October 8, 2020
In response to President Trump’s directive E.O 13788, to “Buy American, Hire American” and the recent economic crisis caused by the COVID-19 health emergency, on October 6, 2020, the Department of Homeland Security (DHS) released an Interim Final Rule (IFR) titled “Strengthening the H-1B Nonimmigrant Visa Classification Program.” The new rule will become effective, December 7, 2020 after a 60-day notice period to allow stakeholders to provide comments before the rule goes into effect.
The following key changes are being made:
- New Definition and Standards for “Specialty Occupation;”
- Added Definitions For “Worksite” and “Third-Party Worksite;”
- Revised definition of “United States Employer;”
- Clarifies “Employer-Employee Relationship” Between the Petitioner and the Beneficiary;
- Requiring Corroborating Evidence of Work in a Specialty Occupation;
- Limiting the Validity Period for Third-Party Placement Petitions to a Maximum of 1 Year;
- Providing a Written Explanation When the Petition is Approved With an Earlier Validity Period End Date Than Requested;
- Amending the General Itinerary Provision to Clarify it Does Not Apply to H-1B Petitions; and
- Codifying USCIS’ H-1B Site Visit Authority, Including the Potential Consequences of Refusing a Site Visit.
See in more detail below:
- New Definition and Standards for “Specialty Occupation”
The new rule amends the definition of a “specialty occupation” at 8 CFR 214.2(h)(4)(ii) to clarify that there must be a direct relationship between the required degree field(s) and the duties of the position.
The IFR states a position 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. Moreover, the amended definition clarifies that a position would not qualify as a specialty occupation if attainment of a general degree, without further specialization, is sufficient to qualify for the position.
The petitioner will have the burden of demonstrating that there is a direct relationship between the required degree in a specific specialty (in other words, the degree field(s) that would qualify someone for the position) and the duties of the position.
Section 214(i)(1) of the INA allows the “attainment of a bachelor’s or higher degree in the specific specialty (or its equivalent)” as such USCIS may accept the equivalent to a degree in a specific specialty, as long as that equivalent provides the same (or essentially the same) body of specialized knowledge.
In cases where the petitioner lists degrees in multiple disparate fields of study as the minimum entry requirement for a position, the petitioner would have to establish 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 to meet the requirements of sections 214(i)(1)(A) and (B) of the INA, 8 U.S.C. 1184(i)(1)(A) and (B), the regulatory definition, and one of the four criteria at new 8 CFR 214.2(h)(4)(iii)(A).
The CFR definition of “Specialty Occupation” will be updated to match the INA. “Normally” “common,” and “usually” is eliminated from the regulation. Petitioner will have to establish that the bachelor’s degree in a specific specialty, or its equivalent, is a minimum requirement for entry into the occupation in the United States by showing that this is always the requirement for the occupation as a whole, the occupational requirement within the relevant industry, the petitioner’s particularized requirement, or because the position is so specialized, complex, or unique that it is necessarily required to perform the duties of the specific position.
The Specialty Occupation definition under 8 CFR 214.2(h)(4)(iii)(A) is revised from “to qualify as a specialty occupation,” to “A proffered position does not meet the definition of specialty occupation unless it also satisfies” [one of the regulatory criteria]. This change will clarify that meeting one of the regulatory criteria is a necessary part of—but not necessarily sufficient for—demonstrating that a position qualifies as a specialty occupation.
8 CFR 214.2(h)(4)(iii)(A)(1) will be amended by replacing the word “position” with “occupation,” so that it sets forth “the minimum requirement for entry into the particular occupation in which the beneficiary will be employed.” Replacing “position” with “occupation” clarifies that the first criterion can be satisfied if the petitioner can show that its position falls within an occupational category for which all positions within that category have a qualifying minimum degree requirement. For example, where an occupation requires a Bachelor’s degree, it should follow that positions for that occupation would require a Bachelor’s Degree.
DHS further is amending 8 CFR 214.2(h)(4)(iii)(A)(2) by consolidating this criterion’s second prong into the fourth criterion. See new 8 CFR 214.2(h)(4)(iii)(A)(2). The second prong of current 8 CFR 214.2(h)(4)(iii)(A)(2), which focuses on a position’s complexity or uniqueness, is similar to current 8 CFR 214.2(h)(4)(iii)(A)(4), which focuses on a position’s complexity and specialization.
Petitioners may now demonstrate eligibility under this criterion if the position is “so specialized, complex, or unique” (emphasis added), as opposed to “so complex or unique” under current 8 CFR 214.2(h)(4)(iii)(A)(2) and “so specialized and complex” under current 8 CFR 214.2(h)(4)(iii)(A)(4) (emphasis added).
A petitioner will satisfy the new 8 CFR 214.2(h)(4)(iii)(A)(2) if it demonstrates that the specialty degree requirement is the minimum entry requirement for (1) parallel positions (2) at similar organizations (3) within the employer’s industry in the United States. This criterion is intended for the subset of positions with minimum entry requirements that are determined not necessarily by occupation, but by specific industry standards.
The new regulation under 8 CFR 214.2(h)(4)(iii)(A)(3) revises the criteria from “The employer normally requires a degree” to “employer requires a degree or its equivalent for the position.”
As such the petitioner also must establish that the proffered position requires a directly related specialty degree, or its equivalent, to perform its duties,”
2. Added Definitions For “Worksite” and “Third-Party Worksite”
DHS will define “worksite” similar to the DOL definition of “place of employment” in 20 CFR 655.715 as “the physical location where the work is actually performed by the H-1B nonimmigrant.” A “worksite” will not include any location that would not be considered a “worksite” for LCA purposes, meaning that DHS will apply the same exclusions and examples of “non-worksite locations” as set forth in DOL’s regulations.
A “Third-party worksite” is defined as “a worksite, other than the beneficiary’s residence in the United States, that is not owned or leased, and not operated, by the petitioner.” This definition is similar to the “owned or operated” test commonly used in the LCA context.
3. Revised definition of “United States Employer”
U.S Employer was previously defined as: “a person, firm, corporation, contractor, or other association, or organization in the United States” which, among other things, “[e]ngages a person to work within the United States.
The new definition of U.S. Employer: “a person, firm, corporation, company, or other association, or organization in the United States” which, among other things, “[e]ngages the beneficiary to work within the United States, and ha[ve] a bona fide, non-speculative job offer for the beneficiary,”
The deletion of term “contractor” from the regulatory definition does not mean that a contractor never would qualify as a “United States employer” for the purpose of filing an H-1B petition. A contractor may be a person, firm, company, corporation, or other association or organization, and the contractor (whatever the form) still may qualify as a U.S. employer of the H-1B beneficiary if the contractor demonstrates the requisite employer-employee relationship with the beneficiary.
DHS states that the new regulations under 8 CFR 214.2(h)(4)(ii) will make it clear that a petitioner must have non-speculative employment for the beneficiary at the time of filing.
DHS states this rule is not requiring employers to establish non-speculative and specific assignments for each and every day of the proposed period of employment. Again, under new 8 CFR 214.2(h)(4)(ii), a petitioner must demonstrate, at the time of filing, of the requested availability of actual work as start date.
4. Clarifies “Employer-Employee Relationship” Between the Petitioner and the Beneficiary
The new “employer-employee” definition will list non-exhaustive factors to be considered in the totality of the circumstances in cases where the H-1B beneficiary does not possess an ownership interest in the petitioning organization or entity:
- 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.
- Under this factor, subfactors are also relevant:
- The skill required;
- the source of the instrumentalities and tools;
- the location of the work;
- the duration of the relationship between the parties;
- whether the hiring party has the right to assign additional projects to the hired party;
- the extent of the hired party’s discretion over when and how long to work;
- the method of payment; the hired party’s role in hiring and paying assistants;
- whether the work is part of the regular business of the hiring party;
- whether the hiring party is in business;
- the provision of employee benefits; and
- the tax treatment of the hired party.
DHS states that by listing these factors out, it is making clear that no single factor is dispositive and that all factors must be taken into consideration to the extent applicable and appropriate to the facts of the specific case.
“Employer-employee” definition in cases where the H-1B beneficiary possesses an ownership interest in the petitioning organization or entity.
- Whether the petitioning entity can hire or fire the beneficiary or set the rules and parameters of the beneficiary’s work,
- whether and, if so, to what extent the petitioner supervises the beneficiary’s work,
- whether the beneficiary reports to someone higher in the petitioning entity,
- whether and, if so, to what extent the beneficiary is able to influence the petitioning entity,
- whether the parties intended that the beneficiary be an employee, as expressed in written agreements or contracts, and
- whether the beneficiary shares in the profits, losses, and liabilities of the organization or entity. All of these are additional factors, meaning that they would supplement, not replace, the other factors listed in paragraph (1) of the revised definition.
5. Requiring Corroborating Evidence of Work in a Specialty Occupation
The new regulations under 8 CFR 214.2(h)(4)(iv)(C) will require that the petitioner establish, at the time of filing, that it has actual work in a specialty occupation available for the beneficiary as of the start date of the validity period as requested on the petition.
According to the IFR, Petitioners who regularly place their workers at third-party worksites often submit uncorroborated statements describing the role the H-1B beneficiary will perform at the third-party worksite. Such statements, without additional evidence, are generally insufficient to establish by a preponderance of the evidence that the H-1B beneficiary will actually perform work in a specialty occupation.
Where a beneficiary will be placed at one or more third-party worksites, DHS will require the petitioner to submit evidence such as contracts, work orders, or other similar evidence (such as a detailed letter from an authorized official at the third-party worksite) to establish that the beneficiary will perform services in a specialty occupation at the third-party worksite(s), and that the petitioner will have an employer-employee relationship with the beneficiary. See new 8 CFR 214.2(h)(4)(iv)(C).
6. Limiting the Validity Period for Third-Party Placement Petitions to a Maximum of 1 Year
DHS will set a 1-year maximum validity period for all H-1B petitions in which the beneficiary will be working at a third-party worksite. See new 8 CFR 214.2(h)(9)(iii)(A)(1).
Please note, this 1 -year maximum validity period for H-1B aliens placed at third-party worksites does not result in the alien being unable to obtain the statutory maximum six years of H-1B status. The result with this rule is that petitioners with this business model will pay more in filing costs for the continued use of H-1B workers than they currently do.
7. Providing a Written Explanation When the Petition is Approved With an Earlier Validity Period End Date Than Requested
DHS is amending its regulations to require its issuance of a brief explanation when an H-1B nonimmigrant petition is approved but USCIS grants an earlier end validity date than requested by the petitioner.
8. Amending the General Itinerary Provision to Clarify it Does Not Apply to H-1B Petitions
DHS is revising the itinerary requirement at 8 CFR 214.2(h)(2)(i)(B) (for service or training in more than one location) to specify that this particular provision will not apply to H-1B petitions in accordance with recent Federal Court rulings.
9. Codifying USCIS’ H-1B Site Visit Authority, Including the Potential Consequences of Refusing a Site Visit.
The new regulations state inspections may include, but are not limited to, 1) an on-site visit of the petitioning organization’s facilities, 2) interviews with its officials, 3) review of its records related to compliance with immigration laws and regulations, and 4) 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 H-1B petition, such as facts relating to the petitioner’s and beneficiary’s H-1B eligibility and compliance.
The new regulation also clarifies 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.
Failure or refusal may be grounds for denial or revocation of any H-1B petition for H-1B workers performing services at the location or locations which are a subject of inspection, including any third-party worksites.
These tightened rules will narrow the number of H-1B visas approved and make it more expensive for employers to petition H-1B employees. However, these updated rules will undoubtedly face challenges in federal court.