DHS Finalized H-1B Modernization Rule Set to Take Effect January 17, 2025

By: Justin Kennedy and Mishita Jethi

Introduction

The Department of Homeland Security (DHS) has finalized its updates to the H-1B visa regulations, initially proposed in October 2023. These changes will go into effect on January 17, 2025 and the complete rule can be found on the Federal Register website. While certain updates, especially those affecting the annual visa selection process, have already been implemented since March 2024, the final rule largely mirrors the original proposal with a few key revisions that offer benefits to employers.

The new rule is designed to offer more flexibility for employers and foreign workers by (i) updating the criteria for specialty occupation positions and organizations such as nonprofits and government research institutions that are exempt from the annual H-1B visa cap and (ii) strengthening cap gap protections for F-1 students. Further, the new rule provides additional clarity to H-1B amendment requirements and codifies USCIS’ policy of deference to prior approvals. These changes are designed to help U.S. businesses attract and retain the talent they need, to remain competitive in the global economy.

Key Takeaways from the Rule

The final regulation introduces several key provisions that clarify and expand the scope of H-1B visa eligibility, including provisions aimed at addressing specific employment-related issues. One notable change is the revision of the definition of qualifying H-1B occupations. The updated rule offers more flexibility by allowing positions that “normally” require a bachelor's degree to qualify, even if the degree is not always required. It also clarifies that a position may qualify for an H-1B visa if the employer accepts a variety of degree fields, provided that each field is “directly related” to the job duties. Additionally, the final rule includes provisions for off-site placements, specifying that when an H-1B beneficiary is staffed at a third-party client location, that the third party’s requirements—rather than the petitioner’s—will determine the position’s eligibility as a specialty occupation.

The new rule also strengthens USCIS’s authority to conduct inspections and enforce penalties for violations, thus ensuring compliance and preserving program integrity. Employers must demonstrate that a legitimate specialty occupation role exists for the worker by the requested start date, ensure the Labor Condition Application aligns with the H-1B petition, and verify their legal presence and accountability in the U.S.

Another significant update is the formalization of USCIS’s policy on deference to prior nonimmigrant adjudications. The rule establishes that USCIS will defer to previous I-129 approvals when the same parties and facts are involved, unless there have been material changes in circumstances or eligibility. This change provides employers with greater predictability when filing new petitions, reducing the likelihood of requests for evidence (RFEs) or denials. The rule also strengthens the requirements for H-1B location changes, clarifying when petition amendments are necessary and codifying when changes within the intended employment area do not require amendments. Furthermore, the regulation clarifies the eligibility of business owners with a controlling interest in their petitioning entity, allowing them to apply for H-1B status, provided they will be performing specialty occupation duties the majority of the time.

For international students on F-1 visas transitioning to H-1B status, the rule also provides options to maintain legal status and work authorization, minimizing potential disruptions. It streamlines the process for individuals who have previously held an H-1B visa, thus enabling quicker application processing. Additionally, the rule extends H-1B eligibility to individuals with a controlling interest in their sponsoring organization, provided they meet certain conditions.

The final regulation also expands the scope of H-1B cap exemptions for certain nonprofit and governmental research organizations, recognizing that research or education need not be the organization’s primary mission to qualify for exemption. Finally, beginning January 17, 2025, employers will need to use a revised version of Form I-129, Petition for a Nonimmigrant Worker, for all H-1B applications. USCIS will soon release a preview of the updated form on its website, and no grace period will be allowed for using older versions.

Conclusion

For more information on the H-1B modernization rule, refer to the Federal Register website. If you have additional questions, reach out to your trusted immigration professionals at Chugh, LLP.