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DHS Announces Major Changes to H-1B Program

On Tuesday, Oct. 6, 2020, the Department of Homeland Security announced some major changes to the H-1B visa program. The interim final rule is set to be published this week, and unless it is challenged, it will go into effect 60 days after publication (roughly Dec. 7, 2020). The ruling could potentially affect about half a million H-1B immigrants currently in the United States, and it revises regulations related to H-1B approval terms, wage levels, the definition of “specialty occupation”, and the H-1B employee-employer relationship.

The ruling reduces the approval term for H-1Bs. H-1B employees working at a third-party client site will have a maximum approval term of one year, while H-1Bs working directly with clients will be approved for three years at a time. It supersedes a court settlement from earlier this year that struck down short H-1B approval terms. The result is that H-1B employers will have to file extensions for their employees every year, costing them more in fees.

Second, the ruling increases required minimum wages for H-1B employees. New LCAs and PERM filings filed after the ruling’s publication date (Oct. 8) will be required to meet the new salary requirements. Those either filed before Oct. 8 or currently pending will also be considered based on the new salary rules. Level 1 wages will move from the 17th percentile to the 45th percentile. Level 2 wages will increase from the 34th percentile to the 62nd percentile. Level 3 wages, from the 50th percentile to the 67th percentile. And Level 4 wages will go from the 67th percentile to the 95th percentile.

This portion will most heavily affect young professionals. A Level 1 position is an entry-level job. By requiring employers to significantly increase the salaries for entry-level positions given to foreign workers, the ruling hurts international students graduating from college and looking for H-1B sponsorship to remain in the U.S.

Thirdly, the ruling revises the definition of “specialty occupation”. To be considered for a position in the U.S., a candidate for an H-1B visa must now have an education degree directly related to the job. They must have a bachelor’s degree or higher in a field specifically related to the job in question. Also, H-1B employers must prove that the job requires a specialty degree at a specific level in order to fulfill the job functions as required.

Finally, the ruling revises the terms of the employee-employer relationship. It sets stricter regulations for how H-1B employers will supervise their employees. It states that employers must have the right to control the H-1B employee’s day-to-day work, assign projects, hire and fire the employee, and evaluate the employee’s productivity. H-1B employers will be required to provide equipment (like work-issued laptops) to employees. Employers will also have to factor the employee into its own business tax purposes, provide employee benefits, and grant the H-1B employee certain bits of intellectual property in order to do their jobs.

This new ruling is estimated to affect the eligibility of about one-third of H-1B employees currently in the U.S. Existing approved H-1B applications will not be opened. New extensions, transfers, amendments, and changes of status will have to go through the new rules. Approved PERM and LCAs will not be affected.

Experts speculate that a lawsuit preventing the implementation of these new rules is highly likely. The ruling will not be finalized until the lawsuit is resolved.

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