New DHS Rule Narrows H-1B Eligibility Requirements and Imposes Other Limitations
/Background
The Department of Homeland Security (“DHS”) has published a new rule that has the potential to significantly narrow the eligibility criteria for the H-1B work visa program. Unless it is blocked by litigation that is sure to follow shortly, the new rule will take effect in 60 days and it will apply to all H-1B petitions filed on or after the effective date, including new petitions, extensions, a request to change employers, and amendments.
The new regulation tightens the H-1B criteria in four principal areas: the employer-employee relationship; the definition of specialty occupation; limiting the validity period of third-party worksite placements; and reasserting the USCIS’ work-site visit authority.
Employer-Employee Relationship
The rule changes provide USCIS with more discretion to determine whether an employer-employee relationship exits, which is a foundational requirement of H-1B eligibility. The employer-employee relationship is not defined, rather, USCIS will assess the relationship based on a list of non-determinative factors:
Whether the petitioner supervises the beneficiary and, if so, where such supervision takes place;
Where the supervision is not at the petitioner’s worksite, how the petitioner maintains such supervision;
Whether the petitioner has the right to control the work of the beneficiary on a day-to-day basis and to assign projects;
Whether the petitioner provides the tools or instrumentalities needed for the beneficiary to perform the duties of employment;
Whether the petitioner hires, pays, and has the ability to fire the beneficiary;
Whether the petitioner evaluates the work-product of the beneficiary;
Whether the petitioner claims the beneficiary as an employee for tax purposes;
Whether the petitioner provides the beneficiary any type of employee benefits;
Whether the beneficiary uses proprietary information of the petitioner in order to perform the duties of employment;
Whether the beneficiary produces an end-product that is directly linked to the petitioner’s line of business; and
Whether the petitioner has the ability to control the manner and means in which the work product of the beneficiary is accomplished.
Specialty Occupation
Under the H-1B program, a “Specialty Occupation” is defined as a position that requires a bachelor’s degree or equivalent as a minimum. The new rule now requires that the degree must be directly related to the position and expressly notes that positions that allow a general degree such a business administration or liberal arts without further specialization will not meet the Specialty Occupation definition.
The new rule also eliminates the use of “normally”, “common” and “usual” degree language from the Specialty Occupation definition. Prior to the rule change, petitioners could demonstrate that a minimum degree field was “normal” for the position, “common” to the industry, or the job duties are so complex that the knowledge required to perform the position is “usually” associated with attaining a bachelor’s degree. The new rule requires petitioners to prove any degree fields listed for the position are in fact the minimum requirements provided by the Department of Labor.
Under the new rule an H-1B position will only meet the definition of specialty occupation if it meets at least one of the following criteria:
A U.S. baccalaureate or higher degree in a directly related specific specialty, or its equivalent, is the minimum requirement for entry into the particular occupation in which the beneficiary will be employed;
A U.S. baccalaureate or higher degree in a directly related specific specialty, or its equivalent, is the minimum requirement for entry into parallel positions at similar organizations in the employer’s United States industry;
The employer has an established practice of requiring a U.S. baccalaureate or higher degree in a directly related specific specialty, or its equivalent, for the position. The petitioner must also establish that the offered position requires such a directly related specialty degree, or its equivalent, to perform its duties; or
The specific duties of the proffered position are so specialized, complex, or unique that they can only be performed by an individual with a U.S. baccalaureate or higher degree in a directly related specific specialty, or its equivalent.
The biggest change here is that the new regulation eliminates an option that permitted a H-1B petitioning employer to establish that the required degree is common in the industry for the specialty occupation. The revised version requires the petitioner to establish that the required degree is the minimum requirement for entry into parallel positions at similar organizations.
All in all, these changes are not a substantial departure from how USCIS has been interpreting the regulations in recent years.
Third-Party Worksite Placements
Under the new rule, the maximum validity period for an approved H-1B petition where the employee will be working at a third-party worksite will be limited to one year (versus three years, currently). Further, where an H-1B employee will be placed at one or more third-party worksites, the petitioner must submit evidence such as a contract, work orders, or other corroborating evidence to confirm the nature of the work and that the H-1B employee will retain an employer-employee relationship throughout the placement. The new rule also requires an itinerary for H-1B employees who will work at multiple worksites. These provision are not new, rather this rule is mostly reinstating USCIS policies that were invalidated by a federal court earlier this year.
Also, while there was speculation that this new rule might include a new for end-clients to obtain certified Labor Condition Applications (LCAs) for H-1B workers placed at their worksite, such a provision is not included in the new rule.
USCIS Worksite Visits
Under the new rule, USCIS will be granted even greater authority to enforce compliance through worksite inspections, before, during, and after the H-1B petition is approved.
USCIS will be authorized to conduct site-visits at the petitioning organization’s headquarters, satellite locations, or the location where the H-1B employee will work, including third-party worksites. USCIS will also have the authority to deny or revoke an H-1B petition where a site-visit or inspection is refused or where the petitioner is considered uncooperative.
Ellis Porter’s Analysis
Since DHS circumvented the normal rulemaking process to roll out this new rule with very weak legal justifications for doing so, we expect this new rule will be challenged in court before the effective date.
As a result, it is unclear if or when this new rule will actually take effect, and Ellis Porter will continue to monitor and report developments related to this new rule closely.
Additionally, even if this rule were to become effective, many of these changes are not too much of a departure from how USCIS has been adjudicating H-1B petitions in recent years (more restrictively). However, it does underscore the need to ensure every H-1B petition, whether it is a new petition or a subsequent extension is carefully prepared to withstand challenges from USCIS.
For companies who rely on third-party worksite placements, it will become even more important to work with your third-party clients to ensure robust and detailed documentation is available to support H-1B petitions going forward.
Finally, developing a well-documented and organized site-visit process is essential for any company with foreign national employees. Ellis Porter regularly assists clients in designing and developing compliance processes and protocols to ensure companies are prepared and organized to respond to any USCIS site visits.
Questions?
If you have any additional questions about how this rule change could impact you, please contact Ellis Porter and we will be happy to provide further clarification and assistance.