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In October 2023, the U.S. Citizenship and Immigration Services (USCIS) announced several proposed changes to the H-1B program.  This article explains general concepts regarding the H-1B program and some of the key proposals as they relate to specialty occupations.

What is the H-1B program?

H-1B is a temporary status classification used for individuals who seek employment in the U.S. in a specialty occupation or as a fashion model of distinguished merit and ability.  As a general rule, in order for the intended job to qualify as a specialty occupation, a bachelor’s degree or its equivalent must be normally required to enter the profession. 

Current law allows for 65,000 H-1B visas per fiscal year for individuals holding a bachelor’s degree from an accredited university in the U.S. or abroad, and another 20,000 for individuals holding a Master’s or Ph.D. from a public or not-for-profit university in the U.S.  Needless to say, there are far more applicants than the available number of visas annually.  As a result, all of these visas initially go into a lottery in March of each year.  Those selected in the lottery can then submit their petitions on the merits to USCIS.  For the current fiscal year, USCIS received over 780,000 lottery registrations.

Are all H-1B submissions subject to the lottery?

No, there are some types of H-1B petitions that are not subject to the lottery or the annual cap.  For instance, H-1B renewals or extensions do not have to go through the lottery again, unless the employee has already spent six years in H-1B status. 

H-1B holders who are the beneficiary of an employment-based permanent residence case are often able to extend their H-1B status without the need for a new lottery even beyond those six years, depending on the stage of their permanent residence case.

Likewise, first-time H-1B petitions filed by certain institutions of higher education, non-profit research organizations, or certain other non-profit organizations are also not subject to the H-1B lottery for their H-1B employees.

What are the USCIS proposed changes?

There are several major types of changes in the recent USCIS proposal: one type would change the way the H-1B lottery is administered, so it would impact only those H-1B petitions subject to the lottery; another type of change would impact all H-1B petitions, including those from university and/or non-profit employers, and it would address the definition of “specialty occupation;” the proposal would also have specific provisions for start-up founders and entrepreneurs, who may not qualify under the old system. 

1. Proposed changes to the lottery selection

   The H-1B lottery registration is done by the company (employer), not by the employee.  Currently, the H-1B lottery registration system allows multiple companies to register the same employee(s) in the lottery, as long as the companies are not related to each other.  This has led to many employees being entered into the lottery multiple times, through different companies, which increases their chances of getting selected.  At the same time, this method opens the door to potential fraud and misuse of the system.

   To minimize the potential of fraud, and to provide a more equitable selection process, USCIS has proposed to limit employees to one registration only, no matter how many separate companies submit a registration on that employee’s behalf.   This would ensure that all individuals have equal chances of being selected and it would drive down the overall number of registrations ultimately submitted in the final selection process.

2. Definition of specialty occupation

   The definition of “specialty occupation” currently listed in the federal regulations has caused significant litigation and inconsistent USCIS decisions in recent years.  As a result, USCIS has initiated the process of formally adopting recent provisions from policy and court orders surrounding the H-1B program into the official federal regulations.  USCIS is proposing to clarify and codify the following “specialty occupation” elements:

   -          Educational requirements to qualify for H-1B status – there has been considerable dispute as to whether a specialty occupation position must require a bachelor’s degree in a very specific and narrow field of study, or whether a range of degree fields is sufficient.  The proposed rule would make it official that the H-1B specialty occupation may require a range of different degrees, as long as they are all directly related.

   -          A general degree, without further specialization, will not be sufficient to qualify a position as a specialty occupation.  For instance, an occupation that normally requires a Bachelor Degree in Business Administration, without more, is not a specialty occupation. 

   -          The applicable bachelor degree must “normally” be required, not “always” be required. 
   

3. Opening the H-1B program to start-up founders

Currently, the H-1B visa is not designed to accommodate start-up founders and entrepreneurs who own a controlling interest in the company.  Under the current system, start-up founders generally cannot use the start-up they founded to obtain H-1B status, subject to some exceptions.  If a start-up founder is able to get H-1B status through their own start-up, the current H-1B program generally does not allow the entrepreneur to perform any duties not expressly related to the underlying specialty occupation.  For instance, an entrepreneur who gains H-1B status as a computer science engineer would generally not be allowed to engage in any business-related activity to manage or grow the company.

The new proposal aims to change that, and to include some start-up founders with controlling interest among those eligible for H-1B status through the very company they founded.  The proposed changes would also allow the entrepreneur to engage in business-related activities needed to manage or grow the company.

When will the new H-1B rules take effect?

These proposed changes (and several others) are still being discussed.  They were all published in a Notice of Proposed Rulemaking, which gives the general public 60 days to comment.  At the end of the public comment period, the Department of Homeland Security will review all public comments and determine if any of the proposals should be adjusted.  This review process may take several months before the final changes are announced and implemented.

However, we expect that the proposed change regarding how the H-1B lottery is administered will be prioritized.  We expect to see the final version of those changes by the end of February 2024, as they will likely take effect at the time of the upcoming lottery season in March 2024.  All other proposed changes may be finalized at the same time, or they may be finalized in a phased-in process throughout the course of the upcoming year.

If you are seeking additional information regarding the H-1B program, or if you have any other immigration-related question, contact Attorney Raluca (Luca) Vais-Ottosen at rvo@dewittllp.com or (608) 252-9291.