Strengthening the H-1B Nonimmigrant Visa Classification Program

Federal RegisterOct 8, 2020

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DEPARTMENT OF HOMELAND SECURITY

8 CFR Part 214

[CIS No. 2658-20 DHS Docket No. USCIS-2020-0018]

RIN 1615-AC13

Strengthening the H-1B Nonimmigrant Visa Classification Program

AGENCY:

U.S. Citizenship and Immigration Services, Department of Homeland Security.

ACTION:

Interim final rule (IFR) with request for comments.

SUMMARY:

The Department of Homeland Security (DHS or the Department), is amending certain DHS regulations governing the H-1B nonimmigrant visa program. Specifically, DHS is: Revising the regulatory definition of and standards for a “specialty occupation” to better align with the statutory definition of the term; adding definitions for “worksite” and “third-party worksite”; revising the definition of “United States employer”; clarifying how U.S. Citizenship and Immigration Services (USCIS) will determine whether there is an “employer-employee relationship” between the petitioner and the beneficiary; requiring corroborating evidence of work in a specialty occupation; limiting the validity period for third-party placement petitions to a maximum of 1 year; providing a written explanation when the petition is approved with an earlier validity period end date than requested; amending the general itinerary provision to clarify it does not apply to H-1B petitions; and codifying USCIS' H-1B site visit authority, including the potential consequences of refusing a site visit. The primary purpose of these changes is to better ensure that each H-1B nonimmigrant worker (H-1B worker) will be working for a qualified employer in a job that meets the statutory definition of a “specialty occupation.” These changes are urgently necessary to strengthen the integrity of the H-1B program during the economic crisis caused by the COVID-19 public health emergency to more effectively ensure that the employment of H-1B workers will not have an adverse impact on the wages and working conditions of similarly employed U.S. workers. In addition, in strengthening the integrity of the H-1B program, these changes will aid the program in functioning more effectively and efficiently.

DATES:

This interim final rule is effective on December 7, 2020. Written comments must be submitted on this interim final rule on or before December 7, 2020. Comments on the collection of information (see Paperwork Reduction Act section) must be received on or before November 9, 2020. Comments on both the interim final rule and the collection of information received on or before November 9, 2020 will be considered by DHS and USCIS. Only comments on the interim final rule received between November 9, 2020 and December 7, 2020 will be considered by DHS and USCIS. Note: Comments received after November 9, 2020 only on the information collection will not be considered by DHS and USCIS.

ADDRESSES:

You may submit comments on the entirety of this interim final rule package, identified by DHS Docket No. USCIS-2020-0018, through the Federal eRulemaking Portal:

http://www.regulations.gov.

Follow the website instructions for submitting comments. Comments submitted in a manner other than the one listed above, including emails or letters sent to DHS or USCIS officials, will not be considered comments on the interim final rule and may not receive a response from DHS. Please note that DHS and USCIS cannot accept any comments that are hand-delivered or couriered. In addition, USCIS cannot accept comments contained on any form of digital media storage devices, such as CDs/DVDs and USB drives. Due to COVID-19, USCIS is also not accepting mailed comments at this time. If you cannot submit your comment by using

http://www.regulations.gov,

please contact Samantha Deshommes, Chief, Regulatory Coordination Division, Office of Policy and Strategy, U.S. Citizenship and Immigration Services, Department of Homeland Security, by telephone at 202-272-8377 for alternate instructions.

FOR FURTHER INFORMATION CONTACT:

Charles L. Nimick, Chief, Business and Foreign Workers Division, Office of Policy and Strategy, U.S. Citizenship and Immigration Services, Department of Homeland Security, 20 Massachusetts Ave. NW, Suite 1100, Washington, DC 20529-2120. Telephone Number (202) 272-8377 (not a toll-free call). Individuals with hearing or speech impairments may access the telephone numbers above via TTY by calling the toll-free Federal Information Relay Service at 1-877-889-5627 (TTY/TDD).

SUPPLEMENTARY INFORMATION:

I. Table of Contents

II. Public Participation

III. Executive Summary

A. Purpose and Summary of the Regulatory Action

B. Legal Authority

C. Summary of Costs and Benefits

IV. Background

A. History and Purpose of the H-1B Visa Program

B. Implementation of this Interim Final Rule

V. Discussion of the Provisions to Strengthen the H-1B Program

A. Amending the Definition and Criteria for a “Specialty Occupation”

1. Amending the Definition of a “Specialty Occupation”

2. Amending the Criteria for Specialty Occupation Positions

B. Defining “Worksite” and “Third Party Worksite”

C. Clarifying the Definition of “United States Employer”

1. Replacing “contractor” With “company”

2. Engaging the Beneficiary To Work

3. Clarifying the “Employer-Employee Relationship”

D. Corroborating Evidence of Work in a Specialty Occupation

E. Maximum Validity Period for Third-Party Placements

F. Written Explanation for Certain H-1B Approvals

G. Revising the Itinerary Requirement for H-1B Petitions

H. Site Visits

I. Severability

VI. Statutory and Regulatory Requirements

A. Administrative Procedure Act

B. Executive Orders 12866 (Regulatory Planning and Review), Executive Order 13563 (Improving Regulation and Regulatory Review), and Executive Order 13771 (Reducing Regulation and Controlling Regulatory Costs)

1. Summary of Economic Impacts

2. Provisions of the IFR with Economic Impacts

3. Population

i. Historical Population of H-1B Specialty Occupation Worker Program

ii. Population Affected by the Rule

4. Costs and Cost Savings of Regulatory Changes to Petitioners

i. Estimated Wage by Type of Filers

ii. Baseline Estimate of Current Costs

iii. Detailed Economic Effects of Each Provision in the IFR

a. Revising the Regulatory Definition and Standards for Specialty Occupation so They Align More Closely With the Statutory Definition of the Term

1. Additional Costs Due to Changes in Form I-129 for H-1B Petitions

b. Requiring Corroborating Evidence of Work in a Specialty Occupation

1. Costs of Submitting Contracts, Work Orders, or Similar Evidence Establishing Specialty Occupation and Employer-Employee Relationship

c. Codifying in Regulations Existing Authority To Conduct Site Visits and Other Compliance Reviews and Clarifying Consequences for Failure To Allow a Site Visit

1. Cost of Worksite Inspections

d. Eliminating the General Itinerary Requirement for H-1B Petitions

1. Cost Savings of Itinerary Requirement Exemption

e. Limiting Maximum Validity Period for Third-Party Placement

1. Costs of Requesting Authorization To Continue H-1B Employment

f. Familiarization Cost

5. Total Estimated and Discounted Net Costs of Regulatory Changes to Petitioners

6. Costs to the Federal Government

7. Benefits of the Regulatory Changes

C. Regulatory Flexibility Act

D. Unfunded Mandates Reform Act

E. Congressional Review Act

F. Executive Order 13132 (Federalism)

G. Executive Order 12988 (Civil Justice Reform)

H. Executive Order 13175 (Consultation and Coordination With Indian Tribal Governments)

I. National Environmental Policy Act

J. Paperwork Reduction Act

1. USCIS Form I-129H1

2. USCIS H-1B Registration Tool

K. Signature

II. Public Participation

DHS invites all interested parties to participate in this rulemaking by submitting written data, views, comments, and arguments on all aspects of this interim final rule. DHS also invites comments that relate to the economic, environmental, or federalism effects that might result from this interim final rule. Comments must be submitted in English, or an English translation must be provided. Comments that will provide the most assistance to DHS in implementing these changes will: Reference a specific portion of the interim final rule; explain the reason for any recommended change; and include data, information, or authority that supports such a recommended change. Comments submitted in a manner other than those listed in the

ADDRESSES

section, including emails or letters sent to DHS or USCIS officials, will not be considered comments on the interim final rule. Please note that DHS and USCIS cannot accept any comments that are hand delivered or couriered. In addition, USCIS cannot accept mailed comments contained on any form of digital media storage devices, such as CDs/DVDs and USB drives.

Instructions:

If you submit a comment, you must include the agency name (U.S. Citizenship and Immigration Services) and the DHS Docket No. USCIS-2020-0018 for this rulemaking. Regardless of the method used for submitting comments or material, all submissions will be posted, without change, to the Federal eRulemaking Portal at

http://www.regulations.gov,

and will include any personal information you provide. Therefore, submitting this information makes it public. You may wish to consider limiting the amount of personal information that you provide in any voluntary public comment submission you make to DHS. DHS may withhold information provided in comments from public viewing that it determines may impact the privacy of an individual or is offensive. For additional information, please read the Privacy and Security Notice available at

http://www.regulations.gov.

Docket:

For access to the docket and to read background documents or comments received, go to

http://www.regulations.gov,

referencing DHS Docket No. USCIS-2020-0018. You may also sign up for email alerts on the online docket to be notified when comments are posted or a final rule is published.

III. Executive Summary

A. Purpose and Summary of the Regulatory Action

Congressional intent behind creating the H-1B program was, in part, to help U.S. employers fill labor shortages in positions requiring highly skilled or educated workers using temporary workers.

A key goal of the program at its inception was to help U.S. employers obtain the temporary employees they need to meet their business needs.

To address legitimate countervailing concerns of the adverse impact foreign workers could have on U.S. workers, Congress put in place a number of measures intended to protect U.S. workers to ensure that H-1B workers would not adversely affect them. Immigration and Nationality Act (INA) section 212(n) and (p); 8 U.S.C. 1182(n) and (p). However, over time, legitimate concerns have emerged that indicate that the H-1B program is not functioning as originally envisioned and that U.S. workers are being adversely affected. On April 18, 2017, the President of the United States issued Executive Order (E.O.) 13788,

Buy American and Hire American,

instructing DHS to “propose new rules and issue new guidance, to supersede or revise previous rules and guidance if appropriate, to protect the interests of U.S. workers in the administration of our immigration system.”

E.O. 13788 specifically directed DHS and other agencies to “suggest reforms to help ensure that H-1B visas are awarded to the most-skilled or highest-paid petition beneficiaries.”

See

H.R. Rep. 101-723(I) (1990),

as reprinted in

1990 U.S.C.C.A.N. 6710, 6721 (stating “The U.S. labor market is now faced with two problems that immigration policy can help to correct. The first is the need of American business for highly skilled, specially trained personnel to fill increasingly sophisticated jobs for which domestic personnel cannot be found and the need for other workers to meet specific labor shortages.”).

Bipartisan Policy Council,

Immigration in Two Acts,

Nov. 2015, at 7,

https://bipartisanpolicy.org/wp-content/uploads/2019/03/BPC-Immigration-Legislation-Brief.pdf,

citing 1990 U.S.C.C.A.N.

supra

at 6721 (stating “At the time [1990], members of Congress were also concerned about U.S. competitiveness in the global economy and sought to use legal immigration as a tool in a larger economic plan, stating that “it is unlikely that enough U.S. workers will be trained quickly enough to meet legitimate employment needs, and immigration can and should be incorporated into an overall strategy that promotes the creation of the type of workforce needed in an increasingly global economy.”).

See

Executive Order 13788,

Buy American and Hire American,

82 FR 18837, sec. 5 (Apr. 18, 2017).

See id.

at sec. 5(b).

In response to the directives of E.O. 13788, DHS undertook a comprehensive review of all rules and policies regarding nonimmigrant visa classifications for temporary foreign workers, including the H-1B visa program. Although the H-1B program was intended to allow employers to fill gaps in their workforce and remain competitive in the global economy, it has expanded far beyond that, often to the detriment of U.S. workers. Data shows that the H-1B program has been used to displace U.S. workers and has led to reduced wages in a number of industries in the U.S. labor market.

The economic crisis caused by the COVID-19 public health emergency has compounded those detrimental effects.

See e.g.,

Ron Hira and Bharath Gopalaswamy, Atlantic Council,

Reforming US' High-Skilled Guestworker Program

(2019), available at

https://www.atlanticcouncil.org/in-depth-research-reports/report/reforming-us-high-skilled-immigration-program/.

The President of the United States addressed those harms in

Proclamation Suspending Entry of Aliens Who Present a Risk to the U.S. Labor Market Following the Coronavirus Outbreak

and directed DHS to pursue rulemaking that ensures that U.S. workers are not disadvantaged by H-1B workers.

This interim final rule is consistent not only with that directive, but also with the aims of the Presidential Proclamation

Suspension of Entry of Immigrants and Nonimmigrants Who Present a Risk to the United States Labor During the Economic Recovery Following the 2019 Novel Coronavirus Outbreak.

Section 5

of Proclamation 10052 directs the Secretary of DHS to, “as soon as practicable, and consistent with applicable law, consider promulgating regulations or take other appropriate action . . . ensuring that the presence in the United States of H-1B nonimmigrants does not disadvantage United States workers.” In addition, this rule will further the policy objective of E.O. 13927,

Accelerating the Nation's Economic Recovery from the COVID-19 Emergency by Expediting Infrastructure Investments and Other Activities.

Proclamation 10014 of April 22, 2020,

Suspension of Entry of Immigrants Who Present a Risk to the United States Labor Market During the Economic Recovery Following the 2019 Novel Coronavirus Outbreak,

85 FR 23441 (Apr. 27, 2020).

Proclamation 10052 of June 22, 2020,

Suspension of Entry of Immigrants and Nonimmigrants Who Present a Risk to the United States Labor Market During the Economic Recovery

Following the 2019 Novel Coronavirus Outbreak,

85 FR 38263 (Jun. 25, 2020).

See

Executive Order 13927,

Accelerating the Nation's Economic Recovery from the COVID-19 Emergency by Expediting Infrastructure Investments and Other Activities,

85 FR 35165, sec. 2 (Jun. 9, 2020) (ordering that “agencies should take all reasonable measures to . . . speed other actions . . . that will strengthen the economy and return Americans to work”).

Consistent with Congressional intent of the H-1B program, the

Buy American and Hire American

E.O. 13788, Presidential Proclamations 10014 and 10052, and to ensure that U.S. workers are protected under U.S. immigration laws, DHS is proposing a number of revisions and clarifications, which are detailed below. As noted above, these changes are urgently needed to strengthen the H-1B program during the economic crisis caused by the COVID-19 public health emergency to more effectively ensure that the employment of H-1B workers will not negatively affect the wages and working conditions of similarly employed U.S. workers.

By reforming key aspects of the H-1B nonimmigrant visa program, this rule will improve program integrity and better ensure that only petitioners who meet the statutory criteria for the H-1B classification are able to employ H-1B workers who are qualified for the classification. This, in turn, will protect jobs of U.S. workers as a part of responding to the national emergency, and facilitate the Nation's economic recovery.

B. Legal Authority

The Secretary of Homeland Security's authority for these regulatory amendments is found in various sections of the INA, 8 U.S.C. 1101

et seq.,

and the Homeland Security Act of 2002 (HSA), Public Law 107-296, 116 Stat. 2135, 6 U.S.C. 101

et seq.

General authority for issuing this rule is found in section 103(a) of the INA, 8 U.S.C. 1103(a), which authorizes the Secretary to administer and enforce the immigration and nationality laws, as well as section 102 of the HSA, 6 U.S.C. 112, which vests all of the functions of DHS in the Secretary and authorizes the Secretary to issue regulations.

See also

6 U.S.C. 202(4) (charging the Secretary with “[e]stablishing and administering rules . . . governing the granting of visas or other forms of permission . . . to enter the United States to individuals who are not a citizen or an alien lawfully admitted for permanent residence in the United States”). Further authority for these regulatory amendments is found in:

• Section 101(a)(15)(H)(i)(b) of the INA, 8 U.S.C. 1101(a)(15)(H)(i)(b), which classifies as nonimmigrants aliens coming temporarily to the United States to perform services in a specialty occupation or as a fashion model with distinguished merit and ability;

• Section 214(a)(1) of the INA, 8 U.S.C. 1184(a)(1), which authorizes the Secretary to prescribe by regulation the terms and conditions of the admission of nonimmigrants;

• Section 214(c) of the INA, 8 U.S.C. 1184(c), which,

inter alia,

authorizes the Secretary to prescribe how an importing employer may petition for an H nonimmigrant worker and the information that an importing employer must provide in the petition;

• Section 214(i) of the INA, 8 U.S.C. 1184(i), which defines the term “specialty occupation;” and

• Section 287(b) of the INA, 8 U.S.C. 1357(b), which authorizes USCIS to administer oaths and to take and consider evidence concerning any matter which is material and relevant to the administration and enforcement of the INA.

Finally, under section 101 of HSA, 6 U.S.C. 111(b)(1)(F), a primary mission of the Department is to “ensure that the overall economic security of the United States is not diminished by efforts, activities, and programs aimed at securing the homeland.”

C. Summary of Costs and Benefits

This interim final rule will impose new annual costs of $24,949,861 for petitioners completing and filing H-1B petitions

with an additional time burden of 30 minutes. The changes in the H-1B petition, resulting from this interim final rule, result in additional time to complete and file the petition as compared to the time burden to complete the current form. By reducing uncertainty and confusion surrounding disparities between the statute and the regulations, this rule will better ensure that approvals are only granted for positions adhering more closely to the statutory definition. This rule will also result in more complete petitions and allow for more consistent and efficient adjudication decisions.

DHS estimates the costs and benefits of this rule using the newly published

U.S. Citizenship and Immigration Services Fee Schedule and Changes to Certain Other Immigration Benefit Request Requirements,

final rule (“Fee Schedule Final Rule”), and associated form changes, as the baseline. 85 FR 46788 (Aug. 3, 2020). The Fee Schedule Final Rule was scheduled to go into effect on October 2, 2020. On September 29, 2020, the U.S. District Court for the Northern District of California issued a nationwide injunction, which prevents DHS from implementing the Fee Schedule Final Rule.

See, Immigrant Legal Resource Center

Wolf,

No. 4:20-cv-5883 (N.D. Cal. Sept. 29, 2020). DHS intends to vigorously defend this lawsuit and is not changing the baseline for this rule as a result of the litigation. Should DHS not prevail in the Fee Schedule Final Rule litigation, this rule may reflect overstated transfers, costs, and opportunity costs associated with the filing of the Form I-129.

DHS estimates $17,963,871 in annual costs to petitioners to submit contractual documents, work orders, or similar evidence required by this rule to establish an employer-employee relationship and qualifying employment. The petitioner must establish, at the time of filing, that it has actual work in a specialty occupation available for the beneficiary as of the start date of the validity period as requested on the petition. In addition, all H-1B petitions for beneficiaries who will be placed at a third-party worksite must submit evidence showing that the beneficiary will be employed in a specialty occupation, and that the petitioner will have an employer-employee relationship with the beneficiary.

DHS estimates $1,042,702 for the total annual opportunity cost of time for worksite inspections of H-1B petitions. This interim final rule is codifying DHS' existing authority to conduct site visits and other compliance reviews and clarifying consequences for failure to allow a site visit. Conducting on-site inspections and other compliance reviews is critical to detecting and deterring fraud and noncompliance. Failure or refusal of the petitioner or third-party worksite parties to cooperate in a site visit or verify facts may be grounds for denial or revocation of any H-1B petition for workers performing services at locations which are a subject of inspection, including any third-party worksites.

DHS estimates cost savings of $4,490,968 annually in eliminating the general itinerary requirement for H-1B petitions. Relative to the current regulation, this provision reduces the cost for petitioners who file on behalf of beneficiaries performing services in more than one location and submit itineraries.

While the maximum validity period for a specialty occupation worker is

currently 3 years, this interim final rule will limit the maximum validity period to 1 year for workers placed at third-party worksites. DHS estimates costs of $0 in FY 2021, $376,747,030 in FY 2022, $502,330,510 for each of FY 2023 through FY 2027, and $349,127,070 for each of FY 2028 through FY 2030, for the increasing number of Form I-129H1 petitions to request authorization to continue H-1B employment for workers placed at third-party worksites. DHS will have greater oversight in such cases, which are most likely to involve noncompliance, fraud, or abuse, thereby strengthening the H-1B program.

DHS estimates a one-time total regulation familiarization cost of $11,941,471 in FY2021. For the 10-year implementation period of the rule (FY 2021 through FY 2030), DHS estimates the annual net societal costs to be $51,406,937 (undiscounted) in FY 2021, $416,212,496 (undiscounted) in FY 2022, $541,795,976 (undiscounted) from FY 2023 through FY 2027 each year, $388,592,536 (undiscounted) from FY 2028 through FY 2030 each year. DHS estimates the annualized net societal costs of the rule to be $430,797,915, annualized at 3-percent and $425,277,621, annualized at 7-percent discount rates.

IV. Background

A. History and Purpose of the H-1B Visa Program

The H-1B nonimmigrant visa program allows U.S. employers to temporarily employ foreign workers in specialty occupations, defined by statute as occupations that require the theoretical and practical application of a body of highly specialized knowledge, and a bachelor's or higher degree in the specific specialty, or its equivalent.

See

INA sections 101(a)(15)(H)(i)(b) and 214(i); 8 U.S.C 1101(a)(15)(H)(i)(b) and 1184(i). The H-1B visa program also includes workers performing services related to a Department of Defense (DOD) cooperative research and development project or coproduction project, and services of distinguished merit and ability in the field of fashion modeling.

See

INA section 101(a)(15)(H)(i)(b), 8 U.S.C. 1101(a)(15)(H)(i)(b); 8 CFR 214.2(h)(4)(i)(A).

The number of aliens who may be issued initial H-1B visas or otherwise provided initial H-1B nonimmigrant status during any fiscal year has been capped at various levels by Congress over time, with the current numerical limit generally being 65,000 per fiscal year.

See

INA section 214(g)(1)(A); 8 U.S.C. 1184(g)(1)(A). Congress has also provided for various exemptions from the annual numerical allocations, including an exemption for 20,000 aliens who have earned a master's or higher degree from a United States institution of higher education.

See

INA section 214(g)(5) and (7); 8 U.S.C. 1184(g)(5) and (7). Additionally, Congress has exempted from the annual numerical allocations H-1B workers who are or will be employed at a nonprofit or public institution of higher education or a related or affiliated nonprofit entity, a nonprofit research organization, or a governmental research organization.

See

INA section 214(g)(5)(A)-(B), 8 U.S.C. 1184(g)(5)(A)-(B). The 5-year average annual number of H-1B petitions approved outside the numerical limitations established by Congress, which also includes petitions for continuing H-1B workers who were previously counted toward an annual numerical allocation and who have time remaining on their 6-year period of authorized admission,

see

INA section 214(g)(7), 8 U.S.C. 1184(g)(7), was approximately 214,371 based on DHS data.

As of September 30, 2019, the total H-1B authorized-to-work population was approximately 583,420.

The total H-1B authorized-to-work population, rather than the yearly cap, is more indicative of the scope of the H-1B nonimmigrant program and the urgent need to strengthen it to protect the economic interests of U.S. workers.

Office of Policy and Strategy, Policy Research Division (PRD) Claims 3 and USCIS analysis. July 29, 2020.

U.S. Department of Homeland Security, U.S. Citizenship and Immigration Services, Office of Policy and Strategy, Policy Research Division, H-1B Authorized to Work Population Estimate, available at

https://www.uscis.gov/sites/default/files/document/reports/USCIS%20H-1B%20Authorized%20to%20Work%20Report.pdf

(reflecting that not all of the 583,420 H-1B workers were approved in the same fiscal year as the data used to estimate the population as of September 30, 2019, was pulled on October 9, 2019).

Despite Congress' efforts to protect the interest of U.S. workers to ensure that H-1B workers will not adversely affect them,

data show that the H-1B program has been subject to abuse or otherwise adversely affected U.S. workers from its inception.

When the Immigration Act of 1990 (IMMACT 90) was introduced, Congress specifically sought to address “the problem of H-visa abuse.”

As early as 1992, the U.S. Government Accountability Office (GAO) published a report noting concerns by representatives of organized labor that H-1B nonimmigrants were adversely affecting the wages and working conditions of U.S. workers, and were allowing U.S. employers to excessively rely on foreign labor.

In September 2000, the GAO published another report highlighting documented allegations of and concerns relating to program misuse—such as employers paying workers less than comparable wages or employees using false credentials—and questioning whether the program adequately serves employers or protects workers.

This report concluded that the H-1B “program is vulnerable to abuse—both by employers who do not have bona fide jobs to fill or do not meet required labor conditions, and by potential workers who present false credentials.”

Such abuse threatens the wages and job opportunities of qualified U.S. workers. More GAO reports followed in 2003, 2006, and 2011, all continuing to report on the pervasive abuses and shortcomings in the H-1B program. For instance, the 2006 report highlighted common violations such as employers not paying their H-1B workers the required wage and owing them back wages.

The 2011 reports cited to the high incidence of wage-related complaints against staffing companies, and concluded that the involvement of staffing companies in the H-1B program further weakens U.S. labor protections.

Several news alerts and

investigative newsletters released in 2019 and 2020 by the Department of Labor (DOL) and Department of Justice (DOJ) highlighted convictions of individuals using their companies to engage in fraud through the H-1B program.

See

INA section 212(n) and (p); 8 U.S.C. 1182(n) and (p).

See, e.g., How H-1B Visas Have Been Abused Since the Beginning,

CBS News, Aug. 13, 2017,

https://www.cbsnews.com/news/how-h-1b-visas-have-been-abused-since-the-beginning/.

1990 U.S.C.C.A.N. 6710, 6724.

U.S. Gov't Accountability Off., GAO/PEMD-92-17, Immigration and the Labor Market Nonimmigrant Alien Workers in the United States, at 17 (1992),

https://www.gao.gov/assets/160/151654.pdf.

U.S. Gov't Accountability Off., GAO/HEHS-00-157, H-1B Foreign Workers: Better Controls Needed to Help Employers and Protect Workers, at 4 (2000),

https://www.gao.gov/new.items/he00157.pdf.

GAO/HEHS-00-157, at 19.

U.S. Gov't Accountability Off., GAO-06-901T, H-1B Visa Program: More Oversight by Labor can Improve Compliance with Program Requirements (2006),

https://www.gao.gov/new.items/d06901t.pdf.

U.S. Gov't Accountability Off., GAO-11-26, Reforms are Needed to Minimize the Risks and Costs of Current Program 60 (2011),

https://www.gao.gov/assets/320/314501.pdf

(“The involvement of staffing companies, whose share of H-1B workers is not precisely known but is likely not trivial, further weakens enforcement efforts because the end-user of the H-1B worker is not liable for complying with labor protection requirements.”); U.S. Gov't Accountability Off., GAO-11-505T, H-1B Visa Program Multifaceted Challenges Warrant Re-examination of Key Provisions 12 (2011),

https://www.gao.gov/assets/90/82421.pdf

(“Another factor that weakens protection for U.S. workers is the fact that the H-1B program lacks a legal provision to hold employers accountable to program requirements when they obtain H-1B workers through staffing

companies” and “Wage and Hour investigators reported that a large number of the complaints they receive about H-1B employers were related to the activities of staffing companies.”).

See, e.g., OIG Investigations Newsletter

(U.S. Dep't of Lab., Off. of Inspector Gen.) (Dec. 1, 2019—Jan. 30, 2020),

https://www.oig.dol.gov/public/oinewsletter/DOL-OIG%20Investigations%20Newsletter%20December%202019%20-%20January%202020.pdf

(last visited Aug. 11, 2020);

OIG Investigations Newsletter

(U.S. Dep't of Lab., Off. of Inspector Gen.) (Oct. 1, 2019-Nov. 30, 2019),

https://www.oig.dol.gov/public/oinewsletter/DOL-OIG%20Investigations%20Newsletter%20October%20-%20November%202019.pdf

(last visited June 23, 2020);

News Release

(U.S. Dep't of Just., U.S. Att'y's Off.) (Feb. 19, 2020),

https://www.justice.gov/usao-ednc/pr/corporate-president-kronsys-inc-cygtec-inc-and-arkstek-inc-sentenced-conspiracy-commit

(last visited June 23, 2020);

News Release

(U.S. Dep't of Just., U.S. Att'y's Off.) (Mar. 17, 2020),

https://www.justice.gov/usao-nj/pr/owner-information-technology-companies-sentenced-15-months-prison-visa-fraud-and-tax

(last visited June 23, 2020).

DHS believes that the same concerns have persisted in recent years, as highlighted by certain petitions filed by entities within the information technology (IT) industry. In recent years, there has been a 75 percent increase in the proportion of IT workers in the population of H-1B approved petitions—from 32 percent in FY 2003 to 56 percent in FY 2019.

As a comparison, there has been a 16 percent increase in the proportion of IT workers in the U.S. civilian workforce—from 2.5 percent in 2000 to 2.9 percent in 2014.

At the same time, wages have largely remained flat in IT fields.

For instance, the average IT wage was 189 percent of the national average in FY 2003 and 182 percent in FY 2019.

The disproportionate growth of H-1B petitions for computer-related occupations versus the percentage growth of IT positions in the U.S. economy, and the stagnation of IT wages, demands DHS seriously consider whether petitioners are using the H-1B program in a way that disproportionally benefits foreign IT workers and the companies who petition for them to the detriment of U.S. IT workers. DHS must also consider whether there is a correlation between the large flow of H-1B workers into the economy and the stagnation of wages for U.S. IT workers generally.

If the employment of H-1B workers is having an adverse effect on similarly employed U.S. workers by way of reducing their wages or displacing U.S. workers by hiring H-1B workers, that adverse effect likely will be proportionately greater in the IT industry.

Characteristics of H-1B Specialty Occupation Workers (H-1B): Fiscal Year 2004 Issued November 2006.

https://www.uscis.gov/sites/default/files/document/reports/h1b_fy04_characteristics.pdf

(last visited Sept. 18,2020), Table 13A. IT related industry (IT industry number of petition approved is 70,189 and total number of petition approved is 217,340); Characteristics of H-1B Specialty Occupation Workers: Fiscal Year 2019 Annual Report to Congress October 1, 2018—September 30, 2019 (Mar. 5, 2020),

https://www.uscis.gov/sites/default/files/document/reports/Characteristics_of_Specialty_Occupation_Workers_H-1B_Fiscal_Year_2019.pdf

(last visited Aug. 11, 2020), Table 13A. IT related industry (IT industry number of petition approved is 217,447 and total number of petition is 388,403). Calculations: 75% = 56%/32%−1. 32% rounded = (70,189/217,340) * 100%, 56% rounded = (217,447/388,403) * 100%.

U.S. Census Bureau, Occupations in Information Technology (Aug. 16, 2016), available at

https://www.census.gov/content/dam/Census/library/publications/2016/acs/acs-35.pdf,

p2. Figure 1.

Hal Salzman, Daniel Kuehn, and B. Lindsay Lowell, Economic Policy Institute,

Guestworkers in the High-Skill U.S. Labor Market: An analysis of supply, employment, and wage trends,

Apr. 24, 2013, at 2, 23, available at

https://files.epi.org/2013/bp359-guestworkers-high-skill-labor-market-analysis.pdf

(“However, following the crash of 2001, wages declined and have been essentially flat for the decade.”); Sean McLain and Dhanya Ann Thoppil,

Bulging Staff Cost, Shrinking Margins,

CRISIL Research, (2019), available at

https://www.crisil.com/en/home/our-analysis/reports/2019/05/bulging-staff-cost-shrinking-margins.html

(analyzing local wages for computer-based occupations, along with H-1B wage rates prevalent for the same computer-based occupations across the U.S., and concluding that the average per hour rate for an H-1B-based employee is ~$33 while a locally-based employee is ~$42).

See generally

Hira and Gopalaswamy,

supra

note 5, at 11 (“H-1B workers are underpaid and placed in substandard working conditions, while U.S. workers' wages are depressed, and they lose out on job opportunities”).

See

U.S. Department of Labor, Bureau of Labor Statistics, Occupational Employment Statistics,

May 2003 National (XLS),

available at

https://www.bls.gov/oes/tables.htm

(last visited Sept. 22, 2020) (showing that the annual mean wage for SOC code 00-0000 was $36,210 in May 2003); U.S. Department of Labor, Bureau of Labor Statistics, Occupational Employment Statistics,

May 2019 National (XLS),

available at

https://www.bls.gov/oes/tables.htm

(last visited Sept. 22, 2020) (showing that the annual mean wage for SOC code 00-0000 was $53,490 in May 2019); U.S. Department of Labor, Bureau of Labor Statistics, Occupational Employment Statistics,

May 2003 National industry-specific (XLS),

available at

https://www.bls.gov/oes/tables.htm

(last visited Sept. 28, 2020) (showing that the annual mean wage for SOC code 15-0000 and NAICS code 541000 was $68,420 in May 2003); U.S. Department of Labor, Bureau of Labor Statistics, Occupational Employment Statistics,

May 2019 National Industry-Specific Occupational Employment and Wage Estimates, NAICS 541000—Professional, Scientific, and Technical Services,

available at

https://www.bls.gov/oes/2019/may/naics3_541000.htm

(last visited Sept. 28, 2020) (showing that the annual mean wage for SOC code 15-0000 was $97,230 in May 2019). We calculated the percentages by dividing the 2019 figures by the 2003 figures for the respective SOC codes (189% = ($68,420/$36,210) * 100%, 182% = ($97,230/$53,490) * 100%).

Salzman,

supra

note 22, at 26 (“In other words, the data suggest that current U.S. immigration policies that facilitate large flows of guestworkers appear to provide firms with access to labor that will be in plentiful supply at wages that are too low to induce a significantly increased supply from the domestic workforce.”).

Moreover, many H-1B petitions for IT workers are filed by companies, including staffing companies,

that place the H-1B workers at worksites of third-parties,

i.e.,

companies that did not directly petition USCIS for H-1B workers. From FY 2018 to FY 2019 an average of 71 percent of all approved H-1B petitions in the IT industry involved third-party worksites (compared to 36 percent for all approved H-1B petitions across industries).

As noted in the 2011 GAO report and evidenced by the recent convictions highlighted in the DOL and DOJ reports, the extensive involvement and lack of accountability of staffing companies within the H-1B program is a major factor that makes the program vulnerable to fraud and weakens protection for U.S. workers.

DOL has received a large number of complaints about staffing companies and participated in several investigations that led to convictions of technology staffing companies for fraudulent involvement in the H-1B program.

The term “staffing companies” refers to “employers that apply for H-1B workers but ultimately place these workers at the worksites of other employers as part of their business model.” GAO-11-26, at 19.

U.S. Department of Homeland Security, U.S. Citizenship and Immigration Services, Office of Policy and Strategy, Policy Research Division, Systems: C3 database, Database Queried: 05/20/2020, Report Created: 05/20/2020. This data is based on H-1B approvals where the petitioner reported “off-site [work] at another company or organization's location” on the Form I-129. The term “off-site” which is used on the Form I-129 has the same meaning as “third-party worksite.” The I-129 does not ask a petitioner seeking to place a beneficiary “off-site” to specify whether it is a staffing company.

GAO-11-505T, at 12;

OIG Investigations Newsletter

(Dec. 1, 2019-Jan. 30, 2020),

supra; OIG Investigations Newsletter

(Oct. 1, 2019-Nov. 30, 2020),

supra; News Release

(Feb. 19, 2020,

supra; News Release

(Mar. 17, 2020),

supra.

See supra

note 17.

Some staffing companies may also be described as outsourcing companies,

i.e.,

companies that are hired to perform services or produce goods for another company and, in some cases, also seek to transfer work from the United States to workers based abroad to reduce the overall costs of the services they provide to clients in the United States.

Outsourcing companies have been criticized as “gaming the system” so that they have a ready pool of low-paid temporary workers, which ultimately hurts the wages of U.S. workers.

The “outsourcing” business model involves using H-1B visas to bring relatively low-cost foreign workers into the United States and then contracting them out to other U.S. companies seeking their services.

These H-1B workers are relatively “low-paid” or “low-cost” in the sense that they are often paid less than the local median salary for workers in the same occupation, in other words, often paid less than what the worker would command in a truly competitive open job market.

H-1B employers are able to “take advantage of program rules in order to legally pay many of their H-1B workers below the local median wage for the jobs they fill.”

By bringing in lower-paid foreign workers, U.S. companies, in turn, may be incentivized to avoid hiring more U.S. workers or, even worse, lay off their own, higher-paid U.S. workers who previously performed those services adequately and replace them with lower-paid H-1B workers of lesser qualifications employed by a staffing company.

An employer's preference for hiring H-1B workers based on their citizenship, immigration status, or national origin could violate the INA's anti-discrimination provision at INA section 274B, 8 U.S.C. 1324b.

Further still, the outsourcing companies may ultimately send their H-1B nonimmigrant workers back to their home countries to perform their jobs or move a significant amount of work overseas to capitalize on lower costs of business, taking away even more U.S. jobs.

As a result, DHS is concerned that the current regulatory regime encourages some companies to use the H-1B visa as a tool to lower business costs at the expense of U.S. workers.

Merriam-Webster. (n.d.). Outsource. In

Merriam-Webster.com dictionary.

Retrieved August 3, 2020, from

https://www.merriam-webster.com/dictionary/outsource

(“to procure (something, such as some goods or services needed by a business or organization) from outside sources and especially from foreign or nonunion suppliers: To contract for work, jobs, etc., to be done by outside or foreign workers.”). While the word “outsourcing” can refer to the practice of locating work overseas,

see e.g.,

GAO-11-26 at FN 48, it can also be used

interchangeably with the word “staffing” to refer to the general practice of contracting out H-1B workers to third-party clients,

see

Daniel Costa and Ron Hira, Economic Policy Institute,

H-1B Visas and Prevailing Wage Levels,

May 4, 2020, at 4, available at

https://www.epi.org/publication/h-1b-visas-and-prevailing-wage-levels/

(describing the “outsourcing business model” as “plac[ing] H-1B hires at third-party client sites.”).

See, e.g .,

Costa and Hira,

supra

note 30; Sarah Pierce and Julia Gelatt, Migration Policy Institute,

Evolution of the H-1B: Latest Trends in a Program on the Brink of Reform,

March 2018, at 2, available at

https://www.migrationpolicy.org/research/evolution-h-1b-latest-trends-program-brink-reform;

Karen Pedersen, Peter Eckstein, Sandra Candy Robinson,

Commentary: The H-1B Visa Problem as IEEE-USA Sees It,

Mar. 6, 2017, available at

https://spectrum.ieee.org/view-from-the-valley/at-work/tech-careers/commentary-the-h1b-problem-as-ieeeusa-sees-it;

HaeYoun Park,

How Outsourcing Companies are Gaming the Visa System,

N.Y. Times, Nov. 10, 2015, available at

https://www.nytimes.com/interactive/2015/11/06/us/outsourcing-companies-dominate-h1b-visas.html;

Julia Preston,

Large Companies Game H-1B Program, Costing the U.S. Jobs,

N.Y. Times, Nov. 10, 2015, available at

https://www.nytimes.com/2015/11/11/us/large-companies-game-h-1b-visa-program-leaving-smaller-ones-in-the-cold.html?action=click&contentCollection=U.S.&region=Footer&module=WhatsNext&version=WhatsNext&contentID=WhatsNext&moduleDetail=undefined&pgtype=Multimedia.

Pedersen, Eckstein, and Robinson,

supra

note 33.

Costa and Hira,

supra

note 30 (explaining that “the market wage is the wage a U.S. worker would command for a position” and that “the most reasonable and closest proxy for a market wage is the median wage for an occupation in a local area”); Youyou Zhou,

Most H-1B Workers are Paid Less, But It Depends on the Type of Job,

The Associated press, Apr. 18, 2017, available at

https://apnews.com/afs:Content:873580003

(workers in high-tech jobs such as computer science are often paid less than their American counterparts).

Costa and Hira,

supra

note 30. As this article explains, these actions comport with the existing legal framework in which H-1B employers are only required to pay the higher of the actual wage level for similarly situated employees or the prevailing wage.

See

section 212(n)(1)(A) of the Act. Further, based on the way the four wage levels are set, the lowest two permissible H-1B wage levels fall below the local median salaries.

See

section 212(p)(4) of the Act. For more general information on wage levels and how they are calculated,

see

Amy Marmer Nice,

Wages and High-Skilled Immigration: How the Government Calculates Prevailing Wages and Why It Matters,

American Immigration Council, Dec. 2017, available at

https://www.americanimmigrationcouncil.org/sites/default/files/research/wages_and_high-skilled_immigration.pdf.

Preston,

supra

note 33.

See

U.S. Department of Justice, Justice News,

Justice Department Settles Claim Against Virginia-Based Staffing Company for Improperly Favoring Temporary Visa Workers Over U.S. Workers

(July 27, 2020),

https://www.justice.gov/opa/pr/justice-department-settles-claim-against-virginia-based-staffing-company-improperly-favoring

(announcing a settlement agreement with a provider of IT staffing and consulting services resolving a claim that one of the provider's offices “discriminated against U.S. workers because of their citizenship status when it posted a job advertisement specifying a preference for non-U.S. citizens who held temporary work visas. . . . Under the INA, employers cannot discriminate based on citizenship, immigration status or national origin at any stage of their hiring process, including the posting of job advertisements, regardless of whether it affects the final hiring outcome.”).

Preston,

supra

note 33.

Maria L. Ontiveros, H-1B Visas, Outsourcing and Body Shops: A Continuum of Exploitation for High Tech Workers, 38 Berkeley J. Emp. & Lab. L. 1, 17 (2017); Grace Martinez, Comment, Legal Immigrants Displacing American Workers: How U.S. Corporations are Exploiting H-1B Visas to the Detriment of Americans, 86 UMKC L. Rev. 209 (2017).

U.S.-based companies that are not traditionally in the staffing or outsourcing business also have exploited the H-1B program in ways not contemplated by Congress.

In recent years, U.S. companies such as The Walt Disney Company, Hewlett-Packard, University of California San Francisco, Southern California Edison, Qualcomm, and Toys “R” Us have reportedly laid off their qualified U.S. workers and replaced them with H-1B workers provided by H-1B-dependent outsourcing companies.

In some cases, the replaced U.S. workers were even forced to train the foreign workers who were taking their jobs and sign nondisclosure agreements about this treatment as a condition of receiving any form of severance.

These examples illustrate how the current regulatory regime of the H-1B program allows employers, whether staffing, outsourcing, or other types of companies, to exploit the H-1B program in ways not contemplated by Congress.

Paayal Zaveri and Aditi Roy,

Big American Tech Companies are Snapping up Foreign-Worker Visas, Replacing Indian Outsourcing Firms,

CNBC, Apr. 20, 2018, available at

https://www.cnbc.com/2018/04/20/big-american-tech-companies-are-snapping-up-h1-b-visas.html. See also

H.R. REP. 105-657, 20-21 (stating “[b]ecause the bill is so dramatically increasing the supply of foreign workers without there being firm evidence of a domestic labor shortage, it is imperative that we build into the H-1B program adequate protections for U.S. workers”).

See Pierce

and Gelatt,

supra

note 33, at 24; Hira and Gopalaswamy,

supra

note 22; Patrick Thibodeau,

Southern California Edison IT Workers “Beyond Furious” Over H-1B Replacements,

Computerworld, Feb. 4, 2015, available at

https://www.computerworld.com/article/2879083/southern-california-edison-it-workers-beyond-furious-over-h-1b-replacements.html;

DHS, Office of Inspector General, OIG-18-03, USCIS Needs a Better Approach to Verify H-1B Visa Participants, at 3 (Oct. 20, 2017), available at

https://www.oig.dhs.gov/sites/default/files/assets/2017/OIG-18-03-Oct17.pdf.

See Perrero

HCL Am., Inc.,

No. 616CV112ORL31TBS, 2016 WL 5943600, at 1 (M.D. Fla. Oct. 13, 2016) (“According to the allegations of the Complaint (Doc. 1), which are accepted in pertinent part as true for purposes of resolving the instant motions, Perrero is a former employee of [Disney]'s information technology (“IT”) department. (Doc. 1 at 6). HCL is an IT services provider. (Doc. 27 at 1). In January 2015, he and several hundred other [Disney] IT workers were fired; their responsibilities were filled by IT workers employed by HCL. (Doc. 1 at 6). The workers who replaced the Plaintiff and his co-workers were foreign nationals holding H-1B visas. (Doc. 1 at 7) [Disney] management told Perrero and his co-workers of their imminent firing more than 90 days in advance, and informed them that if they did not stay and train the HCL IT workers during that period, they would not get a bonus and severance pay.”).

See also

144 Cong. Rec. E2323-01, 144 Cong. Rec. E2323-01, E2323, 1998 WL 785735 (stating “[t]he employers most prone to abusing the H-1B program are called `job contractors' or `job shops'. . . the[se] companies don't have to shoulder the obligations of being the legally recognized employers—the job contractors/shops remain the official employers”) (statement of Rep. Lamar Smith, then chairman of the Subcommittee on Immigration and Claims).

For example, section 212(n)(3)(B) of the Act defines “exempt H-1B nonimmigrant” as an H-1B nonimmigrant who receives annual wages equal to at least $60,000 or has attained a master's or higher degree (or its equivalent) in a related specialty. The $60,000 salary threshold was set in 1998 through the American Competitiveness and Workforce Improvement Act and has not been adjusted to date. If adjusted for inflation, the salary threshold for the exception to the U.S. worker recruitment would be over $93,000.

See,

U.S. Dep't of Labor, Bureau of Labor Statistics,

CPI Inflation Calculator, https://www.bls.gov/data/inflation_calculator.htm

(comparing data from October 1998 to May 2020).

U.S. Department of Labor, Employment and Training Administration, Office of Foreign Labor Certification, Public Disclosure File: LCA Data, Federal Fiscal Year: 2019.

See

INA section 212(n)(1)(E)(ii) and (G), 8 U.S.C. 1182(n)(1)(E)(ii) and (G).

See supra

note 36.

Overall, these reports and studies expose significant gaps in the ability of the H-1B program, as currently structured, to serve its original intent to supplement the U.S. workforce with a limited number of highly skilled workers while protecting the economic interests of U.S. workers. The President's recent “Proclamation Suspending Entry of Aliens Who Present a Risk to the U.S. Labor Market Following the Coronavirus Outbreak” notes that the entry of additional workers through the H-1B program “presents a significant threat to employment opportunities for Americans affected by the extraordinary economic disruptions caused by the COVID-19 outbreak.”

The changes made in the interim final rule will extend beyond the duration of the proclamation, but the threats described in the proclamation highlight the urgent need for strengthening of the H-1B program to protect U.S. workers. The Department's responsibility to ensure the safety and security of our country includes the protection of American workers.

This responsibility includes ensuring, as much as possible, that American workers are not negatively affected by H-1B workers. Therefore, the Department believes it is imperative to issue this rule to strengthen the integrity of the H-1B program and make more certain that petitions are only approved for qualified beneficiaries and petitioners.

See

Proclamation 10052 of June 22, 2020, Suspension of Entry of Immigrants and Nonimmigrants Who Present a Risk to the United States Labor Market During the Economic Recovery Following the 2019 Novel Coronavirus Outbreak, 85 FR 38263 (Jun. 25, 2020), available at

https://www.govinfo.gov/content/pkg/FR-2020-06-25/pdf/2020-13888.pdf.

Cf.

section 101 of the Homeland Security Act of 2002, 6 U.S.C. 111(b)(1)(F), stating that a primary mission of the Department is to “ensure that the overall economic security of the United States is not diminished by efforts, activities, and programs aimed at securing the homeland.”

B. Implementation of This Interim Final Rule

This rule only will apply to petitions filed on or after the effective date of the regulation, including amended petitions or petition extensions. DHS will not apply the new regulations to any pending petitions nor to previously approved petitions, either through reopening or through a notice of intent to revoke.

V. Discussion of the Provisions To Strengthen the H-1B Program

A. Amending the Definition and Criteria for a “Specialty Occupation”

1. Amending the Definition of a “Specialty Occupation”

DHS is revising the regulatory definition and standards for a “specialty occupation” to align with the statutory definition of “specialty occupation.”

Section 101(a)(15)(H)(i)(b) of the INA, 8 U.S.C. 1101(a)(15)(H)(i)(b), describes, among others, nonimmigrants coming temporarily to the United States to perform services in a specialty occupation. Section 214(i)(1) of the INA, 8 U.S.C. 1184(i)(1) states, in relevant part, “the term `specialty occupation' means an occupation that requires—(A) theoretical and practical application of a body of highly specialized knowledge, and (B) attainment of a bachelor's or higher degree in the specific specialty (or its equivalent) as a minimum for entry into the occupation in the United States.” Currently, 8 CFR 214.2(h)(4)(ii) defines “specialty occupation” as an occupation which requires theoretical and practical application of a body of highly specialized knowledge in fields of human endeavor including, but not limited to, architecture, engineering, mathematics, physical sciences, social sciences, medicine and health, education, business specialties, accounting, law, theology, and the arts, and which requires the attainment of a bachelor's degree or higher in a specific specialty, or its equivalent, as a minimum for entry into the occupation in the United States.

First, this rule amends the definition of a “specialty occupation” at 8 CFR 214.2(h)(4)(ii) to clarify that there must be a direct relationship between the required degree field(s) and the duties of the position. Consistent with existing USCIS policy and practice, a position

for which a bachelor's degree in any field is sufficient to qualify for the position, or for which a bachelor's degree in a wide variety of fields unrelated to the position is sufficient to qualify, would not be considered a specialty occupation as it would not require the application of a body of highly specialized knowledge.

Similarly, the amended definition clarifies that a position would not qualify as a specialty occupation if attainment of a general degree, without further specialization, is sufficient to qualify for the position. This is consistent with the statutory requirement that a degree be “in the specific specialty” and has long been the position of DHS and its predecessor, Immigration and Naturalization Service (INS).

See Caremax Inc

Holder,

40 F. Supp. 3d 1182, 1187-88 (N.D. Cal. 2014).

See Royal Siam Corp.

Chertoff,

484 F.3d 139, 147 (1st Cir. 2007) (stating “[t]he courts and the agency consistently have stated that, although a general-purpose bachelor's degree, such as a business administration degree, may be a legitimate prerequisite for a particular position, requiring such a degree, without more, will not justify the granting of a petition for an H-1B specialty occupation visa”);

see also Shanti, Inc.

Reno,

36 F. Supp. 2d 1151, 1166 (D. Minn.1999) (the proffered position's requirement of a business administration degree is a general degree requirement, and therefore, INS did not abuse its discretion in denying the H-1B petition);

All Aboard Worldwide Couriers, Inc.

Attorney General,

8 F. Supp. 2d 379, 381 (S.D.N.Y. 1998) (INS did not abuse its discretion in determining that the proffered position did not qualify as a specialty occupation based on “an absence of evidence that [the petitioner] require[s] job candidates to have a B.A. in a specific,

specialized

area.”).

Under this new rule, the petitioner will have the burden of demonstrating that there is a direct relationship between the required degree in a specific specialty (in other words, the degree field(s) that would qualify someone for the position) and the duties of the position. In many cases, the relationship will be clear and relatively easy to establish. For example, it should not be difficult to establish that a required medical degree is directly correlated to the duties of a physician. Similarly, a direct relationship may be established between the duties of a lawyer and a required law degree, and the duties of an architect and a required architecture degree. In other cases, the direct relationship may be less readily apparent, and the petitioner may have to explain and provide documentation to meet its burden of demonstrating the relationship. To establish a direct relationship, the petitioner would need to provide information regarding the course(s) of study associated with the required degree, or its equivalent, and the duties of the proffered position, and demonstrate the connection between the course of study and the duties and responsibilities of the position.

The requirement of a direct relationship between a degree in a specific specialty, or its equivalent, and the position should not be misconstrued as necessarily requiring a singular field of study. Section 214(i)(1) of the INA allows the “attainment of a bachelor's or higher degree in the specific specialty

(or its equivalent)

” (emphasis added). The placement of the phrase “or its equivalent” after the phrase “in the specific specialty” means that USCIS may accept the equivalent to a degree in a specific specialty, as long as that equivalent provides the same (or essentially the same) body of specialized knowledge.

In general, provided the required fields of study are closely related, for example, electrical engineering and electronics engineering for the position of an electrical engineer, a minimum of a bachelor's or higher degree, or its equivalent, in more than one field of study may be recognized as satisfying the “degree in the specific specialty (or its equivalent)” requirement of section 214(i)(1)(B) of the INA, 8 U.S.C. 1184(i)(1)(B). In such a case, the “body of highly specialized knowledge” required by section 214(i)(1)(A) of the INA, 8 U.S.C. 1184(i)(1)(A), essentially would be the same, and each field of study would be in a “specific specialty” directly related to the position consistent with section 214(i)(1)(B) of the INA, 8 U.S.C. 1184(i)(1)(B).

See, e.g., Relx, Inc.

Baran,

397 F. Supp. 3d 41, 54 (D.D.C. 2019) (“There is no requirement in the statute that only one type of degree be accepted for a position to be specialized.”);

Residential Fin. Corp.

U.S. Citizenship & Immigration Servs.,

839 F. Supp. 2d 985, 997 (S.D. Ohio 2012) (stating that when determining whether a position is a specialized occupation “knowledge and not the title of the degree is what is important.”).

In cases where the petitioner lists degrees in multiple disparate fields of study as the minimum entry requirement for a position, the petitioner would have to establish how each field of study is in a specific specialty providing “a body of highly specialized knowledge” directly related to the duties and responsibilities of the particular position to meet the requirements of sections 214(i)(1)(A) and (B) of the INA, 8 U.S.C. 1184(i)(1)(A) and (B), the regulatory definition, and one of the four criteria at new 8 CFR 214.2(h)(4)(iii)(A).

As such, a minimum entry requirement of a bachelor's or higher degree, or its equivalent, in multiple disparate fields of study would not automatically disqualify a position from being a specialty occupation. For example, a petitioner may be able to establish that a bachelor's degree in the specific specialties of either education or chemistry, each of which provide a body of highly specialized knowledge, is directly related to the duties and responsibilities of a chemistry teacher. In such a scenario, the “body of highly specialized knowledge” requirement of section 214(i)(1)(A) of the INA, 8 U.S.C. 1184(i)(1)(A), and the “degree in the specific specialty” requirement of section 214(i)(1)(B) of the INA, 8 U.S.C. 1184(i)(1)(B), would both be met and the chemistry teacher position listing multiple disparate fields of study would be in a specialty occupation.

In determining specialty occupation, USCIS interprets the “specific specialty” requirement in section 214(i)(1)(B) of the INA, 8 U.S.C. 1184(i)(1)(B), to relate back to the body of highly specialized knowledge requirement referenced in section 214(i)(1)(A) of the INA, 8 U.S.C. 1184(i)(1)(A), required by the specialty occupation in question, such that section 214(i)(1)(B) of the INA, 8 U.S.C. 1184(i)(1)(B), is only met if the purported degree in a specific specialty or specialties, or its equivalent, provides a body of specialized knowledge directly related to the duties and responsibilities of the particular position as required by section 214(i)(1)(A) of the INA, 8 U.S.C. 1184(i)(1)(A).

If the minimum entry requirement for a position is a general degree without further specialization or an explanation as to what type of degree is required, the “degree in the specific specialty (or its equivalent)” requirement of section 214(i)(1)(B) of the INA, 8 U.S.C. 1184(i)(1)(B), would not be satisfied. For example, a requirement of a

general

engineering degree for a position of software developer would not satisfy the specific specialty requirement. In such an instance, the petitioner would not satisfactorily demonstrate how a required general engineering degree provides a body of highly specialized knowledge that is directly related to the duties and responsibilities of a software developer position.

See supra

note 54.

Similarly, a petition with a requirement of an engineering degree in any or all fields of engineering for a position of software developer would not suffice unless the record establishes how each or every field of study within an engineering degree provides a body of highly specialized knowledge directly relating to the duties and responsibilities of the software

developer position.

The issue is whether a proffered position requires the application of a body of highly specialized knowledge as required by section 214(i)(1)(A) of the INA, 8 U.S.C. 1184(i)(1)(A), and attainment of at least a bachelor's degree in the specific specialty (or its equivalent) as required by section 214(i)(1)(B) of the INA, 8 U.S.C. 1184(i)(1)(B). If an individual could qualify for a software developer position based on having a seemingly unrelated degree in any engineering field or in general engineering, or its equivalent, then it cannot be concluded that the position requires the application of a body of highly specialized knowledge and a degree in a specific specialty because someone with an entirely or largely unrelated degree may qualify to perform the job.

In such a scenario, the requirements of sections 214(i)(1)(A) and (B) of the INA, 8 U.S.C. 1184(i)(1)(A) and (B), would not be satisfied.

The requirement of any engineering degree could include, for example, a chemical engineering degree, marine engineering degree, mining engineering degree, or any other engineering degree in a multitude of unrelated fields.

In these examples, the educational credentials are referred to by the title of the degree for expediency. However, USCIS separately evaluates whether the beneficiary's actual course of study is directly related to the duties of the position, rather than merely the title of the degree. When applicable, USCIS will consider whether the beneficiary has education, specialized training, and/or progressively responsible experience that is equivalent to completion of a U.S. baccalaureate or higher degree in the specialty occupation.

Similarly, a requirement of a bachelor's degree in an unspecified “quantitative field” (which could include mathematics, statistics, economics, accounting, or physics) for a software developer position would be insufficient to meet the requirements of a specialty occupation unless the record identifies specific specialties within the wide variety of “quantitative fields” and establishes how each identified degree in a specific specialty provides a body of highly specialized knowledge, consistent with section 214(i)(1)(A) of the INA, 8 U.S.C. 1184(i)(1)(A), that is directly related to the duties and responsibilities of the software developer position. While a position may allow a range of degrees, and apply multiple bodies of highly specialized knowledge, each of those qualifying degree fields must be directly related to the proffered position.

2. Amending the Criteria for Specialty Occupation Positions

As quoted above, under section 214(i)(1) of the INA, 8 U.S.C. 1184(i)(1), a “specialty occupation” requires attainment of a bachelor's or higher degree in the specific specialty (or its equivalent) as a minimum for entry into the occupation in the United States. However, the current regulatory criteria at 8 CFR 214.2(h)(4)(iii)(A) states that a bachelor's degree be “normally” required, or “common to the industry,” or that the knowledge required for the position is “usually associated” with at least a bachelor's degree or equivalent. The words “normally,” “common,” and “usually” are not found in the statute, and therefore, should not appear in the regulation. To conform to the statutory definition of a “specialty occupation” and promote consistent adjudications, DHS is eliminating the terms “normally,” “common,” and “usually” from the regulatory criteria.

See

new 8 CFR 214.2(h)(4)(iii)(A). This change means that the petitioner will have to establish that the bachelor's degree in a specific specialty or its equivalent is a minimum requirement for entry into the occupation in the United States by showing that this is always the requirement for the occupation as a whole, the occupational requirement within the relevant industry, the petitioner's particularized requirement, or because the position is so specialized, complex, or unique that it is necessarily required to perform the duties of the specific position.

The wording of the current regulatory criteria creates ambiguity. For example, the dictionary definition of “normally” is “usually, or in most cases,” and “usually” is defined as “in the way that most often happens.”

“Most” is defined as “the biggest number or amount (of), or more than anything or anyone else,”

and is a synonym for “normally” or “usually.” These definitions could be read to encompass anything from 51 percent to 99 percent, and possibly a broader range depending on the interpretation, highlighting how ambiguous they are. Use of these terms, if interpreted to mean that a position is a specialty occupation if merely 51 percent of positions within a certain occupation require at least a certain bachelor's degree, is inconsistent with the most natural read of, and arguably runs directly contrary to the statutory definition of, a “specialty occupation” which imposes a minimum entry requirement of a bachelor's or higher degree in the specific specialty (or its equivalent).

See

section 214(i)(1) of the INA, 8 U.S.C. 1184(i)(1). Thus, DHS believes that it is imperative to align the regulatory language with the statutory language and clarify that a bachelor's (or higher) degree in a directly related specific specialty is required. It will no longer be sufficient to show that a degree is normally, commonly, or usually required. In FY 2018, USCIS frequently issued Requests for Evidence (RFEs) in H-1B cases, requesting more evidence or explanations to establish that proffered positions qualified as specialty occupations.

DHS believes that the revisions in this rule will clarify the requirements for establishing a specialty occupation and reduce the need for RFEs in future adjudications.

Cambridge Dictionary, normally,

https://dictionary.cambridge.org/us/dictionary/english/normally

(last visited Sept. 9, 2020); Cambridge Dictionary, usually,

https://dictionary.cambridge.org/us/dictionary/english/usually

(last visited Sept. 9, 2020).

Cambridge Dictionary, most,

https://dictionary.cambridge.org/us/dictionary/english/most

(last visited Sept. 9, 2020).

See

USCIS report

Understanding Requests for Evidence (RFEs): A Breakdown of Why RFEs were Issued for H-1B Petitions in Fiscal Year 2018,

available at

https://www.uscis.gov/sites/default/files/USCIS/Resources/Reports%20and%20Studies/Immigration%20Forms%20Data/BAHA/understanding-requests-for-evidence-h-1b-petitions-in-fiscal-year-2018.pdf.

In addition, DHS is replacing the phrase, “To qualify as a specialty occupation,” with the phrase “A proffered position does not meet the definition of specialty occupation unless it also satisfies” prior to setting forth the regulatory criteria.

See

new 8 CFR 214.2(h)(4)(iii)(A). This change will clarify that meeting one of the regulatory criteria is a necessary part of—but not necessarily sufficient for—demonstrating that a position qualifies as a specialty occupation. This is not new; the criteria at current 8 CFR 214.2(h)(4)(iii)(A) must be construed in harmony with and in addition to other controlling regulatory provisions and with the statute as a whole. In 2000, the U.S. Court of Appeals for the Fifth Circuit highlighted the ambiguity of the regulatory provision's current wording, and petitioners have misinterpreted the criteria in 8 CFR 214.2(h)(4)(iii)(A) as setting forth both the necessary and sufficient conditions to qualify as a specialty occupation, a reading that resulted in some positions meeting one condition of 8 CFR 214.2(h)(4)(iii)(A), but not the definition as a whole.

These changes will eliminate this source of confusion.

Defensor

Meissner,

201 F.3d 384, 387 (5th Cir. 2000) (stating that current 8 CFR 214.2(h)(4)(iii)(A) “appears to implement the statutory and regulatory definition of specialty occupation through a set of four different standards. However, this section might also be read as merely an additional requirement that a position must meet, in addition to the statutory and regulatory definition. The ambiguity stems from the regulation's use of the phrase `to qualify as.' In common usage, this phrase suggests that whatever conditions follow are both necessary and sufficient conditions. Strictly speaking, however, the language logically entails only that whatever conditions follow are necessary conditions. . . . If § 214.2(h)(4)(iii)(A) is read to create a necessary and

sufficient condition for being a specialty occupation, the regulation appears somewhat at odds with the statutory and regulatory definitions of `specialty occupation.' ”).

DHS also is amending 8 CFR 214.2(h)(4)(iii)(A)(

) by replacing the word “position” with “occupation,” so that it sets forth “the minimum requirement for entry into the particular occupation in which the beneficiary will be employed.”

See

new 8 CFR 214.2(h)(4)(iii)(A)(

). DHS believes that replacing “position” with “occupation” will clarify that the first criterion can be satisfied if the petitioner can show that its position falls within an occupational category for which all positions within that category have a qualifying minimum degree requirement.

DHS further believes that this revision provides added clarity to the regulatory criteria as the criteria will flow from general to specific (

i.e.,

occupation level to industry to employer to position). If the occupation requires at least a bachelor's degree in a specific specialty (

e.g.,

lawyer or doctor) then it necessarily follows that a position in one of those occupations would require a degree and qualify as a specialty occupation. If that is not applicable, then the petitioner could submit evidence to show that at least a bachelor's degree in a specific specialty (or its equivalent) is required based on industry norms, the employer's particular requirement, or because of the particulars of the specific position. USCIS will continue its practice of consulting DOL's

Occupational Outlook Handbook

and other reliable and informative sources submitted by the petitioner, to assist in its determination regarding the minimum entry requirements for positions located within a given occupation.

DHS generally determines a position's occupation or occupational category by looking at the standard occupational classification (SOC) code designated on the LCA.

DHS further is amending 8 CFR 214.2(h)(4)(iii)(A)(

) by consolidating this criterion's second prong into the fourth criterion.

See

new 8 CFR 214.2(h)(4)(iii)(A)(

). The second prong of current 8 CFR 214.2(h)(4)(iii)(A)(

), which focuses on a position's complexity or uniqueness, is similar to current 8 CFR 214.2(h)(4)(iii)(A)(

), which focuses on a position's complexity and specialization. In practice, they are frequently consolidated into the same analysis. This amendment streamlines both criteria, as well as the explanation and analysis in written decisions issued by USCIS pertaining to specialty occupation determinations, as such decisions discuss all four criteria and are necessarily repetitive because of the existing overlap between 8 CFR 214.2(h)(4)(iii)(A)(

) and (

). This amendment also simplifies the analysis because petitioners may now demonstrate eligibility under this criterion if the position is “so specialized, complex,

unique” (emphasis added), as opposed to “so complex

unique” under current 8 CFR 214.2(h)(4)(iii)(A)(

) and “so specialized

and

complex” under current 8 CFR 214.2(h)(4)(iii)(A)(

) (emphasis added). Notwithstanding these amendments, the analytical framework of the first prong of 8 CFR 214.2(h)(4)(iii)(A)(

) generally will remain the same. Thus, a petitioner will satisfy new 8 CFR 214.2(h)(4)(iii)(A)(

) if it demonstrates that the specialty degree requirement is the minimum entry requirement for (1) parallel positions (2) at similar organizations (3) within the employer's industry in the United States. This criterion is intended for the subset of positions with minimum entry requirements that are determined not necessarily by occupation, but by specific industry standards. For example, registered nurses (RNs) generally do not qualify for H-1B classification because most RN positions normally do not require a U.S. bachelor's or higher degree in nursing (or a directly related field), or its equivalent, as the minimum for entry into these particular positions.

However, advanced practice registered nurses generally would be specialty occupations due to the advanced level of education and training required for certification.

For this criterion, DHS would continue its practice of consulting the DOL's

Occupational Outlook Handbook

and other reliable and informative sources, such as information from the industry's professional association or licensing body, submitted by the petitioner.

See

U.S. Dep't of Labor, Bureau of Labor Statistics,

Occupational Outlook Handbook,

“Registered Nurses,”

https://www.bls.gov/ooh/healthcare/registered-nurses.htm#tab-4

(indicating that nurses can have a bachelor's or associate's degree in nursing, or a diploma from an approved nursing program) (last visited Jun. 25, 2020).

USCIS Policy Memorandum PM-602-0104, Adjudication of H-1B Petitions for Nursing Occupations (Feb. 18, 2015), available at

https://www.uscis.gov/sites/default/files/USCIS/Laws/Memoranda/2015-0218_EIR_Nursing_PM_Effective.pdf.

The third criterion at 8 CFR 214.2(h)(4)(iii)(A)(

) essentially will remain the same, other than the deletion of “normally.” This criterion still will recognize an employer's valid employment practices, provided that those practices reflect actual requirements. The additional sentence, “The petitioner also must establish that the proffered position requires such a directly related specialty degree, or its equivalent, to perform its duties,” simply will reinforce the existing requirements for a specialty occupation, in other words, that the position itself must require a directly related specialty degree, or its equivalent, to perform its duties.

See

new 8 CFR 214.2(h)(4)(iii)(A)(

). Employers requiring degrees as a proxy for a generic set of skills will not meet this standard. Employers listing a specialized degree as a hiring preference will not meet this standard either. If USCIS were constrained to recognize a position as a specialty occupation merely because an employer has an established practice of demanding certain educational requirements for the proffered position—without consideration of whether the position requires the application of a body of highly specialized knowledge consistent with the degree requirement—then any beneficiary with a bachelor's degree in a specific specialty could be brought into the United States to perform work in a non-specialty occupation if the employer arbitrarily imposed such a degree requirement for the non-specialty occupation position.

With respect to the first part of this criterion, a petitioner could submit evidence of an established recruiting and hiring practice for the position to establish its requirements for the position. DHS is leaving the term “established practice” undefined to allow more flexibility for petitioners, although it notes that petitioners seeking to fill a position for the first time generally would not be able to demonstrate an “established practice.”

Defensor,

201 F.3d at 388 (noting “If only [the employer]'s requirements could be considered, then any alien with a bachelor's degree could be brought into the United States to perform a non-specialty occupation, so long as that person's employment was arranged through an employment agency which required all clients to have bachelor's degrees. Thus, aliens could obtain six-year visas for any occupation, no matter how unskilled, through the subterfuge of an employment agency. This result is completely opposite the plain purpose of the statute and regulations, which is to limit H1-B [sic] visas to positions which require specialized experience and education to perform.”)

First-time hirings are not precluded from qualifying under one of the other criteria.

As discussed above, the criterion at the new 8 CFR 214.2(h)(4)(iii)(A)(

) incorporates the second prong of current 8 CFR 214.2(h)(4)(iii)(A)(

See

new 8 CFR 214.2(h)(4)(iii)(A)(

). No other substantive changes are being made to this criterion. Thus, the fourth criterion can be satisfied if the petitioner

demonstrates that the proffered position's job duties are so specialized, complex, or unique that they necessitate the attainment of a U.S. bachelor's degree in a directly related specific specialty, or its equivalent.

DHS acknowledges that some petitioners may believe they have a reliance interest in retaining the existing regulatory framework for specialty occupation. For example, by eliminating the word “normally” from the regulatory criterion at 8 CFR 214.2(h)(4)(iii)(A)(

), some occupations that previously qualified under this criterion may no longer qualify because a bachelor's degree in a specific specialty or its equivalent is not always a minimum requirement for entry. To the extent that petitioners may have a reliance interest in retaining the current regulations, the government's interests in having the regulations conform to the best reading of the statutory definition and creating clearer standards to facilitate more consistent adjudications

far outweigh any such reliance interest. It is important to note that, although some occupations will no longer qualify under 8 CFR 214.2(h)(4)(iii)(A)(

), the petitioner may still establish that the proffered position satisfies any one of the other criteria at 8 CFR 214.2(h)(4)(iii)(A)(

)-(

). None of the revised provisions categorically prevent any particular position from qualifying as a specialty occupation.

See

GAO/HEHS-00-157, at 25 (finding that “a petition previously submitted and denied can be approved by another adjudicator, even if the denying adjudicator determined that the employer does not meet H-1B requirements” owing to inconsistently available reasons for denials and information system limitations); GAO-11-26, at 27 (noting examples of instances in which “[e]xecutives at several companies” experienced inconsistencies in the adjudication process, including decisions to deny or grant H-1B classification based on whether projects required “specialty occupation”).

Further, DHS recognizes the possibility that some petitions for H-1B nonimmigrant classification might have been approved in error under the current regulation even though the petitions indicated that an alien could qualify to perform the relevant position based on a general degree. USCIS has generally denied such petitions on the basis that such petitions do not meet the statutory and regulatory definition of specialty occupation under the current regulation, but recognizes that a small number might have been approved in error and that similar petitions will be denied as a result of this Rule's clarification of the definition of “specialty occupation.” For example, by adding the phrase “A position is not a specialty occupation if attainment of a general degree, such as business administration or liberal arts, without further specialization, is sufficient to qualify for the position” at new 8 CFR 214.2(h)(4)(ii), positions where a general degree may qualify someone to perform the job, and that may have been erroneously approved as specialty occupations because of confusion created by the ambiguous wording in the current regulations, may now be denied. But again, to the extent that the revised regulations would result in the denial of some petitions that were erroneously approved under the current regulatory scheme, the government's interests in better adhering to the statute and better ensuring consistent adjudication far outweigh any interests petitioners may have in receiving continued petition approvals in a small number of cases based on error resulting from imprecise regulatory text. DHS notes that each case is decided on its own merits, and simply because a petition was approved previously does not guarantee that a similar petition would be approved in the future as prior approvals are not binding on USCIS.

The burden of proof remains on the petitioner, even where an extension of stay in H-1B nonimmigrant status is sought.

Louisiana Philharmonic Orchestra

INS,

2000 WL 282785 (E.D. La.), aff'd 248 F.3d 1139 (5th Cir. 2001), cert. denied, 122 S. Ct. 51 (2001);

Matter of Church Scientology Intl,

19 I&N Dec. 593, 597 (Comm'r 1988).

See

8 CFR 103.2(b)(1) (“An applicant or petitioner must establish that he or she is eligible for the requested benefit at the time of filing the benefit request and must continue to be eligible through adjudication); 8 CFR 214.1(c)(5) (“Where an applicant or petitioner demonstrates eligibility for a requested extension, it may be granted at the discretion of the Service.”).

B. Defining “Worksite” and “Third Party Worksite”

DHS will add definitions for “worksite” and “third-party worksite” to the existing list of definitions at 8 CFR 214.2(h)(4)(ii).

See

new 8 CFR 214.2(h)(4)(ii). First, DHS will define “worksite” similar to the DOL definition of “place of employment” in 20 CFR 655.715 as “the physical location where the work is actually performed by the H-1B nonimmigrant.” A “worksite” will not include any location that would not be considered a “worksite” for LCA purposes, meaning that DHS will apply the same exclusions and examples of “non-worksite locations” as set forth in DOL's regulations.

As H-1B petitioners and USCIS officers should already be familiar with the concept of “worksite” because it also applies in the LCA context, DHS believes that this definition does not represent a significant change. Second, DHS will define “third-party worksite” as “a worksite, other than the beneficiary's residence in the United States, that is not owned or leased, and not operated, by the petitioner.”

See

new 8 CFR 214.2(h)(4)(ii).

This definition is similar to the “owned or operated” test commonly used in the LCA context.

Again, as this concept should already be familiar to H-1B petitioners and USCIS officers, this definition should not be a significant change.

See

20 CFR 655.715 (definition of “place of employment”).

While the definition of “third-party worksite” will exclude the beneficiary's U.S. residence, employment of the beneficiary from home must still be in accordance with all applicable laws.

See

20 CFR 655.734(a)(1)(ii)(A) (the petitioner's obligation requires proper notice at each place of employment “whether such place of employment is owned or operated by the employer or by some other person or entity”).

The newly added definitions are helpful because the terms “worksite” and “third-party worksite” are used elsewhere in the amended regulations. As explained below, the new employer-employee relationship definition specifically refers to the beneficiary's worksite as a relevant factor in determining whether such relationship exists (

e.g.,

“where the supervision is not at the petitioner's worksite, how the petitioner maintains such supervision,”

see

new 8 CFR 214.2(h)(4)(ii)). Further, a 1-year maximum validity period will apply whenever the beneficiary will be working at a third-party worksite.

See

new 8 CFR 214.2(h)(9)(iii)(A)(

). Finally, the new site visit provisions will clarify that inspections may include any third-party worksites, as applicable.

See

new 8 CFR 214.2(h)(4)(i)(B)(

C. Clarifying the Definition of “United States Employer”

Currently, the term “United States employer” is defined at 8 CFR 214.2(h)(4)(ii) as “a person, firm, corporation, contractor, or other association, or organization in the United States” which, among other things, “[e]ngages a person to work within the United States” and “[h]as an employer-employee relationship with respect to employees under this part, as indicated by the fact that it may hire, pay, fire, supervise, or otherwise control the work of any such employee.” Through this rule, DHS is changing this definition by: (1) Striking the word “contractor” from the general definition of “United States employer”; (2) inserting the word “company” in that general definition; (2) expanding upon the existing requirement to engage the beneficiary to work within the United

States; and (3) expanding upon the employer-employee relationship and the factors used to determine if a valid “employer-employee relationship” between the petitioner and the beneficiary exists or will exist.

See

new 8 CFR 214.2(h)(4)(ii).

DHS believes these revisions are necessary to clarify the requirements to qualify as an employer for purpose of the H-1B classification. As previously discussed, the current regulation at 8 CFR 214.2(h)(4)(ii) defines “United States employer” as an entity that has an “employer-employee relationship” with an “employee.” But these terms are not adequately defined. Section 101(a)(15)(H)(i)(

) of the INA, 8 U.S.C. 1101(a)(15)(H)(i)(

), defines an H-1B nonimmigrant as a worker coming temporarily to the United States to perform services in a specialty occupation, and for whom the intending “employer” has filed a labor condition application. Section 214(c)(1) of the INA, 8 U.S.C. 1184(c)(1), states in relevant part that the question of importing any alien as an H-1B nonimmigrant shall be determined after consultation with appropriate agencies of the Government, upon petition of the importing employer. Congress continued using the term “employer” and “employment” in subsequent amendments, but without specifically defining those terms.

See, e.g.,

section 214(n) of the INA, 8 U.S.C. 1184(n), as amended by the American Competitiveness in the Twenty-first Century Act of 2000 (AC21), Public Law 106-313, 114 Stat. 1251 (authorizing the H-1B nonimmigrant to accept new “employment” upon the filing of an H-1B petition by the “prospective employer”). DHS believes the revisions in this rule are necessary to clarify and strengthen the requirements to qualify as a United States employer for the H-1B program.

1. Replacing “contractor” With “company”

First, striking “contractor” will avoid potential confusion as the term “contractor” in the definition is misleading. The inclusion of “contractors” in the regulatory language could be read to suggest that contractors should generally qualify under the definition of a “United States employer.” While a contractor is certainly not excluded from qualifying as a “United States employer” for purposes of an H-1B petition, the contractor, like any petitioner, must establish the requisite “employer-employee relationship” with the H-1B beneficiary. This revision will also update the definition to include reference to “company,” as that term is commonly used to describe various types of business entities, such as limited liability companies.

DHS acknowledges that third-party arrangements involving one or more contractors may be a legitimate business model.

However, these types of business arrangements generally make it more difficult to assess whether the petitioner and the beneficiary have or will have the requisite employer-employee relationship. Typically, these types of business arrangements require the beneficiary to be placed at one or more third-party worksites, which are not owned or leased and not operated, by the petitioner. This placement, in itself, potentially dilutes the petitioner's control over the beneficiary. The difficulty of assessing control is increased in situations where there are one or more intermediary contractors (often referred to as “vendors”)

involved in the contractual chain. Overall, the more parties there are in the contractual chain, the more likely those other parties exert control over the beneficiary's work, and more importantly, potentially limit the amount of control, if any, that the petitioner would have over the beneficiary's employment. As a result, the relationship between the petitioner and the beneficiary becomes more attenuated.

Karen Jensen,

Barriers to H-1B Visa Sponsorship in the IT Consulting Industry: The Economic Incentive to Alter H-1B Policy,

35 Fordham International Law Journal Volume 1027, 1036 (2017).

The “vendor” concept is frequently referenced in H-1B petitions that involve the information technology (IT) industry. While the term is not precisely defined, petitions commonly refer to “primary vendors,” who have an established or preferred relationship with a client, or “implementing vendors,” who bid on an IT project with a client and then implement the contract using their own staff. Primary or implementing vendors may turn to secondary vendors to fill staffing needs on individual projects.

See, e.g., Acclaim Systems, Inc.

Infosys,

No. Civ.A. 13-7336, 2016 WL 974136 at *2 (E.D. Pa. Mar. 11, 2016). As a result, the ultimate client project may be staffed by a team of H-1B beneficiaries who were petitioned for by different, unrelated employers.

By removing the word “contractor”, DHS seeks to avoid any confusion or mistaken belief that contractors should generally qualify as “United States employers.” Petitioners that are contractors are reminded of their burden, similar to all other H-1B petitioners, whether they are a person, corporation, or company, to establish the employer-employee relationship for each H-1B petition they file.

Nevertheless, it is important to note that the deletion of the term “contractor” from the regulatory definition does not mean that a contractor never would qualify as a “United States employer” for the purpose of filing an H-1B petition. A contractor may be a person, firm, company, corporation, or other association or organization, and the contractor (whatever the form) still may qualify as a U.S. employer of the H-1B beneficiary if the contractor demonstrates the requisite employer-employee relationship with the beneficiary.

Because this change will not impact a contractor's continued ability to establish a valid employer-employee relationship on a case-by-case basis, DHS does not believe that removing the term “contractor” will have a substantive impact on the eligibility determination. The change is simply intended to remove a term that is typically associated with work arrangements that typically do not involve an employer and employee.

DHS recognizes that this change will result in a definition of “United States employer” that is slightly different from DOL's definition of “employer.” 20 CFR 655.715 states in pertinent part: “

Employer

means a person, firm, corporation, contractor, or other association or organization in the United States that has an employment relationship with H-1B . . . nonimmigrants and/or U.S. worker(s).” However, DHS does not believe this disparity would be significant, particularly because the DOL definition still requires the contractor to have an employment relationship with the H-1B nonimmigrant based on the common law. Furthermore, DHS definitions are separate from, and generally serve different purposes than, DOL definitions. While DOL may deem the person or entity filing an H-1B petition to be the employer for purpose of enforcing wage and other obligations, DHS must determine whether the petitioner qualifies as the intending or importing United States employer.

See, e.g.,

20 CFR 655.705 (DOL administers the LCA process and most enforcement provisions).

2. Engaging the Beneficiary To Work

As currently written in 8 CFR 214.2(h)(4)(ii), the requirement for a petitioner to “[engage] a person to work within the United States” has limited practical value. It does not specify that the petitioner should engage the beneficiary (rather than “a person”). And it does not qualify the work to be performed within the United States. By stating in new 8 CFR 214.2(h)(4)(ii) that an employer must “[engage] the beneficiary to work within the United States, and ha[ve] a bona fide, non-speculative job offer for the beneficiary,” DHS seeks to provide more meaningful requirements for the definition of “United States employer,” consistent with statutory references to the intending or importing employer petitioning for an alien to perform services in a specialty occupation.

Consistent with the existing rule, this language does not and will not prohibit H-1B nonimmigrants from travelling internationally.

New 8 CFR 214.2(h)(4)(ii) will make it clear that a petitioner must have non-speculative employment for the beneficiary at the time of filing.

At the time of filing, the petitioner must establish that a bona fide job offer exists and that actual work will be available as of the requested start date.

If the petitioner does not have any work available, then it cannot reasonably engage the beneficiary “to work within the United States” in order to qualify as a United States employer at the time of filing.

See

8 CFR 214.2(h)(4)(ii).

Cf.

8 CFR 103.2(b)(1) (eligibility must be established at the time of filing).

The requested start date as indicated on the H-1B petition in this context may differ from when an H-1B nonimmigrant is considered to “enter into employment” for purposes of receiving required pay under DOL regulations.

See

20 CFR 655.731(c)(6), section 212(n) of the INA. While DOL regulations provide for a limited period of time for the employer to place the beneficiary on the payroll, that is a separate rule pertaining to the employer's wage obligation under section 212(n) of the INA and does not pertain to the petitioner's obligation under section 214 of the INA and new 8 CFR 214.2(h)(4)(ii) to establish that work is available for the beneficiary to perform as of the start date requested by the petitioner. The requirement in new 8 CFR 214.2(h)(4)(ii) will be met if work is available for the beneficiary as of the start date of intended employment requested on the H-1B petition.

The agency long held and communicated the view that speculative employment is not permitted in the H-1B program. For example, a 1998 proposed rule documented this position, stating that historically, USCIS (or the Service, as it was called at the time) has not granted H-1B classification on the basis of speculative, or undetermined, prospective employment.

This proposed rule explained that the H-1B classification was not intended as a vehicle for an alien to engage in a job search within the United States, or for employers to bring in temporary foreign workers to meet possible workforce needs arising from potential business expansions or the expectation of potential new customers or contracts.

Speculative employment undermines the integrity and a key goal of the H-1B program, which is to help U.S. employers obtain the skilled workers they need to meet their business needs, subject to annual numerical limitations, while protecting the wages and working conditions of U.S. workers. Further, USCIS cannot reasonably ascertain whether the beneficiary will be employed in a specialty occupation if the employment is speculative.

Petitioning Requirements for the H Nonimmigrant Classification,

63 FR 30419, 30419-20 (proposed June 4, 1998) (to be codified at 8 CFR part 214).

Id. See also

GAO/HEHS-00-157,

supra

at 10 (“The petition is required to contain the necessary information to show that a bona fide job exists . . . .”);

Serenity Info Tech

Cuccinelli,

2020 WL 2544534, at *13 (N.D. Ga. 2020) (“Demonstrating that the purported employment is actually likely to exist for the beneficiary is a basic application requirement . . . .”).

Note, however, that establishing non-speculative employment does not amount to demonstrating non-speculative daily work assignments through the duration of the requested validity period. DHS is not by this rule requiring employers to establish non-speculative and specific assignments for each and every day of the proposed period of employment.

Again, under new 8 CFR 214.2(h)(4)(ii), a petitioner must demonstrate, at the time of filing, availability of actual work as of the requested start date.

See ITServe Alliance, Inc.

Cissna,

443 F.Supp.3d 14, 19 (D.D.C. Mar. 10, 2020) (the U.S. District Court for the District of Columbia, in considering a requirement that an H-1B petitioner establish non-speculative assignments for the entire time requested in a petition, explained that “very few, if any, U.S. employers would be able to identify and prove daily assignments for the future three years for professionals in a specialty occupation” and that “[n]othing in [the definition of `specialty occupation'] requires specific and non-speculative qualifying day-to-day assignments for the entire time requested in the petition.”);

Serenity,

2020 WL 2544534, at *13 (citing

ITServe

). Speculative employment should not be confused with employment that is contingent on petition approval, visa issuance (when applicable), and the grant of H-1B status. DHS recognizes that employment may be actual, but contingent on petition approval and the alien being granted H-1B status.

3. Clarifying the “Employer-Employee Relationship”

Third, DHS will remove the phrase “as indicated by the fact that it may hire, pay, fire, supervise, or otherwise control the work of any such employee” from the current definition of “United States employer,” and replace that phrase with a separate, more extensive definition of “employer-employee relationship” based on USCIS' interpretation of existing common law.

See

new 8 CFR 214.2(h)(4)(ii). These revisions will clarify the test for establishing the requisite “employer-employee relationship” and eliminate the ambiguity and confusion created by the existing regulation.

The term “employer-employee relationship” at 8 CFR 214.2(h)(4)(ii) is not adequately defined. The phrase in that provision which reads, “as indicated by the fact that it may hire, pay, fire, supervise, or otherwise control the work of any such employee,” does not give sufficient guidance. For example, it is unclear whether the five factors are entirely disjunctive, such that the test is met if any one factor is met, or whether the last factor (“or otherwise control”) is merely disjunctive of the fourth factor (“supervision”), such that the first three factors (“hire, pay, fire”) must always be met.

Although some courts have viewed this phrase as establishing that any single listed factor, such as pay, in and of itself is sufficient to establish the requisite control,

DHS agrees with the Fifth Circuit's statement in

Defensor

that the conjunctive interpretation, where “hire, pay, fire, supervise” are read together “as one prong of the test and `otherwise control the work' is . . . viewed as an independent prong of the test

accords better with the commonsense notion of employer.”

DHS firmly disagrees with the disjunctive interpretation because it leads to the illogical result of virtually any petitioner satisfying the definition, because H-1B petitioners are generally required to submit an LCA that includes an attestation that the petitioner will pay the beneficiary at least the required wage. If the regulation is read to set forth a five-factor disjunctive test, then arguably all petitioners who submit an LCA would satisfy the pay factor, such that reference to other factors would be superfluous in any case where the petitioner is required to submit an LCA.

See, e.g., Defensor,

201 F.3d at 388 (“Under § 214.2(h)(4)(ii)(2), an employer is someone who `[h]as an employer-employee relationship with respect to the employees . . . , as indicated by the fact that it may hire, pay, fire, supervise, or otherwise control the work of any such employee.' It is unclear whether Vintage's ability to simply `hire' or `pay' an employee is sufficient standing alone to grant Vintage employer status under this definition. Another interpretation would be that `hire, pay, fire, supervise' are to be read conjunctively as one prong of the test and `otherwise control the work' is to be viewed as an independent prong of the test. Under the latter interpretation, merely being able to `hire' or `pay' an employee, by itself, would be insufficient to grant employer status to an entity that does not also supervise or actually control the employee's work . . . . [T]he second interpretation accords better with the commonsense notion of employer . . .”)

See, e.g., ITServe,

2020 WL 1150186, at *17 (“The use of `or' distinctly informs regulated employers that a single listed factor can establish the requisite `control' to demonstrate and employer-employee relationship. This formulation makes evidence that there are multiple ways to demonstrate employer control, that is, by hiring or paying or firing or supervising or `otherwise' showing control.”).

See Defensor,

201 F.3d at 388 (emphasis added).

In the absence of specific, clear, and relevant statutory or regulatory definitions, USCIS has interpreted these terms consistent with its understanding of current common law. In 2010, USCIS provided clarifying policy guidance regarding the employer-employee regulation and factors based on the common law that USCIS officers should consider when adjudicating H-1B

petitions.

While the listed factors were based on the agency's interpretation of the common law, they were specifically tailored to the H-1B program based on the agency's expertise and experience dealing with challenges posed particularly by cases where the beneficiary was placed at a third-party worksite.

This policy guidance remained in effect for more than a decade and was only recently rescinded in response to a recent court decision finding the policy guidance, as applied, to be a new substantive rule that required rulemaking in accordance with the Administrative Procedure Act (APA), 5 U.S.C. 551

et seq.

This interim final rule will restore, with additional clarification, the policy that existed since 2010 and only recently was rescinded due to a judicial ruling on procedural grounds.

USCIS Policy Memorandum HQ 70/6.2.8, Determining Employer-Employee Relationship for Adjudication of H-1B Petitions, Including Third-Party Site Placements (Jan. 8, 2010). This memorandum was superseded and archived on June 17, 2020. Therefore, it can be found in the Supporting Documents accompanying this interim final rule.

For example, the 2010 memorandum's listed factor of “does the petitioner supervise the beneficiary and is such supervision off-site or on-site” was an elaboration of the common-law factor of “the location of the work,”

Darden,

503 U.S. at 323-24, but was tailored to issues commonly presented by H-1B cases where the petitioner claimed to supervise the beneficiary, but was not physically located at the same worksite as the beneficiary and end-client.

See, e.g., ITServe,

2010 WL 1150186, at *2 (“The current CIS interpretation of the employer-employee relationship requirement is inconsistent with its regulation, was announced and applied without rulemaking, and cannot be enforced.”).

USCIS interprets the term “employer-employee relationship” to be the “conventional master-servant relationship as understood by common-law agency doctrine.”

That doctrine, as explained by the Supreme Court, requires an evaluation of the hiring party's right to control the manner and means by which the product is accomplished “among the other factors” relevant to the employer-employee relationship.

As the common law test contains “no shorthand formula or magic phrase that can be applied to find the answer, . . . all of the incidents of the relationship must be assessed and weighed with no one factor being decisive.”

See Clackamas Gastroenterology Assocs., P.C.

Wells,

538 U.S. 440, 445 (2003);

Nationwide Mutual Ins. Co.

Darden,

503 U.S. 318, 323 (1992) (quoting

Cmty. for Creative Non-Violence

Reid,

490 U.S. 730 (1989)).

Darden,

503 U.S. at 323-24.

Id.

at 324 (quoting

NLRB

United Ins. Co. of Am.,

390 U.S. 254, 258 (1968));

See also

144 Cong. Rec. E2323-01, E2323, 1998 WL 785735 (stating “[t]he employers most prone to abusing the H-1B program are called `job contractors' or `job shops'. Much, or all, of their workforces are composed of foreign workers on H-1B visas. Many of these companies make no pretense of looking for American workers and are in business to contract their H-1Bs out to other companies. The companies to which the H-1Bs are contracted benefit in that the wages paid to the foreign workers are often well below what comparable Americans would receive. Also, the companies don't have to shoulder the obligations of being the legally recognized employers-the job contractors/shops remain the official employers”) (statement of Rep. Lamar Smith, then chairman of the Subcommittee on Immigration and Claims).

If submitting contracts, the petitioner should include both the master services agreement and the accompanying work order(s), statement(s) of work, or other similar legally-binding agreements under different titles. These contracts should be signed by an authorized official of the third-party entity that will use the beneficiary's services. In general, the master services agreement (also commonly called a supplier agreement) sets out the essential contract terms and provides the basic framework for the overall relationship between the parties.

107

The work order or statement of work provides more specific information, such as the scope of services to be performed, details about the services, and the allocation of responsibilities among the parties.

108

The petitioner may also submit a detailed letter signed by an authorized official of the ultimate end-client company or companies where the beneficiary will actually work. Other types of corroborating evidence may include technical documentation, milestone tables, marketing analyses, cost-benefit analyses, brochures, and funding documents, insofar as this evidence corroborates that the petitioner will have an employer-employee relationship with the beneficiary, and that the beneficiary will perform services in a specialty occupation at the third-party worksite(s). Overall, the totality of the evidence submitted by the petitioner must be detailed enough to provide a sufficiently comprehensive view of the work available and substantiate, by a preponderance of the evidence, the terms and conditions under which the work will be performed. Documentation that merely sets forth the general obligations of the parties to the agreement, or which do not provide specific information pertaining to the actual work to be performed, would generally be insufficient.

109

107

See

§ 49:35. Contract scope—Master services agreement, 3 Successful Partnering Between Inside and Outside Counsel § 49:35.

108

See

§ 49:37. Contract scope—Statements of work, 3 Successful Partnering Between Inside and Outside Counsel § 49:37.

109

When requested evidence may contain trade secrets, for example, the petitioner may redact or sanitize the relevant sections to provide a document that is still sufficiently detailed and comprehensive, yet does not reveal sensitive commercial information. Although a petitioner may always refuse to submit confidential commercial information if deemed too sensitive, the petitioner must also satisfy the burden of proof.

Cf. Matter of Marques,

16 I&N Dec. 314, 316 (BIA 1977) (“The respondent had every right to assert his claim under the Fifth Amendment. However, in so doing he runs the risk that he may fail to carry his burden of persuasion with respect to his application for discretionary relief.”).

Further, in cases where the beneficiary is staffed to a third-party, the submitted corroborating documents should generally demonstrate the requirements of the position as imposed by the third-party entity (commonly referred to as the “end-client”) that will use the beneficiary's services. As noted in

Defensor

Meissner,

if only the petitioner's requirements are considered, “then any beneficiary with a bachelor's degree could be brought into the United States to perform work in a non-specialty occupation, so long as that person's employment was arranged through an employment agency that required all [staffed workers] to have bachelor's degrees.”

110

This result would be completely opposite of the plain purpose of the statute and regulations, which is to limit H-1B visas to positions which require specialized education to perform duties that require theoretical and practical application of a body of highly specialized knowledge.

111

However, not all third-party placements would necessarily require such evidence. For example, where the beneficiary is placed at a third-party's worksite, but performs work as part of a team of the petitioner's employees, including an on-site supervisor employed by the petitioner and who manages the work of the petitioner's employees, the requirements of the position as established by the petitioner may be determinative. USCIS will make the determination as to whether the requirements of the petitioner or third-party entity are controlling on a case-by-case basis, taking into consideration the totality of the relevant circumstances, as described above.

110

201 F.3d at 387-88.

111

Id.

Finally, new 8 CFR 214.2(h)(4)(iv)(C) will also state that, in accordance with 8 CFR 103.2(b) and 214.2(h)(9), USCIS may request copies of contracts, work orders, or other similar corroborating evidence on a case-by-case basis in all cases, regardless of where the beneficiary will be placed. While USCIS already has general authority to request any document it deems necessary, this additional provision will make it clear that USCIS has authority to specifically request contracts and other similar evidence. This provision will apply to any H-1B petition, including a petition where the petitioner indicates that the beneficiary will exclusively work in-house. For example, if a petitioner indicates that the beneficiary will develop system software for a client but will perform such work exclusively at the petitioner's premises, USCIS may request a copy of the client contract or other corroborating evidence to confirm that the relevant work exists to ensure that the beneficiary will be employed in a specialty occupation.

E. Maximum Validity Period for Third-Party Placements

While DHS recognizes that third-party arrangements may generally be part of a legitimate business model, this business model presents more challenges in the context of the H-1B program and USCIS' ability to better ensure eligibility and compliance. Accordingly, DHS will

set a 1-year maximum validity period for all H-1B petitions in which the beneficiary will be working at a third-party worksite.

See

new 8 CFR 214.2(h)(9)(iii)(A)(

). To make the determination of whether a beneficiary will be working or placed at a third-party worksite, USCIS will rely on information contained in the H-1B petition and any accompanying LCA, which must identify each worksite where the beneficiary will work and the name of any third-party entity (secondary entity) at each worksite.

112

The Labor Condition Application for H-1B, H-1B1 and E-3 Nonimmigrant Workers Form ETA-9035CP—General Instructions for the 9035 & 9035E, defines “secondary entity” as “another entity at which or with which LCA workers will be placed during the period of certification.”

See https://www.dol.gov/sites/dolgov/files/ETA/oflc/pdfs/Form%20ETA-9035CP%20Instructions.pdf.

Although the maximum period of authorized admission for an H-1B nonimmigrant has been established by Congress in section 214(g)(4) of the INA, 8 U.S.C. 1184(g)(4), Congress did not specify the validity period for an approved H-1B visa petition. Congress authorized DHS to promulgate regulations setting the validity period, including a range of validity periods not to exceed the maximum period of authorized admission.

Id.

In relevant part, section 214(a)(1) of the INA, 8 U.S.C. 1184(a)(1), states, “the admission to the United States of any alien as a nonimmigrant shall be for such time and under such conditions as the [Secretary] may by regulations prescribe . . . .”

See also

section 214(c)(1) of the INA, 8 U.S.C. 1184(c)(1) (“The question of importing any alien as [an H-1B nonimmigrant] in any specific case or specific cases shall be determined by [DHS] . . . upon petition of the importing employer . . . . The petition shall be in such form and contain such information as [DHS] shall prescribe.”). Under current regulations at 8 CFR 214.2(h)(9)(iii), the maximum validity period an H-1B petition may be approved is “up to three years,” which necessarily allows for lesser periods as well. USCIS has an established practice of approving H-1B petitions for less than 3 years for various reasons, such as to conform to the dates of the accompanying LCA.

See id.

Further, DHS regulations already limit the validity period to 1 year in cases of temporary licensure.

See

8 CFR 214.2(h)(4)(v)(C). Likewise, DHS will now limit the validity period for third-party placement petitions to a maximum of 1 year.

DHS believes that the 1-year limit is reasonable given the nature of third-party placements. In general, the nature of contracting work leads to beneficiaries being more transient, as well as greater potential for changes to the terms and conditions of employment. Specifically, these are situations where the petitioner is not the end-user of the H-1B worker's services, and the beneficiary performs work for another entity at that other entity's worksite. DHS believes that enhanced monitoring of compliance is valuable and needed to ensure that the beneficiary is being employed consistent with the terms and conditions of the petition approval.

113

The fact that 6 to 12 month work orders are common in petitions involving third-party placements, based on USCIS' program experience and review of evidence in such cases,

114

supports DHS's belief that limiting the validity period to up to one year is reasonable as it more closely aligns with the length of time that a beneficiary would generally be assigned under a particular work order. It is also common based on USCIS' program experience that, despite the requirement that the petitioner must file an amended or new H-1B petition with the corresponding LCA when there is a material change in the terms and conditions of employment,

115

once a certain work order expires, a petitioner may obtain another work order under changed terms and conditions, including a different work location, or even assign the beneficiary to a different client, without timely filing the required amended or new petition. Such unaccounted changes increase the risk of violations of H-1B program requirements. DHS believes that continuing to approve third-party petitions for longer periods of time, including the maximum three-year validity period, would greatly diminish USCIS' ability to properly monitor program compliance in cases where fraud and abuse are more likely to occur.

113

This includes, among other terms and conditions, that the petitioner is maintaining the required employer-employee relationship with the beneficiary. Enhanced monitoring of the employer-employee relationship is particularly important in cases where a staffing company uses H-1B workers to fill positions previously occupied by the petitioner's in-house employees.

114

See, e.g., Matter of I-S-S- LLC,

Appeal of California Service Center Decision Form I-129, Petition for a Nonimmigrant Worker, 2017 WL 959844, at *5 (the Petitioner stated in its support letter that “industry convention is to issue work orders for a short duration and continue extending them through project completion.”);

Matter of K-T-, Inc.

Appeal of Vermont Service Center Decision Form I-129, Petition for a Nonimmigrant Worker, 2019 WL 1469913, at *4 (the Petitioner asserted that contract extensions for six-month intervals are common within the IT consulting industry); (Identifying Information Redacted by Agency) Petition for a Nonimmigrant Worker Pursuant to Section 101(a)(15)(H)(i)(b) of the Immigration and Nationality Act, 8 U.S.C. S 1101, 2013 WL 4775077, at *8 (on appeal, counsel states that in the petitioner's industry, it is standard to issue work orders or statements of work for short-term project, which typically last for six to nine months, and that it “is neither typical nor normal for a company to have a [statement of work] that covers a three-year period of time.”).

115

See

8 CFR 214.2(h)(2)(i)(E) (requiring that a petitioner file an amended or new petition to reflect any material changes in the terms and conditions of employment or training or the alien's eligibility as specified in the original approved petition), (h)(11)(i)(A) (requiring the petitioner to “immediately notify the [agency] of any changes in the terms and conditions of employment of a beneficiary which may affect eligibility”);

Matter of Simeio Solutions, LLC,

26 I&N Dec. 542, 547 (AAO 2015).

DHS considered an alternative of limiting validity periods only when the beneficiary would “primarily” work at a third-party worksite. DHS believes that this alternative would allow petitioners to easily avoid the limited validity period provision. For example, if “primarily” were defined to mean more than half of the time, the petitioner could claim that a beneficiary would not work 51% of the time (and thus not “primarily”) at a third-party worksite to circumvent this limitation. This would undermine the effectiveness of the rule. It would also create additional burdens on DHS in that it would require adjudicators to review and evaluate evidence regarding where a beneficiary would “primarily” be placed. Further, DHS believes that excluding any location that would not require an LCA from the definition of “worksite” provides sufficient flexibility in the application of this rule.

116

Therefore, DHS rejected the alternative of limiting validity periods only when the beneficiary would “primarily” work at a third-party worksite.

116

For example, DOL's definition of worksite (which DHS adopts) excludes locations where an H-1B nonimmigrant's job functions may necessitate frequent changes of location with little time spent at any one location, such as jobs that are peripatetic in nature.

See

20 CFR 655.715.

DHS believes that limiting approvals for third-party placement petitions to a maximum of 1 year will allow the agency to more consistently and thoroughly monitor a petitioner's and beneficiary's continuing eligibility, including whether the beneficiary has maintained H-1B status, whether the beneficiary's position remains a specialty occupation (

e.g.,

whether the terms of the contract or placement have changed), and whether any changes in the nature of the placement interfere with the necessary employer-employee relationship between the petitioner and the beneficiary, through the adjudication of more frequent petitions

requesting an extension of status.

117

Additionally, it will reduce the potential for employer violations. Based on the agency's experience in administering the H-1B program, significant employer violations, including placing beneficiaries in non-specialty occupation jobs, may be more likely to occur when petitioners place beneficiaries at third-party worksites.

118

In many instances, the relationship between the petitioning employer and the H-1B beneficiary is more attenuated when the beneficiary is working at a third-party worksite. Petitioners who contract H-1B workers out to another company at a third-party worksite generally have less visibility into the actual work being performed, including whether it is the appropriate work for a specialty occupation, the hours worked, and the relationship between the beneficiary and his or her on-site supervisor. As the GAO stated in its 2011 report to Congress, DOL's Wage and Hour investigators reported that a large number of the complaints they received were related to the activities of staffing companies, where the H-1B beneficiary is placed at a third-party worksite.

119

117

The approval of a new or amended petition for a beneficiary placed at a third-party worksite will also be limited to a maximum of 1 year.

See

8 CFR 214.2(h)(2)(i)(E);

see also Matter of Simeio Solutions, LLC, supra at

547.

118

U.S. Department of Homeland Security, U.S. Citizenship and Immigration Services, Policy Research Division (2019). Summary of H-1B Site Visits Data (showing a higher rate of noncompliance for petitioners who indicated the beneficiary works at an off-site or third-party location compared to worksites where the beneficiary does not work off-site).