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DHS issues proposed rule to modernize the H-1B visa program, includes startup founder provision

October 26, 2023
By: Michele Hujber

A proposed Department of Homeland Security (DHS) rule could herald significant changes to the H-1B specialty occupation worker program. These proposed changes would bring about a revised definition of “specialty occupation,” install what DHS says would be a more equitable selection process, allow entrepreneurs to sponsor themselves for an H-1B Visa, and open more non-lottery options for nonprofits.

The H-1B nonimmigrant visa program allows U.S. employers to hire international workers temporarily. These positions must require a bachelor's degree plus specialization or their equivalent. Sixty-five thousand of these visas are awarded each year. Congress has described the program's purpose as "filling shortages and creating opportunities for innovation and expansion.”

Criteria for specialty occupation positions would be revised to clarify that a position may allow a range of degrees, but that the required degree field and the position's duties must have a direct relationship. The proposed rules also clarify that general degrees, such as business administration or liberal arts, are insufficient to qualify someone for a specialty occupation position; further specialization would be required.

The new rule proposal would clear the way for international startup founders to petition for an H-1B visa on their own behalf. These entrepreneurs must own a controlling interest in the petitioning entity and spend 50% of their time performing specialty occupation duties. These new provisions come with limitations: DHS proposes to limit the validity period for the initial petition and first extension of such a petition to 18 months each. Any subsequent extension would not be limited and may be approved for up to 3 years. The proposed rule explains that "these limitations would be imposed as a safeguard against possible fraudulent petitions."

Another significant provision involves benefits and flexibility. Currently, the number of workers at institutions of higher education or a related or affiliated nonprofit entity, and workers who will be employed at a nonprofit or governmental research organization, is unlimited. The rule proposal loosens this restriction to include nonprofit entities or governmental research organizations that conduct research as a fundamental activity but are not primarily engaged in research. It also allows organizations where research is not a primary mission to meet the definition of a nonprofit research entity. Additionally, DHS proposes to revise the requirements for beneficiaries so that they qualify for H–1B cap exemption when they are not directly employed by a qualifying organization but still provide essential work. This rule would apply even when their duties do not further the organization's fundamental purpose.

Provisions to bolster the integrity of the H-1B program have been added to the proposed rule. As the final rule notes, these additions are in response to companies adding applicants’ names multiple times to increase their chances of winning the lottery. The proposed rule prohibits multiple registrations and codifies penalties for doing so. As noted in the rules proposal, “while DHS is aware that multiple petitioners may submit registrations for a highly qualified beneficiary, it raises red flags if one beneficiary has 41 or 83 registrations submitted on their behalf, which occurred in FY22 and FY23, respectively.” The proposed rule suggests selecting based on unique H-1B visa candidates instead of registrations submitted by potential employers. However, the proposed rule emphasizes that “there is no limit on the number of registrations that may be submitted on behalf of one unique individual by different registrants.”

The public may submit comments on this proposed rulemaking package, identified by DHS Docket No. USCIS–2023–0005, here before midnight Eastern time on December 22, 2023.

DHS may publish final rules in time for FY 2025 "if agency resources allow."

DHS, H-1B, startups