The Department of Homeland Security (DHS) has released yet another rule that will make it harder and more costly for U.S. companies to employ highly skilled workers.

As a companion regulation to the “Strengthening Wage Protections for the Temporary and Permanent Employment of Certain Aliens in the United States” rule, DHS has released the “Strengthening of the H-1B Nonimmigrant Visa Classification” rule. Like its companion, it is being published as an Interim Final Rule (IFR), but will go into effect after 60 days. DHS expects about one-third of petitions for H-1B visa classification will be denied under the new rule.

The H-1B Rule codifies policies USCIS has been pursuing over the past several years that made it more difficult to obtain H-1B approvals and resulted in more Requests for Evidence (RFEs) and petition denials — all without transparent legislative or regulatory changes. Employers sued the administration in federal court arguing that a number of these policies were “arbitrary and capricious” in violation the Administrative Procedures Act (APA). In response, USCIS settled the cases and agreed to withdraw a number of the most contentious agency policies. In response, DHS is now intending to reimplement many of those policies through the truncated Interim Final rulemaking process. DHS contends that this is necessary in order to protect U.S. jobs during the current COVID-19-related economic downturn. Companies that employ H-1B workers maintain that access to these skilled workers is essential to ongoing operations and benefits the U.S. economy.

Key takeaways of the new rule for employers:

  • The definition of a “specialty occupation” is revised to focus more specifically on the relationship between the degree requirements and the duties of the position. This will make it more difficult for those in new, innovative fields, where specific specialty degrees are not yet even available.
  • Petitioners will bear the burden of showing a specific bachelor’s degree is always a requirement, not just “normally” a requirement for the position, a near impossible task.
  • Contractors will no longer be specifically listed among those who qualify as U.S. employers, although they can still qualify as U.S. employers by proving a bona fide employer-employee relationship.
  • The definition of a bona fide employer-employee relationship will focus more heavily on a totality of circumstances standard, rather than any one factor, such as the right to control.
  • H-1B workers at third-party locations will be limited to one year, rather than the currently available three years, renewable annually. Petitioning employers intending to place H-1B workers at third-party worksites will have to provide corroborating evidence to prove that specialty occupation work will be available throughout the requested time period. These changes will greatly increase the costs and documentary requirements for certain petitioners who rely on third-party placements.
  • The H-1B Rule codifies the scope and potential consequences of USCIS Fraud Detection and National Security Officers (FDNS) worksite inspections. If the FDNS is not able to verify facts related to an H-1B petition or compliance with H-1B requirements due to the failure or refusal of the petitioner or third party to cooperate, such failure may be grounds for denial or revocation of a petition.

Because this far reaching rule is being issued as an Interim Final regulation without opportunity for full notice and comment, litigation seeking to enjoin implementation is likely.  In addition, the rule is likely to be challenged while the validity of Chad Wolf’s appointment as Acting Director of DHS is still being contested.

If you have any questions about how the H-1B Rule will affect your company, please reach out to your Jackson Lewis attorney.


USCIS has entered into a broad settlement agreement that requires it to withdraw certain H-1B policies.

H-1B denials have skyrocketed since 2017, especially following enactment of the “Buy American, Hire American” Executive Order. In February 2018, USCIS issued further guidance specifically placing additional onerous documentation requirements for H-1B employees working at client sites, disproportionately affecting staffing and consulting companies. As a result, staffing and consulting companies have seen the highest H-1B denial rates.

In response, employers filed cases in federal courts alleging the USCIS denials were arbitrary, capricious, and in violation of the relevant statutes and regulations. After filing, some of those denials were reversed and approved by USCIS without extensive litigation. Those cases (and those that proceeded through litigation) affected specific employers – not USCIS policy.

Now, summary judgment decisions for the plaintiffs in the consolidated cases of ITServe Alliance v. Cissna and Serenity Info Tech v. Cuccinelli have led USCIS to enter into a broad settlement agreement with ITServe Alliance, an association of IT service organizations.

According to the terms of the settlement:

  • Within 90 days of the settlement, USCIS will withdraw its guidance known as the “Contract and Itinerary Memorandum” that required employers to provide an onerous amount of documentation to prove that beneficiaries would be employed in a specialty occupation throughout the requested period. The guidance required detailed documentation, including evidence of work assignments, copies of all contractual agreements, itineraries with specific dates and locations, and copies of detailed statements of work signed by the end-user client.
  • USCIS will broaden its interpretation of what constitutes an employer-employee relationship to conform with the Department of Labor definition, which states that an employer-employee relationship is “indicated by the fact that [the employer] may hire, pay, fire, supervise, or otherwise control the work of any such employee . . ..” [emphasis added]
  • USCIS will stop its practice of approving petitions for time periods shorter than those requested by the employer without at least a brief explanation of the legal justification.

USCIS will start reopening and readjudicating approximately 200 cases involved in the consolidated case, and, importantly, will not use these overly restrictive standards.

USCIS has not yet issued any specific guidance regarding the ITServe Alliance settlement and how it might be used by other employers with previously denied cases.

Jackson Lewis attorneys are available to assist you in determining how the change will affect your employment plans, including H-1B petitions, extensions, or past denials.