refusing to cooperate, such as a third party
misunderstanding. A company suggested that petitioners be able to
arrange additional site visits or interviews to address an initial
failure or refusal to cooperate, thus codifying a current practice
among Fraud Detection and National Security Directorate (FDNS)
officers. A legal services provider recommended that the site visit
provision require USCIS to provide specific details to petitioners in
the form of a report to address issues identified during an inspection.
A trade association requested USCIS implement a system that decreases
the frequency of site visits for employers that repeatedly demonstrate
compliance.
Response: As is current practice and captured in existing
regulations, USCIS will generally not revoke an approval or deny a
petition based on information from a site visit or inability to verify
facts based on a lack of cooperation at a site visit without first
giving the petitioner the opportunity to rebut and provide information
on their behalf. See 8 CFR 103.2(b)(16), 214.2(h)(10) and (11). There
may be instances where information from a pre-adjudication site visit
or the inability to verify facts based on a lack of cooperation at a
pre-adjudication site visit could result in the denial of the petition
without additional notice to the petitioner, if the information
uncovered or the inability to verify facts was derogatory information
of which the petitioner was aware. DHS declines to add specific
regulatory text concerning this issue, as site visits and subsequent
adjudicative actions will continue to be governed by existing practice
and existing regulations at 8 CFR 103.2(b)(16) and 214.2(h)(10) and
(11) which govern the notice requirements. Petitioners will therefore
generally have the opportunity to resolve issues that may arise during
the site visit, including those identified by commenters. DHS declines
to use a specific form to report issues that arise during a visit.
Rather, USCIS officers will continue to issue NOIDs or NOIRs that
provide sufficient derogatory information and details for the
petitioner to respond to. DHS further notes that it is not a national
practice for FDNS officers to always arrange additional site visits or
interviews to address an initial failure or refusal to cooperate.
However, it is in the officer's discretion to allow such a request, and
if a petitioner is otherwise cooperative and requests to schedule a
follow-up visit, FDNS may allow such a request.
USCIS determines the frequency of site visits based on a number of
factors, including random selection as part of the ASVVP. Although
USCIS officers make efforts to reduce duplicative visits, DHS notes
that each petition stands alone and information that is petition
specific, such as the job location and duties, would not have been
previously verified. As such, the successful completion of a prior site
visit is not indicative that future problems will not exist.
Comment: A trade association requested that USCIS clarify in the
NPRM what actions constitute a refusal or failure to comply with USCIS
site visits. A law firm also suggested that USCIS clarify the
expectations and process for site visits under the proposed rule,
including establishing a standard timeframe between site visits and any
subsequent actions taken, and subjecting any revocations to appeal. The
law firm added that revocations should be based on a ```clear and
convincing evidence' standard.'' Lastly, the law firm emphasized the
importance of collecting the names and title of any interviewees during
site visits to ensure full transparency on the record.
Response: As discussed in the proposed rule, DHS's goal is to
provide transparency to the compliance review process so that entities
and individuals subject to those processes understand that USCIS'
inability to verify pertinent facts, including for failure to
cooperate, may result in denial or revocation of the approval of a
petition. 88 FR 72870, 72908 (Oct. 23, 2023). With this rule, DHS is
codifying its existing authority and clarifying the scope of
inspections and the consequences of a refusal or failure to fully
cooperate with these inspections. To ``fully cooperate'' in this
context means that entities will comply with the scope of the reviews,
including: granting access to the premises, to include the employer's
place of business and any site where the work is performed, making a
representative of the petitioner or employer available for questions,
submitting or allowing review of pertinent records, providing access to
workers and allowing interviews with such employees to take place in
the absence of the employer or employer's representative and at a
location mutually agreed to by the employee and USCIS officers, which
may or may not be on the employer's property.
As described in the proposed rule, a petitioner or employer failing
or refusing to cooperate ``could include situations where one or more
USCIS officers arrived at a petitioner's worksite, made contact with
the petitioner or employer and properly identified themselves to a
petitioner's representative, and the petitioner or employer refused to
speak to the officers or were refused entry into the premises or
refused permission to review human resources records pertaining to the
beneficiary. Failure or refusal to cooperate could also include
situations where a petitioner or employer agreed to speak but did not
provide the information requested within the time period specified, or
did not respond to a written request for information within the time
period specified.''
DHS declines to add ``within the reasonable time specified'' to the
regulations regarding site visit compliance and cooperation. USCIS
issuance of notice and adjudicative decisions is already governed by
existing regulations at 8 CFR 103.2(b)(16) and 214.2(h)(10) and (11).
These regulations do not include a timeframe within which USCIS must
issue a notice or decision. The amount of time that lapses between when
a site visit takes place and when a notice or

[[Page 103144]]

decision is issued can vary depending on the specific facts of the
case. Such factors could include time for additional USCIS fact finding
or additional time for petitioners to reschedule a visit or respond
with requested documentation. As such, DHS will not limit USCIS'
ability to take action on a petition simply because a specific amount
of time has lapsed since a site visit was undertaken. If USCIS officers
need to request additional information from petitioners after the site
visit, the deadline for submitting such information will be provided to
the petitioner in writing. Additionally, per 8 CFR 214.2(h)(12),
revocation on notice under 8 CFR 214.2(h)(11)(iii) of an H-1B
petition's approval may be appealed to the Administrative Appeals
Office.
DHS declines to add a new standard of proof for revocations after
site visits, as it remains the petitioner's burden to demonstrate
eligibility for H-1B classification by a preponderance of the evidence.
If USCIS is unable to verify pertinent facts required to demonstrate
the petitioner's eligibility and continued compliance with the terms
and conditions of the petition, and the petitioner does not overcome
these findings and demonstrate eligibility by a preponderance of the
evidence, then the petition's approval would be rightly revoked. The
authority of USCIS to conduct on-site inspections, verifications, or
other compliance reviews to verify information does not relieve the
petitioner of its burden of proof or responsibility to provide
information in the petition (and evidence submitted in support of the
petition) that is complete, true, and correct. See 8 CFR 103.2(b).\151\
Moreover, USCIS has the authority to administer and enforce the INA,
including provisions pertaining to the H-1B nonimmigrant
classification. See INA 103(a)(1) and (3).\152\
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\151\ ``In evaluating the evidence, `the truth is to be
determined not by the quantity of evidence alone but [also] by its
quality.' '' See Matter of Chawathe, 25 I&N Dec. 369, 376 (AAO 2010)
(quoting Matter of E-M-, 20 I&N Dec. 77, 80 (Comm'r 1989)).
\152\ See also INA 235(d)(3), 8 U.S.C. 1225(d)(3) (authorizing
``any immigration officer'' . . . ``to administer oaths and to take
and consider evidence of or from any person touching the privilege
of any alien or person he believes or suspects to be an alien to
enter, reenter, transit through, or reside in the United States or
concerning any matter which is material and relevant to the
enforcement of [the INA] and the administration of [DHS]'').
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Regarding the request to collect names and titles of any
interviewees, DHS notes that USCIS officers keep records of the
individuals with whom they speak. To the extent practicable, USCIS
seeks to protect the privacy of workers when using the information they
have provided to support any adjudicative decision. However, USCIS must
also adhere to 8 CFR 103.2(b)(16)(i), which states that for any
decision based on derogatory information unknown to the petitioner, the
petitioner will be advised of this and offered an opportunity to rebut
the information, and to the extent that this information is necessary
for the petitioner to respond to and rebut any identified deficiencies,
USCIS will disclose that information in the notice of intent to deny or
notice of intent to revoke.
Comment: A law firm expressing support for the use of site visits
to ensure program integrity noted that FDNS officers should be limited
to inspecting whether the H-1B worker is: located where they are
supposed to be per the LCA and visa petition, doing the work
represented in the petition, and being compensated according to the
petition. The law firm added that any data beyond these points are not
appropriate to collect (e.g., the H-1B filing history of the
petitioner). Similarly, a legal services provider urged USCIS to limit
the scope of site visits to not include ``any other records'' or ``any
other individuals'' that the investigating official deems pertinent. A
company recommended that employers or third parties should be able to
refuse government representatives access to certain facilities or
records for ``reasonable business purposes.'' Similarly, the same
company remarked that the NPRM should limit the types of documentation
that can be requested in a compliance review in order to protect
sensitive business information.
Response: DHS declines to further limit the types of documents that
can be reviewed or requested as part of the USCIS verification efforts.
The purpose of a USCIS site visit is to verify the information provided
by the petitioner, confirm that eligibility for the petition approval
has been demonstrated by a preponderance of the evidence and to ensure
that the beneficiary is or will be employed in accordance with the
terms and conditions of the petition. The language of the new
regulations makes clear that USCIS officers will limit their review to
pertinent information, which includes information that was provided by
the petitioner, material to eligibility, or needed to make a
determination on continued compliance with the terms and conditions of
the petition. This universe of information will vary according to the
specific petition being reviewed. Because DHS does not limit the
evidence used by petitioners to demonstrate eligibility and compliance
with the terms and conditions of the petition, DHS likewise will not
limit the types of evidence that may be requested by USCIS officers, as
long as such evidence is pertinent to their inquiry.
Concerning disclosure of ``sensitive business information,'' when
requested evidence contains sensitive business information, the
petitioner may redact or sanitize the relevant sections to provide a
document that is still sufficiently detailed and comprehensive, yet
does not reveal sensitive commercial information. Although a petitioner
may always refuse to submit confidential commercial information if they
believe it is too sensitive, the petitioner must also satisfy the
burden of proof and runs the risk of denial if alternative evidence is
insufficient to establish eligibility. Cf. Matter of Marques, 16 I&N
Dec. 314, 316 (BIA 1977) (in refusing to disclose material and relevant
information that is within his knowledge, the respondent runs the risk
that he may fail to carry his burden of persuasion with respect to his
application for relief).
Comment: A trade association stated that the proposed rule lacks a
``reasonableness standard'' and allows officials to request information
or documentation at their discretion, even if it is not pertinent to
the petition at hand; the trade association remarked that petitioners
that resist potentially unnecessary lines of questioning could be
deemed non-cooperative and have the petition in question, as well as
others, unfairly revoked. The trade association also commented that the
lack of a reasonableness standard creates a vague and indefinite time
period for petitions to undergo review following site visits, which
could hinder employers' ability to hire employees and perform work.
Response: As noted in the proposed rule, site visits may include
review of the petitioning organization's facilities, interviews with
its officials, review of its records related to compliance with
immigration laws and regulations, and interviews with any other
individuals or review of any other records that USCIS may lawfully
obtain and that it considers pertinent to verify facts related to the
adjudication of the petition, such as facts relating to the
petitioner's and beneficiary's eligibility and continued compliance
with the requirements of the H-1B program. See new 8 CFR
214.2(h)(4)(i)(B)(2). DHS declines to add any additional
``reasonableness standard,'' as the new regulations sufficiently limit
the universe of information that could be addressed in a site visit to
that which is pertinent to eligibility and continued compliance with
the terms and conditions of the petition. Further,

[[Page 103145]]

although USCIS follows up on site visits as soon as practicable, DHS
will not add any timeframe requirement for those actions, as each case
will be different, and could involve return visits at the petitioner's
request that would be unnecessarily limited if a timeframe for action
was implemented. It is also unclear how USCIS' timeline after a site
visit would limit a petitioner's ability to hire and perform work, as
there would be no impact until adjudicative action is taken and such
action would be preceded by a NOID or NOIR.
Comment: An advocacy group expressed opposition to the proposed
changes to site visit policy, writing that it would give officers
excessive authority to enter businesses or homes without prior notice
and potentially invalidate many visas if one individual does not, or
cannot, comply with requests. The advocacy group added that this power
could be used to intimidate immigrant populations, who may be more wary
of scams and fraud.
Response: DHS notes this rule does not change the way that site
visits are conducted and does not extend USCIS' authority to conduct
site visits beyond what is already allowed in statute and regulations.
The purpose of a site visit is to verify the information that was
provided in the petition with review of an accurate and unrehearsed
view of the work being performed. As such, site visits are generally
unannounced. However, as part of the site visit program, USCIS officers
do not enter businesses or homes without permission. USCIS officers
carry identification that can be confirmed and as noted above,
interviewees may request that the petitioner or representative join an
interview telephonically or in person, or reschedule for a time where
the representative can be present. As stated previously, failure or
refusal to cooperate with a site visit may result in denial or
revocation of the approval of any petition for workers who are or will
be performing services at the location or locations that are a subject
of inspection or compliance review. See new 8 CFR 214.2(h)(4)(i)(B)(2).
Comment: A professional organization urged USCIS to amend 8 CFR
214.2(h)(4)(i)(B)(2)(i) and redefine ``inability to verify facts'' to
``inability to verify material facts,'' and ``compliance'' to
``substantial compliance'' when referring to the adjudication of the
petition and compliance with H-1B petition requirements. The
organization proposed additional amendments to 8 CFR 214.2(h)(10)(ii)
and (h)(11)(iii)(A)(2), suggesting that DHS change ``inaccurate'' to
``materially inaccurate.''
Response: DHS notes that the commenter refers to 8 CFR
214.2(h)(4)(i)(B)(2)(i) but quotes language from 8 CFR
214.2(h)(4)(i)(B)(2)(ii), and as such our response is in reference to 8
CFR 214.2(h)(4)(i)(B)(2)(ii). DHS declines to add ``material'' to the
new regulation at 8 CFR 214.2(h)(4)(i)(B)(2)(ii) because the regulation
already states that the petition may be denied or an approval revoked
if USCIS is unable to verify facts related to the adjudication of the
petition and compliance with H-1B petition requirements. Consistent
with the language of the regulation, USCIS officers will limit their
review to pertinent information, which includes information that was
provided by the petitioner, is material to eligibility, or is needed to
make a determination on continued compliance with the terms and
conditions of the petition. DHS likewise declines to add
``substantial'' to this language because DHS is interested in the
petitioner's continued compliance with all conditions and requirements
of the H-1B petition.
DHS also declines to amend 8 CFR 214.2(h)(10)(ii) and
(h)(11)(iii)(A)(2). The grounds of denial and revocation regarding
inaccurate statements work in conjunction with the certifications on
the petition, H-1B registration, temporary labor certification, and
labor condition application, which all require the petitioner or
employer to certify that the information contained in those submissions
is true and accurate. Inaccuracies in these submissions that may not by
themselves be material to eligibility can raise doubts as to the
accuracy and veracity of the overall submission. Such inaccuracies
would also violate the certifications signed by the petitioner or
employer. As such, inaccurate information and statements made as part
of these submissions, which are required precursors to or part of the
petition filing, may be a sufficient ground for denial or revocation of
an approved petition. These provisions are intended to enhance program
integrity, and DHS believes that amending them as suggested by
commenters would introduce ambiguity and narrow their application in a
manner that would contradict their purpose. Therefore, USCIS will
retain the text of 8 CFR 214.2(h)(10)(ii) and (h)(11)(iii)(A)(2) as it
was finalized in ``Improving the H-1B Registration Selection Process
and Program Integrity,'' 89 FR 7456 (Feb. 2, 2024).
Comment: Multiple commenters asked USCIS to provide notice to an
employer or their attorney of record prior to a site visit. Several
commenters requested that company representatives be present during and
facilitate H-1B beneficiary interviews with USCIS, with a trade
association remarking that this would deter scams. A couple of these
commenters, including an advocacy group and a company, noted that the
employer's presence could be at the employee's request.
Response: USCIS site visits are intended to be an unrehearsed view
of an employer's business and the beneficiary's work. As such, DHS will
not require that notice be given to employers or representatives prior
to any site visit. DHS likewise declines to require that employer
representatives be present at the interview of beneficiaries or other
individuals with pertinent facts. However, any individual being
interviewed by USCIS officers may request the presence of their
employer or their representative. The employer or representative may
join the visit in person, telephonically, or request that an interview
be rescheduled.
DHS recognizes that workers providing information to USCIS officers
during interviews can place the worker in a precarious position, but
each individual will have their own preference as to whether or not to
have their employer or representative present. USCIS will not ignore
the individual's preference or request that the employer or their legal
representative be present.
Comment: A joint submission of attorneys commented that language in
the NPRM noting that the presence of employers at inspection interviews
can induce a chilling effect on H-1B employees is misplaced, as
unannounced government inspections are more likely to induce such a
chilling effect in employees. The joint submission further expressed
concern that while the NPRM included language allowing such interviews
to be conducted ``at a neutral location agreed to by the interviewee
and USCIS away from the employer's property,'' the stress associated
with potential visa revocation reduces a worker's comfort with voicing
their true preference.
Response: DHS disagrees with the commenters' assertions. Providing
an employee the option to speak without the employer or employer's
representative is important to ensuring the employee feels free to
discuss concerns with USCIS. For example, an H-1B beneficiary who is
not being paid the required wage by the petitioner may be more
comfortable discussing this outside the presence of the employer.
Although DHS appreciates that participating in site visit interviews
can

[[Page 103146]]

be stressful for beneficiaries, allowing each individual the choice of
whether to be interviewed either with or without their employer present
allows individuals to participate in the interview at their greatest
possible comfort level. DHS cannot presume to know each individual's
preference.
DHS understands that interviews by government officials can be an
intimidating experience and that the outcome could impact the
interviewees' immigration status. Interviews may also provide H-1B
beneficiaries with an avenue to report fraud and abuse by unscrupulous
employers, which is harmful to U.S. workers and H-1B beneficiaries. The
proposed rule balances DHS's interest in maintaining the integrity of
the H-1B program with interests of the petitioners and beneficiaries.
Comment: Several commenters expressed concern with the proposed
provision to expand site visits to employees' homes. While expressing
support for USCIS' authority to conduct site visits to maintain the
integrity of the H-1B program, multiple commenters urged USCIS to state
that site visits would happen at the workplace or another location
whenever possible, even for remotely working beneficiaries, but not at
an employee's residence, due to safety and privacy concerns. A few of
these commenters, including a business association, a joint submission
and a trade association, stated that workers should be able to decline
site visits at their home without it resulting in an adverse
determination. The commenters provided sample language recommendations
on the subject for incorporation into the final rule.
A company expressed opposition to conducting site visits at worker
residences without the support of the employer, stating that pertinent
information such as duties, working conditions, wages, and
qualifications can be verified at a company facility, while an
employee's language, culture, or personal barriers may hinder efforts
to glean compliance information at the employee's home and potentially
lead to an unfair ``refusal to comply'' finding. A couple of companies
urged USCIS to limit site visits to the workplace to reduce the risk of
scams on H-1B beneficiaries. An individual commenter stated that site
visits at employee residences would be an additional burden on
employees.
Several commenters stated that if site visits must occur at a
beneficiary's home, workers should receive significant prior notice. A
professional association added that beneficiaries should receive the
option of a pre-arranged live video interaction rather than being
required to allow government representatives to enter their home. An
advocacy group similarly remarked that employees should be able to
coordinate the ``timing, location and manner'' of an interview.
An attorney suggested that the proposed provision could have a
chilling effect on H-1B workers, as they may forgo remote work
opportunities due to privacy concerns regarding home visits. The
attorney therefore recommended that USCIS clarify if a site visit to a
home office would require access beyond the physical workspace or the
company-issued computer.
Response: DHS declines to add a requirement that employees be given
notice prior to a site visit at their residence. As noted, the purpose
of a site visit is to verify the information that was provided in the
petition with review of an accurate and unrehearsed view of the work
being performed. As such, site visits are generally unannounced. DHS
further declines to otherwise restrict the ability of USCIS officers to
visit and interview employees at their assigned work location,
including if it is the employee's residence. To do otherwise would
create a loophole wherein any petitioner may exempt themselves from
their evidentiary burden simply by locating workers at their
residences. DHS appreciates the additional considerations that
individuals might have when granting access to their home, but DHS
finds that the ability to visit and interview at work sites is so
integral to ensuring the integrity of the H-1B program, that it
outweighs those considerations. Additionally, DHS notes that USCIS
officers currently routinely visit individuals' residences in
compliance visits for H-1B and a variety of other benefit requests, and
as such, this is not a new activity for USCIS. As noted above, any time
USCIS officers conduct a site visit or interview, the officers will
request the individuals' permission to undertake the visit and
interview, and if the individual is represented and wishes to have
their representative present, they may ask their representative to join
telephonically or reschedule the visit at a later time. USCIS officers
also carry official identification which they will display to those
being interviewed, regardless of where the interview is being
conducted. If a beneficiary is unsure of the authenticity of the
identification or whether the officer is acting in their official
capacity, FDNS officers can provide supervisory contact information to
verify their identities and official nature of the inquiry. With
regards to the areas of a residence that might be accessed, USCIS
officers would need only to access the work area and any portion of the
residence that must be accessed to reach the work area.
Comment: Several commenters, remarking specifically on third party
facilities and records, stated that a third party employee's refusal or
failure to speak with FDNS officers, grant them access to facilities,
lead them to the correct worker, or permit them to review records,
should not lead to a finding of noncompliance for the petitioner as
petitioners are not responsible for third party actions. The company
and a law firm added that inaccurate adverse findings from such
situations can lead to significant consequences for businesses, and DHS
should notify petitioners ahead of third party site visits so that
petitioners can facilitate cooperation. The advocacy group expressed
concern that this would have repercussions for H-1B visa holders, who
could have their visa revoked due to third party noncompliance.
Similarly, a couple of commenters urged USCIS to notify petitioners of
planned visits to third party work locations, in the event that the
third party does not communicate to the petitioner that a site visit
occurred. Additionally, a law firm said that the third-party placement
provision could create at least two difficulties for both the FDNS
officer and the service provider in the case of site visits, including
that the receptionist for the building owned by the end-client may have
no knowledge of the presence of a contractor employee who is working
remotely most of the time and that the service provider has no control
over who the end-client may grant access to its premises. The end-
client receptionist may deny admission to the FDNS officer. The
commenter recommended that in this case, the FDNS officer should not
automatically infer that the petition is fraudulent. A joint submission
urged USCIS to protect petitioners and beneficiaries with regard to
third party placements, such that findings regarding unaffiliated on-
site H-1B beneficiaries employed by a third party do not impact the
petitioner or beneficiaries that are not the subject of the visit. A
trade association remarked that the proposed provision could be invoked
unfairly, as requiring third parties to provide evidence in support of
another employer's petition could be used to ``argue a joint-employer
relationship exists,'' even when one does not. An advocacy group
expressed concern towards employees at third party sites being asked to
share sensitive

[[Page 103147]]

information about individuals that are not their direct employees,
adding that it is unreasonable to impose this potential liability on
them.
Response: As noted in the NPRM, DHS is clarifying that an
inspection may take place at the petitioning organization's
headquarters, satellite locations, or the location where the
beneficiary works or will work, including the beneficiary's home, or
third-party worksites, as applicable. 88 FR 72870, 72907 (Oct. 23,
2023). DHS's ability to inspect various locations is critical because
the purpose of a site inspection is to confirm information related to
the petition, and any one of these locations may have information
relevant to a given petition that cannot be ascertained by only
visiting the petitioner's headquarters. The work performed by the
beneficiary is a key element of H-1B eligibility and as such, the
worksite is pertinent. There is no requirement that a petitioner place
the beneficiary at a third-party location; however, if a petitioner
chooses to petition for a beneficiary that is placed at a third-party
location, it remains the petitioner's burden to demonstrate
eligibility, meet all requirements of the H-1B petition, and employ the
H-1B worker consistent with the terms of the approved petition. To
allow otherwise would create an exemption wherein placing a beneficiary
at a third party would allow a petitioner to circumvent the
requirements of the H-1B program by rendering the beneficiary outside
the scope of the compliance review process. The language of this rule
makes clear the responsibilities of both the petitioner and any third-
party client and such transparency will allow all parties to make
decisions regarding their level of cooperation with full knowledge of
the potential implications of a lack of cooperation.
As previously noted, the purpose of a site visit is to observe an
unrehearsed version of the beneficiary's work, the petitioner's
organization, and the operations of a third-party, if applicable. As
such, site visits are generally unannounced and DHS declines to add a
requirement to notify petitioners before third-party sites are visited.
However, petitioners can inform third-party clients of the possibility
of a site visit for any H-1B worker that is placed at a third-party
location, so that the third-party client can be prepared for how to
handle a visit and cooperate during the visit. Moreover, the petitioner
will be given notice of any deficiency identified before USCIS takes
any adjudicative action based on the results of a site visit to a
third-party location. Further, if USCIS is unable to verify pertinent
facts to confirm eligibility and compliance with the terms and
conditions of the H-1B petition, including due to noncooperation at a
third-party work site, USCIS may consider those findings beyond the
petition that was subject to the site visit, if those findings call
into question whether other petitions that list the same worksite
demonstrate eligibility and continued compliance. However, as noted,
USCIS generally will not take any adjudicative action based on site
visit findings on any petition without providing the petitioner with
notice and the opportunity to rebut the findings.
Regarding concerns that cooperation during a site visit at a third-
party site could render the third party to assume some liability or be
considered a joint employer, DHS notes that USCIS currently undertakes
site visits at third party locations and the commenters have provided
no evidence that such a problem exists under the current site visit
process. This rule is not increasing or changing the parameters of site
visits, but rather is adding transparency about the potential
consequences of non-cooperation if USCIS is unable to verify pertinent
facts about the petition. It is unclear how cooperation with a USCIS
site visit, including providing information about a beneficiary's work
for a third-party client, would create a joint employer relationship
where one does not already exist under applicable laws. Likewise, it is
unclear how providing information concerning a beneficiary that is
placed at a third-party worksite would indicate that the third-party
client was assuming any liability beyond what exists currently in the
business relationship with the petitioner, and the commenter does not
elaborate or provide any examples of such a concern. If third-party
clients or petitioners are concerned about such liability, this rule
provides the transparency for what both parties can expect with regards
to site visits and consequences, and petitioners and third-party
clients are welcome to utilize this information to structure their
relationships in a way that would alleviate these concerns.
Comment: A few organizations stated that audit and enforcement
powers for the H-1B program should lie with DOL; a research
organization supported the need for site visits, citing statistics on
fraud uncovered in FDNS inspections, but clarified that an agency
focused on labor standards should conduct them. A few commenters
expressed that the site visit provision oversteps USCIS' authority,
writing that site visits or inspections should fall within the purview
of Immigration and Customs Enforcement (ICE). Similarly, a research
organization urged DHS to rescind its policy memorandum Guidelines for
Enforcement Actions in or Near Protected Areas, stating that no
``robust worksite enforcement'' can take place while ICE is constrained
by that memo.
Response: DHS disagrees with commenters who claim that H-1B site
visits should be conducted only by DOL. Both USCIS and DOL have
important roles to play in the oversight of the H-1B program. USCIS
officers conduct verification and compliance reviews, including on-site
verifications to ensure eligibility for petition approval and
compliance with the terms and conditions of the H-1B petition filed
with USCIS. The focus of these reviews is on information that is needed
by USCIS to verify facts related to the adjudication of the petition,
such as facts relating to the petitioner's and beneficiary's
eligibility and continued compliance with the requirements of the H-1B
program. Such information goes beyond the labor standards overseen and
enforced by DOL. The occurrence of a review by another agency does not
absolve the employer of its responsibility to cooperate with USCIS
verification and compliance reviews, including on-site inspections. It
remains the petitioner's burden to demonstrate eligibility for the
benefit sought.\153\
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\153\ See INA sec. 291, 8 U.S.C. 1361; Matter of Simeio
Solutions, LLC, 26 I&N Dec. 542, 549 (AAO 2015) (``It is the
petitioner's burden to establish eligibility for the immigration
benefit sought.''); Matter of Skirball Cultural Ctr., 25 I&N Dec.
799, 806 (AAO 2012) (``In visa petition proceedings, the burden of
proving eligibility for the benefit sought remains entirely with the
petitioner.'').
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DHS further disagrees with the assertion that conducting site
visits oversteps USCIS' authority and that such visits should be
conducted by ICE. As noted in the NPRM, USCIS has the authority to
conduct site visits under INA sections 103(a), 214(a), 235(d)(3), and
287(b), 8 U.S.C. 1103(a), 1184(a), 1225(d)(3) and 1357(b); sections
402, 428, and 451(a)(3) of the HSA, 6 U.S.C. 202, 236, and 271(a)(3);
and 8 CFR 2.1. As noted in the NPRM, USCIS has the authority to conduct
site visits under INA sections 103(a), 214(a), 235(d)(3), and 287(b), 8
U.S.C. 1103(a), 1184(a), 1225(d)(3) and 1357(b); sections 402, 428, and
451(a)(3) of the HSA, 6 U.S.C. 202, 236, and 271(a)(3); and 8 CFR 2.1.
88 FR 72870, 72906 (Oct. 23, 2023). USCIS conducts inspections,
evaluations, verifications, and compliance reviews, to ensure that a
petitioner and beneficiary are eligible for the benefit sought and that
the petitioner is in compliance with all laws

[[Page 103148]]

before and after approval of such benefits. Importantly, USCIS
inspections, verifications, and compliance reviews are not enforcement
actions, but are rather conducted for the purpose of information
gathering to ensure that entities remain in compliance with the terms
and conditions of the H-1B petition that was filed with USCIS.
Regarding the mentioned policy memorandum, USCIS does not
anticipate that the requirements of that memorandum would interfere
with the activities of USCIS officers conducting on-site inspections in
a way that would limit their ability to interview pertinent
individuals. To the extent that the commenter is discussing only the
impact of the memo on ICE, that is outside the scope of this rule.
Comment: A few commenters stated that the site visit provision and
the possibility of arriving at an adverse determination following a
site visit denies petitioners and beneficiaries due process under the
law. A joint submission of attorneys further clarified that authorizing
site inspections without the presence of the employer or their
representatives violates employees' due process rights.
Response: As noted above, any represented individual may request
that their legal representative be present during an interview. This
could be accomplished by the representative joining the interview in
person or telephonically or requesting to have the interview
rescheduled to a later time when the representative could be present.
Furthermore, as previously stated, no denial or revocation for USCIS'
inability to verify pertinent facts from a site visit would occur
without the petitioner first being given notice of USCIS' finding of
noncompliance and an opportunity to rebut such a finding in compliance
with 8 CFR 103.2(b)(16). Furthermore, as previously stated, no denial
or revocation for USCIS' inability to verify pertinent facts from a
site visit would occur without the petitioner first being given notice
of USCIS' finding of noncompliance and an opportunity to rebut such a
finding in compliance with 8 CFR 103.2(b)(16).
Comment: A few commenters expressed concern that the proposed site
visit provision is unlawful under the Homeland Security Act of 2002
(HSA), writing that the HSA authorizes USCIS for adjudicative functions
only and not investigative or interrogative functions. The commenters
also remarked that the NPRM also violates E.O. 12988, as the site visit
provision does not minimize litigation, provide a clear legal standard,
or reduce burdens. The joint submission of attorneys added that INA
sec. 235(d)(3) does not authorize USCIS to conduct site visits, but
rather ``to `administer oaths . . . and consider evidence of or from
any person' '' without an administrative subpoena; the commenters also
noted that in the case of neglect or refusal to respond to a subpoena
during a site visit, the correct course of action is to involve any
court of the United States.
Response: As discussed in detail above, DHS disagrees with
commenters' assertion that it lacks legal authority to conduct on-site
inspections through the USCIS Fraud Detection and National Security
(FDNS) Directorate. The site visits and inspections conducted by FDNS
are authorized through multiple legal authorities. The Secretary of
Homeland Security is authorized to administer and enforce the
immigration laws. INA sec. 103(a); 8 U.S.C. 1103(a).\154\ USCIS also
has the ``authority to interrogate aliens and issue subpoenas,
administer oaths, take and consider evidence, and fingerprint and
photograph aliens under sections 287(a), (b), and (f) of the INA, 8
U.S.C. 1357 and under 235(d) of the INA, 8 U.S.C. 1225(d).'' \155\
Further, regulations support the FDNS activities that are described in
this rule. For example, 8 CFR 1.2, defines ``immigration officer'' to
include a broad range of DHS employees including immigration agents,
immigration inspectors, immigration officers, immigration services
officers, investigators, investigative assistants, etc. As duly
appointed immigration officers, FDNS officers may question noncitizens
based on the authority delegated by the Secretary of Homeland Security.
Furthermore, 8 CFR 287.8 specifically sets out standards for
interrogation and detention not amounting to arrest, wherein
immigration officers can question anyone so long as they do not
restrain the freedom of the person they are questioning.
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\154\ Additionally, pursuant to 8 CFR 2.1, all authorities and
functions of the Department of Homeland Security to administer and
enforce the immigration laws are vested in the Secretary of Homeland
Security. The Secretary of Homeland Security may, in the Secretary's
discretion, delegate any such authority or function to any official,
officer, or employee of the Department of Homeland Security,
including delegation through successive redelegation, or to any
employee of the United States to the extent authorized by law.
\155\ See Delegation 0150.1(II)(S).
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The Board of Immigration Appeals has recognized that the reports
produced by FDNS based on site visits and field investigations are
``especially important pieces of evidence.'' \156\ These investigations
and reports that result from them help ensure that adjudicative
decisions are made with confidence by providing information that would
otherwise be unavailable to USCIS.\157\
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\156\ Matter of P. Singh, 27 I&N Dec. 598, 609 (BIA 2019).
\157\ Mestanek v. Jaddou, 93 F.4th 164, 172 (4th Cir. 2024)
(holding in the context of marriage fraud in the I-130 immigrant
petition context that ``[i]n allocating USCIS a set of nonexhaustive
functions, Congress did not intend to hamstring USCIS's ability to
fulfill the statutory mandate to investigate cases before
adjudicating them.'').
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14. Third-Party Placement (Codifying Policy Based on Defensor v.
Meissner (5th Cir. 2000))
Comment: Numerous commenters voiced general support for the third-
party placement provision on the grounds that it would increase
accountability, decrease fraud, and protect American workers. An
advocacy group voiced support for DHS's efforts to reduce fraud in the
H-1B program and to ``ensure that petitioners are not circumventing
specialty occupation requirements,'' by making it clear that the work
an individual performs for a third party must be in a specialty
occupation and that the work for the third party is subject to the same
oversight as direct employers. An individual commenter stated that
USCIS should ``tie the requirements to the end client.'' A research
organization also voiced support for considering the ``third-party
job'' as the relevant job for ``specialty occupation'' determination.
An attorney writing as part of a form letter campaign cited
Defensor v. Meissner, 201 F.3d 384 (5th Cir. 2000), and the example
provided in the NPRM describing an employee who is placed full time by
the petitioner in a third party organization, rather than merely
providing a service to the third party on behalf of the petitioner. The
attorney said that in such a scenario, it is reasonable to rely on the
third party's requirements for the position and to require petitioners
to include information about the third party's requirements. The
campaign supported the third-party placement provision as consistent
with the adjudication of H-1B petitions that involve placement of an
employee at a third party for a substantial part of their employment
following Defensor.
Response: DHS agrees with the commenters that this provision will
help clarify H-1B eligibility requirements and maintain H-1B program
integrity, specifically by ensuring that petitioners are not
circumventing specialty occupation requirements by imposing token
requirements or requirements that are not normal to the third party. In

[[Page 103149]]

Defensor v. Meissner, 201 F.3d 384 (5th Cir. 2000), the court
recognized that, if only the petitioner's requirements are considered,
then any beneficiary with a bachelor's degree could be brought to the
United States in H-1B status to perform non-specialty occupation work,
as long as that person's employment was arranged through an employment
agency that required all staffed workers to have bachelor's degrees.
Therefore, DHS agrees that, at times, it is reasonable to rely on the
third party's minimum requirements rather than those of the employer
responsible for placement.
Comment: A couple of individual commenters voiced general
opposition to the provision, stating ``USCIS seeks to eliminate
staffing companies from the (H-1B) visa category.''
Response: DHS disagrees that the third-party placement provision
will eliminate staffing companies from the H-1B visa program. As stated
in the NPRM, the third-party placement provisions are consistent with
longstanding USCIS practices and are intended to clarify that, where a
beneficiary is staffed to a third party, USCIS will look to that third
party's requirements for the beneficiary's position, rather than the
petitioner's stated requirements, in assessing whether the proffered
position qualifies as a specialty occupation. 88 FR 72870, 72908 (Oct.
23, 2023). This will help ensure that petitioners are not circumventing
specialty occupation requirements by imposing token requirements or
requirements that are not normal to the third party. The rule does not
prohibit staffing companies, or other third-party arrangements, from
participating in the H-1B program. Rather, the rule clarifies the
circumstances under which it is reasonable for USCIS to consider the
requirements of the third party as determinative of whether the
position is a specialty occupation.
Comment: Several commenters called the third-party placement
provision confusing for petitioners and adjudicators and said that it
creates the risk of arbitrary and inconsistent enforcement, with higher
rates of RFEs and NOIDs. The commenters said that the ``staffing''
versus ``providing services'' distinction is novel and lacks foundation
in law and historical practice. The commenters, along with an advocacy
group and a trade association stated that the distinction between
``staffing'' and ``providing services'' could easily be misinterpreted
by adjudicators such that every time an H-1B professional is placed at
a third-party company, the adjudicator would want to look at what is
required for similar roles at that company. Several of these commenters
said, for example, that adjudicators might mistakenly conclude that the
third party does not normally require a degree or its equivalent for
the beneficiary's position simply because it does not require so from
less-skilled employees within its own workforce, relying on foreign
talent on H-1B visas to satisfy its needs for higher-skilled labor. The
advocacy group voiced concern that the provision would require IT
services companies to prove they provide services and not ``staffing,''
given the significant distinction in requirements proposed for the two
types of firms. Another law firm voiced concern that the binary
distinction between an H-1B ``service provider'' versus a ``staffed
worker'' who becomes part of that third party's organizational
hierarchy by filling a position in that hierarchy, with the commenter
saying that, in practice, H-1B workers are integrated in the end-
client's organizational hierarchy on a ``continuum.''
Response: DHS disagrees that the provision ``lacks foundation in
law or historical practice.'' As stated in the NPRM, this provision is
generally consistent with longstanding USCIS practice and is also
consistent with the decision in Defensor v. Meissner, 201 F.3d 384 (5th
Cir. 2000). 88 FR 72870, 72909 (Oct. 23, 2023). This provision is
consistent with the statute and relevant to determining whether the
beneficiary will be employed in a specialty occupation.
DHS also disagrees that the distinction in new 8 CFR
214.2(h)(4)(i)(B)(3) between a beneficiary being staffed to a third
party and providing services to a party is unclear or that it will lead
to inconsistent adjudications. As explained in the NPRM, a beneficiary
who is ``staffed'' to a third party becomes part of that third party's
organizational hierarchy by filling a position in that hierarchy, even
when the beneficiary technically remains an employee of the petitioner.
88 FR 72870, 72908 (Oct. 23, 2023). By contrast, DHS explained that,
for example, a beneficiary would be providing services to a third-party
where they were providing software development services to that party
as part of the petitioner's team of software developers on a discrete
project, or where they were employed by a large accounting firm
providing accounting services to various third-party clients. In these
examples, the beneficiary is not ``staffed'' to the third-party because
the third-party does not have employees within its organizational
hierarchy performing those duties in the normal course of its business
and does not have a regular, ongoing need for the work to be performed.
USCIS will make the determination as to whether the beneficiary would
be ``staffed'' to a third party on a case-by-case basis, taking into
consideration the totality of the relevant circumstances. As is
consistent with current practice, USCIS will review documentation in
the petition including the petitioner's description of the services to
be provided to determine if there are indications that a beneficiary is
filling an otherwise permanent position at the third-party rather than
simply providing services or work on a discrete project for that third
party. In USCIS's experience, it is rare that a beneficiary is staffed
to a third party rather than providing services for them.
Comment: A trade association voiced concern over the case-by-case
approach and the limited examples provided to determine whether a
beneficiary is ``staffed'' to a third party which the commenter said
leaves ambiguity and makes it challenging to predict how USCIS will
treat a particular scenario and what documentation would be necessary
to establish that a beneficiary is not ``staffed.'' The commenter said
that in the current business environment, companies often outsource
tasks without integrating external service providers into their
organizational structure, and the dynamics of collaboration and
separation of roles are often not explicitly detailed in the contracts
governing the relationship between entities. The commenter said that in
such a scenario, it is unclear how USCIS would distinguish between
staffing arrangements and the provision of services, placing an
excessive burden not only on employers but also on USCIS in the form of
increased RFEs.
Response: DHS disagrees with the commenters. USCIS will assess and
weigh all relevant aspects of the relationships between the different
entities receiving the beneficiary's services. If the beneficiary will
work for a third party and become part of that third party's
organizational hierarchy by filling a position in that hierarchy, the
beneficiary will be considered ``staffed'' to the third party. In this
scenario, the actual work to be performed by the beneficiary must be in
a specialty occupation based on the requirements of the third party.
Alternatively, in a scenario where a beneficiary provides services to
various third-party clients on discrete projects or is merely providing
services to various third-party clients without becoming a part of a
third

[[Page 103150]]

party's regular operations, the third-party provision would not apply.
DHS does not anticipate an increase in RFEs since this provision is
consistent with long-standing USCIS practice. In Defensor v. Meissner,
201 F.3d 384 (5th Cir. 2000), the court recognized that, if only the
petitioner's requirements are considered, then any beneficiary with a
bachelor's degree could be brought to the United States in H-1B status
to perform non-specialty occupation work, as long as that person's
employment was arranged through an employment agency that required all
staffed workers to have bachelor's degrees. This result would be the
opposite of the plain purpose of the statute and regulations, which is
to limit H-1B visas to positions that require specialized education to
perform the duties.
Comment: A joint submission stated that the reference to third-
party staffing arrangements and their job descriptions is not legally
relevant to a petition to employ a specialty occupation worker. The
commenters said that a ``bedrock principle'' of the H-1B program is
that the merits of a petition should be considered based on the
circumstances of the specific job offer that is extended to the
beneficiary in that petition and that the placement of a worker at a
third-party location is not directly connected or correlated to that
third-party's hiring practices. The commenters stated that businesses
purchase professional services from other businesses specifically
because they are unable to perform such services internally, citing the
example, among others, of a thoracic surgeon performing ambulatory
surgeries for a sister hospital where that specialty does not exist.
The commenters said that there is no need for a reference to a specific
third-party's job descriptions as they are unlikely to be related to
the facts of the petition, adding that such a reference would confuse
adjudicating officers and result in inconsistent adjudications that are
unsupported by the statutory guidelines.
Response: DHS disagrees with the comment that ``third-party
staffing arrangements and their job descriptions are not legally
relevant to a petitioner's filing to employ a specialty occupation
worker.'' However, DHS agrees that ``the merits of a petition should be
considered based on the circumstances of the specific job offer.'' For
purposes of clarification, DHS has provided an explanation of the
difference between a petitioner who provides services in a specialty
occupation to a third party and a petitioner who provides staffing to a
third party where the beneficiary will become part of that third
party's organizational hierarchy by filling a position in that
hierarchy. DHS defines ``staffed'' to mean that the beneficiary would
be contracted to fill a position in the third party's organization.
Using the commenter's example, where a thoracic surgeon performs
ambulatory surgery services for a sister hospital, USCIS generally
would not consider the requirements of the third-party sister hospital
as determinative of whether the position is a specialty occupation,
provided that there is no vacant permanent position for an ambulatory
surgeon in the third party's organization, the beneficiary's services
are specialized, individualized, or otherwise outside the normal
operations of the sister hospital, or the beneficiary is not considered
to be filling a position in the third party's organization.
Comment: A company stated that it is unclear how DHS would
determine whether a beneficiary has become ``part of the third party's
organizational hierarchy'' and what specific indicators would be used
to make this determination, other than to assert that it would take
into consideration ``the totality of the relevant circumstances,'' and
that it is unknown whether DHS plans to consider the source of pay,
employee benefits, work equipment, work schedules, and work location
for the contract worker. The commenter said that it appears that DHS
plans to focus primarily on supervisory and reporting relationships
within the third-party organizational hierarchy and consequently, would
not be able to distinguish staffing from contract service positions.
The joint submission said that there is no clear explanation in the
preamble or the proposed regulatory language of what ``filling a
position'' in the organizational hierarchy of a client means or what
parameters apply, voicing concern that it is not clear how USCIS would
ensure that adjudicators flesh out the distinction between a staffing
arrangement and the provision of services consistently to determine
which party should be called upon to state the degree requirements.
Response: DHS acknowledges that there are differences between
staffing companies and corporate entities with which another entity has
engaged for the delivery of specialty occupation services. To provide
additional clarity, USCIS considers factors such as the nature of the
petitioning entity's and receiving third party's normal business
activities, the general services provided by the involved parties, the
work that the beneficiary will perform, and the organizational
structure of the petitioning entity and receiving third party.\158\
This does not generally include analyzing the source of pay, employee
benefits, work equipment, work schedules, and work location for the
contract worker. Rather, USCIS would typically consider evidence such
as master services agreements, statements of work, letters from end
clients, organizational charts, staffing descriptions, and company
descriptions to determine if the beneficiary will become part of that
third party's organizational hierarchy by filling a position in that
hierarchy.
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\158\ See, e.g., In re 31014012, 2024 WL 3667879, at *2 (AAO May
6, 2024) (``The nature of a petitioner's business operations along
with the specific duties of the proffered job are also considered.
We must evaluate the employment of the individual and determine
whether the position qualifies as a specialty occupation. See
Defensor, 201 F.3d 384.'').
---------------------------------------------------------------------------

For example, an IT consulting company specializes in software
development and has been contracted to provide services to a third-
party real estate company to develop a software program that meets the
real estate company's specific needs. In assessing whether the position
qualifies as a specialty occupation, although the petitioning entity
will provide services to a third party, it would not be reasonable to
look to the real estate agency's (third party's) degree requirements as
determinative of whether the work to be performed will be a specialty
occupation. The petitioning IT consulting company normally offers
software development services, and the real estate agency's normal
business hierarchy does not include software developers. In this
scenario, because the beneficiary will perform services in software
development, not real estate, USCIS would look to the petitioner's
degree requirements as determinative of whether the work to be
performed at the real estate agency will be a specialty occupation.
In another example, the AAO has found that where an end-client is
familiar with and normally employs personnel in the proffered position
(e.g., the client needs supplemental contracted personnel to augment
their regular staff), the client likely possesses the knowledge of what
duties the beneficiary would engage in, and the requirements in which
to perform those responsibilities.\159\ This is a scenario in which the
duties and the qualifications to perform in the proffered position as
required by the third party entity where the beneficiary would actually
perform their work would be controlling. In such

[[Page 103151]]

a case, USCIS may request additional evidence to determine the
requirements for the position and to confirm whether the beneficiary
will be staffed to the end client such that the end-client's
requirements would control.
---------------------------------------------------------------------------

\159\ In re 5037859, 2019 WL 6827396 (AAO Nov. 7, 2019).
---------------------------------------------------------------------------

Comment: A couple of commenters said that the proposed third-party
placement provision would lead to administrative burdens for
petitioning employers and their clients, with a trade association and a
law firm stating that it would be difficult for the sponsoring employer
to obtain such documentation from a client. One of the individual
commenters, along with a business association, also stated that the
provision would be arbitrary and capricious because it disregards
established departmental policy without explanation and lacks
evidentiary support. The individual commenter specifically cited text
from a 1995 Policy Memo: ``The submission of [contracts between the
employer and the alien work site] should not be a normal requirement
for the approval of an H-1B petition filed by an employment contractor.
Requests for contracts should be made only in those cases where the
officer can articulate a specific need for such documentation'' and
``[t]he mere fact that a petitioner is an employment contractor is not
a reason to request such contracts.'' The commenter said that under the
proposed rule--and unlike the Defensor-based scheme--adjudicators would
be required to decide in every case involving third-party placements
whether the beneficiary would be ``staffed'' to or merely ``provide
services'' to a third party, contradicting the 1995 Policy Memo. The
commenter, along with a law firm, said that the provision would also be
arbitrary and capricious due to lacking adequate justification. The
commenter, along with the business association said that DHS's concern
that petitioners are circumventing specialty occupation requirements by
imposing token requirements or requirements that are not normal to the
third party is ``rank speculation.'' The commenters added that DHS
``offers no explanation'' as to why it is concerned that some employers
might ``impos[e] token requirements'' and fails to justify the burden
this provision would impose on all contractors who utilize the H-1B
visa program and their clients.
Response: DHS disagrees that the third-party placement provision
would lead to administrative burdens for petitioning employers and
their clients. Petitioners should be able to provide evidence of the
third party's requirements for the beneficiary's position through
documents that are generated in the normal course of the relationship
(e.g., a Master Services Agreement or statement of work) or are
reasonably obtainable from the third party (e.g., a letter from the
client). Documents showing the third party's requirements for the
position will only be necessary in cases where the beneficiary is being
staffed to the third party. DHS also disagrees that the third-party
provision is ``arbitrary and capricious'' and that it disregards
established departmental policy without explanation. To the contrary,
this provision is consistent with longstanding USCIS practice.\160\
Further, in Defensor v. Meisner,\161\ the Fifth Circuit Court of
Appeals recognized that if only the petitioner's requirements are
considered, then any beneficiary with a bachelor's degree could be
brought to the United States in H-1B status to perform non-specialty
occupation work, as long as that person's employment was arranged
through an employment agency that required all staffed workers to have
bachelor's degrees. In the instance of an employer imposing token
degree requirements on its employees while having no valid reason, a
degree requirement alone is insufficient to establish that the
beneficiary will be employed in a specialty occupation. Instead, USCIS
must look to the duties that the beneficiary will perform, and the
requirements of the end-client to which the beneficiary is being
staffed, as relevant and determinative as to whether the beneficiary's
position will be in a specialty occupation.
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\160\ See, e.g., In re 5037859, 2019 WL 6827396 (AAO Nov. 7,
2019) (``The scenario in Defensor has repeatedly been recognized by
Federal Courts as appropriate in determining which entity should
provide the requirements of an H-1B position and the actual duties a
beneficiary would perform.'') (citing Altimetrik Corp. v. USCIS, No.
2:18-cv-11754, at *7 (E.D. Mich. Aug. 21, 2019); Valorem Consulting
Grp. v. USCIS, No. 13-1209-CV-W-ODS, at *6 (W.D. Mo. Jan. 15, 2015);
KPK Techs. v. Cuccinelli, No. 19-10342, at *10 (E.D. Mich. Sep. 16,
2019); Altimetrik Corp. v. Cissna, No. 18-10116, at *11 (E.D. Mich.
Dec. 17, 2018); and Sagarwala v. Cissna, No. CV 18-2860 (RC), 2019
WL 3084309, at *9 (D.D.C. July 15, 2019)).
\161\ See Defensor v. Meissner, 201 F.3d 384 (5th Cir. 2000).
---------------------------------------------------------------------------

DHS notes that the November 13, 1995 memorandum referenced by the
commenter, entitled ``Supporting Documentation for H-1B Petitions,''
was rescinded by the 2018 memorandum ``Contracts and Itineraries
Requirements for H-1B Petitions Involving Third-Party Worksites.''
\162\ Although the 2018 memorandum was itself rescinded by the
``Rescission of Policy Memoranda'' memorandum published on June 17,
2020,\163\ that memorandum did not reinstate the 1995 memoranda.
---------------------------------------------------------------------------

\162\ USCIS, Policy Memorandum PM-602-0157, Contracts and
Itineraries Requirements for H-1B Petitions Involving Third-Party
Worksites (Feb. 22, 2018), https://www.uscis.gov/sites/default/files/document/memos/2018-02-22-PM-602-0157-Contracts-and-Itineraries-Requirements-for-H-1B.pdf.
\163\ USCIS, Policy Memorandum PM-602-0114, Recission of Policy
Memoranda (June 17, 2020), https://www.uscis.gov/sites/default/files/document/memos/PM-602-0114_ITServeMemo.pdf.
---------------------------------------------------------------------------

Comment: A trade association stated that the provision would create
confusion among adjudicators and would prompt extensive and burdensome
RFEs and NOIDs, increasing inefficiency and unnecessary expense for
employers and USCIS. The commenter said that the level of discretion
left to adjudicators in determining whether an H-1B worker has been
staffed or is merely a service provider creates a high risk that the
third-party placement provision would be applied to placements that do
not involve staff augmentation, causing employment bottlenecks for U.S.
companies and leaving work unfulfilled. The commenter said that third-
party companies rely on H-1B workers to perform high-skilled
information technology services that their existing workforces cannot
provide. The commenter said that the high cost and risk created by the
proposal ignores business realities and fails to account for the
difficulty petitioners would have in obtaining cooperation from end-
clients who have little to no experience with the H-1B process, and
adding that the new end-client validation requirements are inconsistent
with the principles of H-1B sponsorship which requires the petitioner
to makes attestations of the specialty occupation role under penalty of
perjury, not the end client. The commenter stated that the LCA along
with the information and documentation provided by the petitioning
employer should be sufficient.
Response: DHS disagrees that this provision will cause confusion
among adjudicators, resulting in unnecessary RFEs and the
misapplication of this provision. Adjudicators are accustomed to
reviewing the duties of a proposed position in conjunction with the
nature of the petitioning entity's business practices, including
additional information relating to any relevant third parties. This
provision is not a change, but rather codifies longstanding practice
with respect to determining eligibility in cases involving third-party
placement.
DHS also disagrees that this provision is ``inconsistent with the
principles of H-1B sponsorship.'' It has always been

[[Page 103152]]

the petitioner's burden to establish eligibility for the benefit
sought. As the commenter states, ``it is the petitioning employer that
makes attestations of the specialty occupation role under penalty of
perjury.'' Therefore, it is not evident how a petitioner can attest to
or certify that a position will be a specialty occupation or comply
with DOL labor condition application requirements if the beneficiary
will essentially become part of another entity's organization and that
third party entity is unwilling or unable to provide specific
information about the minimum requirements for the position that the
beneficiary will be staffed to fill. Moreover, most petitioners should
be able to provide evidence of the third party's requirements for the
beneficiary's position through documents that are generated in the
normal course of the relationship (e.g., a master services agreement or
statement of work) or are reasonably obtainable from the third party
(e.g., a letter from the end client).
Comment: An individual commenter said that the third-party
placement provision represents a ``major change'' in the way that USCIS
deals with third-party placements and that the provision is singling
out staffing companies. The commenter stated that the provision for
staffing companies to prove job requirements would place the staffing
company in an impossible position if the end customer is unwilling to
provide the necessary information. The commenter also noted that there
may be difficulty in obtaining necessary documents where there are
second and third level staffing companies in between the petitioner and
the end customer. The commenter added that end customers may ``want no
involvement'' with attesting to the requirements for the positions,
stating that these end customers have concerns over joint employment
liability. The commenter also expressed concerns with respect to
petitioners providing fraudulent documentation when documentation from
a third party cannot be obtained.
Response: DHS disagrees that this provision will prevent staffing
companies from establishing eligibility for H-1B specialty occupation
workers. Further, if the petitioner seeks to staff the beneficiary to a
third party but is unable to demonstrate the type of work the
beneficiary will perform for the third party, it is unclear how the
petitioner would be able to establish eligibility for the H-1B
petition. Again, it remains the petitioner's burden to establish
eligibility for the benefit sought. Petitioners should be able to
provide evidence of the third party's requirements for the
beneficiary's position through documents that are generated in the
normal course of the relationship (e.g., a master services agreement or
statement of work) or are reasonably obtainable from the third party
(e.g., a letter from the client). Further, DHS clarifies that this rule
does not address joint employment liability and this is not relevant to
USCIS's determination for H-1B specialty occupation employment. It is
also unclear how providing evidence documenting the work to be
performed and the requirements for the position would impact joint
employment liability in other contexts any more so than the nature of
the contracted work itself.
Comment: A trade association said that its members employ H-1B
transfers and places them with end clients to complete project teams--
referred to as ``staff augmentation''--where multiple IT/engineering
professionals, including H-1B workers, are placed with a client to
complete a time sensitive, complex project. The commenter said that DHS
is attempting to create a distinction where there is often no
difference in the nature of the work being performed and added that
there is no reason why U.S.-based IT staffing firms should be subject
to different requirements than firms employing a different business
model. The commenter said that the fundamental and only question should
be whether the petitioner is performing work that satisfies the
specialty occupation requirement. Similarly, a couple of individual
commenters and a company stated that the proposed provision ignores the
petitioning companies' long-term term need for particular skill sets
and focuses exclusively on the end client's requirements for a short-
term project when determining if a position is in a specialty
occupation. A law firm said that the provision would be fundamentally
incompatible with the IT consulting industry's business model, and that
DHS's failure to acknowledge that the rule would upend the IT services
industry and upset related reliance interests is arbitrary and
capricious. The commenter said that the provision would have negative
policy consequences for American businesses, inconsistent with the
goals of fueling innovation in technology industries spaces and
maintaining a globally premier workforce.
Response: DHS disagrees with the commenters' allegations that it is
attempting to create a distinction where there is often no difference
in the nature of the work being performed. There is a distinction
between a beneficiary who merely provides services to a third party,
and a beneficiary who fills a position within a third party's
organizational hierarchy. In the former scenario, the petitioner may be
better positioned to know the actual degree requirements for the
beneficiary's work, whereas in the latter scenario, the third party may
be better positioned than the petitioner to be knowledgeable of the
actual degree requirements for the beneficiary's work. Thus, in the
latter scenario, it is reasonable for USCIS to consider the
requirements of the third party as determinative of whether the
position is a specialty occupation.
DHS also disagrees with the comments that this provision would be
fundamentally incompatible with the IT consulting industry's business
model. While IT staffing firms may have to provide additional evidence
in some cases, they are still subject to the same fundamental
requirement of demonstrating that the beneficiary will perform work in
a specialty occupation. See INA sec. 101(a)(15)(H)(i), 8 U.S.C.
1101(a)(15)(H)(i). It is exactly for this reason why DHS is codifying
the third-party provision to clarify the circumstances when USCIS will
consider a third party's requirements. The third-party provision is
intended to ensure that petitioners are not circumventing specialty
occupation requirements by imposing token requirements that are not
relevant or applicable to the proffered position. This provision will
help preserve the intent and purpose of the H-1B statute and
regulations, which is to limit H-1B visas to positions that require
specialized education, or its equivalent, to perform the duties, and
theoretical and practical application of a body of highly specialized
knowledge.
DHS reiterates that the third-party provision does not eliminate
the use of IT staffing companies in the H-1B program. As noted above,
consistent with current practice, USCIS will review documentation in
the petition to determine if there are indications that a beneficiary
is filling an otherwise permanent position at the third-party rather
than simply providing services or work on a discrete project for that
third party. In USCIS's experience, it is rare that a beneficiary is
staffed to the third party rather than providing services for them. If
the beneficiary is staffed to a third party the petitioner would need
to provide evidence of the third party's requirements for the
beneficiary's position through documents that are generated in the
normal course of the relationship (e.g., a master services agreement or
statement of work) or are reasonably obtainable from the third

[[Page 103153]]

party (e.g., a letter from the client). Further, since this provision
is consistent with longstanding USCIS practice, DHS does not believe
there is a related reliance interest involved.
Comment: A trade association and a law firm said that USCIS'
``reliance'' in the NPRM on Defensor is ``misplaced.'' According to the
commenters, the Defensor court treated the client as a co-employer,
whereas the H-1B regulations contemplate only the petitioner as the
employer. The commenters said that as Defensor involved a staffing
agency for nurses that contracted H-1B nurses to hospitals, there is a
``critical distinction'' between the nurses in Defensor and a software
engineer providing services to the client rather than being staffed to
the client. Similarly, a legal services provider said that Defensor
involved an H-1B petitioner whose purported education requirement
exceeded what was normal for the occupation in the industry at that
time and exceeded what the third-party normally required, which the
commenter said should be distinguished from a position where the
employer's requirement is consistent with the normal requirements for
the occupation. The commenter expressed concern that in all cases
involving end-clients, USCIS will request evidence that the client
normally requires a bachelor's degree, regardless of the position or
the type of third-party relationship. The commenter said that Defensor
is well-settled case law, and that proposed provision is unnecessary
and likely to lead to more RFEs and thus more work for USCIS.
Response: DHS disagrees that USCIS' reliance in the NPRM on
Defensor is misplaced. Defensor is settled case law and establishes
guidelines regarding the educational requirements that are most
relevant in assessing whether a position is a specialty occupation in a
petition involving a third-party placement. The third-party provision
is intended to codify and clarify the Defensor analysis so that it is
clear such analysis will only apply in situations where the beneficiary
will be contracted to fill a position in a third party's organization.
Contrary to the commenter's claim, this provision will not apply to
every petition involving an end-client and the agency will not always
request evidence of the end client's requirements. This provision is
intended to codify existing USCIS practice and DHS does not anticipate
that it will increase RFEs. Consistent with current practice, USCIS
will make the determination as to whether the beneficiary will be
``staffed'' to a third party on a case-by-case basis, taking into
consideration the totality of the relevant circumstances.
DHS acknowledges that the fact pattern in Defensor may be
distinguishable from many other third-party placement scenarios,
including those discussed above by the commenters. Nevertheless,
reliance on Defensor is appropriate because this case illustrates the
relevance of third-party requirements for the beneficiary's position,
in addition to the petitioner's stated requirements, in assessing
whether the proffered position qualifies as a specialty occupation. The
court explained that, if only the petitioner's requirements are
considered, any beneficiary with a bachelor's degree could be brought
to the United States in H-1B status to perform non-specialty occupation
work, as long as that person's employment was arranged through an
employment agency that required all staffed workers to have bachelor's
degrees. Defensor, 201 F. 3d at 388.
Comment: A few commenters stated that the Defensor court's analysis
that ``it was not an abuse of discretion to interpret the statute and
regulations so as to require [the staffing agency] to adduce evidence
that the entities actually employing the nurses' services required the
nurses to have degrees, which [the staffing agency] could not do''
depended on its view that the hospital was a common-law ``employer''
under the regulations, which the commenters said was removed in the
proposed rule. The commenters said that, unlike the adjudicators who
have been relying on Defensor for more than two decades, the case
offers no guidance on how USCIS should decide whether a consulting firm
is ``staffing'' H-1B workers to third parties versus ``providing their
services,'' which the commenters said is an entirely different question
from the existence of an employment relationship under common law. The
individual commenter cited legal commentators who have ``rightfully''
asked whether USCIS would ``understand the distinction between the
nurse in Defensor,'' who filled an identical role as the hospital's own
nursing staff, ``and a software engineer providing services to the
client rather than being staffed at the client.''
Response: DHS disagrees that the proposed rule includes a new
standard without adequate explanation. The requirement that the
beneficiary is coming to work in a specialty occupation has been and
continues to be the main consideration when making H-1B specialty
occupation determinations. DHS looks to Defensor as relevant in certain
circumstances where a beneficiary will be staffed to a third party. In
Defensor, the court found that the evidence of the client companies'
job requirements is critical if the work is performed for entities
other than the petitioner. However, simply being placed at a third
party does not always make that third party's requirements
determinative. DHS has provided examples in its NPRM and in this rule
to help differentiate when a third party's requirements would be more
relevant than the petitioner's.
Comment: A few individual commenters requested that USCIS grant H-
1B visas only to direct employers and not staffing companies.
Similarly, another individual commenter recommended that there not be
any third-party placement allowed at all under the H-1B program.
Another individual commenter requested that third-party employers be
required to do paperwork similar to an LCA or an H-1B petition for
accountability purposes.
Response: DHS declines to adopt the suggestion to prohibit staffing
companies and employees placed at third party worksites from utilizing
the H-1B program, or to subject third party employers to additional
paperwork similar to an LCA. DHS is finalizing changes to improve the
integrity of the H-1B program, applicable to staffing companies and
other H-1B petitioners, such as codifying DHS's authority to conduct
site visits and clarifying that refusal to comply with site visits may
result in denial or revocation of the petition, codifying its authority
to request contracts, requiring that the petitioner establish that it
has a bona fide position in a specialty occupation available for the
beneficiary as of the requested start date, ensuring that the LCA
properly supports and corresponds with the petition, and revising the
definition of ``United States employer'' and adding a requirement that
the petitioner have a legal presence and be amenable to service of
process in the United States. These changes combined address the
integrity and fraud concerns raised by the commenters, and will help
maintain accountability and insight into employer practices,
specifically with respect to the H-1B program, by providing additional
measures to identify noncompliance and detect and deter fraud within
the H-1B program.
Comment: Several commenters urged DHS to remove the third-party
placement provision, indicating that in most circumstances, the
petitioning employer's requirements will govern H-1B adjudications. A
couple of trade associations and a joint submission recommended that
USCIS solicit further feedback from stakeholders on provisions relating
to third-party

[[Page 103154]]

placement. The trade associations added that the provision, as written,
would undermine other provisions in the proposed rule that seek to
reduce government and private-sector burdens and bring clarity to the
H-1B process. The trade associations added that the lack of clarity
regarding the rules for adjudication for third-party employers would
leave USCIS susceptible to legal challenges under the Administrative
Procedure Act, incurring additional costs for the government and
uncertainty for the public.
Response: DHS disagrees that the third-party provision undermines
other provisions in this rule or elsewhere, or that the provision will
interfere with reducing burdens for the government and private sector.
Further, DHS declines to remove the third-party placement provisions or
solicit further feedback on it. As explained in responses to other
comments, this provision is generally consistent with long-standing
USCIS practice and codifies current case law. In codifying this
practice and providing numerous examples both in the NPRM and in the
responses to comments above, DHS aims to provide additional clarity on
this provision.
Comment: A law firm recommended that the adjective ``educational''
should precede the word ``requirements'' in the sentence within the
proposed rule, requesting that DHS clarify that it is the third party's
requirements, not the petitioning employer's requirements, that are
most relevant if the beneficiary will be staffed to a third party. The
commenter said that the third-party's educational requirements for the
position is reliable, while the third party's experience and skill set
requirements are ``notoriously'' unreliable. The commenter stated that
it is a common practice for recruiters to describe the ideal or dream
candidate while rarely describing their employers' actual experience
and skill set requirements for the position.
Response: DHS declines to adopt the commenter's suggestion to add
the word ``education'' before the word ``requirements'' in the
regulatory text. The word ``requirements'' is intended to include
requirements in addition to education, which may include experience or
training relevant to the proffered position, and may be relevant in
assessing eligibility, including whether the proffered position
qualifies as a specialty occupation.
Comment: A law institute cited third-party placements of H-1B
workers as a ``common feature'' in H-1B fraud, defeating the purpose of
H-1B program as a means to provide labor when U.S. workers are not
available. The commenter stated that as long as DHS permits third-party
placement of H-1B workers, DHS is not serious about reducing abuse in
the H-1B program. Similarly, a union requested that staffing companies
be barred from the H-1B program.
Response: As stated in the NPRM, the third-party placement
provisions are consistent with longstanding USCIS practice and are
intended to clarify that, where a beneficiary is staffed to a third
party, USCIS will look to that third party's requirements for the
position, rather than the petitioner's stated requirements, in
assessing whether the proffered position qualifies as a specialty
occupation. 88 FR 72870, 72908 (Oct. 23, 2023). This will help ensure
that petitioners do not circumvent specialty occupation requirements by
imposing token requirements or requirements that are not normal to the
third party. DHS did not propose to eliminate third-party placement
arrangements, and notes that such placements are permissible under the
INA.\164\ As explained throughout this rule, DHS is finalizing a number
of provisions intended to enhance the integrity of the H-1B program
including by (1) codifying its authority to request contracts; (2)
requiring that the petitioner establish that it has a bona fide
position in a specialty occupation available for the beneficiary as of
the requested start date; (3) ensuring that the LCA supports and
properly corresponds with the petition; (4) revising the definition of
``United States employer'' by codifying the existing requirement that
the petitioner has a bona fide job offer for the beneficiary to work
within the United States as of the requested start date and adding
requirements of legal presence and amenability to service of process in
the United States. Therefore, DHS declines to make changes in response
to these comments.
---------------------------------------------------------------------------

\164\ See, e.g., INA sec. 212(n)(1)(F), 8 U.S.C. 1182(n)(1)(F)
(prescribing certain requirements and obligations pertaining to non-
displacement when an H-1B worker will be performing duties at the
worksite of another employer).
---------------------------------------------------------------------------

15. Other Comments on Program Integrity and Alternatives
Comment: Several commenters generally discussed concerns related to
misuse of the H-1B program and emphasized the need to uphold the
integrity of the program. For example, a professional association noted
unemployment rates for recent college graduates, and stated that the
proposed rule revisions ``do not set enforcement consequences should
the [] business cut corners to hire foreigners instead of Americans.''
The commenter further stated that DHS ``should focus on employing
unemployed and underemployed Americans before employing non-citizens.''
A union stated that DHS should unambiguously state that it is illegal
to replace a U.S. worker with an H-1B guestworker under any
circumstances, whether directly or through secondary displacement.
Response: DHS appreciates the commenters' concerns about preserving
the integrity of the H-1B program. With respect to the comments about
recruiting or hiring U.S. workers before utilizing H-1B workers, DHS
notes that the INA does not require a traditional labor market test for
the H-1B program, and therefore, there is no specific requirement for a
U.S. employer to first recruit U.S. workers before opting to hire H-1B
workers instead of U.S. workers. Instead, Congress required U.S.
employers seeking to utilize the H-1B program to obtain a certified
LCA, attesting that the employment of H-1B workers will not adversely
affect the wages and working conditions of similarly employed U.S.
workers. Further, Congress specifically subjected certain petitioners
(H-1B dependent employers and willful violators) to additional
attestations, including that they did not and will not displace a U.S.
worker and that they have taken good faith steps to recruit U.S.
workers in the United States before filing the LCA.\165\
---------------------------------------------------------------------------

\165\ See INA sec. 212(n)(1)(E), (G), 8 U.S.C. 1182(n)(1)(E),
(G). These attestation requirements apply only to H-1B dependent
employers, as defined at INA section 212(n)(3), 8 U.S.C. 1182(n)(3).
H-1B dependent employers are not subject to these additional
requirements, however, if the only H-1B nonimmigrant workers sought
in the LCA receive at least $60,000 in annual wages or have attained
a master's or higher degree in a specialty related to the relevant
employment. See INA sec. 212(n)(1)(E)(ii) and (n)(3)(B), 8 U.S.C.
1182(n)(1)(E)(ii) and (n)(3)(B).
---------------------------------------------------------------------------

Comment: A joint submission recommended that USCIS clarify the
requirement that the H-1B petition be non-frivolous. The commenters
elaborated that ``non-frivolous'' should be defined consistently with
the tolling provision of INA sec. 212(a)(9)(B)(iv) for foreign
nationals who do not accrue unlawful presence after their Form I-94
expires if there is a timely filed, non-frivolous extension or change
of status pending, or for H-1B portability when a non-frivolous H-1B
change of employer petition is filed under INA sec. 214(n).
Response: The term ``non-frivolous'' is well-understood and
currently exists within multiple regulations. See 8 CFR
214.2(h)(2)(i)(H)(1)(ii). DHS notes that

[[Page 103155]]

the term ``frivolous,'' means that there is no arguable basis in law
and fact, and believes this term is generally understood and
sufficiently clear.\166\ Therefore, DHS declines to separately define
``non-frivolous'' in this rule. USCIS will continue to review each
filing on its own merits, on a case-by-case basis, according to the
facts presented.
---------------------------------------------------------------------------

\166\ According to Black's Law Dictionary, ``frivolous'' means
lacking a legal basis or legal merit; manifestly insufficient as a
matter of law.
---------------------------------------------------------------------------

G. Request for Preliminary Public Input Related to Future Actions/
Proposals

16. Use or Lose
Comment: An advocacy group recommended that beneficiaries be
permitted a minimum 6-month timeframe after being issued an H-1B visa
to enter the United States and begin working in accordance with the
terms of such visa, with a provision for exceptions in compelling
situations (e.g. family illness/death). Additionally, the commenter
recommended providing students with 1 year due to the uncertainty
surrounding finishing coursework and research. The commenter also
recommended 6 months for local petitioners. A couple of companies urged
DHS to structure any use or lose system such that unused H-1B numbers
can be reassigned.
A few commenters, including associations and companies, recommended
continued engagement with stakeholders to determine the best way to
ensure that the limited number of H-1B cap-subject visas are used for
bona fide job opportunities, adding that there are several legitimate
reasons why there may be a delay in the beneficiary commencing
employment. Several commenters stated that DHS fails to acknowledge
some legitimate reasons for delays, including individuals who are
already in the United States under another nonimmigrant visa category
who may choose to delay commencing their H-1B employment. Another
commenter recommended providing petitioning employers with the option
to notify DHS that the employee is currently working under a different
status and will eventually switch to H-1B.
A company and a joint submission said that the frequency of
``speculative employment'' is likely not as pervasive as expressed in
the NPRM, and therefore, the solutions suggested by DHS are not
required. For example, a couple of companies said that focusing on
consular processing data may have been misplaced, as the majority of H-
1B cap petitions do not request consular processing.
A trade association noted that while the data in Table 9 of the
NPRM, which shows data on H-1B cap-subject petitions that selected
consular processing into the United States, may be correct, DHS failed
to acknowledge the causal relationship between government action/
inaction and the percentage of employees who had entered the United
States within 6 months of the validity date. For example, according to
the commenter, average processing times for H-1B petitions in 2017 were
over one year, guaranteeing that employees would not be available for
the beginning of the validity period. The commenter stated that this
problem was exacerbated by staffing decreases at USCIS in 2017 and
COVID-19. The commenter noted that Table 10 of the NPRM, which shows
data on H-1B beneficiaries who went through consular processing, who
arrived more than 90 days after their DOS visa validity start date,
also failed to acknowledge impacts of COVID-19.
A joint submission expressed opposition to the use or lose
provision. The commenters said that the proposed beneficiary-based
registration system is ``a less burdensome and more effective measure
to increase H-1B cap usage,'' negating the need for a use or lose
provision. Additionally, the commenters stated that post-approval use
or lose mechanisms would be overbroad, burdensome, and would not deter
bad actors.
A research organization inquired why DHS proposed having employers
report by a set deadline when DHS already possesses this information,
as demonstrated in Tables 9 and 10, which show data on H-1B cap-subject
petitions that selected consular processing into the United States and
data on H-1B beneficiaries who went through consular processing, who
arrived more than 90 days after their DOS visa validity start date,
respectively. The commenter suggested that DHS should systematically
check which petitions are associated with workers who have not entered
the country after 90 days or 6 months. Additionally, the commenter
reasoned that without punitive action beyond revocation of such
petitions, the use or lose provision would not deter fraud. The
commenter suggested that DHS review public documents from Federal
lawsuits where visa-ready and travel-ready strategies were discussed by
executives, and then audit firms with large numbers of H-1B workers who
have not come to the United States, as well as firms with H-1B workers
who have left the United Stated and not returned in over 30 days.
Finally, the commenter stated that the proposed solution would require
employers to self-report such fraud.
Response: In the NPRM, DHS stated that it wants to ensure that the
limited number of H-1B cap-subject visas and new H-1B grants that are
statutorily available each fiscal year are used for non-speculative job
opportunities. 88 FR 72870, 72909 (Oct. 23, 2023). DHS further stated
that it is looking for the most effective ways to prevent petitions for
speculative H-1B employment from being approved, and to curtail the
practice of delaying H-1B cap-subject beneficiary's employment in the
United States until a bona fide job opportunity materializes. DHS is
not making any final regulatory changes as a result of the request for
comments in the NPRM, but will take into consideration the input
provided by commenters as it continues to research and consider the
feasibility, benefits, and costs of various options to achieve its
stated goals.
17. Beneficiary Notification
Comment: A trade association requested clarification on the
agency's policy goals regarding beneficiary notification. The
association expressed an interest in discussing potential solutions
that would balance the government's objectives without placing an undue
burden and risk on petitioners.
Response: As explained in the NPRM, DHS is exploring ways to
provide H-1B and other Form I-129 beneficiaries with notice of USCIS
actions taken on petitions filed on their behalf, including receipt
notices for a petition to extend, amend, or change status filed on
their behalf. 88 FR 72870, 72913 (Oct. 23, 2023). Enabling Form I-129
beneficiaries to verify their own immigration status could improve
worker mobility and protections. DHS is not making any final regulatory
changes as a result of the request for preliminary input in the NPRM,
but will take into consideration the input provided by commenters as it
continues to research and consider the feasibility, benefits, and costs
of various options to achieve its stated goals.
Comment: A few commenters expressed support for the proposal to
notify beneficiaries of USCIS actions taken on petitions filed on their
behalf. One of these commenters expressed appreciation for the proposal
and stated that it did not anticipate any substantial additional costs
associated with the proposed change, as most large employers provide H-
1B employees with USCIS notices as part of standard

[[Page 103156]]

procedure. A company highlighted the importance of allowing the option
of electronic notification and considering a petitioner's reasonable
attempts to contact a former employee as reasonable compliance with the
regulations. A trade association urged DHS to change the regulations to
afford beneficiaries the chance to respond to any allegation that could
affect their status. An advocacy group remarked that beneficiaries who
are located in the United States must rely on petitioners to provide
them with their Form I-94 Arrival-Departure Record, while beneficiaries
who are outside of the United States receive this information or
documentation directly. As such, the commenter recommended that the
Department communicate with both the beneficiary as well as petitioner.
A legal services provider suggested that USCIS should use its premium
processing electronic notification system to provide receipt notices
and approval notices by email to petitioners, beneficiaries, and
attorneys. The commenter also stated that the use of an email system
would save the agency administrative time, costs, and other expenses by
eliminating the need to mail physical copies of documents to parties.
A few commenters cited the Office of the Citizenship and
Immigration Services Ombudsman (CIS Ombudsman) recommendation in
response to USCIS' request for preliminary public input on ways to
provide beneficiaries with notice of USCIS actions taken on petitions
filed on their behalf. A union cited the Ombudsman recommendation and
urged DHS to implement it, stating that all information pertaining to
an employee's visa process should be accessible and available in real-
time to each employee. The commenter reasoned that only providing such
information to the employer leaves employees vulnerable to
exploitation. A research organization expressed their support for
notifications to be sent to H-1B and other nonimmigrant workers and
stated that there was ample time and opportunity to include a provision
in the final rule to address this issue. The organization suggested
that notifications could be sent directly to beneficiaries through text
and via WhatsApp, making information more accessible to workers. A
group of Federal elected officials agreed that petitioners should
provide notices to beneficiaries and also encouraged DHS to include a
provision requiring beneficiary notification in the final rule. The
commenters cited the CIS Ombudsman recommendation and further reasoned
that there would be no significant cost or burden since the agency
already sends notification to the petitioning employer.
A joint submission said that DHS's policy suggestion appears to be
in response to the CIS Ombudsman recommendation and expressed support
that beneficiaries receive direct notification. Thus, the commenters
suggested the following:
USCIS modify its online portal, akin to the U.S. CBP
online system for obtaining Form I-94, allowing beneficiaries to access
their status information directly;
Interested beneficiaries create a MyUSCIS account to which
USCIS could upload documentary information accessible to the
beneficiary;
USCIS send a copy of the notice to the beneficiary at the
address listed in the Form I-129; and
USCIS email notification to the beneficiary's email
address listed in the Form I-129.
Response: In the NPRM, DHS stated that it was seeking preliminary
public input on ways to provide H-1B and other Form I-129 beneficiaries
with notice of USCIS actions taken on petitions filed on their behalf
as well as other suggestions regarding ways to ensure adequate
notification to beneficiaries of actions taken with respect to
petitions filed on their behalf. 88 FR 72870, 72913 (Oct. 23, 2023). As
indicated in the NPRM, the feedback was sought to inform potential
future action, and DHS did not propose a particular approach in the
NPRM. Therefore, DHS is not making any regulatory changes as a result
of the request for preliminary input in this final rule but will take
into consideration the input provided by these commenters as it
continues to research and consider the feasibility, benefits, and costs
of various options separate and apart from this final rule.

H. Other Comments on the Proposed Rule

Comment: Some commenters, including joint submissions, a trade
association, professional associations, a research association, and a
company, cited research on labor shortages of STEM professionals,
projected growth, and additional labor needs as general support for the
need to modernize the H-1B program. The commenters stated that foreign
STEM talent is necessary for the U.S. economy and current immigration
policies negatively impact the ability to attract and retain talent. A
trade association said that immigration policies must enable firms to
hire global talent when the number of U.S. engineering graduates does
not meet demand.
Response: DHS shares the commenters concern with ensuring that
immigration policies support the United States and U.S. employers in
attracting and retaining foreign STEM talent and filling labor needs
across all industries.
Comment: Some commenters included remarks regarding the
exploitation of noncitizen and U.S. workers through the H-1B program.
An advocacy group and a research organization remarked that H-1B visa
holders are not necessarily working in highly technical fields and
stated that they tend to hold ``ordinary skills'' that are abundantly
available in the U.S. labor market. Additionally, the commenters
expressed that companies are exploiting the program by paying foreign
workers below market levels, which in turn drives down wages of
American workers.
Response: The H-1B program allows U.S. employers to temporarily
employ foreign workers in specialty occupations, defined by statute as
occupations that require the theoretical and practical application of a
body of highly specialized knowledge and at least a bachelor's or
higher degree in the specific specialty, or its equivalent. See INA
secs. 101(a)(15)(H)(i)(b) and 214(i), 8 U.S.C. 1101(a)(15)(H)(i)(b) and
1184(i). Therefore, DHS disagrees with the commenters' assertion that
H-1B nonimmigrants tend to work in fields that are not highly technical
or hold ``ordinary skills.''
With respect to wages, per DOL regulations at 20 CFR 655.731, an
employer seeking to employ an H-1B worker in a specialty occupation
must attest on the LCA that it will pay the H-1B worker the higher of
either the prevailing wage for the occupational classification in the
geographic area of intended employment or the actual wage paid by the
employer to individuals with similar experience and qualifications for
the specific employment in question. H-1B petitions for a specialty
occupation worker must include a certified LCA from DOL, and failure to
comply with DOL LCA requirements may impact eligibility.
Comment: A research organization said that there are several
structural and programmatic flaws with the H-1B program. For example,
the organization said that employers are not required to recruit U.S.
workers before hiring H-1B workers. Additionally, the commenter said
that employers can legally underpay H-1B workers and that there is
evidence that DOL is failing to enforce the requirement to pay H-1B
workers the ``actual wage'' they pay U.S.

[[Page 103157]]

workers. The same commenter also expressed that H-1B workers are
exploited and lack job mobility to leave these underpaying jobs, due to
recruitment fees and the inability to self-petition for an H-1B visa.
Finally, the commenter stated that outsourcing companies use the H-1B
program to offshore jobs, replace U.S. workers with underpaid H-1B
workers, and ultimately degrade the labor standards for skilled
workers. A union made similar statements, citing several sources. The
commenter urged DHS to pursue ``bolder structural changes'' to the H-1B
program instead of ``tinkering at the edges'' of the program.
Response: DHS acknowledges the general concerns that some
unscrupulous employers abuse the H-1B visa program. To prevent fraud
and abuse and strengthen H-1B program integrity, DHS is finalizing this
rule, which: (1) codifies DHS's authority to request contracts; (2)
requires that an H-1B petitioner establish that it has a bona fide
position in a specialty occupation available for the beneficiary as of
the requested start date; (3) ensures that the LCA supports and
properly corresponds with the petition; (4) revises the definition of
``United States employer'' by codifying the existing requirement that
the petitioner has a bona fide job offer for the beneficiary to work
within the United States as of the requested start date, consistent
with current DHS policy, and adds a requirement that the petitioner
have a legal presence and be amenable to service of process in the
United States; (5) clarifies that beneficiary-owners may be eligible
for H-1B status, while setting reasonable conditions for when the
beneficiary owns a controlling interest in the petitioning entity; (6)
codifies USCIS' authority to conduct site visits; (7) clarifies that
refusal to comply with site visits may result in denial or revocation
of the petition; and (8) clarifies that, if an H-1B worker will be
staffed to a third party, meaning they will be contracted to fill a
position in the third party's organization, it is the requirements of
that third party, and not the petitioner, that are most relevant when
determining whether the position is a specialty occupation. DHS
disagrees with the suggestion that these changes are not significant.
These changes strike an appropriate balance between improving program
integrity without being unduly onerous to H-1B employers.
DHS also recognizes the commenters' concerns regarding what they
perceive as structural flaws in the H-1B program. However, DHS is
unable to make the types of structural changes to fundamentally change
the H-1B program the commenters suggested. For example, as noted above
in this preamble, the statute generally does not require a labor market
test for the H-1B program, and therefore, there is no general statutory
requirement for an H-1B petitioner to first recruit U.S. workers before
opting to hire H-1B workers instead of U.S. workers.
Comment: Some individual commenters stated that DHS needs to
address current backlogs before moving forward with additional
applications. A different individual commenter said that many H-1B
employees are on these temporary visas due to backlogs, not by personal
choice. A trade association encouraged USCIS to continue to explore
actions that would reduce backlog and costs, such as reinstituting the
``Known Employer'' Initiative. An advocacy group expressed concern that
changes, such as redefining ``specialty occupation,'' increasing
requirements for third-party employers, and expanding the authority of
investigators to conduct site visits could increase backlogs.
Response: DHS is committed to reducing backlogs for all immigration
benefit requests. However, it is unclear to which backlogs the
commenters referred. H-1B petitions have historically been adjudicated
within a median processing time of 0.2 to 4.7 months depending on
whether they were filed with a premium processing request.\167\
---------------------------------------------------------------------------

\167\ DHS, USCIS, Historical National Median Processing Time (in
Months) for All USCIS Offices for Select Forms By Fiscal Year 2019
to 2024 (up to Feb. 28, 2024), https://egov.uscis.gov/processing-times/historic-pt (last visited Apr. 8, 2024) (showing that the 2024
median processing time for premium-processed H-1B petitions was 0.2
months, and for non-premium-processed H-1B petitions was 2.6
months).
---------------------------------------------------------------------------

In terms of the Known Employer (KE) pilot, USCIS made the decision
to end the KE pilot in 2020, based on a combination of operational,
technical, and regulatory issues.\168\ The lengthy process of clearing
KE predeterminations, combined with no discernible time savings for
USCIS during the adjudication of petitions using the KE process, meant
that time savings were negligible. While reducing the paperwork burden
for the agency and petitioners was one of the goals, such a reduction
was not observed in any meaningful way because of the low participation
rate from most participants. Developing a permanent KE program of
similar design would divert resources away from current technology
development priorities, add complexity to operations by creating
additional petition ingestion processes, create differing adjudication
processes, require additional personnel, and require the creation of
additional electronic systems that would need to be maintained.
---------------------------------------------------------------------------

\168\ DHS, USCIS, Trusted Employer Program Fiscal Year 2022
Report to Congress (Aug. 11, 2022), https://www.dhs.gov/sites/default/files/2022-09/USCIS%20-%20Trusted%20Employer%20Program.pdf.
---------------------------------------------------------------------------

DHS further declines to make changes to this final rule owing to
concerns that strengthening the integrity of the H-1B program may cause
adjudication delays that increase backlogs. While DHS aims to eliminate
backlogs and improve program efficiency, DHS must also balance the need
to address fraud and abuse in the H-1B program.
Comment: An advocacy group said that the final rule should address
USCIS' legal opinion issued after the enactment of Public Law 114-113.
The commenter recommended that the fee for H-1B petitions should be
extended to all employers. According to the commenter, the increased
revenue would fund the entry/exit system, per the statute. Another
commenter suggested additional fees for premium processing. A different
commenter said that increasing fees or higher taxes on companies with a
substantial H-1B workforce could be a deterrent to using the program. A
company said that H-1B fees have gone towards programs that support
growth of the domestic technology workforce. The commenter recommended
continued funding for these programs by USCIS and encouraged DOL to
reopen the ``H-1B One Workforce'' and the ``Apprenticeships: Closing
the Skills Gap'' grant programs, or open similar grant programs.
Response: DHS declines to adopt the commenters' suggestions
concerning fees and funding, as such suggestions are beyond the scope
of this rulemaking. DHS notes that it also issued an NPRM on June 6,
2024, proposing changes to the regulations and applicability of the
Public Law 114-113 fee to better ensure that the entry/exit system is
fully funded.\169\
---------------------------------------------------------------------------

\169\ See ``9-11 Response and Biometric Entry-Exit Fee for H-1B
and L-1 Visas,'' 89 FR 48339 (June 6, 2024).
---------------------------------------------------------------------------

Comment: A law firm said that they look forward to USCIS issuing
guidance and training to ensure adoption of these provisions. An
advocacy group urged quick implementation of the updated provisions
related to the registration process, deference, and clarified
eligibility for entrepreneurs and cap-exempt organizations. Similarly,
some individual commenters urged quick

[[Page 103158]]

implementation of the proposed rule. A trade association recommended
further clarification regarding the effective date of the rule as it
relates to the impact of the upcoming H-1B cap season and the then-
proposed increases in fees. The association emphasized the need for
USCIS to coordinate the implementation of these two rules, carefully
considering their combined impact on petitioners and beneficiaries.
Response: DHS appreciates the commenters' concerns about the timely
implementation of this final rule. As with all final rules, DHS will
ensure that adjudicators receive any necessary guidance and training in
a timely manner to properly adjudicate the forms that this final rule
will affect. This final rule will be effective January 17, 2025, and
will apply to petitions filed on or after that date. DHS published a
final rule to make changes to the registration process, including
beneficiary-centric selection, on February 2, 2024 (89 FR 7456), and
those changes went into effect for the registration period for the FY
2025 cap season.
Comment: A joint submission cited research and ``urged Congress to
find common ground on high-skilled immigration and border reform and
reduce critical STEM talent gaps by recapturing unused visas, creating
a startup visa for entrepreneurs, exempting advanced graduates in STEM
fields from green card caps, and eliminating outdated and arbitrary
per-country caps on green cards that no longer track to economic
need.'' A couple of individual commenters urged USCIS to lobby Congress
for further enhancements to professional immigration policy. A couple
of individual commenters urged USCIS to lobby Congress for further
enhancements to professional immigration policy.
Response: DHS will not make responsive changes to this final rule
to address these suggestions, as such suggestions are beyond the scope
of this rulemaking. DHS will continue to support requests from Congress
for technical assistance with legislative proposals.
Comment: A professional association recommended maintaining or
reducing the number of visas due to increased unemployment rates. The
commenter reasoned that more Americans are qualified for the positions
that employers need to fill, and prioritizing the hiring of Americans
would decrease unemployment, homelessness, crime, and mental health
issues.
Response: DHS declines to adopt the commenter's suggestions
concerning visa numbers, as such suggestions would require a
legislative change and as such, are beyond the scope of this
rulemaking.

I. Out of Scope

DHS received many comments that were unrelated to the proposed
revisions in the NPRM. Many of these comments would require
congressional action or separate regulatory action by DHS. Other
comments suggested revisions within the purview of DOL or other
departments and agencies. Although DHS has summarized the comments it
received below, DHS is not providing substantive responses to those
comments as they are beyond the scope of this rulemaking. Comments from
the public outside the scope of this rulemaking concerned the following
issues:
Numerous commenters discussed the immigrant visa process and
backlog. These comments included the following:
General concerns about the immigrant visa backlog for
those adjusting status via an approved employment-based immigrant visa
petition;
Requests that USCIS provide an EAD and advance parole
document to those with an approved Form I-140;
Requests to remove the per-country cap on immigrant visas;
Requests to not count dependents of principal immigrant
visa beneficiaries when determining immigrant visa usage;
Suggestions to clear the current immigrant visa backlogs.
Requests to remove delays within the immigrant visa
process;
A comment that increasing cap exemptions without expanding
immigrant visa numbers would exacerbate backlog issues and be unfair to
H-1B workers currently waiting for an employment-based immigrant visa
number to become available in the United States;
Several commenters provided suggestions related to the
statutory H-1B cap, such as:
Requests to increase the H-1B cap or exempt certain groups
of individuals, unrelated to the proposed revisions to cap exemptions
(including requests to ``prioritize'' specific groups);
Requests to eliminate the H-1B cap altogether;
Requests to lower the H-1B cap.
A request that additional cap exemptions be provided for
H-1B positions in U.S. AI programs, citing articles detailing the
importance of foreign born talent for AI innovation. An individual
commenter generally stated that cap exemptions should be provided for
graduates working in STEM fields or AI, as well as entrepreneurs.
Similarly a company requested that DHS work with Congress to consider
increasing the H-1B visa cap and exempt STEM fields from the H-1B cap.
Several commenters suggested that USCIS bar or place a cap on
prospective beneficiaries from certain countries, including:
Implementing a country cap for H-1B;
Banning certain countries from the H-1B program;
Introducing a new visa classification for countries like
India and China.
Some commenters provided remarks related to DOL rulemakings and DOL
authorities, including:
Recommendations that the prevailing wage be adjusted;
A suggestion that employers must file multiple LCAs for H-
1B employees who work a hybrid schedule involving work from home and
on-site elements;
A suggestion that DHS change its procedures to ensure that
LCAs for an H-1B petition are submitted no earlier than 6 months before
the start date of intended employment, thus ensuring consistency
between H-1B application processes and LCA validity;
A suggestion that DHS promulgate a new H-1B wage
methodology rule through DOL.
Several commenters provided remarks on dependents or derivatives of
H-1B visa holders, such as:
Comments and concerns related to H-4 visas;
Recommendations to implement protections for dependents
who age out of their immigration status and/or eligibility for an
immigrant visa;
Removing dual intent from H-1B visas.
Several commenters discussed topics related to F-1 OPT and
Curricular Practical Training (CPT) programs outside the scope of the
rule, including:
General comments related to the F-1 visa program;
Requests to add additional oversight to or end the OPT
system;
A request that F-1 OPT interns/volunteers of 501(c)(3)
organizations not be treated as ``employees,'' and allow them to be
charged a fee/tuition;
A request that USCIS promulgate regulations to extend H-1B
cap gap benefits to F-1 students seeking to apply for the O-1B
classification, reasoning that recent graduates pursuing arts careers
would benefit from extended OPT;
A request that USCIS extend the provision allowing OPT
students who are in the cap-gap to travel before their

[[Page 103159]]

H-1B effective date, reasoning that they may also need to travel for
personal or professional reasons prior to their H-1B status taking
effect;
Requests to give additional time for non-stem OPT
individuals to find a sponsorship;
A comment that extending the cap-gap for OPT students
would help ``weed out'' the issue of Day 1 CPT schools; and
A suggestion that USCIS work with labor agencies to ensure
workers have adequate protection against retaliation when they exercise
collective bargaining rights and that USCIS should take proactive
measures to prevent threats by employers of nonimmigrant visa holders.
Several Commenters discussed program integrity and made suggestions
to improve it that were outside the scope of the rulemaking, including:
Requests to improve immigration policy overall, including
congressional immigration reform;
Requests for companies to receive harsher punishments when
they violate H-1B rules or other labor laws along with clarity on how
they would be prosecuted;
A request for transparency as to how companies are using
the H-1B program, so that there can be public scrutiny as to which
companies may be abusing it;
A commenter recommended revisions to support the integrity
of the program, including:
Require petitioners to remain in good standing with
Federal, State, and local laws;
Prohibit part-time and concurrent employment for H-1B visa
holders.
Finally, numerous commenters offered remarks on other topics
outside the scope of the proposed rule, including:
Requests to make it mandatory for entities to provide
evidence that they were unable to find qualified individuals in the
United States for positions before using the H-1B program;
Requests for domestic renewal of visas;
Request to add additional grace period if an H-1B holder
loses employment;
Requests for investigations and more oversight of IT and
consulting firms;
Requests to allow H-1B employees to change employers;
Requests for changes to the maximum period of stay in H-1B
status and changes to the calculation of the maximum period of stay
(eliminating recapture of time spent outside the U.S.);
A comment that cap-exempt entities should be required to
disclose any Federal spending that is related to the job listed in I-
129 filings or if the beneficiaries' work at a secondary employer is
federally funded. The commenter added that cap-exempt positions should
include strong worker protections to promote the public interest and
allow for labor mobility of petitioners, require Level 3 or 4 wages,
and prohibit outsourcing companies from placing H-1B beneficiaries at
cap-exempt employers;
Recommendations that DHS modernize H-1B licensure
requirements, reasoning that the current regulations requiring H-1B
licensing are impractical since licensing requirements vary by State
and occupation;
A suggestion for a three-phase modernization process,
which would involve a five percent cap on non-U.S. citizens at any
company while providing training to U.S. citizens; conducting an audit
of H-1B employers whose employees were selected for a position over
U.S. citizens, and if no suspicious activity was found, then H-1B
holders could be permitted to apply for residency after 5 years;
A request that DHS provide concrete status protections to
noncitizen workers that report potential company abuse of the system,
since workers often have the most knowledge and evidence of petitioner
efforts to offer speculative employment;
A suggestion that foreign labor recruiters should be
prohibited from charging fees to workers;
A request for clarification regarding ``when a beneficiary
is considered counted towards the cap;''
A few individual commenters recommended the following:
Raise the minimum wage for H-1B workers to $150,000;
Require employers to certify that there are not American
workers available for the position;
Require Employers to pay 10 to 15 percent of their total
H-1B payroll expenses into a fund that would be used to train and
educate American students;
Prohibit H-1B dependent companies from requesting
additional H-1B visas without hiring more Americans;
Prohibit companies who reported layoffs from using H-1B
for the next 2 years;
Add a provision that would convert all contractors to full
time after 90 days, similar to provisions implemented by the Illinois
DOL;
Emphasize that each F-1 student can only submit one H-1B
application at a time.

J. Statutory and Regulatory Requirements

1. Administrative Procedure Act
Comment: While expressing support for DHS's effort to improve the
H-1B program, a few commenters including trade associations, an
advocacy group, and an individual commenter urged the Department to
incorporate the concerns, suggestions, and expertise of the regulated
community, such as the higher education and legal industries. A
research organization remarked that DHS should provide a public
analysis of the program change impacts and their scale at the NPRM
stage. The commenter noted that under the Administrative Procedure Act,
the public should have the opportunity to understand and comment on the
proposed change after reviewing a detailed analysis. A trade
association expressed concern that USCIS has decreased engagement with
regulated industry, and suggested that increasing engagement with
industry would improve compliance and trust in the system. A business
association similarly requested that USCIS host listening sessions with
stakeholders and publish additional Federal Register notices.
Response: DHS provided sufficient analysis of the impacts of the
proposed rule in the NPRM published in the Federal Register on October
23, 2023 (88 FR 72870), and provided a 60-day period for the public to
provide comments on the proposed rule. In finalizing this rulemaking,
DHS has considered all of the concerns and suggestions made in each
comment and incorporated changes, where appropriate. DHS disagrees that
USCIS has decreased engagement with the regulated public. Rather, USCIS
regularly conducts public engagements on the national and local level
on a variety of topics, including topics related to the H-1B program.
Comment: A company expressed support for the decision to seek
public input on the proposed rule. A couple of commenters remarked that
the proposed changes should be subject to a ballot measure, in order to
effectively engage U.S. citizens. A couple of commenters also expressed
concern that many people may not be aware of the proposed rule or its
comment period. An individual commenter expressed that only citizens
should be involved in the public participation process. An individual
commenter expressed concern that the purpose of the comment period is
minimized if review and finalization of the rule takes several years.

[[Page 103160]]

Response: This final rule complies with the Administrative
Procedure Act. DHS provided notice to the public by issuing a proposed
rule in the Federal Register on October 23, 2023 (88 FR 72870). USCIS
also announced publication of the proposed rule on its website.\170\
DHS accepted public comments on the proposed rule through December 22,
2023, a period of 60 days. Submission of comments was not limited to
U.S. citizens, and DHS notes that there is no basis for such
limitation. With respect to the commenter's concerns regarding the
passage of time from the publication of the NPRM and the comment period
to the issuance of the final rule, DHS notes that this rulemaking has
proceeded on a fast schedule given the breadth and complexity of the
issues covered; within a year from the closing of the comment period,
DHS has issued two final rules addressing the proposals contained in
the NPRM.\171\
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\170\ https://www.uscis.gov/newsroom/news-releases/dhs-issues-proposed-rule-to-modernize-the-h-1b-specialty-occupation-worker-program.
---------------------------------------------------------------------------

2. Comments on the Regulatory Impact Analysis (RIA) (E.O. 12866 and
E.O. 13563)
Comment: An individual commenter, expressing support for the
proposed rule, said that while the proposed changes may lead to the
costs outlined in the summary of costs and benefits, the long-term
benefits to the H-1B program including robustness, fairness, and
transparency would outweigh these costs.
Response: DHS agrees that this rule will provide significant long-
term benefits to the H-1B program.
Comment: An attorney remarked that by extending OPT, the proposed
rule would have negative economic impacts such as deflecting employment
opportunities from U.S. workers and suppression of wages. To support
this, the commenter provided several statistics on employment in the
United States from a Center for Immigration Studies report, a 2016
National Academy of Sciences study, and an article from the Washington
Examiner.
Response: Regulatory impact analyses completed by USCIS regularly
consider two competing scenarios in which employers are or are not
assumed to be able to find reasonable labor substitutes such as U.S.
workers to perform work. Treating each scenario as equally likely,
USCIS would describe the impact of policies that result in increased
labor supply as partly a transfer of wages from hypothetically willing
and able U.S. workers--whether actively seeking employment or not--to
the foreign workers, and partly a benefit to employers or consumers
from foreign workers performing work that otherwise could not be
completed without significant training and search costs. From these
analyses, USCIS observes that replacement costs are significant, often
prohibitively so for higher skilled and higher-wage positions.\172\
With regard to this rule's provision granting up to six additional
months employment authorization to a foreign student who has already
worked one or more years for an employer and who has already been
approved for an H-1B visa, the commenter's baseline assumption that
employers would hire other U.S. workers for this gap period between
training and employment is unreasonable and not supported by the
general discussion in the sources cited. USCIS sought public comment on
estimates of the population expected to benefit from the expansion of
cap-gap, but no commenters provided information on this or evidence of
how students working between graduation and the start of H-1B work
deflects employment opportunities for other reasonable labor
substitutes.
---------------------------------------------------------------------------

\172\ See 89 FR 24655.
---------------------------------------------------------------------------

Comment: A few commenters including a joint submission of
attorneys, a trade association, and a company commented that the NPRM's
estimate of a 1.08-hour burden for site visits split evenly between the
H-1B beneficiary and their supervisor is an underestimate, as other
internal or third-party personnel such as human resources and legal are
often involved. The commenters also stated that the statistics the NPRM
presents relating to noncompliance and fraud are inaccurate, both
because the NPRM does not provide raw data about the instances
categorized as noncompliant or fraudulent, and because in some cases
the NPRM conflates noncompliance with fraud.
Response: The average 1.08-hour burden is based on a calculation
from data provided by the USCIS Fraud Detection and National Security
Directorate. See 88 FR 72870, 72945 (Oct. 23, 2023). DHS acknowledges
that the duration of individual site visits varies. The commenter noted
that, in addition to beneficiaries and their supervisors, various
parties such as in-house and third-party counsel may spend time
preparing for a site visit. While noting that the 5-year average burden
increased to 1.09 hour when adding data for FY 2023, DHS declines to
further increase the estimate of an average site visit. DHS notes that
the Form I-129 burden captures the estimated time to gather, prepare,
attach, and submit required documentation related to beneficiary's
employment. The Form I-129 instructions also note that DHS may verify
any information submitted to establish eligibility through methods
including ``making unannounced physical site inspections of residences
and locations of employment.'' While some petitioners may elect to have
additional managers, legal counsel, or executives prepare for or
participate in a site visit, DHS believes that the methodology in the
NPRM reasonably estimates the additional resources for the site visit
provision and declines to estimate the opportunity cost of time for
these additional parties.
Comment: An individual commenter expressed concern that the
proposed rule would disproportionately impact small nonprofits, due to
having fewer resources to comply with the new requirements. The
commenter urged USCIS to mitigate impacts on small nonprofits.
Response: DHS acknowledges that a high percentage of entities
impacted by this rule are small but notes that the net impacts of the
final rule result in cost savings.
Comment: A company remarked that the 10-year net impact of the
proposed rule is justified given that it would result in greater
robustness and equity in the H-1B program. The company added that the
benefits of the program include mitigating deterrents to working or
studying in the United States, which would increase talent in student
and employment pools, leading to advancements in research and
technology.
Response: DHS agrees with the commenter that the benefits of this
rule justify the costs.

K. Severability

All of the provisions of this rule are severable from each other
such that if a court were to hold that any provision is invalid or
unenforceable as to a particular person or circumstance, the rule would
remain in effect as to any other person or circumstance. Specifically,
DHS intends that the provisions which streamline requirements for the
H-1B program such as revising the regulatory definition and criteria
for a ``specialty occupation''; clarifying that ``normally'' does not
mean ``always'' within the criteria for a specialty occupation; and
clarifying that a position may accept a range of qualifying degree
fields as sufficient to qualify for the position, although there must
be a direct

[[Page 103161]]

relationship between the required field(s) and the duties of the
position all be severable from one another and from all of the other
provisions in this rule. In addition, DHS intends that the provision
clarifying when an amended or new petition must be filed due to a
change in an H-1B worker's place of employment, the provisions
addressing USCIS' deference policy, the provision requiring that
evidence of maintenance of status to be included with the petition if a
beneficiary is seeking an extension or amendment of stay, and the
provision eliminating the itinerary requirement, impacting all H
classifications, as well as that allowing petitioners to amend
requested validity periods where the requested validity expires before
adjudication all be severable from one another. None of these
provisions are dependent on one another and can function independently
if any are invalidated. In the severability clause at new 8 CFR
214.2(h)(33), DHS has identified the second level paragraphs (for
example, paragraph (h)(2)) in which the severable amended provisions
contained in this final rule can be found. These references along with
the date of the final rule are intended to better identify the
severable provisions and differentiate them from the existing
provisions in 8 CFR 214.1 and 214.2 that are not being impacted by this
final rule.

IV. Statutory and Regulatory Requirements

A. Executive Order 12866 (Regulatory Planning and Review) and Executive
Order 13563 (Improving Regulation and Regulatory Review)

Executive Orders (E.O.) 12866 (Regulatory Planning and Review), as
amended by Executive Order 14094 (Modernizing Regulatory Review), and
13563 (Improving Regulation and Regulatory Review) direct agencies to
assess the costs and benefits of available regulatory alternatives and,
if a regulation is necessary, to select regulatory approaches that
maximize net benefits (including potential economic, environmental,
public health and safety effects, distributive impacts, and equity).
E.O. 13563 emphasizes the importance of quantifying both costs and
benefits, of reducing costs, of harmonizing rules, and of promoting
flexibility.
The Office of Management and Budget (OMB) has designated this final
rule a ``significant regulatory action'' as defined under section 3(f)
of E.O. 12866, as amended by Executive Order 14094, but it is not
significant under section 3(f)(1) because its annual effects on the
economy do not exceed $200 million in any year of the analysis.
Accordingly, OMB has reviewed this final rule.
1. Summary of Changes From NPRM to Final Rule
As discussed in the preamble, the purpose of this rulemaking is to
modernize and improve the regulations governing the H-1B program by:
(1) streamlining the requirements of the H-1B program and improving
program efficiency; (2) providing greater benefits and flexibilities
for petitioners and beneficiaries; and (3) improving integrity
measures.
Following careful consideration of the public comments received,
this final rule adopts the provisions proposed in the NPRM, with
revisions as described above relating to Specialty Occupation
Definition and Criteria, Bar on Multiple Registrations Submitted by
Related Entities, Contracts, Bona fide employment, and Beneficiary-
Owners.
DHS analyzed two baselines for this final rule, the no action
baselines and the without-policy baseline. The primary baseline for
this final rule is the no action baseline. For the 10-year period of
analysis of the final rule DHS estimates the annualized net cost
savings of this rulemaking will be $333,835 annualized at 2 percent.
DHS also estimates that there will be annualized monetized transfers of
$1.4 million from newly cap-exempt petitioners to USCIS and $38.8
million from other employees to F-1 workers, both annualized at a 2
percent discount rate. Table 1 provides a more detailed summary of the
final rule provisions and their impacts.
BILLING CODE 9111-97-P

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In addition to the impacts summarized above, and as required by OMB
Circular A-4, Table 2 presents the prepared accounting statement
showing the costs and benefits that will result in this final
rule.\173\
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\173\ OMB, Circular A-4 (Sept. 17, 2003), https://www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/circulars/A4/a-4.pdf (last viewed June 1, 2021).
[GRAPHIC] [TIFF OMITTED] TR18DE24.041

[[Page 103172]]

[GRAPHIC] [TIFF OMITTED] TR18DE24.042

BILLING CODE 9111-97-C
2. Background
The purpose of this rulemaking is to modernize and improve the
regulations relating to the H-1B program by: (1) streamlining the
requirements of the H-1B program and improving program efficiency; (2)
providing greater benefits and flexibilities for petitioners and
beneficiaries; and (3) improving integrity measures. Some of the
provisions will narrowly impact other nonimmigrant classifications.
3. Costs, Transfers, and Benefits of the Final Rule
viii. Specialty Occupation Definition and Criteria
In response to commenters' concerns, DHS is modifying the
definition of specialty occupation. After carefully considering the
comments, DHS is not finalizing the proposed regulatory text of ``[t]he
required specialized studies must be directly related to the
position,'' as this language may be misread as stating that USCIS would
only consider a beneficiary's specialized studies. The ``directly
related'' requirement is, however, being retained in the definition of
``specialty occupation'' and in the criteria.
DHS is also adding regulatory text to clarify the level of
connection needed to meet the ``directly related'' requirement by
adding the sentence, ``directly related means that there is a logical
connection between the degree, or its equivalent, and the duties of the
position,'' to the regulatory text. Further, DHS is adding a reference
to the ``duties of the position'' to the prior sentence about allowing
a range of qualifying degree fields to assure stakeholders that this
practice has not changed.
To address commenters' various concerns about not relying on degree
titles, DHS is removing the references to ``business administration''
and ``liberal arts.'' These changes recognize that title of the degree,
alone, is not determinative and that titles may differ among schools
and evolve over time.
DHS is also making some minor, non-substantive revisions to 8 CFR
214.2(h)(4)(iii)(A), which include: changing the word ``are'' to ``is''
in 8 CFR 214.2(h)(4)(iii)(A)(4); revising 8 CFR 214.2(h)(4)(iii)(A)(2)
from ``United States industry'' to ``industry in the United States'';
and revising 8 CFR 214.2(h)(4)(iii)(A)(2) and (3) by adding ``to
perform the job duties for'' rather than just the word ``position''.

[[Page 103173]]

Relative to the no-action baseline, this change has no costs
associated with it, and there may be transparency benefits due to this
change. Relative to the without-policy baseline petitioners may have
taken time to provide position descriptions or other evidence of
connection between a degree, or its equivalent, and the duties of the
position.
ix. Amended Petitions
DHS is clarifying when an amended or new H-1B petition must be
filed due to a change in an H-1B worker's place of employment.
Specifically, this rule will clarify that any change of work location
that requires a new LCA is itself considered a material change and
therefore requires the petitioning employer to file an amended or new
petition with USCIS before the H-1B worker may perform work under the
changed conditions.
This change will clarify requirements for H-1B amended petitions by
codifying Matter of Simeio Solutions, LLC \174\ and incorporating DOL
rules on when a new LCA is not necessary. DHS estimates that this
change will save petitioners filing amended petitions 5 minutes for
each petition (0.08 hours).
---------------------------------------------------------------------------

\174\ See USCIS, ``USCIS Final Guidance on When to File an
Amended or New H-1B Petition After Matter of Simeio Solutions,
LLC,'' PM-602-0120 (July 21, 2015), https://www.uscis.gov/sites/default/files/document/memos/2015-0721_Simeio_Solutions_Transition_Guidance_Memo_Format_7_21_15.pdf.
---------------------------------------------------------------------------

USCIS received a low of 64,385 amended petitions in FY 2019, and a
high of 77,255 amended petitions in FY 2023. Based on the 5-year annual
average, DHS estimates that 71,141 petitioners file for an amended
petition each year shown in Table 3. DHS does not know if all of these
amended petitions are due to a change in an H-1B worker's place of
employment. Because of this, DHS cannot estimate how many of these new
and amended petitions will benefit by consolidating existing
requirements and providing clearer regulatory text pertaining to when a
petitioner must submit an amended or new petition with or without a new
LCA.
BILLING CODE 9111-97-P
[GRAPHIC] [TIFF OMITTED] TR18DE24.043

DHS conducted a sensitivity analysis to estimate the number of
petitions that may benefit from this change. Table 4 presents the lower
and upper bound number of petitions filed annually for amended
petitions and for new petitions, which corresponds to a range of 10 to
90 percent.
[GRAPHIC] [TIFF OMITTED] TR18DE24.044

Using the lower and upper bounds of the estimated annual population
for the petitioners who will file amended petitions, DHS estimates the
cost savings based on the opportunity cost of time of gathering and
submitting information by multiplying the estimated time burden savings
for those filing an amended petition (5 minutes or 0.08 hours) by the
compensation rate of an HR specialist, in-house lawyer, or outsourced
lawyer, respectively.
In order to estimate the opportunity costs of time for completing
and filing an H-1B amended petition DHS assumes that a petitioner will
use an HR specialist, an in-house lawyer, or an outsourced lawyer to
prepare an H-1B

[[Page 103174]]

amended petition.\175\ DHS uses the mean hourly wage of $36.57 for HR
specialists to estimate the opportunity cost of the time for preparing
and submitting the H-1B amended petition.\176\ Additionally, DHS uses
the mean hourly wage of $84.84 for in-house lawyers to estimate the
opportunity cost of the time for preparing and submitting the H-1B
amended petition.\177\
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\175\ USCIS limited its analysis to HR specialists, in-house
lawyers, and outsourced lawyers to present estimated costs. However,
USCIS understands that not all entities employ individuals with
these occupations and, therefore, recognizes equivalent occupations
may also prepare and file these amended petitions.
\176\ See BLS, ``Occupational Employment and Wage Statistics,
Occupational Employment and Wages, May 2022, 13-1071 Human Resources
Specialists,'' https://www.bls.gov/oes/2023/may/oes131071.htm (last
visited August 23, 2024).
\177\ See BLS, ``Occupational Employment and Wage Statistics,
Occupational Employment and Wages, May 2022, 23-1011 Lawyers,''
https://www.bls.gov/oes/2023/may/oes231011.htm (last visited August
23, 2024).
---------------------------------------------------------------------------

DHS accounts for worker benefits when estimating the total costs of
compensation by calculating a benefits-to-wage multiplier using the BLS
report detailing the average employer costs for employee compensation
for all civilian workers in major occupational groups and industries.
DHS estimates that the benefits-to-wage multiplier is 1.45 and,
therefore, is able to estimate the full opportunity cost per
petitioner, including employee wages and salaries and the full cost of
benefits such as paid leave, insurance, retirement, etc.\178\ DHS
multiplied the average hourly U.S. wage rate for HR specialists and in-
house lawyers by 1.45 to account for the full cost of employee
benefits, for a total of $53.03 \179\ per hour for an HR specialist and
$123.02 \180\ per hour for an in-house lawyer. DHS recognizes that a
firm may choose, but is not required, to outsource the preparation of
these petitions and, therefore, presents two wage rates for lawyers. To
determine the full opportunity costs of time if a firm hired an
outsourced lawyer, DHS multiplied the average hourly U.S. wage rate for
lawyers by 2.5 for a total of $212.10 to approximate an hourly cost for
an outsourced lawyer to prepare and submit an H-1B amended petition or
LCA.\181\
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\178\ The benefits-to-wage multiplier is calculated as follows:
(Total Employee Compensation per hour)/(Wages and Salaries per hour)
($45.42 Total Employee Compensation per hour)/($31.29 Wages and
Salaries per hour) = 1.45158 = 1.45 (rounded). See BLS, Economic
News Release, ``Employer Costs for Employee Compensation--December
2023,'' Table 1. ``Employer Costs for Employee Compensation by
ownership [Dec. 2023],'' https://www.bls.gov/news.release/archives/ecec_03132024.htm (last visited Aug. 21, 2024). The Employer Costs
for Employee Compensation measures the average cost to employers for
wages and salaries and benefits per employee hour worked.
\179\ Calculation: $36.57 * 1.45 = $53.03 total wage rate for HR
specialist.
\180\ Calculation: $84.84 * 1.45 = $123.02 total wage rate for
in-house lawyer.
\181\ Calculation: $84.84 * 2.5 = $212.10 total wage rate for an
outsourced lawyer.
The DHS analysis in ``Exercise of Time-Limited Authority to
Increase the Fiscal Year 2018 Numerical Limitation for the H-2B
Temporary Nonagricultural Worker Program,'' 83 FR 24905 (May 31,
2018), https://www.federalregister.gov/documents/2018/05/31/2018-11732/exercise-of-time-limited-authority-to-increase-the-fiscal-year-2018-numerical-limitation-for-the, used a multiplier of 2.5 to
convert in-house attorney wages to the cost of outsourced attorney
wages.
The DHS ICE rule ``Final Small Entity Impact Analysis: `Safe-
Harbor Procedures for Employers Who Receive a No-Match Letter' '' at
G-4 (Aug. 25, 2008), https://www.regulations.gov/document/ICEB-2006-0004-0922, also uses a multiplier. The methodology used in the Final
Small Entity Impact Analysis remains sound for using 2.5 as a
multiplier for outsourced labor wages in this rule.
---------------------------------------------------------------------------

DHS does not know the exact number of petitioners who will choose
an in-house or an outsourced lawyer but assumes it may be a 50/50 split
and therefore provides an average. Table 5 shows that the total annual
cost savings will range from $77,111 to $694,006. DHS estimates the
total cost savings to be the average between the lower bound and the
upper bound estimates. Based on this, DHS estimates the average cost
savings from this provision to be $385,559.

[[Page 103175]]

[GRAPHIC] [TIFF OMITTED] TR18DE24.045

x. Deference to Prior USCIS Determinations of Eligibility in Requests
for Extensions of Petition Validity
DHS is codifying and clarifying its existing deference policy at
amended 8 CFR 214.1(c)(5). Deference has helped promote consistency and
efficiency for both USCIS and its stakeholders. The deference policy
instructs officers to consider prior determinations involving the same
parties and facts, when there is no material error with the prior
determination, no material change in circumstances or in eligibility,
and no new material information adversely impacting the petitioner's,
applicant's, or beneficiary's eligibility. This provision is codifying
the deference policy \182\ dated April 27, 2021. Relative to the no-
action baseline there are no costs to the public. The benefit of
codifying this policy is that there may be some transparency benefits
to having the policy in the CFR. Relative to a without-policy baseline
petitioners may need to take time to familiarize themselves with those
changes made in the 2021 deference policy memo. The provision applies
to all nonimmigrant classifications for which form I-129 is filed to
request an extension of stay (i.e., E-1, E-2, E-3, H-1B, H-1B1, H-2A,
H-2B, H-3, L-1, O-1, O-2, P-1, P-1S, P-2, P-2S, P-3, P-3S, Q-1, R-1,
and TN nonimmigrant classifications). The deference policy had been in
effect since 2004 but was rescinded in 2017 until 2021, when it was
reinstated in the USCIS Policy Manual. After USCIS rescinded deference
in 2017, the number of RFEs and denials increased.
---------------------------------------------------------------------------

\182\ See USCIS, ``Deference to Prior Determinations of
Eligibility in Requests for Extensions of Petition Validity, Policy
Alert,'' PA-2021-05 (April 27, 2021), https://www.uscis.gov/sites/default/files/document/policy-manual-updates/20210427-Deference.pdf
(last visited on Mar. 23, 2023).
---------------------------------------------------------------------------

Table 6 shows the number for Form I-129 RFEs filed for an extension
of stay or amendment of stay, that are requesting a continuation of
previously approved employment or a change in previously approved
employment from FY 2019 through FY 2023. USCIS received a low of 8,381
RFEs for Form I-129 classifications in FY 2023, and a high of 43,435
RFEs for Form I-129 classifications in FY 2020. Based on a 5-year
annual average, 26,192 petitioners who filed for an extension of stay
or amendment of stay are requesting a continuation of previously
approved employment or a change in previously approved employment
receive an RFE for Form I-129 per year.

[[Page 103176]]

[GRAPHIC] [TIFF OMITTED] TR18DE24.046

DHS will codify the deference policy that applies to the
adjudication of a petition. Relative to a without-policy baseline, this
change could affect the number of RFEs that USCIS sends for Form I-129.
USCIS estimates that there may be a reduction in RFEs, as officers
adjudicating a Form I-129 involving the same parties and the same
underlying facts will typically be able to defer to a prior approval,
given there is no new material information or a material error. The
reduction in RFEs may save time and make the overall process faster for
petitioners and USCIS.
Table 7 shows the number of Form I-129 receipts, submitted
concurrently with a Form G-28, filed for a continuation of previously
approved employment or a change in previously approved employment, and
requesting an extension of stay or amendment of stay, on which USCIS
issued an RFE. Based on the 5-year annual average, DHS estimates that
20,049 petitioners who received an RFE filed with a Form G-28 and 6,142
petitioners who received an RFE filed without a Form G-28.
[GRAPHIC] [TIFF OMITTED] TR18DE24.047

DHS conducted a sensitivity analysis to estimate the number of
petitions that may benefit from codifying and clarifying its existing
deference policy. Table 8 presents the lower and upper bound number of
petitions filed annually for amended petitions and for new petitions,
which corresponds to a range of 10 to 90 percent.

[[Page 103177]]

[GRAPHIC] [TIFF OMITTED] TR18DE24.048

Using the lower and upper bounds of the estimated annual population
for the petitioners who may no longer have to provide duplicative data,
DHS estimates the cost savings based on the opportunity cost of time of
gathering and submitting duplicative information by multiplying the
estimated time burden to gather information 10 minutes (0.167 hours) by
the compensation rate of an HR specialist, in-house lawyer, or
outsourced lawyer, respectively. DHS does not know the exact number of
petitioners who will choose an in-house or an outsourced lawyer but
assumes it may be a 50/50 split and therefore provides an average.
Table 9 shows that the total annual cost savings due to the codifying
and clarifying its existing deference policy will range from $61,772 to
$555,900. DHS estimates the total cost savings to be the average
between the lower bound and the upper bound estimates. Based on this
DHS estimates the average cost savings from this provision to be
$308,836.
[GRAPHIC] [TIFF OMITTED] TR18DE24.049

xi. Evidence of Maintenance of Status
DHS is clarifying current requirements and codifying practices
concerning evidence of maintenance of status at 8 CFR 214.1(c)(1)
through (7). Primarily, DHS seeks to clarify that evidence of
maintenance of status is required for petitions where there is a
request to extend or amend the beneficiary's stay.
This change will list examples of additional evidence types that
petitioners may provide but will not limit petitioners to those
specific evidence types. The form instructions further state that if
the beneficiary is employed in the United States, the petitioner may
submit copies of the beneficiary's last two pay stubs, Form W-2, and
other relevant evidence, as well as a copy of the beneficiary's Form I-
94, passport, travel document, or Form I-797. This change may decrease
the number of RFEs and NOIDs by clearly stating what types of
supporting documentation are relevant and clarifying that petitioners
should submit such supporting documentation upfront, rather than
waiting for USCIS to issue a request for additional information.

[[Page 103178]]

This may benefit petitioners by saving them the time to review and
respond to RFEs and NOIDs.
DHS is codifying into regulation the instructions that, when
seeking an extension or amendment of stay, the applicant or petitioner
must submit supporting evidence to establish that the applicant or
beneficiary maintained the previously accorded nonimmigrant status
before the extension or amendment request was filed. Additionally, DHS
will remove the sentence: ``Supporting evidence is not required unless
requested by the director.'' See amended 8 CFR 214.2(h)(14). See also
amended 8 CFR 214.2(l)(14)(i) (removing ``Except in those petitions
involving new offices, supporting documentation is not required, unless
requested by the director.''); amended 8 CFR 214.2(o)(11) and amended 8
CFR 214.2(p)(13) (removing ``Supporting documents are not required
unless requested by the director.''). DHS expects that these changes
will reduce confusion for applicants and petitioners, clarify what
evidence is required for all extension or amendment of stay requests,
and simplify adjudications by decreasing the need for RFEs and NOIDs.
Based on the 5-year annual average, DHS estimates that 292,324 Form
I-129 petitions are filed requesting an extension of stay. Of those
total filed petitions, DHS estimates that 48,064 petitioners who
requested an extension of stay received an RFE and the remaining
244,260 did not receive and RFE as shown in Table 10.
[GRAPHIC] [TIFF OMITTED] TR18DE24.050

DHS estimates that 26,344 petitions are filed requesting to amend
the stay. Of those, DHS estimates that 5,802 petitions that are filed
requesting to amend the stay receive an RFE and 20,542 do not receive
an RFE.
[GRAPHIC] [TIFF OMITTED] TR18DE24.051

DHS estimates that 84,164 petitions are filed requesting to change
status and extend the stay. Of those, DHS estimates that 22,867
petitions that are filed requesting to change status and extend the
stay receive an RFE and 61,298 do not receive an RFE.

[[Page 103179]]

[GRAPHIC] [TIFF OMITTED] TR18DE24.052

It is important to note that issuing RFEs and NOIDs takes time and
effort for adjudicators--to send, receive, and adjudicate
documentation--and it requires additional time and effort for
applicants or petitioners to respond, resulting in extended timelines
for adjudications.\183\ Data on RFEs and NOIDs related to maintenance
of status are not standardized or tracked in a consistent way, limiting
USCIS's ability to accurately or reliably observe the relationship
between specific circumstances and RFEs; however, the data demonstrate
that these requests and notices continue to occur at nontrivial rates.
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\183\ The regulations state that when an RFE is served by mail,
the response is timely filed if it is received no more than 3 days
after the deadline, providing a total of 87 days for a response to
be submitted if USCIS provides the maximum period of 84 days under
the regulations. The maximum response time for a NOID is 30 days.
See USCIS Policy Manual, Vol. 1, ``General Policies and
Procedures,'' Part E, ``Adjudications,'' Chap. 6, ``Evidence,''
https://www.uscis.gov/policy-manual/volume-1-part-e-chapter-6.
---------------------------------------------------------------------------

DHS anticipates that USCIS adjudicators may issue fewer RFEs and
NOIDs related to maintenance of status under this rule due to clarity
of what types of supporting documentation are relevant and
clarification that petitioners and applicants should submit such
supporting documentation upfront, rather than waiting for USCIS to
issue a request for additional information, which will reduce the
burden on applicants, petitioners, and adjudicators, and save time
processing applications and petitions.
xii. Eliminating the Itinerary Requirement for H Programs
DHS will eliminate the H programs' itinerary requirement. See
amended 8 CFR 214.2(h)(2)(i)(B) and (F). Current 8 CFR
214.2(h)(2)(i)(B) states that ``A petition that requires services to be
performed or training to be received in more than one location must
include an itinerary with the dates and locations of the services or
training and must be filed with USCIS as provided in the form
instructions.'' In addition, current 8 CFR 214.2(h)(2)(i)(F) contains
additional language requiring an itinerary for H petitions filed by
agents as the petitioner.
DHS recognizes this change may affect H-1B petitioners filing for
beneficiaries performing services in more than one location and
submitting itineraries.\184\ However, due to the absence of detailed
data on petitioners submitting itineraries, DHS estimates the affected
population as the estimated number of petitions filed annually for
workers placed at off-site locations. DHS assumes the petitions filed
for workers placed at off-site locations are likely to indicate that
beneficiaries may be performing services at multiple locations and,
therefore, petitioners are likely to submit itineraries. Eliminating
the itinerary requirement will reduce petitioner burden and promote
more efficient adjudications, without compromising program integrity.
This change may benefit petitioners who have beneficiaries at
alternative worksites.
---------------------------------------------------------------------------

\184\ USCIS does not currently apply the itinerary requirement
to H-1Bs working at multiple locations. See 88 FR 72870, 72882.
---------------------------------------------------------------------------

Table 13 shows the total number of Form I-129 H-1B Receipts with
and without Form G-28, FY 2019 through FY 2023. USCIS received a low of
386,598 Form I-129 H-1B Receipts in FY 2023, and a high of 474,311 Form
I-129 H-1B Receipts in FY 2022. Based on the 5-year annual average, DHS
estimates that there are 421,421 Form I-129 H-1B petitioners each year.

[[Page 103180]]

[GRAPHIC] [TIFF OMITTED] TR18DE24.053

Table 14 shows the average number of Form I-129 H-1B petitions
approved in FYs 2019 through 2023 for workers placed at off-site
locations. Approximately 27 percent of approved petitions were for
workers placed at off-site locations. DHS uses the estimated 27 percent
as the proportion of both the population of received petitions and the
population of approved petitions that are for workers placed at off-
site locations.
[GRAPHIC] [TIFF OMITTED] TR18DE24.054

DHS conducted a sensitivity analysis to estimate the number of H-1B
petitions filed annually for workers placed at off-site locations that
may contain itineraries (113,784).\185\ Table 15 presents the lower and
upper bound number of petitions filed annually for workers placed at
off-site locations who may submit itineraries, which corresponds to a
range of 10 to 90 percent.
---------------------------------------------------------------------------

\185\ DHS uses the proportion of petitions approved for off-site
workers (27 percent from Table 14) as an approximate measure to
estimate the number of petitions received annually for off-site
workers from the total number of petitions filed. 113,784 petitions
filed requesting off-site workers = 421,421 petitions filed annually
x 27 percent.

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[[Page 103181]]

[GRAPHIC] [TIFF OMITTED] TR18DE24.055

Using the lower and upper bounds of the estimated annual population
for H-1B petitioners who may no longer be required to gather and submit
itinerary information, DHS estimates the cost savings based on the
opportunity cost of time of gathering and submitting itinerary
information by multiplying the estimated time burden to gather
itinerary information (0.08 hours) by the compensation rate of an HR
specialist, in-house lawyer, or outsourced lawyer, respectively. Table
16 shows that the total annual cost savings due to the itinerary
exemption will range from $130,631 to $1,175,692. Since the itinerary
information normally is submitted with the Form I-129 H-1B package,
there will be no additional postage cost savings. DHS estimates the
total cost savings to be the average between the lower bound and the
upper bound estimates. Based on this DHS estimates the average cost
savings from this provision to be $653,162.

[[Page 103182]]

[GRAPHIC] [TIFF OMITTED] TR18DE24.056

BILLING CODE 9111-97-C
DHS acknowledges the elimination of the itinerary requirement may
also affect H petitions filed by agents as well as H-2 petitions filed
for beneficiaries performing work in more than one location or for
multiple employers, however, DHS has not estimated these cost savings
here.
xiii. Validity Period Expires Before Adjudication
DHS will allow H-1B petitions to be approved or have their
requested validity period dates extended if USCIS adjudicates and deems
the petition approvable after the initially requested validity period
end-date, or the period for which eligibility has been established, has
passed. This typically will happen if USCIS deemed the petition
approvable upon a favorable motion to reopen, motion to reconsider, or
appeal.
If USCIS adjudicates an H-1B petition and deems it approvable after
the initially requested validity period end-date, or the last day for
which eligibility has been established, USCIS may issue an RFE asking
whether the petitioner wants to update the dates of intended
employment. This change may increase the number of RFE's; however, it
may save petitioners from having to file another H-1B petition and
USCIS from having to intake and adjudicate another petition.
If in response to the RFE the petitioner confirms that it wants to
update the dates of intended employment and submits a different LCA
that corresponds to the new requested validity dates, even if that LCA
was certified after the date the H-1B petition was filed, and assuming
all other eligibility criteria are met, USCIS will approve the H-1B
petition for the new requested period or the period for which
eligibility has been established, as appropriate, rather than require
the petitioner to file a new or amended petition. Under a no-action
baseline, the requirement to file an amended or new petition results in
additional filing costs and burden for the petitioner. DHS expects that
this change will save

[[Page 103183]]

petitioners the difference between the opportunity cost of time and the
fee to file an additional form, and the nominal opportunity cost of
time and expense associated with responding to the RFE. This change
will benefit beneficiaries selected under the cap, who will retain cap-
subject petitions while their petition validity dates are extended or
whose petitions now may be approved rather than denied based on this
technicality.
xiv. H-1B Cap Exemptions
DHS is revising the requirements to qualify for H-1B cap exemption
when a beneficiary is not directly employed by a qualifying
institution, organization, or entity at 8 CFR 214.2(h)(8)(iii)(F)(4).
These final changes intend to clarify, simplify, and modernize
eligibility for cap-exempt H-1B employment, so that they are less
restrictive and better reflect modern employment relationships. The
changes also intend to provide additional flexibility to petitioners to
better implement Congress's intent to exempt from the annual H-1B cap
certain H-1B beneficiaries who are employed at a qualifying
institution, organization, or entity.
DHS is revising 8 CFR 214.2(h)(19)(iii)(C), which states that a
nonprofit research organization is an entity that is ``primarily
engaged in basic research and/or applied research,'' and a governmental
research organization is a Federal, State, or local entity ``whose
primary mission is the performance or promotion of basic research and/
or applied research.'' DHS is replacing ``primarily engaged'' and
``primary mission'' with ``a fundamental activity'' in order to permit
a nonprofit entity or governmental organization that conducts research
as a fundamental activity but is not primarily engaged in research to
meet the definition of a nonprofit research entity or a governmental
research organization. This will likely increase the population of
petitioners who are now eligible for the cap exemption and, by
extension, will likely increase the number of petitions that may be
cap-exempt.
Petitioners who qualify for a cap exemption for their employees
under the final rule will no longer have to register for the cap
lottery or pay the $215 registration fee. Some affected petitioners may
avoid ACWIA fees that would have been applicable to their initial cap-
subject petitions. While DHS does not have administrative data to
estimate precisely how many additional petitioners will now qualify for
these cap exemptions, the RIA presented estimates that the modest
expansion in I-129 petitions and approved beneficiaries results from
cap-subject registrants, many of whom would not have been randomly
selected in the lottery, become eligible to petition directly for cap-
exempt researchers.
Aside from the reduction in transfers from not having to pay the
registration fee, petitioners that qualify under the cap exemptions
will also benefit from not having to wait for H-1B cap season to
commence employment. This may allow approved petitioners to have their
H-1B workers commence employment earlier, prior to the beginning of the
fiscal year on October 1.
The National Science Foundation's (NSF) Nonprofit Research
Activities (NPRA) Survey of nonfarm businesses filing IRS tax form 990
as tax-exempt organizations with payroll of $500,00 or more, estimated
there were 2,835 nonprofits with research and development (R&D)
activity accounting for $27B in FY2021 R&D expenditures.\186\ This
equals $9.6M R&D expenditures per nonprofit with R&D activity in
2021.\187\ The largest share of nonprofits' R&D expenditures were made
possible by Federal Government funds (43%), followed by other sources
of funds (30%) and internal funds (28%). While data on the specific
activities of individual research nonprofits is not available to DHS or
the public, NSF NPRA Tables 1, 2, and 3 show that R&D as a share of a
research nonprofits' expenditures vary widely. For example, while
comparable amounts were spent on research activities by nonprofits in
the science and technology (S&T) sector and the healthcare sector ($21M
and $22M, respectively), these expenditures comprise 53% of a typical
S&T nonprofit's expenditures, but only 2% of a typical healthcare
nonprofit's total expenditures.\188\ Other research nonprofits outside
the S&T or healthcare sectors spent less on research activities ($1M or
5% of total expenditures), but outnumbered both S&T and healthcare
sectors combined (1,660 ``other nonprofit organizations'' compared to
514 S&T and 658 healthcare nonprofits with R&D activity). NPRA Tables 8
through 11 show similar results for research employees as a share of
total employees (R&D employees comprise 55,527 FTE or 68% of the 81,241
employees of S&T organizations with R&D activity, compared with 2% for
healthcare organizations with R&D activity and 8% of other nonprofit
organizations with R&D activities. NPRA Table 11 provides additional
detail on the mix of researchers, technicians and other support
personnel employed to support nonprofits' research activities.
---------------------------------------------------------------------------

\186\ See NSF NPRA Data Table 1 at https://ncses.nsf.gov/surveys/nonprofit-research-activities/2021#data. Last accessed 8/6/
2024.
\187\ $27.19B All R&D expenditures (NPRA Table 3) divided by
2,835 organizations with R&D activity (NPRA Table 1) = $9.6M
(rounded).
\188\ USCIS analysis. Dividing All R&D expenditures in NPRA
Table 3 by total expenses of Science and technology nonprofit
organizations in NPRA Table 2 = 53% (rounded) R&D expenditures as a
share of a research nonprofits' expenses. This approach yields 2%
for Healthcare and 5% for Other nonprofit organizations.
---------------------------------------------------------------------------

Given the highly competitive nature of the market for research
funding, DHS assumes R&D funding is unlikely to be awarded to
nonprofits that do not already employ the highly skilled, highly
specialized staff required to successfully carry out research
requirements.\189\ Consequently, any impacts to nonprofits that do not
already employ skilled/specialized labor would be constrained by the
difficulty of competing for research funding before petitioning for
qualified researchers or petitioning for qualified researchers before
competing for research funding. A national immigration law-firm with
significant experience provided comments agreeing a more significant
difference in the number of petitions that fit the parameters of cap
exempt eligibility is unlikely.
---------------------------------------------------------------------------

\189\ NIH RePORT Research Project Grants: Competing
Applications, Awards and Success Rates at https://report.nih.gov/nihdatabook/report/20 (last accessed 8/6/2024). NIH Data Book shows
a 19% success rate defined as the number of grants awarded divided
by the number of applications received. Similarly, see National
Science Board Report at https://www.nsf.gov/nsb/news/news_summ.jsp?cntn_id=307818 (last access 8/6/24) reporting an
FY2021 funding rate of 26%.
---------------------------------------------------------------------------

Furthermore, NSF's NPRA Table 7 shows $0.32 for every $1 of FY2021
nonprofit organizations' research expenditures flowing out in the form
of grants, subcontracts or subawards to support R&D by other
organizations. While neither DHS nor NSF know the degree to which
research activities' employment is structured around interpretations of
DHS's requirement of employment at the cap-exempt entity, NPRA Table 7
depicts a highly interconnected research enterprise in which research
activities flow between other organizations with research
activities.\190\ A practical impact of the definition change could be
additional flexibility for research organizations and

[[Page 103184]]

foreign researchers when determining the appropriate employer. For this
reason, these changes are assumed to represent a shift from currently
cap-exempt organizations to newly exempt organizations rather than a
true expansion in the population of cap-exempt visas. DHS agrees,
however, with information submitted by a commenter representing
postdocs and research organizations that the change ``diversif[ies]
international postdocs' available career paths'' and therefore could
result in an expansion if cap-exempt H-1B workers' research careers
gradually extend more broadly throughout the research enterprise as a
result of this flexibility.
---------------------------------------------------------------------------

\190\ Funds provided by ``Other nonprofit organizations'' to
others for R&D ($5.5B in FY2021 from NPRA Table 7) exceeds Total R&D
Expenditures by other nonprofit organizations ($2.4B in NPRA Table
6) because providing R&D funding to another organization does not
count as an R&D expenditure. Consequently, DHS describes this as
$2.28 in research funding to other organizations per $1 of research
expenditures rather than 228% of expenditures.
---------------------------------------------------------------------------

In the NPRM, the RIA estimated these modest impacts would accrue to
cap subject registrants seeking highly skilled, highly specialized
research staff.\191\ DHS's assessment that a larger response is
unlikely is supported by several factors. Cap subject petitioners have
always had the option to access cap-exempt researchers by creating
separate research nonprofits or partnerships with cap-exempt
universities and research organizations. DHS's high-end estimate, 2,845
additional cap exempt visas, is just higher than the NSF estimated
number of nonprofits with R&D activity in FY2021.
---------------------------------------------------------------------------

\191\ See 88 FR 72934.
---------------------------------------------------------------------------

Commenters provided no information nor substantive critique of the
NPRM RIA's estimated impact, incorrectly alleged no rationale for the
proposed changes, and contradicted the NSF NPRA data in asserting,
without evidence, that ``all nonprofits do some activity they could
labeled as or considered to be research [sic]'' and, therefore the
change would ``bust the statutory cap wide open.'' In the absence of
information, DHS includes the monetized impacts of 0.3-0.8 percent of
cap-subject registrants becoming cap-exempt as shown in Table 17.
[GRAPHIC] [TIFF OMITTED] TR18DE24.057

Relative to the No-Action baseline where most registrants will not
ultimately be selected in the random lottery to petition using Form I-
129 H-1B, the estimated 0.3-0.8 percent expansions in cap-exempt
research non-profits result in reduced registrations as well as
additional Form I-129 H-1B filings and fees from non-profits made
exempt by this final rule that would not have been selected in the
lottery. These newly cap-exempt Form I-129 fees are discounted from
$780 to $460 and the Asylum Program fees are discounted from $600 to
$300 consistent with research non-profits.\192\ Table 17 shows that
cap-exemptions result in $784,693 additional payments from these new
cap-exempt petitioners to USCIS under the 0.3-percent scenario and
$2,083,759 additional payments from these new cap-exempt petitioners to
USCIS under the 0.8-percent scenario. The midpoint of this range
describes the primary estimate scenario in which these new cap-exempt
petitioners will, on net, pay $1,434,226 to USCIS in additional fee
revenue for cap-exempt beneficiaries. Consistent with the NPRM and
other USCIS rulemakings, because these payments are made in exchange
for existing services provided by USCIS, these payments are described
as transfers from newly cap-exempt petitioners to USCIS rather than
costs or cost savings.
---------------------------------------------------------------------------

\192\ ``U.S. Citizenship and Immigration Services Fee Schedule
and Changes to Certain Other Immigration Benefit Request
Requirements,'' 89 FR 6194 (Jan. 31, 2024).
---------------------------------------------------------------------------

xv. Automatic Extension of Authorized Employment ``Cap-Gap''
DHS is extending the automatic cap-gap extension at 8 CFR
214.2(f)(5)(vi). Currently, the automatic extension is valid only until
October 1 of the fiscal year for which H-1B status is being requested,
but DHS extends this until April 1 of the fiscal year. See amended 8
CFR 214.2(f)(5)(vi). This change will result in more flexibility for
both students and USCIS and will help to avoid disruption to U.S.
employers that are lawfully employing F-1 students

[[Page 103185]]

while a qualifying H-1B cap-subject petition is pending.
Each year, a number of U.S. employers seek to employ F-1 students
via the H-1B program by requesting a COS and filing an H-1B cap
petition with USCIS. Many F-1 students complete a program of study or
post-completion OPT in mid-spring or early summer. Per current
regulations, after completing their program or post-completion OPT, F-1
students have 60 days to take the steps necessary to maintain legal
status or depart the United States. See 8 CFR 214.2(f)(5)(iv). However,
because the change to H-1B status cannot occur earlier than October 1,
an F-1 student whose program or post-completion OPT expires in mid-
spring has two or more months following the 60-day period before the
authorized period of H-1B status begins.
Under current regulations, the automatic cap-gap extension is valid
only until October 1 of the fiscal year for which H-1B status is being
requested. DHS is changing the automatic extension end date from
October 1 to April 1 to avoid disruptions in employment authorization
that some F-1 nonimmigrants awaiting the change to H-1B status have
been experiencing over the past several years. Table 18 shows the
historical pending petition volumes, for F-1 nonimmigrants awaiting H-
1B status. Preventing such employment disruptions will also benefit
employers of F-1 nonimmigrants with cap-gap extensions. This change in
the automatic extension end date will also allow USCIS greater
flexibility in allocating officer resources to complete adjudications
without the pressure of completing as many change of status (COS)
requests as possible before October 1.
[GRAPHIC] [TIFF OMITTED] TR18DE24.058

DHS does not have precise data on the number of cap-gap F-1
nonimmigrants who have faced EAD disruptions. Using available
administrative data, DHS estimated in the NPRM that between 1 and 5
percent of F-1 nonimmigrants seeking a change of status to H-1B may
have faced EAD disruptions.
Current regulations allow OPT F-1 students 60 days to take the
steps necessary to maintain legal status or depart the United States.
See 8 CFR 214.2(f)(5)(iv). However, because the change to H-1B status
cannot occur earlier than October 1, an F-1 student whose program or
post-completion OPT expires in mid-spring has two or more months
following the 60-day period before the authorized period of H-1B status
begins. While many F-1 students complete a program of study or post-
completion OPT in mid-spring or early summer, some complete their
programs at different times of the year, with 60-day grace periods.
Additionally, some F-1 nonimmigrants with pending H-1B petitions may
not have intended to work during the full period covered by this
provision. The labor impacts of this provision of the rule would be
constrained in these and other instances not readily available in
USCIS's administrative data.
DHS estimates that this change will benefit up to 5 percent (1,348)
of the population (26,961) on an annual basis and on the low end 270 (1
percent); however, F-1 students who are beneficiaries of H-1B cap
petitions that provide cap-gap relief will be able to avoid employment
disruptions while waiting to obtain H-1B status. DHS estimates that an
F-1 student who is the beneficiary of an H-1B cap petition makes $46.14
\193\ per hour in compensation. This compensation includes wages and
salaries, benefits such as paid leave and insurance, and legally
required benefits such as Social Security and Medicare.\194\
---------------------------------------------------------------------------

\193\ $46.14 Total Employee Compensation per hour. See BLS,
Economic News Release, ``Employer Costs for Employee Compensation--
March 2024,'' Table 1. ``Employer Costs for Employee Compensation by
ownership [Mar. 2024],'' https://www.bls.gov/news.release/archives/ecec_06182024.htm (last visited Aug. 20, 2024).
\194\ For a breakout of the components of total compensation,
see BLS, Economic News Release, ``Employer Costs for Employee
Compensation--March 2024,'' Table 1. ``Employer Costs for Employee
Compensation by ownership [Mar. 2024],'' https://www.bls.gov/news.release/archives/ecec_06182024.htm (last visited Aug. 20,
2024).
---------------------------------------------------------------------------

Based on a 40-hour work week,\195\ DHS estimates the potential
compensation for each F-1 student who is the beneficiary of an H-1B cap
petition to be $47,996 \196\ for 6 months of employment from October
1st to April 1st. DHS estimates that this potential compensation may be
a benefit to F-1 students who are seeking a COS to a H-1B status. This
benefit ranges from $12,958,920 \197\ to $64,698,608 \198\ annually,
with a midpoint of $38,828,764. This midpoint is the primary estimate
of transfer payments from other workers to F-1 students who remain
employed up to six months longer than under current regulations, in the
form of increased compensation during the additional duration of
employment. Employers will benefit, as they will be gaining
productivity and potential profits that the F-1 students'

[[Page 103186]]

continuing employment will provide. Companies may also benefit by not
incurring opportunity costs associated with the next best alternative
to the immediate labor the F-1 student will provide. DHS does not know
what this next best alternative may be for impacted companies. For
instance, in the absence of F-1 workers providing this labor, employers
may redistribute the work to their other workers either as a part of
their regular job duties or require them to work overtime, or companies
may need to reprioritize the work, or put off certain work until a
later time.
---------------------------------------------------------------------------

\195\ See, e.g., 8 CFR 214.2(f)(5)(vi)(A) (describing cap-gap
employment) and (f)(11)(ii)(B) (describing OPT and noting that it
may be full-time).
\196\ Calculation: $46.14 * 40 hours = $1,846 per week * 26
weeks = $47,996 per 6 months.
\197\ Calculation: $47,996 per 6 months * 270 (1 percent of
26,961) F-1 students = $12,958,920.
\198\ Calculation: $47,996 per 6 months * 1,348 (5 percent of
26,961) F-1 students = $64,698,608.
---------------------------------------------------------------------------

There may be additional transfers due to tax impacts associated
with this compensation, but these transfers are difficult to quantify.
Foreign students in F-1 status more than five calendar years are
typically liable for Social Security and Medicare taxes \199\ in
addition to Federal and State income taxes.
---------------------------------------------------------------------------

\199\ See https://www.irs.gov/individuals/international-taxpayers/foreign-student-liability-for-social-security-and-medicare-taxes (last visited Sep. 26, 2024).
---------------------------------------------------------------------------

xvi. Provisions To Ensure Bona Fide Job Offer for a Specialty
Occupation Position
a. Contracts
DHS will codify USCIS' authority to request contracts, work orders,
or similar evidence. See amended 8 CFR 214.2(h)(4)(iv)(C). Such
evidence may take the form of contracts or legal agreements, if
available, or other evidence including technical documentation,
milestone tables, or statements of work. Evidence submitted should show
the contractual relationship between all parties, the bona fide nature
of the beneficiary's position, and the minimum educational requirements
to perform the duties.
While USCIS already has the authority to request contracts and
other similar evidence, DHS is amending the regulations for added
clarity. By codifying this authority, USCIS is putting stakeholders on
notice of the kinds of evidence that could be requested to establish
the nature of the beneficiary's work and the minimum educational
requirements to perform the duties. This evidence, in turn, could
establish that the petitioner has a bona fide job offer for a specialty
occupation position for the beneficiary. Relative to the no-action
baseline, this change has no costs associated with it, and there may be
transparency benefits due to this change. Relative to the without-
policy baseline petitioners may have taken time to provide contracts or
legal agreements, if available, or other evidence including technical
documentation, milestone tables, or statements of work. DHS cannot
estimate how much time it will have taken for petitioners to provide
that information.
b. Bona Fide Employment
DHS will codify its requirement that the petitioner must establish,
at the time of filing, 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. See 8 CFR
214.2(h)(4)(iv)(D). This change is consistent with current USCIS 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.\200\ Relative to the
no-action baseline, this change has no costs associated with it, and
there may be transparency benefits due to this change. Relative to the
without-policy baseline petitioners may require time to provide
documentation to establish that their position was a bona fide position
in a specialty occupation. DHS cannot estimate how much time it takes
for petitioners to provide that information.
---------------------------------------------------------------------------

\200\ See USCIS, ``Rescission of Policy Memoranda,'' PM-602-0114
(June 17, 2020) (citing Matter of Chawathe, 25 I&N Dec. 369 (AAO
2010)).
---------------------------------------------------------------------------

c. LCA Corresponds With the Petition
DHS will update the regulations to expressly include DHS's existing
authority to ensure that the LCA supports and properly corresponds with
the accompanying H-1B petition. Relative to the no-action baseline,
this change has no costs and may yield transparency benefits due to
consistency between regulation and current policy. Relative to the
without-policy baseline petitioners may have taken time to provide
their LCA to DHS, however DHS cannot estimate how much time it will
have taken for petitioners to provide that information.
d. Revising the Definition of U.S. Employer
DHS is revising the definition of ``United States employer.''
First, DHS will eliminate the employer-employee relationship
requirement. In place of the employer-employee relationship
requirement, DHS will codify the requirement that the petitioner has a
bona fide job offer for the beneficiary to work, which may include
telework, remote work, or other off-site work within the United States.
DHS also will replace the requirement that the petitioner ``[e]ngages a
person to work within the United States'' with the requirement that the
petitioner have a legal presence and is amenable to service of process
in the United States. Relative to the no-action baseline, this change
has no costs associated with it, and there may be transparency benefits
due to this change. Relative to the without-policy baseline,
petitioners may require time to provide documentation establishing a
bona fide job offer for the beneficiary to work. DHS cannot estimate
how much time petitioners take to provide that information.
e. Employer-Employee Relationship
DHS will remove from the definition of U.S. employer the reference
to an employer-employee relationship requirement, which, in the past,
was interpreted using common law principles and was a significant
barrier to the H-1B program for certain petitioners, including
beneficiary-owned petitioners. This proposed change is consistent with
current USCIS policy guidance and will promote clarity and transparency
in the regulations. This change will benefit petitioners because it may
decrease confusion and increase clarity for stakeholders. Relative to
the no-action baseline, this change has no costs associated with it,
and there may be transparency benefits due to this change. Relative to
the without-policy baseline petitioners may have taken time to
understand the change.
xvii. Beneficiary-Owners
DHS codifies a petitioner's ability to qualify as a U.S. employer
even when the beneficiary possesses a controlling interest in that
petitioner. To promote access to H-1Bs for entrepreneurs, start-up
entities, and other beneficiary-owned businesses, DHS will add
provisions to specifically address situations where a potential H-1B
beneficiary owns a controlling interest in the petitioning entity. If
more entrepreneurs are able to obtain H-1B status to develop their
business enterprise, the United States could benefit from the creation
of jobs, new industries, and new opportunities.\201\ This change will

[[Page 103187]]

benefit H-1B petitions filed by start-up entities and other
beneficiary-owned businesses, or filed on behalf of entrepreneurs who
have a controlling interest in the petitioning entity. DHS is unable to
estimate how many petitioners will benefit from this change.
---------------------------------------------------------------------------

\201\ See, e.g., National Bureau of Economic Research, ``Winning
the H-1B Visa Lottery Boosts the Fortunes of Startups'' (Jan. 2020),
https://www.nber.org/digest/jan20/winning-h-1b-visa-lottery-boosts-fortunes-startups (``The opportunity to hire specialized foreign
workers gives startups a leg up over their competitors who do not
obtain visas for desired employees. High-skilled foreign labor
boosts a firm's chance of obtaining venture capital funding, of
successfully going public or being acquired, and of making
innovative breakthroughs.''). Pierre Azoulay, et al., ``Immigration
and Entrepreneurship in the United States'' (National Bureau of
Economic Research, Working Paper 27778 (Sept. 2020) https://www.nber.org/system/files/working_papers/w27778/w27778.pdf
(``immigrants act more as `job creators' than `job takers' and . . .
non-U.S. born founders play outsized roles in U.S. high-growth
entrepreneurship'').
---------------------------------------------------------------------------

DHS is also providing new guardrails for beneficiary-owned
entities, including limiting the validity period for beneficiary-owned
entities' initial petition and first extension (including an amended
petition with a request for an extension of stay) of such a petition to
18 months. See amended 8 CFR 214.2(h)(9)(iii)(E). Any subsequent
extension will not be limited and may be approved for up to 3 years,
assuming the petition satisfies all other H-1B requirements. DHS is
limiting the first two validity periods to 18 months as a safeguard
against possible fraudulent petitions. While DHS sees a significant
advantage in promoting the H-1B program to entrepreneurs and allowing
these beneficiaries to perform a significant amount of non-specialty
occupation duties, unscrupulous petitioners might abuse such provisions
without sufficient guardrails. DHS believes that there may be a cost to
petitioners associated with this change however cannot estimate how
many petitioners may be affected by limiting the validity period. DHS
is also finalizing the provision that a beneficiary-owner may perform
duties that are directly related to owning and directing the
petitioner's business as long as the beneficiary will perform specialty
occupation duties a majority of the time, consistent with the terms of
the H-1B petition. DHS believes that there may be a cost to petitioners
associated with this change however cannot estimate how many
petitioners may be affected.
xviii. Site Visits
USCIS conducts inspections, evaluations, verifications, and
compliance reviews, to ensure that a petitioner and beneficiary are
eligible for the benefit sought and that all laws have been complied
with before and after approval of such benefits. These inspections,
verifications, and other compliance reviews may be conducted
telephonically or electronically, as well as through physical on-site
inspections (site visits). DHS is adding regulations specific to the H-
1B program to codify its existing authority and clarify the scope of
inspections and the consequences of a petitioner's or third party's
refusal or failure to fully cooperate with these inspections. Using its
general authority, USCIS may conduct audits, on-site inspections,
reviews, or investigations to ensure that a petitioner and beneficiary
are entitled to the benefits sought and that all laws have been
complied with before and after approval of such benefits.\202\ The
authority to conduct on-site inspection is critical to the integrity of
the H-1B program to detect and deter fraud and noncompliance.
---------------------------------------------------------------------------

\202\ See INA section 103 and 8 CFR 2.1. As stated in subsection
V.A.5.ii(d) of this analysis, regulation would also clarify the
possible scope of an inspection, which may include the petitioning
organization's headquarters, satellite locations, or the location
where the beneficiary works or will work, including third-party
worksites, as applicable.
---------------------------------------------------------------------------

In July 2009, USCIS started the Administrative Site Visit and
Verification Program \203\ as an additional method to verify
information in certain visa petitions under scrutiny. Under this
program, FDNS officers are authorized to make unannounced site visits
to collect information as part of a compliance review, which verifies
whether petitioners and beneficiaries are following the immigration
laws and regulations that are applicable in a particular case. This
process includes researching information in government databases,
reviewing public records and evidence accompanying the petition,
interviewing the petitioner or beneficiary, and conducting site visits.
Once the FDNS officers complete the site visit, they write a Compliance
Review Report for any indicators of fraud or noncompliance to assist
USCIS in final adjudicative decisions.
---------------------------------------------------------------------------

\203\ See USCIS, ``Administrative Site Visit and Verification
Program,'' https://www.uscis.gov/about-us/directorates-and-program-offices/fraud-detection-and-national-security/administrative-site-visit-and-verification-program (last visited Sept. 18, 2019). See
USCIS, ``Administrative Site Visit and Verification Program,''
https://www.uscis.gov/about-us/directorates-and-program-offices/fraud-detection-and-national-security/administrative-site-visit-and-verification-program (last visited Sept. 18, 2019). See USCIS,
``Administrative Site Visit and Verification Program,'' https://www.uscis.gov/about-us/directorates-and-program-offices/fraud-detection-and-national-security/administrative-site-visit-and-verification-program https://www.uscis.gov/about-us/directorates-and-program-offices/fraud-detection-and-national-security/administrative-site-visit-and-verification-program (last visited
Sept. 18, 2019).
---------------------------------------------------------------------------

The site visits conducted under USCIS's existent, general
authority, and thus part of the baseline against which this rule's
impact should be measured, have uncovered a significant amount of
noncompliance in the H-1B program.\204\ Further, when disaggregated by
worksite location, the noncompliance rate was found to be higher for
workers placed at an off-site or third-party location compared to
workers placed at a petitioner's on-site location.\205\ As a result,
USCIS began conducting more targeted site visits related to the H-1B
program, focusing on the cases of H-1B dependent employers (i.e.,
employers who have a high ratio of H-1B workers compared to U.S.
workers, as defined by statute) for whom USCIS cannot validate the
employer's basic business information through commercially available
data, and on employers petitioning for H-1B workers who work off-site
at another company or organization's location.
---------------------------------------------------------------------------

\204\ USCIS, Office of Policy and Strategy, PRD, Summary of H-1B
Site Visits Data.
\205\ Id.
---------------------------------------------------------------------------

DHS believes that site visits are important to maintain the
integrity of the H-1B program to detect and deter fraud and
noncompliance in the H-1B program, which in turn ensures the
appropriate use of the H-1B program and the protection of the interests
of U.S. workers. These site visits will continue in the absence of this
rule and DHS notes that current Form I-129 instructions notify
petitioners of USCIS' legal authority to verify information before or
after a case decision, including by means of unannounced physical site
inspection. Hence, DHS is adding additional requirements specific to
the H-1B program to set forth the scope of on-site inspections, and the
consequences of a petitioner's or third party's refusal or failure to
fully cooperate with existing inspections. DHS does not foresee the
rule leading to more on-site inspections.
This rule will provide a clear disincentive for petitioners that do
not cooperate with compliance reviews and inspections while giving
USCIS greater authority to access and confirm information about
employers and workers as well as identify fraud.
The regulations will make clear that inspections may include, but
are not limited to, an on-site visit of the petitioning organization's
facilities, interviews with its officials, review of its records
related to compliance with immigration laws and regulations, and
interviews with any other individuals or review of any other records
that USCIS may lawfully obtain and that it considers pertinent to
verify facts related to the adjudication of the petition, such as facts
relating to the petitioner's and beneficiary's eligibility and
continued compliance with the requirements of the H-1B program. See
amended 8 CFR 214.2(h)(4)(i)(B)(2). The regulation will also clarify
that an

[[Page 103188]]

inspection may take place at the petitioning organization's
headquarters, satellite locations, or the location where the
beneficiary works or will work, including third-party worksites, as
applicable. The provisions will make clear that an H-1B petitioner or
any employer must allow access to all sites where the labor will be
performed for the purpose of determining compliance with applicable H-
1B requirements. The regulation will state the consequences if USCIS is
unable to verify facts related to an H-1B petition, including due to
the failure or refusal of the petitioner or a third-party worksite to
cooperate with a site visit. These failures or refusals may be grounds
for denial or revocation of any H-1B petition related to locations that
are a subject of inspection, including any third-party worksites. See
amended 8 CFR 214.2(h)(4)(i)(B)(2).
In order to estimate the population impacted by site visits, DHS
uses site inspection data used to verify facts pertaining to the H-1B
petition adjudication process. The site inspections were conducted at
H-1B petitioners' on-site locations and third-party worksites during FY
2019 through FY 2023. For instance, from FY 2019 through FY 2023, USCIS
conducted a total of 32,366 H-1B compliance reviews and found 6,206 of
them, equal to 19 percent, to be noncompliant or indicative of
fraud.\206\ These compliance reviews (from FY 2019 through FY 2023)
consisted of reviews conducted under both the Administrative Site Visit
and Verification Program and the Targeted Site Visit and Verification
Program, which began in 2017. The targeted site visit program allows
USCIS to focus resources where fraud and abuse of the H-1B program may
be more likely to occur.\207\
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\206\ DHS, USCIS, PRD (2023). PRD399. USCIS conducted these site
visits through its Administrative and Targeted Site Visit Programs.
\207\ See USCIS, ``Putting American Workers First: USCIS
Announces Further Measures to Detect H-1B Visa Fraud and Abuse''
(April 3, 2017), https://www.uscis.gov/archive/putting-american-workers-first-uscis-announces-further-measures-to-detect-h-1b-visa-fraud-and-abuse.
---------------------------------------------------------------------------

Table 19 shows the number of H-1B worksite inspections conducted
each year and the number of visits that resulted in compliance and
noncompliance. USCIS found a low of 1,061 fraudulent/noncompliant cases
in FY 2022, and a high of 1,473 fraudulent/noncompliant cases in FY
2021. DHS estimates that, on average, USCIS conducted 6,473 H-1B
worksite inspections annually from FY 2019 through FY 2023 and of those
DHS finds a noncompliance rate of 19 percent. Assuming USCIS continues
worksite inspections at the 5-year annual average rate, the population
impacted by this provision will be 1,241 or 19 percent of H-1B
petitioners visited who are found noncompliant or indicative of fraud.
The outcomes of site visits under the rule are indeterminate as
currently noncooperative petitioners might be found to be fully
compliant, might continue to not cooperate with site visits despite
penalties, or might be forced to reveal fraudulent practices to USCIS.
The expected increase in cooperation from current levels will be the
most important impact of the provision, which DHS discusses below. DHS
notes that the increased cooperation might come disproportionately from
site visits of third-party worksites that did not sign Form I-129
attesting to permit unannounced physical site inspections of residences
and places of employment by USCIS.
[GRAPHIC] [TIFF OMITTED] TR18DE24.059

[[Page 103189]]

Table 20 shows the average duration of time to complete each
inspection was 1.09 hours. Therefore, DHS assumes that USCIS will
continue to conduct the same number of annual worksite inspections
(6,929), on average, and that the average duration of time for a USCIS
immigration officer to conduct each worksite inspection will be an
average of 1.09 hours. The data in Tables 19 and 20 differ slightly
based on the different search criteria, pull dates and systems
accessed. DHS also assumes that the average duration of time of 1.09
hours to conduct an inspection covers the entire inspection process,
which includes interviewing the beneficiary, the on-site supervisor or
manager and other workers, as applicable, and reviewing all records
pertinent to the H-1B petitions available to USCIS when requested
during inspection.
[GRAPHIC] [TIFF OMITTED] TR18DE24.060

DHS assumes that a supervisor or manager, in addition to the
beneficiary, will be present on behalf of a petitioner while a USCIS
immigration officer conducts the worksite inspection. The officer will
interview the beneficiary to verify the date employment started, work
location, hours, salary, and duties performed to corroborate with the
information provided in an approved petition. The supervisor or manager
will be the most qualified employee at the location who could answer
all questions pertinent to the petitioning organization and its H-1B
nonimmigrant workers. They will also be able to provide the proper
records available to USCIS immigration officers. Consequently, for the
purposes of this economic analysis, DHS assumes that on average two
individuals will be interviewed during each worksite inspection: the
beneficiary and the supervisor or manager. DHS uses their respective
compensation rates in the estimation of the worksite inspection
costs.\208\ However, if any other worker or on-site manager is
interviewed, the same compensation rates will apply.
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\208\ DHS does not estimate any other USCIS costs associated
with the worksite inspections (i.e., travel and deskwork relating to
other research, review and document write up) here because these
costs are covered by fees collected from petitioners filing Form I-
129 for H-1B petitions. All such costs are discussed under the
Federal Government Cost section.
---------------------------------------------------------------------------

DHS uses hourly compensation rates to estimate the opportunity cost
of time a beneficiary and supervisor or manager will incur during
worksite inspections. Based on data obtained from a USCIS report in
2024, DHS estimates that an H-1B worker earned an average of $130,000
per year in FY 2023.\209\ DHS therefore estimates the salary of an H-1B
worker is approximately $130,000 annually, or $62.50 hourly wage.\210\
The annual salary does not include noncash compensation and benefits,
such as health insurance and transportation. DHS adjusts the average
hourly wage rate using a benefits-to-wage multiplier to estimate the
average hourly compensation of $90.63 for an H-1B nonimmigrant
worker.\211\ In order to estimate the opportunity cost of time they
will incur during a worksite inspection, DHS uses an average hourly
compensation rate of $96.03 per hour for a supervisor or manager, where
the average hourly wage is $66.23 per hour worked and average benefits
are $29.80.\212\ While the average duration of time to conduct an
inspection is estimated at 1.09 hours in this analysis, DHS is not able
to estimate the average duration of time for a USCIS immigration
officer to conduct an interview with a beneficiary or supervisor or
manager. In the absence of this information, DHS assumes that it will
on average take 0.545 hours to interview a beneficiary and 0.545 hours
to interview a supervisor or manager.\213\
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\209\ This is the annual average earning of all H-1B
nonimmigrant workers in all industries with known occupations
(excluding industries with unknown occupations) for FY 2023. It is
what employers agreed to pay the nonimmigrant workers at the time
the applications were filed and estimated based on full-time
employment for 12 months, even if the nonimmigrant worker worked
fewer than 12 months. USCIS, ``Characteristics of H-1B Specialty
Occupation Workers, Fiscal Year 2023 Annual Report to Congress,
October 1, 2022-September 30, 2023,'' at 50, Table 9a (Mar. 6,
2024). See https://www.uscis.gov/sites/default/files/document/reports/OLA_Signed_H-1B_Characteristics_Congressional_Report_FY2023.pdf (last visited
Aug. 21, 2024).
\210\ The hourly wage is estimated by dividing the annual salary
by the total number of hours worked in a year (2,080, which is 40
hours of full-time workweek for 52 weeks). $62.50 hourly wage =
$130,000 annual pay / 2,080 annual work hours. According to DOL that
certifies the LCA of the H-1B worker, a full-time H-1B employee
works 40 hours per week for 52 weeks for a total of 2,080 hours in a
year assuming full-time work is 40 hours per week. DOL, Wage and
hour Division: ``Fact Sheet # 68--What Constitutes a Full-Time
Employee Under H-1B Visa Program?'' (July 2009), https://www.dol.gov/whd/regs/compliance/whdfs68.htm (last visited July 30,
2019).
\211\ Hourly compensation of $90.63 = $62.50 average hourly wage
rate for H-1B worker x 1.45 benefits-to-wage multiplier. See section
V.A.5. for estimation of the benefits-to-wage multiplier.
\212\ Hourly compensation of $96.03 = $66.23 average hourly wage
rate for Management Occupations (national) x 1.45 benefits-to-wage
multiplier. See BLS, ``Occupational Employment and Wage Statistics,
Occupational Employment and Wages, May 2023, 11-0000 Management
Occupations (Major Group),'' https://www.bls.gov/oes/2023/may/oes110000.htm (last visited Aug. 20, 2024).
\213\ DHS assumes that beneficiary takes 50 percent of average
inspection duration and supervisor, or manager takes 50 percent.
Average duration of interview hours for beneficiaries (0.545) =
Average inspection duration (1.09) x 50% = 0.545. Average duration
of interview hours for Supervisors or managers (0.545) = Average
inspection duration (1.09) x 50% = 0.545.

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[[Page 103190]]

In Table 21, DHS estimates the total annual opportunity cost of
time for worksite inspections of H-1B petitions by multiplying the
average annual number of worksite inspections (6,929) by the average
duration the interview will take for a beneficiary or supervisor or
manager and their respective compensation rates. DHS obtains the total
annual cost of the H-1B worksite inspections to be $704,886 for this
rule.
[GRAPHIC] [TIFF OMITTED] TR18DE24.061

This change may affect employers who do not cooperate with site
visits who will face denial or revocation of their petition(s), which
could result in costs to those businesses. Petitioners may face
financial losses because they may lose access to labor for extended
periods, which could result in too few workers, loss of revenue, and
some could go out of business. DHS expects program participants to
comply with program requirements, however, and notes that those that do
not could experience significant impacts due to this rule.
xix. Third-Party Placement (Codifying Policy Based on Defensor v.
Meissner (5th Cir. 2000))
Amended 8 CFR 214.2(h)(4)(i)(B)(3) clarifies that, in certain
circumstances USCIS will look at the third party's requirements for the
beneficiary's position, rather than the petitioner's stated
requirements, in assessing whether the proffered position qualifies as
a specialty occupation.
As required by both INA section 214(i)(1) and 8 CFR
214.2(h)(4)(i)(A)(1), an H-1B petition for a specialty occupation
worker must demonstrate that the worker will perform services in a
specialty occupation, which requires theoretical and practical
application of a body of highly specialized knowledge and attainment of
a baccalaureate or higher degree in the specific specialty (or its
equivalent) as a minimum requirement for entry into the occupation in
the United States. This provision will ensure that petitioners are not
circumventing specialty occupation requirements by imposing token
requirements or requirements that are not normal to the third party.
Specifically, under amended 8 CFR 214.2(h)(4)(i)(B)(3), if the
beneficiary will be staffed to a third party, meaning they will be
contracted to fill a position in a third party's organization and
becomes part of that third party's organizational hierarchy by filling
a position in that hierarchy (and not merely providing services to the
third party), the actual work to be performed by the beneficiary must
be in a specialty occupation. Therefore, it is the requirements of that
third party, and not the petitioner, that are most relevant when
determining whether the position is a specialty occupation. Relative to
the no-action baseline, this change has no costs associated with it,
and there may be transparency benefits due to this change. Relative to
the without-policy baseline some petitioners for third parties may have
taken time to demonstrate that the worker will perform services in a
specialty occupation for that third party. Because this has been in
place for a long time, DHS cannot estimate how much time it will have
taken for petitioners to provide that information.
4. Alternatives Considered
In the NPRM, DHS sought public comment on how to ensure that the
limited number of H-1B cap-subject visas, and new H-1B status grants
available each fiscal year are used for non-speculative job
opportunities. DHS has reviewed public comments, including suggested
alternatives, on the various provisions in the NPRM and responded
above.
5. Total Quantified Net Costs of the Final Regulatory Changes
In this section, DHS presents the total annual cost savings of this
final rule annualized over a 10-year period of analysis. Table 22
details the annual cost savings of this rule. DHS estimates the total
cost savings is $1,038,721.

[[Page 103191]]

[GRAPHIC] [TIFF OMITTED] TR18DE24.062

DHS summarizes the annual costs of this rule. Table 23 details the
annual costs of this rule. DHS estimates the total cost is $704,886.
[GRAPHIC] [TIFF OMITTED] TR18DE24.063

Net costs savings to the public of $333,835 are the total costs
minus cost savings.\214\ Table 24 illustrates that over a 10-year
period of analysis from FY 2024 through FY 2033 annualized cost savings
will be $333,835 using a 2-percent discount rates.
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\214\ Calculations: $1,038,721 Total Costs Savings-$704,886
Total Costs = $333,835 Net Cost Savings.
[GRAPHIC] [TIFF OMITTED] TR18DE24.064

B. Regulatory Flexibility Act

The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601 and 602,
as amended by the Small Business Regulatory Enforcement Fairness Act of
1996, Public Law 104-121, requires Federal agencies to consider the
potential impact of regulations on small businesses, small governmental
jurisdictions, and small organizations during the development of their
rules. The term ``small entities'' comprises small businesses, not-for-
profit organizations that are independently owned and operated and are
not dominant in their fields, and governmental jurisdictions with
populations of less than 50,000.\215\
---------------------------------------------------------------------------

\215\ A small business is defined as any independently owned and
operated business not dominant in its field that qualifies as a
small business per the Small Business Act, 15 U.S.C. 632.
---------------------------------------------------------------------------

An ``individual'' is not considered a small entity and costs to an
individual are not considered a small entity impact for RFA purposes.
In addition, the courts have held that the RFA requires an agency to
perform a regulatory flexibility analysis of small entity impacts only
when a rule directly regulates small entities.\216\ Consequently,
indirect impacts from a

[[Page 103192]]

rule on a small entity are not considered as costs for RFA purposes.
USCIS acknowledges that the rule could have indirect impacts on small
entities including, but not limited to, costs associated with the time
required to comply with the site visits provision. These indirect
impacts are not included within the RFA because of uncertainty related
to how many small entities would be affected and the degree to which
affected entities would be impacted. The Regulatory Impact Analysis
included above contains in-depth analysis of those possible impacts and
how they may impact small entities.
---------------------------------------------------------------------------

\216\ See Small Business Administration, ``A Guide For
Government Agencies, How to Comply with the Regulatory Flexibility
Act,'' at 22, https://advocacy.sba.gov/wp-content/uploads/2019/06/How-to-Comply-with-the-RFA.pdf (last visited Aug. 23, 2024).
---------------------------------------------------------------------------

USCIS's RFA analysis for this final rule focuses on the population
of Form I-129 petitions for H-1B workers.

C. Final Regulatory Flexibility Act (FRFA)

6. A Statement of the Need for, and Objectives of, the Rule
The purpose of this rulemaking is to modernize and improve the
regulations relating to the H-1B program by: (1) streamlining the
requirements of the H-1B program and improving program efficiency; (2)
providing greater benefits and flexibility for petitioners and
beneficiaries; and (3) improving integrity measures.
7. A Statement of the Significant Issues Raised by the Public Comments
in Response to the IRFA, a Statement of the Assessment of the Agency of
Such Issues, and a Statement of any Changes Made in the Proposed Rule
as a Result of Such Comments
DHS invited comments in the NPRM but did not receive any comments
specific to the IRFA. USCIS responded to general comments concerning
the rule in section III (Public Comments on the Proposed Rule).
8. The Response of the Agency to Any Comments Filed by the Chief
Counsel for Advocacy of the Small Business Administration in Response
to the Proposed Rule, and a Detailed Statement of Any Change Made to
the Proposed Rule in the Final Rule as a Result of the Comments
DHS invited comments in the NPRM but did not receive any comments
filed by the Chief Counsel for Advocacy of the Small Business
Administration.
9. A Description and an Estimate of the Number of Small Entities to
Which the Rule Will Apply or an Explanation of Why No Such Estimate Is
Available
For this analysis, due to the impracticality of full population
analysis, DHS conducted a sample analysis of historical Form I-129 H-1B
petitions to estimate the number of small entities impacted by this
rule. DHS utilized a subscription-based electronic database of U.S.
entities, ReferenceUSA, as well as three other open-access, free
databases of public and private entities, Manta, Cortera, and Guidestar
to determine the North American Industry Classification System (NAICS)
code, revenue, and employee count for each entity. To determine whether
an entity is small for purposes of RFA, DHS first classified the entity
by its NAICS code and then used Small Business Administration (SBA)
guidelines to classify the revenue or employee count threshold for each
entity. Some entities were classified as small based on their annual
revenue, and some by their numbers of employees.
Using FY 2022 internal data on actual filings of Form I-129 H-1B
petitions, DHS identified 44,593 unique entities. DHS devised a
methodology to conduct the small entity analysis based on a
representative, random sample of the potentially impacted population.
DHS first determined the minimum sample size necessary to achieve a 95-
percent confidence level confidence interval estimation for the
impacted population of entities using the standard statistical formula
at a 5-percent margin of error. DHS then created a sample size greater
than the minimum necessary to increase the likelihood that our matches
would meet or exceed the minimum required sample. DHS notes that the
random sample was drawn from the population of Form I-129 H-1B
petitioners for purposes of estimating impacts of each provision in the
NPRM, including those finalized here, on the population of Form I-129
H-1B petitioners at-large.
DHS randomly selected a sample of 3,396 entities from the
population of 44,593 entities that filed Form I-129 for H-1B petitions
in FY 2022. Of the 3,396 entities, 1,724 entities returned a successful
match of a filing entity in the ReferenceUSA, Manta, Cortera, and
Guidestar databases; 1,672 entities did not return a match. Using these
databases' revenue or employee count and their assigned NAICS code, DHS
determined 1,209 of the 1,724 matches to be small entities, 515 to be
non-small entities. DHS assumes filing entities without database
matches or missing revenue/employee count data are likely to be small
entities. As a result, in order to prevent underestimating the number
of small entities this final rule will affect, DHS considers all the
non-matched and missing entities as small entities for the purpose of
this analysis. Therefore, DHS classifies 2,881 of 3,396 entities as
small entities, including combined non-matches (1,672), and small
entity matches (1,209). Thus, DHS estimates that 84.8 percent (2,881 of
3,396) of the entities filing Form I-129 H-1B petitions are small
entities.
In this analysis DHS assumes that the distribution of firm size for
our sample is the same as the entire population of Form I-129 H-1B
petitioners. Thus, DHS estimates the number of small entities to be
84.8 percent of the population of 44,593 entities that filed Form I-129
under the H-1B classification, as summarized in Table 25 below. The
annual numeric estimate of the small entities impacted by this final
rule is 37,815 entities.\217\
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\217\ The annual numeric estimate of the small entities (37,815)
= Population (44,593) * Percentage of small entities (84.8%).
[GRAPHIC] [TIFF OMITTED] TR18DE24.065

[[Page 103193]]

Following the distributional assumptions above, DHS uses the set of
1,209 small entities with matched revenue data to estimate the economic
impact of the final rule on each small entity. Typically, DHS will
estimate the economic impact, in percentage, for each small entity is
the sum of the impacts of the final changes divided by the entity's
sales revenue.\218\ DHS constructed the distribution of economic impact
of the final rule based on the 1,209 small entity matches in the
sample. Because this final rule resulted in an overall cost savings for
petitioners there also would be no adverse impact on the estimated
small entity population. Based on FY 2022 revenue, of the 1,209 small
entities, 0 percent (0 small entities) would experience a cost increase
that is greater than 1 percent of revenues.
---------------------------------------------------------------------------

\218\ The economic impact, in percentage, for each small entity
i = ((Cost of one petition for entity i x Number of petitions for
entity i)/Entity i's sales revenue) x 100. The cost of one petition
for entity i (-$0.79) is estimated by dividing the total cost of
this rule by the estimated population. -$333,835/421,421 = -$0.79.
The entity's sales revenue is taken from ReferenceUSA, Manta,
Cortera, and Guidestar databases.
---------------------------------------------------------------------------

10. A Description of the Projected Reporting, Recordkeeping, and Other
Compliance Requirements of the Rule, Including an Estimate of the
Classes of Small Entities That Will be Subject to the Requirement and
the Types of Professional Skills Necessary for Preparation of the
Report or Record
This rule codifies USCIS' existing authority to conduct site visits
and clarify the scope of inspections and the consequences of a
petitioner's or third party's refusal or failure to fully cooperate
with these inspections, and supervisors of H-1B beneficiaries will bear
an opportunity cost of time as described above.
11. A Description of the Steps the Agency has Taken To Minimize the
Significant Economic Impact on Small Entities Consistent With the
Stated Objectives of Applicable Statutes, Including a Statement of the
Factual, Policy, and Legal Reasons for Selecting the Alternative
Adopted in the Final Rule and why Each of the Other Significant
Alternatives to the Rule Considered by the Agency was Rejected
While the site visit provision imposes some burden to prospective
employers, USCIS found no other alternatives that achieved stated
objectives with less burden to small entities.

D. Unfunded Mandates Reform Act of 1995 (UMRA)

The Unfunded Mandates Reform Act of 1995 (UMRA) is intended, among
other things, to curb the practice of imposing unfunded Federal
mandates on State, local, and Tribal governments. Title II of UMRA
requires each Federal agency to prepare a written statement assessing
the effects of any Federal mandate in a proposed rule, or final rule
for which the agency published a proposed rule, that includes any
Federal mandate that may result in a $100 million or more expenditure
(adjusted annually for inflation) in any one year by State, local, and
Tribal governments, in the aggregate, or by the private sector.\219\
---------------------------------------------------------------------------

\219\ See 2 U.S.C. 1532(a).
---------------------------------------------------------------------------

The inflation adjusted value of $100 million in 1995 is
approximately $200 million in 2023 based on the Consumer Price Index
for All Urban Consumers (CPI-U).\220\ This final rule does not contain
a Federal mandate as the term is defined under UMRA.\221\ The
requirements of title II of UMRA, therefore, do not apply, and DHS has
not prepared a statement under UMRA.
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\220\ See BLS, ``Historical Consumer Price Index for All Urban
Consumers (CPI-U): U.S. city average, all items, by month,'' https:/
www.bls.gov/cpi/tables/supplemental-files/historical-cpi-u-202312.pdf (last visited Jan. 17, 2024). Calculation of inflation:
(1) Calculate the average monthly CPI-U for the reference year
(1995) and the current year (2023); (2) Subtract reference year CPI-
U from current year CPI-U; (3) Divide the difference of the
reference year CPI-U and current year CPI-U by the reference year
CPI-U; (4) Multiply by 100 = [(Average monthly CPI-U for 2023-
Average monthly CPI-U for 1995) / (Average monthly CPI-U for
1995)]x100 = [(304.702-152.383) /152.383] = (152.319/152.383) =
0.99958001x100 = 99.96 percent = 100 percent (rounded). Calculation
of inflation-adjusted value: $100 million in 1995 dollarsx2.00 =
$200 million in 2023 dollars.
\221\ The term ``Federal mandate'' means a Federal
intergovernmental mandate or a Federal private sector mandate. See 2
U.S.C. 1502(1), 658(6).
---------------------------------------------------------------------------

E. Congressional Review Act

OIRA has determined that this final rule is not a major rule, as
defined in 5 U.S.C. 804, for purposes of congressional review of agency
rulemaking pursuant to the Congressional Review Act, Pub. L. 104-121,
title II, sec. 251 (Mar. 29, 1996), 110 Stat. 868 (codified at 5 U.S.C.
801-808). This rule will not result in an annual effect on the economy
of $100 million or more.
DHS will send this rule to Congress and to the Comptroller General
as required by 5 U.S.C. 801(a)(1).

F. Executive Order 13132 (Federalism)

This final rule would not have substantial direct effects on the
States, on the relationship between the National Government and the
States, or on the distribution of power and responsibilities among the
various levels of government. Therefore, in accordance with section 6
of Executive Order 13132, it is determined that this final rule does
not have sufficient federalism implications to warrant the preparation
of a federalism summary impact statement.

G. Executive Order 12988 (Civil Justice Reform)

This final rule was drafted and reviewed in accordance with E.O.
12988, Civil Justice Reform. This final rule was written to provide a
clear legal standard for affected conduct and was carefully reviewed to
eliminate drafting errors and ambiguities, so as to minimize litigation
and undue burden on the Federal court system. DHS has determined that
this final rule meets the applicable standards provided in section 3 of
E.O. 12988.

H. Executive Order 13175 (Consultation and Coordination With Indian
Tribal Governments)

This final rule does not have ``tribal implications'' because it
will not have substantial direct effects on one or more Indian Tribes,
on the relationship between the Federal Government and Indian Tribes,
or on the distribution of power and responsibilities between the
Federal Government and Indian Tribes. Accordingly, E.O. 13175,
Consultation and Coordination with Indian Tribal Governments, requires
no further agency action or analysis.

I. National Environmental Policy Act (NEPA)

As discussed in the National Environmental Policy Act (NEPA) \222\
section of the NPRM,\223\ and partially addressed in the H-1B
Registration Improvement final rule,\224\ DHS proposed a broader set of
reforms in the H-1B program, as well as discrete reforms impacting
other nonimmigrant programs. DHS received one public comment on the
NEPA discussion in the NPRM. DHS is addressing that comment here to the
extent it pertains to the provisions of this final rule. DHS previously
addressed this public comment in the rule that finalized the
registration process aspects of the NPRM.\225\
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\222\ See Public Law 91-190, 42 U.S.C. 4321-4347.
\223\ 88 FR 72870, 72955 (Oct. 23, 2023).
\224\ ``Improving the H-1B Registration Selection Process and
Program Integrity,'' 89 FR 7456, 7489 (Feb. 2, 2024) (final rule).
\225\ 89 FR 7456, 7489 (Feb. 2, 2024).
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Comment: One commenter asserted that DHS's reliance on categorical

[[Page 103194]]

exclusion (``CATEX'') A3 is arbitrary and capricious and indicated that
DHS must prepare an environmental impact statement or at least an
environmental assessment before finalizing the NPRM.\226\ The commenter
asserted that the action proposed in the NPRM is an action that, by its
nature, increases the population because its goal is to increase the
number of foreign nationals who enter the country. The commenter argued
that the action proposed in the NPRM has the potential to have a
cumulative effect when combined with other actions that increase levels
of immigration, and that it should be considered rather than
categorically excluded. The commenter further stated that DHS's use of
categorical exclusion A3 is ``entirely irrational'' because DHS could
not assess the environmental impact of the rule and thus concluded that
the rule is of the type that would not have any. The commenter further
stated that the NPRM does not fit into any of the categories under
CATEX A3, and that DHS was not considering rules that increase
immigration to the United States when it formulated this rule.
---------------------------------------------------------------------------

\226\ The commenter stated: ``Categorical exclusion A3, in full,
is as follows: A3 Promulgation of rules, issuance of rulings or
interpretations, and the development and publication of policies,
orders, directives, notices, procedures, manuals, advisory
circulars, and other guidance documents of the following nature: (a)
Those of a strictly administrative or procedural nature; (b) Those
that implement, without substantive change, statutory or regulatory
requirements; (c) Those that implement, without substantive change,
procedures, manuals, and other guidance documents; (d) Those that
interpret or amend an existing regulation without changing its
environmental effect; (e) Technical guidance on safety and security
matters; or (f) Guidance for the preparation of security plans.''
---------------------------------------------------------------------------

Response: DHS disagrees with both the factual and the legal
assertions made by this commenter. The commenter cited no data,
analysis, evidence, or statements made by DHS in the NPRM to support
the commenter's assertion. Specifically with respect to the provisions
being finalized through this final rule, the intended and expected
impact of those provisions is not anticipated to significantly increase
the number of foreign nationals in the United States. Rather, as
discussed throughout this preamble, DHS is amending existing
regulations to primarily modernize the H-1B program but is also
including certain provisions that impact other nonimmigrant programs--
H-2, H-3, F-1, L-1, O, P, Q-1, R-1, E-3, and TN. In addition, the final
rule will provide certain benefits and flexibilities, as well as
improve program integrity. These amendments to existing regulations
clearly fit within CATEX A3 because they are administrative in nature,
do not have the potential to significantly affect the environment. are
not a part of any larger Federal actions, and DHS is unaware of the
existence of any extraordinary circumstances that create the potential
for environmental effects. These amendments are administrative in
nature, reflect current USCIS policy, and will not result in a change
to the environmental impact of the regulation. The same is true with
clarifications regarding the filing of amended petitions, deference
policy, and rules regarding evidence of maintenance of status.
NEPA Final Rule Analysis
DHS and its components analyzed the proposed actions to determine
whether NEPA applies to them and, if so, what level of analysis is
required. DHS Directive 023-01, Rev. 01 (Directive) and Instruction
Manual 023-01-001-01, Rev. 01 (Instruction Manual) \227\ establish the
procedures DHS and its components use to comply with NEPA and the
Council on Environmental Quality (CEQ) regulations for implementing
NEPA. See 40 CFR parts 1500 through 1508. The CEQ regulations allow
Federal agencies to establish in their NEPA implementing procedures
categories of actions (``categorical exclusions'') that experience has
shown normally do not individually or cumulatively have a significant
effect on the human environment and, therefore, do not require
preparation of an Environmental Assessment or Environmental Impact
Statement. See 40 CFR 1501.4(a). Instruction Manual, Appendix A, Table
1 lists the DHS categorical exclusions.
---------------------------------------------------------------------------

\227\ See DHS, ``Implementing the National Environmental Policy
Act,'' DHS Directive 023-01, Rev 01 (Oct. 31, 2014), and DHS
Instruction Manual Rev. 01 (Nov. 6, 2014), https://www.dhs.gov/publication/directive-023-01-rev-01-and-instruction-manual-023-01-001-01-rev-01-and-catex.
---------------------------------------------------------------------------

Under DHS NEPA implementing procedures, for an action to be
categorically excluded, it must satisfy each of the following three
conditions: (1) the entire action clearly fits within one or more of
the categorical exclusions; (2) the action is not a piece of a larger
action; and (3) no extraordinary circumstances exist that create the
potential for a significant environmental effect.\228\
---------------------------------------------------------------------------

\228\ See Instruction Manual, section V.B.2 (a-c).
---------------------------------------------------------------------------

As discussed throughout this preamble, this final rule amends
existing regulations governing the H-1B program primarily to modernize
and streamline those regulations, provide certain benefits and
flexibilities to the regulated public, and improve program integrity.
It therefore fits within CATEX A3 because the amendments are
administrative and procedural in nature, are not a part of a larger
Federal action and do not have the potential to significantly affect
the environment. Finally, DHS is unaware of the existence of any
extraordinary circumstances that would result in any environmental
effects.

J. Paperwork Reduction Act

Under the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13,
all agencies must submit to the OMB, for review and approval, any
reporting requirements inherent in a rule, unless they are exempt.
In compliance with the PRA, DHS published an NPRM on October 23,
2023 (88 FR 72870), in which comments on the revisions to the
information collections associated with this rulemaking were requested.
Any comments received on information collections activities were
related to the beneficiary-centric changes and documentation required
for establishing unique beneficiary identification. DHS responded to
those comments in section III. of this final rule. The information
collection instruments that will be revised with this final rule are
described below.
Overview of Information Collections:
H-1B Registration Tool (OMB Control No. 1615-0144)
(1) Type of Information Collection: Revision of a Currently
Approved Collection.
(2) Title of the Form/Collection: H-1B Registration Tool.
(3) Agency form number, if any, and the applicable component of DHS
sponsoring the collection: OMB-64; USCIS.
(4) Affected public who will be asked or required to respond, as
well as a brief abstract: Primary: Business or other for-profit. USCIS
uses the data collected on this form to determine which employers will
be informed that they may submit a USCIS Form I-129, Petition for
Nonimmigrant Worker, for H-1B classification.
(5) An estimate of the total number of respondents and the amount
of time estimated for an average respondent to respond: The estimated
total number of respondents for the information collection H-1B
Registration Tool (Businesses) is 20,950 and the estimated hour burden
per response is 0.6 hours. The estimated total number of respondents
for the information collection H-1B Registration Tool (Attorneys) is
19,339 and the estimated hour burden per response is 0.6 hours.

[[Page 103195]]

(6) An estimate of the total public burden (in hours) associated
with the collection: The total estimated annual hour burden associated
with this collection of information is 213,354 hours.
(7) An estimate of the total public burden (in cost) associated
with the collection: The estimated total annual cost burden associated
with this collection of information is $0.
Form I-129 (OMB Control No. 1615-0009)
(1) Type of Information Collection: Revision of a Currently
Approved Collection.
(2) Title of the Form/Collection: Petition for a Nonimmigrant
Worker.
(3) Agency form number, if any, and the applicable component of the
DHS sponsoring the collection: I-129; USCIS.
(4) Affected public who will be asked or required to respond, as
well as a brief abstract: Primary: Business or other for-profit. USCIS
uses Form I-129 and accompanying supplements to determine whether the
petitioner and beneficiary(ies) is (are) eligible for the nonimmigrant
classification. A U.S. employer, or agent in some instances, may file a
petition for nonimmigrant worker to employ foreign nationals under the
following nonimmigrant classifications: H-1B, H-2A, H-2B, H-3, L-1, O-
1, O-2, P-1, P-2, P-3, P-1S, P-2S, P-3S, Q-1, or R-1 nonimmigrant
worker. The collection of this information is also required from a U.S.
employer on a petition for an extension of stay or change of status for
E-1, E-2, E-3, Free Trade H-1B1 Chile/Singapore nonimmigrants and TN
(USMCA workers) who are in the United States.
(5) An estimate of the total number of respondents and the amount
of time estimated for an average respondent to respond: \229\ The
estimated total number of respondents for the information collection I-
129 (paper-filings) is 572,606 and the estimated hour burden per
response is 2.55 hours; the estimated total number of respondents for
the information collection I-129 (electronic-filings) is 45,000 and the
estimated hour burden per response is 2.333 hours the estimated total
number of respondents for the information collection E-1/E-2
Classification Supplement to Form I-129 is 12,050 and the estimated
hour burden per response is 0.67 hours; the estimated total number of
respondents for the information collection Trade Agreement Supplement
(paper-filings) to Form I-129 is 10,945 and the estimated hour burden
per response is 0.67 hours; the estimated total number of respondents
for the information collection Trade Agreement Supplement (electronic-
filings) to Form I-129 is 2,000 and the estimated hour burden per
response is 0.5833 hours; the estimated total number of respondents for
the information collection H Classification Supplement (paper-filings)
to Form I-129 is 426,983 and the estimated hour burden per response is
2.07 hours; the estimated total number of respondents for the
information collection H Classification Supplement (electronic-filings)
to Form I-129 is 45,000 and the estimated hour burden per response is 2
hours; the estimated total number of respondents for the information
collection H-1B and H-1B1 Data Collection and Filing Fee Exemption
Supplement (paper-filings) is 353,936 and the estimated hour burden per
response is 1 hour; the estimated total number of respondents for the
information collection H-1B and H-1B1 Data Collection and Filing Fee
Exemption Supplement (electronic-filings) is 45,000 and the estimated
hour burden per response is .9167 hour; the estimated total number of
respondents for the information collection L Classification Supplement
to Form I-129 is 40,353 and the estimated hour burden per response is
1.34 hours; the estimated total number of respondents for the
information collection O and P Classifications Supplement to Form I-129
is 28,434 and the estimated hour burden per response is 1 hour; the
estimated total number of respondents for the information collection Q-
1 Classification Supplement to Form I-129 is 54 and the estimated hour
burden per response is 0.34 hours; and the estimated total number of
respondents for the information collection R-1 Classification
Supplement to Form I-129 is 6,782 and the estimated hour burden per
response is 2.34 hours.
---------------------------------------------------------------------------

\229\ After the publication of the NPRM, DHS published the USCIS
Fee Schedule Final Rule (``Fee Rule'') (89 FR 6194) on January 31,
2024, and that rule went into effect on April 1, 2024. Subsequently,
DHS updated the information collection, and the baseline estimated
total number of respondents, and the amount of time estimated for an
average respondent to respond, to reflect the changes to the
information collection approved in connection with the Fee Rule. As
a result, the estimated total public burden in hours and cost
associated with the information collection has changed since the
publication of the NPRM. USCIS Form I-129 (paper-filings) estimated
time burden average per response is 2.487 hours (current) + .067
hours (increase from the NPRM) = 2.55 hours. On April 1, 2024, DHS
also began accepting online filing for H-1B cap petitions and since
included the estimated total respondents and the estimated time
burden average per response to account for electronic filing
submissions since the publication of the NPRM.
---------------------------------------------------------------------------

(6) An estimate of the total public burden (in hours) associated
with the collection: The total estimated annual hour burden associated
with this collection is 3,795,670 hours.
(7) An estimate of the total public burden (in cost) associated
with the collection: The estimated total annual cost burden associated
with this collection of information is $294,892,090.

List of Subjects in 8 CFR Part 214

Administrative practice and procedure, Aliens, Cultural exchange
program, Employment, Foreign officials, Health professions, Reporting
and recordkeeping requirements, Students.

Accordingly, DHS amends chapter I of title 8 of the Code of Federal
Regulations as follows:

PART 214--NONIMMIGRANT CLASSES

0
1. The authority citation for part 214 continues to read as follows:

Authority: 6 U.S.C. 202, 236; 8 U.S.C. 1101, 1102, 1103, 1182,
1184, 1186a, 1187, 1221, 1281, 1282, 1301-1305, 1357, and 1372; sec.
643, Pub. L. 104-208, 110 Stat. 3009-708; Pub. L. 106-386, 114 Stat.
1477-1480; section 141 of the Compacts of Free Association with the
Federated States of Micronesia and the Republic of the Marshall
Islands, and with the Government of Palau, 48 U.S.C. 1901 note and
1931 note, respectively; 48 U.S.C. 1806; 8 CFR part 2; Pub. L. 115-
218, 132 Stat. 1547 (48 U.S.C. 1806).

0
2. Amend Sec. 214.1 by:
0
a. Revising paragraphs (c)(1) and (4);
0
b. Redesignating paragraph (c)(5) as paragraph (c)(7);
0
c. Adding a new paragraph (c)(5) and paragraph (c)(6); and
0
d. Revising newly redesignated paragraph (c)(7).
The revisions and additions read as follows:

Sec. 214.1 Requirements for admission, extension, and maintenance of
status.

* * * * *
(c) * * *
(1) Extension or amendment of stay for certain employment-based
nonimmigrant workers. An applicant or petitioner seeking the services
of an E-1, E-2, E-3, H-1B, H-1B1, H-2A, H-2B, H-3, L-1, O-1, O-2, P-1,
P-2, P-3, P-1S, P-2S, P-3S, Q-1, R-1, or TN nonimmigrant beyond the
period previously granted, or seeking to amend the terms and conditions
of the nonimmigrant's stay without a request for additional time, must
file for an extension of stay or amendment of stay, on Form I-129, with
the fee prescribed in 8 CFR 106.2, with the initial evidence specified
in Sec. 214.2, and in accordance

[[Page 103196]]

with the form instructions. Dependents holding derivative status may be
included in the petition if it is for only one worker and the form
version specifically provides for their inclusion. In all other cases,
dependents of the worker should file extensions of stay using Form I-
539.
* * * * *
(4) Timely filing and maintenance of status. (i) An extension or
amendment of stay may not be approved for an applicant or beneficiary
who failed to maintain the previously accorded status or where such
status expired before the application or petition was filed, except
that USCIS may excuse the late filing in its discretion where it is
demonstrated at the time of filing that:
(A) The delay was due to extraordinary circumstances beyond the
control of the applicant or petitioner, and USCIS finds the delay
commensurate with the circumstances;
(B) The applicant or beneficiary has not otherwise violated their
nonimmigrant status;
(C) The applicant or beneficiary remains a bona fide nonimmigrant;
and
(D) The applicant or beneficiary is not the subject of deportation
proceedings under section 242 of the Act (prior to April 1, 1997) or
removal proceedings under section 240 of the Act.
(ii) If USCIS excuses the late filing of an extension of stay or
amendment of stay request, it will do so without requiring the filing
of a separate application or petition and will grant the extension of
stay from the date the previously authorized stay expired, or the
amendment of stay from the date the petition was filed.
(5) Deference to prior USCIS determinations of eligibility. When
adjudicating a request filed on Form I-129 involving the same parties
and the same underlying facts, USCIS gives deference to its prior
determination of the petitioner's, applicant's, or beneficiary's
eligibility. However, USCIS need not give deference to a prior approval
if: there was a material error involved with a prior approval; there
has been a material change in circumstances or eligibility
requirements; or there is new, material information that adversely
impacts the petitioner's, applicant's, or beneficiary's eligibility.
(6) Evidence of maintenance of status. When requesting an extension
or amendment of stay on Form I-129, an applicant or petitioner must
submit supporting evidence to establish that the applicant or
beneficiary maintained the previously accorded nonimmigrant status
before the extension or amendment request was filed. Evidence of such
maintenance of status may include, but is not limited to: copies of
paystubs, W-2 forms, quarterly wage reports, tax returns, contracts,
and work orders.
(7) Decision on extension or amendment of stay request. Where an
applicant or petitioner demonstrates eligibility for a requested
extension or amendment of stay, USCIS may grant the extension or
amendment in its discretion. The denial of an extension or amendment of
stay request may not be appealed.
* * * * *

0
3. Amend Sec. 214.2 by:
0
a. Revising paragraph (f)(5)(vi)(A);
0
b. Removing and reserving paragraph (h)(2)(i)(B);
0
c. Revising paragraphs (h)(2)(i)(E) and (F) and (h)(4)(i)(B);
0
d. Revising the definitions of ``Specialty occupation'' and ``United
States employer'' in paragraph (h)(4)(ii);
0
e. Revising the heading for paragraph (h)(4)(iii) and paragraph
(h)(4)(iii)(A);
0
f. Adding paragraph (h)(4)(iii)(F);
0
g. Revising paragraph (h)(4)(iv) introductory text;
0
h. Adding paragraph (h)(4)(iv)(C);
0
i. Revising paragraphs (h)(8)(iii)(F)(2)(iv), (h)(8)(iii)(F)(4), and
(h)(9)(i);
0
j. Adding paragraphs (h)(9)(ii)(D) and (h)(9)(iii)(E);
0
k. Revising paragraph (h)(11)(ii);
0
l. Removing the period at the end of paragraph (h)(11)(iii)(A)(6) and
adding ``; or'' in its place;
0
m. Adding paragraph (h)(11)(iii)(A)(7);
0
n. Revising paragraphs (h)(14), (h)(19)(iii)(B)(4), (h)(19)(iii)(C),
and (h)(19)(iv);
0
o. Adding paragraph (h)(33); and
0
p. Revising paragraphs (l)(14)(i), (o)(11), and (p)(13).
The revisions and additions read as follows:

Sec. 214.2 Special requirements for admission, extension, and
maintenance of status.

* * * * *
(f) * * *
(5) * * *
(vi) * * *
(A) The duration of status, and any employment authorization
granted under 8 CFR 274a.12(c)(3)(i)(B) or (C), of an F-1 student who
is the beneficiary of an H-1B petition subject to section 214(g)(1)(A)
of the Act (8 U.S.C. 1184(g)(1)(A)) requesting a change of status will
be automatically extended until April 1 of the fiscal year for which
such H-1B status is being requested or until the validity start date of
the approved petition, whichever is earlier, where such petition:
(1) Has been timely filed;
(2) Requests an H-1B employment start date in the fiscal year for
which such H-1B status is being requested consistent with paragraph
(h)(2)(i)(I) of this section; and
(3) Is nonfrivolous.
* * * * *
(h) * * *
(2) * * *
(i) * * *
(E) Amended or new petition--(1) General provisions. The petitioner
must file an amended or new petition, with the appropriate fee and in
accordance with the form instructions, to reflect any material changes
in the terms and conditions of employment or training or the
beneficiary's eligibility as specified in the original approved
petition. An amended or new H-1B, H-2A, or H-2B petition must be
accompanied by a current or new Department of Labor determination. In
the case of an H-1B petition, this requirement includes a current or
new certified labor condition application.
(2) Additional H-1B provisions. The amended or new petition must be
properly filed before the material change(s) takes place. The
beneficiary is not authorized to work under the materially changed
terms and conditions of employment until the new or amended H-1B
petition is approved and takes effect, unless the beneficiary is
eligible for H-1B portability pursuant to paragraph (h)(2)(i)(H) of
this section. Any change in the place of employment to a geographical
area that requires a corresponding labor condition application to be
certified to USCIS is considered a material change and requires an
amended or new petition to be filed with USCIS before the H-1B worker
may begin work at the new place of employment. Provided there are no
material changes in the terms and conditions of the H-1B worker's
employment, a petitioner does not need to file an amended or new
petition when:
(i) Moving a beneficiary to a new job location within the same area
of intended employment as listed on the labor condition application
certified to USCIS in support of the current H-1B petition approval
authorizing the H-1B nonimmigrant's employment.
(ii) Placing a beneficiary at a short-term placements(s) or
assignment(s) at any worksite(s) outside of the area of intended
employment for a total of 30 days or less in a 1-year period, or for a
total of 60 days or less in a 1-year period where the H-1B beneficiary
continues to maintain an office or work station at their permanent
worksite, the

[[Page 103197]]

beneficiary spends a substantial amount of time at the permanent
worksite in a 1-year period, and the beneficiary's residence is located
in the area of the permanent worksite and not in the area of the short-
term worksite(s); or
(iii) An H-1B beneficiary is going to a non-worksite location to
participate in employee development, will be spending little time at
any one location, or when the job is peripatetic in nature, in that the
normal duties of the beneficiary's occupation (rather than the nature
of the employer's business) requires frequent travel (local or non-
local) from location to location. Peripatetic jobs include situations
where the job is primarily at one location, but the beneficiary
occasionally travels for short periods to other locations on a casual,
short-term basis, which can be recurring but not excessive (i.e., not
exceeding 5 consecutive workdays for any one visit by a peripatetic
worker, or 10 consecutive workdays for any one visit by a worker who
spends most work time at one location and travels occasionally to other
locations).
(F) Agents as petitioners. A United States agent may file a
petition in cases involving workers who are traditionally self-employed
or workers who use agents to arrange short-term employment on their
behalf with numerous employers, and in cases where a foreign employer
authorizes the agent to act on its behalf. A United States agent may
be: the actual employer of the beneficiary; the representative of both
the employer and the beneficiary; or a person or entity authorized by
the employer to act for, or in place of, the employer as its agent. The
burden is on the agent to explain the terms and conditions of the
employment and to provide any required documentation. In questionable
cases, a contract between the employers and the beneficiary or
beneficiaries may be required.
(1) An agent performing the function of an employer must guarantee
the wages and other terms and conditions of employment by contractual
agreement with the beneficiary or beneficiaries of the petition.
(2) A foreign employer who, through a United States agent, files a
petition for an H nonimmigrant alien is responsible for complying with
all of the employer sanctions provisions of section 274A of the Act and
8 CFR part 274a.
* * * * *
(4) * * *
(i) * * *
(B) General requirements for petitions involving a specialty
occupation--(1) Labor condition application requirements. (i) Before
filing a petition for H-1B classification in a specialty occupation,
the petitioner must obtain a certified labor condition application from
the Department of Labor in the occupational specialty in which the
alien(s) will be employed.
(ii) Certification by the Department of Labor of a labor condition
application in an occupational classification does not constitute a
determination by the agency that the occupation in question is a
specialty occupation. USCIS will determine whether the labor condition
application involves a specialty occupation as defined in section
214(i)(1) of the Act and properly corresponds with the petition. USCIS
will also determine whether all other eligibility requirements have
been met, such as whether the alien for whom H-1B classification is
sought qualifies to perform services in the specialty occupation as
prescribed in section 214(i)(2) of the Act.
(iii) If all of the beneficiaries covered by an H-1B labor
condition application have not been identified at the time a petition
is filed, petitions for newly identified beneficiaries may be filed at
any time during the validity of the labor condition application using
copies of the same certified labor condition application. Each petition
must refer by file number to all previously approved petitions for that
labor condition application.
(iv) When petitions have been approved for the total number of
workers specified in the labor condition application, substitution of
aliens against previously approved openings cannot be made. A new labor
condition application will be required.
(v) If the Secretary of Labor notifies USCIS that the petitioning
employer has failed to meet a condition of paragraph (B) of section
212(n)(1) of the Act, has substantially failed to meet a condition of
paragraphs (C) or (D) of section 212(n)(1) of the Act, has willfully
failed to meet a condition of paragraph (A) of section 212(n)(1) of the
Act, or has misrepresented any material fact in the application, USCIS
will not approve petitions filed with respect to that employer under
section 204 or 214(c) of the Act for a period of at least 1 year from
the date of receipt of such notice.
(vi) If the employer's labor condition application is suspended or
invalidated by the Department of Labor, USCIS will not suspend or
revoke the employer's approved petitions for aliens already employed in
specialty occupations if the employer has certified to the Department
of Labor that it will comply with the terms of the labor condition
application for the duration of the authorized stay of aliens it
employs.
(2) Inspections, evaluations, verifications, and compliance
reviews. (i) The information provided on an H-1B petition and the
evidence submitted in support of such petition may be verified by USCIS
through lawful means as determined by USCIS, including telephonic and
electronic verifications and on-site inspections. Such verifications
and inspections may include, but are not limited to: electronic
validation of a petitioner's or third party's basic business
information; visits to the petitioner's or third party's facilities;
interviews with the petitioner's or third party's officials; reviews of
the petitioner's or third party's records related to compliance with
immigration laws and regulations; and interviews with any other
individuals possessing pertinent information, as determined by USCIS,
which may be conducted in the absence of the employer or the employer's
representatives; and reviews of any other records that USCIS may
lawfully obtain and that it considers pertinent to verify facts related
to the adjudication of the H-1B petition, such as facts relating to the
petitioner's and beneficiary's H-1B eligibility and compliance. The
interviews may be conducted on the employer's property, or as feasible,
at a neutral location agreed to by the interviewee and USCIS away from
the employer's property. An inspection may be conducted at locations
including the petitioner's headquarters, satellite locations, or the
location where the beneficiary works, has worked, or will work,
including third party worksites, as applicable. USCIS may commence
verification or inspection under this paragraph (h)(4)(i)(B)(2) for any
petition and at any time after an H-1B petition is filed, including any
time before or after the final adjudication of the petition. The
commencement of such verification and inspection before the final
adjudication of the petition does not preclude the ability of USCIS to
complete final adjudication of the petition before the verification and
inspection are completed.
(ii) USCIS conducts on-site inspections or other compliance reviews
to verify facts related to the adjudication of the petition and
compliance with H-1B petition requirements. If USCIS is unable to
verify facts, including due to the failure or refusal of the petitioner
or a third party to cooperate in an inspection or other compliance
review, then such inability to verify facts, including due to failure
or refusal to cooperate, may result in denial or revocation of any H-1B
petition for H-

[[Page 103198]]

1B workers performing services at the location or locations that are a
subject of inspection or compliance review, including any third party
worksites.
(3) Third party requirements. If the beneficiary will be staffed to
a third party, meaning they will be contracted to fill a position in a
third party's organization and becomes part of that third party's
organizational hierarchy by filling a position in that hierarchy (and
not merely providing services to the third party), the actual work to
be performed by the beneficiary must be in a specialty occupation. When
staffed to a third party, it is the requirements of that third party,
and not the petitioner, that are most relevant when determining whether
the position is a specialty occupation.
* * * * *
(ii) * * *
Specialty occupation means an occupation which requires theoretical
and practical application of a body of highly specialized knowledge in
fields of human endeavor including, but not limited to, architecture,
engineering, mathematics, physical sciences, social sciences, medicine
and health, education, business specialties, accounting, law, theology,
and the arts, and which requires the attainment of a bachelor's degree
or higher in a directly related specific specialty, or its equivalent,
as a minimum for entry into the occupation in the United States. A
position is not a specialty occupation if attainment of a general
degree, without further specialization, is sufficient to qualify for
the position. A position may allow for a range of qualifying degree
fields, provided that each of those fields is directly related to the
duties of the position. Directly related means there is a logical
connection between the required degree, or its equivalent, and the
duties of the position.
United States employer means a person, firm, corporation,
contractor, or other association, or organization in the United States
that:
(1) Has a bona fide job offer for the beneficiary to work within
the United States, which may include telework, remote work, or other
off-site work within the United States;
(2) Has a legal presence in the United States and is amenable to
service of process in the United States; and
(3) Has an Internal Revenue Service Tax identification number.
(4) If the H-1B beneficiary possesses a controlling interest in the
petitioner, meaning the beneficiary owns more than 50 percent of the
petitioner or has majority voting rights in the petitioner, such a
beneficiary may perform duties that are directly related to owning and
directing the petitioner's business as long as the beneficiary will
perform specialty occupation duties a majority of the time, consistent
with the terms of the H-1B petition.
(iii) General H-1B requirements--(A) Criteria for specialty
occupation position. A position does not meet the definition of
specialty occupation in paragraph (h)(4)(ii) of this section unless it
also satisfies at least one of the following criteria at paragraphs
(h)(4)(iii)(A)(1) through (4) of this section:
(1) A U.S. baccalaureate or higher degree in a directly related
specific specialty, or its equivalent, is normally the minimum
requirement for entry into the particular occupation;
(2) A U.S. baccalaureate or higher degree in a directly related
specific specialty, or its equivalent, is normally required to perform
job duties in parallel positions among similar organizations in the
employer's industry in the United States;
(3) The employer, or third party if the beneficiary will be staffed
to that third party, normally requires a U.S. baccalaureate or higher
degree in a directly related specific specialty, or its equivalent, to
perform the job duties of the position; or
(4) The specific duties of the proffered position are so
specialized, complex, or unique that the knowledge required to perform
them is normally associated with the attainment of a U.S. baccalaureate
or higher degree in a directly related specific specialty, or its
equivalent.
(5) For purposes of the criteria at paragraphs (h)(4)(iii)(A)(1)
through (4) of this section, normally means conforming to a type,
standard, or regular pattern, and is characterized by that which is
considered usual, typical, common, or routine. Normally does not mean
always.
* * * * *
(F) Bona fide position in a specialty occupation. At 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. A petitioner
is not required to establish specific day-to-day assignments for the
entire time requested in the petition.
* * * * *
(iv) General documentary requirements for H-1B classification in a
specialty occupation. Except as specified in paragraph (h)(4)(iv)(C) of
this section, an H-1B petition involving a specialty occupation must be
accompanied by:
* * * * *
(C) In accordance with 8 CFR 103.2(b) and paragraph (h)(9) of this
section, USCIS may request evidence such as contracts, work orders, or
other similar evidence between all parties in a contractual
relationship showing the bona fide nature of the beneficiary's position
and the minimum educational requirements to perform the duties.
* * * * *
(8) * * *
(iii) * * *
(F) * * *
(2) * * *
(iv) The nonprofit entity has entered into a formal written
affiliation agreement with an institution of higher education that
establishes an active working relationship between the nonprofit entity
and the institution of higher education for the purposes of research or
education, and a fundamental activity of the nonprofit entity is to
directly contribute to the research or education mission of the
institution of higher education. A nonprofit entity may engage in more
than one fundamental activity.
* * * * *
(4) An H-1B beneficiary who is not directly employed by a
qualifying institution, organization, or entity identified in section
214(g)(5)(A) or (B) of the Act will qualify for an exemption under such
section if the H-1B beneficiary will spend at least half of their work
time performing job duties at a qualifying institution, organization,
or entity and those job duties directly further an activity that
supports or advances one of the fundamental purposes, missions,
objectives, or functions of the qualifying institution, organization,
or entity, namely, either higher education, nonprofit research, or
government research. Work performed ``at'' the qualifying institution
may include work performed in the United States through telework,
remote work, or other off-site work. When considering whether a
position is cap-exempt, USCIS will focus on the job duties to be
performed, rather than where the duties are physically performed.
* * * * *
(9) * * *
(i) Approval. (A) USCIS will consider all the evidence submitted
and any other evidence independently required to assist in
adjudication. USCIS will notify the petitioner of the approval of the
petition on a Notice of Action. The approval notice will include the
beneficiary's (or beneficiaries') name(s) and classification and the
petition's

[[Page 103199]]

period of validity. A petition for more than one beneficiary and/or
multiple services may be approved in whole or in part. The approval
notice will cover only those beneficiaries approved for classification
under section 101(a)(15)(H) of the Act.
(B) Where an H-1B petition is approved for less time than requested
on the petition, the approval notice will provide or be accompanied by
a brief explanation for the validity period granted.
(ii) * * *
(D)(1) If an H-1B petition is adjudicated and deemed approvable
after the initially requested validity period end-date or end-date for
which eligibility is established, the officer may issue a request for
evidence (RFE) asking the petitioner whether they want to update the
requested dates of employment. Factors that inform whether USCIS issues
an RFE could include, but would not be limited to: additional petitions
filed or approved on the beneficiary's behalf, or the beneficiary's
eligibility for additional time in H-1B status. If the new requested
period exceeds the validity period of the labor condition application
already submitted with the H-1B petition, the petitioner must submit a
certified labor condition application with a new validity period that
properly corresponds to the new requested validity period on the
petition and an updated prevailing or proffered wage, if applicable,
except that the petitioner may not reduce the proffered wage from that
originally indicated in their petition. This labor condition
application may be certified after the date the H-1B petition was filed
with USCIS. The request for new dates of employment and submission of a
labor condition application corresponding with the new dates of
employment, absent other changes, will not be considered a material
change. An increase to the proffered wage will not be considered a
material change, as long as there are no other material changes to the
position.
(2) If USCIS does not issue an RFE concerning the requested dates
of employment, if the petitioner does not respond, or the RFE response
does not support new dates of employment, the petition will be
approved, if otherwise approvable, for the originally requested period
or until the end-date eligibility has been established, as appropriate.
However, the petition will not be forwarded to the Department of State
nor will any accompanying request for a change of status, an extension
of stay, or amendment of stay, be granted.
(iii) * * *
(E) H-1B petition for certain beneficiary-owned entities. The
initial approval of a petition filed by a United States employer in
which the H-1B beneficiary possesses a controlling interest in the
petitioning organization or entity, meaning the beneficiary owns more
than 50 percent of the petitioner or has majority voting rights in the
petitioner, will be limited to a validity period of up to 18 months.
The first extension (including an amended petition with a request for
an extension of stay) of such a petition will also be limited to a
validity period of up to 18 months.
* * * * *
(11) * * *
(ii) Immediate and automatic revocation. The approval of any
petition is immediately and automatically revoked if the petitioner
goes out of business, files a written withdrawal of the petition, or
the Department of Labor revokes the labor certification upon which the
petition is based. The approval of an H-1B petition is also immediately
and automatically revoked upon notification from the H-1B petitioner
that the beneficiary is no longer employed.
(iii) * * *
(A) * * *
(7) The petitioner failed to timely file an amended petition
notifying USCIS of a material change or otherwise failed to comply with
the material change reporting requirements in paragraph (h)(2)(i)(E) of
this section.
* * * * *
(14) Extension of visa petition validity. The petitioner must file
a request for a petition extension on the Form I-129 to extend the
validity of the original petition under section 101(a)(15)(H) of the
Act. A request for a petition extension generally may be filed only if
the validity of the original petition has not expired.
* * * * *
(19) * * *
(iii) * * *
(B) * * *
(4) The nonprofit entity has entered into a formal written
affiliation agreement with an institution of higher education that
establishes an active working relationship between the nonprofit entity
and the institution of higher education for the purposes of research or
education, and a fundamental activity of the nonprofit entity is to
directly contribute to the research or education mission of the
institution of higher education. A nonprofit entity may engage in more
than one fundamental activity;
(C) A nonprofit research organization or government research
organization. When a fundamental activity of a nonprofit organization
is engaging in basic research and/or applied research, that
organization is a nonprofit research organization. When a fundamental
activity of a governmental organization is the performance or promotion
of basic research and/or applied research, that organization is a
government research organization. A governmental research organization
may be a Federal, State, or local entity. A nonprofit research
organization or governmental research organization may perform or
promote more than one fundamental activity. Basic research is general
research to gain more comprehensive knowledge or understanding of the
subject under study, without specific applications in mind. Basic
research is also research that advances scientific knowledge but does
not have specific immediate commercial objectives although it may be in
fields of present or potential commercial interest. Applied research is
research to gain knowledge or understanding to determine the means by
which a specific, recognized need may be met. Applied research includes
investigations oriented to discovering new scientific knowledge that
has specific commercial objectives with respect to products, processes,
or services. Both basic research and applied research may include
research and investigation in the sciences, social sciences, or
humanities and may include designing, analyzing, and directing the
research of others if on an ongoing basis and throughout the research
cycle;
* * * * *
(iv) Nonprofit or tax exempt organizations. For purposes of
paragraphs (h)(19)(iii)(B) and (C) of this section, a nonprofit
organization or entity must be determined by the Internal Revenue
Service to be a tax exempt organization under the Internal Revenue Code
of 1986, section 501(c)(3), (c)(4), or (c)(6), 26 U.S.C. 501(c)(3),
(c)(4), or (c)(6).
* * * * *
(33) Severability. The Department intends that should any of the
revisions effective on January 17, 2025, to provisions in paragraphs
(f)(5), (h)(2), (4) through (6), (8), (9), (11), (14), and (19),
(l)(14), (o)(11), and (p)(13) of this section or to the provisions in 8
CFR 214.1(c)(1) and (4) through (7) be held to be invalid or
unenforceable by their terms or as applied to any person or
circumstance they should nevertheless be construed so as to continue to
give the maximum effect to the provision(s) permitted by law, unless
any such provision is held to be wholly invalid

[[Page 103200]]

and unenforceable, in which event the provision(s) should be severed
from the remainder of the provisions and the holding should not affect
the other provisions or the application of those other provisions to
persons not similarly situated or to dissimilar circumstances.
* * * * *
(l) * * *
(14) * * *
(i) Individual petition. The petitioner must file a petition
extension on Form I-129 to extend an individual petition under section
101(a)(15)(L) of the Act. A petition extension generally may be filed
only if the validity of the original petition has not expired.
* * * * *
(o) * * *
(11) Extension of visa petition validity. The petitioner must file
a request to extend the validity of the original petition under section
101(a)(15)(O) of the Act on the form prescribed by USCIS, in order to
continue or complete the same activities or events specified in the
original petition. A petition extension generally may be filed only if
the validity of the original petition has not expired.
* * * * *
(p) * * *
(13) Extension of visa petition validity. The petitioner must file
a request to extend the validity of the original petition under section
101(a)(15)(P) of the Act on the form prescribed by USCIS in order to
continue or complete the same activity or event specified in the
original petition. A petition extension generally may be filed only if
the validity of the original petition has not expired.
* * * * *

Alejandro N. Mayorkas,
Secretary, U.S. Department of Homeland Security.
[FR Doc. 2024-29354 Filed 12-17-24; 8:45 am]
BILLING CODE 9111-97-P