The Department of Homeland Security (DHS) has finalized the H-1B Modernization Rule, introducing significant reforms to the program that will benefit both employers and foreign workers. Scheduled to take effect on January 17, 2025, these changes aim to clarify and modernize the H-1B visa process, providing greater flexibility while tightening oversight measures.

 

However, with the Trump administration's intent to impose stricter controls on both legal and illegal immigration, the rule's future remains uncertain. While these changes are advantageous for stakeholders, they could face legal and regulatory challenges under the incoming administration's policies. Only time will tell how these reforms will fare in the evolving political landscape.

 

Key Provisions of the Rule:

 

1. Revised Definition of Specialty Occupation

• Greater flexibility: Positions requiring a bachelor's degree no longer need to “always” require one.
• Employers may now consider multiple related degree fields for a role, provided there's a logical connection to the job duties.

2. Deference to Prior Approvals

• USCIS must defer to prior H-1B approvals unless there are material changes or adverse findings.
• This codification reduces uncertainty and ensures predictability for employers.

3. Location Change Requirements

• Employers must file amendments for material location changes but not for moves within the same geographic area covered by the original Labor Condition Application (LCA).

4. H-1B Eligibility for Business Owners

• Entrepreneurs with controlling interest in a company may qualify for H-1B status but will face stricter validity limits of 18 months for initial and first extension petitions.

5. Focus on Bona Fide Employment

• The rule prioritizes the establishment of bona fide job offers, eliminating the requirement to provide daily assignment itineraries.

6. Extended CAP-Gap Protections for F-1 Students

• F-1 students transitioning to H-1B can enjoy an extended CAP-gap period, ensuring continuous status and work authorization until April 1 of the following year if needed

7. Validity Adjustments for Delayed Adjudications

• Employers can amend the validity period of petitions affected by adjudication delays, ensuring compliance with prevailing wage requirements.

8. Strengthened Site Visit Program

• USCIS now has codified authority to conduct site visits at all H-1B work locations, including third-party sites. Non-compliance may result in petition denial or revocation.

9. Expanded CAP Exemptions

• Nonprofits and governmental research organizations with secondary missions of research or education now qualify for H-1B CAP exemptions.

Potential Challenges Ahead:

Equal Pay Transparency (EPT) laws have been passed in several states and localities, potentially impacting the PERM process for employers conducting labor market testing efforts within those states. The AILA DOL Liaison Committee has provided this update.

 

As a reminder, New York City's EPT rule has been in effect since November 1, 2022.

 

Key Updates on Equal Pay Transparency Laws:

 

• Washington State: Effective January 1, 2023, employers with 15 or more employees must disclose the wage scale or salary range and a general description of all benefits and compensation in each job posting.
• California: Starting January 1, 2023, employers with 15 or more employees must post pay ranges in written job postings. Additionally, all employers must disclose pay ranges to applicants upon request and maintain job title and pay history records for each employee for the duration of employment plus three years.
• Rhode Island: Effective January 1, 2023, all employers must provide a pay range or rate upon request to job applicants before discussing compensation.

States with Existing EPT Laws:

Colorado, Connecticut, Maryland, Nevada, New Jersey, and Ohio already have EPT laws in effect. These rules vary by locality, with some requiring salary information in job postings, while others mandate disclosure upon request at the time an employment offer is made.

 

 

The requirements to publish pay in job postings significantly impact employers' PERM programs, specifically during labor market testing activities initiated before prevailing wage determinations (PWDs) are issued. While PERM regulations do not require wage or wage range disclosure in newspaper/journal advertisements, they do mandate this information in the Notice of Filing.

 

Challenges for Employers:

 

• Retesting Efforts: If a PWD is issued higher than the wage listed in the job posting or the low end of a salary range, employers may need to redo testing efforts, including the Notice of Filing.
• Compliance with Both PERM and EPT Laws: Employers must ensure compliance with EPT laws alongside PERM regulations. While PERM regulations do not override EPT laws, employers must adhere to both to avoid non-compliance.

Action Steps for Practitioners: 

1. Pre-Testing Wage Analysis: Conduct wage analyses before initiating testing efforts to anticipate the PWD. However, note that this method is not foolproof.
2. Consult Local Employment Counsel: Employers in areas affected by EPT laws should work with local employment counsel to ensure compliance with both PERM and EPT rules.
3. Incorporate EPT Laws in PERM Practices: Employers must integrate EPT law requirements into labor market testing activities, including job postings.

 

1. USCIS H-1B Modernization Rule

 

• U.S. Citizenship and Immigration Services (USCIS) is set to publish the second phase of its H-1B modernization plan this month.
• The rule is expected to include revised definitions for key H-1B terms, enhanced F-1 CAP-gap protections, and additional updates to streamline the program.

2. Increased 9/11 Response Fee for H-1B and L-1 Petitions

• U.S. Customs and Border Protection (CBP) is progressing with its proposal to expand the imposition of the $4,000 or $4,500 9/11 Response Fee to more H-1B and L-1 petitions.
• A final rule is scheduled for publication in April 2025, increasing the financial burden on employers filing these petitions.

3. Labor Certification Exemption for Schedule A Occupations

• The Department of Labor (DOL) has moved its proposal to expand Schedule A exemptions for labor certification to its long-term agenda.
• This shift suggests the initiative is no longer a near-term priority, leaving employers without expanded automatic exemptions for certain occupations.

Broader Implications:

The regulatory agenda reflects current policy priorities, but significant changes may occur after President-Elect Trump assumes office on January 20, 2025. While some initiatives may continue if they align with the administration's goals, others—particularly those seen as favoring immigration—could face delays or cancellation.

Employers, immigration professionals, and foreign workers should prepare for potential adjustments in the regulatory landscape and monitor agency announcements for developments on these key initiatives.

Next Steps: